Suggestions for National Rural Livelihood Mission: A Review of SGSY

Written By ADITYA

Prepared by G. Bhaskara Rao,  Associate Vice President & Coordinator Enable, APMAS

Send your comments and feedback to gbrao(at the rate) apmas (dot)org and bhaskara2(at the rate)yahoo(dot)

The Swarnajayanti Gram Swarojgar Yojana (SGSY) is a scheme launched by the central government of India to provide employment to poor people living in villages and rural areas of India. The scheme was officially launched on April 1, 1999. The SGSY mainly aims at providing self-employment to villagers through the establishment of Self Help Groups.

Suggestions for National Rural Livelihood Mission: A Review of SGSY

Download the case study on SGSY at the link below

Suggestions for National Rural Livelihood Mission: a review of SGSY -pdf-53pages-500kb



1.1. SGSY was designed on the basis of the learning of several anti-poverty programs, which were implemented earlier. It is a credit and group-oriented holistic anti-poverty program.

1.2. Because of its several positive features like group approach, credit linkage, the involvement of NGOs, line departments, banks, PRIs, etc, it is considered as a wonderful program by many stakeholders. Many feel that if the scheme were implemented properly, there will be no need for another scheme.

1.3. However, it has been chronically encountering numerous problems in the implementation. The success rate is modest at best and successful cases are few and far ways in terms of space and time.

1.4. Given the importance of poverty alleviation, the Government of India has been extending all kinds of support to the program. The Government has been constantly getting reviewed the program with several prestigious institutions and
experts and improving the program by incorporating the appropriate recommendations.

1.5. However, as most of the studies and reviews were carried with a limited mandate, there was no series review of the design of the program, which is more critical for the success of the program.

1.6. The major objective of this paper is to review critically the design of the program and make critical suggestions to improve the design of the program.


2.1. Since inception, the program assisted information of 35.7 lakh SHGs; assisted

1.2 4 Cr. Swarozgaris in establishing their own micro-enterprises. The Government of India released Rs.11,486 Cr under the program; bank credit mobilization is Rs.19,017.

2.2. The programs have numerous and severe failures like – Failed to take off; Failed to mobilize the credit as per targets; Failed to target the real poor and vulnerable sections; Low survival rate of promoted micro-enterprises; Realized additional income from the micro-enterprises is, significantly less than anticipated, the incremental income of Rs.2,000 per month.

2.3. To overcome these problems, the Government is planning to redesign the program. There are some very important positive features in proposed redesigning, like more flexibility to the states; promotion of SHG federations; setting up of training institutions; placement; interest subsidy; etc. However, the proposed measures can not address the crucial issues like a bank credit, low survival rates of assisted micro-enterprises, etc.


3.1. Critical limitations of the program are:

(a) Banks are not enthusiastically participating in the program due to mounting NPA,
(b) Pilferage in different stages of implementation and
(c) The primary stakeholders are not participating in whole heartily in the program.

These critical limitations manifested in different forms. These limitations were identified in the early 2000s itself. Since then
several measures were taken to overcome various implementation related problems, without success.

3.2. The principal reason, for the persistence and magnification of these limitations and problems, is the deliberate and strategic behavior by different stakeholders like banks, officials, and swarozgaries.

3.3. To overcome these limitations, the design-related problems of the program have to be identified and removed, in other words, the program has to be redesigned.

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