(GIST OF YOJANA) Livelihood Development and Diversification [SEPTEMBER-2018]

(GIST OF YOJANA) Livelihood Development and Diversification


Livelihood Development and Diversification

As the Sustainable Development Goals (SDGs) bring out clearly, poverty is multidimensional and therefore requires a range of interventions. Illustratively brings out the challenges of creating poverty-free Rural Clusters. Nonfarm livelihoods and multiple livelihoods that are required to make a difference. As recent data points out, half of manufacturing and one-third of the services
sector is already part of the rural economy. Income and Employment through Livelihood Development and Diversification is clearly the way forward.

The last 4 years has seen a considerable stepping up of financial resources for improving rural infrastructure, diversifying livelihoods, reducing poverty, and thereby improving the wellbeing of poor households in terms of allocation for Programmes of Department of Rural Development. The actual expenditure of Department of Rural Development from 2012-13 to 2017-18 and the Budget Estimates (BEs) for the year 2018-19 shown in the Table-l illustrates the points very well. Annual expenditure in 2017-18 is more than double of what it was in 2012-13. One has also to bear in mind that there were 4 additional sources of funds for addressing rural poverty during this period:

The sharing pattern under programmes for non Himalayan States became 60:40, and 90: 10 in Himalayan States. Under Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), instead of a 75:25 sharing earlier, it became 60:40 leveraging a total of Rs. 45,000 crore in 3 years as State share, against a government of India provision of Rs. 81,975 crore. Likewise, from December 2015, states started contributing 40 per cent of Pradhan Mantri Gram Sadak Yojana (PMGSY) funds. This leveraged an additional Rs. 8000/to Rs. 9000/crore of State share each year which were not available earlier with PMGSY. A similar increase happened in programmes that were brought on 60:40 share from the earlier 75:25, like NSAP, DAY-NRLM, etc.

From 2017-18, under the Housing Programme, additional resources were mobilised through Extra Budgetary Resources (EBRs) as well. A total of Rs. 21,975 crore of Extra Budgetary Funds have been mobilised/are being mobilised in 2017 to 2019 period for PMAY-Gramin. Rs. 7329.43 crore has already been disbursed through EBR.

The transfer of funds under the 14th Finance Commission awards has also registered a significant increase compared to the allocations earlier under the 13th Finance Commission. It can be seen in Table-II. The fourth important factor to note is the leveraging of Bank Loans by Women Self Help Groups (SHGs) during this period. A total of Rs. 1.64 lakh crore have been mobilised as Bank Loan by Women Self Help Groups in the last 5 years. The Bank Loan outstanding has more than doubled from Rs. 31865 crore in 2013-14 to Rs. 69733 crore in 2017-18 under DAY-NRLM.

Besides the specific resource provision for Rural Poverty Programmes, the thrust on Swachh Bharat Mission (SBM), increase in the allocations of Ministry of Agriculture and other infrastructure and livelihood programmes for the poor, the total transfer of financial resources to rural India has been very significant. A large proportion of the same goes into improvement in incomes and employment.

The Department of Rural Development has focused on development and diversification of livelihoods of the poor households during this period. The Socio-Economic Caste Census (SECC) 201 1 released in July 2015 provided an evidence based criteria for selection of beneficiaries under various government programmes. The application of deprivation criteria of SECC t0 the Provision for LPG Gas connection under Ujjwala, free household electricity connection under Saubhagya, selection of beneficiaries under PMAY-G, and new selection under Aayushman Bharat for National Health
Protection have ensured that the benefits of development reach the most deprived on a priority. The use of SECC in finalisation of Labour Budgets to States under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and insistence in enrollment of all women from households with deprivation under SHGs of Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) has also ensured that poor regions with larger number of poor households receive priority in programmes of rural poverty. Table-III highlights the kinds of deprivation

All programmes of rural development were aligned to livelihood development and diversiiication. Mahatma Gandhi National Rural Employment Guarantee Scheme focused on durable assets and water conservation, and also provided for livelihood generating individual benefits like farm ponds, dug wells, goat shed, poultry shed, housing support, and support for dairy shed. The livelihood linkages in convergence with subsidy programmes for animal resources and for agriculture contribute to improved incomes in the Agriculture and Allied Sectors. The increase in production of fruits and vegetables and the significant growth through animal resources over the last 4 years have been on account of this larger thrust on rural livelihood development and diversification. To illustrate some of the salient livelihood generating and income and employment supporting initiatives over the last 3 years are as follows:

  1. 143 lakh hectares of land provided benefit of water conservation works.

  2. Nearly 15 lakh farm ponds and 4 lakh wells for irrigation besides a very large number of Water Conservation Community Structures came up during this period.

  3. Over 6222 Custom Hiring Centres managed by Women Self Help Groups fully functional during this period.

  4. 11000 Bank Sakhis and 773 Bank Mitras trained as Banking Correspondents (BCs) from among SHG Women.

  5. 33 lakh women farmers supported under non-chemical based agro ecological interventions.

  6. 86,000 Producer Groups and 126 Agni Producer Companies established.

  7. 449 vehicles under Aajeevika Grameen Express Yojana (AGEY) for Rural Transport plying on roads with women drivers.

  8. Over 9 lakh solar lamps assembled by nearly 4000 Women Self Help Group Members in remote regions of Bihar, Uttar Pradesh, Jharkhand, Rajasthan, etc.

  9. Over 6000 Barefoot Technicians trained and certified.

  10. 3.54 lakh candidates successfully placed for wage employment under Deen Dayal Upadhyaya Grameen Kaushalaya Yojana (DDUGKY) and 12.65 lakh candidates
    settled for self employment under Rural Self Employment Training Institutes (RSETIS) in the last 4 years.

  11. 10949 Rural Masons trained and certified under the Housing Programme.

National Institute of Public Finance and Policy (NIPFP) was requested to assess the impact of Pradhan Mantri Awaas YojanaGramin (PMAY-G) on Income and Employment. The Report found that “By using information about the completed and under construction houses since 2016-17 that is made available through Awaas Soft and by the MoRD, we estimate that the scheme could have generated about 52.47 crore person-days. Of this, nearly 20. 85 crore person-days are for skilled labour and the remaining 31.62 crore person-days are for the unskilled labour force in both years”.

A significant stepping up of road construction programmes has also generated direct and indirect employment. On an average one-fourth of the total cost of construction of rural roads contributes to employment of skilled, semi-skilled and unskilled wage earners. Clearly these have also contributed to incomes and employment during this period. The Central Government annual allocation was increased to Rs. 19000 crore over the last 3 years. This is able to leverage Rs. 8000 crore to Rs. 9000 crore as State share. Over the last 3 years, this means that nearly Rs. 70,000 crore to Rs. 80,000 crore was available only for road construction. 25 per cent creating direct employment is naturally a larger number with consequences for incomes and employment in rural areas. Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been a major source of strengthening livelihood security with full transparency during this period.

The expansion of the National Food Security Act (NFSA) with a provision of rice at Rs. 3 per kg and wheat at Rs. 2 per kg has facilitated food security in poor households. The increases in the Consumer Price Index for agricultural labour has been modest on account of the low food price inflation during this period as food items comprise the largest chunk of the basket of goods and services for calculating the Consumer Price Index for agricultural labour. The subsidies on rice and wheat, and the ready availability of cheap food-grains to poor households need to be factored while looking at wage rates for agricultural labour. Even with nominal increases in real wage, the purchasing power goes up as major expenditure items like rice and wheat are heavily subsidized with effective availability.

Rural poverty is truly multidimensional and there is a need to address it simultaneously for greater impact. The efforts over the last few years have been towards convergence of rural initiatives to make a real difference to the well being of poor households. These interventions have targeted both the poverty of households and the poverty of geographies. The factors contributing to these are listed below:

Poverty of Households

  • Lack of education and skills

  • Under nutrition and ill-health

  • Lack of employment opportunities

  • Assetlessness

  • Lack of safe housing

  • Limited access to public services

  • Clutches of middlemen/ corruption/ moneylender

  • Absence of social capital collectives of women/youth/ poor households

  • Poverty of Geographies

  • Low Price for produce distress

  • Violence/crime

  • Unirrigated agri/vagaries of monsoon

  • Lack of basic infra-roads, electricity, Internet

  • Lack of access to markets and jobs

  • Lack of non-farm Opportunities

It is evident from the data and interventions listed earlier that higher financial resources have been made available for addressing rural poverty over the last few years along with a much higher scale of leverage of Bank Loans for Women Self Help Groups. These have been contributing to both rise in incomes and employment through diversification and development of livelihoods. A few illustrative examples of such diversification have been listed above. Overall, the challenges to rural poverty are being effectively addressed through the range of interventions outlined above. Evaluation Studies by the Institute of Rural Management Anand (IRMA) has also confirmed increase in incomes, productive assets, and enterprises in villages where Women Self Help Groups are active under DAY-NRLM. Similarly, Studies of Water Conservation works under MGNREGA by the Institute of Economic Growth confirmed increase in income, productivity, acreage, and the water table. Such increases are bound to generate employment on a large scale.

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