Name of the Scheme – National Livelihood Mission – Rural
Department – Directorate of Rural Development
Scheme for : Individual and Institutions
Where to Apply : NA
When to Apply : Anytime
Overview
The core belief of National Rural Livelihoods Mission (NRLM) is that the poor have a strong desire and innate capabilities to come out of poverty. They are entrepreneurial. The challenge is to unleash their innate capabilities to generate meaningful livelihoods, which enable them to come out of poverty. The first step in this process is motivating them to form their own institutions. Their true potential is realized when they are provided sufficient capacities to manage the external environment and easy access to finance, and are enabled to expand their skills and assets and convert them into meaningful livelihoods. This requires continuous handholding support by their institutions. An external dedicated, sensitive support structure, from the national level to the sub-district level, is required to induce such social mobilization, institution building and livelihoods promotion.
Strong institutional platforms of the poor empower the poor households and enable them to build-up their own human, social, financial and other resources. They, in turn, enable them to access their rights, entitlements and livelihoods opportunities, including services (both from the public and private sector). The social mobilization process enhances solidarity, voice and bargaining power of the poor. These processes enable them to pursue viable livelihoods based on leveraging their own resources, skills and preferences. Thus, they come out of abject poverty and do not fall back into poverty.
NRLM also believes that the programme can be up scaled in a time bound manner, only if it is driven by the poor themselves.
NRLM Guiding Principles
- Poor have a strong desire to come out of poverty, and they have innate capabilities to do so.
- Social mobilization and building strong institutions of the poor is critical for unleashing the innate capabilities of the poor.
- An external dedicated and sensitive support structure is required to induce the social mobilization, institution building and empowerment process.
- Facilitating knowledge dissemination, skill building, access to credit, access to marketing, and access to other livelihoods services underpins this upward mobility.
Key Features of NRLM
Social Inclusion and Institutions of the Poor
1. Universal Social Mobilization: To begin with, NRLM would ensure that at least one member from each identified rural poor household, preferably a woman, is brought under the Self Help Group (SHG) network in a time bound manner. Subsequently, both women and men would be organized for addressing livelihoods issues i.e. farmers organizations, milk producers’ cooperatives, weavers associations, etc. All these institutions are inclusive and no poor would be left out of them. NRLM would ensure adequate coverage of vulnerable sections of the society such that 50% of the beneficiaries are SC/STs, 15% are minorities and 3% are persons with disability, while keeping in view the ultimate target of 100% coverage of BPL families.
2. Promotion of Institutions of the poor: Strong institutions of the poor such as SHGs and their village level and higher level federations are necessary to provide space, voice and resources for the poor and for reducing their dependence on external agencies. They empower them and also act as instruments of knowledge and technology dissemination, and hubs of production, collectivization and commerce. NRLM, therefore, would focus on setting up these institutions at various levels.
In addition, NRLM would promote specialized institutions like Livelihoods collectives, producers’ cooperatives/companies for livelihoods promotion through deriving economies of scale, backward and forward linkages, and access to information, credit, technology, markets etc. The Livelihoods collectives would enable the poor to optimize their limited resources.
There are existing institutions of the poor women formed by Government efforts and efforts of NGOs. NRLM would strengthen all existing institutions of the poor in a partnership mode. The self-help promoting institutions both in the Government and in the NGO sector would be supported. Further, existing institutions and their leaders and staff would support the processes of forming and nurturing new institutions.
3. Training, Capacity building and skill building: NRLM would ensure that the poor are provided with the requisite skills for: managing their institutions, linking up with markets, managing their existing livelihoods, enhancing their credit absorption capacity and credit worthiness, etc. A multi-pronged approach is envisaged for continuous capacity building of the targeted families, SHGs, their federations, government functionaries, bankers, NGOs and other key stakeholders. Particular focus would be on developing and engaging community professionals and community resource persons for capacity building of SHGs and their federations and other collectives. NRLM would make extensive use of ICT to make knowledge dissemination and capacity building more effective.
4. Revolving Fund and Capital Subsidy: Subsidy would be available in the form of revolving fund and capital subsidy. The Revolving Fund would be provided to the SHGs (where more than 70% members are from BPL households) as an incentive to inculcate the habit of thrift and accumulate their own funds towards meeting their credit needs in the long-run and immediate consumption needs in the short-run. Subsidy would be a corpus and used for meeting the members’ credit needs directly and as catalytic capital for leveraging repeat bank finance. Capital Subsidy fund would be given directly to the SHGs or would be routed to the SHGs through the federations, wherever the SHGs desire such an arrangement.The key to coming out of poverty is continuous and easy access to finance, at reasonable rates, till they accumulate their own funds in large measure.
5. Universal Financial Inclusion: NRLM would work towards achieving universal financial inclusion, beyond basic banking services to all the poor households, SHGs and their federations. NRLM would work on both demand and supply side of Financial Inclusion. On the demand side, it would promote financial literacy among the poor and provides catalytic capital to the SHGs and their federations. On the supply side, it would coordinate with the financial sector and encourage use of Information, Communication & Technology (ICT) based financial technologies, business correspondents and community facilitators like ‘Bank Mitras’. It would also work towards universal coverage of rural poor against loss of life, health and assets. Further, it would work on remittances, especially in areas where migration is endemic.
6. Provision of Interest Subsidy: The rural poor need credit at low rate of interest and in multiple doses to make their ventures economically viable. In order to ensure affordable credit, NRLM has a provision for subsidy on interest rate above 7% per annum for all eligible SHGs, who have availed loans from mainstream financial institutions, based on prompt loan repayment (This would not be applicable when a SHG avails capital subsidy. Interest subsidy would be provided to this SHG, when they avail a fresh loan after repaying the capital subsidy linked loan). This subsidy would be available to SHGs, where at least 70% of the members are from BPL households, till a member accesses credit, through repeat cumulative loaning, up to Rs 1.00 lakh per household.
7. Livelihoods: Poor have multiple livelihoods as a coping mechanism for survival. Their existing major livelihoods are: wage labour, small and marginal holding cultivation, cattle rearing, forest produce, fishing, and traditional non-farm occupations. The net incomes and
employment days from the current livelihoods are not adequate to meet their expenditures. NRLM would look at the entire portfolio of livelihoods of each poor household, and work towards stabilizing and enhancing the existing livelihoods and subsequently diversifying their livelihoods.
8. Infrastructure creation and Marketing support: NRLM would seek to ensure that the infrastructure needs for the major livelihoods activities of the poor are met with. It would also provide support for marketing to the institutions of the poor. The range of activities in marketing support includes market research, market intelligence, technology extension, developing backward and forward linkages, building livelihoods collectives and supporting their business plans. NRLM would encourage and support partnerships with public and private organizations and their networks/associations for these activities, particularly for market linkages. Rural Haats would also be encouraged to directly link producer groups (SHGs) and individual producers with urban and peri-urban markets through a well developed system of continuous identification and rotation of beneficiaries. 20% of the state’s programme outlay (25% in case of North-Eastern States and Sikkim) is reserved for this purpose.
9. Skills and Placement Projects: NRLM would scale up the existing skill and Placement projects through partnership mode as one of the best investments in youth, and provide impetus to livelihoods opportunities in emerging markets. For strengthening this, various models of partnerships with public, private, non-government and community organizations would be developed. A strong relationship would also be developed with industry associations and sector specific employers’ associations. National Skill Development Corporation (NSDC) would be one of the leading partners in this effort. 15% of the central allocation under NRLM is earmarked for this purpose.
10. Rural Self Employment Training Institutes (RSETIs)
NRLM encourages public sector banks to set up RSETIs in all districts of the country. RSETIs transform unemployed rural youth in the district into confident self-employed entrepreneurs through need-based experiential learning programme followed by systematic handholding support. Banks are completely involved in selection, training and post training follow-up stages. RSETIs partner with others, including the institutions of the poor, to realize their mandate and agenda.
11. Innovations: NRLM believes that successful innovations can reduce the learning curve for poverty eradication by showing a different pathway out of poverty. 5% of the Central allocation is therefore, earmarked for innovations. Those innovations, which have the potential for reaching out specifically to the poorest or for reaching out to the largest number of poor and having maximum impact with limited resources, would be preferred and supported.
Source:
https://nrlm.gov.in/outerReportAction.do?methodName=showIndex#gsc.tab=0