Inclusive growth via SHGs & telcos …A KUMAR & R PRASAD
THE government has rightly chosen more inclusive and faster growth as the goal of the Eleventh Plan. However, with the current pace and pattern of development, it is evident that even achieving the Common Minimum Programme targets will be a distant reality for India. Though total literacy rate has increased from 52% in 1991 to 66% in 2001, 46% of women and 39% of all adults are illiterate. Similarly, while expectation of life at birth is 63.9 (male) and 66.9 (female), 17% of our population are not likely to survive up to 40 years. This article proposes a new approach to inclusive growth utilising the success story of telecom on the one hand and microcredit on the other.
The movement for financial inclusion has been one of the real hopes for inclusive growth. The poor and the excluded have successfully organised themselves into 25 lakh self-help groups (SHGs). At an average of 12 members per SHG, and an average family size of five members, the total population touched by SHGs is of the order of 15 crore. Most of these SHGs are registered with specific names and possess a bank account. They have established systems of viable monthly financial management that include routine deposits and rules for inter-loaning and repayment.
Yet there are several challenges in the growth of SHGs. The SHGs lack connectivity at block, district and state level for large scale impact. The proportion of SHGs engaged in viable commercial activity is low compared to the SHGs engaged in non-viable or consumption-oriented activity. Of the SHGs engaged in commerce, the proportion engaged in off-farm activities is low. And the working of the SHGs does not directly offer enough scope for social empowerment of the marginalised.