"The emergence of the Self-Help Groups (SHGs) in contemporary times points to the slow but steady…

Question

"The emergence of the Self-Help Groups (SHGs) in contemporary times points to the slow but steady withdrawal of the State from developmental activities." Examine the role of the SHGs in developmental activities and the measures taken by the Government of India to promote the SHGs.

Ghissu Editorial · Accepted Answer

SHGs drive financial inclusion, last-mile delivery and women's agency, and the Government promotes them through DAY-NRLM, cheap collateral-free credit and enterprise schemes, so they mark a shift in the State's role rather than its withdrawal. DAY-NRLM has organised over 10 crore households into about 91 lakh SHGs.

**Introduction**

DAY-NRLM has organised over 10 crore rural households into about 91 lakh Self-Help Groups (PIB, 2025). This is less a withdrawal of the State than a shift from direct provider to facilitator of community institutions.

**Role of SHGs in Developmental Activities**

SKETCH: flow | SHG Development Ladder
- Thrift
- Internal lending
- Bank linkage
- Livelihood
- Enterprise

1. **Credit without collateral**: Peer pressure replaces collateral; NABARD's 1992 SHG-Bank Linkage pilot proved poor women repay, and 47,952 Bank Sakhis now take banking into villages.
2. **Last-mile delivery**: Madhya Pradesh handed its take-home-ration plants to SHG federations, and Kudumbashree ran Kerala's community kitchens during the COVID-19 lockdown.
3. **Agency and voice**: Bihar's 1.45 crore Jeevika didis pressed the demand behind the 2016 prohibition law, showing collective political voice.
4. **Uneven results**: Credit stays concentrated in southern states, and the 2010 Andhra Pradesh microfinance crisis showed the danger of multiple borrowing.

**Government of India's Measures to Promote SHGs**

1. **DAY-NRLM (2011)**: One woman from every poor household is brought into a group seeded with a Revolving Fund and a Community Investment Fund.
2. **Cheap credit**: SHG loans are priority-sector lending, collateral-free up to ₹20 lakh, with interest subvention to 7%.
3. **Enterprise and markets**: NAMO Drone Didi (15,000 drones), the Lakhpati Didi target of 3 crore women, SARAS melas and GeM access move groups from credit to business.

**Conclusion**

Federating groups, closing the regional gap and tracking incomes rather than group counts would complete the shift. SHGs show the State working through communities, turning welfare into empowerment and carrying SDG 5 to the last household.

"The emergence of the Self-Help Groups (SHGs) in contemporary times points to the slow but steady withdrawal of the State from developmental activities." Examine the role of the SHGs in developmental activities and the measures taken by the Government of India to promote the SHGs.

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