HPAS Mains 2021/22 Answer Writing Challenge Day 17 : 23-10-2021

HPAS Mains Syllabus General Studies Paper II: Governance

Question : “Self-help groups (SHGs) present a viable and efficient model for tapping the entrepreneurial energies of rural population”. Comment.  (20 Marks, 400 words)

Model Answer: 

Self Help Groups are self-governed, peer-controlled information group of people with similar socioeconomic background and having a desire to collectively perform for common purpose.

Self Help Groups very strong instrument of economic development, creating financial habits and unleashing entrepreneurial talents.

1. Tool for women empowerment: According to some estimates, about 46 million rural poor women are mobilized through SHGs architecture.
2. The impact of SHGs on poverty is enormous and shows the huge potential of banking on the most unprivileged population.
3. Self Help Groups helps in developing economic self-independence and habits of small saving among the members.
4. Most of the beneficiaries of Government schemes have been from weaker and marginalized communities and hence their participation through SHGs ensures social justice.
5. It has enabled the participating households to spend more on education, food and health than nonclient households.
6. 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.
7. Economic empowerment through SHGs, provides women the confidence for participation in decision making affairs at the household-level as well as at the community-level.
8. Un-utilised and underutilised resources of the community can be mobilized effectively under different SHG-initiatives.

But still SHGs are facing many problems in generating real entrepreneurial energy in rural areas.   Members of a group do not come necessarily from the poorest families. 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. 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. 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.  SHGs are heavily dependent on their promoter NGOs and government agencies. The withdrawal of support often leads to their collapse.

Constant monitoring of the SHGs is the need of the hour. A separate government body to monitor the functioning and the progress of the SHGs can make it more successful. New financial mechanisms based on the individual needs of the area is also essential for the SHGs to achieve their aims and objectives.