Drudgery Reduction for Women

It is time to invest in agriculture, rural development and food security. That's where the future of India lies.There is lot of women's participation in agriculture and allied activities in addition to the household work. Manually women were not able to increase the productivity and some of the health problem occurs. Simple Machine and tools like Coconut peeler, fishinh net, sugarcane stripper always act in drudgery reducing technologies and help to reduce the incidence of the health issues.

Odisha government launched an innovative scheme, “Women SHGs for Drudgery Reduction". The vision behind is to make a positive impact on the health of women folk of the state by reducing their physical exertion. As per the scheme, each SHG would get Rs. 10,000 as financial assistance through which they can buy different types of technical equipments and enhance their productivity. Mahila Vikas Samabaya Nigam, the Women’s Development Corporation, was established as the Nodal Agency for implementing Schemes and Programmes for the welfare, development and empowerment of women.

There was planned disbursement of funds to SHG accounts in e-transfer mode. The project involved District level committee entrusted with the responsibility of transparent selection of SHGs and identifying the main activities that are undertaken in the district. Priority was given to SHGs with SC/ST/PWD/BPL families. Monitoring and random field verification was the guideline provided by the government for the proper implementation. On receipt of funds, SHG members will procure in a transparent involved in at the lowest possible market price.

Physical Target for DRDA was nearly 245 SHGs while financial was 232.75 Lakh in Ganjam district. Manual operated Pulse Thresher, Manual Weeder, Smokeless cook stoves and Paddy Ripping Sickle were the main procured items. This scheme must be evolved for workers involved in MSME. There is a cashew processing cluster employing mostly women in Ganjam district along coastal belt. Workers require gloves but the employers are apprehensive that output would reduce if gloves are used. Small machines enhance the efficiency of their work of shelling, peeling, and grading.

This is one of the better scheme launched by the government. Such initiative will help in increasing production and productivity besides reducing drudgery of labour associated with farm activities. Only time and project management can give us the result of this scheme. But there has been no baseline study before implementation of this scheme. Hence, questions such as - " Has drudgery / no of hours of work/ been reduced by technological improvements?" will remain unanswered. I saw this scheme as an extension of Conditional Cash Transfer(CCT). There is a good article on cash transfers at World Bank blog. Please read Cash Transfers: Sorting Through the Hype.

Indian Government had started the ambitious direct benefit transfer (DBT) scheme on January 1, 2013. Direct Cash Transfer can work wonders when the beneficiary is identified correctly. Who are these beneficiaries and how to identify them ? A pretty useless and a stupid question to ask if it was pertaining to India. Identification is not a statistical exercise, but is a major political activity at ground level. Hence, even with either conditional or unconditional cash transfer, nothing can work with money going through non existing beneficiaries into corrupt bureaucracy and political leaders. Cash in the hands of sensible people does more than in the hands of corrupt state or senseless aid agencies;

SHG Bank Linkage

There is a lot of talk about inclusive growth through financial inclusion. The competition between banks has never brought credit to the poor; it only took new financial products to richer people. RBI policy has forced banks for priority sector lending and the opening of branches in rural areas. SHG Bank linkage model was developed by NABARD under the strategy to reach the poor in a sustainable way. I have written on this issue in a previous post.

SHGs are linked to the formal banking system or microfinance institutions for accessing credit. Self-help groups minimize the bank's transaction costs and generate an attractive volume of deposits. While bankers have to handle only a single SHG account instead of a large number of small-sized individual accounts, borrowers as part of an SHG cut down expenses on travel (to & from the branch and other places) for completing paperwork and on the loss of workdays in canvassing for loans. There are many practical issues in this scheme faced by all three stakeholders: SHG, Banks, and Government.

Bank readily opens the account of SHG but treats them as an extra workload on the employees. One major reason cited for this is the staff shortage at the bank level as well as liquidity crunch at rural branches, leading to delays in cash transfers to SHGs. Transaction time and Cheque clearance time at RRB can be very long. Any new and non-routine applications of SHG bank account take a lot of time but the returns in the Bank portfolio are abysmally low. There have been cases where the account holder has to run repeatedly to withdraw money from her SHGs bank account!

An SHG decides to seek a loan from the bank. SHG submits the application that takes into account the activity proposed, the amount of loan required, duration of loan requirement, the purpose of the loan, and the number of installments in which the loan can be repaid. The procedural issue is that the field officer from the bank needs to check the existence, record books, and proper functioning of the SHG. This poses the problem where the field officer is often overburdened with a large amount of work. Even interaction of bank officials is limited to President and Secretary of the group hence decision-making process often escapes the rest of the members.

There is a huge rise in NPAs (non-performing assets) to poorer supervision of loans. RRBs are doing the worst in all the banks. The task of recovering money from the people is politically volatile. Hence, Banks try to even deny the loan services to the SHGs for the most arbitrary of reasons. Banks can't randomly choose genuine groups among the hundreds of the SHGs. The discrepancy in the paperwork is given reason and SHG members have to approach the bank repeatedly.

Even lending norms for SHGs are suited to poor members of SHGs. There are many issues even in this arrangement like poor members taking the loan and being used by other prosperous members. This practice is equivalent to a ghost loan. This actually prevents credit risk, but the purpose of solving poverty is lost as the actual borrowing member will not be using it. Another member using the loan may not give priority for repayment as the loan is not in their name and the group became defunct.

Political desire triumph over economic reality - That is the summary of my experience in the field of SHG loan recovery. The loan waiver scheme had become a major deterrent in repayment of any type of bank loan in Odisha. The loan waiver scheme has disincentivized those SHGs who repay on time. Such type of Government intervention changes the behavior of both rural and urban populations. Giving people (APL or BPL) handouts with no strings attached is not a panacea. Such freebies' offerings destroy the Micro-credit institution, especially in rural areas. It can be easily concluded that state aid almost always brings in its wake political favoritism and corruption.

The role of government is not only limited to loan recovery. There are targets of SHG's linkage for each public sector bank by State Level Bankers Committee (SLBC) and Panchayati Raj Department, resulting in the supply-driven approach of pushing external loans on SHGs. The amount and timing of such loans must depend on member capacities and merely the fact of repayment of a previous loan (a weak but essential indicator of future credit absorption capacity). The whole SHG Bank scheme of demand-driven credit availability becomes converted into a credit distribution exercise.

Public sector banks have been able to grow despite offering poorer customer service by simply expanding their reach. When a private bank sees a loan turning doubtful, it is able to quickly exit, even if needed by taking a haircut. Public sector banks need to engage with either NGOs or any agency that can build the capacity of SHGs. The mismatch between the expectations of the poor and the capabilities of the formal banking system still today needs to be minimized. Till then, Banker' relation with the Government and SHGs will always be strained.

Micro Investment Plan (MIP) of SHG

The international standard for the definition of the poor i.e. a household that spends more than one-third of its income on food is followed in India, 95 percent of all households would be considered poor. Every country needs an inclusive political and economic institution to break out the cycle of poverty. The delivery of financial services at an affordable cost to the vast sections of extremely poor and vulnerable groups of people is a necessity for the development of India.

Plans are useless, but planning is indispensable. — Dwight D. Eisenhower

Budgets help to determine how much money one has, where to invest it, and whether one can achieve your financial goals. A budget is a forecast of all cash sources and expenditures. MIP is a tool for financial planning that can be used for both SHG and its members. Socio-Economic Analysis of each SHG is performed as risk is involved in giving loans without any collateral. The format used in TRIPTI can be downloaded here.

Indicative Components/ Seven Steps for preparing a Micro Investment Plan (MIP) :

Step 1-SHG Details Format

Step 2-Members’ socio-economic details Format

Step 3-Income and expenditure statement of members Format

Step 4-Listing of Household Investment Plans (for economic, social, and household needs) Format

Step 5-Prioritization of Members Format

Step 6-Financing and Rotation Plan Format

Step 7-Terms of Partnership Format

MIPs are promoted under National Rural Livelihood Mission as it helps in better planning to avoid bad loans on behalf of the banks. Micro Investment Plan is prepared with the initiatives of Community Resource Person Strategy in the Project. MIP is used for SHG members where many factors like a priority, wealth ranking, Investment in the activity proposed, Loan Amount, Life of Asset, Monthly Incremental Income, Saving Capacity of Household, Installment Amount, No. of Monthly Installment and other entitlements (PDS, Insurance, Pensions, etc) are considered. MIP includes plans for investment on asset creation for income generation and household needs investments. MIP is assessed at a Household-level where assets, liabilities, risks, vulnerabilities, entitlements, and other expenses are noted down in the detail.

But such detail exercise exists only in theory. Most of the MIP forms had not been filed properly. Activity proposed, No. of installation, Payback amount, and signature of President & Secretary is the main focus of Banks. The low-income who have been excluded from the financial services of formal institutions lacks financial literacy in most cases. Financial literacy for poor villagers is really important but it doesn't mean training by government officials once in a blue moon. There is always a need for the Livelihood mission/MFI/NGO to reach and build the capacity of SHG members. People need awareness about financial products, fraud activities, or else they are misleading and fall to misdeeds of chit fund companies promising high returns; This often ends up losing the lifetime savings.

Let us see a practical example of credit linkage. An SHG demanded nearly 1 Lakh as per their MIP and each member of the SHG deliberately had put Rs 10,000 as the investment capital for the proposed activity. Rs 50000 from the GPLF (Gram Panchayat level Federation of SHG under Livelihood Mission) at a nominal interest rate of 7% was given as a loan to SHG. Group divided this money among themselves equally (Rs. 5000) per member. The amount according to their need(proposed activity) will always differ from each member but fairness is maintained through this equal division. Only internal loaning is done among members on the basis of priority. In the case of external loans/grants, this fairness in distribution is always maintained by SHG. So, Priority in lending is a nice theoretical concept. How do a rural manager can change 20 years of what the common wisdom has taught them?

Validation and Grading of SHGs

SHGs were formed under Mission Shakti in Odisha. Odisha government started a validation and grading exercise to know SHG status in December 2012. The validation process aimed at confirming the existing status of SHGs, whereas the Gradation Process assessed their eligibility for receiving Revolving Funds.

Validation

In an ideal world, the Branch Manager/ Representative of the Bank, B.D.O/Representative from the block, and C.D.P.O/Representative from ICDS should visit the field and complete the process. This may take from 5-10 days depending on the size of the district. This doesn't happen in the real world where AWW sits with the President/Secretary of SHG for the complete assessment.

DRDA and ICDS Balangir have a record of 11097 SHG existing in the district but validation led to only 7846 functioning groups. Hence, we can easily imagine with these figures, the difference between SHGs claimed and existing can run in lakhs. Defunct and far SHGs form a major part of the numbers claimed by the government.

Grading

Grade I and II with A, B, and C as three categories of the SHG was the grading format. The format with various criteria is uploaded on Scribd. SHGs having 70% BPL members and passed the Grade-I test and categorized as “A” or “B” i.e. Scoring more than 60% marks during Grading will only be eligible for Revolving Fund in order of merit as per their scores. The Graded SHGs are assisted under NRLM, as this fund will aim to address the immediate production and consumption needs of members of the SHGs as well as encourage internal lending practices among the members.

In the intensive Block under NRLM, Revolving Fund(RF) of 10,000 or 15,000 depending on whether they had already received any prior assistance under any other government scheme. The SHGs who have qualified grade I test but have not availed of any financial assistance will be provided with a revolving fund of ₹.15,000/- in two tranches. In the first tranche ₹.5000/- will be provided and on successful utilization of this amount ₹.10,000/- will be provided to the group directly in 2nd tranche at least after 3 months of receiving 1st tranche. This fund will become a part of their group corpus. The group members can borrow from the group corpus to meet their various needs as decided in the group. However, the groups who have already availed of such financial assistance under Mission Shakti or any Govt. program will not be eligible for 1st tranche and receive only 10,000. I insisted on attaching Xerox copies of my BPL card and Bank Passbook SHG while working at Bhanjanagar block in Ganjam district. Hence, it created transparency and gave validity to the no. of BPL members by any SHG.

Conclusion

RF/PPIF is distributed in a campaigning mela organized at each block to sensitize the groups about NRLM. Generally, it is more show of the good work done by the government. In an ideal world, SHG assessment (or rating) should not just be limited to current performance but could also assess credit absorption and repayment capacity. That requires qualitative information to look for problems faced by each group. It is assumed by the government that the SHGs that are found ineligible would be provided hand-holding support, to improve their credibility for future assistance. However, there was no staff at the field level to do this tedious job. Record keeping at the group level has emerged as a very weak aspect of SHG functioning.

The main problem is that we don't have data on the Life cycle of a SHG. We are unable to understand how many groups are defunct or discontinued so we don’t know the mortality rate of the group. So, the government has no answer to these two questions: What groups work, and what works with groups?

Disaster Management

Disaster Management in Phailin was remarkable in its aspect of losing minimum lives when faced with challenge of massive proportion. India evacuated more than half a million people as massive Cyclone Phailin hit eastern ghats at Odisha and Andhra Pradesh. An early warning and timely actions saved countless lives. Earlier entire nation prays for the well-being of the people of disaster struck zone. Yet never care to plan. Things started changing with 1999 Odisha cyclone. And even world bank blog has put an article on the preparation by Odisha government.

In the case of flood/tsunami/cyclone, torrential rains always play havoc and diseases are rampant due to decaying carcass. The relief center must be equipped with grains, deworming pills, Trampoline sheet, dhoti/lungi with saree, mosquito net, blanket, towel & utensil kitchen as an immediate requirements for the household affected with cyclone. My prior experience on preparation for disaster management was itself a big lesson.

I was posted in Ganjam district with Panchyati Raj Department after one month of cyclone Phailin. I observed that mangroves have lowered the full impact of cyclone in the coastal region. Even 50 km from the coast, the brick mortar schools were partially destroyed by the storms.  On enquiring about the relief work at block level,  I was given brief on the help provided by administration post disaster. There were 33,283 households in Bhanjanagar. They were provided with kerosene oil, jaggery and flattened rice (chuda) of two months supply. 50 kg of grains and Rs 500 were given to each household. Plastic cover roof was in demand more than anything. Ganjam was worst hit by the Phailin and the accounts were horrifying.

There is lack of access to basic resources to sustain livelihood for the community. There must be careful planning with Donor funds coming for rehabilitation. Poor countries have become fighting arena of NGOs on international aid after each disaster. And all the international aid and investment is mostly consumed by INGOs, private companies involved in the relief effort. Even missionary organization pops up for saving the soul of unbelievers post disaster with charity. When disaster strikes, who profits? This is the key question for policy level to eliminate corruption and inefficiencies. No other country in the world has more non-governmental organizations (NGOs) per capita as Haiti. Yet we all know about real face of international relief after 2010 earthquakes. (Source 1 and Source 2).