ra es

Author
Surendra Sharma
(Director Sharma Academy)

O Surendra Sharma (Sharma Academy)

Ak rights reserved.

No part of this publication may be reproduced, or distributed in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise, or stored database or retrieval system without the
prior written permission of the pubUsher.
 PAPER-II GENERAL STUDIES
Constitution, Governance, Political and Administrative Structure

UNIT-I (Page 1 to 64)

• Constitution of India:- Its Foundation (1), characteristics (6), Basic Structure (8) and important
amendments (l l).
• Conceptual elements:- Objectives (l 8), fundamental rights (21) and duties (3 l), directive principle of
state policy(33).
• Federalism, Central:- State Relations (39), Supreme Cowt (43), High Court (50), Judicial Review
(54), JudicialActivism (56), LokAdalat (60) and Public Interest Litigation (62).

UNIT-II (Page 65 to 108)

• Election Commission of India (65), Comptroller and Auditor General of India (73), Union Public
Service Commission (77), Madhya Pradesh Public Service Commission (80) and NITI Aayog (8 l).
• Role of caste , religion, class, ethnicity, language and gender in Indian politics, Political parties and
voting behavior in Indian polities, civil society and Public movement, National integrity and security
issues (83 to 108).

UNfT-IIt (Page 108 to 156)

• Public participation and local government (with reference of 73rd and 74th amendment to the
Constimtion) (108 to 123)
• Accountability and Rights:- Competition Commission (123), Consumer Forum (124), Information
Commission (127), Women's Commission (129), Human Rights Commission (131), SC / ST / OBC
Commission (133), Central Vigilance Commission (135).
• Features of democracy (137) :- Political Representations (87), Participation of Citizens in the
Decision making Process (138).
• Community-based organizations (CBO) (l4l), Non Government Organizations (NGOs) (144) and
Self-help groups (SHG) (149).
• Role of Media and Problems (Electronic, Print and Social) (153)

UNIT-IV (Page 157 to 183)

• Indian Political Thinkers Kautilya (157), Mahatma Gandhi (160), Jawaharlal Nehru (165), Sardar
Vallabh Bhai Patel (170), Ram Manohar Lohia (172), Dr.B.R.Ambedkar (175), Deendayal Upadhyaya
(179), Jayaprakash Narayan (l 80).

UNIT-V (Page 183 to 228)

• Administration and Management:- Meaning (l 83), nature and significance (185), Role of public
administration in the developed and developing societies (191), Development of Public administration
as a subject (194), Modern Public Administration (198), Principles ofPublic Administration (201).
• Concepts:- Power (204), Authority (205), Responsibility and Delegation (206).
• Theories of organization (210), steps and area ofcontrol and unity ofcommand(21 5).
• New dimensions of public management (217), management of change (221) and development
administration (224).
 JAYAPRAKASH NARAYAN:

Marxism, Democratic Socialism and Gandhism

Power which is a fundamental ingredient of politics and a ubiquitous social phenomenon evokes
different responses from different political actors depending on their personal dispositions and cultural
and historical milieus. Among these responses, the one that appears most desirable is represented by the
attitude that Gandhi brought to bear on power and, for that matter, politics generally. Jayaprakash
Narayan (1902-1979), a posthumous follower of the Mahatma, stands out as the most creative innovator
of Gandhian politics, just as Jawaharlal Nehru seems to be the safest bridge between Gandhi and modern
science and technology, and Acharya Vinoba Bhave, the most authentic link between Gandhism and
normative traditional Hindu humanism. JP, as he was popularly called, was described in a biographical
sketch in 1963 as, „India‟s foremost dissenter, critic, intellectual nonconformist and fighter of lost causes
that never lose their following‟.

That characterization remained valid until his death. His passionate quest for an ideological identity took
him on a voyage from Marxism through democratic socialism to Gandhian socialism and in the process
he creatively developed the socialist and Gandhian traditions of thought, grappling with some of the
deepest problems of Indian democracy and contemporary civilization.

He was probably the most sophisticated advocate of a nonpartisan democracy and a Gandhian
constitution for independent India.

„No other Indian public figure‟, wrote Girilal Jain on the morrow of JP‟s death, „has sought to embody
so many intellectual currents and cross-currents in himself as JP, not even the incomparably
suppleminded Jawaharlal Nehru. JP was the mirror to 20th century India‟.

Marxism and Democratic Socialism

Essentially, JP‟s entire philosophy and political praxis can be divided into two broad streams, namely,
Democratic socialism and Sarvodaya. From the Leninist perspective his earliest stint in politics (1930s)
is categorized as the Marxian phase but when it is put to rigorous scrutiny with the benefit of hindsight
of history we do not find any fundamental difference between his Marxism and Democratic socialism.
However, irrespective of change in nomenclature or in his philosophy that occurred in the 40 years of
his political praxis there is a consistency in his outlook on one aspect, i.e., in his approach towards
peasantry and in his thoughts about village life. His Marxism or Democratic socialism, besides, was not
ahead of radical liberalism, but as history shows that the radical reforms he had proposed in 1936 or in
1940 for achieving socialism were already abandoned by Marx and Engels in the 19th century on the
ground that they were no longer relevant since the development of capitalism had already incorporated
them or made them redundant. Numerous prefaces to new editions of the „Communist Manifesto‟
abundantly indicate towards this trend. Apart from it, „The Critique of the Gotha Programme‟ and „The
Peasant Question in France and Germany‟ reveal the irrelevance of the demands of peasantry for the
cause of socialism that French and German communists had thought to put for-ward as part of their
programme. In the April Thesis, however, Lenin made a capitulation and brought the peasantry and their
causes back into the socialist fold which Marx and Engels had criticized throughout their lives. The
success of Lenin in Russia made his political programmes universal which was accepted as socialism.
Lenin, nonetheless, accepted the fact that Russian economy was state monopoly capitalism, and that in
the given Russian circumstances the best course for the success of the revolution was to co-opt the
peasantry for it. He knew very well that land reforms and other such measures were the tasks of the
bourgeois revolution, and in the absence of such fulfillment it had to be completed by the Communists.
But the Communists in India accepted Lenin‟s politico-economic programmes as the development of
Marxism without deep critical analysis. JP‟s Marxism was, more or less, the same though he never
joined the CPI and differed with it on many issues. His realization of weaknesses in Lenin‟s theory came
later. His Marxism was essentially an ideology steeped in the Leninist paradigm that he had learnt at
Madison, Wisconsin, in the U.S.A. in the company of Jewish and European-born students. It was an
ideology of a radical youth leader of 1930s-1940s who was searching for methods and objectives of
freedom.

Jayaprakash Narayan sympathized with attempts of some Third World leaders, following the post-war
rapid collapse of Western-type democratic regimes, to experiment with next concepts of democracy
presumably rooted more firmly in indigenous traditions and contemporary realities. „The setting up of
the National Union in the U.A.R. and Basic Democracies in Pakistan‟, he wrote, „is some little advance
in the promised direction, but these countries are still far from being a democracy of any kind whatever‟.

JP seemed to be only less dissatisfied with the Western democracies which sought to combine political
liberalism with capitalist economy and the welfare state: „There is no doubt that the developed and
mature democracies of the West are not so top-heavy and devoid of the support of broad-based
infrastructures of various kinds‟.

But as he sees it, the „Western democracy is little more than government by consent‟ electorally
obtained at one point in time and then in effect putting of popular participation until the next elections.
Besides, European liberalism and socialism also fall short of „a socialist democracy‟.

In Britain, for instance, the „Welfare State, which is constantly under conservative fire, is a poor
substitute for socialism, and that too seems to be in the danger of being converted into the „opportunity
state‟ of Mr. Macmillan‟.

Another twin trend in Western democracies that disturbed him was private corporatization and
governmental bureaucratization, both leading to centralization: „with the growth of science and
technology and complex economic system, government is becoming more and more the business of
smaller and smaller numbers of people. With the consequent growing concentration of economic and
political power in the hands of fewer people-whether they are private citizens or officers of the state-
democracy would soon be just a matter of form rather than of substance‟.

The alternative offered by JP was Sarvodaya communitarian utopia promising genuinely participative
democracy and real socialism. Socially, sarvodaya was to be based not on an exclusive dominant class
or group but on an all-inclusive egalitarian commune of citizens. Politically, it sought to establish a truly
decentralized democracy that went beyond the democratic elitism of the West and ensured what JP
called Panchayati Raj or „Swaraj from below‟.

Economically, sarvodaya envisaged a thoroughly decentralised and voluntaristic economic order, going
beyond state socialism and comprising, on the one hand, a network of many local and regional small-
scale industries plus some large-scale central industries, and on the other, a large number of
communitarian farms collectively owned and managed by entire villages.

JP‟s greater reliance on lokniti (politics of people) and lokshakti (power of people) in preference to
rajniti (power politics) and rajshakti (state power) could also be observed in his behavior as a political
and social leader, In 1942, he came forward to lead a spontaneous mass upsurge at a time when the
entire top leadership of the Indian National Congress was in jail. In 1954, he cut of his life-long
association with party politics to join Acharya Vinoba Bhave‟s Bhoodan (voluntary land donation for
the landless) movement. In 1966-67, he stepped forward during the Bihar famine to lead the
organization of a massive relief operation on a voluntarist basis largely outside the usual governmental
frameworks.

During the Bihar Movement in the early and mid-1970‟s he gave his blessings and leadership to another
mass upsurge on the issue of corruption and authoritarianism largely outside the framework of the
established party system. It was during this movement that he put forward his ideas of a Gandhian
sampurna kranti (total revolution), and brought to the fore issues relating to fundamental reforms in the
electoral, administrative, economic, social, political, and educational systems of the country with greater
salience and urgency than ever since independence.

JP joined this movement, nevertheless, to depend indirectly on pre-existing organizational networks in

league with newer social and political forces within a framework of largely ad hoc inclusive structures
such as Lok Sangharsha Samiti and Chhatra-Yuva Sangharsha Vahini. Apart from no-party students, the
intelligentsia and the nondescript masses contagiously drawn into it, the movement tended to draw
structural sustenance mainly from a divided Sarvodaya stream and the non-CPI opposition parties
ranged against the ruling Congress.

This aspect of the movement, coupled with the fact that it came to be intercepted by the proclamation of
internal Emergency, did not allow a long enough political socialization to yield a sizeable corps of
young political recruits to make their impact felt on the post-Emergency got elected to the Vidhan Sabha
in 1977 it was lost in the maize of factional politics in the Janata Party along the lines of the major
constituent parties forming the Janata agglomerate as well as along caste lines. This party that the
advocate of nonpartisan politics ironically fathered and fostered led the spectacular electoral land- slide
in 1977 and managed to govern in New Delhi for three years, but did not even survive the terminally
ailing JP except as a rump.

Nevertheless, the ideological legacy to the nation bequeathed by him will certainly be more durable and
powerful than any organizational legacy could perhaps have been. JP‟s creative experiments in
Gandhian thought and politics had significance beyond India. As Nirmal Verma writes, „In his
Endeavour to transcend the deceptions and the iron laws of history he made each of us aware of the
innermost laws of our own being. This moral dimension elevated „Total Revolution‟ far above all the
power-crazed revolutions of the 20th century. J.P. in his last days was like a poet-revolutionary who had
at long last found a form, a content and a living voice for that restless dream which he had never ceased
to stir within him‟.
 NON – GOVERNMENTAL ORGANISATIONS
According to the World Bank, “a Non – Governmental Organization (NGO) is a private organization
that pursues activities to relieve suffering, promote the interests of the poor, protect the environment,
provide basic social services, or undertake community development”. In other words NGOs are legally
constituted organizations, operate independently from the government and are generally considered to be
non–profit oriented groups who purposes of public interest.

The primary objective of NGOs is to provide social justice, development and protect human rights.
NGOs are generally funded totally or partly by governments and they maintain their non – governmental
status by excluding government representatives from membership in the organization In a democratic
society, it is the state that has the ultimate responsibility for ushering development to its citizens. In
India, through the progressive interpretation of the Constitution and its laws and policies, the scope of
development has been significantly broadened to include not just economic progress for citizens, but
also promotion of social justice, gender equity, inclusion, citizen‟s awareness, empowerment and
improved quality of life. To achieve this holistic vision of development, the state requires the
constructive and collaborative engagement of the civil society in its various developmental activities and
program. Non – Governmental organizations (NGOs) as the operational arm of the civil society
therefore have an important role in the development processes.

India has a long tradition of social, service, social reform and voluntary agencies. NGOs emerged in
India soon after Independence when mahatma Gandhi made a plea for dissolving the Indian National
Congress (the political party which came into power upon Independence), and transforming it into a Lok
Sevak Sangh (Public Service Organization). This plea was, however, rejected nevertheless, it did not
halt the formation of Non – Governmental programs on social and economical issues. These agencies
organized handicrafts and village industries rural development programs, credit cooperatives,
educational institutions, etc.

The second stage of growth of NGOs in India was around 1960 when many individuals noticed that the
governmental programs seemed to be inadequate to deal with the deprived sections of India. These
groups formed organizations that the governmental programs seemed to be inadequate to deal with the
deprived sections of India. These groups formed organizations that worked on behalf of the poor, the
landless, the tribals the bonded labourers, and many other social groups that were being discriminated
against by the policies of the state and social structure. These grass roots organizations work at the micro
– level and work with limited resources and lack of coordination. Since independence in 1947 until
around 1980 there was little effort on the part of the Indian government. In 1980 however, with the sixth
five year plan (1980 – 1985), the government identified new areas, in which NGOs as new actors could
participate in development. These areas include:
 Optimal utilization and development of renewable source of energy, including forestry through the
formation of renewable energy association at the block level.
 Family welfare, health and nutrition, education and relevant community programs.
 Health for all programs.
 Water management and soil conservation.
 Social welfare programs for weaker sections.
 Implementation of minimum needs program.
 Disaster preparedness and management (i.e. for floods, cyclogy and tribal development, and
Environmental protection and education.
This plan, nevertheless, was to become a part of a series. Under the seventh Five Year Plan (1985-1990)
the Indian government visualised a more active role for voluntary organization to aid in making
communities as self – reliant as possible. These groups were expected to show how village and
indigenous resources could be used and how human resources, rural skills and local knowledge, grossly
 underutilized at present could be used for their situation and interaction with local people can be very
effective in bringing change. Since they are able to address issues that governments are often not able to
comprehend.

In the Eight Five Year Plan, the importance of NGOs is further enhanced, paying particular attention to
the role of these agencies as participants in rural appraisal for drawing up development plans at a very
low cost and involving the rural communities. The plan document states, “A nation – wide network of
NGOs will be created. In order to facilitate the working of this network three schemes relating to the
creation, replication, multiplication and consultancy development have been worked out by the Planning
Commission”.

Role of NGOs in Present Scenario

Today, India has a vigorous NGO sector. Although there has been no complete census of NGOs, it is
estimated that about 25,000 to 30,000 are active in India. In fact as of 31st December , 1989, there were
12,313 NGOs registered with the Ministry of Home Affairs, Government of India under the Foreign
contribution (Regulation) Act (FCRA) 1976, furthermore, 726 NGOs are unregistered but under the
prior permission category.

One problem with NGOs in India, was NGOs anywhere else in the world has been increasing
dependency on governmental fund or donations from external (foreign) donors like the World Bank.
This dependent relationship has resulted in a lack of flexibility on the part of NGOs to pick their mission
and objectives since many are expected to perform certain tasks in return for funding. But, further
still, it has also created structures that have become more bureaucratic in nature and, hence, less
effective in development. Nevertheless, NGOs are here to stay and will continue to work in India on
political, economical or social issues.

National Policy on the Voluntary Sector 2007

The National Policy on the Voluntary Sector aims to provide an enabling environment for the voluntary
sector and also make it accountable, so that VOs (voluntary Organisations) can play their constructive
role in development activities effectively.
The main objectives of the policy include:
 Creating an enabling environment for Voluntary Organisations (VOs) that not only stimulates their
effectiveness, but also protects their identity and safeguards their autonomy.
 Enabling VO‟s to legitimately mobilise the necessary financial resources from India and abroad.
 Identifying system by which the Government may work together with the voluntary sector.
 Encouraging VO‟s to adopt transparent and accountable systems of governance and management.

Role of NGOs in Development

 NGOs or voluntary Agencies have played an important role in providing welfare services to the
vulnerable sections of the society, the poor, the wretched, the underprivileged and the deprived. The
Reformation Movement of the 19th Century created in its trail quit a number of voluntary
organizations particularly for the welfare of women, children and also of the downtrodden. Even
today, organizations working for the welfare of women and children are in existence.
st
 The 1 Five Year Plan stated, “A major responsibility for organising activities in different fields of
social welfare like the welfare of women and children social education, community development etc.
falls naturally on private voluntary agency” Similar dependence on voluntary organizations for
promotion of welfare Of the people, these organisations were considered more appropriate
instruments for carrying out the task of reaching the people. These organisation were consider more
appropriate instruments for carrying out the task of reaching the people because of their
characteristics of flexibility, speed, humaneness and innovativeness.
The important roles played by NGOs are stated below:
Participation
The most important role of these agencies is to stimulate active participation of the citizens in matters
that concern them and their community. The importance of people‟s participation as the key to all anti –
poverty and social welfare programmes has been accepted as official system is capable of it. These
agencies are generally capable of providing linkage between the official programmes and the
beneficiaries.

NGOs try to involve the beneficiaries in decision – making, implementation, monitoring and evaluation
of the programmes. The NGOs, through their specific activities, come close to the beneficiaries and
educate and train them in regard to their problems, the ways to solve these problems and the obstacles in
the way of solving these problems. These agencies create the necessary awareness and develop a
position outlook among the beneficiaries. In this way, they play the important role of consciousness
raising, awakening, educating and development of the human beings.

Organising Beneficiaries
Apart from awakening and mobilising the community, Non – Governmental Organizations (NGO‟s)
play an important role in organising the beneficiaries. There have been repeated calls that the poor and
the exploited should organise themselves and fight to ensure their rights. This is a call to break the unjust
policies and to promote revolution change in the rural countryside and in the growing urban slums. The
poor, are not capable of this on their own. It is these agencies that try to mobilise and organise the poor
so that by applying pressure, the quality of this service and the attitude of the government functionaries
may be made to improve.

Facilitating Various Services

The NGOs play an important role in socio – economic development by way of providing certain services
such as building up of infrastructure in depressed or backward areas, providing tractor – hiring services,
providing or facilitating credit, supply of seeds, fertilizers, technical knowledge etc a number of such
agencies are playing an important role in training a cadre of grass roots village workers with the
induction of professional expertise and scientific knowledge so that the poor (particularly the rural poor)
may learn to depend on themselves and not depend on intermediaries. In this regard, a variety of
vocational training programmes have been introduced even for the newly skilled and semi – skilled
workers.

Supplementing Government Efforts

Traditionally, it is the voluntary agencies in India, which have been doing a lot in the field of social
welfare in one or the other way. Even after 40 years of planned development, the government look up to
these agencies for help in the implementation of various programmes of social welfare, rural
development etc. however, to expect these organizations to replace even partly, the official machinery
engaged in development is expecting too much from them. Still, there is no doubt that they play a
supportive and complementary role. Though, the NGOs supplement government efforts, they do so
without compromising on strategies, policies and methods. They may set an example in the field of
flexibility, initiative, low – cost techniques, simple or effective methods and the ability to improvements.

Checking Government Actions

The NGOs have a very important function in highlighting the legislative loopholes in social legislation,
and in ensuring that legislation like the Minimum Wages Act, the Abolition of Bonded Labour Act, the
Protection of Civil Right Act, Land Ceiling legislation etc. are being properly adhered to. However, only
politically uncommitted and freely operation agencies can perform this function as repeated studies
indicate. Government agencies are the real organisers, mobilisers and change agents for the poor. They
are the eyes and ears of people in certain areas and give reliable feedback and take the voice of the
people to the planners and policy – makers. They activate the system and make it moved and respond to
the felt needs of the people. They highlighted the legislative loopholes built into the land ceiling
legislation.

Through these, a whole troop of party functionaries got their Ownership/tenancy rights registered and
helped the informal tenants in getting their tenancies regularised in village records and by the tehsildras
by identifying benami transfers of surplus lands. They publish such violations of ceiling laws in the
villages and blocks with the name of the land owners involved and other details of the violators being
made public. Thus, the non – governmental agencies have an important function of over – seeing the
implementation of the legislations. NGOs are playing a leadership role in a number of areas.

Role of NGOs and Its Relationship with Government

The role of NGO‟s and its relationship with government is stated in the points below:
• Recognising the important contribution by NGOs, Government has declared NITI Ayoug as Nodal
Agency for Government Organisation and voluntary organization interface.
• National policy on voluntary Sector 2007 seeks to establish a new working relationship between
government and voluntary Sector. It encourages and empowers an independent and effective
voluntary Sector. It identifies systems by which Government and voluntary organizations work
together on basis of principle of mutual trust, respect and shared responsibility.
• Civil society window was started in 2004 to enable people to engage with PC (Planning
Commission) and offer the benefit of their field experiences.
• Input from CS is plan process of 11th FYP through regional consultation.
• Strengthening social sector policy implementation through proper implementation of policies, their
monitoring, social audit, capacity building, mobilising the resources and knowledge base etc.
• Enables NGOs to legitimately mobilise necessary financial resources from India and abroad.
• Adopt transparent accountable system of Governance and Management for voluntary orgnisation.
• Making aware people about the government policies and programmes and their rights through mass
awareness compaingns.
• Helping people in rehabilitation after the natural disaster and calamities.
• Poverty alleviation programmes, housing, sanitation, education, health, women empowerment and
their rights, child labour, water , rights for tribal people, removing caste based stigma and
discrimination, leprosy eradication programme, well for safe drinking (Jeevan Dhara) NGOs play a
important role in all these programmes.
• Industrial policies have influenced the relationship between industries and NGOs. CII has been
raising the issue of Corporate Social Responsibility (CSR). Industrial policies has led to formation of
Khadi and village Industries Commission (KVIC), small industry Association etc.
• Gram Sree Mela (GSM) through NGOs for providing an opportunity to rural producers to sell their
products directly to major markets.

Problem and Limitations of NGOs

Lack of Financial Resources
In discharging their functions, NGOs face a number of limitations and problems. One of the topmost
problem of the NGOs is the lack of financial resources. They depend upon grants and contributions, but
most of them find it difficult to get regular grants from the government and to raise fund from the
business community. Also related with this is the problem for misuse of funds. The money meant for
welfare activities generally does not reach the beneficiaries fully. This is mainly due to the
mismanagement and misappropriation of funds.

Outreach and Concentration

There has been a mushroom growth of NGOs/voluntary organizations, but none of them has a
nationwide outreach or network reaching out to every State and UT and certainly not to every district,
block or village in the country. This poses a problem for the government in depending upon these
agencies. Another weakness of these agencies is their improper concentration. The number of agencies
which are located in the rural areas where the major job has to be done is very limited.

A study of the comprehensive list of voluntary agencies maintained by the Union Ministry of Social
Welfare and the Central Social Welfare Board shows that most of them are headquartered in urban
locals. They go out to work in the villages, which bring in an appearance of „Good Samaritan‟ like
charity to their work in the rural areas.

Lack of Coordination
Coordination and cooperation involves mutual consent of the agencies. Although, coordination between
voluntary agencies and state agencies is easy, coordination among the voluntary agencies themselves
presents some problems. These problems are (a) There is overlapping of efforts in certain areas. (b)
Because of the mushroom growth of voluntary agencies and the political patronage to some, it is often
difficult to bring them on a common forum, (c) Each voluntary agency has its own sources of funds, it
does not like to pool or share its resources with other agencies; and (d) There are mutual jealousies
among the voluntary agencies which make coordination still more difficult.

Mutual Distrust Among Agencies

It has been found that except for the coordination between NGOs and the Ministry of Social Welfare,
there is mutual distrust between these agencies and other ministries/departments, which makes joint
planning and delivery of goods and services impossible. Health, Education, Rural Development
Departments both at the Union and State levels. Regard these agencies as unwelcome intruders into their
terrain. Whereas it is difficult to achieve proper coordination between non – governmental agencies and
some governmetal agencies, on the other hand, a number of governmental agencies interfere in the
working of the non – governmental agencies. Voluntary agencies resent the governmental grants which
are accompanied by controls and interference.

Hostility of Bureaucrats
The bureaucracy is generally hostile to the NGOs. It can be safely predicted that a truly voluntary sector
is not likely to emerge and grow in India. The sector would consist of the so – called voluntary agencies
which are simply agents of the local oligarchy and/ or the bureaucracy and remains another channel for
the misappropriation of funds.

Paucity of Trained and Committed Workers

Shortage of trained and committed workers has been the paramount problem of all the countries. Low
salaries, inadequate security, poor personnel practices and competing job opportunities in industry and
business for the people with social work skills and low prestige are cited as the major causes for the
shortage of trained and committed workers.

The pattern of administration of major NGOs shows that the Governing Board members have high
social, economic and political status. This is often, so because the agency depends upon them for the
financial support that they can give or get from the community and from government subsidies.
Conspicuous by their absence are the representatives of the client systems who are the beneficiaries and
consumers of the services. The interpretation of needs and problems is more often than not done by the
staff, whose values and competence can, at times, be questioned especially when they are untrained or
semi – trained. For the agency to serve its purpose, there is a need to bridge the social distance between
the elite board members and the clients.
 SELF – HELP GROUPS (SHGs)
SHGs are informal associations of people who choose to come together to find ways to improve their
living conditions. They help to build social capital among the poor, especially women. Such groups
work as a collective guarantee system for members who propose to borrow from organised sources.
Consequently, Self – Help Groups have emerged as the most effective mechanism for delivery of micro
– finance services to the poor. The range of financial services may include products such as deposits,
loans, money transfer and insurance.
The most important functions of a Self – Help Groups (SHGs) are:
• To encourage and motivate its members to save.
• To persuade them to make a collective plan for generation of additional income.
• To act as a conduct for formal banking services to reach them.

Role and Impact of SHGs

Self – Help Groups (SHGs) play today a major role in poverty alleviation in rural India. A growing
number of poor people (mostly women) in various parts of India are members of SHGs and actively
engage in savings and credit, as well as in other activities (income generation, natural resources
management, literacy, child care and nutrition etc.). The savings and credit focus in the SHGs is the
most prominent element and offers a change to create some control over capital, though in very small
amounts.

Almost all major donor agencies support SHGs in India in one way or other and many success stories
are available, describing how membership in a SHGs changed the life a particular individual or group
for the better. Many NGOs in India are promoting the SHGs mechanism and linking it to various other
development interventions. Whereas there is ample evidence that the SHGs approach is a very effective,
efficient and relevant tool for organising and empowering the poor, problems do arise with design,
development and introduction of programmes to promote income generating activities that will generate
sufficient, sustainable and regular income.

Development of SHGs in India

The development of SHGs in different decades is given below:
In 1950’s
The first organised initiative in the direction was taken in Gujarat in 1954, when the Textile Labour
Association of Ahemdabad formed its women‟s wing to organise the women belonging to households of
mill workers in order to train them in primary skills like sewing, knitting embroidery, typesetting and
stenography etc.

In 1970’s
In 1972, it was given a more systematised structure when Self Employed Women‟s Association (SEWA)
was formed as a trade union under the leadership of Ela Bhatt. She organised women workers such as
hawkers, vendors, home based operator like weavers, papad makers, small producers like cattle –
rearers, salt workers, cooks and vendors with the primary objective of: increasing their income and
assets enhancing their food and nutritional standards; and increasing their organisational and leadership
strength. The overall intention was to organise women for full employment.

In 1980’s
In the 1980s, Myrada, a Karnataka based non – governmental organization, promoted several
locally formed groups to enable the members to secure credit collectively and use it along with their own
savings for activities, which could provide them economically gainful employment. Small group
formations at the local level were initiated in Tamil Nadu and Kerala through the Tamil Nadu Women in
Agriculture Programme (TANWA) 1986, Participatory Poverty Reduction programme of Kerala,
(kudumbashree) 1995 and Tamil Nadu Women‟s Development Project (TNWDP) 1989. These
initiatives gave a firm footing of SHG movement in these States.
Today, around 44% of the total bank - linked SHGs of the country are in 4 Southern State of
 Andhra Pradesh, Tamil Nadu, Karnataka and Kerala.
The positive experience gained from the above programmes has led to emergence of a very
strong consensus that the twin concepts:
• Small group organizations.
• Self – management are potent tools for economic and social empowerment of the rural poor.
Efforts have been made almost in all parts of the country to adopt this model as a necessary component
of the poverty alleviation programmes.
The SHGs – Bank linkage programme was started as a Test Project in 1989 when NABARD, the Apex
Rural Development Bank in the country, sanctioned Rs. 10 lakhs to Mysore Resettlement and
Development Agency (MYRADA) as seed money assistance for forming credit management groups.
Ministry of Rural Development also provided financial support to Professional Assistance to
Development Action (PRADAN) to establish SHGs in some rural pockets of Rajasthan.

1990’s and Onwards

On the basis of these experiences, a full – fledged project involving a partnership among SHGs, Banks
and NGOs was launched by NABARD in 1992. NABARD‟s Corporate Mission was to make available
micro – finance services to 20 million poor households.

In 1995, the Reserve Bank of India (RBI) streamlined the credit delivery procedure by issuing a set of
guidelines to Commercial Banks. It enabled SHGs to open bank accounts. The scheme was further
strengthened by a standing commitment given by NABARD to provide refinance and promotional
support to banks for credit payment under the SHG – Bank Linkage Programme.

In the initial years, the progress in the programme was slow; around 33000 groups could be credit –
linked during the period 1992 – 99. But, thereafter, the programme grew rapidly and the number of
SHGs financed increased to more than 7 lakhs in 2010. Cumulatively, 33 million poor households in the
country have been able to secure access to micro – finance from the formal banking system.

NABARD, in association with Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ),

conducted a study in 2005, on the comparative performance of SHG – Bank linkage progrmme vis – a –
vis other modes of priority sector lending. It revealed that the 40 million families and 205 million people
having been covered under this programme and the cumulative loan figure standing at around 18000
crores appear to be impressive.

Merits of SHGs
• They establish gender equality through economic empowerment of women as well as inculcating
leadership skills among them.
• They promote social Justice by strengthening the voice of economically vulnerable section of
society.
• They encourage smooth credit flow in remote rural areas.
• They promote poor households‟ access to formal banking system.
• Sometimes successful SHG acts as pressure – group to ensure proper functioning of Gram
Panchayat.
• They do not only create thrift among members, but also encourages oneness among group members.
The need for keeping the records, accounting indirectly promote the literacy among them and make
them aware of the formal processes. At the same time it inculcate the optimal use of resources.
• Strong social integration and cohesion has possibility to lead to social movement against ill practices
of society.
• Access to social security is a fundamental human right. While country is experiencing rapid Gross
Domestic Product (GDP) growth rate, SHG play an important role in balanced growth by bridging
the gap between rich and poor.
 • SHG is becoming/promoted as a part of micro – finance intervention aimed at helping the poor to
obtain every financial service like savings credit and insurance.
• The micro – finance facility offered to and by SHG has reduced the need to approach money lenders.
• The peer pressure ensures timely repayment and replaces the collateral for the bank loan NPA.
• As a form of enterprise SHG performs the role of collective banks and enterprise and ensure better
access to loan with a lower rate of interest to start micro unit enterprises.
• By facilitating micro credit to rural women, it has improved their bargaining power in day – to – day
decision making of household and in community.
• SHG has better local area understanding and can be developed at remote places.

Limitations SHGs
• Social mobilisation of people for SHG should not go against the primovdial social loyality. Selecting
the members from Heterogeneous community in Indian society is difficult.
• Apathy of rural banks to provide funds to SHG keeping in view their failures to return bank – loan in
time.
• Lack of knowledge and proper orientation among SHG members to take up suitable and profitable
livelihood options.
• Lack of awareness among SHG – members regarding their own community resources, often leave
them with limited option of income generation activities.
• Growing need for capacity building or orientation program for SHG – members to enable them to be
do cost benefit analysis of financial investment.
• The product developed by SHG face certain limitations such as quality as provided by corporate
counterparts scale of operation finance, skills and marketability.
• Prevention of small cottage industries developing into micro – enterprises because of lack of regular
business and secured revenue.
• Though registration of SHG is not needed, but procedure for gradation has prevented them to
participate in some of government activities bidding process.

Success Story of Kudumbashree

Kudumbashree is a female – oriented, community based, Poverty Reduction Project of the Government
of Kerala, launched in May 1998. This mission aimed to eradicate absolute poverty in 10 years, through
concerted community action under the leadership of local governments.
The primary objectives of the project are:
• Identification of poor families through risk indices based surveys, with the active participation of the
poor and the community.
• Empower the poor women to improve the productivity and managerial capabilities of the community
by organising them into community – based organizations.
• Encouraging thrift and investment through credit by developing a network of informal banks of the
poor.
• Improving incomes of the poor through improved skills and investment for self – employment.
• Ensuring basic amenities like safe drinking water, sanitary latrines, improved shelters and healthy
environment.
• Ensuring a minimum of 5 years of primary education for all children, belonging to risk families.
• Achievement the Kudumbashree project has made significant achievement in terms of its
parameters. As a result, it has been recognised by various organizations. In 2012, the project won the
award for best practices to improve the living environment, in 2007, it won the Prime Minister‟s
Award for excellence in public administration. The project has also been given the Indian Innovation
Award for Social Innovations (2006).
Improvement for SHGs
• Integrated approach is required for meeting overall credit needs in terms of backward linkages with
technology and forward linkages with processing and marketing organization. Simplification of
process of providing loans to SHGs.
• There is need for establishment of separate SHG monitoring cell in every state with direct links with
district and block level monitoring system.
• Creation of task force to review the existing capacity building programmes and creation of network
of capacity building institutions.

SHG – Bank Linkage Programme

• The Self – Help Group – Bank Linkage Progrmme (SBLP), started as a pilot programme in 1992 has
development with rapid progress over the years
• SHG – Bank Linkage programme was started on the basis of recommendation of SK Kalia
Committee.
Under the SBLP the following three different models have emerged
i. Model I : SHGs promoted, guided and financed by banks
ii. Model II : SHGs promoted NGOs/Government agencies and financed by banks
iii. Model III: SHGs promoted by NGOs and financed by banks using NGOs/formal agencies as
financial intermediaries.
• Model II has emerged as the most popular model under the SBLP programme. Commercial banks,
co – operative banks and the regional rural banks have been actively participating in the SBLP.
• In 2009 – 10, 1.59 million new SHGs were credit – linked with banks and bank loan of Rs. 14,453
crore (including repeat loan) was disbursed to these SHGs. Further, at the end in March 2010, 6.95
million SHGs maintained savings accounts with banks.
• On an average the amount of savings per SHG was 8,915 as compared to the amount of credit
outstanding of 57,795 in 2009 – 10. While there was a continued increase in the amount of credit
outstanding per SHG, there was a fluctuating trend in the amount of saving per SHG in the recent
years.