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The programmes of Ministry of Rural Development’s (MoRD), Government of India that directly target poor families for creation of assets and self employment started with Integrated Rural Development Programme (IRDP) in the year 1980. A major reform took place in 1999, when IRDP was transformed into Swarnjayanti Gram Swarozgar Yojana (SGSY). Self-employment through organizing poor into Self Help Groups (SHGs) became the cornerstone of the new strategy. In the states, there is now widespread acceptance of the need for poor to be organized into SHGs, as a pre-requisite for their poverty reduction. 2.5 Crore rural BPL households have been organized and brought into SHG network.

A systematic review of SGSY has brought into focus certain shortcomings like vast regional variations in mobilization of rural poor; insufficient capacity building of beneficiaries; insufficient investments for building community institutions; and weak linkages with banks leading to low credit mobilization and low repeat financing. Several states have not been able to fully utilize the funds received under SGSY. Absence of aggregate institutions of the poor, such as the SHG federations, precluded the poor from accessing higher order support services for productivity enhancement, marketing linkage, risk management, etc. Several evaluation studies have shown that SGSY scheme has been relatively successful in alleviating rural poverty wherever systematic mobilization of the poor into SHGs and their capacity building and skill development has been taken up in a process-intensive manner. In other places, the impact has not been that significant.

The magnitude of the unfinished task is enormous. Out of the estimated 7.0 crore rural BPL households (2010 projections of BPL households), 4.5 Crore households still need to be organized into SHGs. Even the existing SHGs need further strengthening and greater financial support. It was in this background, Government has approved the restructuring the SGSY as the National Rural Livelihoods Mission (NRLM), to be implemented in a mission mode across the country.

NRLM’s mandate is to reach out to all the poor families, link them to sustainable livelihoods opportunities and nurture them till they come out of poverty and enjoy a decent quality of life. Towards this, NRLM puts in place a dedicated and sensitive support structures at various levels. These structures work towards unleashing the innate potential of the poor and complement it with capacities to: deal with external environment, enable access to finance and other resources, and with their own institutions at different level. The institutions play the roles of initiating the processes of organizing them in the beginning, providing the livelihoods services and sustaining the livelihoods outcomes subsequently. The support structures need to work with the unemployed rural poor youth for skilling them and providing employment either in jobs, mostly in high growth sectors, or in remunerative self-employment and micro-enterprises.