Human Resource Poverty alleviation program of india

Poverty alleviation

1. Poverty alleviation programmes in India The  poverty alleviation programmes in India  can be categorized based on whether it is targeted either for rural areas or for urban areas in the country. Most of the programmes are designed to target rural poverty as the prevalence of poverty is high in rural areas. Also targeting poverty is a great challenge in rural areas due to various geographic and infrastructure limitations.

2. The programmes can be mainly grouped into 1) Wage employment programmes 2) Self-employment programmes 3) Food security programmes 4) Social security programmes 5) Urban poverty alleviation programmes. 6) skill india programmes for employment.

3. Initiatives 1. Jawahar Gram Samridhi Yojana ( JGSY ) 2. National Old Age Pension Scheme ( NOAPS ) 3. National Family Benefit Scheme ( NFBS ) 4. National Maternity Benefit Scheme 5. Annapurna 6. Integrated Rural Development Progra ( IRDP ) 7. Pradhan Mantri Gramin Awaas Yojana

4. Jawahar Gram Samridhi Yojana ( JGSY Jawahar Gram Samridhi Yojana ( JGSY ) is the restructured, streamlined and comprehensive version of the Jawahar Rozgar Yojana ( JRY ). It was started on 1 April 1999. The main aim of this programme was the development of rural areas. Infrastructure like roads to connect the village to different areas, which made the village more accessible and also other social, educational (schools) and infrastructure like hospitals. Its secondary objective was to give out sustained wage employment. This was only given to BELOW POVERTY LINE families and fund was to be spent for individual beneficiary schemes for SCs and STs and 3% for the establishment of barrier-free infrastructure for the disabled people.

5. National Old Age Pension Scheme ( NOAPS ) This scheme came into effect on 15 August 1995. The scheme provides pension to all old people who were above the age of 65 (now 60) who could not fund for themselves and did not have any means of subsistence. The pension that was given was ₹200 a month (now it is 2000 per month). This pension is given by the central government. The job of implementation of this scheme in  states  and  union territories  is given to panchayats and  municipalities . The states contribution may vary depending on the state. The amount of old age pension is ₹200 per month for applicants aged 60–79. For applicants aged above 80 years, the amount has been revised to ₹500 a month according to the 2011–2012 Budget. It is a successful venture.

6. National Family Benefit Scheme ( NFBS ) This scheme was started in August 1995 . This scheme is sponsored by the state government. It was transferred to the state sector scheme after 2002–03. It is under the community and rural department. This scheme provides a sum of ₹20,000 to a person of a family who becomes the head of the family after the death of its primary breadwinner. The breadwinner is defined as a person who is above 18 who earns the most for the family and on whose earnings the family survives.

7. National Maternity Benefit Scheme This scheme provides a sum of ₹6000 to a pregnant mother in three instalments. The women should have age to be older than 19 years of age. It is given normally 12–8 weeks before the birth and in case of the death of the child the women can still avail it. The NMBS is implemented by almost all states and union territories with the help of panchayats and municipalities. During 1999–2000 the total allocation of funds for this scheme was 767.05 crores and the amount used was ₹4444.13  crore . It is for families below the poverty line. The scheme was updated in 2005-06 into Janani Suraksha Yojana with ₹1400 for every institutional birth.

8. National Maternity Benefit Scheme First instalment  ( in first trimester of pregnancy ) - ₹3,000/Early Registration of Pregnancy, preferably within first three months. Received one antenatal check-up. Second instalmen t At the time of institutional delivery - ₹1500/- Third instalment  ( 3 months after delivery ) - ₹1500/-Child birth is compulsory to be registered. Child has received BCG vaccination. • Child has received OPV and DPT -1 & 2.

9. Annapurna This scheme was started by the government in 1999–2000 to provide food to senior citizens who cannot take care of themselves and are not under the National Old Age Pension Scheme ( NOAPS ), and who have no one to take care of them in their village. This scheme would provide 10 kg of free food grains a month for the eligible senior citizens. The allocation for this scheme in 2000-2001 was ₹100  crore . They mostly target groups of 'poorest of the poor' and 'indigent senior citizens'

10. Integrated Rural Development Program ( IRDP ) IRDP in India is among the world's most ambitious programs to alleviate rural poverty by providing income-generated assets to the poorest of the poor. This program was first introduced in 1978–79 in some selected areas, but covered all the areas by November 1980. During the sixth five-year plan (1980–85) assets worth 47.6 billion rupees were distributed to about 16.6 million poor families. During 1987–88, another 4.2 million families were assisted with an average investment of 4,471 per family or 19 billion rupees overall. The major objective of Integrated Rural Development Program ( IRDP ) is to raise families of identified target group below poverty line by creation of sustainable opportunities for self-employment in the rural sector.

11. Integrated Rural Development Program ( IRDP ) Assistance is given in the form of subsidy by the government and term credit advanced by financial institutions (commercial banks, cooperatives and regional rural banks.) The program is implemented in all blocks of the country as centrally sponsored scheme funded on 50:50 basis by the center and the states. The target group under IRDP consists of small and marginal farmers, agricultural labourers and rural artisans having annual income below ₹11,000 defined as poverty line in the Eighth Plan.

12. Integrated Rural Development Program ( IRDP ) In order to ensure that benefits under the program reach the more vulnerable sectors of the society, it is stipulated that at least 50 per cent of assisted families should be from scheduled castes and scheduled tribes with corresponding flow of resources to them. Furthermore, 40 per cent of the coverage should be of women beneficiaries and 3 per cent of physically challenged persons. At the grassroots level, the block staff is responsible for implementation of the program. The State Level Coordination Committee ( SLCC ) monitors the program at state level whereas the Ministry of Rural Areas and Employment is responsible for the release of central share of funds, policy formation, overall guidance, monitoring and evaluation of the program.

13. Pradhan Mantri Gramin Awaas Yojana This scheme aimed at creating housing for everyone. It was initiated in 1985. It aimed at creating 20  lakh housing units out of which 13  lakhs were in rural areas. This scheme also would give out loans to people at subsidized rates to make houses. It was started in 1999–2000. In 1999–2000, ₹1438.39  crore was used for this scheme and about 7.98  lakh units were built. In 2000-01 a central outlay of ₹1710.00 crores was provided for this scheme. It improved the standard of living of rural areas: health, primary education, drinking water, housing and roads. The scheme has proved to be a major boost in Indian rural population's income. To augment wage employment opportunities by providing employment on demand and by specific guaranteed wage employment every year to households.

14. Pradhan Mantri Gramin Awaas Yojana The Ministry of Rural Development ( MRD ) is the nodal Ministry for the implementation of NREGA . It is responsible for ensuring timely and adequate resource support to the States and to the Central Council. It has to undertake regular review, monitoring and evaluation of processes and outcomes. It is responsible for maintaining and operating the MIS to capture and track data on critical aspects of implementation, and assess the utilization of resources through a set of performance indicators. MRD will support innovations that help in improving processes towards the achievement of the objectives of the Act. It will support the use of Information Technology (IT) to increase the efficiency and transparency of the processes as well as improve interface with the public. It will also ensure that the implementation of NREGA at all levels is sought to be made transparent and accountable to the public. Now 100 to 150 days work for all is provided.

15. Bangladesh Grameen Bank(1) Grameen Bank   is a microfinance organisation and community development bank founded in Bangladesh. It makes small loans (known as microcredit or " grameen credit") to the impoverished without requiring collateral. Grameen Bank originated in 1976, in the work of Professor Muhammad Yunus  at University of Chittagong, who launched a research project to study how to design a credit delivery system to provide banking services to the rural poor. In October 1983 the Grameen Bank was authorised by national legislation to operate as an independent bank. The bank grew significantly between 2003 and 2007. As of January 2011, the total borrowers of the bank number 8.4 million, and 97% of those are women. In 1998 the Bank's "Low-cost Housing Program" Won a World Habitat Award. In 2006, the bank and its founder, Muhammad Yunus , were jointly awarded the Nobel Peace Prize.

16. Bangladesh Grameen Bank(2) Muhammad Yunus  was inspired during the Bangladesh famine of 1974 to make a small loan of to a group of 42 families as start-up money so that they could make items for sale, without the burdens of high interest under predatory lending. Yunus believed that making such loans available to a larger population could stimulate businesses and reduce the widespread rural poverty in Bangladesh. Yunus developed the principles of the Grameen Bank from his research and experience.  Grameen Bank is Bengali for "Rural" or "Village" Bank.  He began to expand microcredit as a research project together with the Rural Economics Project at Bangladesh's University of Chittagong to test his method for providing credit and banking services to the rural poor.

17. Bangladesh Grameen Bank(3) As of 2017, the Bank had about 2,600 branches and nine million borrowers, with a repayment rate of 99.6%. 97% of the borrowers were women. The Bank has been active in 97% of the villages of Bangladesh. Its success has inspired similar projects in more than 64 countries around the world, including a World Bank initiative to finance Grameen -type schemes. Grameen Bank is now expanding into wealthy countries as well. As of 2017,  Grameen America had 19 branches in eleven US cities. Its nearly 100,000 borrowers were all women Grameen Bank is founded on the principle that loans are better than charity to interrupt poverty: they offer people the opportunity to take initiatives in business or agriculture, which provide earnings and enable them to pay off the debt.

18. Bangladesh Grameen Bank(4) The bank is founded on the belief that people have endless potential, and unleashing their creativity and initiative helps them end poverty. Grameen has offered credit to classes of people formerly underserved: the poor, women, illiterate, and unemployed people. Access to credit is based on reasonable terms, such as the group lending system and weekly-instalment payments, with reasonably long terms of loans, enabling the poor to build on their existing skills to earn better income in each cycle of loans. Grameen's objective has been to promote financial independence among the poor. Yunus encourages all borrowers to become savers, so that their local capital can be converted into new loans to others. Since 1995, Grameen has funded 90 percent of its loans with interest income and deposits collected, aligning the interests of its new borrowers and depositor-shareholders.

19. Bangladesh Grameen Bank(5) It targets the poorest of the poor, with a particular emphasis on women, who receive 95 percent of the bank's loans. Women traditionally had less access to financial alternatives of ordinary credit lines and incomes. They were seen to have an inequitable share of power in household decision making. Grameen has diversified the types of loans it makes. It supports hand-powered wells and loans to support the enterprises of Grameen members' immediate relatives. It has found that seasonal agricultural loans and lease-to-own agreements for equipment and livestock help the poor establish better agriculture.

20. Bangladesh Grameen Bank(6) No legal instrument  is made between Grameen Bank and its borrowers; the system works based on trust. To supplement the lending, Grameen Bank requires the borrowing members to save very small amounts regularly in a number of funds, designated for emergency, the group, etc. These savings help serve as an insurance against contingencies In a country in which few women may take out loans from large commercial banks, Grameen has focused on women borrowers; 97% of its members are women. While a World Bank study has concluded that women's access to microcredit empowers them through greater access to resources and control over decision making, some other economists argue that the relationship between microcredit and women-empowerment is less straightforward.

21. What Is Microfinance? Microfinance, also called microcredit​, is a type of banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. While institutions participating in the area of microfinance most often provide lending—microloans can range from as small as 10000, 20000, 30000, 50000, 100000 . Many banks offer additional services such as checking and savings accounts as well as micro-insurance products, and some even provide financial and business education. The goal of microfinance is to ultimately give impoverished people an opportunity to become self-sufficient.

22. Microfinance Supports Educating Entrepreneurs Micro financing organizations support a large number of activities that range from providing the basics—like bank checking and savings accounts—to  startup capital for small business entrepreneurs and educational programs that teach the principles of investing. These programs can focus on such skills as bookkeeping, cash-flow management, and technical or professional skills, like accounting. Unlike typical financing situations, in which the lender is primarily concerned with the borrower having enough collateral to cover the loan, many microfinance organizations focus on helping entrepreneurs succeed. Once educated, customers may apply for loans. Just as one would find at a traditional bank, a loan officer helps borrowers with applications, oversees the lending process, and approves loans.

23. Microfinance Loan Terms Like conventional lenders, micro financiers must charge interest on loans, and they institute specific repayment plans with payments due at regular intervals. Some lenders require loan recipients to set aside a part of their income in a savings account, which can be used as insurance if the customer defaults. If the borrower repays the loan successfully, then they have just accrued extra savings.   Empowering women in particular, as many microfinance organizations do, may lead to more stability and prosperity for families.  Because many applicants cannot offer collateral, micro lenders often pool borrowers together as a buffer. After receiving loans, recipients repay their debts together. Because the success of the program depends on everyone's contributions, this creates a form of peer pressure that can help to ensure repayment. For example, if an individual is having trouble using his or her money to start a business, that person can seek help from other group members or from the loan officer. Through repayment, loan recipients start to develop a good  credit history , which allows them to obtain larger loans in the future.

24. Benefits of Microfinance The World Bank estimates that more than 500 million people have directly or indirectly benefited from microfinance-related operations. However, these operations are only available to approximately 20% of the three billion people who qualify as among the world’s poor.   In addition to providing micro financing options, the IFC has helped establish or improve credit reporting bureaus in 30 developing nations. It has also advocated for adding relevant laws in 33 countries that govern financial activities. The benefits of microfinance extend beyond the direct effects of giving people a source for capital. Entrepreneurs who create successful businesses, in turn, create jobs, trade, and overall economic improvement within a community.

25. Concerns about For-Profit Micro financing Many major financial institutions and other large corporations have launched for-profit microfinance departments. Other companies have created mutual funds that invest primarily in microfinance firms. Its for-profit peers have been criticized by many, including the grandfather of modern microfinance himself, Muhammad Yunus . The immediate, pragmatic fear is that, out of a desire to make money, large microfinance bankers will charge higher interest rates that may create a debt trap for low-income borrowers. But  Yunus and others also have a more fundamental concern: that the incentive for microcredit should be poverty alleviation, not profit. By their very nature—and their obligation to stockholders—these publicly-traded firms work against the original mission of microfinance, helping the poor above all else. commercialization allows them to operate more efficiently, and to attract more capital by appealing to profit-seeking investors. By becoming a profitable business, their argument goes, a microfinance bank is able to extend its reach, providing more money and more loans to low-income applicants. For now, though, charitable and commercialized micro financiers do co-exist.

26. What is the role of micro finance? Microfinance  in  India  plays a major  role  in the development of  India . It act as an anti-poverty vaccine for the people living in rural areas. It aims at assisting communities of the economically excluded to achieve greater level of asset creation and income security at the household and community level.

27. How Micro financing Works The term microfinance encompasses microloans, micro-savings, and micro insurance. Microfinance institutions provide small loans and other resources to business owners and entrepreneurs to help them get their businesses off the ground. Many of the recipients are in developing countries, and could otherwise not obtain a traditional loan. Micro-savings accounts are also under the microfinance umbrella. They allow entrepreneurs to have a savings account with no minimum balance. And micro insurance provides these borrowers with insurance, at a lower rate, and with lesser premiums.

28. Why Is It Important? Microfinance is important because it provides resources and access to capital to the financially underserved, such as those who are unable to get checking accounts, lines of credit, or loans from traditional banks. Without microfinance, these groups may have to resort to using loans or payday advances with extremely high-interest rates or even borrow money from family and friends. Microfinance helps them invest in their businesses, and as a result, invest in themselves.

29. Who Benefits from Micro financing? Microfinance can also help women break the cycle of poverty. In fact, women are major microfinance borrowers, making up 80% of loans in 2018, according to the 2019 Microfinance Barometer. Around 65% of total borrowers live in rural areas, which means that a large number of female microfinance borrowers live in rural areas with limited resources. The microfinance industry is also growing rapidly. In 2018, there were 139.9 million microfinance borrowers, for a total of $124 billion in loans. India accounted for most of these borrows, followed by Bangladesh, and Vietnam.

30. MICRO-FINANCE: LESSONS FROM INTERNATIONAL EXPERIENCE Lesson One –The Poor Are Bankable There is enough evidence that the poor are capable of using credit profitably and repaying loans out of the proceeds from the use of funds. The poor have always borrowed money for a multiplying of purposes from informal sources and repaid most of these loans. They do not comprise an extraordinarily high-risk segment. A participatory involvement and realization that repayment enhances their long-term borrowing capacity ensure the proper attitude onwards repayment. At the same time, MFIs should have effective methods for monitoring the loans and ensuring repayment at convenient times.

31. Lesson Two – Micro-credit Benefits the Poor There is clear evidence that MF benefits the poor by providing them savings opportunities and credit. Borrowers often increase their incomes and improve their livelihood because of micro-credit. Where wide gender disparities abound, MFI catering to women raises their sense of participation and increases their empowerment. There is however little evidence that mF succeeds in transforming a community from poverty to prosperity.

32. Lesson Three – Penetration of the Poorest of the Poor is Difficult While some MFIs have penetrated the poorest of the poor, most MFIs have concentrated their focus on the less poor. This is partly due to the difficulties of administering loans, the needs of the poorest being mainly for consumption possibly perceived as a higher risk. The poorest of the poor would require greater support in the form of advisory services, skill development and marketing support to make effective use of credit. These support services require to be provided by either other organizations or the capacity of mFIs has to be strengthened to provide such services.

33. Lesson Four – A Realistic Interest Rate is Vital Micro-credit should not be disbursed at below commercial rates of interest. This statement may find a mixed response among micro-finance practitioners in India. The disadvantages of cheap credit have been amply demonstrated. Yet the case against subsides can defeat the objectives of mF. While in the long run, the interest charged by mFIs should cover their total costs, there appears to be a good case for subsidizing the cost of risk, as otherwise, the interest cost could be prohibitive. This rate of interest would be higher than commercial bank lending rates, but much lower than interest rates of informal lenders. The additional administration costs would require to be subsidized.

34. Lesson Five – Saving Mobilisation Strengthens MFIs There is indisputable evidence that mFIs which mobilize savings to enhance their sustainability. Micro-finance should be viewed as having two complementary components, micro-credit and savings. There is a close correlation between the success in savings mobilization of mF organizations and heir overall success. Apart from the advantages of enhancing is fund base, a clientele that has a stake in the mFI is more accountable, and savings could form an important foundation for participatory involvement in the mFI . Saving mobilization strengthens the asset base of the mFI , provides a basis for asset-based lending, reduces risk, enhances financial viability and can even provide opportunities for supplementary earnings from investments outside.

35. Lesson Six – Governance and Financial Systems Require Strengthening Many mFIs have weak accounting systems. Consequently, they are sometimes unaware of their own financial situation. This has resulted in mFIs not realizing their financial weaknesses. Good accounting practices, especially performance accounting, are essential to ensure accountability and continuous evaluation of performance.

36. Lesson Seven – Strong Regulatory Framework With an expansion in the number of MFIs and many of then accepting savings, it is generally argued that MFIs should be subjects to a regulatory framework in the interest of both the poor, as also the long-term viability and sustainability of mFIs . Given the situation described above, compliance with such a regulatory framework could be difficult and developing the capacity for reporting to the regulator costly. A cost-effective or subsidized reporting/regulatory mechanism may be necessary. While most analysts are of the view that a proper regulatory framework is a prerequisite for the expansion of mF, this is a tricky issue as the informal character of mFIs could be jeopardized, and voluntary and visionary efforts could be discouraged.

37. Lesson Eight – No Single Model of MFI The vast differences in MFIs make it very clear that there is no single model of successful MFIs. Each MFI would require to be oriented to the needs of the particular community and find ways and means of enlisting participatory involvement, develop group actions and collective responsibilities, find innovative means of reducing administration and transaction costs and increase outreach. The extent of participatory decision-making has to be decided on the basis of whether collective decision-making is a realistic option. While participatory involvement is generally desired, many of the successful mFIs have adopted a ‘top-down’ approach. Therefore, each mFI would require to be designed according to o be context and environment it operates in and be willing to respond to changes in the light of its own experience.

38. Lesson Nine – Most MFIs Require Outside Funding While financial viability should be the objective of MFIs, the experience indicates that most MFIs would require outside finances for commencement and a gestation period. Such assistance should be in the form of seed capital, funds for expanding activities and to defray administrative expenditure. Another expenditure is likely to be so high in the beginning that a relatively high-interest rate above the average of market-rate but below he informal moneylender rates is not likely to cover costs. Therefore, substantial outside assistance would be needed to enlarge the number of MFIs and their outreach. Yet, the ultimate and only sustainable strategy is one where MFIs are solidly grounded in local resources.

39. Lesson Ten – Credit Alone Cannot Achieve Objectives Micro-credit attempts to address a genuine need of credit for the poor for consumption needs, working capital and sometimes-fixed capital of small enterprises. Yet these only facilitate small entrepreneurs. Those without a capacity to use such funds profitably would not benefit. Both the expansion and effectiveness of micro-credit requires a number of other pre-requisites. These include a macroeconomic policy framework conducive to mE , improvements in physical and economic infrastructure, the opportunity for education and skill development, and marketing opportunities for products of MFs .