CONTACT US

084594-00000

About Us  :  Online Enquiry

Public Administration by G.Rajput


Download

Self Help Groups

Self Help Groups (SHG) are mentioned in the GS Paper 2 as per the latest UPSC Mains Syllabus. SHG related questions can also be expected in Prelims as well as in the Essay Paper of Mains. This article is based on July 2013 Kurukshetra magazine, and intends to give a gist about SHGs.

UPSC syllabus related with SHG reads like this : Development processes and the development industry- the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.

Topics covered:

  • About SHGs and its composition
  • Role of animator
  • Need of SHGs
  • Members and meetings of SHG
  • Keeping SHG accounts
  • Functions, benefits and challenges of SHG
  • SHG Movement In India

 

What are Self Help Groups?

  • Self Help Groups (SHGs) are small groups of poor people. The members of an SHG face similar problems. They help each other, to solve their problems.
  • SHGs promote small savings among their members. The savings are kept with the bank.
  • This is the common fund in the name of the SHG.
  • The SHG gives small loans to its members from its common fund.
  • SHG is an informal group and registration under any Societies Act, State cooperative Act or a partnership firm is not mandatory vide Circular RPCD.No. Plan BC.13/PL -09.22/90- 91 dated July 24th, 1991.

Composition of SHGs

  • A reasonably educated and helpful local person has to initially help the poor people to form groups. He or She tells them about the benefits of thrift and the advantages of forming groups. This person is called an ‘animator’ or ‘facilitator’. Usually, the animator is a person who is already known to the community.
  • Any of the following persons can be a successful animator:
    • Retired school teacher or a retired government servant, who is well known locally.
    • A health worker/a field officer/staff of a development agency or department of the State Government.
    • Field officer or a staff member of a commercial bank/regional rural bank or a field staff from the local co-operative bank or society
    • A field level functionary of an NGO.
    • An unemployed educated local person, having an inclination to help others.
    • A member/participant in the Vikas Volunteer Vahini (VVV) Programme of NABARD.
    • Woman animators can play more effective role in organising women SHGs.
  • The animator cannot organise the groups all alone.
  • He or she will need guidance, training, reading material, etc.
  • Usually, one of the following agencies help:
    • A voluntary agency or Non Governmental Organization (NGO).
    • The development department of the State Government.
    • The local branch of a bank.

Role Of An Animator

  • The animator talks to people in the village or at their homes.
  • He or she explains the benefits of thrift and group formation.
  • No promise of bank loan is given to anyone.
  • He or she helps the group members to hold one or two initial meetings.
  • The group finds a group leader, for holding meetings, keeping books, etc.
  • The animator guides and encourages the leader and the group members.

Need for SHGs

  • One of the reasons for rural poverty in our country is low access to credit and financial services.
  • A Committee constituted under the chairmanship of Dr. C. Rangarajan to prepare a comprehensive report on ‘Financial Inclusion in the Country’ identified four major reasons for lack of financial inclusion:
    • Inability to provide collateral security,
    • Poor credit absorption capacity,
    • Inadequate reach of the institutions, and
    • Weak community network.
  • The existence of sound community networks in villages is increasingly being recognised as one of the most important elements of credit linkage in the rural areas.
  • They help in accessing credit to the poor and thus, play a critical role in poverty alleviation.
  • They also help to build social capital among the poor, especially women. This empowers women and gives them greater voice in the society.
  • Financial independence through self-employment has many externalities such as improved literacy levels, better health care and even better family planning.

Size of the SHG

  • The ideal size of an SHG is 10 to 20 members. (Advantage: In a bigger group, members cannot actively participate. Also, legally it is required that an informal group should not be of more than 20 people.).
  • The group need not be registered.

Membership

  • From one family, only one person can become a member of an SHG. (More families can join SHGs this way.)
  • The group normally consists of either only men or of only women. Mixed groups are generally not preferred.
  • Women’s groups are generally found to perform better. (They are better in savings and they usually ensure proper use of loans.)
  • Members should have the same social and financial background.
  • Some Common factors for Membership in an SHG
    • Women/men from very poor households.
    • Those who depend on moneylenders even for daily necessities.
    • Those with a per capita income not exceeding Rs. 250 per month.
    • Those having dry land holding not exceeding 2.5 acres.
    • Common living conditions for the Group Members  eg. Living in kutcha houses, Having no access to safe drinking water, Presence of illiterate adults in the family etc

Meetings

  • The group should meet regularly. Ideally, the meetings should be weekly or at least monthly. They become closer, if they meet regularly. This helps them to understand each other’s difficulties better.
  • Compulsory attendance: Full attendance in all the group meetings will make it easy for the SHG to stabilise and start working to the satisfaction of all.
  • Membership register, minutes register etc., are to be kept up to date by the group by making the entries regularly. This helps you to know about the SHG easily. It also helps to build trust among the SHG members.

Keeping of Accounts by the SHG

  • Simple and clear books for all transactions to be maintained.
  • If no member is able to maintain the books, the SHG may take outside help. (It has been seen that a boy or a girl from the village with some educational qualification does this job enthusiastically. After some months, the group can even consider giving him or her a small reward for this job.). Animator can also help.
  • All registers and account books should be written during the course of the meeting. (Advantage: This creates confidence in the minds of members who are unable to read and write.)
  • Books to be kept by an SHG
    • Minutes Book:The proceedings of meetings, the rules of the group, names of the members etc. are recorded in this book.
    • Savings and Loan Register:Shows the savings of members separately and of the group as a whole. Details of individual loans, repayments, interest collected, balance, etc. are entered here.
    • Weekly /Fortnightly/Monthly Register:Summary of receipts and payments, updated in every meeting.
    • Members’ Passbooks:Individual members’ pass books in which individual’s savings and loan balance outstanding is regularly entered. (Advantage: this encourages regular savings.)

Functions

  • It looks to build the functional capacity of the poor and the marginalized in the field of employment and income generating activities.
  • It resolves conflicts through collective leadership and mutual discussion.
  • It provides collateral free loan with terms decided by the group at the market driven rates.
  • Such groups work as a collective guarantee system for members who propose to borrow from organised sources. The poor collect their savings and save it in banks. In return they receive easy access to loans with a small rate of interest to start their micro unit enterprise.
  • Consequently, Self-Help Groups have emerged as the most effective mechanism for delivery of microfinance services to the poor.

Benefits of SHGs

  • Social integrity – SHGs encourages collective efforts for combating practices like dowry, alcoholism etc.
  • Gender Equity – SHGs empowers women and inculcates leadership skill among them. Empowered women participate more actively in gram sabha and elections.
  • There is evidence in this country as well as elsewhere that formation of Self-Help Groups has a multiplier effect in improving women’s status in society as well as in the family leading to improvement in their socio-economic condition and also enhances their self-esteem.
  • Pressure Groups – their participation in governance process enables them to highlight issues such as dowry, alcoholism, the menace of open defecation, primary health care etc and impact policy decision.
  • Voice To Marginalized Section– Most of the beneficiaries of government schemes have been from weaker and marginalized communities and hence their participation through SHGs ensures social justice.
  • Financial Inclusion – Priority Sector Lending norms and assurance of returns incentivize banks to lend to SHGs. The SHG-Bank linkage programme pioneered by NABARD has made access to credit easier and reduced the dependence on traditional money lenders and other non-institutional sources.
  • Improving efficiency of government schemes and reducing corruption through social audits.
  • Alternate Source Of Employment – it eases dependency on agriculture by providing support in setting up micro-enterprises e.g. personalised business ventures like tailoring, grocery, and tool repair shops.
  • Changes In Consumption Pattern – It has enabled the participating households to spend more on education, food and health than non-client households.
  • Impact on Housing & Health – The financial inclusion attained through SHGs has led to reduced child mortality, improved maternal health and the ability of the poor to combat disease through better nutrition, housing and health – especially among women and children.
  • Banking literacy – It encourages and motivates its members to save and act as a conduit for formal banking services to reach them.

Weaknesses of SHGs

  • Though there has been social empowerment of the poor, the economic gain to bring about a qualitative change in their life has not been satisfactory.
  • Members of a group do not come necessarily from the poorest families.
  • There is a lack of qualified resource personnel in the rural areas who could help in skill upgradation or acquisition of new skills by group members. Further, institutional mechanisms for capacity building and skill training have been lacking.
  • Many of the activities undertaken by the SHGs are still based on primitive skills related mostly to primary sector enterprises. With poor value addition per worker and prevalence of subsistence level wages, such activities often do not lead to any substantial increase in the income of group members.
  • Lack of resources and means to market their goods.
  • Poor accounting practices and incidents of misappropriation of funds.
  • SHGs are heavily dependent on their promoter NGOs and government agencies. The withdrawal of support often leads to their collapse.

Challenges

  • Lack of rural banking facilities – There are about 1.2 lakh bank branches and over 6 lakh villages. Moreover, many public sector banks and micro-finance institutions are unwilling to provide financial services to the poor as the cost of servicing remains high.
  • Lack of knowledge and proper orientation among SHG-members to take up suitable and profitable livelihood options.
  • Patriarchal mindset – primitive thinking and social obligations discourages women from participating in SHGs thus limiting their economic avenues.
  • Sustainability and the quality of operations of the SHGs have been a matter of considerable debate.
  • Only a minority of the Self-Help Groups are able to raise themselves from a level of micro-finance to that of micro-entrepreneurship.
  • No Security – The SHGs work on mutual trust and confidence of the members. The deposits of the SHGs are not secured or safe

Measures to Make SHGs Effective

  • Positive Attitude – Government functionaries should treat the poor and marginalized as viable and responsible customers and as possible entrepreneurs.
  • The Government should play the role of a facilitator and promoter, create a supportive environment for the growth and development of the SHG movement.
  • Expanding SHG Movement to Credit Deficient Areas of the Country – such as Madhya Pradesh, Rajasthan, States of the North-East.
  • Extension of Self-Help Groups to Urban/Peri-Urban Areas – efforts should be made to increase income generation abilities of the urban poor as there has been a rapid rise in urbanisation and many people remain financially excluded.
  • Rapid expansion of financial infrastructure (including that of NABARD) and by adopting extensive IT enabled communication and capacity building measures in these States.
  • Need Based Approach – Commercial Banks and NABARD in collaboration with the State Government need to continuously innovate and design new financial products for these groups.
  • Monitoring – Need to establish a separate SHG monitoring cell in every state. The cell should have direct links with district and block level monitoring system. The cell should collect both quantitative and qualitative information.

SHG Movement In India 

  • Formation of SHGs for savings and credit and their linkage to commercial banks was initiated in India by MYRADA (Mysore Resettlement and Development Agency), an NGO, in the mid-1980s.
  • However, SHGs as a tool to address poverty became significant only when the Reserve Bank of India (RBI) issued a circular in 1992 to link about 500 groups under the NABARD-SHG bank linkage pilot program.
  • This success has led to mainstreaming of SHGs into the financial landscape and especially the Indian banking system, with about 94 million poor linked with banks through 7.5 Million SHGs, availing them of collateral-free credit.
  • As a part of the poverty alleviation measures, the Government of India launched the Swarnjayanti Gram Swarozgar Yojna (SGSY) in April 1999 where the major emphasis is on SHG formation, social mobilization and economic activation through micro-credit finance
  • This success led to the genesis of a massive community mobilization initiative by the Government of India as National Rural Livelihoods Mission (NRLM) in 2011



300 Key sentences for Pub Ad

Use this sentence or idea while writing answer on woodrow wilson.You can also make a diagram on the same  The politics/administration distinction its

Blaksburg Manifesto

Refounding Public Administration (Wamsley et al., 1990) was a pioneering publication in the field of U.S. public administration. It was one of the ea

MIS

What is MIS? MIS is the use of information technology, people, and business processes to record, store and process data to produce information that de

Organisation and Methods (O & M)

Organisation and Methods (O & M) The Meaning of O and M-The O and M is an abbreviation for Organization and Methods’. O & M work means revie

Delegated Legislation

In order to reduce pressure on parliamentary time acts of parliament often give Government Ministers or opt per authorities the power to regulate admi

Administrative Tribunals

Administrative tribunals differ from the ordinary courts in two things, their constitution and procedure. As regards their composition they consist of

Dicey on Administrative Law

According to Dicey, Administrative Law is that portion of a nation’s legal system which determines the legal status and liabilities of all state off

Content and process theories of Motivation

Motivation theories We can distinguish between contentand processmotivation theories. Content theories focus on WHAT, while process theories focus o

Contingency Approach to Management

The ‘Contingency Approach to Management’ is relatively a new approach to manage­ment. It is an extension of the system approach. The basic idea o

New Public Management (NPM)

The term New Public Management (NPM) emerged in the beginning of the 1990s in response to the challenges of   globalization, international compe

Development Administration: Concept and Features

The essence of development administration is to bring about change through integrated, organised and properly directed governmental action. In the rec

CHRIS ARGYRIS

Chris Argyris was basically a psychologist who studied organisation from the stand point of psychology. He has dwelt on length on the social and psyc

William Ouchi’s Theory Z of Motivation: Features and Limitations!

William Ouchi’s Theory Z of Motivation: Features and Limitations! William Ouchi developed Theory Z after making a comparative study of Japanese and

Scientific Management Movement

Scientific Management Movement Management is the art of getting things done. There have been two important events in history which influenced the natu

Contribution of Administration Thinkers.

Here we are giving the Significant Works and Ideas of Administrative Thinkers which will help the candidates. Public Administration Thinkers | Adminis

Salient features of Indian Constitution

The Constitution of India is considered as a distinctive constitution around the globe. It is the largest written liberal democratic constitution of t

Bureaucracy and development

Bureaucracy as an organization is expected to play a pivotal role, in process of development. The concept of Development Administration had originated

Political culture

POLITICAL CULTURE: Political culture can be defined as “The orientation of the citizens of a nation toward politics, and their perceptions of politi

Constitutionalism

In the present post, we will briefly understand the definitions relating to constitution, constitutional law, constitutionalism and metaconstitution.

Multiple Regulatory Bodies in India – Issues & Suggestions

Regulatory body is an organization set up by the Government to monitor, guide and control a particular sector such as banking, insurance, education

Pert and CPM

Project management can be understood as a systematic way of planning, scheduling, executing, monitoring, controlling the different aspects of the proj

O and M Working in India

Organisation and Methods (O & M) The Meaning of O and M-The O and M is an abbreviation for Organization and Methods’. O & M work means revie

PPP model of Indian government-Examples

Some of the successful or failure examples of PPP models of Indian government are:- CASES OF SUCCESSFUL PPP MODELS: 1.) IN TRANSPORT SECTOR: A.) SECON

Riggs model of Comparative Public Administration

Topics Covered Fred Riggs Tools Agraria – Industria Model :Fred Riggs Fused Prismatic Diffracted Model ( Fred Riggs) Prismatic Sala Model( Fred Rigg

HERBERT A. SIMON

Topics covered Decision-Making School Of Thought Attack On ‘Proverbs’ Of Administration Specialization, Unity Of Command And Span Of Contr

Comparison of Human Relations School with the Classical School

Comparison of Human Relations School of Thought with the Classical School Human Relations Theory of George Elton Mayo is basically built upon the succ

Elton Mayo

Elton Mayo  The development of the human relations theory can be traced back to the contributions of the Hugo Munster Berg and Elton Mayo and his col

Critical Appraisal of Theory of Principles (or Classical Theory)

Classical school Public Administration The thinking in the Classical School of thought which believes in organisational principles was influenced by t

Can you explain ‘Civil Services Activism’ in India with examples?

Civil services’ activism includes all or any of those proactive steps which are taken by civil servants to make the system/administration more peopl

Vroom’s Expectancy Theory

Vroom’s Expectancy Theory was proposed by Victor. H. Vroom, who believed that people are motivated to perform activities to achieve some goal to th

Chester Barnard

Topics covered About Chester Barnard Three elements in an organization Contribution- Satisfaction Equilibrium General and Specific Inducements Positio

Difference Between Fiscal Policy and Monetary Policy

The economic position of a country can be monitored, controlled and regulated by the sound economic policies. The fiscal and monetary policies of the

Monetary Policy Committee

The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016,  to provide for a statutory and institutionalised framework

Mary Parker Follet (1866-1933).

 Ideas of Mary Parker Follet’s are a bridge between the classical school of thought and the Behavioural School of Thought. She gave a socio-psy

ELTOM MAYO- First enquiry

George Elton Mayo is considered as one of the pioneers of the human relations movement. Elton Mayo advocated a humanistic not mechanistic employer-e

MCGREGOR’S THEORY X and theory Y

Introduction  Douglas Mcgregor is a behaviorist and social psychologist of repute. He is a strong believer in the potentialities of human beings in c

MASLOW’S THEORY OF MOTIVATION

MASLOW’S THEORY OF MOTIVATION Maslow ‘in his classic paper ‘A Theory of Human Motivation’ published in 1943 outlined an overall th

NEW PUBLIC ADMINISTRATION

NEW PUBLIC ADMINISTRATION New Public Administration is an anti-positivist, anti-technical, and anti-hierarchical reaction against traditional public a

APPROACHES OF COMPARATIVE PUBLIC ADMINISTRATION

APPROACHES OF COMPARATIVE PUBLIC ADMINISTRATION APPROACHES OF COMPARATIVE PUBLIC ADMINISTRATION Ideal or Bureaucratic Approach Bureaucratic specifica

CURRENT STATUS OF COMPARATIVE PUBLIC ADMINISTRATION

After the decline of the comparative administration group (CAG) in the early 1970’s,there was a lull in this field due to several factors like t

Budgetary Process

The budget process in India, like in most other countries, comprises  four distinct phases. Budget formulation: the preparation of estimates of expen

FRBM Act

The FRBM Act is a fiscal sector legislation enacted by the government of India in 2003, aiming to ensure fiscal discipline for the centre by setting t

Self Help Groups

Self Help Groups (SHG) are mentioned in the GS Paper 2 as per the latest UPSC Mains Syllabus. SHG related questions can also be expected in Prelims as

Anti Development thesis.

After the WWII, European reconstruction was undertaken under ‘Marshall Plan’ to rebuild war-devastated economies of European countries. This becam

Budgetary procedure in India

The budgetary procedure in India involves four different operations that are Preparation of the budget Enactment of the budget Execution of the budget

Controller General of Accounts

Duties and Functions of Controller General of Accounts (CGA) The information regarding accounts of the union government are released / disseminated by

Accounts and Audit

Accounts Francis Oakey defines the term as “Accounting is the science of producing promptly and presetting clearly the facts relating to financial c

Monetary Policy of India 

Monetary Policy of India   You might have heard of the term Monetary Policy in Economy class. Recently there were many changes in the way Monetar

ADMINISTRATIVE LAW – Meaning,Nature and Scope

Administrative law is the body of law that governs the activities of administrative agencies of the government which comprise of rule making or legi

Dicey on Administrative Law

According to Dicey, Administrative Law is that portion of a nation’s legal system which determines the legal status and liabilities of all state off

Delegated Legislation

In order to reduce pressure on parliamentary time acts of parliament often give Government Ministers or opt per authorities the power to regulate admi

ADMINISTRATIVE TRIBUNAL

With the acceptance of Welfare ideology, there was a mushroom growth of public services and public servants. The courts, particularly the High Courts

Tribunals in India

Tribunals were added in the Constitution by Constitution (Forty-second Amendment) Act, 1976 as Part XIV-A, which has only two articles viz. 323-A and

Growth of Administrative Law in India

The term Rule of Law of got from French phase ‘la principle de legalite’ which implies the principle of legality. It refers to an administration i

STRONG STATE VERSUS THE MARKET DEBATE:

STRONG STATE VERSUS THE MARKET DEBATE: There has been a constant debate as to what shall be the instrumental influencing factor for the economic arran

Concept of Development

Concept of Development Development is quite dynamic concept. It is ever changing. The concept of development is neither new nor old. It has been in ex

Impact of Liberalization on Administration in Developing Countries

Impact of Liberalization on Administration in Developing Countries Liberalisation means relaxation of government controls in the spheres of economic a

Self Help Groups(women)

What is a self-help group (SHG)? Self-Help Groups are informal associations of people who choose to come together to find ways to improve their living

Critic of Anti-Development Thesis

There is a large body of works which are critical of post-development theory and its proponents. It has been noted that post-development theory sees a

Anti-Development Thesis

Anti-Development Thesis After the WWII, European reconstruction was undertaken under ‘Marshall Plan’ to rebuild war-devastated economies of Europe

Dichotomy

Dichotomy The Politics-administration dichotomy is a theory that constructs the boundaries of public administration and asserts the normative relation

Current Status of Comparative Public Administration

Current Status of Comparative Public Administration The contemporary comparative public administration is concerned with the complexities of social ch

Comparative Public Administration

COMPARATIVE PUBLIC ADMINISTRATION DEFINITION Comparative public administration is defined as the revise of administrative systems in a comparative fas

Fredrick Taylor

Fredrick Taylor At the turn of the 20th century, the American engineer, Frederick Winslow Taylor, proposed scientific methodologies to improve the pro

Woodrow Wilson Politics-Administration Dichotomy

TheWoodrow Wilson Politics-administration dichotomy is a theory that constructs the boundaries of public administration and asserts the normative rel

Sociology lecture 2 by ILA TRIPATHI

Sociology lecture 2 by ILA TRIPATHI Link to the class: “https://www.youtube.com/watch?v=_ZGF8DdR_Ag” Facebook Twitter Google+ Pinterest Li

Minnowbrook Conference-III

Minnowbrook Conference-III The Academic-Practitioner RelationshipThis conference took place during September, 2008. It was chaired by Rosemary O’Lea

Procedure Established by Law vs Due Process of Law

In this post we shall see two important terms often cited in Supreme Court Judgments – Procedure Established by Law and Due Process of Law – thei

MOTIVATION

What is Motivation? Motivation is the answer to the question “Why we do what we do?”. The motivation theories try to figure out what the “M” i

NEW PUBLIC-ADMINISTRATION

Introduction During 1960s the American society was in dismay and the citizens were full of grievances. In such a scenario the scholars got together to

Human relation theory/ELTON MAYO

Human relation theory/ELTON MAYO -This theory came as a reaction to the classical approach, which stressed on formal structure. -The classical school

SCIENTIFIC MANAGEMENT(FREDRICK TAYLOR)

SCIENTIFIC MANAGEMENT INTRODUCTION 19TH century was the period of industrial revolution and there was an expansion of business. This led to new proble

PUBLIC CHOICE APPROACH

Public Choice Approach  Public choice approach is the application of economics in the study of public administration. This approach is advocated by C

MARRY PARKER FOLLET

Mary Parker Follet Introduction She is regarded as a bridge between classical approach and human relation – behavioral approach. She was the first o

WOODROW WILSON

INTRODUCTION Woodrow Wilson was an American president and is considered to be the father of public administration due to his pioneering contribution i

Send this to a friend