SELF-EMPLOYMENT A Framework for Implementation National Rural Livelihood Mission Ministry of Rural Development Government of India SELF-EMPLOYMENT A Framework for Implementation National Rural Livelihood Mission Ministry of Rural Development Government of India June 22, 2016 Executive Summary MoRD has been thinking about a strategy to systematically bring panchayats out of poverty within a clear timeline. Given that 51% of the rural workforce is self-employed, there is a need to create a policy framework for holistically improving self-employment opportunities for the rural poor. In the light of the above, a framework document titled Self-Employment–A Framework for Implementation (No.J-11060/1/2016-RL) dated June 22nd, 2016 has been prepared after a consultation with state representatives in NIRD&PR in Hyderabad on January 9, 2016 and a national consultation in Delhi at Vigyan Bhawan on January 14, 2016. Before the document is taken up for formal consideration at the GoI level, it was thought necessary to seek the opinion of State governments. Accordingly, a copy of the framework document is hereby attached for your comments. The framework proposes a new scheme within the NRLM framework called the Grameen Swarozghar Yojana (GSY) that would be implemented through inter-departmental collaboration. The proposal is to ensure that self-employment, skill up-gradation, and efficient delivery of government schemes and entitlements lead to poverty-free panchayats within a definite timeline. The new scheme is proposed on 7 key principles: 1. Build on the strengths of previous efforts while avoiding it weaknesses 2. Build on the recent success of establishing high quality SHGs through the CRP strategy 3. Establish institutional arrangements that can realize convergence at all levels - national, state and implementing agency 4. Work with a range of implementation partners both for-profit and non-profit 5. Allow for a diversity of approaches that account for an area’s ecological and economic resources as well as a household’s poverty and capabilities 6. Craft a special strategy for the ultra-poor who tend to get left out 7. Put in place a financial management arrangement that makes it easy for partners to work with government The proposed GSY is anchored in four distinct approaches that together have the ability to cover the seven principles enunciated above. The four approaches are: 1. A Graduated Approach, in 2532 blocks that were identified in consultation with the states as being the most backward. The list of backward blocks were finalised while launching the Intensive Participatory Planning Exercise (IPPE) under MGNREGS. Within this approach, PIAs will first identify all households that are poor and ultra-poor using the SECC data and wealth ranking techniques under PRA, and create a targeted plan to ensure that these households will be brought out of poverty over the course of 8 years. PIAs will also ensure that all the poor and ultra-poor households in the assigned geography begin to benefit from all government schemes that they are eligible for. 2. An Ultra-Poor Approach, in the remaining blocks with a focus on providing a unique package of assistance to those who face the highest form of deprivation due to poverty. This approach will have the following features: a one-time productive asset transfer, technical skills training, consumption support, savings support, health services and coaching and monitoring with a special focus on socio-psychological support. All ultra- poor households must additionally be enrolled in all eligible government schemes. After the household has come out of ultra-poverty through interventions described above, the PIA will adopt a graduated approach (detailed above) to ensure that the household comes out of poverty. 3. A Sector-Based Approach, in all blocks which will work with corporate value chains. Through this, large corporate entities that already have successful and rapidly growing value chains will be supported to provide training and talent acquisition aimed at the rural poor who they will bring on board as associates (not employees). 4. An RSETI Approach with Satellite Centres, which will draw upon the existing Rural Self- Employment Training Institutes (RSETI) to upgrade and expand their training outreach in rural areas and their ability to ensure that trainees receive better self-employment opportunities. Under this approach, PIAs will partner with the National Centre for Excellence in RSETIs (NACER) to set up satellite centres. Existing RSETI’s will install CCTV cameras, Iris based biometric attendance, provide on line content, virtual classrooms and track beneficiaries for 3 years with income certification. Given that India’s GDP growth rate is averaging approximately 7% per year, the SECC is complete and can enable the identification of the poor, and India now has a network of good quality self-help groups, we have the basic building blocks for poverty-free panchayats. However, we feel that for poverty-free panchayats to work sustainably, we need an institutional arrangement through which funding abilities of different programs can be converged in such a manner that the implementing agency can be freed from anxieties around sourcing of finances for projects that are funded through multiple sources. The proposed institution for convergence across departments in a new vertical for GSY under the National Rural Livelhoods Promotion Society (NRLPS). Table of Contents Table Of Figures 2 Abbreviations 3 Preface 6 Chapter 1: Rationale 9 1.1 Introduction 9 1.2 What is GSY? 10 1.3 History of self-employment in rural India 11 1.4 Current self-employment schemes 12 Chapter 2: Evidence 16 2.1.1 Integrated Rural Development Programme (IRDP) 18 2.1.2 Swarnajayanti Gram Swarozgar Yojana (SGSY) 21 2.1.3 National Rural Livelihoods Mission (NRLM) 24 2.2 Institutional Partnerships for Poverty Alleviation 25 2.2.1 Case Study: BAIF-EU Project in India 28 2.2.2 Case Study: Rural Poverty Alleviation Program in Brazil 30 2.2.3 Case Study: The Bangladesh Rural Advancement Committee (BRAC) 32 2.3. Evidence on Differentiated Approaches 33 2.3.1 A Territorial Approach 34 2.3.2 Evidence on Targeting the Ultra-Poor 34 Chapter 3: Design for a New Program 38 3.1 Need for a new program 38 3.2 Need for a new institutional architecture 40 3.3 GSY Board 41 3.3.1 Roles of the GSY Board 41 3.3.2 GSY Board Finances 44 3.4. Regional Hubs 44 3.5 State ECs and SRLM Units 45 3.5.1 Role of State ECs and SRLM Units 45 3.5.2 GSY SRLM Unit Finances 46 Chapter 4: Program Approach 47 Chapter 5: Institutional Architecture 52 5.1 The GSY Board 52 5.1.1 The Organisational Structure 52 5.1.2 The functions of the Governing Board 54 5.1.3 Management Unit of GSY Board 54 5.2 State Empowered Committee (EC) 55 5.2.1 The functions of the EC 56 5.3 GSY Unit in SRLM 56 Chapter 6: Program Administration 58 6.1 Project Application, Appraisal, and Monitoring 58 6.1.1 Application process 58 6.1.2. Minimum Eligibility Requirements 64 6.1.3 Project Appraisal Scoring 67 6.1.4 Awarding projects 68 6.2 Mobilization and selection of program beneficiaries 68 6.3 Budget 70 6.4 Criteria for success 79 6.5 Monitoring, Evaluation and Learning (MEL) 82 6.5.1 The MEL Architecture 83 6.6 Yearly Plan (YP) and Annual Plan (AP) States 86 6.7 Fund release 86 6.8 Closure 89 Annexure 1: Particularly Vulnerable Tribal Groups as of February 2016 91 Annexure 2: List of Backward Blocks 94 Annexure 3: Office Memorandum for Development of Framework for Self- Employment Initiatives 158 Annexure 4: Vigyan Bhavan Consultation Attendees 159 Annexure 5: NIRD&PR Consultation Attendees 161 1 Table Of Figures Figure 1: Approaches Under GSY 50 Figure 2: Organogram for GSY 53 Figure 3: Potentiality Score Criteria — Graduated and Ultra-Poor Approaches 62 Figure 4: Potentiality Score Criteria — RSETI & Satellite Approach 63 Figure 5: Potentiality Score Criteria — Sector Approach 64 Figure 6: Additional Applicant PIA Criteria for GSY Approaches 66 Figure 7: Estimated Budget for GSY, by Approach 72 Figure 8: Estimated Ultra-Poor Approach Budget for GSY 73 Figure 9: Estimated Graduated Approach Budget for GSY 75 Figure 10: Estimated RSETI & Satellite Approach Budget Budget for GSY 77 Figure 11: Estimated Sector Approach Budget for GSY 79 Figure 12: Milestones for Fund Release Authorisation, Graduated & Ultra-Poor Approaches 87 Figure 13: Milestones for Fund Release Authorisation, RSETI & Satellite Approach 88 Figure 14: Milestones for Fund Release Authorisation, Sector Approach 89 2 Abbreviations AP Annual Plan API Application Program Interface ARI Agro and Rural Industry ATMA Agricultural Technology Management Agency BIMARU Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh BMMU Block Mission Management Unit BPL Below Poverty Line BRAC Bangladesh Rural Advancement Committee Committee to Review the Existing Administrative Arrangements for Rural CAARD Development and Poverty Alleviation Programmes CCTV Closed Circuit Television CEO Chief Executive Officer CEO Chief Executive Officer CNC Common Norms Committee COO Chief Operating Officer CSB Central Silk Board CRP Community Resource Persons DAHD Department of Animal Husbandry, Dairying and Fisheries DEDS Dairy Entrepreneurship Development Scheme DMMU District Mission Management Unit DPSU District Plan Support Unit DRDA District Rural Development Agency DWCRA Development of Women and Children in Rural Areas EC Empowered Committee EU European Union GDP Gross Domestic Product GKY Ganga Kalya Yojana GSY Grameen Swarozgar Yojana GoI Government