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Swarnajayanti Gram Swarozgar Yojana

Swarnajayanti Gram Swarozgar Yojana

Swarnajayanti Gram Swarozgar Yojana

Swarnajayanti Gram Swarozgar Yojana (SGSY) was enacted in the dawn of the financial year of 1999-2000 as a replacement of six other affiliated schemes. The initiative was designed as an integrated program that caters to the self-employment of the rural poor. It is funded by the Centre and the State in a 75:25 ratio and is implemented by commercial banks, regional banks and cooperative banks. Other financial institutions, Panchayat Raj institutions, District Rural Development Agencies (DRDAs), Non-Government Organizations (NGOs), and technical institutions in the district will also undertake the process of planning, implementing and monitoring the scheme. This article seeks to create awareness of this self-employment scheme.

Schemes Replaced

The scheme effectively replaces for the following other schemes:

  • 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)


The scheme is established with the intent of bringing the assisted low-income families (also referred to as swarozgaris) above the poverty line by providing them with an appreciable sustained income over a period of time. This shall be fulfilled by organizing the rural poor into Self-Help Groups (SHGs) through the process of social mobilization, training, capacity building and provision of income generating assets.

The scheme envisages the development of activity clusters with an emphasis on key activities identified in the block, both for the group as well as for individual assistance. These activity clusters will be in geographic clusters of neighbouring villages within a reasonable radius.

Self-Help Groups

The Self-Help Groups (SHGs) will be organized by ‘Swarozgaris’ drawn from the BPL list approved by the Gram Sabha. The scheme facilitates the formation of Self-Help Groups (SHGs), who will be assisted on a loan-cum-subsidy basis for undertaking income-generating activities. The scheme regulations state that half of the groups formed at the block level should be exclusively women groups.

Coverage of the Scheme

The scheme caters to the rural communities such as those with land, landless labour, educated unemployed, rural artisans and the disabled. The assisted low-income families could be either individuals or groups and would be selected from Below Poverty Line (BPL) families by a three-member team comprising of a Block Development Officer (BDO), banker and sarpanch.

The scheme specifically focuses on the vulnerable sections of the rural poor. The SC/ST would gain the bulk of assistance (50%), while a proportion of the remaining funds would be earmarked for women and the disabled.

The scheme is aimed at the development of Swarozgaris through training courses that are designed in accordance with the activities selected and the requirements of each swarozgari.


The initiative focusses on establishing a large number of micro-enterprises in rural areas based on the potential of such areas (land-based or otherwise). Due consideration is accorded to different components such as capacity building of the poor, skill development training, credit, training, technology transfer, marketing and infrastructure.

The scheme entails the following processes:

  • Group Creation – This stage covers the assessment of the skill level of the members.
  • Capital Creation – This involves the use of a rotating fund system. Here, the members are facilitated to hone their skills through experience.
  • Implementation – the final stage deals with the identification and nurturing of abilities and group skills. The implementation is processed according to the pace desired by the respective groups.

Sealing of Subsidies

The subsidy allocation for the scheme is as follows:

  • A uniform subsidy of 30% of the total project cost is allowed under the scheme, subject to a ceiling of Rs. 7,500.
  • A subsidy of 50% of the total project cost, subject to a ceiling of Rs. 10,000 is extended to SC/STs and disabled persons.
  • 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) is provided to Self-Help Groups (SHGs) and individual swarozgaris.
  • No monetary limits on subsidy have been specified for irrigation projects.
  • Subsidy under these provisions is back-ended. The banks are prohibited from charging interest on the subsidy portion of the loan amount.
  • As already stated, special emphasis will be laid on vulnerable groups among the rural poor


  • The scheme will function through multiple credits in lieu of a one-time credit injection.
  • The SHGs may comprise of 10-20 members.
  • SHGs are formed through a selection process.
  • Regular festivals and meals are organized by the government so as to assist the SHGs to sell their output/goods to a broader audience and create a market in the process.

Funding and Training

The groups formed under the scheme will be maintained, educated and funded by the NGOs, philanthropists, CBOs, banks, organizations promoting self-aid and District Land Development Agencies (DRDAs) owned by the government. The training program involves elements of bookkeeping, market knowledge, identification and appraisal, acquaintance with product costing, product keeping, familiarization with project financing by banks as well as basic skills pertaining to the identified activity.

Disposal of Revolving Funds

SHGs that are in existence for a period of six months and have demonstrated the potential of a viable group qualifies for the receipt of cash credits from DRDA and banks. Such funds, known as revolving funds, is extended to augment the group corpus. This enables a large number of members to avail loans.

Insurance Cover

Insurance coverage is provided for assets/livestock bought out of the loan. Moreover, the swarozgaris are covered under the group insurance scheme.

Repayment of Loan

Loans rendered under these schemes are medium-term with a minimum repayment period of five years. The instalments will be determined in accordance with the unit cost approved by the NABARD/district. SGSY committee.

Note: Banks rendering such loans will be reimbursed by NABARD for the loans disbursed.