SWARNAJAYANTHI GRAM SWAROZGAR YOJANA(SGSY)

A new programme known as SWARNAJAYANTHI GRAM SWAROZGAR YOJANA (SGSY) has been launched from April 1999 This is a holistic programme covering all aspects of self employment such as organization of the poor into self Help Groups, training, credit, technology, infrastructure and marketing. With the coming into force of the SGSY, the earlier programmes like IRDP, TRYSEM, SITRA, DWCRA, GKY, and MWS are no longer in operation. Under IRDP since 6^th Plan onwards 17479 families assisted and an expenditure of Rs.508.92 lakhs incurred, under TRYSEM since 1989-90 onwards 4003 youths trained and an expenditure of Rs.44.24 lakhs incurred, under DWCRA since 1988-89 onwards, 318 groups formed and an expenditure of Rs.40.51 lakhs incurred, under SITRA since 1992-93 onwards, 2309 rural artisans assisted and an expenditure of Rs.42.91 lakhs incurred, under Million wells scheme since 1993-94 onwards, 51 wells constructed and an expenditure of Rs.34.91 lakhs incurred.

Objective -The objective of the SGSY is to bring the assisted poor families (Swarozgaries) above the poverty line in three years, by providing them income generating assets through a mix of bank credit and government subsidy. The effort is to cover about 30% of the poor families in each block during the next five years.

Below Poverty Line (BPL)

The poverty line in the VIII th plan period was Rs.11,000/- per annum.

The poverty line during IXth plan period varied in different states from Rs.13,000/- to Rs.19650/-per annum, but in this UT still it was considered as Rs.11,000/- per annum.

The Under Secretary, GOI, Ministry of Urban Affairs & Employment, New Delhi vide letter No: K-11019/103/MIS/UPA dated 8.10.1997 has fixed the State-Wise poverty line for the UT of the Andaman & Nicobar Islands in the Rural area as 269.07 per month per capita and in the Urban area Rs.381.04 per month per capita. All the persons whose per capita per month expenditure is less than Rs.269.07 in the rural areas were considered as persons below the poverty line.

As per the BPL List in the Andaman District there are 4432 No. of Heads of families with 19,640 total family members, who are below the poverty line. In the Nicobar District, in General category total No of household under BPL is 397 with 1710 family members, and in the ST category the total No. of household under the BPL is 1651 with 23221 family members.The total No of BPL household in this UT is 6480 and the total No. of family BPL members are 44571

Objective

The objective of the SGSY is to see that the assisted family comes above the poverty line in three years. The selection of the activities should be such that it would afford the Swarozgari an opportunity to expand his asset and skill base in three years and at least in the third year, the net income should be more than Rs.2000 per month.

Salient features of SGSY

• SGSY aims at establishing a large number of micro enterprises in the rural areas building upon the potential of the rural poor.

• The assisted families is known as Swarozgaries( individuals) and groups (Self Help Groups). Emphasis will be on Group approach.

• The objective under SGSY is to bring every assisted families above the poverty line in three years.

• In establishing the micro- enterprises, the emphasis under the SGSY is to on cluster approach. 4-5 key activities are to be identified for each block based on the resources, occupational skills of the people and availability of markets. Selection of key activities would be with the approval of the Panchayat Samitis and the block level and the DRDA/ZP at the district level. The major share of the SGSY assistance will be in activity clustesrs.

• SGSY adopts a project approach for each key activity. Project reports are to be prepared in respect of identified key activities. The banks and other financial institutions are to be closely associated and involved in preparing these project reports so as to avoid delays in sanctioning loans and to ensure adequacy of financing.

• The existing infrastructure for the cluster of activities is to be reviewed.

• The efforts under the SGSY is to cover 30% of the poor in each block in each block in the next five years through an efficient programmes.

• SGSY is to focus on Group approach which involve organisation of the poor into SHG and their capacity building. Group activity are given preference and progressively majority of the funding will be for the SHGs.
• The Gram Sabha is to authenticate the list of families below the poverty line identified in the BPL census.
• SGSY is a credit cum subsidy programme. Under SGSY there is closer involvement of the banks, and they are involved in planning and preparation of projects, identification of activity clusters, infrastructure planning as well as capacity building and choices of the activity of the SHGs, selection of individual Swarozgaris, pre-credit activities and post credit monitoring including loan recovery.
• SGSY is to seek to lay emphasis on skill development through well designed training courses.
• SGSY is to ensure upgradation of the technology in the identified activity clusters.
• SGSY is to provide for promotion of marketing of goods produced by the SGSY Swarozgaris.

1. SC/STs-50%
2. Women-40%
3. Disabled-3%

Preparation of Project Reports:

For each key activity there should be a project report indicating the various elements such as training, credit, technology, infrastructure and marketing. The project report should indicate how many people could be covered economically in a block under a key activity. On approval of the District SGSY committee the list of selected key activities as well as the project report of each key activity should be placed before the governing body of the DRDA. On approval it would be circulated between the BDO and the banks in the concerned blocks and the concerned line departments.

SGSY is focused on organisation of the poor at the grassroots level through a process of social mobilisation for poverty eradication. Social mobilisation enables the poor to build their own organisations (Self Help Groups)(SHG)in which they participate fully and directly and take decisions on all issues concerning poverty eradication. Simultaneously the SHGs have the advantage of the assistance in terms or credit or technology or market guidance etc so as to reach the poor faster and more effectively.

SHGS go through three stages of evolution

1. Group formation
2. Capital formation through the revolving fund, skill development.
3. Taking up economic activity for income generation.

Formation of Self Help Group

For the group formation the following guidelines has to be kept in mind

1. Under SGSY a SHG may consist of 10-20 persons, in case of minor irrigation and in case of the disabled persons this number may be a minimum of five persons.
2. All members of the group should belong to families below poverty line. A person should not be a member of more than one group.
3. The group should devise a code of conduct.
4. The members should build their corpus through regular savings.
5. The group corpus fund should be used to advance loans to the members.
6. The members in the group meetings should take all the loaning decisions through a participatory decision making process.
7. The group should be able to prioritize the loan applications fix repayment schedules, fix appropriate rate of interest for the loans advanced and closely monitor the repayment of the loan installments from the loanees.
8. The group should operate a group account so as to deposit the balance amounts left with the groups after disbursing loans to its members.
9. The groups should maintain simple basic records such as Minutes book, attendance register, loan ledger, General ledger, Cash Book, Bank pass book and individual passbook.
10. 50% of the groups formed in each block should be exclusively for the women.
11. The SHGs is to register themselves under the societies registration act or as a partnership firm.
12. Social mobilisation and community organisation is a process oriented approach as different from target oriented approach.

GRADING OF THE SELF HELP GROUPS

The formation stage lasts six months and at the end of the six months it is necessary to subject each group to a test whether it has evolved into a good group and is ready to go into the next stage of evolution. This is done through a grading exercise. This exercise would focus attention on weak groups so that the DRDAs can assist them to overcome the weaknesses and graduate into good groups. Grading of the groups should also enable the DRDAs to establish linkages for the good groups with Banks. Grading can be done by banks.

Process involved for grading

1. Development of exhaustive list of characteristics of a good group by DRDA in consultation with its partners if any involved in promotion and development
2. Development of criteria for grading of the groups with appropriate weightage for various parameters.
3. Identification of suitable agency to undertake grading exercise.
4. Intensive training to the investigators who is to interact with the members of the groups to assess the group on various parameters. This training can either be conducted by the agency identified for grading or by DRDA.
5. Facilitate the agency to visit the groups for assessing the status of the groups.
6. Obtain SHG-wise reports with the rating awarded and the reasons.
7. Develop an appropriate SHG-wise action plan for strengthening the groups identified as weak or average.
8. Pursue with the bankers for securing SHG linkage with such SHGs that are rated as good.

Every SHG that is in existence at least for a period of 6 months had has demonstrated the potential of a viable groups enter the second stage wherein it receives the Revolving fund and also embarks on further capacity building of its entire team. DRDA is to arrange to provide the revolving fund to such groups meeting their share from out of 10% of the SGSY fund.

Taking up of the economic activity

Once the SHG has demonstrated that it has successfully passed through the second stage it is eligible to receive the assistance for economic activities. This is in the form of loan and subsidy.

1. Loan-cum-subsidy of SGSY to the individuals in a group, provided the prospective swarozgaries in the group are capable of and willing to take up income generation activities under these sectors.
2. Loan –cum-subsidy to the group where all the members of the group want to take up a group activity.

Identification and Selection

The individual Swarozgaries are selected in the Gram Sabha., a three member team consisting of BDO, the banker and the Sarpanch should visit each of the habitations of the Panchayat according to a schedule drawn up for this purpose and duly publicized. In each habitation the team must ascertain the persons from among the BPL families who can be covered under any designated key activities. After the selection the BDO shall arrange to have the applications filled by the selected persons and forward the same to the Banks, Once the banks have received the applications they should sanction the application normally in 15 days and not later than one month.The list of Swarozgaris finally selected should be got printed by the BDO and copies made available to the Gram Pancahayat for placing it before the next Gram Sabha. This list shall also be made available to the DRDA, Bank officials,DRDA, other block official and all concerned agencies.

Financial Assistance

The financial assistance to Swarozgaries under SGSY comprises of loan and subsidy. The major part of investment consists of bank credit from financial institutions.

The size of loan for the project depends on the nature of the project and there is no investment ceiling, which is equal to the total project cost including the amount of subsidy admissible to the Swarozgaris. The interest rates is to be notified by RBI/NABARD from time to time. The security norms is also to be prescribed by the RBI from time to time.

The loan is to be released by the bank within 15 days from the date of receipt of application. The bank should not do part financing and under repayment. As soon as the selection is done, the line departments complete the basic orientation or the skill training programme. Now the bank shall shall disburse the loan and subsidy amount to the Swarozaris.

Subsidy under SGSY is uniform at 30% of the project cost, subject to a maximum of Rs.7500/-. In respect of SC/STs it is 50% that is Rs.10,000/-respectively. For groups of Swarogaris(SHG) the subsidy ist 50% if the cost of the scheme, subject to a ceiling of Rs.1.25 Lakhs.

Repayment of loan

All SGSY loans are treated as medium term loans with minimum repayment period of 5 years. Repayment installments should not be more than 50% of the incremental net income expected from the project.

GROUP LIFE INSURANCE SCHEME 

A group life insurance scheme for Swarozgaris aged not less than 18 years and not more than 60 years was introduced with effect from 1.4.88. This scheme is operative from the date on which the asset is disbursed to the Swarozgaris till the Swarozgaris completes the age of 60 years or a period of 5 years from the date of commencement of the cover, whichever is earlier. A sum of Rs.5000/- shall become payable by LIC to the nominee of the deceased in case of natural death and Rs.10,000/- for accidental death.