SC/STs get little in rural scheme

The government may accuse the private sector of not doing enough for India's Scheduled Castes and Tribes (SCs and STs) but the country's largest self-employment programme for the rural poor run by the Centre has been found marginalising these sections.

A study, commissioned by the rural development ministry to assess the impact of the Swarnajayanti Gram Swarozgar Yojana (SGSY) in Uttar Pradesh, Bihar, Chhattisgarh and Orissa, which have high SC and ST populations, said the assistance (subsidy plus loan) provided to this category of beneficiaries rarely crossed Rs 10,000 a head.

This is in contrast with the ministry's claims that the average investment per head per year under the scheme is Rs 21,818.

SGSY is a nationwide programme that works through the formation of self-help groups (SHGs), comprising individuals below the poverty line (BPL), that are given assistance in form of a grant and a bank loan to pursue income-generating activities.

The study grew out of the concerns of a Parliamentary Standing Committee that SCs and STs are not benefitting from the programme "" and confirms its suspicions.

The findings were serious enough to prompt the rural development ministry to re-assess the design of the scheme. "We will evolve a proper mechanism to fill the gaps," a ministry official told Business Standard.

The study was conducted by the Banker's Institute of Rural Development (BIRD), Lucknow, between August and October this year in 40 blocks in nine districts of the four states.

It shows that even after eight years of the programme there has been little improvement in the income levels of most of the beneficiaries in the scheme's catchment areas.

SCs and STs, who are economically and politically more disenfranchised, have seen almost no benefit at all. In fact, most of the 7,235 SCs and STs who had participated in the scheme told researchers that there was no improvement in their income levels.

The skewed functioning of the scheme is most evident in Uttar Pradesh. "While no wealth ranking within the BPL families is done (to identify the most needy), BPL lists in many villages include even the richest," the study said.

Even when these villages are made part of the SHGs, the objective is purely to meet minimum membership norms, the study said.

The study also found that a large number of scheduled caste villages in Uttar Pradesh do not have a single SGSY group. The study blames indifference of the banks and SGSY officials at various levels in the states for faulty implementation.

Banks responsible for bank-rolling these schemes "" both commercial banks and regional rural banks "" were often found to passing on the subsidies to the SHGs without bothering to disburse the follow-up loan.

In cases in which the full amount was disbursed, the study found that it was often transferred to the SHGs' savings bank account without providing for a passbook to withdraw the funds. In some cases, banks simply withheld passbook facilities.

Researchers also said that the subsidy often did not match the SHGs' requirement or even entitlement. "And sometimes they are even charged interest on the subsidy," the study added.

In fact, interest rates varied from bank to bank and even branch to branch.

"Groups within the same block are being charged differently by different banks. And while the prescribed rate of interest on the loan should be nine per cent these banks are charging even 13.5 per cent," one researcher said.

The study also said that few banks bothered to monitor these schemes after disbursing the loans. None of the State Level Bankers' Committees which was required to monitor these schemes has reviewed the coverage of SCs and STs.

"Except in Gaya in Bihar where district-level meetings are held at uneven intervals, district and block-level SGSY meetings are not being held in any of these states," it said.

The acts of omission on banks' part were compounded by official apathy. As the study found, no effort has been made by local officials to build capacity in a sustainable manner.

The study observed that "even basic orientation programmes were done in a very casual manner and skill training is almost non-existent".

The study also said that hand-holding support to SHGs is not available "when in fact, the SC and ST groups are more vulnerable and required prolonged period of hand-holding".

Further, SGSY guidelines require that half the beneficiaries of the scheme should be SCs and STs. Barring Orissa, the study found that local officials were unaware of this guideline.

The result of the lack of awareness and capacity-building was that the SGSY was reduced to a free hand-out rather than a means to enable rural poor to generate income.

"Groups are distributing revolving fund among members equally, terming it a subsidy that need not be repaid. Groups are formed just to avail of the subsidy and group meetings stop the day the term loan is disbursed," the researcher said.

The study attributes this fault to the basic design of the scheme which does not spell out norms for the formation of federations of SHGs or market networks for their products.

"There is a target-oriented subsidy released to banks and the onus of verifying the asset creation vests with nobody," the study pointed out, adding, "The subsidy part dominates the programme putting all features of the scheme on the backburner."

Intrigued by the revelations of this study, the ministry has asked BIRD to study some southern states. "A final report is expected in December including the status of the SC, STs in SGSY in states like Andhra Pradesh, Kerala and Tamil Nadu," a ministry official said.