Finance Minister Arun Jaitley on Tuesday said that employment in the large unorganised sector can be improved if banks channelise funds through the self-help groups (SHGs).
"So if the banking system, through various schemes, diverts loans to this sector, there will be creation of more jobs," he said here at the 36th Foundation Day of National Bank For Agriculture and Rural Development (Nabard).
"People who look for work in the unorganised sector are much more than those in the organised sector," he said.
Jaitley noted that during the growth of the country, "people on the margins are not benefited" and the aim of the government and state policies was to help in the growth of such groups.
"In the last 2-2.5 decades, our growth has increased. When economy improves, in the development, some people are left behind. The number of people left behind is not small. More benefit is received in cities, businesses and organised sector. The urban slums, tribal areas, people on the margins, they do not receive much benefit," Jaitley said.
Also Read
"The policies framed by the Centre and states aim that when resources increase in society, through these policies, these people who were left behind should receive benefits," he said.
Twenty-five years back, SHGs were devised so that such people in the unorganised sector could get loans, he said.
Today there are about 85 lakh SHGs in the country.
Former Reserve Bank of India (RBI) Governor C. Rangarajan said that SHG has become a tool in the hands of the banks for providing credit of small amounts to "vulnerable people".
"The ability of other organised banking system to reach out to small borrowers is very difficult. SHGs is a measure or tool through which the banking system can work," Rangarajan told reporters on the sidelines of the event.
The former RBI Governor said that the SHG tool could come handy for the agricultural sector where the size of land holding is small.
"We should be permitting five to six farmers form joint liability groups so that they can get some advantage by inputs and by way of selling also," he said.
Financial Services Secretary Anjuly Chib Duggal said that apart from the credit linkage the government was also trying to link the SHG members to other social security schemes relevant to them like Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana.
"Apart from ensuring credit linkages we are working on linkage of SHG members to social security schemes relevant to them. We are trying to increase the reach of SHGs," Duggal, who also participated in the event, said.
--IANS
mm/vsc/in/dg
Disclaimer: No Business Standard Journalist was involved in creation of this content
