Swarnajayanti Gram Swarozgar Yojana

The Swarnajayanti Gram Swarozgar Yojana (SGSY) was enacted at the start of the financial year 1999-2000 to replace six other affiliated schemes aiming to promote self-employment in rural areas. This integrated program targets the rural poor, providing a 75:25 funding ratio between the Centre and the State, and is implemented by commercial, regional, and cooperative banks. Other entities such as Panchayat Raj institutions, District Rural Development Agencies (DRDAs), Non-Government Organizations (NGOs), and technical institutions are also involved in its planning, implementation, and monitoring. This article aims to increase awareness of this vital self-employment scheme.

Schemes Replaced

The SGSY scheme supersedes the following programs with its comprehensive approach:

Integrated Rural Development Program (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)

Objective

The scheme is designed to uplift low-income families, known as swarozgaris, out of poverty by providing sustained income sources over time. This is achieved by organizing the rural poor into Self-Help Groups (SHGs) using social mobilization, training, capacity building, and income-generating asset provision. Activity clusters focus on key block activities for group and individual support, situated within accessible geographical clusters of nearby villages.

Self-Help Groups

SHGs under SGSY are formed from Swarozgaris on the BPL list approved by the Gram Sabha. These groups receive aid via a loan-cum-subsidy mechanism for undertaking income-generating activities. The scheme mandates that half of the groups formed at the block level should exclusively consist of women.

Coverage of the Scheme

SGSY targets rural communities, including landowners, landless laborers, educated unemployed individuals, rural artisans, and the disabled. Selections are made from BPL families by a team of a Block Development Officer, a banker, and a sarpanch. Special focus is given to the vulnerable sections, with 50% of assistance earmarked for SC/ST, and a significant portion for women and the disabled.

Roadmap

The initiative focuses on establishing numerous micro-enterprises in rural areas based on local potential, whether land-based or otherwise. The scheme considers components like capacity building, skill development training, credit, technology transfer, marketing, and infrastructure. Processes include:

Group Creation – Evaluates member skill levels.
Capital Creation – Utilizes a revolving fund system, allowing skill development through practice.
Implementation – Identifies and nurtures abilities and group skills, proceeding at a suitable pace.

Sealing of Subsidies

Subsidies in SGSY are structured as follows:

A 30% subsidy of the total project cost, with a Rs. 7,500 cap.
50% subsidy for SC/STs and disabled persons, capped at Rs. 10,000.
50% subsidy for SHGs and individual swarozgaris, capped at Rs. 1.25 lakh or a per capita subsidy of Rs. 10,000, whichever is lower.
No monetary subsidy limits for irrigation projects.
Emphasis on vulnerable groups among the rural poor.

Funding and Training

NGOs, philanthropists, CBOs, banks, and government-owned District Land Development Agencies (DRDAs) facilitate the maintenance, education, and funding of groups. Training covers vital skills such as bookkeeping, market knowledge, product costing, and project financing by banks. This contributes to rural entrepreneurial development, crucial for economic vitality, linking to initiatives like MSME sector development.

Disposal of Revolving Funds

SHGs that prove viability over six months qualify for cash credits from DRDAs and banks. These revolving funds grow the group corpus, enabling more members to access loans and further promoting self-sustainability in rural economies.

Insurance Cover

Assets and livestock purchased are insured under the group insurance scheme, providing financial security for swarozgaris. This safeguards investments in rural enterprises, akin to protections seen in various sectors such as Guwahati's GST initiatives and others.

Repayment of Loan

Loans under these schemes are medium-term, with a minimum repayment period of five years. Instalments are aligned with costs approved by NABARD or district SGSY committees. Banks offering such loans are reimbursed by NABARD, similar to processes in structured financial schemes across India, like trademark protection initiatives.

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Frequently Asked Questions

Common questions about Swarnajayanti Gram Swarozgar Yojana: Empowering Rural Self Employment.

The Swarnajayanti Gram Swarozgar Yojana (SGSY) is a self-employment scheme launched by the government in 1999-2000 to assist rural poor families in rising above the poverty line by providing them with income-generating assets and opportunities. It aims to organize the rural poor into Self-Help Groups (SHGs) and support them through social mobilization, training, and capacity building.

The SGSY scheme caters to various sections of the rural community, including those with land, landless laborers, educated unemployed individuals, rural artisans, and disabled persons. The scheme specifically focuses on vulnerable sections, with 50% of the assistance earmarked for Scheduled Castes and Scheduled Tribes, and a proportion reserved for women and the disabled.

The SHGs are formed by 'Swarozgaris' (beneficiaries) drawn from the Below Poverty Line (BPL) list approved by the Gram Sabha (village council). The scheme mandates that half of the groups formed at the block level should be exclusively women groups, comprising 10-20 members each.

The SGSY scheme provides a uniform subsidy of 30% of the total project cost, subject to a ceiling of Rs. 7,500. For Scheduled Castes, Scheduled Tribes, and disabled persons, the subsidy is 50% of the total project cost, subject to a ceiling of Rs. 10,000. Self-Help Groups and individual Swarozgaris can receive a subsidy of 50% of the total project cost, subject to a ceiling of Rs. 1.25 lakh or per capita subsidy of Rs. 10,000, whichever is less.

The SHGs are trained and maintained by various organizations, including NGOs, philanthropists, community-based organizations (CBOs), banks, self-help promoting organizations, and District Rural Development Agencies (DRDAs) owned by the government. The training covers aspects such as bookkeeping, market knowledge, product costing, project financing, and basic skills related to the identified activity.

Commercial banks, regional banks, and cooperative banks play a crucial role in implementing the SGSY scheme. They provide loans to the SHGs and individual Swarozgaris on a loan-cum-subsidy basis. The banks are reimbursed by NABARD for the loans disbursed under the scheme.

SHGs that have been in existence for at least six months and have demonstrated the potential of a viable group qualify for cash credits from DRDAs and banks. These funds, known as revolving funds, are extended to augment the group corpus and enable more members to avail loans.

Loans provided under the SGSY scheme are medium-term, with a minimum repayment period of five years. The installments are determined based on the unit cost approved by NABARD or the district SGSY committee.

Yes, the SGSY scheme provides insurance coverage for assets or livestock bought out of the loan. Additionally, the Swarozgaris are covered under a group insurance scheme.

The SGSY scheme is funded by the Central and State governments in a ratio of 75:25, respectively.