The Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) is a flagship poverty alleviation program launched by the Ministry of Rural Development (MoRD) in June 2011. It was evolved from the erstwhile Swarnjayanti Gram Swarozgar Yojana (SGSY) following the recommendations of the Radhakrishna Committee, which suggested a transition from a “allocation-based” to a “demand-driven” strategy for rural livelihoods.
Core Philosophy and Institutional Design
The mission operates on the belief that the poor have an innate desire and capability to come out of poverty. The role of the government is to provide them with social mobilization and institutional platforms.
- Social Mobilization: At least one woman member from each rural poor household is brought into the Self-Help Group (SHG) network.
- Three-Tier Institutional Structure:
- Self-Help Groups (SHGs): 10–20 members at the neighborhood level.
- Village Organizations (VOs): Federations of SHGs at the village level.
- Cluster Level Federations (CLFs): Federations of VOs at the block level providing higher-order technical and financial support.
- Community Resource Persons (CRPs): The mission is implemented through “Internal CRPs”—women who have successfully come out of poverty and now train other SHGs, making it a “poor-to-poor” delivery model.
Financial Architecture and Support Mechanisms
NRLM provides a robust financial support system to ensure SHGs become credit-worthy and “bankable” entities.
- Revolving Fund (RF): A grant of ₹10,000 to ₹15,000 provided to SHGs existing for 3–6 months to catalyze internal lending.
- Community Investment Fund (CIF): Provided to VOs and CLFs to lend further to SHGs for small business activities.
- Interest Subvention: The central government provides interest subvention to bring down the effective cost of borrowing to 7% per annum. In 250 districts, an additional 3% subvention is provided for prompt repayment, reducing the rate to 4%.
- SHG-Bank Linkage: Banks are mandated to provide collateral-free loans to SHGs. The limit for such loans was recently increased from ₹10 lakh to ₹20 lakh.
Sub-Schemes and Specialized Interventions
To address specific segments of the rural economy, several sub-schemes operate under the DAY-NRLM umbrella:
Mahila Kisan Sashaktikaran Pariyojana (MKSP)
It aims to empower women in agriculture by making systematic investments to enhance their participation and productivity. It focuses on sustainable practices like Community Managed Natural Farming (CMNF).
Startup Village Entrepreneurship Programme (SVEP)
Focuses on promoting non-farm micro-enterprises at the village level. It helps rural entrepreneurs with business support services, capital, and a localized ecosystem for “Nano-enterprises.”
Aajeevika Grameen Express Yojana (AGEY)
Provides an alternative source of livelihood to SHG members by allowing them to operate public transport services in backward rural areas. This connects remote villages with key hubs like markets and hospitals.
Rural Self Employment Training Institutes (RSETIs)
RSETIs are managed by banks (with government support) to provide short-term residential training to rural youth followed by credit linkage and two years of handholding.
Digital and Technical Integration
| Initiative | Functional Objective |
| National Mobile Monitoring System (NMMS) | Real-time tracking of attendance and progress of various mission activities. |
| Bank Sakhi Model | SHG members trained as Business Correspondents (BCs) to provide doorstep banking and promote digital literacy. |
| Lakhpati Didi Portal | Tracks the progress of women members aiming for a sustainable annual income of ₹1 lakh or more. |
| Saras e-Commerce | Integration of SHG products with platforms like Amazon, Flipkart, and the Government e-Marketplace (GeM). |
Critical Facts for UPSC Prelims
- Funding Pattern: The mission is a Centrally Sponsored Scheme with a 60:40 funding ratio between the Centre and States (90:10 for North-Eastern and Himalayan states).
- Convergence: NRLM works in close convergence with MGNREGA (for labor), PMAY-G (for housing), and the Swachh Bharat Mission (for sanitation).
- Namo Drone Didi Scheme: A recent addition where 15,000 selected SHGs are provided with drones for providing rental services to farmers for liquid fertilizer application.
- Social Development Issues: NRLM is not limited to finance; it uses the SHG platform to address issues like child marriage, nutrition (via FNHW – Food, Nutrition, Health, and Wash), and gender-based violence.
- Targeting: While universal for the poor, it gives special preference to Particularly Vulnerable Tribal Groups (PVTGs), Single Women, and Persons with Disabilities (PwDs).
Challenges in Implementation
- Regional Disparity: States like Andhra Pradesh and Telangana have mature SHG ecosystems, whereas Northern states often struggle with “passive” groups that exist only on paper.
- Credit Quality: While loan volumes have increased, maintaining low Non-Performing Assets (NPAs) in the SHG portfolio remains a challenge for banks.
- Market Linkages: Many SHG products struggle with standardizing quality, branding, and packaging to compete with established private brands in the FMCG sector.
- Digital Divide: Despite the “Bank Sakhi” model, many elderly or unlettered members in remote tribal belts find it difficult to transition to digital financial transactions.