Presentation on swarnjayanti gram swarozgar yojana (sgsy
1. Presentation on Swarnjayanti Gram Swarozgar
Yojana (SGSY)
Presented by
SONALI PATNAIK
BIRAJINI DALAI
SUNIL KUMAR BISWAL
2. INTRODUCTION
In April 1999, the Integrated Rural Development
Programme (IRDP) was restructured and combined with
Training of Rural Youth for Self-Employment
(TRYSEM), Supply of Improved Tools for Rural
Artisans (SITRA), Ganga Kalyan Yojana, Million Wells
Scheme (MWS) and Development of Women and
Children in Rural Areas (DWCRA), and a single self-
employment programme known as Swarnajayanti Gram
Swarojgar Yojana (SGSY) was put in place.
3. Aim and Objective
Establishment of large number of micro
enterprises in the rural areas
SGSY is to bring the assisted poor families
above poverty line by providing them income-
generating assets through bank credit and
government subsidy.
4. Approach’s of SGSY
Formation of organizations of the poor at the
grassroots level through a process of social mobilization for
poverty reduction is central to the programme.
The approach of SGSY is based on SHGs that have to act
as a financial intermediary and in many cases there are
women SHGs which are also expected to serve as vehicle
for their empowerment. Non-Government organizations
(NGOs) are expected to facilitate the formation of
these groups. The community involvement as
emphasized in SGSY, in contrast to IRDP, is reflected
in the mobilization for the formation of SHG groups.
5. SGSY has been conceived as a holistic self-
governing programme covering all aspects of
self-employment of the rural poor such as
organization of the poor into SHGs, their
capacity building, selection of key activities,
planning of activity clusters, infrastructure
build-up, technology and market support
The main principles of the SGSY are: (a) key
activities, (b) cluster approach, and (c) group
method.
6. Salient Features of SGSY
• SGSY: A Centrally sponsored self-employment scheme. Funding is
shared between the Centre and the State in the ratio of 75:25. For North-
Eastern States, the ratio is 90:10.
• The scheme is implemented by District Rural Development Agency
(DRDAs)/Zilla Parishads through Panchayat Samithis with active
involvement of Panchayats based on the funds provided for the SGSY.
• NGOs, CBOs and Self Help Promoting Institutions (SHPIs) are
assisted
upto Rs.10,000 per group by government for the formation and
development of Self Help Groups (SHGs)
• DRDA may incur a maximum amount of 10 per cent of allocation towards
training and capacity building
• SGSY Infrastructure Fund comprises upto 20 per cent of the allocation to
States and 25 percent in the case of North Eastern States.
7. DRDA provides Rs.10,000 to each SHG as Revolving Fund, banks
provide cash credit of Rs.15,000 for Grade-I SHGs.
• Banks provide loans to Grade-II SHGs with minimum repayment period
of three to five years depending on the nature of scheme.
• Subsidy under SGSY is uniform at 30 per cent of the project cost, subject
to a maximum of Rs.7,500 per swarojgari (Rs.10,000 for SC/ST / disabled
swarojgari) .
• The programme predicts establishing a large number of micro-enterprises
by the poor in rural areas with an emphasis on four to five key activities
identified at the block level based on resources, occupational skills of the
people and availability of markets.
8. ACTVITY CLUSTERS – PLANNING
AND SELECTION
SGSY lays stress on the cluster approach. What this means is
that instead of funding diverse activities, each block should
concentrate on a few select activities (key activities) and attend
to all aspects of these activities, so that the Swarozgaris can
draw sustainable incomes from their investments
Selection of key activities :-
The success of SGSY will therefore depend, to start with, on
the choice of activities. The key element is that the choice of
activity should be based on the local resources, the aptitude as
well as the skill of the people. It is also necessary that the
products have ready market
9. For selection of key activities, a profile of the poor families, as
reflected in the BPL Census should be analysed. There will be poor
families with assets, such as land. Efforts should be made to see that
those having a minimum extent of land are enabled to cross the poverty
line by making additional investment on their lands, such as wells or
other irrigation facilities, pump sets etc.
The Block SGSY Committee must interact with as many sarpanches as
possible and also discuss with groups of the rural poor such as the
landless labour, the educated unemployed, those rural poor with lands,
the artisan groups etc. Where self-help groups are in position, they
should also be consulted. In their discussions, the Committee should
explore various opportunities that are available (provided credit,
technology skill up gradation and marketing are assured) to enable the
poor to cross the poverty line.
10. Minor irrigation projects may be group oriented or individual
oriented. It is referable to adopt as far as possible, a project
approach under minor irrigation instead of spreading the
investment in a scattered manner. Minor irrigation can also be
the basis for activity clusters or formation of SHGs.
As regards the non-farm activities, care must be taken to
identify only those activities which result in the production of
goods/services that have a ready market.
Based on this consultation process, the committee may identify
about 8-10 activities, which they may rank in the order of
preference. This list should then be placed before the general
body of the Panchayat Samiti (Block Panchayat). The
Panchayat Samiti should be asked to give its recommendations
11. PROGRAMME INFRASTRUCTURE
Proper infrastructure is essential for the success of micro
enterprises. The infrastructure may be either for
production, processing, quality testing, storage or
marketing.
SGSY will seek to ensure that the infrastructure needs for
the identified activities are met in full, so as to enable the
Swarozgaris to derive the maximum advantage from
their investments
The provision of infrastructure is essentially the
responsibility of the State Governments. Therefore,
the States will strive to provide for necessary investments
as part of their plan efforts of the respective departments
12. The District SGSY Committee should review the infrastructure
gaps and identify the areas of intervention for financing projects
in activity clusters. Infrastructure needs and their
fulfilment will be constantly and closely monitored by the
DRDA.
In order to meet expenditure on such critical infrastructure,
SGSY will provide for a fund, which will be known as ‘SGSY-
Infrastructure Fund’. 20% (25% in the case of North Eastern
States) of SGSY allocation for each district will be set apart for
this fund
13. Principles may be kept in view while framing the
Infrastructure proposals
The infrastructure activities should enable SGSY Swarozgaris’ to make full
utilization of their assets. Marketing linkages should be given priority.
The proposals should emerge out of the specific activities being taken up
by the Swarozgaris and the location decisions should be made by the
Blocks/DRDAs in consultation with Bankers.
Only village or block or district level infrastructure should be planned. In
no case should the proposals envisage development of infrastructure at the
State or regional level.
Only the fixed cost and not the recurring expenditure should be met out of
SGSY funds. There should be an undertaking that the State Government or
the organization concerned would meet the recurring expenditure on staff
and other items.
In the case of assistance for development of infrastructure to cooperative
societies, it should be ensured that at least 50% of the members are SGSY
Swarozgaris.
14. SWAROZGARIS
Under Swarnjayanti Gram Swarozgar Yojana (SGSY), the
beneficiaries are known as Swarozgaris. The Swarozgaris
can be either individuals or groups. SGSY lays emphasis
on the group approach, under which the rural poor are
organized into Self Help Groups.
The list of BPL households identified through BPL census,
duly approved by the Gram Sabha will form the basis for
identification of families for assistance under the SGSY.
The Self Help Groups should also be drawn from the BPL
list approved by the Gram Sabha.
15. SELF HELP GROUPS (SHGS) &
Self Help Groups go through various stages of
evolution
SGSY will focus on organization of the poor at grassroots
level through a process of social mobilization for poverty
eradication.
Self Help Groups go through various stages of evolution
1) Group formation
2) Group Stabilization
3) Micro credit
4) Micro enterprise development
16. Formation of Self Help Groups
Under the SGSY, generally a self-help group may consist
of 10 to 20 persons. However, in difficult areas like
deserts, hills and areas with scattered and sparse population
and in case of minor irrigation and disabled persons, this
number may be from 5-20.
The group should devise a code of conduct (Group
management norms) to bind itself. This should be in the
form of regular meetings (weekly or fortnightly),
functioning in a democratic manner, allowing free
exchange of views, participation by the members in the
decision making process.
17. The group should be able to draw up an agenda for each
meeting and take up discussions as per the agenda.
The members should build their corpus through regular
savings.
The group corpus fund should be used to advance loans to
the members. The group should develop financial
management norms covering the loan sanction procedure,
repayment schedule and interest rates
The members in the group meetings should take all the
loaning decisions through a participatory decision making
process.
18. The group should be able to prioritise the loan applications,
fix repayment schedules, fix appropriate rate of interest
The group should operate a group account preferably in
their service area bank branch, so as to deposit the balance
amounts left with the groups after disbursing loans to its
members
The group should maintain simple basic records such as
Minutes book, Attendance register, Loan ledger, General
ledger, Cash book, Bank passbook and individual
passbooks.
19. IMPLEMENTATION
A close involvement of different agencies is essential for
the success of Swarnjayanti Gram Swarozgar Yojana
(SGSY) SGSY is implemented by District Rural
Development Agencies (DRDAs) through the Panchayati
Samithis and, with the active involvement of other
Panchayati Raj Institutions, the banks, the line departments
and the NGOs
The DRDAs are expected to co-ordinate the
implementation of the programme. In particular their role
will be critical in organization of the Self Help Groups and
their capacity building as well as in terms of coordination
with the technical institutions for technology and training
20. The Gram Panchayats will play a crucial role in SGSY. The
Gram Sabha will first approve the list of BPL families.
Besides, at the beginning of each year, the potential
Swarozgaris for taking up the designated key activities would
be identified in each habitation by a 3-member committee
including the Sarpanch.
The NGOs have also an important role to play. They can be
used in the formation and nurturing of the SHGs as well as in
the monitoring of the progress of the Swarozgaris
The Bankers play a very critical role in the implementation of
Swarnjayanti Gram Swarozgar Yojana. SGSY is a credit-cum-
subsidy programme.