National Rural Livelihood Mission

Why in News?

A government-commissioned evaluation of central rural sector schemes titled ‘Evaluation of Centrally Sponsored Schemes in Package 5-Rural Development Sector’.

What about the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM)?

• DAY-NRLM – It is a flagship centrally sponsored scheme for poverty alleviation and rural livelihoods program based on the Self-Help Group (SHG) model.
• Launched in – 2011
• It was formerly known as the National Rural Livelihoods Mission (NRLM).
• Nodal Ministry – The Ministry of Rural Development.
• Objectives
  • Livelihoods – Promote sustainable livelihoods and rural women entrepreneurship.
  • Financial Inclusion – Enable access to formal credit and financial services.
  • Diversification – Strengthen and diversify livelihoods with access to entitlements and public services.
  • Empowerment – Enhance social and political empowerment of women.
• Implementation – State Rural Livelihoods Missions through SHGs, Village Organisations (VOs) and Cluster-Level Federations (CLFs).
• Exception – DAY-NRLM is implemented across all states and union territories in India (except Delhi and Chandigarh).
• Coverage – About 10 crore rural poor households across India, mobilised into 91 lakh SHGs, which together have received nearly Rs 59,000 crore in capital support since the scheme began.
• Beneficiaries – Rural poor women, SHG members & Rural youth (under skill development components).

What about the evaluation and its key findings?

About the Evaluation

• Undertaken By – Sambodhi Research and Communication Pvt Ltd, a think tank roped in by NITI Aayog’s Development Monitoring and Evaluation Office (DMEO) for the purpose.
• Coverage – A survey of 2,206 households across 11 states and 2 Union Territories were studied.
• Of the 2,206 households surveyed, about 86% (1,895 households) availed benefits of the NRLM.

Key Findings

• Enterprise Creation
• Few SHGs started enterprises – Only 15% of SHGs initiated group-level businesses.
• Loan-free ventures - Nearly half of these enterprises were started without bank loans.
• Target pressure – Many SHGs were formed quickly after the Participatory Identification of the Poor (PIP) exercise, often without viable business opportunities in villages.

Participatory Identification of the Poor (PIP) – PIP is a community-driven process used to identify and measure vulnerable households.

Residents’ participation makes poverty identification more authentic, localized, and effective than top-down surveys alone.

• Use of Funds – SHG members used bank loans for building houses, constructing toilets, medical purposes, etc.
• Loan Reluctance – Many SHG members are reluctant to take loans because there is no assured market for the products made through group enterprises.
• Due to this uncertainty, they fear being unable to repay the loan, discouraging them from borrowing.
• Consumption Focus – As a result, the Revolving Fund (RF) money is often equally distributed among members and utilised to meet their immediate consumption needs.

Revolving Fund – It is a pool of capital from which loans are made to individuals, businesses, or community groups - that keeps recycling money — repayments replenish it, allowing new loans to be issued again & again.

• Limited Access to Support – Access to other financial support under the scheme was also low:
  • Revolving Fund – 74.6% of respondents accessed RF in 13 surveyed states (Rs.20,000–Rs.30,000 per SHG).
  • Community Investment Fund – Fewer than half (49.9%) the respondents received the CIF (up to Rs.2.5 lakh) to support their income-generating and livelihood activities, including entrepreneurial ventures.
  • Bank loans – Only 41.8% accessed bank loans
  • Community Enterprise Fund – Less than 4% (3.8%) received the CEF meant for larger ventures.
• Weak Facilitation – This was primarily due to limited on-ground support from village organisations (VOs), community resource persons (CRPs), and cluster-level federations (CLFs).

How does DAY-NRLM promote women’s empowerment in rural India?

• Grassroots Collectivization – It organizes rural women into tiered, community-led institutions (SHGs, Village Organizations), building strong local leadership and a supportive social network.
• Financial Inclusion & Credit Access – It provides RF and CIF, allowing SHGs to access easy bank loans & bring formal financial services directly to remote villages.
• Livelihoods & Enterprise Development – It supports the diversification of rural incomes through modern agriculture training for Mahila Kisans, non-farm enterprises, etc.
• Technology & Modernization – Programs like Namo Drone Didi train and equip women's SHGs & positioning them at the forefront of rural tech and farming advancements.
• Social & Gender Empowerment – Trained community cadres and Gender Resource Centres actively work to address gender-based discrimination, prevent child marriage, and tackle domestic violence.

What are the key challenges identified in the evaluation?

• Low Loan Uptake – The uptake of bank loans/cash credit limit (CCL) was even lower, mainly due to fear of loan defaults because demand for their products was weak.
• Disconnect in Rural Areas – Many SHG was created despite a significant disconnect between SHG formation and the availability of viable business opportunities in rural areas.
• Limited Support – Limited ground-level support from facilitators and federations added to the problem.

Reference

Indian Express | Review of Centre’s flagship rural scheme has found