Current Context
- DAY-NRLM is due for appraisal for the 2026–27 to 2030–31 cycle, prompting review of strategy to deepen women’s livelihoods, enterprise growth, and institutional sustainability.
- Programme recognised for mobilising women-led collectives and financial inclusion, but next phase demands institutional strengthening and market integration.
Relevance
GS II — Social Justice
- SHGs, women empowerment, poverty alleviation.
- DBT delivery and grassroots institutions.
GS III — Economy
- Financial inclusion, rural entrepreneurship, microfinance.
- Livelihood diversification and credit systems.
Background — DAY-NRLM
What is DAY-NRLM?
- Deendayal Antyodaya Yojana–NRLM, under Ministry of Rural Development, aims to reduce rural poverty through SHG-based mobilisation, financial inclusion, and livelihood promotion of poor households, especially women.
- Focuses on social mobilisation, capacity building, credit access, and enterprise promotion using community institutions.
Institutional Architecture
- Built on three-tier structure: Self-Help Groups (SHGs) → Village Organisations (VOs) → Cluster-Level Federations (CLFs) ensuring decentralised, community-driven governance.
Scale & Achievements
Mobilisation & Financial Inclusion
- Around 10 crore households mobilised into 91 lakh SHGs, federated into 5.35 lakh VOs and 33,558 CLFs, making it one of world’s largest women-led networks.
- SHGs mobilised ₹11 lakh crore bank credit with only ~1.7% NPA, indicating strong credit discipline.
Women’s Economic Gains
- Lakhpati Didis exceed 2 crore, reflecting income enhancement and enterprise success among rural women.
- SHG participation linked to higher financial literacy and asset ownership.
Political & Social Empowerment
- Women’s collectives increasingly influence local governance and DBT delivery, with States using SHG networks for schemes like Ladli Laxmi, Maiya Samman, Ladki Bahin.
Core Concerns
Weakening Autonomy of CLFs
- CLFs reportedly becoming subservient to government functionaries, limiting independent decision-making and diluting community ownership model.
- Contradicts original vision of self-managed community institutions.
Idle Funds & Accountability
- Community institutions hold large capitalisation funds (reported ₹56.69 lakh crore), creating risks of idle funds and misuse without robust audits.
- Need for social and statutory audits to ensure transparency.
Credit Constraints
- SHG members seek higher credit for scaling enterprises but lack individual credit histories and CIBIL scores, limiting access to formal loans.
Financial & Institutional Gaps
Uniform Loan Products
- Standardised loan tenures and rates ignore diversity in livelihoods, reducing financial efficiency and suitability for varied enterprises.
- Community-led credit decisions could improve outcomes.
Limited Financing Models
- Heavy reliance on debt financing; limited use of equity, venture capital, and blended finance restricts enterprise scaling.
Need for Convergence
Siloed Implementation
- Livelihood schemes across departments operate in silos, reducing cumulative impact and causing duplication.
- Convergence often officer-driven and unsustainable.
Institutional Solution
- Proposed Convergence Cell at NITI Aayog could streamline multi-ministry coordination and resource optimisation.
Market Linkage Deficit
Marketing Barriers
- Weak branding, packaging, pricing, and logistics limit SHG product competitiveness in markets.
- Absence of dedicated marketing vertical reduces visibility and scale.
Proposed Solutions
- Dedicated national marketing vertical and State-level professional agencies could improve market access.
- Select CLFs as logistics hubs for aggregation and distribution.
Way Forward
Institutional Reforms
- Revitalise CLFs as community-owned institutions with autonomy and professional support.
- Strengthen audit systems and financial governance.
Financial Deepening
- Develop customised financial products, generate CIBIL scores, and partner with SIDBI, NBFCs, and neobanks.
Livelihood Planning
- Use Village Prosperity and Resilience Plans (VPRP) for annual livelihood planning and enterprise targeting.
Broader Significance
Inclusive Growth Lens
- DAY-NRLM supports SDGs on poverty reduction, gender equality, and decent work, making it central to inclusive rural transformation.
- Strengthened SHG ecosystems can drive rural entrepreneurship and local economic multipliers.
