The scheme offers incentives to promote self-employment and entrepreneurship, especially among women, in rural areas.
Overview
- Swarnajayanti Gram Swarozgar Yojana (SGSY Scheme) was introduced at the start of the 1999-2000 fiscal year to replace six existing related programs. The initiative was created as an integrated program to support rural poor self-employment. It is supported in a 75:25 split by the Centre and the State and is executed by commercial banks, regional banks, and cooperative banks.
- Other financial firms, Panchayat Raj institutions, District Rural Development Agencies (DRDAs), Non-Governmental Organisations (NGOs), and technical institutes in the district will participate in the scheme’s development, implementation, and monitoring. This essay aims to increase understanding of this self-employment opportunity.
- The SGSY Scheme incorporates the previous six schemes: the Integrated Rural Development Programme (IRDP), the Training of Rural Youth for Self-Employment (TRYSEM), the Development of Women and Children in Rural Areas (DWCRA), the Supply of Improved Toolkits to Rural Artisans (SITRA), the Ganga Kalyan Yojana (GKY), and the Million Wells Scheme (MWS).
- The government will construct Activity clusters based on people’s abilities and skills under this rural employment initiative. Funding will be provided by NGOs, Panchayat Raj Institutions, District Rural Development Agencies (DRDAs), Technical Institutions, Banks, and other Financial Institutions. This scheme has been renamed National Rural Livelihood Mission (NRLM) and afterward Aajeevika Mission.
SGSY Scheme: Objective
The scheme is designed to lift supported low-income families (also known as swarozgaris) out of poverty by giving them a significant continuous income over a period. This will be accomplished through forming Self-Help Groups (SHGs) among the rural poor through a process of social mobilization, training, capacity building, and the provision of income-generating assets.
The design envisions the creation of greater versatility with a focus on important activities defined in the area, both for group and individual help. These activity clusters will be located within an acceptable radius of neighboring villages. The SGSY Scheme objective is made clearer in the following points:
- To reduce poverty by establishing a significant number of Micro firms throughout the country.
- Group Lending Capitalisation
- An overall microenterprise programme that covers all aspects of self-employment, including the organisation of rural poor into Self-Help Groups.
- Integration of various institutions such as District Rural Development Agencies, Banks, Line Departments, Panchayati Raj Institutions, Non-Governmental Organisations (NGOs), and so on.
- To supply a mix of income-generating assets such as bank credit and government subsidies.
Scheme Benefits
The SGSY Scheme PDF is available for everyone to view the benefits of the Swarnajayanti Gram Swarozgar Yojana. We are giving you the following basic information on Scheme elements and their benefits:
- Activity Clusters for Skill Development, Self-Help Groups (SHGs)
- Norms for Revolving Fund Lending
- Borrowers of the IRDP receive assistance.
- Insurance Security guidelines
- Follow-up on Subsidy and Post-Credit
- Consumption credit risk fund
- At least 5 years in duration Loan repayment
- Prompt Loan Recoveries
- SGSY loan refinancing
- Bank Officials Deployed to the DRDAs Service Area Data Submission Approach & Annual Credit Plan LBR Returns
Self-Help Groups (SHGs)
Swarozgaris picked from the Gram Sabha-approved BPL list will organize the Self-Help Groups. The Scheme provides for the development, nurturing, and linking of Self-Help Groups (SHGs) with banks. Actions will be prioritized, and most of the money will eventually go to Self-Help Groups. Half of the groups formed at the block level should be made up entirely of women.
SHGs under SGSY Scheme may comprise of 10 to 20 people from low-income families. In the case of young kids and disabled people, this limit may be reduced to a minimum of five. The group may not include over one member from the same family. A person should not belong to more than one organization. SHGs can be informal groups, or they can be registered under the Societies Act, the State Co-operative Act, or as a partnership corporation.
Assistance (loan cum subsidy) could well be provided to individuals and groups or to all members of the group for them to engage in income-generating activities. Banks may keep providing loans in union territories and states where SHG creation has not taken root.
How the Funds Will Revolve?
Every SHG that has been in operation for at least six months and has shown the ability of a viable group will get a revolving fund of ₹25,000/-as a cash credit facility from banks The DRDA will give the bank ₹10,000/- of this amount. Banks could charge interest only on amounts more than ₹10,000/-.
The revolving is supplied to groups to supplement the group corpus, allowing a greater number of members to obtain loans, and facilitating an increase in the per capita loan available to members. The revolving fund teaches participants credit discipline and financial management skills, allowing them to become creditworthy. SHGs that have shown their viability will be eligible for economic aid under the scheme.
SGSY Scheme: Role of Banks and State Agencies
Banks will work closely with government agencies in project implementation, planning, and preparation, identifying important activities, groups, and self-help groups, identification of individual Swarozgaris, infrastructure planning, capacity building, and SHG activity selection, grading of SHGs, Swarozgari selection, pre-credit activities, and post-credit monitoring, including loan recovery. The bank has the ultimate say in the Swarozgaris’ choosing.
SGSY cells may be established by banks at Regional/Zonal Offices. These cells shall monitor and examine the credit flow to SGSY Swarozgaris on a regular basis, ensuring the scheme’s guidelines are followed, gather data from the branches, and make consolidated data available to the bank’s Head Office.
Banks should ensure that no inquiry from the field scale is unanswered by the Main Office. The Scheme may be monitored at the bank’s Head Office level by a Senior Officer, and the success of this scheme may be assessed on a regular basis by Top Management. The scheme calls for the formation of SGSY committees at the Block/District/State and Central levels.
These committees will meet on a regular basis to assess and oversee the scheme’s implementation. Banks are encouraged to actively engage in these discussions and maintain greater coordination with the various entities involved in SGSY implementation.
Roadmap
SGSY Scheme – The plan aims to create a significant number of micro-enterprises in remote regions based on their potential (land-based or otherwise). Various components, such as weak capacity building, skills training, credit training, transfer of technology, marketing, and infrastructure, are given careful consideration.
The following procedures are part of the scheme
- Group Formation – This stage includes determining the level of skill of the members.
- Capital Formation entails the deployment of a revolving fund structure. Members are encouraged to enhance their talents through practice.
- Implementation – the final stage focuses on identifying and developing abilities and group capabilities. The implementation is carried out at the pace chosen by the various organizations.
Funding and Training
The scheme’s groups will be maintained, educated, and sponsored by NGOs, donors, CBOs, banks, self-help organizations, and government-owned District Land Development Agencies (DRDAs). Recordkeeping, market information, identification and appraisal, familiarisation with cost estimation, product keeping, familiarisation with investment projects by banks, and basic skills relevant to the identified activity are all part of the training program.
Repayment of Loan
All SGSY Scheme loans should be viewed as medium-term loans with a minimum repayment duration of five years. Loan payback installments will be set based on the unit cost agreed by the NABARD/District SGSY Committee. During the gestation period, loan repayments will be suspended. Repayment installments should not exceed 50% of the project’s incremental net profits. The number of installments can be determined by considering the principal amount, interest responsibility, and payback duration.
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Sealing of Subsidies
The sealing of subsidies in the SGSY scheme refers to the process of disbursing the subsidy to the beneficiary after the successful completion of the project. This is in contrast to the earlier system where the subsidy was disbursed upfront.
The sealing of subsidies was introduced in the SGSY scheme in 2001-02 with the aim of reducing misuse of subsidies and ensuring that the subsidies are actually used for the intended purpose.
Under the sealing of subsidies system, the beneficiary is required to submit a completion certificate from the bank and the implementing agency to the district administration. The district administration then verifies the completion certificate and disburses the subsidy to the beneficiary.
The sealing of subsidies system has been effective in reducing misuse of subsidies and ensuring that the subsidies are actually used for the intended purpose. However, it has also led to some delays in the disbursement of subsidies to beneficiaries.
FAQs
What is the SGSY scheme?
The Swarnajayanti Gram Swarozgar Yojana (SGSY) is a self-employment scheme for the rural poor in India. It was launched in 1999-2000 and integrates the following existing schemes:
● Integrated Rural Development Programme (IRDP)
● Training of Rural Youth for Self-Employment (TRYSEM)
● Development of Women and Children in Rural Areas (DWCRA)
● Supply of Improved Toolkits to Rural Artisans (SITRA)
What are the objectives of the SGSY scheme?
The objectives of the SGSY scheme are to:
● Provide self-employment opportunities to the rural poor
● Increase the income of the rural poor
● Improve the quality of life of the rural poor
● Reduce poverty in rural areas
● Create sustainable livelihoods for the rural poor
What are the features of the SGSY scheme?
The features of the SGSY scheme include:
● Provision of bank credit and government subsidy to eligible beneficiaries
● Focus on group-based activities
● Training and capacity-building support to beneficiaries
● Market linkage support to beneficiaries
What is the difference between SGSY and IRDP?
The SGSY scheme is a more comprehensive scheme than the IRDP scheme. It integrates a number of existing schemes and provides a wider range of support to beneficiaries.
How many Rural Development programmes have been integrated into SGSY?
Six Rural Development programmes have been integrated into SGSY:
● Integrated Rural Development Programme (IRDP)
● Training of Rural Youth for Self-Employment (TRYSEM)
● Development of Women and Children in Rural Areas (DWCRA)
● Supply of Improved Toolkits to Rural Artisans (SITRA)
● Ganga Kalyan Yojana (GKY)
● Million Wells Scheme (MWS)
What does SGSY aim to provide bank credit and government subsidy to?
SGSY aims to provide bank credit and government subsidies to eligible beneficiaries to enable them to start or expand their self-employment ventures. The subsidy is provided as a back-ended subsidy, i.e., it is paid to the beneficiary after the successful completion of the project.
Conclusion
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