In a short span of time National Rural Employment Guarantee Act (NREGA) emerged as one of most profound government scheme for addressing the socio-economic plights of poor and marginalized rural workforce and infrastructure. NREGA introduced the finest example of cash for work model in India with some distinctness but same rudimentary propositions like some cash transfer programmes in other countries; Oportunidades (Mexico), Social Protection Network(Nicargua), Bolsa Escola and PETI(Brazil), Family Assignment Programme(RAF-Honduras), Chile Solidario (Chile) and Programme of Advancement through Health and Education(Jamaica).
These all implementation are in respective fields and making choices available to the poor beneficiaries.The NREGA evolved out of a political response to relentless people’s movement and the articulated needs of rural workers; indeed civil campaigns has been playing crucial role in its enactment and further in their functioning.
The NREGS is the first employment generation Programme in the country that holds socio-economic rights in a statutory framework and paves a comprehensive nexus between the mass rural workforce and the state authority which layout not only the NREGS albeit also a solid stride of democratic governance. It must be an exaggeration to expect from the partial success of this rural employment Programme to address all the hurdles of vast rural economy even though it’s a universal truth that NREGS has increased the bargaining power of rural farm and other workforce.
On many front NREGS have enhanced the prospect of revivals in rural economy but magnitude of its performances has been found uneven through region wise evaluation of its impacts on respective milieu. Despite this NREGS involves in creating productive assets, enhancing purchasing power, strengthening the Panchayats (Institution of local self governance) besides encouraging new height of transparency.
With broadening the horizons of NREGS it also raised the concern for medium and small marginal farmers as they are coping with higher and competitive labour costs for the farming; surely it’s a positive outlook in many ways but the deficiency of a rational support price, inclusive institutional credit facilities. Crop insurance, subsidies on basic inputs, cross border trade management etc are some haunting issues which jeopardizing the conditions of farmers.
This is a major issue before the government (Both the Central and State) to enabled these farmers through additional financial stimulous by that they would be able to sustain fetching the farm labourers in competitive scenario of rural labour market.
Governments must show better accountability to innovate and broaden the NREGS Programme to the other productive sectors which would further left the assumption that all poor are ready and willing to engage in physical work only. Such innovated NREGS Programme would be entrusted with the more meticulous and varied opportunities to lessen the vulnerability of literate rural unemployed. Implementation of this innovated employment guarantee Programme may come out with various challenges. The potential beneficiaries are expected to be the crucial issue that would be needed an innovative proposition in handling by the policy makers and governments as well.
Implementation of last fifty years of development programmes could make some sense in forming amicable solution of people’s entitlement that also broaden the stimulus and meet the human and social needs of diversified population.
First of all it’s most imperative to expand the existing works under NREGS and make enabling provisions to employing educated unemployed persons as support staff for the NREGS which would also fulfilled the shortage of staffs in projects. There also existed huge chances of spurting entrepreneurship with absorbing literate workforce for more useful productions which would left with finer implications like checking the outbound migration to urban areas; so NREGS could be used to maintain a fine balance and would retrieve the lost glory of Indian villages.
It may be unanimous view at least in proposition that NREGS bears the great entitlement with large pools of marginalized rural workforce that seems nearer to the Amartya Sen’s entitlement theory ‘That lack of access to food (Goods and Services) rather than failure in food supply leads to famines’ necessitated the importance of entitlement; fortunately which is core of NREGS programme.
NREGS holds very healthy composition of workforce; fifty percent of workers are women and rest of workforce consisted with majority of scheduled castes and scheduled tribes, so its aim of socio-economic empowerment is much focused and well structured. Despite having many goods things in its wish list, this programme suffering from routinely violation by authorities which fudging its proper success at execution level.
Delay of payment, absence of work in stipulated time, late redressal of grievances are some of alarming happening in the execution of NREGS; social scientist and activist like Jean Dreeze have made excellent effort to unleash the various payments related discrepancies in Jharkhand. Today it’s imperative to make NREGS work efficiently and wipeout its functional maladies rather than blindly amending it.Attempts of Ministry of Rural Development to craft the format of “NREGA2” should be introduced only with a long range of debates that must involves its core constituents and ensure the basic foundation of NREGA more strengthened. The focus should be concentrated on demand based availability within the stipulated time frame without any frills and its further extension of 100 days work into a regular mode of job. Indeed with great commitments and vision this target is achievable.
Atul Kumar Thakur
31stAugust 2009, New Delhi
atul_mdb@rediffmail.com
Showing posts with label Livelihood. Show all posts
Showing posts with label Livelihood. Show all posts
Monday, August 31, 2009
Thursday, July 2, 2009
In Delhi or Waiting for Delhi
Being the capital of a billion plus size nation, it’s not surprising that Delhi draws a lot of attention from various quarters and spellbound the viewer who shows the concern with this vibrant city. Since the age old Delhi remains habitated and dominated by the so called outsiders; it may be a by chance phenomenon but it did happen in same manner.
In the view of top brass scholars from different fields, Delhi possessed the topnotch position due to its vibrant and consistent intellectual tradition. Off course there are many specialties in Delhi that could be found without making any hectic efforts. So, there should be no amazement if peoples across from the world are moving towards Delhi to enriched with such specialty but here my concern is towards some abnormal sort of craze towards Delhi and other metro cities of India which being arise from desperateness of rural workforce.
The prime reason of such escaping mentality is the improper consumption of workforce in rural areas because lack of proper mode of productions; so catching and utilizing best of their potential remains a distant dream so far. In my recent visits to several north Indian states I found the craze of escapement from their homeland among many peoples with whom I chatted; indeed most of them don’t do this in fantasy instead they are compelled for survival.
But among them I found some negative trend like the plan of short duration migration to cities that they alone think would enable them for bigger status in social hierarchy and street smart life. Such unplanned moves by these types of migrants are absolutely unhealthy for the prospects of their own original identity and where they fled mindlessly.
The real ironies is there living condition which still get inhuman sort of basic facilities in absence of regular income and social security in bigger cities. My real concern is with the grief of such migrants who lost both their cultural and emotional affiliation as well as the economic security.
Do only government’s facilities are inadequate so such state of affairs aroused? My reply will be partial yes because there are several factors like low investment (private as well), weak infrastructures, disguised unemployment, irregular opportunities, bandwagon effects etc are equally deteriorating their plight. Second categories of migrants are students whose rates are exceptionally high in state like Bihar; most of them have valid reason to fly in absence of proper higher educational facilities in their nearby areas in their state.
A state like Bihar must have proper and immediate university upgradation to check out the relentless exodus of their talent pool. Even though the level of governance has considerably improved in state but education sector is still lagging behind from actual paradigms.
Decentralization of central planning has immense potential for rural development, if their enactment will proceed in fair manners, many hurdles would be short; indeed which would benefit the rural hinterland most. So, with a sound rural economy Delhi would become able to welcome its new entrants in healthy manners and abundant civic facilities. We have a strong democracy with the sound constitutional base; we have to pick and make more resonant the two directive principles I. Upliftment of rural economy and II. Decentralization of power; to strengthen both the rural and urban area in equal manners. Hope we will see reverse trend in migration from urban to rural areas in next decades.
Atul Kumar Thakur
New Delhi, IInd July 2009
atul_mdb@rediffmail.com
In the view of top brass scholars from different fields, Delhi possessed the topnotch position due to its vibrant and consistent intellectual tradition. Off course there are many specialties in Delhi that could be found without making any hectic efforts. So, there should be no amazement if peoples across from the world are moving towards Delhi to enriched with such specialty but here my concern is towards some abnormal sort of craze towards Delhi and other metro cities of India which being arise from desperateness of rural workforce.
The prime reason of such escaping mentality is the improper consumption of workforce in rural areas because lack of proper mode of productions; so catching and utilizing best of their potential remains a distant dream so far. In my recent visits to several north Indian states I found the craze of escapement from their homeland among many peoples with whom I chatted; indeed most of them don’t do this in fantasy instead they are compelled for survival.
But among them I found some negative trend like the plan of short duration migration to cities that they alone think would enable them for bigger status in social hierarchy and street smart life. Such unplanned moves by these types of migrants are absolutely unhealthy for the prospects of their own original identity and where they fled mindlessly.
The real ironies is there living condition which still get inhuman sort of basic facilities in absence of regular income and social security in bigger cities. My real concern is with the grief of such migrants who lost both their cultural and emotional affiliation as well as the economic security.
Do only government’s facilities are inadequate so such state of affairs aroused? My reply will be partial yes because there are several factors like low investment (private as well), weak infrastructures, disguised unemployment, irregular opportunities, bandwagon effects etc are equally deteriorating their plight. Second categories of migrants are students whose rates are exceptionally high in state like Bihar; most of them have valid reason to fly in absence of proper higher educational facilities in their nearby areas in their state.
A state like Bihar must have proper and immediate university upgradation to check out the relentless exodus of their talent pool. Even though the level of governance has considerably improved in state but education sector is still lagging behind from actual paradigms.
Decentralization of central planning has immense potential for rural development, if their enactment will proceed in fair manners, many hurdles would be short; indeed which would benefit the rural hinterland most. So, with a sound rural economy Delhi would become able to welcome its new entrants in healthy manners and abundant civic facilities. We have a strong democracy with the sound constitutional base; we have to pick and make more resonant the two directive principles I. Upliftment of rural economy and II. Decentralization of power; to strengthen both the rural and urban area in equal manners. Hope we will see reverse trend in migration from urban to rural areas in next decades.
Atul Kumar Thakur
New Delhi, IInd July 2009
atul_mdb@rediffmail.com
Vanishing Villages
Villages constitute pivotal importance in Indian context unlike the counterpart western countries where hardly it symbolizes same connotation at cultural and social level. Since the time immemorial Indian villages were getting the distinction for their centralized role in national consolidation and unification. As a functional unit villages possessed their own set of characteristics which essentially differs it from urban composition.
But in recent time, such unique characteristics has up fronting severe challenges from burgeoning urban center in terms of leverages which have very rare presence in rural areas.In numbers, Indian villages has strength of nearby half million, but due to adverse planning almost two third of Indian population is compelled to live with marginalized basic facilities.
Such discrimination is completely unjustifiable since its forcing rural landscape towards subordinate position; indeed it’s terrible from any rational point of view. Problems are rambling very fast so their ramifications which being easily evident by visiting a village and forming own perception or relying on various disappointing data’s in this regard.
In recently held parliamentary election, very low turn out of voting (42%) in two major state U.P and Bihar creates antipathy towards electoral awareness; but truth is something more grimmer as it is not occurred solely because of foregone awareness instead it is consequence of mass exodus from these areas to big cities and metropolises in absence of regular opportunity and adequate means of survival.
Its matter of fact that such pattern of migration is so abrupt that it is far distant from being called the upward mobility; which effects the enhancement of position; instead such occurrence is caused by the deficient material state in their homeland. Crises prevail at organized and unorganized level of employment potential, by the effect educated, semi educated, and uneducated (including landless laborers) faces challenging scenario at urban places in their own set of capability and fortune which further impulses their psyches to alienate from their roots.
Such happenings are absolute case of subjugation before the unfortunate state of affairs.These sorry situations are way heading because the improper disbursement of industries and weak entrepreneurial activities in rural areas which further thicken the scale of opportunity and cause for living in these areas.
It’s need of hour at policy level to boost rural economy, and save it from the disgrace of parasite ness in terms of human resource management.Indeed social schemes are being functional in rural areas with very fine motives and their positive effects are being quite visible; schemes like NREGS, Mid Day Meal Scheme, Antyodaya Yojana, Old Age Pension, Indira Awas Yojana etc sustaining the plight of weaker sections to an extant.
But there is need of big booster which can grasp not only the illiterate work force butt all sorts of workforce; operationalisation of various services and huge investments at both the government and private level would be the prime impetus.
I mean to say by all the foregoing point that rural economy needs to be transforming from basically being the agro processing majors to a full scale entrepreneurial hub. We have very fine example of China where the government keeps redrawing plan to shape rural emancipation; consequently the situations has considerably changed there now. With appropriating all the urban amenities; new wave sophistication has entered which radicalized the rural picture in China.
PURA (Providing Urban Facilities in Rural Areas) is an ambitious stride by the Government of India for upliftment of rural masses and their socio-economic structure; hope such more plans with their fair and speedy enactment. For a balanced and inclusive growth it’s very essential to save villages not only as a demographic and political unit but as hub of employment generating services. If all these materialize we may be sanguine for its survival.
Atul Kumar Thakur
New Delhi, IInd July 2009
atul_mdb@rediffmail.com
But in recent time, such unique characteristics has up fronting severe challenges from burgeoning urban center in terms of leverages which have very rare presence in rural areas.In numbers, Indian villages has strength of nearby half million, but due to adverse planning almost two third of Indian population is compelled to live with marginalized basic facilities.
Such discrimination is completely unjustifiable since its forcing rural landscape towards subordinate position; indeed it’s terrible from any rational point of view. Problems are rambling very fast so their ramifications which being easily evident by visiting a village and forming own perception or relying on various disappointing data’s in this regard.
In recently held parliamentary election, very low turn out of voting (42%) in two major state U.P and Bihar creates antipathy towards electoral awareness; but truth is something more grimmer as it is not occurred solely because of foregone awareness instead it is consequence of mass exodus from these areas to big cities and metropolises in absence of regular opportunity and adequate means of survival.
Its matter of fact that such pattern of migration is so abrupt that it is far distant from being called the upward mobility; which effects the enhancement of position; instead such occurrence is caused by the deficient material state in their homeland. Crises prevail at organized and unorganized level of employment potential, by the effect educated, semi educated, and uneducated (including landless laborers) faces challenging scenario at urban places in their own set of capability and fortune which further impulses their psyches to alienate from their roots.
Such happenings are absolute case of subjugation before the unfortunate state of affairs.These sorry situations are way heading because the improper disbursement of industries and weak entrepreneurial activities in rural areas which further thicken the scale of opportunity and cause for living in these areas.
It’s need of hour at policy level to boost rural economy, and save it from the disgrace of parasite ness in terms of human resource management.Indeed social schemes are being functional in rural areas with very fine motives and their positive effects are being quite visible; schemes like NREGS, Mid Day Meal Scheme, Antyodaya Yojana, Old Age Pension, Indira Awas Yojana etc sustaining the plight of weaker sections to an extant.
But there is need of big booster which can grasp not only the illiterate work force butt all sorts of workforce; operationalisation of various services and huge investments at both the government and private level would be the prime impetus.
I mean to say by all the foregoing point that rural economy needs to be transforming from basically being the agro processing majors to a full scale entrepreneurial hub. We have very fine example of China where the government keeps redrawing plan to shape rural emancipation; consequently the situations has considerably changed there now. With appropriating all the urban amenities; new wave sophistication has entered which radicalized the rural picture in China.
PURA (Providing Urban Facilities in Rural Areas) is an ambitious stride by the Government of India for upliftment of rural masses and their socio-economic structure; hope such more plans with their fair and speedy enactment. For a balanced and inclusive growth it’s very essential to save villages not only as a demographic and political unit but as hub of employment generating services. If all these materialize we may be sanguine for its survival.
Atul Kumar Thakur
New Delhi, IInd July 2009
atul_mdb@rediffmail.com
Monday, March 23, 2009
Micro finance: A Panacea of Sustenance
Micro finance notionally stand with social aspects of economic requirements for marginal or weaker sections,both at the rural and urban spaces. It caters the micro credit for immediate requirements of initial capital for farming activities as well as for lower scale entrepreneurial activities.It introduced superb social binding over its recipients with it's theoretical aim to promote group effort during the attainment of specific enterprise.
Popularly these groups are known as Self Help Group(SHG) can be regarded as a forward move with community involvement as a key specialty potential in strengthening the social fabrics and further ushering towards the more regulated social development.
Micro finance as a concept reemerged and gained popularity in 1970’s in East Asian and South Asian countries like Philippines , Bangladesh etc: later caused for the social orientation of banking in developing nations. By which affect the formation of rural banking (Gramin Bank) in Bangladesh and India infused immense hope for inclusive development in these countries.
Dr. Muhammad Yunus received accolades and numerous international awards for his extraordinary accomplishment, so much so that many believe that Micro finance as an institution began only in the 1970’s and that too only in Bangladesh. In fact there have been also earlier claim of successes like William Reiffcisen’s village banking movement; another noteworthy was caisse populaire of Alphonse Desjardins in France were amongst the notable instances where considerable improvement was brought in the condition of the extremely disadvantaged peoples.
Such early conceptions were not entirely hypothetical, though all the previous success of Micro financial activities were not operationalised in an organized banking system,so, such initiative were largely remained confined beyond the institutional pattern.
So, seeing huge success of Gramin Bank in Bangladesh under the visionary leadership of Md Yunus and satisfactory success of Indian Gramin Banking (RRBs) in their goal; now this so far untapped sector is drawing fresh insights from commercial banking NBFC and NGOs.Over the years,Micro finance has emerged as promising way to check the poverty and empowering the underprivileged especially Women, Unemployed and Disabled.
In India a measure policy initiative was made by NABARD in 1992,for SHG-Bank linkage as a pilot project which in course of time grown into one of the largest micro finance programme in the world.
IN AN ANOTHER GREAT MOVE:-
The NABARD is planning to start a MFI to take financing to the” poorest of poor”. The venture will be launched in partnership with Commercial Banks(49%) and NABARD(51%). NABARD will also launch a Financial Advising unit to help bring down the high incidence of farmers suicides.
Despite observing high growth of rural credits and other small segments of lending in last decades the formal sector, nevertheless Microfinance accounts for less than 40% of the agriculture and rural credit; these demonic reality still haunts the welfare aim of institutional finance.Another alarming area of concern would be the burgeoning SHG and Microfinancial organizations becoming a favourite hobby horse of the NGO for exorbitant business that is going to be a grave challenge for original conception behind this movement. Most of them fail on all the basic criteria. Such tendencies needs an immediate cure through stringent regulatory mechanism…
Recently the Government is also proposing a legislation by which it will be able to regulate the Micro financial institutions to ensure fair, equitable and ethical practices and democratic functioning but that regulatory checks must be timely implemented before loosing the essence behind this social venture.Legislation also propose a ceiling of Rs50,000 by MFI; which is considerable in rural segments of Micro credit but will not be suffice in enterprise finances. NABARD would be its regulator.
In some more forward move banks must approach to a customized savings products targeting the poor. NGO should assist SHG to usher in flexible savings options too likewise banks and MFI should deliver agricultural seasonal loans with flexible repayment options through groups on a pilot basis.
Here it’s a chance to create a Micro financial promotional agency on the lines of Pali Karma Sahayak Foundation (PKSF) of Bangladesh programmes.Government must consider making NABARD MCID (Micro Credit Innovational Department) an autonomous promotional body. Having lower competitions among MFI is an another area where the India lag behinds from Bangladesh. Here some innovations are needed in Indian financial sector to infuse competition in Micro financial segments.
This is need of hour to innovate the existing products and introduce to some new product lines. Such some products which has called attention in Bangladesh can be also effective in India because of having many common grounds between two countries, some of those are: -
I. Risk Mitigation – As their insurance programmes are community managed on the basis of mutuality, they do not extend cover for risk of a co-variant nature, such as flood cover and crop failure.
II. Flexible Savings – To cope with food insecurity, employment insecurity etc.
III. Agricultural Finance- This product is already exists in India; only it needs more optimization for better needs and outcome.
IV. Larger Individual Enterprise Loans- This segment has drawn attention from policy makers like Dr Arjun Sengupta, chairmen, National Commission for Enterprise in the Unorganized Sector (NCEUS) expressed his views “If Micro finance properly nurtured and strengthened the unorganized non farm sector can be a pertinent tool of employment creation, poverty reduction and faster inclusive growth and would go a long way in closing the widening devide between urban and rural India.
NCEUS targeted fund corpus of 1,000 crores by 2011-12,target group for this corpus are small enterprise and the unorganized sector covering non farm activities employing less than 10 workers, primarily those with investment in plant and machinery not exceeding Rs5 lakh (excluding land and building at 2004-05 prices) if engaged in manufacturing and investment in plant machinery not exceeding Rs 2 lakh if engaged in non manufacturing.
However the upper limit of financing by the fund would be for enterprise with investment in plant and machinery not exceeding Rs25 lakh if engaged in manufacturing and investment in equipment not exceeding Rs 10 lakh if engaged in non manufacturing activities. As the commission cites the third census of SSI(2001-02);98% of all the manufacturing non agricultural small enterprise employed less than 10 works with an average capital investment of Rs1.47 lakh, quite a good number of them are also engaged in service business and trade.
Despite having all such arrangements, they hardly received about three percent of gross bank credit during 2002-03 to 2004-05 against the RBI priority sector plan that Micro enterprises should get 60% of total credit to SSI, they have been getting just about 40% and this had skidded to 34% in 2004-05.Even more surprising within the non farm, unorganized sector, the most vulnerable group is the smaller size micro enterprises with investment up to Rs 5lakh.
Here it will be quite imperative to channelize better policy options to minimize the suffering of this sector and enabled them for more healthy functioning. It could be a major area of employment generation, which follows by its stabilizing factor to domestic economy, So Government must also leveraged corporate to enter in Micro financial sector in more efficient and regulated manner-away from exorbitant aim of business.
Present presence of Corporate is still standing in obscure proportion, hope they will more motivated in near future with obeying the regulatory norms.In recent years Indian financial institution specially the Regional Rural Banks, some commercial Banks and to some extant Co-operative Banks displayed healthy trends in delivery of Micro credits in rural areas for farming and other employment generation programme. With merger and consolidation, RRBs being able to systematize restructuring of its business and healing from previous loss, now strengthening RRB; would indeed influence much stoutly to Micro finance programmes in near future.
Its huge branch network and strong presence in rural areas would be the most strategic factor in rural credit disbursement.Having tuned negatively for their poor financial structure and inefficient management system ; Co-operative Banks lost much of its reputation as pioneer of Micro financial movements.
Though implementation of Vaidyanathan committee is infusing some new hopes for their strategic revival. If it will able to regain its potential glory then, of course the task of mushrooming productive Micro credits would become much smooth.In present circumstances of financial meltdown, it would be desirable for Indian policy makers to stressed more on domestic financial features ; because it’s sheer domestic demand which is catalyst in sustaining the growing economy.
Hope the Micro financial programme along with other Priority sector programmes would get more attentions from policy front irrespective of any political rotations...besides RBI and NABARD have to keep vigil alive to not let deviate the social orientation of Microfinance for exorbitant greed of business by Corporates.
Atul Kumar Thakur
New Delhi
23rd March2009
atul_mdb@rediffmail.com
Popularly these groups are known as Self Help Group(SHG) can be regarded as a forward move with community involvement as a key specialty potential in strengthening the social fabrics and further ushering towards the more regulated social development.
Micro finance as a concept reemerged and gained popularity in 1970’s in East Asian and South Asian countries like Philippines , Bangladesh etc: later caused for the social orientation of banking in developing nations. By which affect the formation of rural banking (Gramin Bank) in Bangladesh and India infused immense hope for inclusive development in these countries.
Dr. Muhammad Yunus received accolades and numerous international awards for his extraordinary accomplishment, so much so that many believe that Micro finance as an institution began only in the 1970’s and that too only in Bangladesh. In fact there have been also earlier claim of successes like William Reiffcisen’s village banking movement; another noteworthy was caisse populaire of Alphonse Desjardins in France were amongst the notable instances where considerable improvement was brought in the condition of the extremely disadvantaged peoples.
Such early conceptions were not entirely hypothetical, though all the previous success of Micro financial activities were not operationalised in an organized banking system,so, such initiative were largely remained confined beyond the institutional pattern.
So, seeing huge success of Gramin Bank in Bangladesh under the visionary leadership of Md Yunus and satisfactory success of Indian Gramin Banking (RRBs) in their goal; now this so far untapped sector is drawing fresh insights from commercial banking NBFC and NGOs.Over the years,Micro finance has emerged as promising way to check the poverty and empowering the underprivileged especially Women, Unemployed and Disabled.
In India a measure policy initiative was made by NABARD in 1992,for SHG-Bank linkage as a pilot project which in course of time grown into one of the largest micro finance programme in the world.
IN AN ANOTHER GREAT MOVE:-
The NABARD is planning to start a MFI to take financing to the” poorest of poor”. The venture will be launched in partnership with Commercial Banks(49%) and NABARD(51%). NABARD will also launch a Financial Advising unit to help bring down the high incidence of farmers suicides.
Despite observing high growth of rural credits and other small segments of lending in last decades the formal sector, nevertheless Microfinance accounts for less than 40% of the agriculture and rural credit; these demonic reality still haunts the welfare aim of institutional finance.Another alarming area of concern would be the burgeoning SHG and Microfinancial organizations becoming a favourite hobby horse of the NGO for exorbitant business that is going to be a grave challenge for original conception behind this movement. Most of them fail on all the basic criteria. Such tendencies needs an immediate cure through stringent regulatory mechanism…
Recently the Government is also proposing a legislation by which it will be able to regulate the Micro financial institutions to ensure fair, equitable and ethical practices and democratic functioning but that regulatory checks must be timely implemented before loosing the essence behind this social venture.Legislation also propose a ceiling of Rs50,000 by MFI; which is considerable in rural segments of Micro credit but will not be suffice in enterprise finances. NABARD would be its regulator.
In some more forward move banks must approach to a customized savings products targeting the poor. NGO should assist SHG to usher in flexible savings options too likewise banks and MFI should deliver agricultural seasonal loans with flexible repayment options through groups on a pilot basis.
Here it’s a chance to create a Micro financial promotional agency on the lines of Pali Karma Sahayak Foundation (PKSF) of Bangladesh programmes.Government must consider making NABARD MCID (Micro Credit Innovational Department) an autonomous promotional body. Having lower competitions among MFI is an another area where the India lag behinds from Bangladesh. Here some innovations are needed in Indian financial sector to infuse competition in Micro financial segments.
This is need of hour to innovate the existing products and introduce to some new product lines. Such some products which has called attention in Bangladesh can be also effective in India because of having many common grounds between two countries, some of those are: -
I. Risk Mitigation – As their insurance programmes are community managed on the basis of mutuality, they do not extend cover for risk of a co-variant nature, such as flood cover and crop failure.
II. Flexible Savings – To cope with food insecurity, employment insecurity etc.
III. Agricultural Finance- This product is already exists in India; only it needs more optimization for better needs and outcome.
IV. Larger Individual Enterprise Loans- This segment has drawn attention from policy makers like Dr Arjun Sengupta, chairmen, National Commission for Enterprise in the Unorganized Sector (NCEUS) expressed his views “If Micro finance properly nurtured and strengthened the unorganized non farm sector can be a pertinent tool of employment creation, poverty reduction and faster inclusive growth and would go a long way in closing the widening devide between urban and rural India.
NCEUS targeted fund corpus of 1,000 crores by 2011-12,target group for this corpus are small enterprise and the unorganized sector covering non farm activities employing less than 10 workers, primarily those with investment in plant and machinery not exceeding Rs5 lakh (excluding land and building at 2004-05 prices) if engaged in manufacturing and investment in plant machinery not exceeding Rs 2 lakh if engaged in non manufacturing.
However the upper limit of financing by the fund would be for enterprise with investment in plant and machinery not exceeding Rs25 lakh if engaged in manufacturing and investment in equipment not exceeding Rs 10 lakh if engaged in non manufacturing activities. As the commission cites the third census of SSI(2001-02);98% of all the manufacturing non agricultural small enterprise employed less than 10 works with an average capital investment of Rs1.47 lakh, quite a good number of them are also engaged in service business and trade.
Despite having all such arrangements, they hardly received about three percent of gross bank credit during 2002-03 to 2004-05 against the RBI priority sector plan that Micro enterprises should get 60% of total credit to SSI, they have been getting just about 40% and this had skidded to 34% in 2004-05.Even more surprising within the non farm, unorganized sector, the most vulnerable group is the smaller size micro enterprises with investment up to Rs 5lakh.
Here it will be quite imperative to channelize better policy options to minimize the suffering of this sector and enabled them for more healthy functioning. It could be a major area of employment generation, which follows by its stabilizing factor to domestic economy, So Government must also leveraged corporate to enter in Micro financial sector in more efficient and regulated manner-away from exorbitant aim of business.
Present presence of Corporate is still standing in obscure proportion, hope they will more motivated in near future with obeying the regulatory norms.In recent years Indian financial institution specially the Regional Rural Banks, some commercial Banks and to some extant Co-operative Banks displayed healthy trends in delivery of Micro credits in rural areas for farming and other employment generation programme. With merger and consolidation, RRBs being able to systematize restructuring of its business and healing from previous loss, now strengthening RRB; would indeed influence much stoutly to Micro finance programmes in near future.
Its huge branch network and strong presence in rural areas would be the most strategic factor in rural credit disbursement.Having tuned negatively for their poor financial structure and inefficient management system ; Co-operative Banks lost much of its reputation as pioneer of Micro financial movements.
Though implementation of Vaidyanathan committee is infusing some new hopes for their strategic revival. If it will able to regain its potential glory then, of course the task of mushrooming productive Micro credits would become much smooth.In present circumstances of financial meltdown, it would be desirable for Indian policy makers to stressed more on domestic financial features ; because it’s sheer domestic demand which is catalyst in sustaining the growing economy.
Hope the Micro financial programme along with other Priority sector programmes would get more attentions from policy front irrespective of any political rotations...besides RBI and NABARD have to keep vigil alive to not let deviate the social orientation of Microfinance for exorbitant greed of business by Corporates.
Atul Kumar Thakur
New Delhi
23rd March2009
atul_mdb@rediffmail.com
Friday, March 13, 2009
Introspecting NREGS
National Rural Employment Guarantee Scheme introduced as fresh employment scheme by the Government of India, which treats employment as a right and the program is conceived to be demand-driven. It will worthwhile to note that NREGS is entirely different in its conception as well as in execution pattern. Essentially it’s a step forward for social inclusion.
NREGS has potential to transform rural socio-economic mode of relations at different levels. Obviously NREGS essentially challenges the prevailing power structures. NREGS is necessarily “inclusive” at the most basic level in economic terms. Partial success of scheme is a sources of optimism. Despite having huge variation in participation in states. NREGS present optimism at national level.
Share Of Women : -
India’s(36.2%) in total rural workforce,48.9% in NREGS,differences-12.7%
Share of SCs-16.2% in total population, 30.9% in NREGS.differences-14.7
Share of STs-8.1% in total population, 24.1% in NREGS, differences-16%
(Sources-NSS 2004,NREGS Report on January 2008,Census 2001)
Participation of women shows inclusive potential of the program NREGS which involves a very fine gender balance which enabling a large number of them for institutional finance. Such involvement of womens in NREGS is likely to be positively reshape the gender configuration. High participation of SC in NREGS is quite natural as they lack access to means of property, their's share are similarly disproportionate among rural laborers and any other employment program of government.
Moreover,such high participation of STs in program is quite amazing. Because neither Geographical nor previous track records with other scheme was so conducive. Huge participation of STs at national level is a very encouraging sign of success for NREGS.
This trend is worth of admiration. Since the initial 200 districts were chosen on the basis of their backwardness and these tend to be tribal dominated areas as well as in many states,so it may not be surprising that STs have been so magnificently working in NREGS at the aggregate state level.Partial success of NREGS does not ensure a rosy path ahead. Institutions and Individuals are rapidly involved in the arena of corruption. The tremendous potential of the scheme is in danger of being wasted in some states.
There is too much scope for introspection to deal with massive corruption. There prevails a very low consciousness among the workers to their rights. Even 30 percent among them are exactly aware about their rights and their entitlement to 100 days of employment per year under the Act. This powerlessness is also due to the absence of any effective grievances redressal system for NREGS.
Effective presence of IT facilities in rural areas and unorganized civil society vitally determined the state of affairs. Weakness of local governance, also substantially affected the successful enactment of NREGS, this case is very strong in Jharkhand where Gram Panchayat elections have not been held since the enactment of 73rd &74th amendments of the constitution.
Jean Dreeze in his introspection of NREGS found some factors, which rapidly ails the system. These are: -
1.A repressive state people
2.Helplessness of working people
3.Lack of system to redress grievances
4.Absence of Gram Panchayats
5.Casual attitude of government
There are some key restraint before the NREGS. These maladies needs immediate checkout by strong measures by Peoples institutions through appropriate technology, skill development, leveraging market and adequate public investment.NREGS is a major source of domestic demand, which is very crucial for Indian Economy in present circumstances to come out from global financial downturn. Now it is time to realize that NREGS is about more than equity, it is also a very useful macroeconomic weapon against the economic slump and recession .
A strong civil society has off course plays very crucial role, though there effects are not alone enough. In a very lucid inquiry; Mihir Shah & Pramathesh Ambasa (Hindu, Sep 8,2008) found the success of NREGS. Social audit in Andhra Pradesh covering 12 million people is a brilliant example of civil society action, enriching mainstream politics.
In Andhra Pradesh, a fine understanding exists between peoples institution like Mazdoor Kisan Shakti Shangthan(MKSS)& Government. Besides this a separate existence of social audit is another favourable condition which enabled Andhra Pradesh to get breakthrough in NREGS implementation.The MKSS led by Aruna Roy, one of architects of NREGS introduced the concept of social audit into development practices nearly two decades ago. But even in Rajasthan, where MKSS started its work could not meet with same achievements to mainstreaming social audits.
A social audits of 17 NREGS Works in five Gram Panchayats of Deoghar district (Jharkhand),conducted on 12-16th October 2008,revealed some alarming facts related to discrepancies in bank payments .Lot of manipulated bank accounts were found which strengthen the chances of corrupt involvement of institutions like bank. So, it raises question marks on bank payments and Direct Cash Transfer(DCT) to cope with the corruption in NREGS.
Before NREGS, Indira Awas yozna(IAY) used to avail the DCT, where its proved inadequate to cope with corruption because biased involvement of government officials and middlemen’s.Situation is absolutely puzzling how to deal fairly with cash transaction during a project. For policy makers, it still remains a distant dream. Indeed DCT system is most improved solution till now; Economist like Arvind Subramanian even regards DCT as the “first best option “to address poverty in India.
Infact there shall be major concern towards growing violence in its path-like tragic death of Tapas Sen ,who immolated himself in Hazaribagh to protest against official harassment.Mode of NREGS functioning raises serious question against the partial functioning of authorities.
Violence during the project are quite rampant .Brutal murders of two NREGS activist (Lalit Mehta and Kameshwar Yadav) during a survey of NREGS initiated by the G.B .Pant Social Science Institute in Palamu and Kodarama districts left a frightening scar over the program.
Still a lot of fight is needed with such oddity to overcome from imposed hurdles. The NREGS has huge potential to enhance socio-economic dynamicism in country which makes alone suffice to makes its utility evident. Let us hope for more breakthrough…
Atul Kumar Thakur
New Delhi
March 2009
atul_mdb@rediffmail.com
NREGS has potential to transform rural socio-economic mode of relations at different levels. Obviously NREGS essentially challenges the prevailing power structures. NREGS is necessarily “inclusive” at the most basic level in economic terms. Partial success of scheme is a sources of optimism. Despite having huge variation in participation in states. NREGS present optimism at national level.
Share Of Women : -
India’s(36.2%) in total rural workforce,48.9% in NREGS,differences-12.7%
Share of SCs-16.2% in total population, 30.9% in NREGS.differences-14.7
Share of STs-8.1% in total population, 24.1% in NREGS, differences-16%
(Sources-NSS 2004,NREGS Report on January 2008,Census 2001)
Participation of women shows inclusive potential of the program NREGS which involves a very fine gender balance which enabling a large number of them for institutional finance. Such involvement of womens in NREGS is likely to be positively reshape the gender configuration. High participation of SC in NREGS is quite natural as they lack access to means of property, their's share are similarly disproportionate among rural laborers and any other employment program of government.
Moreover,such high participation of STs in program is quite amazing. Because neither Geographical nor previous track records with other scheme was so conducive. Huge participation of STs at national level is a very encouraging sign of success for NREGS.
This trend is worth of admiration. Since the initial 200 districts were chosen on the basis of their backwardness and these tend to be tribal dominated areas as well as in many states,so it may not be surprising that STs have been so magnificently working in NREGS at the aggregate state level.Partial success of NREGS does not ensure a rosy path ahead. Institutions and Individuals are rapidly involved in the arena of corruption. The tremendous potential of the scheme is in danger of being wasted in some states.
There is too much scope for introspection to deal with massive corruption. There prevails a very low consciousness among the workers to their rights. Even 30 percent among them are exactly aware about their rights and their entitlement to 100 days of employment per year under the Act. This powerlessness is also due to the absence of any effective grievances redressal system for NREGS.
Effective presence of IT facilities in rural areas and unorganized civil society vitally determined the state of affairs. Weakness of local governance, also substantially affected the successful enactment of NREGS, this case is very strong in Jharkhand where Gram Panchayat elections have not been held since the enactment of 73rd &74th amendments of the constitution.
Jean Dreeze in his introspection of NREGS found some factors, which rapidly ails the system. These are: -
1.A repressive state people
2.Helplessness of working people
3.Lack of system to redress grievances
4.Absence of Gram Panchayats
5.Casual attitude of government
There are some key restraint before the NREGS. These maladies needs immediate checkout by strong measures by Peoples institutions through appropriate technology, skill development, leveraging market and adequate public investment.NREGS is a major source of domestic demand, which is very crucial for Indian Economy in present circumstances to come out from global financial downturn. Now it is time to realize that NREGS is about more than equity, it is also a very useful macroeconomic weapon against the economic slump and recession .
A strong civil society has off course plays very crucial role, though there effects are not alone enough. In a very lucid inquiry; Mihir Shah & Pramathesh Ambasa (Hindu, Sep 8,2008) found the success of NREGS. Social audit in Andhra Pradesh covering 12 million people is a brilliant example of civil society action, enriching mainstream politics.
In Andhra Pradesh, a fine understanding exists between peoples institution like Mazdoor Kisan Shakti Shangthan(MKSS)& Government. Besides this a separate existence of social audit is another favourable condition which enabled Andhra Pradesh to get breakthrough in NREGS implementation.The MKSS led by Aruna Roy, one of architects of NREGS introduced the concept of social audit into development practices nearly two decades ago. But even in Rajasthan, where MKSS started its work could not meet with same achievements to mainstreaming social audits.
A social audits of 17 NREGS Works in five Gram Panchayats of Deoghar district (Jharkhand),conducted on 12-16th October 2008,revealed some alarming facts related to discrepancies in bank payments .Lot of manipulated bank accounts were found which strengthen the chances of corrupt involvement of institutions like bank. So, it raises question marks on bank payments and Direct Cash Transfer(DCT) to cope with the corruption in NREGS.
Before NREGS, Indira Awas yozna(IAY) used to avail the DCT, where its proved inadequate to cope with corruption because biased involvement of government officials and middlemen’s.Situation is absolutely puzzling how to deal fairly with cash transaction during a project. For policy makers, it still remains a distant dream. Indeed DCT system is most improved solution till now; Economist like Arvind Subramanian even regards DCT as the “first best option “to address poverty in India.
Infact there shall be major concern towards growing violence in its path-like tragic death of Tapas Sen ,who immolated himself in Hazaribagh to protest against official harassment.Mode of NREGS functioning raises serious question against the partial functioning of authorities.
Violence during the project are quite rampant .Brutal murders of two NREGS activist (Lalit Mehta and Kameshwar Yadav) during a survey of NREGS initiated by the G.B .Pant Social Science Institute in Palamu and Kodarama districts left a frightening scar over the program.
Still a lot of fight is needed with such oddity to overcome from imposed hurdles. The NREGS has huge potential to enhance socio-economic dynamicism in country which makes alone suffice to makes its utility evident. Let us hope for more breakthrough…
Atul Kumar Thakur
New Delhi
March 2009
atul_mdb@rediffmail.com
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