http://www.dhan.org/development-matters/pdf/2008/Dev_mat_feb2008

Development Monthly Development update from DHAN Collective

February 2008

Matters

Interview

Field Notes

Events

An enabling model of community development 5

Rainfed farming with positive perspective 10

Reflections on Union Budget 25 2008-09

Feature

Microfinance and education

From the Editors’ Desk

Development Monthly Development update from DHAN Collective

Vol. II

Matters

Issue 2

February 2008

Microfinance intervention helps one to have access to good education not only by its financial products directly, but also indirectly by way of providing access to other assets.

Dear Readers!

Thanks for your continued support in the making of Development Matters and we regret for this delayed issue. This February issue of Development Matters features the integration of microfinance and education. It brings you the reflections on the union government's budget for 2008-09 with development perspective, which was an outcome of the reflective session organised by the Tata Dhan Academy. Many of the articles in this issue focus on our initiatives in the Northern states. Our colleagues reflect from their experiences in taking up community banking to the tribal lands of north India. They write on informal savings and lending practices among tribes, forest based livelihoods, introduction of Kalanjiam programme amidst the resistance from extremists in Assam and so on.

Perspectives on microfinance and its relevance in achieving MDGs from the INAFI will be of current importance. New initiatives such as vocational training centres for the differently abled, support to IGNOU in writing for their course on local governance have been featured in this issue. A team from rainfed farming development theme shares its experience with a village, where they have seen a contrasting positive picture of rainfed farming practice without any external intervention and how the villagers sustain their farming without loss even at adverse climatic conditions. As usual, we look forward for your continued support by contributing articles, comments, critiques, feedback and encouragement to enrich the quality of this magazine.

Happy reading!

Contents 1. Microfinance and education 2. An enabling model of community development

Centre for Development Communication DHAN Foundation 18, Pillaiyar Koil Street, S.S. Colony Madurai - 625 016. Tamil Nadu, INDIA Tel.: +91-452-4353983, 2610794, 2610805 Email: dhanfoundation_tn@airtelmail.in Website: http://www.dhan.org

11 5

3. Rainfed farming with positive perspective

10

4. Microfinance - a tool to achieve MDGs

13

5. Regional Convention on Growth of SHG Federations

14

6. Tribal development with microfinance

16

7. Lac Cultivation - a natural resource based livelihood

20

8. The land of seven sisters

21

9. Course writing for local governance

23

10. Reflections on Union Budget 2008-09

25

1

Feature

Microfinance and education S. Gayathri* Education is of course a problem but only after all the other problems , said a group of villagers in Konampatti, near Bodinayakkanur, in Theni District of Tamil Nadu during one of our Participatory Rural Appraisal exercises. The village with a population of 714 people was once prosperous in agriculture. Now having lost the supply channel (in the hands of encroachers in the upstream) which brings water to their tank, insufficient rainfall adding fuel to the fire, agriculture is a failure today. People have started migrating to other places in search of employment. Female children are getting married in very young ages (15-18); a bus comes only once in the morning. People are risking their life without proper medical facilities nearby.

When we did a pair-wise ranking of these problems by the villagers they prioritized the problems and education was the last in the list. When we asked why they are living with all these problems and not fighting for their right, they said, We can t fight against all these problems as we don t have time for even earning for our livelihood.

The village had a school. The school campus houses a primary school and an Anganwadi center. The school building is constructed with brick wall, concrete roof and cement floor. It had four blackboards. No playing materials were provided for the school. Two teachers are working

in the school. Students of standard I to V are studying in one classroom.

Around sixty five children are studying in the school. Unlike many other schools, the general feature of the school was very good. Parents are sending their children to the school properly. But what is the quality of education? No one knows. Eleven years old Arunkumar who is studying in fifth standard is not able to read or write properly. This is the case with other children also. Hence parents are not willing to send them for higher education further.

traditional occupation. Second thing is that what they learn from schools and colleges is not helping them to acquire any livelihood skill. So neither they involve in their traditional occupation nor do they acquire any skill. This leaves the youth without employment . They also said, There is no one to guide us. Since we are non literate, we are not able to help our children with their studies; we are not able to assess if they are doing well in their studies or not; we are not able to take right decisions about the higher education of our children .

The reasons they gave for not sending their children to school were very interesting. They said, People generally think that educated youth cannot do ordinary work. So if they pursue higher education they also don t want to involve in their

When asked about higher education of girls, Aameena, a village woman said, What will they do with education? If my daughter goes to school then who will do the household chores? Moreover if my daughter is going for higher studies then we would

* S. Gayathri, Team leader, DHAN People Academy, DHAN Foundation, Madurai

2

education is our last problem? This situation reflects in many of the surveys done by many agencies.

have to search for a groom with even higher education and his parents would definitely demand more dowry from us. We can t afford it, she said.

Further she added, For getting higher education we would have to send our daughters to nearby towns. It is not safe for them since they have to walk 2-3 kilometers crossing the fields. Just a few months back one of such girls from neighbouring village (13 years) was raped and killed. If not they may mingle with the boys which is against our culture and tradition . Among many others only one boy has had the privilege of going to the college (highest level of education in the village).

Out of 168 households 66 households were very poor in this village. Except for the economic conditions, the other physical facilities and social factors related to education (condition of school, negative thoughts on girls education, etc) are same for poor and rich. The school in Konampatti is one of the few schools which were provided with toilet

facilities and surprisingly it was kept very clean. When interacting with one of the teachers, my colleague congratulated her for the cleanliness despite many small children using the toilet. Immediately the teacher responded that, no, no, no. we won t allow the children to use the toilet.

They will spoil it.

We all know that Konampatti is not an exceptional village. There are thousands of such villages in our country (even worse than this).

Despite many issues they still have resources like land, water, above all, manpower. But is the manpower really powerful is the question. In these villages the status of education which is essential for making human powerful is very poor. People are struggling for earning for their food when other social, political and economic factors of poverty join hands and weave a complex net to trap them.

In this situation how will they pay attention to the education of their children? Don t they make sense when villagers of Konampatti say

The Union finance minister P. Chidambaram had introduced a historical cess of 2% on all central taxes to generate additional revenue for spending on elementary education.

He also committed to raise the national outlay on education from the current 3.5 percent of GDP to 6 percent in the future. Upgradation of the nation s public education is one of the top priorities on the agenda of National Advisory Council. There are many Central and State sponsored educational programmes being implemented all over the country.

Despite all these efforts, 17% of children are not at all enrolled in schools; Out of 83% who are enrolled only 59% of children reach grade 5; the figure further reduces to 25% in Tertiary level (children studying science, arts, engineering). The rest of them are dropping in the middle of their journey of education much before they reach their destination.

Although the overall literacy rate of our country is 62% the government definition of literacy sets such a low standard that being literate doesn t necessary mean that a person is able to read and write. This has given India 127th place in Human Development Index. Education sector faces different problems ranging from enrollment, school drop outs, poor quality of education, poor infrastructural facilities available in school, inadequate teachers, inadequate capacity of teachers, irrelevant syllabi and assessment system, less scope for learning vocational skills, mismatch between the syllabi and the skills

3

demanded in the market and commercializing education.

Integrating microfinance with education interventions Before discussing on the integration of microfinance and education, we must understand the connectivity between both. It would be relevant to reflect on poverty since both microfinance and education interventions are tools that can help in addressing poverty. As we all know poverty has many dimensions.

Generally poverty is known as state of deprivation. Deprivation of (and lack of accessibility to) assets like knowledge and skill (education) health, social status and physical assets (land, equipments, bank deposits) are leading one to the state of poverty.

Moreover these assets are interrelated with each other. Access and usage of one type of asset leads to the access and usage of another type of asset.

The microfinance interventions focus on providing financial services like savings, credit and sometimes insurance services to the poor. It helps the poor to arrest leakages and get a higher and more stabilized income by enhancing their livelihood and ultimately result in ownership, accessibility and usage of the assets.

In the view of education, microfinance intervention helps one to have access to good education not only by its financial products directly, but also indirectly by way of providing access to other assets.

Similarly, education interventions help people learn theories and philosophies which help people to understand different phenomenon exist in the world; more importantly

it helps to gain skills essential for getting jobs and thereby earn for their living. When we refer to the earlier framework of poverty we could see that education helps in gaining important assets knowledge and skill. Since these assets are interrelated, in a long run it helps one to own, access and use the other assets as well. From this we can understand that education is the cause and effect of poverty.

Coming back to Microfinance, the Self Help Group (SHG) model of microfinance initiative has proved itself to be a powerful instrument in organizing poor to fight against the elements causing poverty. This is achieved by designing financial products which address various development issues of the poor like education, health, unemployment, gender inequity, migration, social injustice etc. Whether all microfinance initiatives are consciously doing this is a debatable issue.

From here a few leads related to integration of microfinance and education intervention is presented.

Any development intervention should start from identifying the real problems of the people that too, context specific. It is a belief and also a fact (to some extent) that the widespread poverty in our country is the prime reason for the low schooling. This is because of the wellestablished fact that children in our country are working on a large scale in the household, in family enterprises or in income-earning activities outside the home. According to official estimates around half of the children between 6 and 14 - around 92 million

- are not attending school. Most of them are working as labourers.

How the Microfinance SHGs can ensure that no child is going to work and there are no school drop outs in their members family?

Is it because the poor parents don t want to loose the income earned by their children? No. Most of the poor parents want to send their children to school especially in the elementary levels (this is mainly because of the free schooling system). They believe that educating their children would give them good employment opportunities and thereby their life would change. But it is only when the children drop out from school (because of failing in the exams, beating/scolding of teachers, girls being teased by men, unavailability of toilets or school is not attractive) or when they have to pay for the education of their children, parents engage them in some work to use their labour for economic purposes and also as a way of equipping them with skills necessary to earn for their future life.

So we can conclude that economic poverty alone is responsible for low schooling.

How the SHGs are going to ensure the quality of education their children get from the schools? and What can SHGs do to upgrade the infrastructure of the schools?

With regard to girl s education the fact that girls spend a greater amount of time on work, mostly on household duties, creates a negative influence on their school participation. The child labour benefits of girls for their

4

parents are therefore generally higher than the child labour benefits of boys.

This economic factor is reinforcing social attitudes against the schooling of girls.

How are the SHGs going to change the social attitudes against education of girls?

There is a widespread unemployment and under employment prevailing in our country.

This is mainly because of lack of saleable skills among the youth. In countries like Germany, Korea and Japan, nearly 95% of the youth acquire any one of livelihood skills even before completing their school education. But most of the youth in our country don t acquire such skills even after completing their college education. This has lead to a situation where, there are lakhs of youth without proper employment while there are many industries and service enterprises looking for skilled employees. To change this situation and to use the opportunities that are emerging in today s liberal economy our youth need to be properly trained in diverse disciplines.

What is the role of SHGs in ensuring that all the youth in their members family are equipped with alternative skills?

There are other areas in which the microfinance initiative can concentrate for improving education of their children

What is the scope of microfinance groups in representing their interests to State education departments (as they are the major players in education)?

What is the scope of these groups in working in collaboration with the Government in designing the syllabi and methodologies?

Given below are a few initiatives that are already taken by many microfinance SHGs towards education.

1.

Giving preference for education loans

2.

Having norms for encouraging girls education (by reducing interest rates for the education loans of girls)

3.

Providing timely credit at the time of school admission

4.

Giving high interest for education savings

5.

Scholarship linked insurance service (linked with Govt s Insurance policy)

These are all a few direct financial products offered by SHGs. As Civil Society Organizations of their locality the SHGs also do the following activities to enhance the education.

MFGs are conducting campaigns to create awareness among the parents about the importance of education

They are running alternative schools (full time or part time)

As development institutions at village level they are taking initiatives to strengthen the Parents- Teachers Association (PTA)

They spend a portion of their common fund in upgrading the infrastructure of the existing schools in their villages

They are creating pressure on the Government especially local governance to upgrade the education facilities in their locality.

With these efforts SHGs are focusing on removing the inequity that exists in the education system between poor and rich; rural and urban. The directive principle contained in Article 45 of the National Policy on Education 1986 says that, the state shall endeavour to provide within a period of ten years from the commencement of this constitution, for free and compulsory education for all children until they complete the age of fourteen years. Despite this the education for poor is completely neglected. This is because of the misunderstanding of the real problems and a complete lack of commitment in tackling them is obvious from the fact that policy after policy and scheme after scheme, have failed to make any appreciable impact with regard to education for poor. This could be very well understood by looking at the background of those going for higher education and who get employment.

Poor children receiving poor education are competing with their rich counterparts who enjoyed good quality education. The result..? They don t get equal jobs.

The Nobel laureate Amartya Sen wrote in his book Economic Opportunity Development and Social Opportunity (1995), The fact that the government was able to get away with so much neglect in the field of primary education relates to the lack of political clout of the illiterate masses .

The micro finance groups should act as change agents in creating such political strength among those illiterate masses.

5

Interview

An enabling model of community development Prof. Trilochan Sastry & Prof. R.Srinivasan (Continuation of the interview published in the January 2008 issue)

Social Sector Vs Corporate Sector RS/TS: As an MBA from IIM Ahmedabad, you are familiar with the corporate sector. How do you define this group that you are working with, vis-à-vis what the corporate sector calls the customer? Do you regard them as customers or as something else?

MPV: We call them members, the community, the users we use different terminology for our own contexts. Most of the time we call them the members of a community group.

TS/RS: In the corporate sector, they talk about top line, bottom line do you have any such concept for DHAN? MPV: Yes, the non negotiable or bottom line is very important here.

Working with communities, interacting and spending more time with communities is our bottom line.

It ensures that we keep our relevance.

The bottom line is really that you need to be in active touch with the community.

The other non negotiables are our five core values. First, we strongly believe in grassroots action, and this takes precedence over consultancy and all other activities. Then come enablement, collaboration because no one can do development alone. We also believe in innovation and

excellence. These are not very different from the imperatives of the corporate world because when you are doing something in an organised, syste matic way, on a large scale, the same principles are applicable. However, the form, the terminology, the context and the qualifications needed for entering the field are completely different.

So these are our non negotiable principles and philosophy. If any programme deviates form this, then we have to correct the systems and processes internally. That s our bottom line. And all said and done, the purpose for which we exist, which is poverty reduction and concrete impact is achieved through these.

TS/RS: Your first priority contact with the community is very interesting. Why is this so important, and why should it be measured as the bottom line?

MPV: To give you an example, today I went to Sira, where some of our colleagues are working on tank rehabilitation with the government.

They have done wonderful work. But the thing that struck me was that the whole range of agriculture is not really included in the process. In the command area of the project, tube wells are the predominant mode of irrigation. However, there is no specific package for the 40 percent of the farming community who have no tube wells, and there is no prospect of

their being included in the ongoing development. There is no way for the development organisation to know that unless they are in touch with the community and really interact with the community.

Secondly, it s a very dynamic scene; changes are constantly taking place. If you want to be relevant, you have to be aware of that and keep abreast of the changes. It s not like a factory where everything is computerised. You have to factor in the human element as well as many other variables, such as the vagaries of the monsoon, which are completely outside your control. The community is aware of these elements, and they have survival skills that have seen them through all kinds of hardships.

Interacting with the community also helps us understand and appreciate these skills.

TS/RS: In the corporate sector, the shareholders and the customer will give you feedback if you re not doing

6

a good job either your market share will fall or the shareholders will throw you out. But in the social sector, this feedback mechanism is missing. So how do you asses your performance in DHAN? MPV: This is something that varies from organisation to organisation, but the checks provided by the customers and shareholders in the corporate world hold good in the social sector as well. If you don t deliver, you may just survive, but you won t be doing it with a high energy level or excitement, or growing or diversifying.

At DHAN we have a very rigorous mechanism for assessing our own purposes and processes. We have rigorous monthly, quarterly and annual reviews, and a consultative forum meeting every six months where all the projects regularly submit their reports, and policy level decisions and changes are made. Our strong internal systems are what ensure that we stay in business.

DHAN is growing by leaps and bounds. We have grown from 50 professionals in 1998 to 400 plus today. Counting the staff working in the clusters and federations as part of community organisations, we are around 700 people; and every year we are adding around 100,000 families to our community. So I would say that there is a very defined performance system here, and our measurement of various internal parameters is probably more sophisticated than what you commonly find in the corporate sector. How else do you ensure quality? Of course, we are also accountable to our founders, who regularly evaluate our reports and our processes.

Sustainability TS/RS: One of the questions raised about non-governmental organisations (NGOs) concerns the sustainability of living on donations.

What is your view on this?

MPV: As long as there is poverty, there is a need for a softer approach.

All promotional efforts, such as correcting an imperfect market and bringing it to a certain level, require grant funds. The source varies. It could be coming from the poor themselves, or the government or anywhere. There is a misapprehension about sustainability which denies opportunity to the poor. There is a need for a support fund when poverty exists, but it does not have to be unsustainable. The issue is, once we get the funds, how do we use it to make the community sustainable?

Today, in the name of sustainability, many MFIs, take huge amounts of money as microfinance funds, and lend to the poor. But it s basically sustainability of the institution that they are concenered with, rather than the sustainability of poor communities. The don t understand that when the people are sustainable, they are going to support you as ling as you keep your relevance.

So the way I define sustainability is that the community, the poor people, must be sustainable. This is also why when we are building an institutional framework, we emphasise the conservation approachreducing the transaction cost, saving money. Money is available, but it has to be made to work. For example last year, we got something like Rs.8-10 crores of people s money. It paid for their own management. I would say that out of our total budget, which is

around Rs.400 crores this year, Rs.200 crores is loans from the banks to the members, nearly Rs 100 crores is the members own savings essentially, they are funding themselves, something that is not properly understood. Then comes the project management cost, which comes to around Rs.20-25 crores. Out of that, their own contribution comes to around Rs.8-10 crores. They are paying part of our staff, and they have their own staff of 3,000 plus. DHAN staff is 700, but the people s staff is around 3,500 all paid by them. DHAN also gets funds of Rs 15 crores from other institutions.

TS/RS: DHAN is now ten years old, with an earlier history with Pradhan.

If you look at your communities, which are now 10-15 years old, would you say that one has to spend less resources on those?

MPV: Yes, in fact we don t have to spend resources on them at all. After five years, many federations manage on their own. And they really want to take it to the next level. We see a kind of four-generation evolutionary pattern. The first generation is the social intermediation phase, where we really create a social fabric. The second is the financial intermediation phase, that concentrates on building sustainability. In the third or business intermediation phase, the focus is on activity and efficiency. The fourth is about civic intermediation. Because by this time it has grown into a large institution, like a civil society or an NGO. They are handling a lot of resources-for example, the Tirupati federation is handling about Rs.9 crores. So each institution has built its own systems, they have constructed their own buildings, which may run

7

to say Rs 20 lakhs, and they have reserves of a few crores.

TS/RS: So you re saying that initially society spends money, and within about five years, the community becomes self sustaining .

MPV: Yes, the rate of return is very high. For example, ICICI came to us and said how much do you need for promotional cost? Then we worked it out; for a federation to be promoted, it s about Rs.40 lakhs. We asked them to give only Rs.25 lakhs, to be amortised over the future returns the remaining Rs.15 lakhs would be collected by the people themselves over a five year period.

TS/RS: But they re not going to repay that money.

MPV: No, they are not going to repay it, because they are really repaying it to other communities.

They go on to promote many groups.

So if you monties that, it s really very high, and you are really promoting a multiplier effect and its spinoffs of the highest order, and the rate of return will be 300 or 400 plus. I believe that return on investment in social capital is phenomenal.

Donor Management TS/RS: Donor Management is probably an important area for DHAN and other organisations in the social sector, as is investor management in the corporate sector. Can you throw some light on how DHAN is relating with donors?

MPV: We have clear strategies for different levels of funding. Many relationships begin and end with project funding. Project funds are easy to get, but they never get to the

next level. In the case of programme funding, there are at least two or three tranches of funding, so the relationship extends further, to shared processes.

We select certain donor institutions, which are aware of our processes, and take them to the next level. The third level is institutional funding. It is very difficult to find institutional funding. Currently we have three institutional funders the Ratan Tata Trust, Ford Foundation and Oxfam Novib. With these we have a long term relationship, they are more like strategic partners. This means they allocate a certain quantum of funds to us, and leave the specifics to us. It is up to us to us to use the funds according to our priorities, and we come out with a proposal. For example, initially we used the Ford Foundation funds for microfinance, but in the last three or four years we have been using it for tank restoration.

So it is used wherever it is needed, there is a lot of flexibility.

TS/RS: Do they evaluate the projects regularly?

MPV: Institutional funders usually don t. In fact, Ford Foundation never does an evaluation, because they really trusts us to use the money effectively. Of course, we still follow our internal systems and write up reports regularly. For instance, in the last two years after the tsunami, we have done about Rs 50 crores work.

That money was lent without interest, but when it was returned it went into the sustainability fund for the community. Generating money is a very interesting process, and for that, openness and flexibility on the part of the donor are very important.

We are now in the process of expanding the institutional funding.

Often, other types of partners want to get into the details of the project, and this makes it very difficult for us to manage. We need at least 10-20 percent deviation in the budget lines, because with a project period of 3-4 years, you can t really think everything through, you can only give a broad outline. What we need at this point of time is bilateral funding and consortium funding. For instance, the Netherlands government allocates a certain percentage of their development funds to different institutions. But the Indian government has rules and regulations which make such funds difficult to access. Our international wing will hopefully take care of some of these problems.

We are trying to build an endowment fund or corpus to be able to meet at least 15 percent of our budget. Currently we have a corpus of about Rs.10 crores. We plough back 50 percent of the interest on that corpus, and 50 percent we use. We have set up a Centre for Philanthrophy to raise funds for the community. We hope to raise Rs.5 crores this year, through local philanthropy, diaspora philanthropy and other countries philanthrophy. We have set up DHAN Netherlands to raise funds. Last year they raised Rs.50 lakh for a school.

Soon there will be a DHAN USA, DHAN Canada and DHAN Switzerland .Our website has evoked a lot of response. For example, we recently listed 25 drinking water ponds for sponsorship. Within about a month, it was all subscribed, mainly

by NRIs. We raised about Rs.20 lakhs for the ponds, as well as funds for a federation building. Now we are putting up another hundred ponds. So we want to make it a self managed

8

funding process. We should be able to do it in about 10-20 years time, so that our development processes and our flexibility are ensured.

TS/RS: But this philanthropy is coming directly to the communities, so what flexibility does it give DHAN? MPV: Some of the programmes, such as the electricity projects, are not ours. We just localize the project and leave it to them. So we really don t need to worry about it. It makes strategic sense.

TS/RS: How much top management time is spent in managing donors?

Apart from raising funds, that isreport writing, meetings and so on.

MPV: Our organisation is decentralized. We have allocated different people to each funding agency. They have to do all the reporting. At least 10 percent of their time is spent on managing the donors, because it is a really critical activity for us. This is a lot of time, but it also keeps the new ideas coming, helps us to network and so on. For instance, we are apart of an international network, International Network for Alternative Financial Institutions (INAFI), which gives us a lot of space for learning. We have learnt a lot from this network, visiting countries like Bangladesh to see their work.

TS/RS: Networking is different from donor management.

MPV: Yes, but it provides access to the donors. Some of the networks are supported by donor agencies like Oxfam, and you really get to travel, meet people and talk to them. There is no substitute for face to face interaction.

TS/RS: Can you give us an idea of DHAN s contribution to society in concrete terms? If you go back to about 1997, the total amount of funds that ever came to DHAN, leaving aside the tsunami funds, may be about Rs. 50 Crores. Can you confidently say that whichever way you measure it, the net benefit to society is at least the amount that has been spent, that is Rs.50 crores?

MPV: I can say definitely that the benefit to society is at least Rs. 250 crores. I think it has multiplied five times at least, because it provides leveraging. These are really leveraging and multiplier funds.

When I invest the programme funds that are coming. I leverage it at least two times - from the bank as well as the government. This doubles every three to four years. As these projects have been running for 10 15 years, it would definitely have multiplied five times.

Leadership Issues: TS/RS: One thing that is always interesting is the issue of leadership, whether it is in the social sector or the corporate sector. What is your definition of leadership?

MPV: My definition of leadership is based on simple, proactive commonsense making an enabling environment for helping people develop. Another very important factor I see initially is that unless you see your future clearly, your leadership is not going to play a critical role. So vision is very critical.

A consultative process is also very important for leadership. My own style is always to consult at least four or five people to check if we are moving in the right direction or not.

We have different consultative processes, like a strategic forum, and so on. And our Board gives us a lot of freedom, they never get too much into the internal processes. So once the processes are over, we send it to them to get their inputs.

TS/RS: How do you select your Board Members?

MPV: Our Board members are selected form diverse fields. We select people who have a flair and also professional equation. Secondly, we ensure that each one brings a distinctive field of expertise. For example, some are from NGOs, some from the corporate sector, some are civil servants; some are from the health sector. Generally, they are individuals known to us. Before we invite them to the Board, they are exposed to the organisation and its activities so that they are familiar with our strengths. For example, Mr. Bangera, our Chairman, is an industrialist from Bangalore, of the IIMA 1970 batch. He has been closely associated with DHAN for several years and has contributed Rs. 10 lakhs to DHAN every year because he believes in contributing 1 percent of his profits to institutions which have a core competence in channelising the money to the community. And he spends at least 15 20 days a year with the organisation.

TS/RS: We have heard of inspiring leadership, charismatic leadership, directing leadership, supporting and encouraging leadership what kind of leadership do you think really works??

MPV: As a leader, one thing I really believe in is Vinobha Bhave s interpretation of Buddhism: buddham sharanam gacchami, sangham sharanam

9

gacchami, dharmam sharanam gacchami. Buddha was a charismatic leader; everything starts with a charismatic founder or leader, but the life cycle of that is one generation. In order to carry it forward, it has to be embedded in an institution or institutionalised. That is where the sangham comes in. Anything I do has to be institutionalised. It should not be around a personality.

In our institution, no one individual gets credit. I myself have declined many awards; I don t want to get individual awards or rewards.

If it s for the institution, I will say yes, otherwise no. This will last for a few generations. Then we come to dharmam, or values. If all your practices are integrated with your values and culture, it will ensure, long generations of sustainability. In building DHAN, we have tried to root its practices in the local culture, so that we are a part of the institutionalized form, and the community also acknowledges us as a part of it.

TS/RS: Do you think this concept of leadership would be applicable to the corporate sector, or is it only applicable to the social sector?

MPV: It will definitely be applicable to the corporate sector, because you can see all the three phases in any sphere of life. I would say the closest approximation of this adherence to values can be seen in the Tatas.

TS/RS: You are right. We do not know how long the Tata corporate will last, but the Tata Institute of Science (now the Indian Institute of Science) and the Tata Institute of Fundamental Research will definitely last for 500 years. So there is a dharmam, yes.

The Way Ahead TS/RS : What do you see as the key challenges and opportunities for DHAN today?

MPV: Today, the primary challenge for DHAN is to share this experience with many people.

Knowledge sharing is our goal. That s why we have created an academy, which is a centre for policy seminars and so on. We have also set up an international wing; DHAN International. We are expanding to Africa to share this enabling model of microfinance, which is far better than the Grameem Bank s pure delivery model that the whole world is talking about today. There is also a lot of scope for sharing our water harvesting structures in Africa, where they are sorely needed.

The second challenge is to take our activities to a higher plane in terms of financial resources. The kind of resources we have got so far is around Rs. 15 20 crores. But now we need to raise at least Rs. 100 crores in another 3 4 years. So we need to really to work with the government at the state level or central level. We need to come to a different kind of partnership. The government must understand that it cannot manage development on its own. They need to be open to bilateral initiatives. We have made a beginning by signing an MOU with the Andra Pradesh government. The programme money will go directly to the community.

Only the project management money, for managing of technical/ management services will be given to us. This is a good arrangement, which we need to create on a large scale so that we stop operating as islands. The time is ripe for such initiatives as we have now reached a threshold level

where people are noticing us, we are a part of many of the policy bodies and we invited to share our experience in many fora. An interesting model in this regard is that of BRAC in Bangladesh. Their annual budget is probably Rs.1000 crore plus. Out of that, 65- 70 percent is their self sufficiency fund. Only 30 35 percent is from outside. And they have expanded to Africa, Afghanistan, Sri Lanka and so on. There is a lot to be learnt from them.

The third challenge is that of human resources. It is very heartening to find that a lot of youth are interested in coming into this sector. We now go to about 200 colleges every year, and reach out to at least 1500 2000 students. About 500 600 are attracted, and we select about 100 of these, and take them through a process of acclimatisation to this kind of activity. On the whole I would say we provide a lot of space for people to grow, with the programme content and so on. So these are the three challenges we are addressing sharing, scaling up in terms of financials, and human resources.

TS/ RS : Now you are at a stage where you are poised for much further growth, what will be the challenges of managing that kind of size and growth?

MPV: With increased size, I think collective leadership is going to play a critical role, because we will need a broader policy level framework while allowing individuals to retain their identity. Every leader would want to have his/her own identify, so sometimes the institution could frustrate or suffocate them. That s one thing that we need to be sensitive to.

Again, that s an art, not a science.

10

The second part is, now that weÂ’re going to be transnational, how are we going to handle it? We strongly believe that in order to gain acceptance and be effective, the local people have to be allowed to take the lead. So we are planning a one year programme for Africans. They will come to India, learn the processes, get other conceptual inputs and then go back and start their own groups. So basically we believe in a localized approach.

TS/RS : You personally have been in this journey for 24 years. Can you reflect on what initially motivated you, and how it may have changed over the years?

MPV: I have been fortunate.

Things have flowed naturally for me.

When I came to work with this organisation in 1982, I had no exposure to this sector. About five years down the line, there was a disturbing incident – a case of dishonesty of a trusted person. That helped me understand my own priorities, and that was when I really defined my self. I decided my life mission would be institution building.

That is what really drives me, and my family are aware that my work is my number one priority. Everything else comes second. My motivation has been strengthened further over the

years and my belief in the community has increased multi-fold.

TS/RS: Do you have any message for the government, for aspiring social entrepreneurs, or for development professionals?

MPV: I have a single message for all of them – first define the centre.

The centre is the community, and you are a part of it. Sometimes, people see themselves as the centre and others as peripheral. This is true of both the government and other sectors. I would say, keep the community as the centre and think of yourself as peripheral.

Our job is to make the functional linkages within the community work.

Field Notes

Rainfed farming with positive perspective M. Annalakshmi*

N

early 60 percent of Indian agriculture is un-irrigated. We get 86 percent pulses, 77 percent oil seeds and 50 percent cereals from the rainfed farming sector. While the widespread hope on the future of rainfed farming is not so encouraging, the case of farmers dependent on rainfed agriculture is not hopeless. This was the lesson we got from Malaipatti, a remote village of Vilathikulam block, Tamil Nadu, where the farmers have been making profits out of rainfed farming even under severe vagaries of monsoon consecutively for the past 30 years. We, a team of professional from the Rainfed Farming Development theme of DHAN have gone on an exposure visit to this village to learn the factors behind their success.

We have got a lot of surprises in Malaipatti by seeing the way they are practicing rainfed farming as not just

their profession, but their way of life.

All the 300 farm families in this village practice rainfed farming for

* M. Annalakshmi, Project Executive, Rainfed Farming Development Theme, Perayur.

11

many generations. There are three Ooranis in this village; of these only Veppamarathu Oorani is used for drawing potable water. Water in four dugout wells is unfit for both irrigation and drinking. Drinking water is brought from Seevalaperi, a nearby village. The villagers have to travel 10 kilometers for banking service at Kadambur village and walk for two kilometers to reach cooperative society.

As the residential area and cultivable area are located separately here, a village guard has been employed by them for Rs.500 / month to watch over the crops at night. They follow a unique system called Maghamai, in which, for every quintal of farm produces sold from this village Rs.10 per is collected as a tax and pooled as village corpus. A person has been appointed exclusively to collect this corpus for a monthly salary of Rs.600. Villagers give no special importance to politics. We could not see any tea shop in this village. They believe tea shops will affect their productive time.

Farming The village has 4,167 acres of black cotton soil. Earlier, major portion of the land was wasteland.

Now due to the efforts of the villagers the wastelands have been converted into cultivable. Now just 10% of the land remains waste as this portion was purchased by a person from Kerala, who has left it fallow. The land value was Rs.3,000 per acre when it was a wasteland. Their efforts to convert them productive have resulted in increase this into Rs.25,000 per acre.

The practice of land leasing is very common in this village, which happens among the villagers themselves for Rs.1,500 per acre.

There is no one in this village without a piece of land.

This village provides employment to many during harvest season. Even people come from neighbouring villages in Lorries for work here as they get better wage. Surprisingly the women get Rs. 70 as wage, which is uncommon in any other rainfed farming situation in Tamil Nadu. For every batch of 10 labourers they receive the wages of 11 labourers.

These aspects attracts labourers from various places, hence there is no need for the farmers to search for labourers, which is very common in even under irrigated farming situations in the state.

Those who own small land holding go for coolie works in otherÂ’s field to meet their ends. Since the younger generation lost their interest in agriculture they migrated to various Kovilpatti and Coimbatore in search of better employments.

Livestock Almost every family has three to four goats here. There are about 150 milch animals and 40 pairs of drought animals. All the cows are cross breeds which yields six liters per day. Since they need to travel for two kilometers to sell their milk in the cooperative milk society they sell it within the village itself. The practice of penning (stalling sheeps for an overnight in an enclosure on the land for manuring) is very common in this village. For penning, sheeps are brought from Airanpatti, a neighbouring village.

The cost of penning overnight is Rs.250. An acre requires three penning, usually done in three successive nights distributed across the area. Penning is done once in a year at three places per acre.

Cropping pattern Agriculture in this village fully depends on rainfall which allows only one crop in a year. A summer crop is possible whenever there is sufficient summer shower. Summer ploughing is done using country plough for several times till they get a fine texture to percolate maximum of the rainfall received. This moisture is used for the summer crop. Until 1972, the villagers cultivated crops like pearl millet, groundnut, horse gram etc. The drought during that year resulted in loss of Cumbu crop. Thereafter the cropping pattern was changed to cotton, gingelly, black gram and green gram. Black gram is cultivated as both intercrop and sole crop. Crop diversification ensures income from either of these crops in case of failure of any one of the crops.

Mixed cropping Two types of mixed cropping are practiced according to the rainfall received. The first type is sowing seeds at the rate of cotton 6 kgs + gingelly 250 gms + black gram 6 kgs. Though cotton and black gram are sown equally (6 kgs each), they expect only 10% of yield from cotton. When there is a shower they will get more yields from cotton and make profit out of it. Otherwise, they will get 90% of yield from black gram. Black gram grows well with the minimum residual moisture. The income from black gram usually exceeds the cost of cultivation. The farmers rely on black gram even when there are other crops.

The second type is sowing black gram 6 kgs + gingelly 250 gms. Even if gingelly fails, they will ensure yield from black gram. This will meet the cost of cultivation of both the crops.

Income from gingelly will be an

12

Iral variety yielded four tonnes with minimum inputs. In cotton they tried KC 2 variety but it did not give good yield. Hence they decided to go for SVPR 2 variety from the next year onwards.

Cultural practices additional profit for them in that case.

In contrast, single cropping is done in small patch of the field, either black gram 6 kgs or green gram 6 kgs is sown.

Over the years of experience, the difference of yield between black gram as sole crop (4½ quintals) and intercropping (4 quintals) has been brought down to just ½ quintal. Other crops like cotton, gingelly, etc. may contribute to 10 %. Green gram is usually cultivated as sole crop, as intercropping it was not profitable.

Fodder sorghum and neem trees are grown as border crops. Surprisingly these farmers have started cultivating maize as rainfed crop after seeing its performance under irrigated condition at Ilavangal, a neighbouring village..

Varieties The farmers are very careful in varietal selection. Every variety is sown and its yield is observed. Only high yielding and locally adopted varieties are selected and sown in the subsequent seasons. In black gram, they cultivated Iral variety (local variety) for a long time and went for Vamban and CO3 varieties. Last year they went for a hybrid variety called Nirmal. They realised that Iral variety was more profitable compared to all these new varieties. The cost of Nirmal seed was Rs.650/ 5kgs. The yield was only three tonnes where as

The farmers adopt various cultural practices, which are mostly their traditional practices. Also they will adopt new practices from other places and continuously fine tune it to make it suitable for their conditions. Aadi pattam thedi vidhai (Sow in the month of Adi) is a famous saying in Tamil. On contrast, these villagers sow according to the onset of monsoon.

The varietal selection is also done according to the monsoon to save the crop at their critical phases of growth.

Within 10 days of onset of the monsoon all the farmers would complete the sowing.

Line sowing: Line sowing is done by animal drawn seed driller and tractor drawn seed driller along with DAP application of 20 kg simultaneously. The advantage of tractor drawn seed driller is that it will cover 20 acres per day, whereas animal drawn seed driller will cover only 8 acres per day. When there is heavy rainfall only animal drawn seed driller and country ploughing could be deployed, because line sowing is not possible by tractor under this condition.

Animal drawn Guntu Weeder: The line sowing is done with the use of animal drawn Guntu weeder (developed by the villagers over years). Last year, they used a chemical weedicide called Brill but it damaged

the gingelly crop which was sown as a mixed crop. This was effective on monocot weeds like Cyprus sp. but not on other weeds. Hence the villagers have decided not to use chemical weedicide, instead to go for cultural practices.

Land preparation: As the sowing is done by September last week to October first week, land preparation is started from April May using disc plough. The weeds uprooted are gathered and burnt. In some cases application of weedicide is done prior to ploughing. Whenever weedicide application is done, the farmers place a placard with the details of weedicide applied. This is to help the grazers in avoiding grazing in the weedicide applied fields. Later in the month of August tilling is done twice till fine tilth is obtained. Then cropping pattern is decided and sowed along with DAP in line sowing method. The process of sowing is completed by first week of October (before Purattasi 20th). Whether there is a rainfall or not the crop will withstand the drought due to summer ploughing.

Economics of cultivation The cost of cultivation of a few selected farmers has brought interesting dimensions. Total expenditure of cultivating mixed crop cotton + black gram + gingelly was Rs.5,930. When there was a harvest of four quintals of black gram, income was amounting to Rs.10,200 as one quintal of black gram fetched a price of Rs.2,550. The profit obtained was Rs.4,270. Income from black gram alone was calculated as Rs.4,270 per acre. Income from cotton (2 quintals) during January and post monsoon harvest of black gram (1 ½ quintals) are the bonus for them. The spilled

13

black gram at the time of harvest would germinate after the showers and yield another quintal of bonus crop.

Marketing There are three merchants who provide inputs needed for agriculture in terms of cash, seed or chemicals.

In turn the farmers sell their produces to the merchants. The farmers sell only when they get right price for their produce. When the price is very low they keep the produce and sell only when it fetches good price. As the

quality of the produce in this village is good as compared to neighbouring villages, they fetch at least Rs.50 greater than other villages. People come from various places to procure these produces, so they get good price and they comfortably repay the loans to merchants or they sell to the merchants at comparatively higher price.

Learnings We ended our exposure visit to Malaipatti with a lot of learnings and

insights. Successful rainfed farming experience by these villagers has thrown a lot of challenges for the scientists and extension workers. We would study this village continuously and feed our learnings into the rainfed farming theme in which we are working. More than the practice, their wisdom and foresight are the factors that contributed for their sustained farming despite gambling of monsoon.

It was an eye opening experience being with the farmers in the village and learn from them.

Perspectives

Microfinance a tool to achieve MDGs M. Kalyanasundaram* Microfinance programmes have emerged as a powerful instrument to address poverty globally.

Microfinance services include access to micro savings, credit, insurance, payment and remittance services to the poor and disadvantaged population. India and Bangladesh have demonstrated how access to microfinance services has made positive impact on the lives of millions of poor people. Beyond the economic aspect, it has contributed improving to the socio cultural milieu of the microfinance clients. The initiative on Millennium Development Goals (MDGs) by United Nations has emerged as an important development agenda for global community with eight development goals eradicate extreme poverty and hunger, ensure all boys and girls complete primary education, promote gender equality, improve the health of mothers and

children, reverse the spread of HIV / AIDS, malaria, tuberculosis, protect environment and create a global partnership for development. The MDGs are important benchmark for the nations and governments for eradicating poverty. Beyond Microfinance, the microfinance programmes have demonstrated its potential and promise in achieving the MDGs. The direct and indirect linkages of Microfinance on MDGs have been established in several contexts in the world.

Mr. M.P. Vasimalai, Chairperson, INAFI INDIA says that Microfinance is not a mere financial instrument. It creates enormous amount of social capital, which could be leveraged for addressing several development issues. The members of INAFI network have experience and shown the way how microfinance could be connected with the development

issues. Mr. Minar Pimple, Deputy Director-Asia, United Nations Millennium Campaign, Bangkok, Thailand sees microfinance as building block and particularly when it is organized for and with women provides tremendous opportunities for achieving Millennium Development Goals.

In view of this positive experience across the world, INAFI INDIA (International Network of Alternative Financial Institutions-INDIA) a network of development NGOs with large microfinance programmes in the country is joining hands with United Nations Millennium Campaign (UNMC) to bring together all stakeholders for collective action and campaign in utilizing the microfinance programmes towards achieving MDGs. In fact, INAFI as a global network, besides INAFI India, would be working with United Nations

* M. Kalyanasundaram, Chief Executive, International Network of Alternative Financial Institutions INDIA, Madurai.

14

Millennium Campaign in three continents namely Asia, Africa and Latin America in advancing the linkage between Microfinance and Millennium Development Goals.

While the global network of INAFI reaching more than 25 millions of poor families, INAFI INDIA is reaching more than a million through its member institutions. Besides the outreach for microfinance services, the clients of microfinance have been enabled to access education/ health service particularly the reproductive health care and primary education. In India, members of the INAFI INDIA network have demonstrated the linkage between microfinance and Millennium Development Goals. DHAN Foundation, Madurai; Shri Kshetra Dharmasthala Rural Development Project (SKDRDP), Dharmasthala; People s Education and Development Organization (PEDO), Rajasthan and People s Rural Education Movement (PREM), Orissa have health programmes for more than 300000 microfinance clients on reproductive health and child care, malaria etc.

Further People s Rural Education

Movement (PREM), Orissa; BAIF Development Research Foundation, Pune; and Grameen Development Services (GDS), Lucknow are touching the lives of more than 200000 families through education programme.

The joint campaign between INAFI INDIA and UNMC seeks to promote partnership with various development actors Governments, civil societies, philanthropies, commercial banks etc. Microfinance programmes have also provided an opportunity to mainstream the Millennium Development Goals through civil societies and NGOs at the local, state and national level. In this joint campaign, INAFI INDIA and UNMC will launch the following action plan to integrate Microfinance and Millennium Development Goals:

Undertake a study of state of Microfinance and Millennium Development Goals at the national and global level and releasing country and global reports

Developing a tool kit for mainstreaming Millennium

Development Goals through Microfinance

Based on the country and global reports, organizing the development summit on Microfinance and Millennium Development Goals

Recognizing the potential of microfinance for mainstreaming the MDGs, INAFI INDIA and UNMC sees greater opportunity for linkages with many of the poverty alleviation programme. More importantly, in India, the joint campaign would seek for including within the framework of SHG bank linkage programme the strategy for achieving MDGs and connecting and building the linkages with other development stakeholders, NGOs, civil societies and development department of Government to work together with SHG bank linkage programmes as fulcrum. INAFI INDIA and UNMC would be working with Central Government and Development institutions like NABARD and other corporate philanthropies to build and strengthen the linkage between the SHG programmes and MDGs at local, state and national level.

Network News

Regional Convention on Growth of SHG Federations T. Narendran*

I

ndian Network of Federations of Microfinance Self Help Groups (INFOS) in association with DHAN Foundation and People s Rural

Education Movement (PREM) organised a Regional Convention (Eastern India) on Growth of SHG Federations. It was held on January 28

& 29, 2008 at Mandiapalli, Berhampur in Orissa with the support of National Bank for Agriculture and Rural Development (NABARD). The

* T. Narendran, Executive, Indian Network of Federations of Microfinance Self Help Groups (INFOS), Madurai.

15

two day convention included lead presentations, subgroups discussions, open discussions, simulation games and exercises. Each session focused on topics such as Microfinance for Poverty Reduction, introduction & networking of SHGs Federations.

250 women leaders representing 50 SHG federations from seven states of eastern India attended the convention. The involvement and contribution of the women leaders of SHG federations from various states for the convention have been very significant. Their active participation and sharing of experiences had facilitated co-learning, the best form of learning. INFOS as part of the convention launched the Eastern India regional chapter with PREM as the regional host organisation for the network activities and events at the regional level.

The convention was the first of its kind in Orissa, which provided space for the leaders of federations to share their experiences and learnings on the growth of their SHG federations. It also provided an opportunity to introduce INFOS to the federations of Eastern India. The schedules of the convention and the methodology followed have made the leaders to come out spontaneously and participate with full involvement.

Jacob Thundyil, President, PREM, M.P.Vasimalai, Executive Director, DHAN Foundation, Bimal Prasad Mishra, Manager, NABARD Bhubaneshwar, M.Kalyanasundaram, CEO, INAFI, Shanthi Maduresan, CEO, INFOS and Vittal Rao, Programme Leader, DHAN Foundation were also present in the

convention and gave inputs to the leaders for sustaining the growth of SHG federations. The leaders have deliberated and drew an action plan for improving the quality of SHGs through the federations. During the course of the convention, six SHG federations promoted by PREM in Orissa were enrolled with INFOS. Leaders during the feedback session shared that the convention had provided good learnings for them to improve performance of their federations and the whole convention was highly amusing, instructive, educative and thought provoking. It

has helped the participants to know each other, build relationships and enhance the process for solidarity, networking.

In the valedictory session, Bimal Prasad shared that it was good to see participants from seven states coming together and sharing their experiences.

He also stated that the intention with which they had all participated was noteworthy. Leaders who participated in the convention also requested PREM and INFOS to organise such kinds of conventions regularly in Orissa and other nearby states.

16

Profile

Tribal development with microfinance Subrata Kumar Biswal* Banswara is one of the 32 districts of the state of Rajasthan, which is geographically India s largest state.

Nearly 73 percent of the population in this district belongs to tribal communities and about 80 percent of them are living below poverty line.

The tribes are living on hill tops forming a scattered habitation with a population density of below 298 persons per sq. km. This has led to uneven development of infrastructure such as road, communication and essential services.

The tribes are called Bagri Adivasi , who is part of second major tribes clan Bhill tribes . Bagari is their language, which is mix of Gujrati, Malwi and Hindi languages. Once upon a time, the presence of thick bamboo (Bans Bamboo in Hindi) forests in the area probably attributed to the name of the district. This district lies along the Aravali River hence the terrain is undulating intersected by streams and Nallahs (small canals).

The tribes inherit unique culture and traditions and are more vulnerable to the exploitative forces. The adverse geo-physical conditions and unemployment further worsen their condition and they live in absolute poverty.

Ethnic diversity A special feature of Banswara district is the diversity of ethnic communities living through the length and breadth of the district. They are

referred as Bagdi or Bhill Adivasi (tribal) belonging to Scheduled Tribes who constitute more than eighty percent of the total population of the district. And also this Bhill community is state s second major tribe, basically they are found in hilly tracts and forests of the state. The Bhill s are the patriarchal tribes, who are stable agriculturists. These Adivasis express their cultural identity in their traditions, dressing, silver ornaments or Jewar, festivals and crafts. Unity and discipline are the basic principle in the tribal culture. They are hospitable, simple and trustworthy. They have the system of equal distribution among them. The new form of elected Panchayat did not undermine the importance of the traditional Panchayat in settling disputes; fixing the date for festivals etc. Elected Panchayat takes care of the development works in the village.

Livelihoods Availability, accessibility and proper utilisation of the natural resources found to be the reason for poor development. Agriculture based livelihoods are the major source of living for majority of the population here. This district ranks third in the state in terms of main workers who constitute 35.39% of the total

population. There has been an extremely marginal decadal (1.15%) increase in the work force. The participation of women as main workers has increased by 12.30% registers decrease in marginal workers by 8.91% and the non-working women by 3.39%. The district rank fourth in the state with a work participation rate of 44.12% of women as against men. (Source: Census2001) Agriculture based livelihoods: Since most part of the district falls in the Aravalli ranges, there are fertile lands in the valleys and hinterlands where the soil depth is 60 to 70 cm.

The soils in most parts are loam to clay loam with bottoms of the hills have shallow to medium black cotton soil.

The average land holding is 1.6 ha,

* Subrata Kumar Biswal, Project Executive, Kalanjiam Community Banking Programme, Danpur, Bansawara (Rajasthan).

17

However, nearly 76% of the main work force is cultivators; about 74% in this category have a land holding of more than two hectares. The Mahi Project provides irrigation to 24% of the cultivated area (2.51 Lakhs ha), while another 8% benefit through other sources of irrigation. 68% of the arable area remains rainfed. Due to recurring drought conditions in the area livelihood from agriculture have suffers seriously. The main crop in khariff is maize with pigeon pea, black gram, cotton and other minor pulses, while wheat and chickpea in Rabi Irrigated rice is grown in the command area while in valleys under the rainfed situation upland rice is grown extensively.

like Mumbai. The second are the marble and stone artisans of Talwara block; where these artisans make beautiful stone and marble crafts which will have great potential for tourism based livelihoods.

Livestock based livelihoods: Banswara has got rich and diverse livestock population, though the income from livestock is subsidiary, there is potential livelihood promotion through animal husbandry.

There is a cooperative dairy in Banswara which collects 8000 liters of milk every day with six milk routes identified and designated for the milk shed. The milk is packed and sold under the brand name of Saras. It is surprising that Banswara has the facility of an artificial insemination center for sheep also, though the population of this specie is rather thin.

Livelihood through forest: The forestland in Banswara district is 112,848 ha, which is about 22 percent of the total geographical area. These forests once well protected are severely degraded now. Some managed by JFMCs (Joint Forest Management Committees) and holds promise for regeneration and greening the Aravalis to bring them to their old glory. There are some initiatives like graam dani villages and community forests developed during the movement of greening the wasteland by the NWDB. Despite the functioning of about 190 JFMCs, there is still no evidence of any major livelihood promotion through forest produces except a few units of Tendu leaves collection .

Artisanal livelihoods: Traditional arts and craft have always been the source of livelihoods in the rural areas.

Due to market forces it seldom becomes main source of livelihood in the present times. The well-known earthen potteries of Garhi block and stone carvings in Talwada block are famous for their grandeur. Now days the potters in Garhi make ordinary pots for water storage and earn meager income even in the far-flung markets

Mining, quarrying and industries: Banswara, once famous for its marble now badly exhausted its resources. Shut gang saws and cross cutters still provides temporary wage employment to local labourers. In few places the stone quarries produce marbles for local use. Among the major industries, two units of the Rajasthan Spinning and Weaving Mill (MAYUR) and one unit of Syntax provide employment opportunity to semi-skilled labourers.

Livelihood through other sources: The economy of the area is largely dependant on seasonal inter and intra-state migration of tribal communities in search of livelihoods.

This apart, Many urban middle and upper middle class families have members in the gulf countries bring

in petrodollar and making rich of few influential.

SHGs and Banking There are three types of formal financial Institutions present i.e. commercial banks, regional rural banks and cooperative societies.

There are nine banks including six nationalised commercial banks, one private commercial bank, one regional rural bank and one co-operative bank.

They are operating through 97 branches in different places in the district. About 25 percent of the total Branches are in operating in Talwara block, which covers the Banswara district headquarter. Bank of Baroda having 30 odd branches has been playing the Lead bank role in the district. ICDS has made effort to organise poor people into SHGs and link them with banks. Government has been encouraging and supporting Non-Government organizations to promote SHGs. Apart from DHAN Foundation, there are handful of NGOs such as BAIF and Sadguru Foundation are the major NGOs in the district working on various development programmes including watershed, forest development, agriculture, livestock and livelihood promotion activities.

Way ahead The state of Rajasthan itself is a backward state, where the Banswara district is one among the 100 most backward districts in the country. This tribal rich district needs all-round development with long term empowering strategy. There exist a huge potential for significant social transformation through building sustainable people s organisations with good governance and local management.

18

Informal systems of savings & credit: a case study The practices of informal saving and credit systems are very common in the tribal area of Banswara district, which is located at the southern part of Rajasthan. The need and important of informal source of saving and credit systems among the poor is highly prevalent in this area.

According to people s perception, the traditional system of savings and credit are easy to operate. The system of NOTRA (mutual monetary help) and GIRVA (informal mortgage/security system) is very popular and important source of credit among the people in this area.

In addition to traditional moneylenders, the people get credit from various other sources such as shopkeepers, friends and relatives who will help at times of need where the mode of lending and repayment varies from place to place. I have made a small study on the informal savings and credit systems of the people in a Gram Panchayat in the Bansawara district.

Village at Glance The village cum Gram Panchayat Mulia is situated in the semi hilly interior area of Pipul Khunt block of Bansawara district of Rajasthan.

There are 201 households in this village with a total population of 1108 with 558 males and 550 females. The Veel tribal community is the predominant community here, which comprises of various subcommunities like Maina, Ninama, Malviya, Chapta, Ktra etc. Their literacy level is as low as 27.52 % and their socio-economic status is almost same. They live in the scattered farm houses here and there.

Agriculture is the main occupation in this village in addition to animal husbandry and labour work.

Every households owns 5-8 Bigha (4 Bighas is equal to one acre) of agricultural land. They rear goats, buffaloes and cows. The lands are characterised by low level of productivity due to poorly developed soil and lack of irrigation facility. The main crops are maize, wheat, cotton, and grams. The villagers are using maize as their staple food. Since the income from the farms is not dependable, more than 50% of the people are opting for seasonal migration during lean seasons to nearby villages where irrigated farming is practiced and to towns like Nimach, Bansawara, Mandsore etc.

This village lacks basic infrastructure facilities such as road, electricity, telephone connection, health care services etc. There is no concrete building except a school and Panchayat building. There is a school up to 8th standard having an enrollment of 278 students but the average regular presence in the school is less than 100 students. There is an Anganwadi center from ICDS for mother and childcare. There are two tube wells and three open wells for drinking and domestic purposes. There are three petty shops where grocery items, vegetables, consumables item are sold. For other needs, the villagers depend upon nearby Chhotisarvan village and weekly Shandy which is 7 Kms away from the village.

Social customs The people of this village are deeply bound by their own traditions, culture, festivals and belief systems.

Major part of their income is spent on social functions like marriages, Notras, and seasonal festivals like Holi, Dewli and Akatish etc.

Spending money in the social function is a matter of pride for the families.

There is no prevalence of dowry system in the marriage but they spend

more on gifting, feasts, country liquor and cultural programme etc. They are spending Rs 15000/- to 50000/- for marriages.

In the Notras system villagers help the needy through contributing a sum of money ranging from Rs 10,000/- to 30,000/- each year with an expectation of the same. The Holi is the main festival where they would spend at least Rs1000/- to 3000/- is very common in each and every family. At the time of Akatish festival people purchase silver ornament or land as property for their future. They borrow money from money lenders for all these expenses apart from spending their farm income.

Informal Savings systems People in the village save in many ways as cash or kind. There are two SHGs functioning in this village, through which a very few people have had an access to formal savings system like bank. Usually they save in their home in various ways like food grain savings in store box called Khothi, sash in small boxes called Pethi etc. In addition to this, they save in variety of ways as described below. .

Kothi system: The Kothi means food grain box in Rajsthani Baghdi local language, which is made up of soil and bamboo.

Generally people save their food grains after harvesting in the Kothi, different food grains has different Kothies. And also different Kothies are used for different purposes like for consumption purposes, seed for next crop etc. As and when money required, the food grains from the Kothi would be taken out and sold in nearby markets.

Pethi System: The Pethi means small box used to store valuables like money, ornaments, and important files or records. Here

19

almost all the people believe that saving in the bank is beyond their reach, so that they save their surplus in the Pethi.

Saving by creating Assets: People usually invest in productive assets like livestock; agricultural land and ornaments etc. and they believe that these forms of saving are readily usable when need arises.

Livestock gives good return on investment, for example investing Rs 1000/- on goat rearing gives Rs 3000/- return in six months.

Ornaments are easily liquidable and in some cases, they prefer to lend it out on interest.

Gifts: The financial supports in the form of cash or kind to the close relatives and friends are very common in this area. At the time of marriage, Notra and other social functions people support their relatives or friends by giving a sum of money, and equivalent gift materials in anticipation of getting them back at after some time when they call for similar functions. People put demands on the other people for the same amount or more amount against their contribution.

Informal Credit systems Informal sources of credit are very common in this village, where more than 90% of the villagers credit needs are met from the informal sources. Various practices are prevalent in this system with respect to traditional moneylenders, shopkeepers, traders, and friends at various rate of interest, which depends on repaying capacity and socio-economic status of the borrower. The following practices are prevalent in this area.

Money lending from Friends and Relatives: The accessibility to the money lenders is very easy and they borrow from them to meet small needs for a shorter period of time.

People do not charge for the smaller amount, only if the amount and the duration are higher, the people charge interest at the rate of 2% per month.

This system helps the people at the need of the hour.

Grains and fodder lending: This system is happening within the village where people lend grains and fodder.

People borrow grain / fodder from a farmer at the time of harvest and return it in the next harvest 50% more than they borrowed. In case they could not pay it as fodder or grain they need to repay it as cash.

Notra System: Notra system is a very common system of mutual help in the form of monetary help or in kind at the time of a person s need. In this system the needy family will invite its close relatives and friends in a particular day for special causes like marriages, health care, house repairing or building, repayment of loan amount etc. They will receive help in the form of cash ranging from Rs 50/- to 2000/ - based on their capacity and closeness to that person. In this system people would anticipate their contribution back at the time of their own Notras.

In this system one can t calculate return on investment, because it is a system of mutual help in the society.

For example, Binod Maina in this village has organized a Notra for repairing his house. He invited around 30 families with an expectation of raising Rs.20,000 and receiving Rs.18,000. Two of his close friends Suna Ninama and Kishan Lal have contributed Rs.1,000 and Rs.2,000 respectively in that Notra. Suna also organized Notra in the subsequent year for his daughter s marriage and received back Rs.1,200 from Binod Maina.

After two year Kishan Lal has organised Notra for purchasing of agricultural land where Binod could contribute Rs.1,000 only.

Security deposit (Girva system): In this method, people depend upon traditional moneylenders by mortgaging securities like ornaments (silver or gold) with fixed rate of interest per month. The borrower will get half of the actual market rate of the ornament cost from the moneylenders.

For example: Goutam was in need of Rs.3,000 loan from money lender. He went with 300 gms of Silver ornament which cost around Rs.6,000/- and got the required amount at the rate of 2% per month. He returned the loan amount with interest after six month which is Rs.3,360. So here the effective rate of interest is 24% per month.

Balloon loan: In this system there is no security deposit required, which is purely based on the creditworthiness and oral commitment of the borrower. This system is in practice among well off families, moneylenders, traders, shopkeepers etc. There is no installment system but to repay the principal and interest rate at the end of the loan term.

Usually the effective rate of interest in this case would be 25% per annum.

In all the cases, there is no hard and fast rule in between lender and borrower, but the lender mostly decides the terms of credit. In case of non-repayment of loan, the borrower has to lose his or her mortgaged material. No doubt the moneylender will always keep continuous watch on the borrowers for repayment. If a borrower defaults, the lenders take the help of local People and use abusive languages.

In case of Notra system if any body is deviating from the cycle of gifting, then the family would be kept away from the system.

20

Action research

Lac Cultivation - a natural resource based livelihood * Alok Kumar Dubey & Alok Ashish The success of Community Banking Program in a location like Latehar in Jharkhand which has poor development and weak local economy cannot thrive just on microfinance alone. There is very limited scope of credit absorption; mostly the Kalanjiam members borrow for consumption, as there is lack of prospective livelihood opportunity and supportive infrastructure facility.

It also results in low savings capacity.

Microfinance should be seen as livelihood finance i.e. credit plus building the capacity of poor to identify livelihood source, building their skills & extending help in creating support system. In this line Lac Cultivation has been identified as prospective intervention and an action research project has been designed.

Lac the green gold The state of Jharkhand has been endowed with rich natural resources.

These resources are backbone of state s economy. The state has forest cover of around 32.5 percent that provides opportunity for forest-based livelihoods, especially for the forest dwelling communities. However, the Lac, otherwise known as green gold of Jharkhand, which has proved to be strong supplements of their income, the state contributes one third (32.24 percent) of country s total lac production. Latehar is one of the tribal dominated districts of Jharkhand with ST population of around 45 percent.

It is located 100 kms away by road

from Ranchi, the capital of Jharkhand.

The tribal economy in this district revolves around using forest products, bi-products and minor products such as tendu leaves, bamboo and its manufactured products, mahua, fruits, leaves (used is the making of Dona, pattal), lac etc. Fortunately, the Lac growing trees, i.e. Palas are found in abundance in this district that is proved to be a boon for the local people, especially for the tribal community. Since agriculture in this district is mostly rainfed and nonremunerative Lac cultivation gets more importance.

Lac production Lac is a natural resin secreted by a specialised group of insects called lac insect. Indian lac insect Kerria Lacca (Ker.) is the most predominant variety of insect which thrives on the tender twings of specific plants known as host trees viz. Palas (Bueta monosperma), Ber (Zizyphus mauritiana, Kusum (Schleichera Oleosa) etc. Three natural, renewable, non-toxic and ecofriendly products i.e. resin, dye and wax are derived from the raw lac.

Rangeeni and Kusmi are the two strains of the lac insect for specified host plants, different in their life cycles and quality of lac produced. The rangeeni strain is grown on Palas for production of commercial lac, the source material of the most versatile resin (Shellac) and lac dye. This lac insect is bivoltine, producing swarns of young ones in October/November

and June/July. The bulk of commercial lac is obtained from this host species, mainly due to its avaibility in abundance, on the waste and undulated land, not suitable for agricultural crops. Lac cultivation on Palas is, therefore, an important tool for self-employment for poor and backward tribal communities.

Declining Lac based livelihoods In spite of favorable environment for the production of lac, people are deprived of proper yield for the last five to six years in Latehar. This has resulted in lack of employment and reduced earnings mostly for the poor people who are involved in Lac cultivation in large numbers. This is a natural resource based livelihood (on trees like Pals & Ber), which are found in and around the villages away from the town area. The host trees are in plenty in the villages near the forest or villages that are inside the forest.

These types of villages are traditional habitat of tribal communities. Lac cultivation used to be the traditional livelihood for these forest dwelling communities that would strongly supplement their income. It is observed that around 90 per cent of the people involved in this occupation are poor, mostly tribal, landless or having small land holding. Even the land possessed by them is non-fertile and solely dependent on rainfall for irrigation. So the agricultural yield depends on the vagaries of nature,

* Alok Kumar Dubey & Alok Ashish, Project Executives, DHAN Foundation, Latehar, Jharkhand.

21

therefore agriculture in this location is non-remunerative and nonguaranteed. That is why the people are compelled to think of other dependable income source.

The consecutive failure of Lac cultivation has compelled people to leave this traditional livelihood, and pushed them to migrate for nearby town and villages involved in brick kiln and other unskilled labour works which is unfamiliar to them.

Moreover, the vulnerability of migrants, especially at their places of destination is manifold. Through rapid need assessment it was found that it is an urgent need to revive the Lac cultivation to address the push migration and reduce its impacts.

Reviving Lac based livelihoods an action research The nature of problem related to this traditional nature based likelihood gives scope to understand the importance of traditional livelihoods in present economic scenario. It also helped to find the cause of its failure so that it could be further revived. The main objectives of this project are to understand the lac based livelihoods and its changes overtime. This would include Lac cultivation with selected poor households (Kalanjiam group members) who own Palas trees, on pilot basis based on scientific way and evolve a model for the revival of this traditional nature based livelihoods. It has been designed for an active co-

operation among local team, IINRG (Indian Institute of Natural Resins and Gums, Ranchi) and Tata-Dhan Academy for the fulfillments of diverse efforts needed. In this regard establishing baseline with respect to the socio-economic condition of lac growers and Lac production, training farmers on scientific knowledge & monitoring the crop on periodic basis are the prominent activities. We are hopeful that this initiative would result in identifying the reason of Lac crop failure. Hence the solution could be derived and this traditional livelihood be revived. The key to success of Community Banking Program in such locations will be based on the success of such integration.

Practitioner s Diary

The land of seven sisters Dr. Girija Prasad Borah* The North Eastern part of the country, which is popularly known as Land of seven sisters , bears significant importance in terms of their poor development despite having abundant natural resources.

There exist a long standing criticism on the step motherly approach and attitude by the Governments that ruled our country since independence. The people of this region, in spite of their hard work and their contribution in building the sovereign India were unable to taste the fruits of development, while the rest of our country derived a lot of resources from these states for their development.

Even in this rapid pace of economic

development and prosperity inadequate infrastructure and investments have made these states to stay behind the other counterparts. A section of the youths and educated have taken non violent path since 80 s due to their anguish over this neglect and growing unemployment.

If we look at the challenges for the balanced growth of this region, the first and foremost factor is its multi variant ethnic complexity and diversified demography which makes uniform planning and implementation difficult for the centrally sponsored programmes. Remoteness with inadequate infrastructure for transport

and communication are making it really difficult to attract investments for industrial growth. The region is hardly able to attract the media attention except sensational political issues once in a while. Coming to the poverty scenario of the region, though the people of this region had never reported starvation deaths but they are malnourished. The predominated tag of illiteracy cannot be the significant identity for most tribal communities of the region. For example, the state of Mizoram having 94% of ST population reports literacy rate of 88% which is stands second after the state of Kerala. Income inequality is prominent among the people of this

* Dr. Girija Prasad Borah, Project Executive, DHAN Foundation, Barama location, Assam.

22

cooperate. In my opinion, these people are more faithful on whom they believe as trustworthy for them who show them ways towards light and self reliance. We could see their growing acceptance for our approach of poverty reduction. Over these above, their affinity ignites my internal desire to unleash my potential meaningfully for the cause actually intended for.

region. Also this region was not so attracted by the competent Non Government Organisations with long term vision and constructive programmes. All these factors have made DHAN Foundation to enter into this region.

Why DHAN in North eastern states?

DHAN Foundation has decided to venture into expand its themes in the north eastern states as the development issues are so complex and poverty is widespread. These challenges can also offer a lot of opportunities for DHAN to find a niche for its programmes in this region. The huge treasure of resources in the region can be effectively and meaningfully utilised for the development. Organising the deprived communities to set agenda for the mainstream with constructive collaboration could be easily done here since the NGOs in this region are poorly equipped and motivated.

DHAN FoundationÂ’s proven track record our expertise in the poverty reduction initiatives with institution building approach would definitely make a difference. DHAN FoundationÂ’s policy advocacy

experience in the other states would be highly useful to work for pro poor policies in these states.

My experiences in Assam Working in a new environment and that too far away from the rest of the country is always challenging and full of uncertainties. But the trust and confidence placed by the organisation on me to explore possibilities for the greater cause and its constant motivation always help me to overcome obstacles and difficulties.

Positioning our works in the local areas quite strongly in the minds and hearts of the downtrodden and deprived people are my priorities, which comes out of my commitment and concern to do something for my people.

Creating confidence among the communities that are frustrated and disappointed for many years due to indifference by the state is always a challenge. This is what I have learnt in my short experience since my placement in this place. In fact the people are unaware of their rights and responsibilities and they are looking for someone to lift them from their distress and they are willing to

I could not say all my experiences were always been smooth and pleasing. However I am taking every obstacle and challenge as an opportunity to tackle the problem with more conviction. Getting acceptance by the local government and mainstream institutions are not so easy here. It is more evident that in spite of enough support from the external donors, international and central governments in recent times, the pace of growth is not enough. Lack of political will and poor functioning of development departments are the sole reason for this lopsided growth. In practice, the Governments are dictating the functioning of NGOs, where the concerns and suggestions of NGOs are not considered seriously.

The real spirit of SHG movement has been distorted in this region due to influence by the government and banks directly on the functioning of such SHGs. In many places the groups are only in the name sake without any principle and philosophy. The poorest of the poor are away from these SHGs in many places. Corruption and malpractices are deep-rooted, which have inflicted negative impact in the attitudes of the people. People have started looking for easy access to benefits without any hard work.

These observations are very discouraging and extremely

23

challenging for us, where we emphasis highly on practicing values and ethics in development action. The total transformation of systems and practices are very much mandatory to ensure significant impact in the lives of the people here. We need to wait for some time to build open and transparent partnership with the government and the financial institutions, which require continuous efforts. A more comprehensive approach with extensive demonstration may probably help us mitigate such difficulties.

Another big challenge is the presence of anti social and disintegrating powers that are always looking for opportunities to create confusion and disbelief among the community for their vested interests.

Those segments are actually worried to loose their grip over these communities in the recent days.

Mobilizing community is not so easy in this context. We will have to develop a lot of patience to face this problem.

Present status of our work Despite all these difficulties and challenges, we have promoted more than 90 Kalanjiams with about 1500 women. Many of the Kalanjiams are

functioning for more than six months and they have mobilised Rs. 2.00 lakhs primary savings. This in fact boosts our confidence in building peopleÂ’s institution owned and managed by the community in the near future. We have already started infusing the idea of self sustenance and cost coverage. We are planning to organise a bigger event in this block with all these members to reinforce solidarity among the community.

Facing challenges with extremism The areas, where we promote groups are prone for the extremistÂ’s activities. I always have an opinion that it is not wise to look for our own safety and security. If we lack courage, how then our people will develop confidence and courage to meet such challenges. Our history tells us the emergence of revolutions and struggles for freedom, when a particular community is oppressed for very long time. When the community feels that the salvation is not easily achievable by peaceful approach, they will take violence in their hands. The movements emerged here with higher level motives, have started deteriorating in their purpose and philosophy. It is quite alarming and equally concerning to observe that decaying value system and purpose

orientation over a period due to vested interests for temporary gains and individual benefits for few segments have made their presence meaningless and irrelevant. These extremists are losing their grounds and confidence among the people. They are looking for accumulating personal wealth and amenities by suppressing and exploiting others by all means.

The lower cadres of such extremists groups are by and large diverted from the purpose and mostly work for their own gain. Problems arise only because of the lower cadres.

These groups have started creating an uncomfortable environment which is obstructive for our works in the location and spirit of the location team. However it was very encouraging to see the firm stand and unity of the location team in such a critical situation. We, as a team tried to explain the purpose and philosophy of our work and clarified our approach to the higher authorities of such groups and got rid of disturbances from the lower cadres. We are now handling situations like two edged knives. We will continue to work with more rigour as we are committed to the larger cause of the communities, for which we are ready to face any kind of situation in a non violent manner.

Sharing knowledge

Course writing for local governance S. Singarayar* Rajiv Gandhi National Institute Youth Development (RGNIYD) invited us to help them in designing a

course Master of Arts in Local Governance. RGNIYD is an autonomous organisation under the

* S. Singarayar, Programme Leader, DHAN Foundation, Madurai.

Ministry of Youth Affairs & Sports, registered as a society and fully funded by the Government of India. The

24

Institute is located at Sriperumbudur near Chennai. The institute endeavors to facilitate our nation s youth with an ambient environment and tools that will enable them to make the most of their natural potential to realize their aspirations. The institute functions as vital resource centre coordinating training, orientation, research, extension and outreach initiatives for state, central governments and national level youth organizations.

RGNIYD has planned to launch five courses targeting the youth s development. For course planning and writing, it has organised a two day workshop with competent resource persons from all over the country.

DHAN was invited to be part of the course writing team for M. A. in Local Governance course. Myself, along with Janakiraman and our consultant Vallinayagam attended the workshop.

Since we have experience in writing for Diploma in Panchayat Management (DPM) course that we offer through DHAN People Academy, we were able to contribute much for the course material in addition to learn many aspects left out in our course.

The first day of the workshop focused on planning and inputs for course writing. After the inputs session the participants were divided into course wise groups and asked to make an attempt for trial writing. This exercise was more useful for us, where we had an opportunity to interact with other resource persons and establish contacts with them. It was a new experience for us to involve in such a workshop and it brought us more clarity on preparing course materials.

We have learnt how to write course materials for distance education programme. Mr. Ramanunjam, Director, Indira Gandhi National Open University (IGNOU) gave an orientation and his team facilitated that session. On the second day we were allotted lessons to write. From DHAN we took the responsibility to write seven lessons. Each lesson was expected to be in around 5000 words.

The quality of the content for the lessons was very much insisted. Based on these inputs, we have started writing lessons for the course.

Our continued interaction with the RGNIYD in the last two years had helped us to build relationship with the Panchayat Raj Institutions and Youth Affairs (PRIYA), which is one among the five divisions in RGNIYD. PRIYA has planned to conduct a nationwide study on Knowledge, Attitude and Practice of youth in PRI .

For Tamil Nadu state, DHAN has taken responsibility to conduct the study. The period of the study will be around eight months. The study will be conducted in any one of the districts in Tamil Nadu.

More about Rajiv Gandhi National Institute Youth Development Rajiv Gandhi National Institute Youth Development undertakes in depth research with a holistic approach to identify youth issues. It sensitizes youth functionaries including SHGs and Community Based Organisations (CBOs) to youth issues and trains the trainers. It formulates specific training capsules for capacity building and empowerment of the youth. The institute acts as a catalyst to marshal

youth participation in rural resurgence, community development and nation building.

It has emerged as the professional resource agency, and acts as a thinktank of the Ministry of Youth Affairs and Sports, and assists the Government and Non government agencies in youth related activities. As the apex Institute at the national level, it works in close cooperation with the NSS, NYKS and other youth organisations in the implementation of training programmes. The Institute is being developed as a nodal agency for training youth and thereby it will become a well-oriented facilitator of youth development activities in rural as well as in urban areas.

This Institute is provided with the essential facilities and infrastructure so that it would serve as a Centre of Advanced Study and Applied Research for ensuring availability of professional expertise in youth work and to create a competent cadre of youth workers. As a regular feature of its functional activities, the Institute has launched a number of research projects and extension programmes to unearth the potential in the young people which perhaps remain untapped. It provides a forum for youth to debate and discuss issues that concern them as well as those that impinge on their development.

The institute has planned to launch academic programmes in five disciplines. They have come out of plan for starting Post Graduate Degree and Diploma in all five disciplines in collaboration with IGNOU from July 2008.

25

Events

Reflections on Union Budget 2008-09 Dr. R. Jaganathan, SM. Lakshmi*

T

ata Dhan Academy organised a reflective session on the 2008-09 Union budget with development perspective on February 29 at Hotel Germanus.

Development practitioners, media professionals, executives from industries, bankers, academicians, scholars and the general public attended the session. Damodar

Jena, Faculty of Tata-Dhan Academy coordinated the session. A. Umarani, Director, Tata Dhan Academy welcomed the participants and briefed them the purposes of organising such an event. She highlighted the need for critiquing the budget on its sensitivity towards development and gender inclusiveness. She also hoped that the

session would be useful to the academia, especially for students for whom it would be a learning opportunity.

Excerpts of 2008-09 budget speech

by P. Chidambaram, Honourable Union Minister of Finance

crore by March 2008. The National Rural Employment Guarantee Scheme has proved to be a historic measure of empowerment of rural population especially women. The Mid Day Meal Scheme covered 11.4 crore children. The National Rural Health Mission has taken improved health care to rural India.

Education

It is the privilege to share the Budget 09 with one of my distinguished predecessors Dr. Manmohan Singh. Honourable Members! The India growth story is an inspiring tale. Since January 1st 2005 till December 07 the growth rate is recorded as over 8%. In the current year too the growth rate is 8.7%. I am confident that we will maintain the average of 8.8% . The drivers of growth are services and manufacturing sectors. Moreover agriculture has struck a disappointing note. Its growth for the whole last year is only 2.6%. The world prices of crude oil commodities and food grains have risen sharply. The Ministry of Agriculture has estimated that the total output of food grains in 200708 will be 219.32 million tones and that will be an all time record.

The Growth - an overview The agricultural credit doubled and will reach a level of 240,000

The Kasturba Gandhi Balika Vidyalaya Scheme has enrolled 182,000 girls in residential schools.

Bharat Nirman has made impressive progress that on each day about 290 habitations are provided with drinking water and 17 habitations are connected through roads, 52 villages are provided with telephones and 42 villages are electrified. This is indeed proof of more inclusive growth. Thus Budget 2008-09 is raising their sights to do more and to do it better. 200809 is the crucial second year in the Eleventh Five Year Plan. It is the year of consolidation of securing the ongoing programme through firm financial foundation, close monitoring of implementation and enforcing accountability, and measuring the outcomes in terms of target achieved.

The participants after watching a live relay of the budget presentation in the Lok sabha, shared their reflections.

The total allocation for education sector will be increased by 20% from last year to this year. The focus of Sarva Shiksha Abhiyan (SSA) is to enhance access, infrastructure and quality learning at primary level and thus ensuring access to upper primary level. The model school programme has to be established to start 6000 high quality model schools. Jawahar Navodaya Vidyalaya schools are to be established in 20 districts to cover SC & ST students. An additional of 410 Kasturba Gandhi Balika Vidyalaya has to be established in educationally backward blocks to address the issue of equity in the education of girls belonging to SC, ST, OBC and minority communities.

A sum of Rs 750 crore will be allocated to National Means-cum Merit Scholarship Scheme to enable students to continue their education beyond class VIII and upto class XII. Nehru Yuva Kendras will be established in 123 districts. The Mid-day meal scheme will be extended to upper primary classes

* Dr. Jaganathan, Programme Officer, SM. Lakshmi, Research Associate, Tata DHAN Academy.

26

in Government and Government aided schools in all blocks in the country. The government proposed to establish 16 central universities, three IITs in Andhra Pradesh, Bihar and Rajasthan, two IISERs at Bhopal and Tiruvanathapuram and two schools of planning and architecture at Bhopal and Vijayawada. It has also been proposed to grant an amount of Rs 500 crore to Deccan College Post Graduate and Research Institute in Pune. The Ministry of Science and technology will introduce a scheme called Innovation in Science Pursuit for Inspired Research (INSPIRE) that includes scholarships for young learners, for continuing education and Research careers. Government has accepted to establish National Knowledge Network by interconnecting all knowledge institutions through an electronic digital broadband network.

Health There would be an increase of 15% in allocation in health over allocation in 2007-08. It has been proposed to increase the allocation for National Rural Health Mission

to the tune of Rs 12,050 crore to make it fully functional. 323 district hospitals will be upgraded. About Rs. 993 crores is allocated for the National AIDS Control programme. There would be a drive to eradicate polio with a revised strategy and a focus would be given in high risk districts in Uttar Pradesh and Bihar. Rashtriya Swasthya Bima Yojana, a scheme for unorganized sector to provide health cover will be launched in Delhi and the states of Haryana and Rajasthan.

The government has planned to establish two National Institutes of Ageing during the eleventh plan period. Eight regional centers and a department for geriatric medical care in one medical college or tertiary level hospital in each state would be setup.

Allocation for Integrated Child Development services will be enhanced, remuneration of Anganwadi workers and helpers will be raised. By this 18 lakh Anganwadi workers and helpers would get the benefit.

Flagship programmes There are eight flagship programmes of the UPA government.

The National Rural Employment Guarantees Scheme (NREGS) will be

rolled out to all the 596 districts in India. Similarly allocation for the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Rajiv Gandhi Drinking Water Mission will be expanded to uncovered habitations and slipped back habitations to address the issues of drinking water quality. Stand alone system will be created to provide potable water to each school in water-deficient habitations. The rest four programmes are dealt two in education sector (SSA & MMS) and two in health sector (NHRM & ICDS). A special attention will be given to North Eastern region and a sum of Rs. 500 crore is dedicated for attending the urgent needs of these areas. ST, SC and socially backward communities and minorities will also continue to receive special attention.

Women and children: Rs 11,460 crore has been provided for 100% women s specific schemes and Rs.16,202 crore for schemes where at least 30% is for women specific programmes. An allocation of Rs 7200 crore will be earmarked for women and child development.

Self help groups: LIC will scale up the Janashree Bima Yogana scheme to all the SHGs. For this Rs 500 crore will be contributed to the corpus. This scheme together with the Rashtriya Swasthya Bima Yojana will mark the beginning of a new deal for women by providing them life and health cover.

Agriculture Growth of agricultural credit has been impressive and it has been proposed to set a target of Rs 280,000 crore. Gross Capital Formation (GCF) needs to be raised to 16%

27

during the 11th plan to achieve the target growth rate of 4%.

Government has planned to invest heavily in the Accelerated Irrigation Benefit Programme (AIBP) and Rainfed Area Development Programme. Rs 500 crore has been allocated to the centrally sponsored schemes on micro irrigation covering another 400,000 hectare.

Agreement has been signed with the World Bank and the Government of Orissa, West Bengal and other states to repair, renovate and restore water bodies. It has been planned to establish the Irrigation and Water Resources, Finance Cooperation with an initial capital of Rs.100 crore.

Special thrust will be given to the revival of crops such as coconut, cashew and pepper through National Horticulture Mission. 500 soil testing laboratories will be set up during the plan period. He One time allocation of Rs.75 crore will be done in order to provide one fully fitted mobile soil testing laboratory.

Rs.40 crore will be allocated for Special Purpose Tea Fund. One time grant of Rs.5 crore will be given to the Centre for Development Studies, Tiruvanandhapuram, in order to promote Research on plantation crops. The National Plant Protection Training Institute at Hyderabad will be converted and upgraded into an autonomous National Institute of Plant Health Management with budgetary support of Rs 29.4 crore. Rs 644 crore will be provided to the National Agricultural Insurance Scheme (NAIS). Rs.50 crore is allocated for Weather Based Crop Insurance Scheme in selected areas of five states.

Central Government promises to share 86% of the total cost in implementing the package of Prof.

Vaidynanathan Committee s report on reviving the long term cooperative credit. All agricultural loans availed by small and marginal farmers will be covered by debt waiver and depth relief scheme.

Financial sector Funds would be setup in NABARD, SIDBI, and NHB to takeup financial inclusion. On a pilot basis, a smart card based delivery system will be launched to deliver food grains under the PDS in Hariyana and Chandigarh. An additional sum of Rs 1000 crore will be provided to LIC in 2008-09 to provide insurance cover to poor households through the Aam Admi Bima Yojana. The Rashtriya Swasthiya Bima Yojana will be implemented with effect from April 1, 2008. All persons over 65 years falling under BPL category will be covered under Indira Gandhi National Old age Pension scheme.

He concluded his presentation quoting the couplets of Saint Poet Tiruvalluvar on good governance

Kodai Ali Sengol Kudi Ombal Nangum Udaiyanam Vendharkku oli Generous grants, compassion, righteous rule and succour to the downtrodden are the hallmarks of good governance. We have tried to remain true to this philosophy. The four years to 2007-08 have been the best years so far but, may I say with humility, that the best is yet to come.

Reflections by participants A. Umarani, Director of TataDhan Academy, has applauded the Finance Minister that due attention was given to women development hence the budget is a gender budget . It is further reported by Muthu Raja, Prof. American College that the budget tries to address the problems of poverty exhibited in National Rural Development Report and Eleventh five year plan report and so it is a humanized budget .

Janakiraman from DHAN Foundation commented it as a charity budget . Kalyanasundaram of INAFI told that it is people s budget as it has focused to middle class people. Hariharan, Professor of

28

Economics says that the budget was a signal for early Loksabha election, and is a wrong budget .

Agriculture sector Dr. R. Jagannathan, formerly a professor of TNAU and now in Tata-Dhan Academy, explained that increased allocations were given to agriculture, such as providing agriculture credits to farmers and provision for seed production, a vital factor for growth and development. Value additions, agriculture processing and cold storage facilities were not thought of. There was no mentioning on innovative research and technology developments through various infrastructure facilities.

Dr. Daniel, Prof of Agricultural Economics, Agricultural College & Research Institute (AC & RI), Madurai, welcomed the features of loan waiver scheme, duly emphasizing the importance farmer s suicide and explained that it will create a concern for inflation and a regulatory procedure is to be finalised for categorising people such as, marginal farmers and small farmers and so on. However, there was no mentioning on regulated marketing, trading and on micro-

irrigation.

The budget brings some cheer to the high range, the spices garden of southern I n d i a .

Farmers will benefit from Rs 40 crore allocated for special tea fund, the crop insurance scheme for pepper and cardamom and the scheme to revive plantations. The allocation for research in tea and spices will help the plantation sector in the long run. The Rs 1000 crore allocation for the Horticulture mission may bring some relief to the coconut and cashew nut farmers in the state.

The budget proposal to extend the weather based crop insurance scheme for the coming Khariff season in Karnataka, Maharastra, and Jharkhand is a welcoming feature.

Dr. Kasthuri, Prof. of Economics Lady Doak college said that there was no adequate focus on rainfed farming, as around 70% of the farmers have a mainstay on dry land agriculture. It was also reiterated that loan waiver scheme is an immediate solution and is also a welcome process.

A student from Fatima College cautioned the feature of nonavailability of lands for agriculture as the fertile lands are being converted in the form of real estates and techno parks which will hit in the long run on agriculture development. Muthu Raja praised the Finance minister P.Chidambaram for allocating funds for the setting up of an exclusive institution for climatology as it is

necessary to have more documentation on climate changes - global warning which is not seen earlier in any of the previous budgets.

Education Dr. Kasthuri, reiterated in detail on knowledge economy and announcement regarding the starting of 16 central universities and three Indian Institute of Technology was a welcome step and a giant leap, but again the budget was silent on Prime Minister s earlier announcement of establishing Government colleges in all districts. Shyamal, student of TDA emphasised the importance of higher education which is the stepping stone to knowledge based society. The setting up IIMs and IITs in Bihar and Rajasthan is a welcome feature so that the rural masses can enjoy and reap the benefits. The selection process policy for IITs and IIMs needs to fixed so that poor people also be able to get inducted into the institutions as quality institutions of higher learning needs to be promoted if our advancement in the areas research and development are to be sustained.

Commercialisation of private education institutions should be dispensed with. It is a welcoming feature that the government has allocated funds for providing digital knowledge based system even in rural schools. It is a welcome feature that adequate funds have been allotted for SSA in respect of education. However it is essential to have an autonomous body consisting of versatile members for the evaluation of the projects and schemes. Chandra Gupta, TDA student, expressed that although

1

sufficient funds have been allotted in respect of Sainik schools the regulatory mechanisms needs to be worked out to facilitate the entry of students from poor communities.

Health Dr. Thangapandian welcomed the feature of allocating adequate funds for health sector. However it was opposed by Janakiraman saying that the fund allocated for health was only a peanut while private medical institutions are thronging up nowadays. Nirmalnath, DGM of Hitech Arai said that the allocation of funds for providing health insurance to parents is a welcoming feature. He further added that 5% exemption in tax levying for the construction of hospitals in non-urban areas is also a welcome feature. The fund allocated towards Child and Women development was encouraging said Dr. Kasturi.

Social Development It was reported by Janakiraman and others that the outlay for the National Rural Employment Scheme was excellent and the work turned out in respect of development was not up to expectation.

Chandrasekhar, Director of CCD has raised voices against total waiver of loans to farmers, which may likely to affect microfinance sector and institutional credit are likely to come down This will ultimately result in poor interest by the bankers to provide loans to SHG members. It is further reported by A. Umarani that this loan waiver is likely to reflect very badly on microfinance sector and rebuilding the attitude of the people to repay would be a great challenge in future, although it is

surmised that it is an ending of the debt trap and attaining food security.

At this juncture, she has explained in detail on the core purposes of SHGs as microfinance groups. The challenge now is to prevent them from getting in to the debt trap again. Although this budget has allocated Rs 60,000 crore for loan waiver, this will ultimately reflect in inflation, which in due course of time, may likely to lead discrimination between the rich and poor. The unorganised sector comprising of auto and rickshaw pullers also received due attention in this budget, said Marimuthu.

Industry Nirmalnath, DGM of Hi-tech Arai indicated that the Finance Minister showed soft corner to textile sector.

He has further added that with the objective of pepping up demand and kick starting, the manufacturing sector to its earlier high growth momentum, the Finance Minister proposed an across-the-board reduction in the general CENVAT (central value added tax) to 14% from 16%, while keeping the peak rate of customs duty unchanged. It is also reported that the reverse mortgage system is also a welcoming feature. It is more than the concessions, the procedural complications hurdle the industrial growth. He also discussed on wage gap between the agriculture and industrial labourers and concluded with the play of middle men robbing which affects the entire economy. He welcomed the budget for given hand to automobile sector which is going in loss by way of reducing excise duty.

Finance The personal income tax slab widened to provide a substantial relief

to tax payers is a welcoming feature.

An idea to deliver subsidies to the target group through the smart card system in PDS is found encouraging. Rasupandi, Canara Bank manager commented on the loan waiver and informed that the price of agricultural commodities could not be fixed on their own accord and indicated that the cost of cement some two decades back was about Rs 50 and it is now Rs 300 indicating that the farmers could not be able to fix the prices of their own produce. Consequent of the waiver of loan, inflation may likely to go up which may cause financial instability and cause poor share trading also. In that case, share prices / costs may also likely to go down.

Kalyanasundaram, Chief Executive of INAFI, spoke on SHGs and the way in which the linkage programme is expanding and deepening across the country, particularly in south India, in terms of deepening and diversification of portfolios which make it appear, as if banks and SHGs are made for each other. Such is the effectiveness and energy of the SHG movement. He also said that for rural and low-income people, financial inclusion is the condition of having access to relevant and sustainable financial services.

The session came to an end with a remark by a participant the budget should have been presented on the lines of the Millennium Development Goals, which all the nations resolved to achieve including India. The budget should spell out what has been achieved and what needs to be done with adequate financial and regulatory measures, which needs policy advocacy at all levels .

Building on Heritage

of Savings Practice Savings build equity with ownership rights

T

he rural communities in India have a rich

heritage of saving resources in various

forms. Appropriate systems suiting to the local context and practices can help the poor communities to leverage their savings for a better future. DHAN Foundation's Kalanjiam Community Banking programme, has formalized the informal savings and lending practices with an institutional framework, transparent and accountable administration.

The Kalanjiams view savings as a powerful tool to build the stakes of the poor women in their groups. It builds the self respect of the people involved and integrates them into the financial system. Mobilisation of need based savings catering to the diversified needs build the trust of the members on the system.

A rural woman saves the grains in the Kalanjiam (granary in Tamil). There were diverse forms of indigenous savings systems followed by the rural communities, mainly to cope up with the seasonality of employment and income in farming. The Kalanjiam groups have just formalized such systems.

Centre for Development Communication DHAN Foundation 18, Pillaiyar Koil Street, S.S. Colony, Madurai - 625 016. Tamil Nadu, INDIA Tel.: +91 - 452 - 4353983, 2610794, 2610805 Fax: +91 - 452 - 2602247 Email: dhanfoundation_tn@airtelmail.in Website: http://www.dhan.org