GS Notes

17. Governance Notes 10

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Elaborate Notes

Challenges Faced by Self-Help Groups (SHGs) in India

Self-Help Groups (SHGs) are informal groups of people who choose to come together to find ways to improve their living conditions. They are generally self-governed and peer-controlled. The SHG movement in India gained prominence with the SHG-Bank Linkage Programme (SBLP) launched by NABARD in 1992, following the recommendations of the S.K. Kalia Committee. It was inspired by the successful microcredit model of the Grameen Bank of Bangladesh, founded by Nobel Laureate Professor Muhammad Yunus in 1983. Despite their successes, SHGs in India face a multitude of challenges rooted in the country’s socio-economic fabric.

  • Historical and Sociological Factors:

    • Patriarchal and Feudal Mindset: Indian society, particularly in the northern states, has historically been characterized by a deeply entrenched patriarchal structure. This is evidenced in ancient texts like the Manusmriti, which, while granting women a protected status, often subordinated them to male authority. This historical legacy perpetuates a feudal mindset where women’s mobility, decision-making power, and economic independence are curtailed.
    • Limited Opportunities and Household Confinement: The agrarian nature of the rural economy has historically defined gender roles, confining women largely to domestic chores and unpaid farm labour. This confinement limited their exposure to the outside world, skill development, and financial literacy, creating a significant barrier to their effective participation in economic activities like SHGs. Sociologist M. N. Srinivas in his work on the Indian village structure highlighted these rigid social norms that restricted women’s roles.
    • Concept of Family Honour: Women are often seen as repositories of family honour (‘izzat’), which leads to restrictions on their movement and interaction with outsiders, particularly men. This social construct directly impedes their ability to attend SHG meetings, engage in marketing activities, or interact with bank officials.
    • Regional Disparities (North-South Divide): SHGs have demonstrated greater success in Southern India (e.g., Kerala’s Kudumbashree mission, established in 1997). This is often attributed to the more egalitarian social structures in the South, higher female literacy rates, and a history of matrilineal systems in certain communities (e.g., the Nairs of Kerala). In contrast, the rigid caste and patriarchal systems in many northern states pose significant challenges.
    • Safety and Security Concerns: The persistent issue of violence against women, both within the domestic sphere and in public spaces, acts as a major deterrent. Fear for their safety prevents many women from participating in evening meetings or travelling to distant markets to sell their products. NCRB data consistently highlights the high incidence of crimes against women, underscoring the reality of this challenge.

  • Solutions to Sociological Challenges:

    • Ensuring Safety and Security: A multi-pronged approach is needed, including effective implementation of laws like the Protection of Women from Domestic Violence Act, 2005, and creating safer public spaces through initiatives like improved street lighting, policing, and gender-sensitization of law enforcement.
    • Gender-Centric Education: As advocated by development theorists like Amartya Sen in his capability approach, education is fundamental to empowerment. The curriculum must incorporate principles of gender equality, gender parity, and sensitivity from an early age to challenge and change deep-seated patriarchal attitudes.
    • Evolving Development Paradigms:
      • Women in Development (WID): This approach, popular in the 1970s, focused on integrating women into existing development processes, treating them primarily as beneficiaries. It aimed to improve their welfare without challenging underlying gender inequalities.
      • Women and Development (WAD): Emerging in the late 1970s, this perspective recognized that women were already part of development, but their work was undervalued. It focused on women-only projects but often overlooked the role of patriarchal structures.
      • Gender and Development (GAD): This more holistic approach, developed in the 1980s, shifts the focus from women as a category to the socially constructed relations between men and women. It argues that development should be gender-neutral and transformative, aiming to dismantle systemic barriers like the “glass ceiling” and ensure genuine gender parity and justice.
    • Role of Civil Society and Media: NGOs and media can play a crucial role in awareness generation (jan jagran), disseminating information about legal rights, government schemes, and showcasing success stories of women entrepreneurs to inspire others.
    • Promoting Role Models: Highlighting the achievements of successful women from similar backgrounds can be a powerful tool to change societal attitudes and inspire both men and women to support female empowerment.

  • Financial Constraints:

    • Inadequate Finance: SHGs often struggle with insufficient capital to scale up their operations. The initial savings pool is small, and credit from banks, while institutionalized through the SBLP, can be difficult to access due to procedural hurdles and lack of collateral.
    • Market Linkage and Price Discovery: Members often lack the marketing skills and networks to sell their products beyond the local village market, where they are forced to sell at low prices to middlemen. This results in poor returns on their labour and investment.
    • Exploitation by Moneylenders: In areas with weak formal credit penetration, informal moneylenders remain a powerful force. They provide easy credit but often trap SHG members in a vicious cycle of debt, forcing them to sell their produce at predetermined, exploitative rates.
    • Predatory Micro Financial Institutions (MFIs): While MFIs have increased credit access, some engage in predatory practices, charging exorbitant interest rates. The Andhra Pradesh Microfinance Crisis of 2010, which saw a spate of suicides by borrowers, highlighted the dangers of unregulated MFIs and led to the formulation of regulations by the RBI, such as the Malegam Committee recommendations.
    • Diversion of Funds: Funds procured for enterprise activities are sometimes diverted for personal consumption, household needs like marriage expenses or medical emergencies. This lack of financial discipline erodes the group’s capital base and hampers business growth.

Suggestions for Dealing with Challenges Faced by SHGs

  • Strengthening Financial Support:

    • Matching Grants: State governments can introduce schemes to provide matching grants to SHGs, doubling their corpus and enhancing their creditworthiness.
    • Robust SHG-Bank Linkage: The process for opening bank accounts and accessing loans under the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) must be simplified. Sensitivity training for bank officials is crucial to change their perception of SHG members as high-risk borrowers.
    • Subsidized Credit: Provision of interest subvention, as is done under DAY-NRLM, makes credit more affordable and enterprise more viable.
    • Regulatory Oversight of MFIs: Bringing all MFIs under the comprehensive regulatory purview of the Reserve Bank of India is essential to cap interest rates and ensure responsible lending practices.

  • Capacity Building and Marketing:

    • Skill Development: Integrating SHGs with skill development programs like Pradhan Mantri Kaushal Vikas Yojana (PMKVY) can improve the quality, design, and packaging of their products, making them more competitive.
    • Creating Market Platforms: Governments should facilitate the creation of dedicated market platforms, both physical (like SARAS Melas) and digital (e.g., the ‘Saras Collection’ on the Government e-Marketplace (GeM) portal), to connect SHG products with a wider customer base. E-governance tools and e-commerce platforms can be leveraged for this.
    • Gender Budgeting: Mandating gender budgeting at the local level ensures that a specific portion of developmental funds is allocated for schemes and programs that benefit women, which can be implemented through SHGs.

  • Holistic Empowerment:

    • Education and Digital Literacy: Economic independence alone is insufficient. Leveraging distance learning and e-learning platforms can provide basic education and digital literacy to members, enhancing their overall capabilities.
    • Political Empowerment: Encouraging and training SHG members to contest Panchayat elections can translate their collective economic strength into political power, enabling them to influence local governance and decision-making. The 73rd Constitutional Amendment Act, which reserves seats for women in PRIs, provides a structural opportunity for this.

E-Governance

E-governance refers to the application of Information and Communication Technology (ICT) for delivering government services, exchanging information, and integrating various stand-alone systems and services. Its ultimate aim is to enhance governance by making it more efficient, transparent, responsive, and participatory.

  • Need for E-Governance:

    • The Indian bureaucracy, often described as a ‘steel frame’, has historically operated on the Weberian model of hierarchy, rules, and impersonality. However, in the post-colonial Indian context, this model manifested several dysfunctions, as noted by various administrative reform committees.
    • Key Weaknesses of Traditional Bureaucracy:
      • Rigid Hierarchy and Red Tapism: Excessive layers of decision-making led to inordinate delays, a phenomenon famously termed ‘red tapism’.
      • Emphasis on Written Communication: Over-reliance on paper-based files and notings slowed down processes significantly.
      • Secrecy and Lack of Transparency: The Official Secrets Act, 1923, fostered a culture of secrecy, limiting public access to information and preventing scrutiny.
      • Absence of Citizen Participation: Governance was a top-down process with minimal input from citizens, leading to a disconnect between policy formulation and ground realities.
      • Lack of Accountability: There were few effective mechanisms to hold public servants accountable for inefficiency or poor service quality.
    • E-governance emerged as a powerful tool to counter these weaknesses, aiming to re-engineer government processes and foster a citizen-centric administrative culture. The Second Administrative Reforms Commission (ARC) in its 11th Report, “Promoting E-governance: The SMART Way Forward” (2008), strongly advocated for its adoption to make governance Simple, Moral, Accountable, Responsive, and Transparent (SMART).

  • Stages in E-governance:

    • The evolution of e-governance is typically understood through a four-stage model, similar to the one proposed by Gartner:
      1. Computerization/Presence: The initial stage involves digitizing internal government records and establishing a basic online presence through websites that provide information.
      2. Interaction/Networking: This stage involves creating networks between government departments (G2G) and allowing citizens to download forms and interact with government agencies via email (G2C).
      3. Transaction: This stage enables online transactions, such as paying taxes, submitting applications, and receiving licenses or certificates.
      4. Transformation: The most advanced stage, where all government services are integrated and delivered seamlessly online, leading to a fundamental transformation in the relationship between government and citizens, fostering genuine participation and empowerment.

  • Challenges Faced in E-governance:

    • E-Government vs. E-Governance: A primary challenge is that implementation has often been limited to ‘e-government’ (digitizing existing processes) rather than ‘e-governance’ (using technology to reform and transform processes). Simply computerizing a flawed manual system does not improve governance; it only creates a “digital red tape.” This requires simultaneous administrative reforms like process re-engineering, delayering, and implementing citizen charters.
    • The Digital Divide: E-governance initiatives have disproportionately benefited the urban, educated, and affluent sections, creating a “digital divide”. According to reports by Oxfam and others, vast segments of the rural, poor, and illiterate population lack access to digital infrastructure and the skills to use it, thus deepening existing inequalities.
    • Infrastructure Deficit: As per NITI Aayog and TRAI data, while mobile penetration is high, broadband internet access remains low, especially in rural areas. Issues like unreliable power supply further compound this problem, hindering the consistent delivery of e-services.
    • Cybersecurity Threats: As India’s digital public infrastructure (e.g., UPI, Aadhaar) expands, it becomes a prime target for cyber-attacks. The Second ARC report and the Economic Survey have repeatedly warned that India’s investment in cybersecurity is inadequate. The use of outdated security protocols makes critical infrastructure vulnerable, as evidenced by the 2022 ransomware attack on the AIIMS, Delhi servers.
    • Language Barrier: Most e-governance platforms and services are designed primarily in English and Hindi, alienating a large non-English speaking population and violating the principle of inclusive governance.
    • Data Protection and Privacy: The collection of vast amounts of personal data by the government for various schemes raises significant privacy concerns. Before the enactment of the Digital Personal Data Protection Act, 2023, there was no robust legal framework to prevent the misuse of this data by state or private actors.
    • Lack of Skilled Workforce: There is a significant capacity deficit within the government. Many public servants lack the necessary training and skills to effectively manage and implement complex e-governance projects.

  • How to Deal with These Challenges:

    • Simultaneous Administrative Reforms: E-governance initiatives must be coupled with deeper administrative reforms, including the implementation of the Right to Information (RTI), social audits, and effective grievance redressal mechanisms, to achieve true accountability and transparency.
    • Bridging the Digital Divide: Projects like BharatNet (to provide broadband to all Gram Panchayats) and the National Fiber Grid Project must be implemented on a war footing. Setting up Common Service Centres (CSCs) can provide assisted access to rural citizens.
    • Embracing Mobile Governance (M-Governance): Given the high tele-density and smartphone penetration, developing services through mobile applications (e.g., UMANG app) can help overcome the last-mile connectivity challenges of traditional e-governance.
    • Strengthening Cybersecurity: A significant increase in budgetary allocation for cybersecurity is needed. Organizations must be mandated to adopt latest-generation security measures and conduct regular security audits. The role of institutions like CERT-In (Indian Computer Emergency Response Team) must be strengthened.
    • Promoting Vernacular Content: E-governance services must be made available in all major regional languages to ensure equitable access and usability for all citizens.
    • Robust Data Protection Framework: The effective implementation of the Digital Personal Data Protection Act, 2023, is critical to build citizen trust by ensuring their data is protected from misuse.
    • Citizen-Centric Design and Feedback: E-governance projects should be designed with the citizen at the center. Regular feedback mechanisms and objective performance evaluations based on citizen satisfaction should be institutionalized to ensure projects meet their intended goals of good governance.

Prelims Pointers

  • Self-Help Groups (SHGs)
    • The concept was popularized by Prof. Muhammad Yunus of Bangladesh through the Grameen Bank (founded 1983).
    • In India, the SHG-Bank Linkage Programme (SBLP) was launched by NABARD in 1992.
    • Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) is the flagship central government scheme for promoting SHGs.
    • Kudumbashree Mission, established in 1997, is a successful poverty eradication and women empowerment program implemented by the State Poverty Eradication Mission (SPEM) of the Government of Kerala.
    • SARAS Melas are initiatives by the Ministry of Rural Development to provide a market platform for products made by rural SHGs.
    • The Malegam Committee (2011) was constituted by the RBI to study issues and concerns in the MFI sector.
  • E-Governance
    • National e-Governance Plan (NeGP) was launched in 2006 with the vision “Make all Government services accessible to the common man in his locality”.
    • Digital India Mission: Launched in 2015 with nine pillars of growth, including Broadband Highways, Universal Access to Mobile Connectivity, and e-Kranti.
    • JAM Trinity: Stands for Jan Dhan Yojana, Aadhaar, and Mobile number, used for direct benefit transfer (DBT).
    • BharatNet Project: Aims to provide broadband connectivity to all Gram Panchayats in the country.
    • UMANG (Unified Mobile Application for New-age Governance): A single mobile app to access various central and state government services.
    • DigiLocker: A flagship initiative under Digital India for secure, cloud-based storage of official documents.
    • CERT-In (Indian Computer Emergency Response Team): The national nodal agency for responding to computer security incidents.
    • Second Administrative Reforms Commission (ARC): Its 11th report, “Promoting E-governance: The SMART Way Forward,” is a key document on this topic.
    • Digital Personal Data Protection Act, 2023: A law enacted to govern the processing of digital personal data.

Mains Insights

  • Self-Help Groups (SHGs)

    • GS Paper I (Society): SHGs are not just economic entities but are powerful instruments of social change. They challenge patriarchal norms, enhance women’s role in household decision-making, and improve social indicators like child nutrition and education. However, their success is often contingent on the local social structure; in highly stratified and feudal societies, they face greater resistance and may be co-opted by dominant elites.
    • GS Paper II (Governance): SHGs represent a shift towards community-based, participatory development. They function as pressure groups at the local level, demanding better governance and service delivery (e.g., PDS, sanitation). The convergence of SHGs with Panchayati Raj Institutions (PRIs) can lead to more inclusive and effective local governance, especially when SHG members get elected to PRIs.
    • GS Paper III (Economy): SHGs are a cornerstone of financial inclusion and micro-entrepreneurship. The SHG-BLP model is one of the world’s largest microfinance programs. The key debate is whether microcredit leads to genuine empowerment or creates new cycles of debt. The success of an SHG depends on its evolution from a credit group to a production and marketing enterprise, which requires significant handholding in terms of skill development, technology infusion, and market linkages.

  • E-Governance

    • GS Paper II (Governance): The core debate is the transition from ‘e-government’ to ‘e-governance’. While India has been successful in creating digital infrastructure and platforms (e-government), the transformation of governance processes to make them genuinely accountable and participatory (e-governance) remains a work in progress. E-governance is a necessary but not sufficient condition for good governance; it must be accompanied by administrative, legal, and political reforms.
    • Cause-Effect Relationship: The implementation of e-governance has a direct causal link to increased transparency (e.g., online land records reducing petty corruption) and efficiency (e.g., Passport Seva Kendra reducing processing time). However, it can also have unintended negative effects like deepening the digital divide and excluding those without digital literacy, thereby creating new forms of marginalization.
    • GS Paper IV (Ethics): E-governance raises critical ethical questions.
      1. Data Privacy vs. Public Good: How to balance the state’s need to collect citizen data for welfare delivery (e.g., Aadhaar) with the individual’s fundamental Right to Privacy?
      2. Algorithmic Bias: When AI and algorithms are used in governance for profiling or benefit allocation, there is a risk of inherent biases being coded into the system, leading to discrimination against certain groups.
      3. Accountability in Automation: Who is accountable when an automated system makes a mistake? Fixing accountability in a complex socio-technical system is a major ethical challenge.
      4. Surveillance State: The same technologies that enable efficient governance can also be used for mass surveillance, posing a threat to civil liberties and democracy.

Previous Year Questions

Prelims

  1. With reference to the ‘National Investment and Infrastructure Fund’, which of the following statements is/are correct? (UPSC 2017) (This question is analogous to questions on government schemes and bodies, similar to how SHG-related schemes might be asked.)

    1. It is an organ of NITI Aayog.
    2. It has a corpus of Rs. 4,00,000 crore at present. Select the correct answer using the code given below: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer: (d)

  2. Which of the following is/are the aim/aims of “Digital India” Plan of the Government of India? (UPSC 2018)

    1. Formation of India’s own Internet companies like China did.
    2. Establish a policy framework to encourage overseas multinational corporations that collect Big Data to build their large data centres within our national geographical boundaries.
    3. Connect many of our villages to the Internet and bring Wi-Fi to many of our schools, public places and major tourist centres. Select the correct answer using the code given below: (a) 1 and 2 only (b) 3 only (c) 2 and 3 only (d) 1, 2 and 3 Answer: (b)

  3. In India, which of the following review the independent regulators in sectors like telecommunications, insurance, electricity, etc.? (UPSC 2019)

    1. Ad Hoc Committees set up by the Parliament
    2. Parliamentary Department Related Standing Committees
    3. Finance Commission
    4. Financial Sector Legislative Reforms Commission
    5. NITI Aayog Select the correct answer using the code given below: (a) 1 and 2 (b) 1, 3 and 4 (c) 3, 4 and 5 (d) 2 and 5 Answer: (a) (This question tests understanding of governance structures, relevant to e-governance implementation.)

  4. In the context of any country, which one of the following would be considered as part of its social capital? (UPSC 2019) (a) The proportion of literates in the population (b) The stock of its buildings, other infrastructure and machines (c) The size of population in the working age group (d) The level of mutual trust and harmony in the society Answer: (d) (Directly relevant to SHGs, which are a prime example of building social capital.)

  5. With reference to the provisions contained in Part IV of the Constitution of India, which of the following statements is/are correct? (UPSC 2020)

    1. They shall be enforceable by courts.
    2. They shall not be enforceable by any court.
    3. The principles laid down in this part are to influence the making of laws by the State. Select the correct answer using the code given below: (a) 1 only (b) 2 only (c) 1 and 3 only (d) 2 and 3 only Answer: (d) (Relevant to the governance philosophy underpinning welfare schemes that support SHGs and e-governance.)

Mains

  1. “The emergence of Self-Help Groups (SHGs) in contemporary times points to the slow but steady withdrawal of the state from developmental activities”. Critically examine the statement. (UPSC 2017, GS-II)

  2. “The performance of welfare schemes that are implemented for vulnerable sections is not so effective due to absence of their awareness and active involvement at all stages of policy process.” Discuss. (UPSC 2019, GS-II) (This question can be directly answered using the context of SHGs and the need for their active participation.)

  3. The strength and sustenance of local institutions is dependent on their effective functional autonomy. Critically examine the statement in the context of the 73rd and 74th Constitutional Amendment Acts. (UPSC 2019, GS-II) (Can be linked to the political empowerment of SHGs through PRIs.)

  4. Implementation of information and Communication Technology (ICT) based projects/programmes usually suffers in terms of certain vital factors. Identify these factors and suggest measures for their effective implementation. (UPSC 2019, GS-II)

  5. Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has its limitations too. Comment. (UPSC 2022, GS-II) (Directly related to e-governance infrastructure like the JAM trinity.)

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