3 Feb 2026·Source: The Hindu

6 min

EconomySocial IssuesPolity & GovernanceNEWS

Empowering Rural Women: Next Phase for Entrepreneurship via Self-Help Groups

DAY-NRLM empowers 10 crore households, fostering rural women's economic and political growth.

The Deendayal Antyodaya Yojana National Rural Livelihoods Mission (DAY-NRLM) has facilitated the mobilization of approximately 10 crore households into 91 lakh Self-Help Groups (SHGs). These SHGs are further organized into 5.35 lakh Village Organizations (VOs) and 33,558 Cluster-Level Federations (CLFs). These SHGs have mobilized credit exceeding ₹11 lakh crore from banks, with Non-Performing Assets (NPA) remaining around 1.7%. The number of Lakhpati didis (SHG members earning over ₹1 lakh annually) has surpassed two crore. This program has also led to the political empowerment of women.

State governments are focusing on unattached Direct Benefit Transfer (DBT) schemes. For example, in Bihar, ₹10,000 each was transferred to over one crore women under the Mukhyamantri Mahila Rozgar Yojana. The DAY-NRLM scheme is slated for appraisal for the next financial cycle from 2026-27 to 2030-31. Strengthening CLFs needs to be the main focus area. CLFs need to become community-owned institutes, free from government interference. Models like Kudumbashree in Kerala and Jeevika in Bihar could be emulated.

Concerns exist regarding the large amount of funds lying idle with the CLFs, which are prone to misuse. Around ₹56.69 lakh crore has been given to community institutions as capitalization support. These funds have to be accounted for by putting in place a robust institutional system of community monitoring through social audits along with statutory audits of CLFs. The program needs to move from debt financing to other models of innovative financing such as equity, venture capital, and blended financing. A ‘Convergence Cell’ at the NITI Aayog will ensure efficient utilization of resources and avoid duplication of efforts.

Key Facts

DAY-NRLM: 10 crore households mobilized into SHGs

SHGs credit from banks: More than ₹11 lakh crore

NPA of SHGs: Around 1.7%

Lakhpati didis: Over two crore

Capitalization support to community institutions: ₹56.69 lakh crore

UPSC Exam Angles

GS Paper 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

GS Paper 3: Inclusive growth and issues arising from it.

Connects to syllabus through poverty alleviation, women empowerment, and rural development.

Potential question types: Statement-based MCQs, analytical questions on the impact of SHGs.

Visual Insights

Key Statistics of DAY-NRLM

Highlights the key achievements and financial aspects of the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM).

Households Mobilized into SHGs: 10 Crore
Number of Self-Help Groups (SHGs): 91 Lakh
Credit Mobilized by SHGs: ₹11 Lakh Crore
Non-Performing Assets (NPA): 1.7%
Number of Lakhpati Didis: 2 Crore

More Information

Background

The concept of self-help groups (SHGs) in India gained prominence in the late 20th century as a strategy for poverty alleviation and women's empowerment. The initial efforts were supported by NGOs and the Reserve Bank of India (RBI). The NABARD's SHG-Bank Linkage Programme, launched in 1992, provided a significant boost by connecting SHGs with formal banking institutions. This program facilitated access to credit for marginalized communities, particularly women, who were previously excluded from the formal financial system. Over time, the SHG movement evolved from a microfinance initiative to a broader platform for social and economic empowerment. The government recognized the potential of SHGs and integrated them into national programs like the Swarnajayanti Gram Swarozgar Yojana (SGSY), later restructured as the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM). These programs aimed to strengthen SHGs by providing training, capacity building, and financial assistance. The focus shifted from mere credit access to promoting sustainable livelihoods and entrepreneurship. The legal and institutional framework supporting SHGs includes various government policies, guidelines issued by the RBI and NABARD, and state-level cooperative societies acts. While there is no specific central legislation governing SHGs, they are often registered under state-level laws related to cooperative societies or societies registration acts. The DAY-NRLM provides a comprehensive framework for promoting and supporting SHGs across the country, with a focus on convergence with other government programs and schemes.

Latest Developments

Recent government initiatives have focused on strengthening the SHG ecosystem and promoting entrepreneurship among women. The Lakhpati Didi program aims to enable SHG members to earn a sustainable income of at least ₹1 lakh per year. This involves providing training, market linkages, and financial support to help women start and expand their businesses. The government is also promoting the use of technology and digital platforms to enhance the efficiency and reach of SHGs. There are ongoing debates about the sustainability and impact of SHGs. Some concerns have been raised about the quality of training, the effectiveness of market linkages, and the potential for over-indebtedness among SHG members. The RBI has been closely monitoring the performance of SHGs and has issued guidelines to ensure responsible lending practices. Civil society organizations and researchers are also conducting studies to assess the long-term impact of SHGs on poverty reduction and women's empowerment. The future outlook for SHGs is positive, with the government committed to further strengthening the movement. The focus is on promoting innovation, diversification, and value addition in SHG activities. The government is also exploring new models of financing, such as equity and venture capital, to support SHG-led enterprises. The NITI Aayog's Convergence Cell is expected to play a key role in ensuring efficient utilization of resources and avoiding duplication of efforts in the SHG sector.

Frequently Asked Questions

1. What is DAY-NRLM and why is it important for rural women?

DAY-NRLM (Deendayal Antyodaya Yojana National Rural Livelihoods Mission) is a program that helps poor people in villages earn a living. It's important because it empowers rural women by organizing them into Self-Help Groups (SHGs), providing them with financial assistance, and promoting entrepreneurship.

2. What are the key facts about DAY-NRLM that are important for the UPSC Prelims exam?

Key facts for Prelims include the number of households mobilized into SHGs (10 crore), the amount of credit provided to SHGs (over ₹11 lakh crore), the NPA percentage of SHGs (around 1.7%), and the number of Lakhpati didis (over two crore). Also, remember the capitalization support amount (₹56.69 lakh crore).

Exam Tip

Focus on memorizing the numbers associated with DAY-NRLM as these are frequently asked in the Prelims exam.

3. How does DAY-NRLM contribute to the political empowerment of women?

DAY-NRLM promotes the political empowerment of women by providing them with leadership opportunities within SHGs, Village Organizations (VOs), and Cluster-Level Federations (CLFs). This participation increases their awareness of rights and enables them to voice their concerns in local governance.

4. What is the Lakhpati Didi program and what is its aim?

The Lakhpati Didi program aims to enable SHG members to earn a sustainable income of at least ₹1 lakh per year. This involves providing training, market linkages, and financial support to help women start and expand their businesses.

5. What are the potential benefits and drawbacks of the SHG model for women's empowerment?

Benefits include increased income, financial independence, and enhanced social capital. Drawbacks may include dependence on government support, limited access to markets, and challenges in managing finances effectively.

6. What reforms are needed to further strengthen the SHG ecosystem in India?

Reforms could focus on improving access to credit, providing better training and skill development, strengthening market linkages, and promoting diversification of income-generating activities. Also, efforts should be made to reduce the NPA of SHGs.

7. How does the success of DAY-NRLM impact common citizens in rural areas?

The success of DAY-NRLM leads to increased income and improved living standards for rural households. It also promotes financial inclusion, reduces poverty, and empowers women, leading to overall socio-economic development in rural areas.

8. What is the significance of the ₹11 lakh crore credit mobilized by SHGs?

The ₹11 lakh crore credit mobilized by SHGs demonstrates the significant role these groups play in providing financial access to rural communities, especially women. It highlights their ability to leverage formal banking channels for economic empowerment.

9. What is the next financial cycle for DAY-NRLM appraisal, as per the topic?

As per the topic, the next financial cycle for DAY-NRLM appraisal is from 2026-27 to 2030-31.

10. What are the recent developments related to state governments and DBT schemes, as mentioned in the topic?

State governments are focusing on unattached Direct Benefit Transfer (DBT) schemes. For example, in Bihar, ₹10,000 each was transferred to over one crore women under the Mukhyamantri M

Practice Questions (MCQs)

1. Consider the following statements regarding the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM): 1. It aims to mobilize all rural poor households into self-managed Self-Help Groups (SHGs). 2. It provides for interest subvention to SHGs on credit accessed from banks. 3. It focuses on promoting diversified livelihood opportunities for the rural poor. Which of the statements given above is/are correct?

A.1 and 2 only
B.2 and 3 only
C.1 and 3 only
D.1, 2 and 3

Show Answer

Answer: D

All three statements are correct. The DAY-NRLM aims to mobilize rural poor households into SHGs (Statement 1). It provides interest subvention on credit accessed from banks (Statement 2). It also focuses on diversified livelihood opportunities (Statement 3). The program has mobilized approximately 10 crore households into 91 lakh SHGs.

2. Which of the following statements accurately describes the current status of Non-Performing Assets (NPAs) related to Self-Help Groups (SHGs) under the DAY-NRLM scheme?

A.NPAs are negligible, remaining below 0.5%.
B.NPAs are a significant concern, exceeding 5%.
C.NPAs are around 1.7%.
D.NPAs are not tracked under the DAY-NRLM scheme.

Show Answer

Answer: C

The correct answer is C. According to the provided text, Non-Performing Assets (NPAs) related to SHGs under the DAY-NRLM scheme remain around 1.7%. This indicates a relatively healthy repayment rate and financial stability within the SHG ecosystem.

3. What is the primary focus area for strengthening the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) in its next phase from 2026-27 to 2030-31, as highlighted in the given text?

A.Increasing the number of Self-Help Groups (SHGs).
B.Strengthening Cluster-Level Federations (CLFs).
C.Enhancing Direct Benefit Transfer (DBT) schemes.
D.Reducing Non-Performing Assets (NPAs) of SHGs.

Show Answer

Answer: B

The correct answer is B. The text explicitly states that strengthening Cluster-Level Federations (CLFs) needs to be the main focus area for the next phase of the DAY-NRLM. The goal is for CLFs to become community-owned institutes, free from government interference.

4. Consider the following statements regarding the 'Lakhpati Didi' initiative: 1. It aims to ensure that all women in Self-Help Groups (SHGs) earn at least ₹2 lakh annually. 2. It is directly managed and funded by NITI Aayog. 3. It seeks to promote sustainable livelihoods and entrepreneurship among women. Which of the statements given above is/are NOT correct?

A.1 and 2 only
B.2 and 3 only
C.1 and 3 only
D.1, 2 and 3

Show Answer

Answer: A

Statements 1 and 2 are NOT correct. The 'Lakhpati Didi' initiative aims for SHG members to earn at least ₹1 lakh annually, not ₹2 lakh. Also, while NITI Aayog has a Convergence Cell to ensure efficient resource utilization, the Lakhpati Didi program is primarily under the DAY-NRLM. Statement 3 is correct as it focuses on sustainable livelihoods and entrepreneurship.