In India, Adivasis make up around 8 per cent of the total population, while Dalits constitute about 20 per cent of the rural populace and 38 per cent of low-income individuals. Poverty affects around 30 per cent of minority communities, highlighting disparities in living standards, education and income compared to non-Adivasi populations.

The members of these communities do not have any collateral and banks do not have any information about their creditworthiness. Banks are, therefore, unwilling to provide loans to these members in their individual capacity. To address these challenges, the government introduced initiatives such as the PM Jan Jati Mission and self-help group linkage programme under DAY-NRLM (Deendayal Antyodaya National Rural Livelihood Mission) to uplift marginalised tribals. Let’s look at whether these schemes have met their desired objectives.

Operationalisation of DAY-NRLM: The scheme’s focus is on implementing various programmes to enhance the socio-economic status and general welfare of indigenous populations. Through the self-help group linkage programme, run under the aegis of DAY-NRLM, the members are able to get funds from banks and financial institutions. The groups are not only able to raise loans, but are also able to inculcate financial discipline through peer monitoring. Due to the joint liability, the members realise that even if one member defaults, all the members will be debarred from the group, due to which the members work together for financial sustainability. The women members have experienced major improvements in economic well-being.

Enhanced financial literacy and hand-holding: Besides the financial support, the members who want to form self-help groups are helped by promotion agencies to get started. These agencies provide the much-needed hand-holding, especially in helping the members market their products to a larger section of people and providing them funds to participate national and international exhibitions. Also, they get to participate in training programmes organised by institutes of national importance. This goes to enhance their financial literacy.

Programme for indigenous communities: The Nari Shakti programme aims to promote gender equality, increase women’s participation in numerous professions, and encourage their overall growth, in terms of education, health, skill development, economic empowerment and social inclusion. Not only are these schemes helping uplift the indigenous tribes, but through financial literacy are making them self-reliant. These social reforms and emancipation have paved the way for sustainable development.

Empirical evidence: To corroborate the findings, propensity score matching was done, using data from CMIE Consumer Pyramids Dx for the Covid period. The Consumer Pyramid household survey in May-August 2019 represented the control group, and May-August 2021 referred to the treatment group. Self-help group linkage under NRLM has helped provide livelihood and income, but still the income of the indigenous communities is lesser than that of the upper caste groups. However, the analysis has revealed that during Covid tribal households who are artisans had a higher income than non-artisan upper caste households.

Welfare schemes like DAY-NRLM have played a significant role in shifting this trend, especially for tribal households with artisans, who are now more inclined to borrow from banks. Moreover, households with higher wealth scores and more assets showed a decreased likelihood of borrowing from shops and moneylenders, suggesting that access to assets and financial stability influence borrowing preferences among households. Overall, the programme has helped reduce poverty and accelerate socio-economic transformation in rural areas.

Malhotra is assistant professor of finance, IIM Sambalpur, and Saravanan is professor of finance, IIM Tiruchirappalli

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