Mains Practice Questions

Introduction

Self-Help Groups (SHGs) in India have significantly contributed to asset creation and income security for rural poor while advancing women’s empowerment. By pooling savings and accessing microcredit, SHGs enable members to invest in livestock, agriculture tools, and small enterprises (e.g., tailoring, dairy farming), directly boosting household assets.

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Twin Role of SHGs:

• Asset Creation:
  • Microcredit access: NABARD’s SHG-Bank Linkage Programme (SSHG-BLP) disbursed approximately ₹209.29 crore in loans to 54.82 lakh SHGs during the FY 2023-24.
    • Direct access to credit has promoted income-generating activities like livestock rearing, small-scale agriculture, and handicrafts.
    • For example, SHGs in Andhra Pradesh facilitated livestock acquisition, enhancing productive capacity, and boosting household resilience against shocks such as crop failure and medical emergencies.
  • Savings and Capital Formation: The savings linkage of SHGs is being undertaken at a CAGR of 7.5% over the last five years, thus accelerating financial inclusion at the grassroot of the economy.
• Income Security: SHGs promote income security by encouraging diversification into micro-enterprises such as food processing, handicrafts, and handloom.
  • Regular savings and credit cycles create a financial buffer, reducing dependence on informal lenders.
    • For example, the MoU with Meesho offers SHG members marketing platforms and business training, improving market access and income opportunities.

Contribution to Women’s Empowerment:

• Control over resources: Women control about 70% of the income generated from SHG activities, boosting their economic independence.
• Entrepreneurship: NABARD’s Micro Enterprise Development Programmes (MEDPs) and Skill Upgradation schemes (m-Suwidha) equip women with skills and support to run sustainable farm and non-farm enterprises.
• Social agency: SHGs tackle gender-based issues like discrimination, dowry, and domestic violence through collective efforts.
  • For example, in Madhya Pradesh, Sachet Didis and Siksha Sakhis are ushering in better health and education opportunities for the women and girls.
• Political participation: SHG members are three times more likely to contest local elections, with many leaders from Rajasthan and Kerala being elected as Sarpanches, where they have influenced policies related to sanitation and education.
  • A notable example is Sampatiya Uikey, a former Sarpanch who was elected to the Rajya Sabha, highlighting the successful political empowerment journey of SHG leaders.

Conclusion

SHGs have demonstrated a transformative twin role in enabling asset creation and income security among the rural poor, strengthening these groups through policy support, capacity building, and inclusive governance is imperative for achieving India’s inclusive growth and rural development objectives.