Job scheme fails to fight poverty

from NDTV

In last year and a half, about 300 weavers killed themselves in Nalgonda alone, while 200 committed suicide in Varanasi.

The death trail grew longer as thousands of weavers were pushed deeper and deeper into poverty.

But a programme that could have dented these numbers, the Swranjayanti Gram Swarojgar Yoojna, has failed to do so grounded by the government.

Sponsored by the Centre and the state, the seven-year-old programme is supposed to cover those left out by the National Rural Employment Guarantee Scheme.

Like the NREGA, it generates employment by extending credit and facilities like technical know-how and marketing facilities to small rural enterprises and artisans.

But till November 2006, the SGSY disbursed just 23 per cent of its credit target.

"There are certain problems with the SGSY. The main issues are, there are no banks in several areas, the lending rates are very high and also banks are not keen to take risk for the poor. I have written to the FM," said Raghuvansh Prasad Singh, Rural Development Minister.

A rural development ministry study reveals:

* Over 20,000 public sector banks across the country did not disburse even 25 per cent of their credit target. This list has been forwarded to the Finance Ministry and RBI to follow up.

* In West Bengal and Meghalaya as little as three per cent and in Manipur no credit at all was extended by banks.

* Banks consider artisans high-risk borrowers and prone to default. And the Governor RBI has been asked to rectify this "poor lending."

The rural development ministry believes that these changes are crucial to stem the distress of craftsmen and banks need to lower their interest rates from nine per cent to 4 to 5 per cent, a demand the finance ministry has rejected.

It is up to the Centre now to find out a way to allocate more funds for the SGSY, if it is serious about the benefits of the scheme reaching the beneficiaries. Unless that happens, eradicating poverty and achieving a nine per cent overall growth rate seems a tough task.