19 December 2024 : Daily Answer Writing
Q1) Self Helf Groups have the potential to become the best antidote to various socio-economic challenges plaguing rural India. Examine. (150 words/10 Marks)
Answer:
Self-Help Groups (SHGs) are informal voluntary groups of people, who come together to find ways to improve their living conditions. It is a financial intermediary group, usually composed of 10 to 25 members from similar social and economic backgrounds.
Role of SHGs in eradicating socio-economic challenges in rural areas:
- Promote Sustainable Institution: (a) principle of collective effort in SHGs is crucial for behavioural change in issues such as dowry, alcoholism, open defecation, etc. (b) democratic nature of SHGs inculcates a spirit of democracy among the participants.
- Financial Inclusion and poverty reduction: (a) promote a habit of saving [provide financial independence to women in the family]; (b) increased financial literacy through collective learning; (c) better access to credit due to better collateral management and bargaining power; (d) benefit from government initiatives like SHG-Bank linkage programme.
- Livelihood: (a) provide members with access to microfinance, enabling them to start small businesses or invest in agriculture, thereby generating income and employment. (b) provide market-oriented vocational training to overcome the issue of disguised and seasonal unemployment; (c) providing opportunities to women to engage in income-generating activities.
- Social cohesion and inclusion: foster a sense of community and solidarity among members through collective efforts; (b) Women-centric SHGs can help in their empowerment and leadership potential – positively affect women’s status in family/society; (c) community participation of marginalized group crossing caste/religion divides; (d) act as platforms for marginalized communities to voice their concerns and advocate for their rights
However, SHGs face some challenges in achieving its potential:
- Challenges in financial inclusion: C Rangarajan committee identified four major reasons for lack of financial inclusion: (a) lack of collateral security; (b) poor credit absorption capacity; (c) Inadequate reach of the institutions; (d) weak community network.
- Most activities undertaken by SHGs are primitive with poor value-addition per member + lack of adoption of technology, hence, the economic gain does not bring any qualitative change in life;
- Social handicaps: (a) SHGs divided on caste/religious lines, thus often reinforcing the social hierarchies; (b) patriarchal mindset preventing women to participate in economic activities, move outside their house, engage in roles beyond that of caregiver of the household.
- Leadership positions within SHGs are often taken up by the affluent members, also participating in unfair distribution of profits;
- Despite government initiatives, credit not readily made available from banks + persistence of corruption/middlemen etc.
