Swarnajayanti Gram Swarojgar Yojana (SGSY) is an initiative launched by the Government of India

Government of India

The Government of India, officially known as the Union Government, and also known as the Central Government, was established by the Constitution of India, and is the governing authority of the union of 28 states and seven union territories, collectively called the Republic of India...

 to provide employment to poor people living in rural areas of the country. The scheme was launched on April 1, 1999.

The SGSY aims at providing self-employment to villagers through the establishment of Self-help groups. Activity clusters are established based on the aptitude and skill of the people which are nurtured to their maximum potential. Funds are provided by NGOs

Non-governmental organization

A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...

, bank

Bank

A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...

s and financial institutions.

Since its inception, over 2.25 million Self-help groups have been established with an investment of Rs. 14,403 crores, profiting over 6.697 million people.

Origin

The Swarnajayanti Gram Swarojgar Yojana (SGSY) was launched as an integrated programme for self-employment of the rural poor with effect from April 1, 1999.

Working of the scheme

The SGSY was somewhat intended to provide self-employment to millions of villagers. Poor families living below the poverty line were organised into Self-help groups (SHG)s established with a mixture of government subsidy and credit from investment banks. The main aim of these SHGs was to bring these poor families above the poverty line and concentrate on income generation through combined effort. The scheme recommended the establishment of activity clusters or clusters of villagers grouped together based on their skills and abilities. Each of these activity clusters worked on a specific activity chosen based on the aptitude and skill of the people, availability of resources and market potentiality.

The SHGs are aided, supported and trained by NGOs, CBOs, individuals, banks and self-help promoting institutions. Government-run District Level Development Agencies (DRDA) and the respective State governments also provided training and financial aid. The programme focusses on establishing microenterprises in rural areas.

The SHGs created may have a varying number of members based on the terrain and physical abilities of the members. It goes through three stages of creation:

• Group formation
• Capital formation through the revolving fund and skill development and
• Taking up of economic activity for skill generation.

The SHGs are usually created by selecting individuals from the Below poverty-line (BPL) list provided by the Gram sabha. The SHGs are divided into various blocks and each of these blocks concentrated on 4-5 key activities. The SGSY is mainly run through government-run DRDAs with support from local private institutions, banks and Panchayati raj

Panchayati Raj

The panchayat raj is a South Asian political system mainly in India, Pakistan, and Nepal. "Panchayat" literally means assembly of five wise and respected elders chosen and accepted by the local community. Traditionally, these assemblies settled disputes between individuals and villages...

 institutions.

The Government also assists villagers in marketing their products by organizing melas or fairs, exhibitions, etc.

Funding

Government subsidy allocated for SGSY per individual is 30% of the total capital investment if the total investment is less than Rs. 7,500 and 50% of the investment for SC/STs if the investment is less than Rs.10,000. For self-help groups, the government offers a subsidy of 50% if the total investment is less than Rs. 1.25 lakhs. There are no monetary ceilings on subsidy in the case of irrigation projects.

The SGSY concentrates on the marginalized sections of society. Accordingly, SC/STs comprise 50 percent, women 40% and the physically challenged make up 3% of the total beneficiaries from the scheme.

Government funding for the scheme is divided between the Center and State on a 75-25 basis.

Staffing

In the case of minor irrigation projects, each SHG might comprise 10-20 members. In case of hilly terrain, deserts and other sparsely populated areas or if the SHGs include disabled people, this number may be reduced to five.

Results

Since its inception in 1999, around 2.252 million SHGs have been established comprising 3.554 million people. Apart from SHGs, the scheme has also benefitted 3.143 self-employed individuals. The total investment provided for the cause has been calculated at Rs. 14,403.73 crores including Rs. 1,200 crores provided by the Government of India for the calendar year 2006-07. Of the beneficiaries, 45.54 percent have been SC/STs and 47.85 percent, women.

Physical and Financial progress since inception
	1999-2000	2000-2001	2001-2002	Total
Financial progress (in crores)
Total Government allocation	1472.33	1332.50	774.50	3579.33
Total funds available	1907.68	1518.40	1054.77	4480.85
Total funds utilized	959.86	1116.27	499.96	2576.09
Physical progress
Self-help groups formed	292,426	492,664	742,354	742,354
Individual Beneficiaries	585,956	687,602	300,700	1,574,258
Members of SHGs benefitted	347,912	342,871	179,251	870,034
Total swarozgaris assisted	933,868	1,030,473	479,951	2,444,292