To address the challenge of rural poverty, the Ministry of Rural Development conceived a mission mode scheme titled as National Rural Livelihood Mission (NRLM) in the year 2010. NRLM was renamed as DAY-NRLM (Deendayal Antyodaya Yojana – National Rural Livelihood Mission) with effect from March 29, 2016. It is a centrally sponsored scheme and the Central and State Governments jointly fund the projects.

The core belief of National Rural Livelihoods Mission (NRLM) is that the poor have innate capabilities and a strong desire to come out of poverty. They are entrepreneurial, an essential coping mechanism to survive under conditions of poverty. The challenge is to unleash their capabilities to generate meaningful livelihoods and enable them to come out of poverty. The first step in this process is motivating them to form their own institutions. They and their institutions are provided sufficient capacities to manage the external environment, enabled to access finance, and to expand their skills and assets, and convert them into meaningful livelihoods. This requires continuous handholding support.

NRLM Mission

“To reduce poverty by enabling the poor households to access gainful self-employment and skilled wage employment opportunities resulting in an appreciable improvement in their livelihoods on a sustainable basis, through building strong and sustainable grassroots institutions of the poor.”

NRLM Guiding Principles

=> Poor have a strong desire to come out of poverty, and they have innate capabilities.

=> Social mobilization and building strong institutions of the poor is critical for unleashing the innate capabilities of the poor.

=> An external dedicated and sensitive support structure is required to induce the social mobilisation, institution building and empowerment process.

=> Facilitating knowledge dissemination, skill building, access to credit, access to marketing, and access to other livelihoods services enables them to enjoy a portfolio of sustainable livelihoods.

NRLM Values

The core values which guide all the activities under NRLM are as follows:

=> Inclusion of the poorest, and meaningful role to the poorest in all the processes.

=> Transparency and accountability of all processes and institutions.

=> Ownership and key role of the poor and their institutions in all stages – planning, implementation and monitoring.

=> Community self-reliance and selfdependence.

Approach

Towards building, supporting and sustaining livelihoods of the poor, NRLM harnesses the innate capabilities of the poor, complements them with capacities (information, knowledge, skills, tools, finance and collectivisation) to deal with the rapidly changing external world. Being conscious of the livelihoods activities being varied, NRLM works on three pillars – enhancing and expanding existing livelihoods options of the poor; building skills for the job market outside; and nurturing self-employed and entrepreneurs.

As NRLM follows a demand driven strategy, the States have the flexibility to develop their livelihoods-based perspective plans and annual action plans for poverty reduction. The overall plans would be within the allocation for the state based on inter-se poverty ratios.

Key Features of NRLM

Social Inclusion and Institutions of the Poor?

1. Universal Social Mobilisation: To begin with, NRLM would ensure that at least one member from each identified rural poor household, preferably a woman, is brought under the Self Help Group (SHG) network in a time bound manner. Subsequently, both women and men would be organised for addressing livelihoods issues i.e. farmers organisations, milk producers’ cooperatives, weavers associations, etc. All these institutions are inclusive and no poor would be left out of them. NRLM would ensure adequate coverage of vulnerable sections of the society such that 50% of the beneficiaries are SC/STs, 15% are minorities and 3% are persons with disability, while keeping in view the ultimate target of 100% coverage of BPL families.

2. Promotion of Institutions of the poor: Strong institutions of the poor such as SHGs and their village level and higher level federations are necessary to provide space, voice and resources for the poor, and for reducing their dependence on external agencies. They empower them. They also act as instruments of knowledge and technology dissemination, 1. 2. and hubs of production, collectivisation and commerce. NRLM, therefore, would focus on setting up these institutions at various levels.

3. Training, Capacity building and skill building: NRLM would ensure that the poor are provided with the requisite skills for: managing their institutions, linking up with markets, managing their existing livelihoods, enhancing their credit absorption capacity and credit worthiness, etc. A multi-pronged approach is, envisaged, for continuous capacity building of the targeted families, SHGs, their federations, government functionaries, bankers, NGOs and other key stakeholders.

4.Revolving Fund and Capital Subsidy: Subsidy would be available in the form of revolving fund and capital subsidy. The Revolving Fund would be provided to the SHGs (where more than 70% members are from BPL households) as an incentive to inculcate the habit of thrift and accumulate their own funds towards meeting their credit needs in the long-run and immediate consumption needs in the short-run.

5.Universal Financial Inclusion: NRLM would work towards achieving universal financial inclusion, beyond basic banking services to all the poor households, SHGs and their federations. NRLM would work on both demand and supply side of Financial Inclusion. On the demand side, it would promote financial literacy among the poor and provides catalytic capital to the SHGs and their federations.

6. Provision of Interest Subsidy: The rural poor need credit at low rate of interest and in multiple doses to make their ventures economically viable. In order to ensure affordable credit, NRLM has a provision for subsidy on interest rate above 7% per annum for all eligible SHGs, who have availed loans from mainstream financial institutions, based on prompt loan repayment. This subsidy would be available to SHGs, where at least 70% of the members are from BPL households, till a member accesses credit, through repeat cumulative loaning, up to Rs 1.00 lakh per household.

Livelihoods

1. Poor have multiple livelihoods as a coping mechanism for survival. Their existing major livelihoods are: wage labour, small and marginal holding cultivation, cattle rearing, forest produce, fishing, and traditional nonfarm occupations.The net incomes and employment days from the current livelihoods are not adequate to meet their expenditures. NRLM would look at the entire portfolio of livelihoods of each poor household, and work towards stabilising and enhancing the existing livelihoods and subsequently diversifying their livelihoods.

2. Infrastructure creation and Marketing support: NRLM would seek to ensure that the infrastructure needs for key livelihoods activities of the poor are fully met. It would also provide support for marketing to the institutions of the poor. The range of activities, in marketing support, includes market research, market intelligence, technology, extension, developing backward and forward linkages and building livelihoods collectives and supporting their business plans.

3. Skills and Placement Projects: NRLM would pursue skill upgradation and placement projects through partnership mode as it is one of the best investments in youth, and provides impetus to livelihoods opportunities in emerging markets. For strengthening this, various models of partnerships with public, private, nongovernment and community organisations would be developed. A strong relationship would also be developed with industry associations and sector specific employers’ associations. National Skill Development Corporation (NSDC) would be one of the leading partners in this effort. 15% of the central allocation under NRLM is earmarked for this purpose.

4. Rural Self Employment Training Institutes (RSETIs): NRLM encourages public sector banks to set up RSETIs in all districts of the country. RSETIs transform unemployed rural youth in the district into confident selfemployed entrepreneurs through need-based experiential learning programme followed by systematic handholding support. Banks are completely involved in selection, training and post training follow-up stages. RSETIs partner with others, including the institutions of the poor, to realise their mandate and agenda.

5. Innovations: NRLM believes that successful innovations can reduce the learning curve for poverty eradication by showing a better pathway or a different pathway out of poverty. 5% of the Central allocation is earmarked for innovations. They should be end-toend solutions and have a clear mandate of transferring knowledge and capabilities to the livelihoods organisations of the poor. Those innovations which have the potential for reaching out specifically to the poorest; or for reaching out to the largest number of poor; and having maximum impact with limited resources would be preferred and supported.

Convergence and partnerships

1. Convergence: NRLM would place a very high emphasis on convergence with other programmes of the Ministry of Rural Development and other Central Ministries, and programmes of state governments for developing synergies directly and through the institutions of the poor.

2. Partnerships with NGOs and other CSOs: NRLM would proactively seek partnerships with Non-Government Organisations (NGOs) and other Civil Society Organisations (CSOs), at two levels -strategic and implementation. The partnerships would be guided by NRLM’s core beliefs and values, and mutual agreement on processes and outcomes. NRLM would develop a national framework for partnerships with NGOs and other CSOs. Further, NRLM would seek partnerships with various other stakeholders at various levels directly, or through the institutions of the poor.

3. Linkages with PRIs: In view of the eminent roles of Panchayat Raj Institutions (PRIs) that include governance, agency, commercial and political, it is necessary to consciously structure and facilitate a mutually beneficial working relationship between Panchayats and institutions of the poor, particularly at the level of Village Panchayats. Formal mechanisms would need to be established for regular consultations between the institutions of the poor and the PRIs for exchange of mutual advice, support and sharing of resources.

Sensitive Support

1. External Sensitive Support Structures: NRLM’s process-intensive effort would require dedicated human resources. Realising this, NRLM would be setting up sensitive and dedicated support structures at the National, State, district and subdistrict levels. NRLM Advisory, Coordination and Empowered Committees and National Mission Management Unit at the national level, State Rural Livelihoods Missions (SRLMs) as autonomous bodies and State Mission Management Units at state level, District Mission Management Units at district level, and sub-district units at block and/or cluster levels would constitute these support structures. These structures would have suitable linkages with Government(s), District Rural Development Agencies (DRDAs), and PRIs. 

2. Technical Support: NRLM would provide technical assistance to the States and all other partners for creating and strengthening their institutional capacities for its effective implementation. It would build national knowledge management and learning forums/ systems. It would facilitate partnerships between institutions of the poor and banking sectors, public and private sectors, for ensuring last mile service delivery to reach the poor. It would build a national pool of experts, practitioners and advisers in all the relevant disciplines including social mobilisation, institution building, microfinance, livelihoods, skill development, entrepreneurship etc. They would provide handholding support to SRLMs for developing and executing state poverty reduction strategies.

3. Monitoring and Learning: NRLM would monitor its results, processes and activities through web-enabled comprehensive MIS, regular meetings of the Performance Review Committee, visits by senior colleagues, Local, District, State and National Monitoring Groups and the mechanisms of Review and Planning Missions. Process monitoring studies, thematic studies and impact evaluations would provide inputs to the above. It would also promote social accountability practices to introduce greater transparency. This would be in addition to the mechanisms that would be evolved by SRLMs and state governments. The learning from one another underpins the key processes of learning in NRLM.

4. Funding Pattern: NRLM is a Centrally Sponsored Scheme and the financing of the programme would be shared between the Centre and the States in the ratio of 75:25 (90:10 in case of North Eastern States including Sikkim; completely from the Centre in case of UTs). The Central allocation earmarked for the States would broadly be distributed in relation to the incidence of poverty in the States.

5. Phased Implementation: Social capital of the poor consists of the institutions of the poor, their leaders, community professionals and more importantly community resource persons (poor women whose lives have been transformed through the support of their institutions). Building up social capital takes some time in the initial years, but it multiplies rapidly after some time. If the social capital of the poor does not play the lead role in NRLM, then it would not be a people’s programme.

6. Transition to NRLM: All States/UTs would have to transit to NRLM within a period of one year from the date of formal launch of NRLM. Further funding under SGSY ceases thereafter.

7. Agenda before NRLM: NRLM has set out with an agenda to reach out, mobilise and support 7.0 crore BPL households across 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats, in 6.0 lakh villages in the country into their self-managed SHGs and their federal institutions and livelihoods collectives. NRLM’s long-term dedicated sensitive support would be with them and extend facilitation support in all their efforts to get out of poverty. In addition, the poor would be facilitated to achieve increased access to their rights, entitlements and public services, diversified risk and better social indicators of empowerment.