Cabinet approves changes to National Rural Livelihoods Mission

Last Updated: Mon, May 06, 2013 15:52 hrs

In an attempt to the roll out of the women's self help group model across the country, the Union Cabinet on Monday cleared important changes to the National Rural Livelihoods Mission (Aajeevika).

Speaking on the move, Union Rural Development Minister Jairam Ramesh said, "This is an extremely welcome move. The changes will provide additional resources and additional flexibility to implement the NRLM (Aajeevika) in a more effective and accelerated manner across the country, creating new livelihoods and empowering women across rural India".

The key changes approved are as follows:

1. Improved targeting, by doing away with BPL criteria and instead identifying target groups through the Participatory Identification of Poor (PIP) process.

Under the existing framework of implementation of NRLM, only rural households included in the official BPL list could be targeted under NRLM. This list was prepared in 2002, has not been updated and has many defects.

Since the entire NRLM scheme depends on the formation of affinity based groups of poor women with common bonding and synergistic functioning, which cannot be created by simply drawing persons from an externally prepared and incomplete BPL list, the Cabinet has now approved the that target groups under NRLM will be determined by a well defined, transparent and equitable process of Participatory Identification of Poor (PIP), at the level of the community.

The PIP process has been extensively demonstrated to be very effectives in states where women's self-help-groups have succeeded. The list finalized through the PIP process will be vetted by the Gram Sabha and approved by the Gram Panchayat.

The PIP process will also have a set of exclusion criteria, automatic inclusion criteria and a set of deprivation indicators for enabling poverty ranking in a participatory manner. This delinks NRLM target group from the BPL list.

2. Interest subvention and additional interest subvention in 150 districts.

Pursuant to the announcement made by the Finance Minister in the Budget Speech for 2012-13, Cabinet has approved the provision of interest subvention to Women SHGs, enabling them to avail loans up to Rs. 3 lakh at an interest rate of 7 per cent per annum.

Women SHGs that repay loans in time will get additional 3 per cent subvention, reducing the effective rate to 4 per cent. The initiative, in the first phase, would focus on 150 districts, including the 82 IAP districts, affected by Left Wing Extremism.

3. Change in the pattern of financial assistance replacing capital subsidy with a community investment support fund.

Financial assistance to the poor households was so far provided in the form of capital subsidy linked to bank credit. It was felt that this did not create a perpetual and viable capital base at the SHG level and was open to misuse.

The Cabinet has thus approved to withdraw 'capital subsidy' to SHGs and instead provide financial support SHG federations and livelihoods organizations of the SHG members in the 'intensive' blocks through a grant called Community Investment Support fund, which will be used by the Federations to advance loans to SHGs and to undertake common socio-economic activities. This will happen in a phased manner, since intensive blocks will be added in a phased manner.

4. Setting up of national level society under NRLM for more effective implementation.

The Cabinet also approved the setting up an 'autonomous, adequately staffed, professionally managed and empowered agency at the national level to implement the NRLM', called the National Rural Livelihoods Promotion Society (NRLPS) under the Societies Registration Act.

The NRLPS will act as the technical support unit of NRLM. The setting up of such a society is essential to implement the programme in a mission mode, as livelihoods programmes require a wide range of specialization and experience. The main objective of the Society is to continuously build capacities of the State rural livelihoods missions in planning, implementing and monitoring the programme.

The society structure would enable access to high quality professional support, provide flexibility to create partnerships and facilitate innovations and would serve as a knowledge center for rural livelihoods for the state missions.

Further it will provide an opportunity for formally involving State Governments in decision-making, by nominating them to the Executive Committee of the Society.

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