1

STUDY TEAM AND SUPPORT STAFF
Prof.M.A.Oommen, Sciences, New Delhi Malcolm.S.Adiseshiah Chair, Institute of Social

Shri.N.Gopalakrishnan Nair, Consultant.

Dr.R.P.Nair, Institute of Social Sciences, Thiruvananthapuram

Shri.D.Mohanan, Institute of Social Sciences, Thiruvananthapuram

Ms.Preetha.P.Nair, Institute of Social Sciences, Thiruvananthapuram

2

ACKNOWLEDGEMENT
This Report is a bit delayed, for which I tender my apologies to the Kudumbashree Mission. Mr.T.K.Jose initiated the project and took keen personal interest. Ms.Sarada Muraleedharan who succeeded him was also equally interested. My sincere thanks to them. Dr.R.P.Nair’s help both physical and intellectual is thankfully acknowledged. He and Mr. Mohanan helped particularly in doing the field work regarding micro enterprises. Mr.N.Gopalakrishnan Nair was always ready to help. Preetha.P.Nair did the computer work cheerfully. I am grateful to them all.

M.A.Oommen

3

CONTENTS
Pages

Acknowledgement List of Tables List of Figures Appendic List of Appendices
1

Chapter 1: Introduction
Salient Features of KDS A Brief History of KDS The structure of Kudumbashree CBOs The Objectives of the Study Methodology Sampling Design Questionnaires Questionnaire for NHG households Questionnaire for the Secretaries of NHGs

Chapter 2: Kudumbashree Households: A Socio Economic Profile

15

Chapter 3: Revisiting the Kudumbashree Poor
The Economic Status: Evidence from the field Self – Evaluation Evaluation by Secretaries A criteria - based analysis

22

4

Chapter 4: The Nine Point Index: A Progress Report and a Critique The Official Poverty Line The KDS Index: Some general criticisms

31

Chapter 5: Thrift and Credit Societies: A Critical Evaluation
Thrift and Loans: The Macro Picture The Micro Scenario Purpose of loans and debt liabilities

39

Chapter 6: Local Governments, Kudumbashree and Convergence
Local Government, Kudumbashree and the Plan

54

Chapter 7: Kudumbashree and Women Empowerment
Organisational Empowerment Economic Empowerment Knowledge and Leadership Empowerment Social Capital

61

Micro Chapter 8: Kudumbashree and Micro Enterprises – Some Case Studies
Kudumbashree Micro Enterprises – the Macro picture A Brief profile of Micro Enterprises in Thiruvananthapuram District A Case study of Micro enterprises in Venganoor Panchayat The Sample units: More details Analysis of working units Units under the Agriculture Sector Units under the Industrial Sector Units under Services Sector Analysis of closed units Lease Land Farming Viability of KDS Micro enterprises: More evidences: Views and suggestions of the organisers of the Micro Enterprises

77

5

Chapter 9: An Evaluative Summing Up

107

References

117

LIST OF TABLES
Pages Table 2.1: Percentage distribution of Respondent Households according to Family size Percentage distribution of Members according to Physical conditions Distribution of members according to level of education Distribution of members who are head of the households according to level of education Distribution of members who are head of the households according to social status and level of education Distribution of members who are head of the households according to social status Distribution of members according to Occupation and Nature of employment Trend in the number of NHGs formed and families covered (2000 01 November 2006) Distribution of sample households according to BPL/APL status, natural region and Phase: Rural & Urban Distribution of members according to Economic status as reported by Secretaries 16

Table 2.2:

16

Table 2.3:

17

Table 2.3 (a):

17

Table 2.4:

17

Table 2.4 (a):

18

Table 2.5:

18

Table 3.1:

23

Table 3.2:

26

Table 3.3:

27

6

Table 3.4:

A Social Class wise distribution of poor and non poor based on the 4/ 9 Point Criteria Improvement in housing conditions after joining the NHG A break up of the Improvement in the housing conditions Pattern of Food Consumption before and after joining NHG Source of Drinking Water before and after joining NHG Sanitation Facility before and after joining NHG No of those employed in the family before and after joining NHG Alcohol addicts in the family before and after joining NHG Overall trend in Thrift and Loans (Mar 2001 to Nov 2006) Overall trend in Thrift and Loans per family (Mar 2001 to Nov 2006) District wise Trend in Linkage Banking Portfolio pattern of Households not depending solely on Thrift and Credits Purpose wise distribution of loans availed: A Phase/ Region wise breakup Distribution of members who availed loans by source Source wise and region wise break up of debt liability at the end of June 2006 Distribution of NHGs according to participation in various activities Distribution of members according Empowerments after joining the NHG to type of

28

Table 4.1:

35

Table 4.1(a):

35

Table 4.2:

36

Table 4.3: Table 4.4: Table 4.5:

36 36 37

Table 4.6:

37

Table 5.1:

40

Table 5.2:

41

Table 5.3: Table 5.4:

45 46

Table 5.5:

47

Table 5.6: Table 5.6(a):

49 50

Table 6.1:

56

Table 7.1:

63

Table 7.2:

Distribution of members according to Organisational

64

7

empowerment after joining the NHG Table 7.3: Education status wise distribution of members according to organisational Empowerment indices after joining the NHG Self perception of the Members regarding increase in Income & Savings after joining the NHG Social category wise Distribution of members according to Economic Empowerment after joining the NHG Social category wise Distribution of members according to Knowledge Empowerment after joining the NHG Social category wise Distribution of members according to leadership Empowerment after joining the NHG Education wise Distribution of members according to harassment after joining NHG Distribution of members according to improvement in Social capital Distribution of members according to Social capital Micro enterprise units functioning in various districts in Rural Areas District wise micro enterprise units functioning under yuvasree (50K) Micro enterprises Thiruvananthapuram District Micro Enterprises in Venganoor Panchayat – Total units registered and units selected for case study Working and Non Working Enterprises by Type Economic profile of the working units Employment/Wages pattern of the working units in the Agricultural sector Select Economic indicators of Agriculture – Based Enterprises 66

Table 7.4

67

Table 7.5:

68

Table 7.6:

69

Table 7.7:

69

Table 7.8:

71

Table 7.9:

73

Table 7.9 (a): Table 8.1:

73 77

Table 8.1(a):

78

Table 8.2: Table 8.3:

79 80

Table 8.4: Table 8.5: Table 8.6:

81 82 83

Table 8.7:

84

8

Table 8.8: Table 8.9: Table 8.10:

Performance Indicators of units under agriculture Micro Enterprises under Industrial Sector Important Indicators of enterprises in the Industry Sector Performance indicators of the enterprises in the Industrial Sector Basic Indicators of the Working Units under Service Sector Basic Data on the Working of the Enterprises under Service Sector

85 86 87

Table 8.11:

87

Table 8.12:

88

Table 8.13:

89

Table 8.14:

Performance Indicators of the units under Service Sector District wise details of lease land farming as on January 31, 2007 Distribution of Micro Enterprises product/services and cost efficiency Problems & Suggestions Entrepreneurs reported by type of

89

Table 8.15:

91

Table 8.16:

93

Table 8.17:

by

Micro

94

List of Figures
Fig: 1.1: The Role of Kudumbashree CBOs in Women Empowerment: A diagrammatic Presentation Trend in the formation of NHGs (2000 01 – Nov 2006) Trend in the Number of Families covered 2000 01 Nov 2006 Trend in Thrift & Loan (Rural) 5

Fig 3.1:

23

Fig 3.1 (a):

24

Fig: 5.1(a):

42

9

Fig: 5.1(b): Fig: 5.1(c): Fig: 5.2: Fig: 6.1:

Trend in Thrift & Loan (Urban) Trend in Thrift & Loan (Tribal) Thrift Loan Ratio Decentralised Planning Stylised Presentation And Kudumbashree: A

43 43 44 57

List of Appendices
Appendix 2A: Appendix 2B: Percentage distribution of households according to Natural region and phase Distribution of NHGs by Regularity of holding meetings and nature of Attendance District wise distribution of Progress of NHGs (March 2001 Nov 2006) BPL (APL) Percentage Distribution by Natural Region and by Phases Average debt liability – by source of debt 20 21

Appendix 3A:

29

Appendix 3B:

30

Appendix 5A:

52

10

Appendix 5B:

District wise percentage distribution of Secretaries according to opinion on the rate of interest charged by banks on loans
education status wise according to knowledge distribution of members

53

Appendix 7A:

74

Appendix 7B:

Distribution of members according to Nature of Co operation

75

Appendix 7C:

Distribution of NHG Secretaries according to resolving conflicts with in family members and conflicts in which the members or their family are not involved

76

Appendix 7D:

Distribution of Candidates from Kudumbashree CBOs who won 2005 Local body elections by type of LGs

76

Appendix 8A:

Performance Indicators – Agriculture Sector Units

98

Appendix 8B:

Performance Indicators – Industrial Sector Units

100

Appendix 8C:

Performance Indicators – Service Sector Units

102

Appendix 8D:

Performance Indicators – Closed Units (Sector Wise)

104

Appendix 8E:

Lease land farming A case study of two NHGs in Venganoor Panchayat

106

Appendix 9A:

Income and Expenditure Highlights

116

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CHAPTER 1 INTRODUCTION
This chapter is introductory. In Part I of this chapter we provide a brief backdrop to the study. The second part of the chapter is devoted to explain the objectives and methodology of the study.

I
Formally inaugurated in May 1998 and launched in April 1999, but fully operationalised by 2003, the Kudumbashree (KDS) is ‘a women-oriented antipoverty programme’ cast in a mission mode under the leadership and patronage of panchayats and municipalities. As the Mission statement puts it: “To eradicate absolute poverty in ten years through concerted community action under the leadership of Local Self Governments by facilitating organisation of the poor combining self-help with demand led convergence of available services and resources to tackle the multiple dimensions and manifestations of poverty holistically”. The economic base of this self help initiative (popularly called ‘Ayalkoottams’) is built on the concept and strategies of micro finance.

1.1

Salient Features of KDS

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1.1.1

Although the basic idea of KDS is derived from microfinance, in its organisational form and operational dimension it has evolved with several unique features. Broadly speaking, micro finance means providing financial services to the poor, long excluded by mainstream banking and financial market. Neoliberals, NGOs as well as several governments of the world now support it for their own reasons. Micro finance as a prominent financial service emerged in the 1970s, notably after Muhammad Yunus of Bangladesh started the Grameen Bank, and began to offer financial services to the poor once excluded from formal banking primarily because they lacked physical collateral. Today micro finance has emerged as an industry in which even big multi-national and national commercial banks are interested because the poor and their collectives have demonstrated their credit worthiness through prompt repayment in a world where their richer counterparts have a record of mounting non-performing assets and bad debts or even create sub-prime lending hazards. The Task Force appointed by NABARD in the latter part of 1990s consider micro finance as the provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban and urban areas enabling them to raise their income levels and improve living standards [NABARD (1999)]. The underlying assumption here is that the loan money will be used primarily on income-generating schemes which enable the loans or micro credit to be liquidated in the process. The major features of micro credit are: It involves loans without collateral Loans are generally advanced to individuals or groups who are members of collectives often called self-help groups (SHGs). An SHG is a substitute for physical collateral and is referred in the literature as providing ‘social collateral’. The formation of groups has the twin advantage of lowering transaction costs and improving repayments, through peer pressures and through the sheer need for sustainability. Micro credit is viewed as a method of promoting market-led growth. Yunus even goes to the extent of describing this phenomenon as privatizing economy [Yunus M (1997)]. By increasing the purchasing power of the poor, a larger market potential is created.

1.1.2

1.1.3

From humble beginning in far flung areas of the developing world such as Bangladesh, India, Indonesia, Africa and Latin America, micro credit graduated into a major industry in contemporary world. Three different approaches have been identified in the evolution of micro finance: the Latin American model, the Grameen Bank model and the SHG-based

13

model. Latin American model is a commercial model. It tries to ally with the formal financial system rather than donors or government-targeted programmes. Emphasis on social and community development of the poor and marginalized women is totally absent in such a model. Instead the main focus is on enterprise creation and growth. The Grameen model is basically centred on small women groups and poverty. The self-help group based model popularised and institutionalised by the National Bank for Agriculture and Rural Development (NABARD) through the commercial banking system is the common pattern in India. KDS does not fall into any one of these, though its economic base partakes the micro finance paradigm and its organisational pattern evolved from the community development society that originated in the Alappuzha municipality in the early 1990s. 1.1.4 In what ways KDS distinguishes itself from other micro finance organisation? This question is answered by outlining the emerging features of KDS. One, KDS is not a commercial institution. It is a community-based organisation (CBO) of the poor identified on the basis of a 9-point criteria. (See section 1.2.2). It has three tiers with the neighbourhood groups of poor women (NHGs) at the bottom, the Area Development society (ADS) at the intermediate level and the community development society (CDS) at the apex level. [For details see section 1.3). By now most poor families in the state have come under the CBOs and are net-worked. Contrary to the extant income poverty approach of the Government of India (GOI), KDS has developed a holistic approach to poverty alleviation. Two, in the KDS community organisation the neighbourhood groups (NHGs) of poor women at the bottom level act as micro financial intermediaries called Thrift and Credit Societies (TCSs). At the intermediary level there is a cluster of 8-10 NHGs called Area Development Society and at the top level of local government the community development society (CDS) is formed by federating all ADSs under the local government. During their weekly meetings, small savings brought by members are collected. The Secretary of the NHG takes up the responsibility of thrift and credit operations at the NHG level. Collection of savings, account keeping, loan disbursement, repayment collection etc is done by the secretary. Each TCS has a thrift register and the weekly savings are accounted in the register. The savings thus mobilised is deposited in a commercial bank. Thus the TCS of KDS functions as a micro-finance intermediary. Kudumbashree promotes the savings of the poor by encouraging the formation of Thrift and Credit Societies (TCSs). Almost simultaneously with the inauguration of the CDS programme in

1.1.5

1.1.6

14

Alappuzha in 19931, the Government of Kerala (GoK) adopted the idea behind the Self Help Groups (SHGs) which have already gained currency in India through the efforts of NGOs like MYRADA (Mysore Resettlement and Development Agency) and promoted by NABARD to bring financial services to the reach of the poor and the informal sector. Now CDS in Kerala is an institution that covers all the municipalities and panchayats. 1.1.6.1 The most important rationale in bringing financial services to the door steps of the poor households is the economy in the transaction costs. For formal banks it will be costly to mobilize the small savings of the poor families lying scattered. Equally prohibitive is the cost to the conventional banks in financing a large number of these families who require credit frequently and in small quantities and that too not backed by collateral securities. It is in this context that the intervention of NABARD and the mediation of CDS on behalf of their TCS assume significance in providing ‘unconventional’ banking and alternative financial services to poor women. An important and probably unique aspect of the micro finance system of KDS is that several individual members and the majority of NHGs do not avail of bank credit and rely only on their own ‘thrift’/savings [See Chapter 5]. 1.1.7 Three, KDS through its micro finance structure and through its manyfaceted activities seeks to empower poor women who are identified using the nine-point poverty criteria [See section 1.2.2]. The empowering process2 is worked through the three-tiered community-based organisation referred to as community development society (CDS). The multi-pronged approach focusses on human resource development, community health, child welfare through ‘Balasabha’, basic minimum needs, rehabilitation of poorest of the poor (the Ashraya Project), lease land farming, housing, besides micro finance and micro enterprise development. The term ‘empowerment’ is used here as a process whereby the powerless women gain a greater share of control over resources and decision-making be it in their family or other social institutions to which they get associated. A stylised diagrammatic presentation is given in Fig 1.1. Four, KDS has the patronage and support of the State Government as well as the local governments. It now functions as part of the participatory planning process and functions as a delivery mechanism at the local level. It is a fact that the CDS has over these years demonstrated the potential to function as a sub-system of the municipalities and panchayats integrating the various antipoverty programmes and function as their delivery system.

1.1.8

1 2

See next section (1.2) for a brief history of Kudumbashree. It is logically untenable and practically impossible to envisage the empowerment process as a 12stage flow process as the State Planning Board (2002) Economic Review (p327) has done.

15

The strength and viability of the CDS system is derived largely from the fact that it is functionally linked to the local bodies.

16

Fig 1.1 The Role of Kudumbashree CBOs in Women Empowerment: A diagrammatic Presentation WOMEN EMPOWERMENT
Economic Empowerment Social Empowerment Decision Making
Participation in Planning and implementation process

Asset Creation and income generation

Micro Enterprises

Micro Finance (Own Thrift + Bank Loan)

CBOs

Social Co-operation reciprocity and Trust (Social Capital)

1.1.9

Five, the most conspicuous feature of the programme is its emphasis on poverty reduction with a target to abolish absolute poverty in ten years. Officially it is characterised as “a planned, mighty onslaught on poverty”.

1.1.10 In brief, KDS is a micro finance-centred CBO with several unique features. The spectrums of activities taken are much wider than that of the Grameen Bank of Bangladesh of Nobel prize fame. In approach and functions they stand poles apart. While both work on the principle of mutual trust and faith which help both in ensuring a very high rate of repayment (90-95%) the Grameen Bank has considerable control and supervision in regard to repayment compared to KDS where the spirit of voluntarism is dominant. One Taka per member per week is compulsory under the Grameen. More over every member has to contribute 5 per cent of the loan amount as

17

Group Tax, besides 25 per cent of interest payments to Group Contingency Fund. The Grameen Bank worker is a ubiquitous presence and attends weekly meetings of members. Grameen Bank’s charter on social development approved in 1984 contains 16 principles (such as solidarity, courage, hard work, discipline etc) to which each group member (only 5 members in a Grameen Group as against an average of 15-40 members for KDS) has to take an oath of allegiance. Even without such formalities the KDS women shoulder greater social responsibilities and as this report strongly demonstrates enjoy greater empowerment reckoned in terms of several parameters. The chief defect of KDS and probably that of such micro credit institutions like Grameen Bank is that they do not envisage any systemic change or structural change in favour of the poor. The poor have to rise by their own bootstraps. The odds against such an approach are very high and could not be expected to bring about radical social and structural changes. We may also note that KDS is a state created CBO and not part of the tribe of adversarial CBOs who keep a critical distance from the state and struggle for alternate forms of mobilisation and goals.

1.2
1.2.1

A Brief History of KDS
Kudumbashree did not emerge out of the blue. In India the idea of providing credit to the poor goes as far back as the cooperative movement. But linking banking to the supply of credit to the priority sector and even the weaker sections and expanding the outreach of banking to remote rural areas could be traced to the bank nationalisation of 1969. The much publicised subsidised credit programme called IRDP (Integrated Rural Development Programme) launched by the Government of India with the help of the commercial banking in early 1980s failed to take off as a sustained project. Beneficiaries did not have a choice over the purpose and amount of credit. Credit target was the overriding concern of banks and implementing officials. It was in this background that NABARD took the initiative of group lending by promoting self-help groups during 1986-87, with the help of Mysore Resettlement and Development Agency (MYRADA). On the basis of an all-India survey of the micro finance in the country, NABARD launched a SHG-linked banking project in 1991. It was the success of this project and the general endorsement of the scheme by the Reserve Bank that micro finance began to progress in the country. Broadly speaking, Kudumbashree of Kerala is an outgrowth of the broad micro finance initiative in the country. Looking back we may say that it was the result of a tripartite initiative in which not only NABARD, but also the UNICEF and the urban poverty cell of the Local Administrative Department, Government of Kerala were involved. The basic idea was to evolve a poverty eradication mission identifying poor women through a 18

multiple criteria and form them into a community based organisation (as against seeing them as benefit-receivers) which in turn worked as a micro finance intermediary. 1.2.2 In the early 1990s, certain important initiatives taken by the UNICEF in the Alappuzha town enthusiastically supported by the functionaries of the Urban Basic Services (UBS) project of the Government of India already functioning in the Alappuzha municipality (fully backed up by the Government of Kerala (GoK)) triggered a new process in the history of urban poverty eradication in the state and probably in the whole country. The most important initiative was to rectify the shortcomings in the identification and targeting of the poor, and the manner of enlisting community participation. In 1991, UNICEF initiated a community-based nutrition programme (CBNP) in the Alappuzha municipality on an experimental basis to improve the nutritional and health levels of the poor especially women and children. As part of this, UNICEF, Chennai office jointly with the Alappuzha municipal UBS team conducted a survey of 5728 households in the town to develop a simple measure of poverty that would enable local community members and volunteers to identify the multiple factors that characterise poverty. Based on this survey nine factors were identified and any family with four or more of these is classified as poor. The nine factors3 designed for identifying the poor are: ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
3

Scheduled Castes and Tribes Only one or none of adult family members being employed. Kutcha or thatched house. Lack of household sanitary latrines. Non-availability of safe drinking water. Family having two meals or less per day. Alcohol or drug addicts in the family. Family having at least one illiterate member. Family having at least one child below 5 years.

The Kudumbashree has modified the index and the current version is given below: Revised Poverty Index or Risk parameters (Urban Areas) 1. No Land/less than 5 cents of land. 2. No house/dilapidated house. 3. No sanitary latrine. 4. No access to safe drinking water within 150 meters. 5. Women headed house hold/presence of a widow, divorcee/abandoned lady/unwed mother. 6. No regularly employed person in the family. 7. Socially disadvantaged groups (SC/ST) 8. Presence of mentally or physically challenged person/chronically ill member in the family. 9. Families without colour TV.

19

1.2.3

Proper identification of the poor is an important first step. But organizing them into a community-based set up is equally important. Kerala’s contribution consists in taking steps towards organizing the poor women into a three-tier system and giving statutory recognition to it. Through several rounds of interaction with the community especially women by the officers of the UBSP (Urban Basic Services for the Poor) who took steps to initiate the process of community organization in Alappuzha with the active cooperation of ICDS supervisors, and Anganwadi workers the CDS structure was made a reality. In 1993, a model byelaw for CDS developed by the state UBSP cell together with the Alappuzha UBSP received the state government approval. On February 6, 1993, the Alappuzha community development society (CDS) was formally inaugurated and this has come to be characterised as the ‘Alappuzha model’. All the households in the other 57 towns (in total 784000 households) were surveyed and using the 4/9 (any four out of nine), 192000 of them or 24.5 per cent were identified as poor. In the meantime in 1994 the entire district of Malappuram, admittedly the most backward district of the state, with more than 600,000 households were surveyed and poor were identified using the nine-point index with minor modifications with the help of the Literacy Mission and local women volunteers assisted by the Anganwadi functionaries. In a span of two years from the inauguration of the CDS system in Alappuzha in February 1993, it has been extended to the entire municipal towns of the state, besides the panchayat areas of the Malappuram district. The Malappuram ‘model’ which was an extension of the CDS system to the rural areas was made possible again thanks to the UNICEF’s Community Based Nutrition Programme and Poverty Alleviation Project [CBNP and PAP]. Because of the success experienced in Alappuzha and Malappuram, the GOK resolved to extend the programme further to the entire state under the name ‘Kudumbashree’ a Malayalam word which means prosperity to the family. It was conceived as a ‘poverty eradication mission’ and the original project prepared by NABARD and the Local Administration Department in 1997 was entitled ‘Poverty Eradication Mission Kerala state: A Woman based participative programme to eradicate poverty in Kerala by 2007’. It is useful to spell out below the mission objectives given in the Report which became the objectives of the KDS mission. Identifying the poor families by the community through a poverty index. Empowering the poor women to improve the productivity and managerial capacitities of the community organising them into CDSs. Encouraging thrift and investment through credit by developing CDS to work as informal banks of the poor.

20

Improve incomes of the poor through improved skills and investments for self-employment. Ensuring better health and nutrition for all. Ensuring basic amenities like safe drinking water, sanitary latrines, improved shelter and overall environment improvement. Ensuring a minimum of primary education for all children belonging to risk families. Enabling the poor to participate in the decentralisation process through the CDS, as a subsystem of the local bodies. 1.2.4 It is clear from the above objectives that the CDS with its micro finance activities is the kingpin of the whole KDS programme and eradication of poverty through women empowerment is envisaged as an integral and viable part of the programme. In the panchayat areas, KDS was introduced in three phases. The KDS office was set up in June 2000, and the first phase was till September 2002, the second phase was till March 2003. Now KDS covers the entire village panchayat areas in the country. Undoubtedly, the launching of the people’s plan campaign triggered an accelerated growth during the latter part of the Ninth Plan and the period since then.

1.2.5

1.3
1.3.1

The structure of Kudumbashree CBOs
The lowest tier of the CBO consists of the Neighbourhood Groups (NHGs) comprising 15-40 women members selected from poor families identified using the nine-point criteria detailed above. The NHG members elect their secretary and president besides three volunteers to be in charge of community health, income generation activities and infrastructural development. In weekly meetings not only the members bring their thrift (or instalments due by those who have availed of loans), they discuss their livelihood problems and seek solutions. This is in sharp contrast to the Grameen model where weekly savings is compulsory and the bank staff go to collect them. The second or intermediate tier called Area Development Society (ADS) is formed at the ward level by federating 8-10 NHGs. The Area Development Society is managed by representatives elected from the various federating NHGs. To dovetail their activities with that of the local government (LGs), a ward level monitoring and advisory committee is formed under the chairmanship of the elected ward member of the LG. This arrangement helps to include the priorities of the poor into the plans of the local governments. 21

1.3.2

1.3.3

At the panchayat level in the rural areas and at the municipality level in the urban areas, stands the community development society (CDS), a body registered under the charitable societies Act of the state. A CDS is formed by federating various ADSs. It is through this apex body that the Kudumbashree operates. In the original Alappuzha and Malappuram ‘models’ of organization of the poor along with the local self governments, there was a provision for preparing a micro plan at the NHG level and a mini plan at the ADS level coordinated at the CDS level. This was not faithfully implemented. The GOK has now come up with a very innovative initiative to prepare an antipoverty sub-plan in which all local governments are partners. The Government has issued detailed procedures for preparing such a plan. All local governments have to prepare a sub plan which is conceived as a bottom up planning exercise by the CDS system. A long-standing criticism of the head-count ratio based on a poverty line is the possibility of neglecting the poorest of the poor, the destitutes. An important component of the anti-poverty sub plan is the detailed package of care services for the poorest of the poor called Ashraya.

1.3.4

II The Objectives and Methodology of the Study

1.4
1.4.1

The Objectives of the Study
The project has been in effective operation for seven to eight years now. It is high time, a comprehensive evaluation of the project is undertaken to assess the performance of the programme, to examine the extent to which the declared goals have been achieved, to identify the weaknesses of the programme, if any, and to suggest possible conceptual and operational improvements. The present study is an attempt in this direction. More specifically, the broad objectives of the study are:i. To evaluate critically, the conceptual and operational relevance and significance of the nine point index and to suggest modifications to suit the changing situations and to evolve new criteria. To estimate the thrifts savings, investment in productive activities, expenditure on household durables, outstanding liabilities, and so

ii.

22

iii.

iv.

v.

vi. vii.

on with a view to obtaining a detailed picture of the economic position of the households. To find out the quantitative and qualitative improvements in the level of living of the NHG members covered by the Kudumbashree programme. To investigate the functioning and effectiveness of the community based organisations of Kudumbasree, and to analyse the linkage between Kudumbasree and the local bodies. To critically examine the viability of the micro enterprises under the Kudumbasree and assess their economic and social impact, especially on the members of NHGs. To analyse the role of the CBOs in promoting convergent action to ensure timely availability of requisite facilities and To evaluate the role played by Kudumbasree in relation to women empowerment.

1.5
1.5.1

Methodology
The study is primarily empirical. The data from the field is supplemented by secondary sources. Besides secondary sources and the field investigation [See Sampling design below] we held elaborate discussions with a wide cross section of functionaries at the panchayat level, mission coordinators, CDS Chairpersons and ordinary members. We have interacted rather closely with the functionaries from over 150 panchayats in the Kollam and Thiruvananthapuram Divisions by attending their monthly review meetings. The sampling design for field investigation is outlined below.

1.6
1.6.1

Sampling Design:
The study has used a multi-stage random sampling. The Poverty Eradication Mission has divided the state into three regions for the purpose of administration. Each region consists of a few districts. The following are the three regions and the districts in each: Region I: Region II: Region III: Thiruvananthapuram, Kollam, Pathanamthitta and Alappuzha. Kottayam, Idukki, Ernakulam, Thrissur and Palakkad. Malappuram, Kozhikode, Wayanad, Kannur and Kasargode.

1.6.2

The survey covers both the rural and urban areas. In the rural areas, from each region two districts are selected in such a way that each region will have substantial areas falling under each of the three natural divisions viz. 23

highland, midland and lowland. In many studies and surveys conducted in the past in the state and the experience with the implementation of rural development programmes, it has been clearly shown that the natural resource endowments, the pattern of economic activities, the lifestyles, and even the level of cooperation of the people, differ significantly among natural regions. Therefore, it will be useful to ensure adequate representation in the sample of each of these three natural divisions. Thus, from each region two districts were selected in such a manner that these two districts together will have substantial areas falling in each of the three natural divisions. The districts selected from each of the regions are as follows: Region I II III Sample districts Alappuzha and Kollam Eranakulam and Idukki Kannur and Wayanad

1.6.3

A total of 54 CDS/village panchayats were selected for the study. These 54 CDS/village panchayats were first allocated to the selected districts of each region in proportion to the total number of CDS/village panchayats in the selected districts. It has been ensured that from each region, there will be three panchayats from each natural division, one each belonging to Phase I, Phase II and Phase III. It may be mentioned here that the phase of the project is important because usually in Phase I project areas only the preliminary work will be in progress. In Phase II areas, the project may be half way through and in the Phase III areas the project will be in its final stages. So, for representative sampling and for a meaningful interpretation of the survey results, a phase-wise analysis is helpful. Attempt has also been made to include, as far as possible, the different grades into which the sample CDS is categorised. From each selected CDS/Panchayat, three ADS were selected at random and from each selected ADS, five neighbourhood groups (NHGs) were selected also at random. From each selected NHG, ten households were selected at random. To sum up, through the sampling procedure, the study intended to cover 54 CDS, 162 ADS, 810 NHGs and approximately 8000 families (of members of NHGs). The selection is done from a district-wise list of CDS, ADS and NHGs, supplied by the Poverty Eradication Mission. Because of non-response from a few CDS/NHGs, the actual number of families surveyed in rural areas were only 6519.

1.6.4

24

1.6.5

From the urban areas, the survey covered one City Corporation and two municipalities. As suggested by the Kudumbashree office, Kozhikode City Corporation, the Thalassery municipality from Kannur district and the Cherthala municipality from Alappuzha district were selected. In the urban sector, a total of 40 NHGs were selected for the study 20 from the corporation and 10 each from the two municipalities. From each NHG, 10 families were surveyed. Thus, in all 400 families in the urban areas were covered by the survey. The actual survey covered 397 urban households. Thus 6916 households were surveyed in total.

1.7
1.7.1

Questionnaires
Two sets of questionnaires were used to canvass the information necessary for making an evaluation of the performance of the Kudumbashree project, one meant for NHG member households and the other to secretaries of NHGs. The first questionnaire which covered 6916 households is very important because the informant is the person who saves/borrows/undertakes production activity and has to be constantly in touch with other members as well as the officials and the financing institutions. The NHG member is also the person who gets the direct benefit of the project. The second questionnaire is meant for the secretary of the NHG. In total 794 secretaries were covered. Among the local level functionaries concerned with the Kudumbasree project, the secretary is perhaps the most important link. She necessarily, has to be thoroughly familiar with the activities carried by the NHGs in her jurisdiction and is eminently suitable to provide information on the same.

1.8
1.8.1

Questionnaire for NHG household
The household questionnaire is very elaborate with a total of 123 questions regarding the diverse aspects and activities of the Kudumbasree project. This questionnaire is divided into four parts A, B, C and D. Part A is meant for collecting information on the identification particulars of the NHG member. The details of savings of the member in the thrift and credit society and particulars of other savings, if any, are also collected. The uses to which the loans taken by the NHG member (thrift loan plus bank loan), the items of assets which the member has created with the credit and the source-wise details of the current debt liability of the member were also ascertained in this part. Part B attempts to ascertain from the member, the improvements, if any, in a number of indicators after the member joined the NHG. The questions here incorporate also some of the nine points considered for designating a 25

1.8.2

family as poor. Important among these are the condition of the house, literacy status, additional employment generated, sanitation, drinking water, pattern of food consumption, land owned and its value etc. 1.8.3 Part C deals with questions on women empowerment. There are four sub divisions under this organisational empowerment, economic empowerment, leadership empowerment and knowledge empowerment. There are, in all, 45 questions in this part, meant for eliciting information on the various dimensions of empowerment. Part C is very important as it attempts to measure the improvements which took place in the members personal abilities as well as in the members social position as a result of her participation in the NHG activities. Part D attempts to measure the ‘social capital’ (see para 7.7 for definition) generated consequent on the working of the community-based mechanism in the operation of the Kudumbasree programme. Changes in the variables such as the willingness of the member to cooperate with other group members, mutual trust with other members of the group as well as other people, the cooperation received from other members, the mutual trust and cooperation received from different sections of society and the like are information collected in this section.

1.8.4

1.9
1.9.1

Questionnaire for the Secretary of the NHG
The questionnaire canvassed from secretaries is arranged in two parts A and B. Besides the identification particulars of the concerned NHG and ADS, general particulars about the secretary such as her age, marital status, educational qualification, economic status etc. are ascertained so that the general background of the main functionary of the NHG can be understood. Other information collected in Part A include the total membership of the NHG, the age profile of the members, the regularity of the NHG meetings, NHG's linkages with the banking institutions and so on. Part B includes questions intended to assess the activities and progress of the NHG during the tenure of office of the present incumbent. Important among them are the functioning of the thrift and credit societies under the NHG, particularly the amount of thrift mobilised, loans given, bank loans arranged, particulars about the members availing the loans, the purpose for which the loans are taken, the type of assistance provided by the NHG to the members, general pattern of decision making in the group, capacity building programmes initiated by the NHG, micro enterprises run by the group, approximate monthly turnover, promptness in keeping the various registers, account books and other records.

26

CHAPTER 2 KUDUMBASHREE HOUSEHOLDS: A SOCIO-ECONOMIC PROFILE
2.1 The CBOs of Kudumbashree have been working over seven years by now. Long before that some of them especially those in urban areas and Malappuram district worked as community development societies as we explained in Chapter 1. But very little is known about the socio-economic characteristics of the CBO members except that they were selected on the basis of a nine-point poverty criteria. This chapter tries to give a brief socioeconomic profile of KDS members based on the field investigation of 6916 households with nearly 30,000 population. In Appendix 2A we present the distribution of the sample households by region by phase, by rural-urban division and by districts. We followed a multiple stratification to make the sample to include the various stages and locations of the neighbourhood households. Appendix 2A shows that the majority of the sample households are from the midlands (44%), followed by the highlands (34%) and then the coastal (16.56%). The urban coverage is nearly 6 per cent. The idea is not to make aggregate estimates but to highlight the various dimensions of a group of people brought under the generic title of poor and formed part of the CDS/KDS collectivity. A common notion among people is that poor have a large family size, are either illiterate or only with low education levels and comprise mostly of the socially backward castes. Tables 2.1, 2.2, 2.3, 2.3(a) and 2.4 throw light on these attributes. Table 2.1 shows that more than 88 per cent of the sample population falls in the 3-6 size class. Indeed the 3-4 represents the mode. The average family size is 4.28 for the sample population and it ranges from 4.18 in Idukki to 5.09 in Kozhikode (Corporation). The presence of large families in urban areas is due to the inclusion of a colony in Kozhikode Corporation area comprising mostly Tamil population where more than one family live in a single house. Actually in Kerala very poor households of SC/ST families and fisher folk are compelled to live in the space of small shelters.

2.2

2.3

27

Table 2.1 Percentage distribution of Respondent Households according to Family size
Family size 1-2 3-4 5-6 7-8 9-11 All Rural 6.60 57.60 32.00 3.70 0.10 100.00 Urban 10.10 37.50 34.50 16.90 1.00 100.00 All 6.80 56.50 32.20 4.40 0.10 100.00

Table 2.2 Percentage distribution of Members according to Physical conditions
Physical Condition Orthopedically handicapped Eyesight impaired Hearing impaired Normal Total Rural % 0.4 8.8 0.7 90.1 100.0 Urban % 2.0 12.6 0.5 84.9 100.0 All % 0.5 9.0 0.7 89.8 100.0

2.4

KDS members do not constitute a physically challenged population as may be seen from Table 2.2. Orthopedically handicapped population comprises only 0.4 per cent of the rural members, although among the urban members it is as large as2 per cent. Eye disease seems to constitute a high proportion and probably needs remedial attention. It may be noted here that the KDS mission has launched a special programme called Ashraya to rehabilitate the physically challenged poor through the local governments. We may discuss the level of education and caste-wise social distribution together with the help of Tables 2.3, 2.3(a), 2.4 and 2.4(a). That over 7 per cent of the sample members are degree holders or with some professional qualification and 46 per cent have SSLC schooling show that poverty is not confined to illiterates. The majority among the degree holders as well as illiterate comprise the other backward classes [See Table 2.4 and 2.4(a)]. Out of the sample population of 6916 households 3246 are OBC and 2566 belong to general categories making a total of nearly 84.1 per cent. The urban sample does not compare well with that of the rural in that 78 per cent of them are with primary school and below qualifications. It is also significant that over two thirds (66.6 per cent) who are heads of households

2.5

28

are either illiterate or only with primary level education. Among the poor, it is important to note that there is a dominant presence of the advanced communities (37.1%) and a significant majority of them have a poor educational background [See Table 2.4 and 2.4(a)].

Table 2.3 Distribution of members according to level of education
Level of Education Illiterate &Literate below primary Primary SSLC Degree and above Others All Rural 13.00 32.00 47.50 6.60 0.90 100.00 Urban 13.60 64.60 20.70 0.80 0.30 100.00 All 13.00 33.90 45.90 6.30 0.90 100.00

Table 2.3 (a) Distribution of members who are head of the households according to level of education
Level of Education Head of the household Not Head of the household All Head of the household % Not Head of the household % All %

Illiterate & Literate below primary Primary SSLC Degree and above Others All

270 443 323 28 6 1070

628 1903 2851 408 56 5846

898 2346 3174 436 62 6916

25.2 41.4 30.2 2.6 0.6 100.0

10.7 32.6 48.8 7.0 1.0 100.0

13.0 33.9 45.9 6.3 0.9 100.0

Table 2.4 Distribution of members who are head of the households according to social status and level of education
Social status SC ST BC OBC General All Illiterate 28.1 7.0 0.8 51.6 12.5 100.0 Literate below primary 18.3 5.6 2.8 39.5 33.8 100.0 Primary 10.2 2.3 0.7 55.2 31.6 100.0 SSLC 12.4 3.4 0.9 51.1 32.2 100.0 Degree & above 14.3 0.0 0.0 53.6 32.1 100.0 Others 0.0 16.7 0.0 66.6 16.7 100.0 All 14.1 3.6 1.0 51.6 29.7 100.0

29

Table 2.4 (a) Distribution of members who are head of the households according to social status
Social status SC ST BC OBC General All 2.6 Head of the household 151 39 11 551 318 1070 Not Head of the household 688 165 50 2695 2248 5846 Head of the household % 839 14.1 204 3.6 61 1.0 3246 51.6 2566 29.7 6916 100.0 All Not Head of the household % 11.8 2.8 0.9 46.0 38.5 100.0 All % 12.1 2.9 0.9 47.0 37.1 100.0

The poverty situation of the KDS members is captured well in Table 2.5 which gives a fairly detailed account of the employment pattern. About 42 per cent are reportedly unemployed. Those who are employed are self employed engaged primarily in non-agricultural business or work as part time or casual labourers. Over 70 per cent of those who have full time employment and 90 per cent of part time and over 97 per cent of the casually employed are either engaged in non-agricultural self employment or wage employment. Self employment is the dominant pattern. Even when they report themselves as ‘APL’ [See Chapter 3] several of them could be considered as struggling to keep the wolf out of the door.

Table 2.5 Distribution of members according to Occupation and Nature of employment
Occupation Agricultural Labour Self employed in agriculture, fishing Self employed in nonagriculture, business Workers head load and general Workers (Construction) Workers (Plantation) Employed Small scale trade Others Pension / Remittance Unemployed All Full time 1.6 9.4 55.4 15.7 0.4 0.0 0.9 15.9 0.7 0.0 100.0 Part time 0.8 7.1 64.2 25.7 0.2 0.0 0.3 1.7 0.0 0.0 100.0 Casual 0.3 0.9 58.5 38.9 0.1 0.2 0.2 0.9 0.0 0.0 100.0 All 0.4 2.3 33.9 17.7 0.1 0.1 0.2 1.9 0.5 42.1 100.0 30

2.7

NHGs in Kerala are generally alive and kicking except in the urban areas in certain cases. [See Appendix 2 B for details). In most cases meetings are held regularly. Exceptions are very rare. In all the rural NHGs, above 75 per cent attendance is the regular pattern. Attendance falling in the 40-60 per cent range is very rare except in urban areas [See Appendix 2 B].

31

Appendix 2A Percentage distribution of households according to Natural region and phase
District Alappuzha Ernakulam Idukki Kannur Kollam Kozhikode Wayanad All Phase I 1.82 1.59 0.00 0.00 1.63 0.00 0.00 5.05 Coastal Phase Phase II III 1.81 1.81 1.74 0.00 1.30 1.62 0.00 0.00 6.46 1.29 0.00 0.00 1.95 0.00 0.00 5.05 All 5.44 4.61 0.00 1.30 5.21 0.00 0.00 16.56 Phase I 3.79 2.96 0.00 6.02 1.92 0.00 0.00 14.69 Mid Land Phase Phase Phase All II III I 5.81 3.70 13.30 0 6.29 0.00 3.50 3.53 0.00 0.00 19.13 2.82 0.00 1.59 1.82 0.00 0.00 9.93 12.07 0.00 11.10 7.27 0.00 0.00 43.75 1.60 3.51 3.60 1.78 0.00 2.13 12.62 High Land Phase Phase II III 0 0 0.00 5.19 1.88 1.82 0.00 6.58 15.47 0.00 1.78 2.31 1.76 0.00 0.00 5.86 All 0 1.60 10.48 7.79 5.36 0.00 8.70 33.95 Urban 1.43 0.00 0.00 1.45 0.00 2.86 0.00 5.74 Total 20.17 18.29 10.48 21.65 17.84 2.86 8.70 100.00

32

Appendix 2 B Distribution of NHGs by Regularity of holding meetings and nature of Attendance
Phase Region whether NHGs hold regular meetings Yes No Total Count Count % % Count % Above 75 % Count % Usual Attendances of members All 60% to 75 % 40 % to 60% Count Count Count % % %

I

II

III

Costal Midland High Land Total Phase I Costal Midland High Land Total Phase II Costal Midland High Land Total Phase III Urban All

36 118 100 254 56 154 116 326 42 83 44 169 35 784

92.3 100.0 99.0 98.4 98.2 99.4 100.0 99.4 100.0 97.6 100.0 98.8 94.6 98.7

3 0 1 4 1 1 0 2 0 2 0 2 2 10

7.7 0.0 1.0 1.6 1.8 0.6 0.0 0.6 0.0 2.4 0.0 1.2 5.4 1.3

39 118 101 258 57 155 116 328 42 85 44 171 37 794

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

26 93 74 193 47 112 97 256 30 63 33 126 18 593

66.7 78.8 73.3 74.8 82.5 72.3 83.6 78.0 71.4 74.1 75.0 73.7 48.6 74.7

13 23 27 63 8 41 19 68 12 21 11 44 14 189

33.3 19.5 26.7 24.4 14.0 26.5 16.4 20.7 28.6 24.7 25.0 25.7 37.8 23.8

0 2 0 2 2 2 4 0 1 0 1 5 12

0 1.7 0.0 0.8 3.5 1.3 0.0 1.2 0.0 1.2 0.0 0.6 13.5 1.5

39 118 101 258 57 155 116 328 42 85 44 171 37 794

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

33

CHAPTER 3 REVISITING THE KUDUMBASHREE POOR
Kudumbashree is a poverty mission which seeks “to eradicate absolute poverty in ten years through concerted community action”. This chapter and the one that follows (Chapter 4) are meant to critique the progress made in eradicating poverty. We also try to critique the conceptual foundations of the nine-point index along with the progress made. Technically the poor are to be identified using the 4/9 criteria and the graduation process out of poverty is also through the progress in eliminating most of these criteria. This chapter has two parts – Part I analyses the overall picture of progress. Part II shows the field situation as revealed from the NHG secretary schedules and household surveys.

I
3.01 KDS which commenced work in early 1999 was the obvious continuum of the urban poverty alleviation programme via the community development society (CDS) network. It has by then covered all the urban local bodies and the entire rural local bodies of the Malappuram district. It now covers all the rural areas and has extended its activity domain to the tribal areas. Table 3.1 shows the trend in the number of NHGs formed, families covered and families per NHG of the rural, urban and tribal areas from April 2000 through November 2006. [The graphical presentations of the trend in growth of NHGs and families there of are given in Fig 3.1 and 3.1(a)]. The Table given as Appendix 3A gives the district- wise distribution of the progress in the total number of NHGs and families. We give below certain broad inferences from these tables. KDS as officially reported has registered a spectacular growth in the number of NHGs and families covered. The number of NHGs increased from 37458 in 2001 to over 1.77 lakhs in November 2006. During the same period the number of families covered increased from 8.67 lakhs to 37.35 lakhs. This comprised the rural, urban and tribal groups. In rural areas except in the Malappuram district, it was introduced as a phased programme. Overall , during the period from 2000 April to November 2006, the number of NHGs in rural areas registered a growth of 464 per cent with a simple average growth rate of 77 per cent per annum and the corresponding increase in the number of families was 386 per cent with a simple average growth of 64 per cent. The overall growth of NHGs in urban areas was only 59 per cent and the growth of the number of families 163 per cent. This may appear less spectacular, but it is also striking 34

3.02

because the entire municipalities/corporations were covered, even before the KDS project was launched.

Table 3.1 Trend in the number of NHGs formed and families covered (2000-01 November 2006)
Year
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 (06Nov)

No of NHGs formed
Rural Urban Tribal Total

No. of Families covered
Rural Urban Tribal Total Rural

Families /NHG
Urban Tribal Total

28973 93052 107745 122704 143983 153117 163426

7538 7848 7863 7947 8667 10687 11987

947 1010 1190 2049 2049 2036 2232

37458 101910 116798 132700 154699 165840

654621 1843631 2068227 2462322 2837977 3020500

196000 196000 247165 273347 292207 292207

16400 12164 15096 24846 24846 32802 35880

867021 2051795 2330488 2760515 3155030 3345509 3735124

22.59 19.81 19.20 20.07 19.71 19.73 19.48

26.00 24.97 31.43 34.40 33.71 27.34 43.02

17.32 12.04 12.69 12.13 12.13 16.11 16.08

23.15 20.13 19.95 20.80 20.39 20.17 21.03

177645 3183529 515715

Fig 3.1

Trend in the Formation of NHGs (2000-01 - Nov 2006)
200000 180000

160000

Neighbourhood Groups

140000 120000

Rural Urban Tribal Total

100000 80000 60000 40000

20000 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 (06Nov)

Year

35

Fig 3.1 (a)
Trend in the Number of Families Covered (2000-01 - Nov 2006)
4000000

3500000

3000000

No. of Families

2500000

2000000

1500000

Rural Urban Tribal Total

1000000

500000

0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 (06Nov)

Year

3.03

The number of NHGs per GP increased from 29 in March 2001 to 165 in 2006. The average number of families per NHG for gram panchayats works out to 22 for March 2001 and that for ULBs, 26. The size shot upto 43 for ULBs, while it declined to 19 for GPs by November 2006 (See Appendix 3A). Clearly while in urban NHGs more members were added, in the rural areas new NHGs were formed. On the basis of discussions with certain focus group members we may safely say that 85 to 90 per cent group were alive and active. The remarkable progress made in the growth of NHGs (See Table 3.1 and Appendix 3A) makes it imperative to reexamine the methodology of admitting NHG members and the process of implementation. The percentage of NHG households covered to the total households (as per 2001 Census) in the gram panchayats which was only 13 per cent in March 2001 rose to 63.54 per cent in November 2006 (if we project a 5 per cent growth in new families by 2006, the percentage will be reduced to 60). The corresponding growth in the municipal areas was from 11.42 per cent to over 30 per cent. In November 2006, the percentage of NHG families covered ranges from 45.46 per cent in the Kollam district to over 90 per cent in the Kannur District. Assuming that the projected number of families in 36

3.04

2006 will be around 72 lakhs, the KDS poor will be over 50 per cent. This surely is not a realistically tenable number. The head count ratio of Kerala (population below the poverty line) based on the NSS 61st round household consumer expenditure survey for rural areas works out to 13.2 per cent for rural areas and 20.16 per cent for urban areas for 2004-05 [Himanshu (2007): 498] which roughly corresponds to the period of our enquiry. Mahendra Dev and Ravi (2007) have estimated the number of poor (also based on NSS (61st round) consumer expenditure) to be around 4.79 million which at an average family size of 4.5 works out to 10.6 lakh families. Actually several secretaries have confessed that the process of selection has not strictly followed the 4/9 criteria. The picture of poverty is exaggerated considerably if we were to accept the KDS numbers.

II
3.1 The Economic Status: Evidence from the field
3.1.1 The success of Kudumbashree is to be measured by the magnitude of poverty reduction. For this we have used three measures: Each sample household was asked to report whether it belonged to the (Above Poverty line) APL/BPL (Below poverty line) category. This is an important self-evaluation particularly because they are generally aware of the nine-point index. NHG –wise situation analysis of poor/non-poor as reported by the secretaries in the sample. A status study based on the major measurable criteria of the nine point index.

(i)

(ii) (iii)

3.2 Self – Evaluation
3.2.1 Table 3.2 gives the distribution of sample households according to BPL/APL status for ULBs and by natural region and the three phases for rural areas. A more disaggregated picture area-wise and phase-wise is given in Appendix 3B. For urban areas 23.4 per cent continues to be APL and only the rest (76.6%) poor. The overall picture of APL in rural areas is much higher at 32.2 per cent. On apriori basis the presence of APL can be explained by the fact that those who graduated from BPL category have not been escorted out. Also, this may be because the identification criteria were not strictly followed. The households in Phase III identified by 4/9 criteria, technically should comprise only the poor. But in Phase III in all the regions we find a mix of 37

3.2.2

APL and BPL. In phase III, the proportion of APL is as high as 38 per cent for highland and 37 per cent for coastal areas with an overall average for the rural areas (phase III) being 34.8 per cent. On the whole the proportion of APL ranges from 30.6 per cent in the Wayanad district to 35.9 per cent in the Ernakulam district. When we examine region-wise, the APL proportion goes as high as 45.1 per cent in the midland region of Kollam. In Alappuzha, Kannur and Wayanad, the percentage of BPL households is higher in Phase II and III (See Appendix 3B). The proportion of APL families ranges from 16.5 per cent in Wayanad district (in Phase II) to as high as 60.2 per cent in the Idukki district (Phase III). Clearly as more panchayats were added in Phase II and III, the norms of selection seems to be relaxed.

Table 3.2 Distribution of sample households according to BPL/APL status: Natural Region and Phase Rural & Urban
District Economic status

Coastal
Phase I Phase II Phase III All Phase I

Midland
Phase II Phase III All

All Sample
Districts

APL % to Total BPL % to Total Total %
Economic status

122 35.0 227 65.0 349 100.0
Phase I

159 35.6 288 64.4 447 100.0

129 37.0 220 63.0 349 100.0
All

410 35.8 735 64.2 1145 100.0
Phase I

370 36.4 646 63.6 1016 100.0
Phase II

444 33.6 879 66.4 1323 100.0
Phase III All

219 31.9 468 68.1 687 100.0
Urban

1033 34.1 1993 65.9 3026 100.0
Total

District

Highland
Phase II Phase III

All (Rural)
747 33.4 1491 66.6 2238
100.0

All Sample
Districts

APL % to Total BPL % to Total Total %

255 29.2 618 70.8 873 100.0

244 22.8 826 77.2 1070 100.0

154 653 38.0 27.8 251 1695 62.0 72.2 405 2348 100.0 100.0

847 29.8 1993 70.2 2840 100.0

502 2096 34.8 32.2 939 4423 65.2 67.8 1441 6519 100.0 100.0

93 23.4 304 76.6 397
100.0

2189 31.7 4727 68.3 6916
100.0

3.2.3

Two broad conclusions can be drawn from Table 3.2 and Appendix 3B. One, the identification of the poor, based on the 4/9 criteria has not been strictly followed. Our discussions as well as interactions with members have convinced us that several external factors notably the ward members influence the choice of the NHG members. Rational and criteria – based formation is rendered difficult in such a context. It may also be because the mission authorities are indifferent or not strict in following the criteria. Two, there is no programme to escort out those who graduate from the BPL situation.

38

3.3 Evaluation by Secretaries
3.3.1 NHG secretaries quite often unanimously elected by the groups are the key functionaries of the programme at the grassroots level. The secretaries were asked to report on the economic status of their members. The responses of the secretaries are reported in Table 3.3.

Table 3.3 Distribution of members according to Economic status as reported by Secretaries
District Alappuzha Ernakulam Idukki Kannur Kollam Kozhikode Wayanad All 3.3.2 No. of NHGs 154 167 84 157 155 17 60 794 APL 1100 1029 334 679 719 169 176 4206 No: of members BPL 1900 1686 1019 2513 1890 469 682 10159 Total 3000 2715 1353 3192 2609 638 858 14365 % of APL to Total 36.67 37.90 24.69 21.27 27.56 26.49 20.51 29.28

The 794 secretaries of the NHGs covered had a total membership of 14365. Table 3.3 shows that 29.28 per cent were APL families and only around 71 per cent BPL families. The APL proportion ranged from 20.5 per cent in the Wayand region to around 38 per cent in Ernakulam. This corresponds broadly with the findings of the self evaluation of individual families reported in Table 3.2.

3.4 A criteria based analysis
3.4.1 Families with less than four of the nine criteria4 are identified as non-poor. Families having more than 4 criteria out of 6916 families covering the poor adds up only to 443 or 6.4 per cent. The non-poor constitute an

4

The nine-point criteria we have used (latter refinements are not taken into account) are given below: (a) Kutcha House (b) No access to safe drinking water (c) No access to sanitary latrine (d) Illiterate adult in the family (e) Family having not more than one earning member (f) Family getting barely two meals a day or less (g) Presence of children below 5 year in the family (h) Alcoholic or drug addict in the family (i) Scheduled caste or scheduled Tribe family.

39

overwhelming majority of 93.6 per cent. To investigate further we give in Table 3.4 a disaggregated picture by broad social classes such as SC/ST categories and other backward classes. The Scheduled Tribes have the single largest majority (36.8%) followed by Scheduled Castes, (21.1%). Interestingly even among the SC/ST categories also non-poor constitute a significant majority. Among the backward classes who comprise 3307 households only 120 or just 3.7 per cent constituted the poor. On the whole the poor constitute only 6.4 per cent of the total sample households. There could be some under estimate.

Table 3.4 A Social Class-wise distribution of poor and non-poor based on the4/ 9 Point Criteria
Social Category SC ST BC & OBC General All 3.4.1 Poor 177 75 120 71 443 % 21.1 36.8 3.7 2.8 6.4 After joining NHG Not Poor % 78.9 662 63.2 129 96.3 3187 97.2 2495 6473 93.6 All 839 204 3307 2566 6916 % 100.0 100.0 100.0 100.0 100.0

To conclude the major findings of the chapter are: 37.4 lakh family-strong membership of Kudumbashree definitely convey an exaggerated picture of the nature and magnitude of poverty in the state. The total families as per 2001 census were only around 67.3 lakhs in the state and now around 72 lakhs. That over 50 per cent of the families in the state are poor cannot be considered as indicating the real situation. The methodology of identification of the poor and its actual implementation at the ward level leave many things to be desired. The omission of meals criterion in the revised index along with a somewhat loose and open ended definition of women-headed households [See para 1.2.2 and foot note No.3) and families without colour TV have left the identification of poor delightfully ambiguous one. Presence of mentally or physically challenged persons/chronically ill members in the family also could be interpreted widely to open the gate wider. [See Chapter 4]. Under such a situation KDS fails to serve as a platform or organisation of the really deprived. There is no mechanism to escort out the non-poor. At any rate the place of the non-poor in the NHG/ADS/CDS level probably has to be clarified and defined.

40

Appendix 3A District wise distribution of Progress of NHGs (March 2001-Nov 2006)
District No of GPs/ ULBs 2 78 69 54 73 74 51 88 92 90 100 77 25 81 39 991 58 No of House holds (2001 Census) 3 505653 491734 268498 345928 368727 252256 364881 459526 455911 552722 364557 160398 237932 181536 5010259 1716097 6726356 No of NHGs formed Mar -01 4 2413 1489 647 2187 1371 1897 1252 4680 736 4645 2499 1178 3197 782 28973 7538 947 37458 Nov -06 5 16740 12085 6426 12691 10310 8829 12189 15512 19365 12810 13311 7156 10509 5493 163426 11987 2232 177645 Rate of growth Families covered Mar -01 7 58495 24310 17280 51216 16803 34028 29684 96075 13881 167000 56973 18205 50613 20058 654621 196000 16400 867021 Nov -06 8 344165 223550 131304 254434 215042 161983 206828 281736 330352 298810 280803 120248 215305 118969 3183529 515715 35880 3735124 Rate of growth No of NHGs per GP Mar01 10 30.94 21.58 11.98 29.96 18.53 37.20 14.23 50.87 8.18 46.45 32.45 47.12 39.47 20.05 29.24
129.97

Rate of growth

%
6 593.74 711.62 893.20 480.29 652.01 365.42 873.56 231.45 2531.11 175.78 432.65 507.47 228.71 602.43 464.06 59.02 135.69 374.25

%
9 488.37 819.58 659.86 396.79 1179.78 376.03 596.77 193.25 2279.89 78.93 392.87 560.52 325.39 493.12 386.32 163.12 118.78 330.80

%
Nov06 11 214.62 175.14 119.00 173.85 139.32 173.12 138.51 168.61 215.17 128.10 172.87 286.24 129.74 140.85 164.91 206.67 12 593.74 711.62 893.20 480.29 652.01 365.42 873.56 231.45
2531.11

Families covered per NHG Mar -01 13 24.24 16.33 26.71 23.42 12.26 17.94 23.71 20.53 18.86 35.95 22.80 15.45 15.83 25.65 22.59 26.00 17.32 23.15 Nov06 14 20.56 18.50 20.43 20.05 20.86 18.35 16.97 18.16 17.06 23.33 21.10 16.80 20.49 21.66 19.48 43.02 16.08 21.03

Rate of growth

%
15 -15.19 13.30 -23.49 -14.39 70.18 2.28 -28.43 -11.53 -9.55 -35.12 -7.47 8.73 29.41 -15.56 -13.78 65.46 -7.18 -9.16

1 Trivandrum Kollam 1
Pathanamthitta

%Households covered to Total households MarNov01 06 16 17 11.57 4.94 6.44 14.81 4.56 13.49 8.14 20.91 3.04 30.21 15.63 11.35 21.27 11.05 13.07 11.42 12.89 68.06 45.46 48.90 73.55 58.32 64.21 56.68 61.31 72.46 54.06 77.03 74.97 90.49 65.53 63.54 30.05 55.53

Alappuzha Kottayam 2 Idukki 3 Ernakulam Trissur Palakkad 4 Malappuram 5 Kozhikode 6 Wayanad Kannur Kasargode Total GPs @

175.78 432.65 507.47 228.71 602.43 464.06 59.02 -

Total ULBs Tribal 8Dist Grand Total

-

(Source Kudumbashree; Statistical Hand book 2005 ) @Total number of Panchayats increased to 999 by bifurcation with effect from 23.7.2005. Kollam 2, Kottayam 1, Idukki 1 Palakkad 1, Malappuram 2, and Kozhikode 1. For purpose of analysis only the old 991 Panchayats have been considered.

41

Appendix 3B BPL (APL) Percentage Distribution by Natural Region and by Phases
Districts / Natural Region Alappuzha Phase I 57.9 (42.1) 71.8 (28.2) 0.0 (0.0) 0.0 (0.0) 66.4 (33.6) 0.0 (0.0) 65.0 (35.0) Coastal Phase Phase II III 60.0 78.4 (40.0) 71.7 (28.3) 0.0 (0.0) 54.4 (45.6) 69.6 (30.4) 0.0 (0.0) 64.4 (35.6) (21.6) 44.9 (55.1) 0.0 (0.0) 0.0 (0.0) 60.7 (39.3) 0.0 (0.0) 63.0 (37.0) Total 65.4 (34.6) 64.3 (35.7) 0.0 (0.0) 54.4 (45.6) 65.3 (34.7) 0.0 (0.0) 64.2 (35.8) Phase I 67.6 (32.4) 63.4 (36.6) 0.0 (0.0) 63.9 (36.1) 54.9 (45.1) 0.0 (0.0) 63.6 (36.4) Midland Phase Phase II III 74.1 61.7 (25.9) 54.9 (45.1) 0.0 (0.0) 80.6 (19.4) 60.2 (39.8) 0.0 (0.0) 66.4 (33.6) (38.3) 64.1 (35.9) 0.0 (0.0) 88.2 (11.8) 69.8 (30.2) 0.0 (0.0) 68.1 (31.9) Total 68.8 (31.2) 59.2 (40.8) 0.0 (0.0) 72.7 (27.3) 61.2 (38.8) 0.0 (0.0) 65.9 (34.1) Phase I 0.0 (0.0) 57.7 (42.3) 65.8 (34.2) 77.1 (22.9) 81.3 (18.7) 69.4 (30.6) 70.8 (29.2) High land Phase Phase II III 0.0 0.0 (0.0) 0.0 (0.0) 67.4 32.6) 88.5 (11.5) 70.6 (29.4) 83.5 (16.5) 77.2 (22.8) (0.0) 0.0 (0.0) 39.8 (60.2) 72.5 (27.5) 70.5 (29.5) 0.0 (0.0) 62.0 (38.0) Total 0.0 (0.0) 57.7 (42.3) 62.2 (37.8) 78.5 (21.5) 74.1 (25.9) 80.1 (19.9) 72.2 (27.8) Phase I 64.4 (35.6) 64.1 (35.9) 65.8 (34.2) 68.9 (31.1) 67.2 (32.8) 69.4 (30.6) 66.6 (33.4) All Phase Phase II III 70.8 67.2 (29.2) 58.6 (41.4) 67.4 32.6) 77.7 (22.3) 65.1 (34.9) 83.5 (16.5) 70.2 (29.8) (32.8) 58.1 (41.9) 39.8 (60.2) 78.9 (21.1) 66.8 (33.2) 0.0 (0.0) 65.2 (34.8) Total 67.8 (32.2) 60.3 (39.7) 62.2 (37.8) 73.7 (26.3) 66.3 (33.7) 80.1 (19.9) 67.8 (32.2)

Eranakulam

Idukki

Kannur

Kollam

Wayanad

All Dist Rural

(Percentage of APL families is given in the bracket

42

CHAPTER 4 THE NINE-POINT INDEX: A PROGRESS REPORT AND A CRITIQUE
This chapter has two parts. Part I of this chapter is a brief critique of the nine-point index to drive home the need to modify it or even to evolve alternate ways of identifying the poor. In India debates relating to measure of poverty continue to be dominated by the poverty line and head count ratio anchored on accepted calorie norms with rural-urban differentiation. Although it is out of place to go through the ‘The great Indian poverty debate5’ we may contextualise the discussion with reference to a brief critique of the official poverty line. Part II, presents the progress made in regard to seven out of the nine criteria6. The criteria relating to SC/ST and children below five years are obviously not suitable candidates to scale progress and hence omitted. This chapter is to be seen along with the previous one.

I
4.1 The Official Poverty Line:
4.1.1 A meaningful poverty assessment should be based on sound conceptual foundations and must serve at least four purposes: (1) Identify the poor from the non-poor (2) Find out how deep is poverty through an appropriate scale that facilitates comparison over time and space (3) Make a meaningful aggregation about the magnitude of poverty in a jurisdiction, be it a country, a state or panchayat or whatever the level of aggregation required and (4) Throw policy insights for reducing poverty progressively. The official poverty line (PL) as well as the 9 point index of KDS cannot be said to be based on sound conceptual foundations and do not satisfy most of these
5

The Great Indian Poverty Debate’ is the title of a book edited by Deaton and Kozel (2005) which discusses the on going debate on poverty in India since the 1990s. The authors consider the poverty debate ‘great’. 6 Under the Ashraya scheme to rehabilitate the poorest of the poor (destitutes) the 9-point criteria have been modified. Besides 8/9 criteria another eight criteria such as families without land, those who spend night in streets or sleep in the verandas of shops, families headed by unwed mothers, families subjected to chronic illness etc. are also used. [For details of this see ‘State Planning Board (2007): pp.364-66).

43

purposes. While the official income poverty line anchored on a minimum calorific norm of 2400 Kcal per capita per day in rural areas and 2100 Kcal per capita per day in urban areas7 has been subjected to considerable scholarly debate (and it still continues), the KDS 9-point criteria have not attracted much review8. 4.1.2 Although we do not want to go into the details of the official PL and the debates we may briefly mention some of its important shortcomings. One, the underlying conceptual foundation is weak. It is not comprehensive. As Amartya Sen (1985, 1992, and 1999) has elaborated, there is a great need to consider the quality of human resources, their capabilities and functionings in any poverty conceptualisation. For him poverty is capability deprivation. Capability refers to the freedom one has to choose from a range of functionings, which means achieving what one wants to do or be. Poverty in this perspective would mean absence of elementary capabilities. The basic question in poverty reduction is one of expansion of elementary capabilities, namely, education, health care, employment, gender equity and women empowerment and provisioning of social and economic security. Of course, we affirm that the elementary capability of being adequately nourished recognised in the official PL is an important aspect of the conceptual foundations of poverty. Second, the PL takes no notice of the fact that when the income of one individual or group of individuals close to a PL falls poverty is reduced. It thus violates the axiom that a reduction of income of any one below the PL given everything else, must increase the poverty measures [See Sen (1981): Appendix C]. Three, the most glaring mistake is that the updated official poverty lines based on the adjusted prices of the 1973-74 consumption expenditure class, do not correspond to the calorie norms of 2400 Kcal and 2100 Kcal for rural and urban areas. [For good empirical proof of this see Mehta, Venkataraman (2000), Utsa Patnaik (2004, 2007), and G.C.Manna (2007) among others]. Utsa Patnaik (2007) gives an elaborate Table based on 55th NSS round data for 1999-2000 and shows that 2400 calorie based head count ratio (HCR) will come to 74.5 per cent and not the official HCR of 27.4 per cent based on the adjusted prices of the 1973-74 expenditure class [See U.Patnaik (2007)]. In brief, even as a nutritional norm-based measure, the HCR is weak. Four, at best it is useful only as an aggregated measure of poverty in a state or economy and has no use in identifying a poor family. It was precisely because of this that the Ministry of Rural Development conducted BPL

7 The Planning Commission Expert Group (1993): identified the total household monthly consumer expenditure whose food expenditure met these calorie norms, from the 28th NSS round consumer expenditure survey for 1973-74 and for later years was updated using Agricultural Labour Consumer price index for rural areas and that of industrial workers for urban areas. 8 The only exception is the detailed review in Oommen (1999).

44

surveys. Five, in the official PL approach, the nutritional norm leaves nonfood requirements as an empirical component. How much non-food preferences have been at the expense of food items is not known. This is particularly so, when it comes to catastrophic payments to meet emergency health requirements. 4.1.3 In India although there are a large number of economists who reverentially appreciate the calorie norm-based approach, most discerning scholars have found it weak and wanting. Long before Planning Commission endorsed the PL approach, Amartya Sen after examining the theoretical and practical problems of conceptualising and measuring poverty held that the head count measure is “quite unacceptable as an indicator of poverty” [Sen 1981:11]. It is in this setting that we have to evaluate the 4/9-point index of KDS. It is primarily to be seen as a tool of identification of the poor. It is not used or meant to be used as an aggregate measure for evaluative judgements about the level of poverty in a society or jurisdiction. Although it had no apriori theoretical conceptual foundations, the CBO which provides the support base today when they evolved it formulated the index on the basis of a field survey in Alappuzha municipal town. An elaborate critique of the 9-point index, its conceptual, statistical and empirical basis was made by M.A.Oommen (1999) as part of an evaluative exercise. We do not propose to go over it again. In Section 4.2 we spell out some important criticisms of the Index to help further revision and /or modification of it.

4.2 The KDS Index9: Some general criticisms
Any four criteria out of nine in the KDS index means, all criteria are treated as equally important. They however are not independent and equally important. Weighting is needed to reflect the priorities of the community. It can be fixed using statistical weighting devices or by community-based preference ordering which each panchayat may adopt. No land/less than 5 cents is important and must be retained. Inclusion of other assets can be problematic although consideration of ownership of the pair of clothing is an essential item that is important. Income is important because it indicates a universal purchasing power which can remove many of the deprivations like lack of food, illiteracy, kutcha house, lack of latrines etc. But in view of the difficulty of getting correct information this need not be included.
9

The comments here refer to the revised Nine-point Index [See Foot note.3. given in Chapter 1].

45

No house or Kutcha house is admittedly a sign of poverty. criterion should be retained.

This

Absence of sanitary facilities and non-availability of and nonaccessibility to safe drinking water are important and their inclusion in the revised criteria is justifiable. Family getting less than two meals a day is probably the most important criterion of poverty. The omission of this in the revised index has to be viewed seriously because a poverty measure that omits this elementary capability is basically flawed. ‘Women headed household/presence of a widow, divorcee/abandoned lady/unwed mothers are more an open ended criterion than a specific measure. The criterion relating to employment has to be made more precise. Presence of adults seeking employment in a family is a great deprivation. Even if there is only one earning member, the family need not be poor because a single earner may command a large salary income or inherited wealth etc. The type of employment or occupation that fetches income for the family is also important. An SC/ST family need not necessarily be poor. They are not essential attributes or expressions of poverty. Indeed SC/ST families have been subjected to very high traditional deprivations. They need special entitlements and affirmative action. Inclusion of an ethnic factor as a measure is logically incorrect especially when you want to measure progress overtime of the community in general. Again inclusion of ‘presence of mentally or physically challenged person/chronically ill member in the family is also opening wide the gate of admission. Thus, basically only three factors – Kutcha house, family having no earning member and family getting less than two meals a day are basic attributes of poverty.

II
4.3 This part presents the progress made by the sample households in regard to the major parameters after joining the KDS project. This is the most obvious way to evaluate progress. As we have noted in Part I, improvements in housing and pattern of food consumption are crucial parameters in poverty reduction. Tables 4.1, 4.1(a) and 4.2 present the 46

situation before and after joining the NHG in regard to these two parameters.

Table 4.1 Improvement in housing conditions after joining the NHG
Item No Improvement Renovation / Maintenance Addition / Extension New Construction Total No of Houses 5826 593 208 289 6916 % of Improvement to Total 84.24 8.57 3.01 4.18 100.00

Table 4.1(a) A break-up of the Improvement in the housing conditions
Present House Thatched Tiled Concrete Others Partially Concrete All Improvement in the condition of house because of joining NHG No Renovation/ Addition / New All Improvement maintenance Extension construction 461 57 14 14 546 3359 294 76 80 3809 1420 151 90 141 1802 539 84 24 50 697 47 7 4 4 62 5826 593 208 289 6916

4.3.1

Only 16 per cent of the 6916 households surveyed have reported improvement in the housing conditions after joining the KDS Mission. About 18 per cent of the thatched households improved their housing. It is important to note that more than 50 per cent of the new houses constructed were concrete structures. As regards the traditional three meals pattern, [See Table 4.2] there is some visible improvement. There is a decline in the households with one meal per day by 16 per cent and those with only two meals have progressed even more remarkably. The percentage of families with three meals has also improved. Although not spectacular, this needs special mention.

4.3.2

47

Table 4.2 Pattern of Food Consumption before and after joining NHG
No. of Meals One Meal per day Two Meals per day Three Meals per day Others All Before Joining NHG No % 286 4.14 644 9.31 596`7 86.28 19 0.27 6916 100.00 After Joining NHG No 246 494 6150 26 6916 % 3.56 7.14 88.92 0.38 100.00 Increase/ Decrease No -40 -150 183 7 % -16.26 -30.36 2.98 26.92 -

4.3.3

Tables 4.3 and 4.4 show the progress with reference to two important health – related parameters viz. safe drinking water and sanitary facilities. There is good improvement especially in regard to attached sanitary facility and own pipe connections along with decline in public well and public tap. There is significant reduction (29.21 per cent) in the proportion of families taking to open defecation. Even so it is a matter of grave concern that 9.7 per cent of the households still take to open defecation.

Table 4.3: Source of Drinking Water before and after joining NHG
Item
Public Well Public Tap Own Well Own Pipe Tank Supply Ponds Others More than One Source All

Before Joining NHG No %
739 1337 3218 430 9 158 890 135 6916 10.69 19.33 46.53 6.22 0.13 2.28 12.87 1.95 100.00

After Joining NHG No %
717 1307 3216 478 10 158 895 135 6916 10.37 18.90 46.50 6.91 0.14 2.28 12.94 1.95 100.00

Increase /Decrease No %
-22 -30 -2 48 1 0 5 0 -3.07 -2.30 -0.06 10.04 10.00 0.00 0.56 0.00

Table 4.4: Sanitation Facility before and after joining NHG
Item Open defecation Outside house Attached Others Outside and attached All Before joining NHG No % 867 12.54 5143 74.36 704 10.18 143 2.07 59 0.85 6916 100.00 After joining NHG No % 671 9.70 5140 74.32 916 13.24 124 1.79 65 0.94 6916 100.00 Increase /Decrease No % -196 -29.21 -3 -0.06 212 23.14 -19 -15.32 6 9.23 48

Table 4.5 No of those employed in the family before and after joining NHG
Item /No Persons None One Two More than Two All 4.3.4 Before joining NHG No % 156 2.26 4586 66.31 1688 24.41 486 7.03 6916 100.00 After joining NHG No 134 3207 2867 708 6916 % 1.94 46.37 41.45 10.24 100.00 Increase /Decrease No -22 -1379 1179 222 % -16.42 -43.00 41.12 31.36

Gainful employment is an important factor that contributes to the income and well-being of a family. There is definite and reportedly remarkable improvement as is well exemplified in Table 4.5. Equally significant is the reduction in alcoholism among the houses surveyed [See Table 4.6]. It is to be noted that this is happening in a state where liquor consumption and alcoholism has assumed pathological proportions. Finally, we may examine the situation in regard to illiteracy. [Not reported in Tables]. Excluding children below five years the 6916 families have a total population of 28254. Of this 234 or about 0.8 per cent constitute illiterates falling in the age group 5-17. This surely is not a high proportion. But because they are from very poor households one may have to revisit to examine the cause of this vulnerable situation. More serious is probably the case of the adults above 18 comprising a total population of 1439 or a little over 5 per cent. That there are people who are not covered by adult literacy programmes or school programmes in the KDS family categories is a matter that should attract the attention of those who manage the Mission.

4.3.5

Table 4.6 Alcohol addicts in the family before and after joining NHG
Item /No No addict One addict Two addict More than two addict All Before joining NHG No % 5773 83.47 1093 15.80 29 0.42 21 0.30 6916 100.00 After joining NHG No % 5958 86.15 921 13.32 22 0.32 15 0.22 6916 100.00 Increase /Decrease No % 185 3.11 -172 -18.68 -7 -31.82 -6 -40.00 -

49

4.4

To conclude, item-wise analysis does not show that there has been uniform progress, although in certain areas such as that of employment growth and reduction in alcoholism the progress made has been quite impressive. That poor households are moving into the proverbial three meals a day syndrome is also a welcome sign. Although the progress cannot be attributed to KDS activities alone, overall achievements have been something to write home about.

50

CHAPTER 5 THRIFT AND CREDIT SOCIETIES: A CRITICAL EVALUATION
This chapter is devoted to examine the role and progress of Thrift10 and Credit societies of Kudumbashree. Admittedly the poor are short of savings. They need credit for a variety of purposes such as for meeting daily consumption needs, for shelter, children’s education, health care, for meeting social needs such as marriages, festivals, besides for productive purposes to earn the income needed for survival and progress. The poor on their own surely cannot meet these needs individually, while a lot of them are achievable through the self-help groups/neighbourhood groups. In this chapter first we present a macro overview of thrift and credit mediated through Thrift and Credit Societies (T & CSs) of Kudumbashree. This is followed by an analysis of some issues related to purpose of loans, debt liabilities etc based on the field investigation.

5.1 Thrift and Loans: The Macro Picture
5.1.1 Tables 5.1 and 5.2 show the overall trend in the thrift and loans from March 2001 through November 2006 of the Kudumbashree CBO. The basic data relating to thrift and loans are from the Kudumbashree office which receive reports from their Mission Centres (we are aware that such reported aggregates are not always precise) could be treated as revealing the overall magnitudes and trends. The overall thrift (savings) which was only Rs. 31.79 crore in March 2001 rose six times in two years to reach Rs. 184.29 crore and then quantum jumped to Rs. 697.61 crore by November 2006. Currently it is heading towards Rs. 800 crore. This fabulous growth (surely because of coverage and intensity of mobilization) of nearly 22 times in five years has very little parallel in the history of micro finance in the world11. This works out to Rs.39270 per NHG and Rs.1874 per family in November 2006. Interestingly nearly 93 per cent of the aggregate saving is contributed by the rural NHGs (See Table 5.1) whose average per NHG works out to

Thrift is a better word to refer to the frugal savings of the poor than the term savings used in the economics literature where it is the surplus arrived after meeting consumption. 11 Two authors in a recent paper claim that the Kalanjiam community Banking Programme controlled by poor women with a savings total of Rs. 74.44 crore by members (covering villages/slums in 31 districts of Tamil Nadu, Andhra Pradesh, Karnataka, MP, Orissa, Rajasthan, Maharastra and Pondicherry) is “the largest micro finance programme in Asia and probably the largest programme in the world” surely is based on inadequate knowledge. [See M.P.Vasimalai etal (2007)].

10

51

Rs.39539 and per family Rs.2038. It is remarkable that the tribal NHGs have stepped up the thrift per family from Rs. 142 in 2001 to Rs.2218 in November 2006. Table 5.2 clearly shows that there has not been much growth in the thrift per family of urban NHGs which stayed within the range of Rs.729 in March 2001 to Rs. 1,341 in March 2006. Actually in two years there was a decline compared to the previous year. The lack of impressive growth in the thrift of the urban NHGs may be because of the larger opportunities of formal portfolios open to them.

Table 5.1: Overall trend in Thrift and Loans (Mar 2001 to Nov 2006)
(Amount in Rs.)

Rural
Year
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

No of NHGs formed
28724 93052 107745 122704 143983 153117 163426 7538 7848 7863 7947 8667 10687 11987

Thrift
172753615 903510975 1635202807 2879949978 4413895241 5949299905 6461714885

Thrift per NHG
6014.26 9709.74 15176.60 23470.71 30655.67 38854.60 39539.09 18955.96 21153.45 25320.94 28252.71 33018.07 36658.53 36405.17

Loan
82157662 800253374 1981590544 5117085458 9686426420 14214712935 18250090968 137729155.00 188273020.00 209587470.00 230165508.00 313100207.00 433723110.00 486406430.00

Loan per NHG
2860.24 8600.07 18391.48 41702.68 67274.79 92835.63 111671.89 18271.31 23989.94 26654.90 28962.57 36125.56 40584.18 40577.83

Urban
142890060.00 166012238.00 199098559.00 224524316.00 286167644.00 391769702.00 436388809.00

Tribal
Year
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

No of NHGs formed
947 1010 1190 2049 2049 2036 2232 37209 101910 116798 132700 154699 165840 177645

Thrift
2333921 5064521 8626455 35691344 35691344 54114722 77998663

Thrift per NHG
2464.54 5014.38 7249.12 17418.91 17418.91 26578.94 34945.64

Loan
66690 2203592 4939333 42517566 42517566 107612661 143236185 219953507.00 990729986.00 2196117347.00 5389768532.00 10042044193.00 14756048706.00 18879733583.00

Loan per NHG
70.42 2181.77 4150.70 20750.40 20750.40 52854.94 64173.92 5911.30 9721.62 18802.70 40616.19 64913.44 88977.62 106277.88

Total
317977596.00 1074587734.00 1842927821.00 3140165638.00 4735754229.00 6395184329.00 6976102357.00 8545.72 10544.48 15778.76 23663.64 30612.70 38562.38 39269.91

52

5.1.2

As regards loans made out of thrift also, Kerala has a very notable record. The thrift loan trend which was low in the early years picked up fast for rural, urban and tribal categories. The thrift loan ratio of all categories is well exemplified in Figures 5.1(a), 5.1(b), 5.1(c) and overall it ranges from 0.69 in 2001 to 2.71 in 2006. The aggregate loan disbursed increased from just Rs. 21.9 crore in 2001 to Rs. 1887.97 crore, 86 times increase in five years. The latter figure as a percentage of the total bank advances (including cooperative banks) in 2006 works out to 3.3 per cent. The thrift loan per family works out to Rs. 5072.8 in 2006 as against Rs.328 in 2001 whereas the per NHG loan increased from Rs.5911 to over Rs.1.06 lakhs during the same period. This is literally self help par excellence because these are made out of their own savings/thrift. The T&CSs act as virtually unstructured intermediaries at the door steps of the poor households and facilitate the mobilization of small thrift that surely might not have been saved at all but for this. The small savings pooled at the ADS level form the collective capital of the Kudumbashree CBO.

Table 5.2 Overall trend in Thrift and Loans per family (Mar 2001 to Nov 2006)
(Amount in Rs.)

Rural
Year
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06 Mar-01 Mar-02 Mar-03 Mar-04

No of NHGs formed
28724 93052 107745 122704 143983 153117 163426 7538 7848 7863 7947 8667 10687 11987 947 1010 1190 2049

Thrift
172753615 903510975 1635202807 2879949978 4413895241 5949299905 6461714885 142890060 166012238 199098559 224524316 286167644 391769702 436388809 2333921 5064521 8626455 35691344

Thrift per NHG
6014 9710 15177 23471 30656 38855 39539 18956 21153 25321 28253 33018 36659 36405 2465 5014 7249 17419

Thrift per family
378 532 810 1183 1565 1979 2038

Loan
82157662 800253374 1981590544 5117085458 9686426420 14214712935 18250090968 137729155 188273020 209587470 230165508 313100207 433723110 486406430 66690 2203592 4939333 42517566

Loan per NHG
2860 8600 18391 41703 67275 92836 111672 18271 23990 26655 28963 36126 40584 40578 70 2182 4151 20750

Loan per Family
180 471 981 2103 3435 4727 5756 703 961 848 842 1072 1484 943 4 181 327 1711

Thrift Loan ratio
0.48 0.89 1.21 1.78 2.19 2.39 2.82 0.96 1.13 1.05 1.03 1.09 1.11 1.11 0.03 0.44 0.57 1.19

Urban
729 847 806 821 979 1341 846

Tribal
142 416 571 1437

53

Mar-05 Mar-06 Nov-06 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

2049 2036 2232 37209 101910 116798 132700 154699 165840 177645

35691344 54114722 77998663 317977596 1074587734 1842927821 3140165638 4735754229 6395184329 6976102357

17419 26579 34946 8546 10544 15779 23664 30613 38562 39270

1437 1652 2218

42517566 107612661 143236185 219953507 990729986 2196117347 5389768532 10042044193 14756048706 18879733583

20750 52855 64174 5911 9722 18803 40616 64913 88978 106278

1711 3285 4073 328.51 519.76 962.65 1973.05 3201.20 4428.86 5072.85

1.19 1.99 1.84 0.69 0.92 1.19 1.72 2.12 2.31 2.71

Total
475 564 808 1150 1510 1919 1874

Source: Aggregate figures from Kudumbashree. All others are worked out by the author.

Fig: 5.1(a)
Tren d in Th rift & Lo an (R u ra l)
20000000000 18000000000 16000000000 14000000000

Th rift Lo an

Thrift & Loan

12000000000 10000000000 8000000000 6000000000 4000000000 2000000000 0 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Ye ar

54

Fig: 5.1(b)
Th rift & Lo a n (Urba n )
600000000.00

Th rift Lo an
500000000.00

400000000.00

Thrift & Loan

300000000.00

200000000.00

100000000.00

0.00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Year

Fig: 5.1(c)
Th rift & Loa n (Tribal)
160000000

140000000

T h r ift Loa n

120000000

Thrift & Loan

100000000

80000000

60000000

40000000

20000000

0 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Yea r

55

Fig: 5.2
Th rift Lo an R atio
3

2.5

R ur al Ur b a n T r ib a l T ot a l

Thrift Loan R atio

2

1.5

1

0.5

0 Year Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Year

5.1.3

Micro credit the world over is predominantly commercial bank-linked, the Kudumbashree is a conspicuous exception. Table 5.3 presents the districtwise trend in the growth of bank linked credit of KDS. The table shows that from Rs.63.54 crore in December 2003, it grew to Rs. 406.36 crore in January 2007, a 6.4 times increase in four years time. Even with this growth it is only 21 per cent of the Thrift Credit issued in 2006 by the KDS. Only 44 per cent of the NHGs take bank-linked credit today. Although this is a significant progress compared to 2003 when only 20 per cent of the NHGs took to bank-linked credit. The three districts of Kollam, Alappuzha and Wayanad account for over 34 per cent of the bank-linked credit. Kollam which accounted for the largest share in 2003 (14.58%) continues to hold the premier position although with a reduced percentage share (12.59%). While Thrissur which held the second position in 2003 with 11.56 per cent, it fell to 6.31 per cent in 2007, Palakkad with a measly sum of Rs.1.07 crore by way of bank-linked credit in 2003 rose to 36.55 crore or over 36 times and accounts for 9 per cent of the total bank linked credit in January 2007.

56

Table 5.3 District-wise Trend in Linkage Banking
(Rs. In Lakhs)

Dec-03
District Thiruvananthapuram Kollam Pathanamthitta Alappuzha Kottayam Idukki Ernakulam Thrissur Palakkad Malappuram Kozhikode Wayanad Kannur Kasargod Total No of NHG's 1499 1912 894 2363 1104 1400 1581 1875 1161 537 1394 2173 1432 1824 21149 Loan disbursed 365.91 926.55 176.67 719.33 280.92 431.30 325.25 734.62 107.18 604.41 442.14 629.80 381.54 229.09 6354.71 % Loan / Dist 5.76 14.58 2.78 11.32 4.42 6.79 5.12 11.56 1.69 9.51 6.96 9.91 6.00 3.61 100.00 7.87 11.58 4.96 13.51 3.96 7.35 5.63 8.40 7.76 5.01 6.02 11.08 4.30 2.58 100.00 No of NHG's 2501 3489 1076 4598 2798 1865 4415 4283 1370 2536 2555 3520 2262 2409 39677 8983 7526 2429 9241 3366 3927 5873 5269 9824 4360 5377 5950 4106 2449 78680

Nov-04
Loan disbursed 638.71 1776.31 471.33 1530.06 673 578.21 922.22 2067.31 268.15 1032.08 728.16 1282.08 712 323.07 13002.69 % Loan / Dist 4.91 13.66 3.62 11.77 5.18 4.45 7.09 15.90 2.06 7.94 5.60 9.86 5.48 2.48 100.00 8.63 12.59 5.93 11.57 5.35 6.91 5.31 6.31 9.00 4.30 6.87 10.02 4.76 2.46 100.00

Nov-05
Thiruvananthapuram 6351 2245.76 Kollam 5626 3304.77 Pathanamthitta 1957 1415.77 Alappuzha 8414 3856.81 Kottayam 3364 1130.09 Idukki 3260 2097.69 Ernakulam 6830 1605.68 Thrissur 4847 2396.71 Palakkad 6179 2216.42 Malappuram 3766 1429.93 Kozhikode 4287 1717.62 Wayanad 6050 3163.24 Kannur 3410 1226.47 Kasargod 2021 736.92 Total 66362 28543.88 Source: Economic Review various years

Jan-07
3508.79 5117.08 2409.87 4702.88 2172.27 2807.06 2156.96 2566.04 3655.55 1745.65 2790.63 4070.78 1932.38 1000.75 40636.69

5.2
5.2.1

The Micro Scenario
Being ‘tiny’ savers the possibility of KDS households taking to a wide range of portfolio options is out of question. Only 26 per cent (1790 households out of 6916) reportedly resort to savings options outside their thrift and

57

credit societies. The pattern of portfolio choice is shown in Table 5.4 which shows that there is not much difference as between the rural and urban areas except that urban households have a higher proportion (46.5%) of insurance protection or contractual savings. A significant proportion of households take to post office savings in both the rural and urban areas (27 per cent). Chit fund also occupy a dominant position in the portfolio of the KDS clients.

Table 5.4 Portfolio pattern of Households not depending solely on Thrift and Credits
Post office
Rural % To Total Urban % To Total Total % To total 468 27.02 16 27.59 484 27.04

Chit fund
324 18.71 10 17.24 334 18.66

Insurance
680 39.26 27 46.55 707 39.50

Others
49 2.83 0 0.00 49 2.74

More than one
211 12.18 5 8.62 216 12.07

All
1732 100.00 58 100.00 1790 100.00

5.2.2

Another noteworthy aspect is that despite the mushrooming of nonKudumbashree micro-finance institutions, KDS members seem to hold on to them loyally. Only 8-9 per cent of KDS members are members of other caste/communal and NGO self help groups that are fast growing in the state. It may be that many may not have reported truthfully. The impression that we gathered from discussions with officials lead us to believe that this is a case of underreporting. The KDS charge officer in Chirayinkizh gram panchayat even issued a strongly worded circular (No.1/07-CDS) against dual/multiple membership. Discussions with the officer have shown that such circulars had no effect. The Mission surely, has to take serious note of this. Divided loyalties can be counter productive because the Mission has wider social goals than simple micro credit. More over NHGs of KDS are conceived as a subset of the local government. The easy facility of borrowing from one and repaying to another and seeking to make the best out of differential interest rates can not be in the interests of building a viable micro finance foundation.

5.3
5.3.1

Purpose of loans and debt liabilities
Only 5810, out of the 6916 households surveyed or 84 per cent have reportedly borrowed money. May be for the rest who do not borrow it becomes a place of prudential regular savings. Quite often it is alleged that

58

the poor and the not-so-poor indulge in reckless spending. Table 5.5 which shows the purpose-wise distribution of loans taken by KDS members, broken into phases and rural and urban categories proves this allegation wrong. The proportion spent on daily needs among the rural categories is as low as 7.86 per cent for Phase I, highland families and the highest in 25.73 per cent for Phase III coastal areas. In urban areas daily consumption needs (31.56 per cent) account for the single largest item with housing coming as a close second. Except the highland NHG members, in all phases in all rural and urban areas, housing by and large occupies the highest proportion. This is followed by working capital for micro enterprises. Festivities do not figure prominently. Invariably in all cases education and medical expenses are important items and along with housing account for over 50 per cent of the expenditure. The poor and the not-so-poor recourse to prudential spending. That poor households borrow for education and health care is a healthy sign because capability deprivation is the hall-mark of poverty.

Table 5.5 Purpose-wise distribution of loans availed: A Phase / Region- wise breakup Phase I
Purpose Daily needs Education Medical expenses Housing Marriage
Income generating purpose

Redemption of loan Festivities Others All Purpose Daily needs Education Medical expenses Housing Marriage
Income generating purpose

Coastal 33 15.21 31 14.29 11 5.07 62 28.57 20 9.22 34 15.67 22 10.14 0 0.00 4 1.84 217 100 Coastal 34 14.53 32 13.68 25 10.68 84 35.90 27 11.54 17 7.26 9 3.85 0.00 6 2.56 234 100

Mid Land 85 11.90 81 11.34 89 12.46 240 33.61 78 10.92 75 10.50 43 6.02 2 0.28 21 2.94 714 100

High Land 69 7.86 123 14.01 113 12.87 191 21.75 68 7.74 241 27.45 38 4.33 0 0.00 35 3.99 878 100 High Land 155 13.10 179 15.13 229 19.36 169 14.29 76 6.42 256 21.64 67 5.66 3 0.25 49 4.14 1183 100

Total 187 10.34 235 12.99 213 11.77 493 27.25 166 9.18 350 19.35 103 5.69 2 0.11 60 3.32 1809 100 Total 342 14.33 353 14.79 367 15.38 531 22.25 174 7.29 404 16.93 118 4.95 4 0.17 93 3.90 2386 100

Phase II
Mid Land 153 15.79 142 14.65 113 11.66 278 28.69 71 7.33 131 13.52 42 4.33 1 0.10 38 3.92 969 100

Redemption of loan Festivities Others All

59

Phase III
Daily needs Education Medical expenses Housing Marriage
Income generating purpose

Redemption of loan Festivities Others All Purpose Daily needs Education Medical expenses Housing Marriage
Income generating purpose

79 57 31 75 19 21 18 0 7 307

25.73 18.57 10.10 24.43 6.19 6.84 5.86 0.00 2.28 100

110 101 75 133 45 102 29 1 8 604

18.21 16.72 12.42 22.02 7.45 16.89 4.80 0.17 1.32 100

62 55 60 55 27 91 13 1 20 384

16.15 14.32 15.63 14.32 7.03 23.70 3.39 0.26 5.21 100

251 213 166 263 91 214 60 2 35 1295

19.38 16.45 12.82 20.31 7.03 16.53 4.63 0.15 2.70 100

Urban
101 23 29 96 36 16 7 0 12 320 31.56 7.19 9.06 30.00 11.25 5.00 2.19 0.00 3.75 100 881 824 775 1383 467 984 288 8 200 5810

All
15.16 14.18 13.34 23.80 8.04 16.94 4.96 0.14 3.44 100

Redemption of loan Festivities Others All

Figures in Italics are percentages 5.3.2 It is important to find out the magnitude of the debt liabilities of the KDS members. How much are they borrowing from sources other than Thrift and Credit Societies and Banks? Do non-institutional sources constitute an important component? What is the order of magnitude of the debt liabilities? Are the interest charged by TCS/Banks very high as to discourage borrowing? Tables 5.6, 5.6(a) and Appendix 5.A and 5B are expected to provide answers to these questions. These Tables show that in terms of numbers the majority of the members borrow from T&CSs followed by cooperatives and banks. While the average debt liability of Thrift and Credit society loan is as low as Rs.4023 for all categories and ranges from Rs.2093 for coastal phase III, to Rs.5106 for coastal phase 1 in rural areas, in regard to banks, the average debt liability is as high as Rs. 47345 and Rs.31451 with cooperative societies and ranges from Rs.36858 for high land, Phase II to Rs. 69285 to coastal Phase II and that of cooperative, from Rs.18341 for midlands Phase II to Rs.52124 for midlands (Phase I). The average debt from all sources works out to Rs.19236 and ranges from Rs.14566 in highlands (Phase II) to Rs.28927 (Phase II) in the coastal regions. The disturbing existence of the liabilities to non-institutional providers is a serious threat to the sustainability of the indebted families. It may well be 60

that the KDS loan is repaid by incurring liabilities from institutional agencies. Indebtedness is on the high side because the average amount of cash loans per household (cultivator and non-cultivators households) as reported in the 59th NSS round as on 30.6.02 for rural Kerala is only Rs.19663 [See Government of India (2005)]. It is important that noninstitutional agencies are not a dominant presence except that of moneylenders in certain urban areas. Non-institutional sources account for about 20 per cent which roughly corresponds to the 18.7 per cent of NSS 59th round [See Government of India (2005)]. The indebtedness of the poor is very high. There is visible divergence between the average savings and average debt liability of the members. 5.3.3 In Appendix 5B we give a Table that gives a district-wise percentage distribution of secretaries according to their opinion on the rate of interest charged by banks. Only a little over 5.4 per cent consider the rate of interest ‘very high’, with a range from zero in most districts to 18.8 per cent in the tribal district of Wayanad. Although Kozhikode and Kannur secretaries do not consider the rate of interest as ‘very high’, 54.5 per cent of those reported in Kannur and 50 per cent in Kozhikode reported it as ‘high’. Even so it is interesting to note that over 44 per cent in Kollam and 30 per cent in Kannur with an all-district average of 19.5 per cent consider the interest on borrowing as low. In all probability this is reflective of the usurious rates prevailing in alternative sources.

Table 5.6 Distribution of members who availed loans by source Phase I
Source Private Money lenders Friends / Relatives T & CS of KDS Co-operative Banks Others All Private Money lenders Friends / Relatives T & CS of KDS Co-operative Banks Others All Coastal 3.7 8 0.9 2 51.2 111 9.7 21 21.2 46 13.4 29 100.0 217 10 22 99 45 43 15 234 4.3 9.4 42.3 19.2 18.4 6.4 100.0 Midland 7.3 52 2.5 18 50.3 359 13.0 93 22.1 158 4.8 34 100.0 714 High Land 6.0 53 4.3 38 44.4 390 18.2 160 24.3 213 2.7 24 100.0 878 74 84 654 85 243 43 1183 6.3 7.1 55.3 7.2 20.5 3.6 100.0 All 113 58 860 274 417 87 1809 180 143 1218 282 468 95 2386 6.2 3.2 47.5 15.1 23.1 4.8 100.0 7.5 6.0 51.0 11.8 19.6 4.0 100.0

Phase II
96 37 465 152 182 37 969 9.9 3.8 48.0 15.7 18.8 3.8 100.0

61

Phase III
Private Money lenders Friends / Relatives T & CS of KDS Co-operative Banks Others All 19 17 174 43 42 12 307 6.2 5.5 56.7 14.0 13.7 3.9 100.0 56 10 328 97 100 13 604 9.3 1.7 54.3 16.1 16.6 2.2 100.0 33 32 184 46 79 10 384 8.6 8.3 47.9 12.0 20.6 2.6 100.0 108 59 686 186 221 35 1295 8.3 4.6 53.0 14.4 17.1 2.7 100.0

Urban
Private Money lenders Friends / Relatives T & CS of KDS Co-operative Banks Others All 65 9 133 16 93 4 320 20.3 2.8 41.6 5.0 29.1 1.3 100.0 466 269 2897 758 1199 221 5810

Total
8.0 4.6 49.9 13.0 20.6 3.8 100.0

Table 5.6(a) Source-wise and region-wise break-up of debt liability at the end of June 2006 Phase I
Source Private Money lenders Friends / Relatives T & CS of KDS Co-operative Banks Others All Private Money lenders Friends / Relatives T & CS of KDS Co-operative Banks Others All Private Money lenders Friends / Relatives T & CS of KDS Co-operative Coastal 1.10 41000 0.21 8000 566788 15.16 743201 19.88 2219100 59.35 4.31 161130 3739218 100.0 122500 675000 246203 1678001 2979251 1068000 6768954 334700 319000 364130 1142858 1.81 9.97 3.64 24.79 44.01 15.78 100.0 7.48 7.13 8.14 25.55 Midland 7.44 1224402 3.79 624001 7.91 1302560 29.46 4847597 44.09 7255802 7.31 1203165 16457527 100.0 High Land 5.31 973801 4.32 792201 2141802 11.68 3880496 21.16 9776104 53.32 4.20 771000 18335404 100.0 897450 1253524 2853271 2298103 8956518 973271
17232136

All 2239212 1424206 4011173 9471343 19251109 2135306 38532349 2464509 2983090 5065972 9060946 22788668 3400491 45763677 1447716 1443309 2045032 4689499

5.81 3.70 10.41 24.58 49.96 5.54 100.0 5.39 6.52 11.07 19.80 49.80 7.43 100.0 6.72 6.70 9.49 21.76

Phase II
1444550 1054552 1966485 5084795
10852806

1359199
21762387

6.64 4.85 9.04 23.37 49.87 6.25 100.0 7.26 1.16 9.10 19.14

5.21 7.27 16.56 13.34 51.98 5.65 100.0 5.63 13.06 10.74 22.72

Phase III
675002 108000 845617 1779096 437999 1016301 835268 1767499

62

Banks Others All Private Money lenders Friends / Relatives T & CS of KDS Co-operative Banks Others All

1713302 599056 4473046

38.30 13.39 100.0

5474200 415500 9297414

58.88 4.47 100.0

3323601 399100 7779768

42.72 5.13 100.0

10511200 1413673 21550428 5.70 5.46 10.43 21.33 50.79 6.29 100.0

48.77 6.56 100.0

Urban
215300 255156 533835 618000 4215997 75000 5913288 3.64 4.31 9.03 10.45 71.30 1.27 100.0 6366736 6105761 11656012 23839788 56766975 7024471 111759742

Total

5.4

To conclude, KDS with over Rs. 800 crore of savings and over Rs.1900 crore of loans, is emerging as a major micro finance institution in the country. It has turned out to be a unique non-banking intermediary catering for the poor. The Thrift and Credit Societies have made and continue to make a significant contribution to both the savings and borrowings of the poor. Contrary to popular notion our study shows that KDS has a good track record of prudential management of micro credit. Even so, the yawing mismatch between the mounting debt liabilities and their saving assets is likely to pose a serious threat in the years to come.

63

Appendix 5.A Average debt liability – By Source of debt Phase 1
Source Private Money lenders Friends / Relatives T & CS of Kudumbashree Co-operative Banks Others All Private Money lenders Friends / Relatives T & CS of Kudumbashree Co-operative Banks Others All Private Money lenders Friends / Relatives T & CS of Kudumbashree Co-operative Banks Others All Coastal 5125.0 4000.0 5106.2 35390.5 48241.3 5556.2 17231.4 12250.0 30681.8 2486.9 37288.9 69284.9 71200.0 28927.1 17615.8 18764.7 2092.7 26578.1 40792.9 49921.3 14570.2 Midland 23546.2 34666.7 3628.3 52124.7 45922.8 35387.2 23149.8 15047.4 28501.4 4229.0 33452.6 59630.8 36735.1 22458.6 12053.6 10800.0 2578.1 18341.2 54742.0 31961.5 15393.1 High Land 18373.6 20847.4 5491.8 24253.1 45897.2 32125.0 20883.1 12127.7 14922.9 4362.8 27036.5 36858.1 22634.2 14566.5 13272.7 31759.4 4539.5 38423.9 42070.9 39910.0 20259.8 All 19815.9 24555.2 4664.1 34566.8 46165.5 24543.6 21300.2 13691.7 20860.6 4159.2 32130.9 48693.5 35794.4 19180.0 13404.6 24462.7 2981.1 25212.2 47561.5 40390.1 16641.1

Phase II

Phase III

Urban
Private Money lenders Friends / Relatives T & CS of Kudumbashree Co-operative Banks Others All 3312.3 28350.7 4013.8 38625.0 45333.3 18750.0 18479.0

Total
13662.4 22697.9 4023.4 31450.7 47345.0 31784.7 19235.6

64

Appendix 5B District-wise percentage distribution of Secretaries according to opinion on the rate of interest charged by banks on loans
District Alappuzha Ernakulam Idukki Kannur Kollam Kozhikode Wayanad All Opinion on the rate of interest charged (No ) Very high High Medium Low 0 9.6 80.8 9.6 14.3 21.4 51.0 13.3 0.0 24.0 72.0 4.0 0 54.5 15.2 30.3 2.5 34.6 18.5 44.4 0 50.0 50.0 0.0 18.8 31.3 43.8 6.3 5.4 26.1 49.0 19.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

65

CHAPTER 6 LOCAL GOVERNMENTS, KUDUMBASHREE AND CONVERGENCE
6.1 Poverty as well as development quintessentially are holistic concepts. Even so development administration and anti-poverty programmes as evolved and implemented in the country as well as in the Kerala state have been pursuing a sectoral and fragmented approach. Each line department sees development like the proverbial blind men’s vision and understanding of an elephant. Kudumbashree mission although one may not see the concept of convergence in its every day policy parlance and practice the institution is grounded on a holistic approach in its anti-poverty efforts. Kudumbashree Mission officials formed with officials drawn from 19 departments enabled convergence in a big way. As many as 27 departments have tried to work through the panchayat system. As a subsystem of local government KDS is expected to promote and practice convergence. This chapter examines briefly the way convergence has been practised by the Kudumbashree which has been evolving as an integral part of the local government. The convergence approach has a history which goes as far back as the UBSP. We have already noted how KDS evolved out of UBSP and the CBO it promoted. {See Chapter 1 See also Oommen (1999)]. The UBSP Guidelines 1990 says: “Wherever resources are available under the schemes of other government departments these are to be converged and pooled with the resources available under this programme with a view to providing an integrated package of physical and social amenities to the urban poor”. Kudumbashree extended this basic principle to the rural local bodies. Actually the first project note on the poverty eradication mission (the name ‘Kudumbashree’ came later) prepared in early 1997 by NABARD and the Local Administration Department of the Government of Kerala conceived the Mission as a convergence project through the three-tiered community development society (CDS), which is a CBO. To quote from the Report for the first phase covering 1997-2002: “Many ongoing programmes implemented by various government departments and agencies targeted at poor can be implemented through the CDS. The CDS would function as an extended arm of the government and local bodies in implementation of the programmes. Social welfare programmes directed at poor in the areas of education, literacy, health, human resource development, empowerment of women, skill upgradation, vocational training, fight against social evils, 66

6.1.1

environmental improvement and such other areas could be implemented through the CDS system”. Indeed, a total approach to poverty eradication is what is envisaged. The Report expected the convergence programme to benefit all the 1.5 million poor families (estimated) ‘with every family benefiting from at least 8 to 9 convergence programmes’. These are ideally well targeted, but the relevant question is how much of it could be carried out in practice. 6.1.2 The inauguration of the devolution of nearly one-third of state plan outlay to the local bodies as a grant on the basis of a comprehensive methodology of participatory planning has added a new dimension to the concept of convergence. Technically the devolution of defined functions, with finance and functionaries to the local governments sets the necessary condition for a proper convergence of activities at the local level. The effectiveness of convergence depends on the quality of decentralized planning and the orientation of the technical and bureaucratic personnel at the local level towards concerted planning and implementation. Actually the officers and technical personnel long used to receiving orders from above now have the onerous task of studying local development issues and seeking solution or get actively involved in the process. Surely capacity-building and reorientation of attitudes are important. Not much however have happened in practice. Treating KDS as a sub-system of the local governments may mean that these CDSs are not independent CBOs. The tasks the NHGs have to shoulder have kept on increasing. KDS is not only directly involved in the business of antipoverty programmes, they are equally well associated with the women component plan, micro enterprise, activities related to health, sanitation, education, natural resource management, tourism and so on, besides being entrusted with the task of mobilisation of people for gram sabha meeting or even for certain political mobilisation. The Women Component Plan (WCP) for which 10 per cent of the plan outlay is earmarked is largely managed by the women members of the three tier system. They are associated with all the employment programmes as well as the recent flagship programme of National Rural Employment Guarantee Programme (NREGP). Thus KDS has become the focal point of every development activity at the cutting edge level. We do not think that the information relating to the query: ‘mention the areas you are actively associated in your engagement with the local bodies’, sought from NHG secretaries could reflect a picture of convergence. However, we report the responses in (Table 6.1).

6.1.3

67

Table 6.1 Distribution of NHGs according to participation in various activities
Activities Health awareness Campaign Immunisation Medical Camps Cleaning Environment Others Multiple Response All No. of NHG’s Participated 110 71 20 228 35 330 794 % to Total 13.85 8.94 2.52 28.72 4.41 41.56 100.00

6.1.4

It is clear from Table 6.1 that environmental sanitation and health-related activities have been the major component. The item multiple response is indicative of the innumerable activities in which NHG office bearers and members are involved. This Table however does not seem to have captured the wider coverage to which the NHG members get involved.

6.2 Local Government, Kudumbashree and the Plan
6.2.1 In Kerala’s decentralization regime, the CDS is treated as the community wing of the local bodies. The UBSP assumed that convergence of inputs and services of various departments and agencies for poverty eradication can be made possible as each department or agency can use the CDS system as its sub-system. This did not meet with much success in practice. The decision to devolve one-third of state plan to local bodies and the reemergence of CDS in Kudumbashree Mission since 1998 added a new dimension to convergence efforts under the local governments. What started out as a trial and error experimentation in decentralization during the 9th plan in Kerala was sought to be institutionalized during the 10th plan and currently in the 11th plan.

68

Fig 6.1

UDUMBASHREE DECENTRALISED PLANNING AND KUDUMBASHREE: A STYLISED PRESENTATION
Working Groups (Participation)
Watershed Manage ment, Agriculture

Local Economic Development, Other than Agriculture

Education, Culture, Sports

Poverty Reduction

Development of Women & Children

Development of Schedule Caste Caste

Kudumbashree
Situation Analysis. Primary & Secondary Survey Stake Holders Consultations (ADS) Environment Creation (Participation) Facilitation (participation) (participation)

Panchayat/Municipality Meeting (Policy Decision) Gram Sabha/Ward Sabha Meeting: Felt Need Assessment/ Determination of priorities Working Group Preparation of Development Reports/Draft Plan Development Seminar
Working Group Projectisation, Panchayat/Municipality finalization & approval

Vetting of Plans by Technical Advisory Groups Approval of Plan by DPC

69

Development of Schedule Tribe

Water Supply & Sanitation

Social Security

Infrastructure

Governance

Energy

Health

6.2.2

Fig 6.1 presents a stylized picture of decentralized planning as is done or directed to be performed in the state. This is presented to highlight the key role played by Kudumbashree in the formulation of the five year plans. It could be seen that working groups play the critical role in plan formulation. Significantly enough the only agency that is represented in all the 13 working groups is the Kudumbashree. In three of them viz. poverty reduction, development of scheduled castes and tribes, and development of women and children there are two representatives each from Kudumbashree. In theory at least the Kudumbashree has been assigned a prominent role in plan formulation as well. The major burden of implementation of several programmes also now falls on the shoulders of the Kudumbashree. Based on the 11th plan guidelines [G.O (MS) 128/07/LSGD dated 14/05/07] Kudumbashree Mission prepared a set of detailed instructions in Malayalam clearly indicating the role of Kudumbashree functionaries in the various working groups and how co-ordination of different programmes is to be done. To cite one example, regarding local economic development, the role of Kudumbashree at panchayat level is mentioned as follows: (i) The services of investigators who were engaged in the study of the working of micro enterprises should be made available to the concerned working group. The leaders of the micro enterprises which are working successfully should be associated with the activities of the working group. The working group should be appraised of the reason for the success and failure of enterprises. The working group should utilize the experiences of CDS and ADS members who played a key role in the organization of these enterprises.

6.2.3

(ii)

(iii) (iv)

6.2.4

It is clear that in building the data, in monitoring and evaluating the micro enterprises, the KDS, CBO has an important role to play. Also the details regarding the role of Kudumbashree functionaries in the development seminar given in the guidelines show the importance given to the Kudumbashree CBOs. The guidelines also stipulate that Kudumbashree shall prepare project reports based on the recommendations of the development seminar. Guidelines also insist that employment generation programmes of various departments like agriculture, animal husbandry, industries, SC & ST should be linked with the plan programmes prepared

70

by the panchayat. But the moot question is whether these CBOs are eminently equipped to carry out these important tasks. 6.2.5 The institutionalization of the planning process and the involvement of the Kudumbashree’s CBO structure in the planning process have enhanced the quality of people’s participation. Our enquiries at the gram panchayat level show that although the routine procedures are not strictly followed, Kudumbashree’s involvement has been substantial. Whether they are qualified and properly equipped is a doubtful question. Our field investigation has shown that about 38 per cent of the secretaries have not received any training at all. This is a serious failure because the Kudumbashree functionaries are generally a deprived set of people and they need special skills in project preparation, plan formulation, and the like, besides the entrepreneurial and management skills needed by the micro enterprises they may identify for productive investment. Training programmes are now organized by Kudumbashree mission at state level, district level and at NHG level. State level training programmes are meant for panchayat presidents, Vice president/Chairperson of Women Task Force and Key Resource persons of Gram Panchayats. The district level training is intended for SHG leaders, voluntary organizations, youth clubs, panchayat members etc. The training programmes at NHG level are meant for its members and office bearers. The general focuss has been on the procedures to be observed in thrift and credit operations of SHGs. The nature and maintenance of minutes books, pass books and account books are dealt in detail in the training programmes. The course contents of this training programmes also include building up of leadership/ communication skills and education regarding poverty and its manifestation. But as per the information available, it is doubtful whether any specific training programme is envisaged for the preparation of project reports based on local resource endowments. Also for running micro enterprises its organization, execution and marketing of products etc – no effective programme is being organized by the Kudumbashree mission. [See Section 8 under Chapter 8]. Though the plan guidelines mention about a convergence workshop, most panchayats in our enquiry have not convened that. However, it is important to note that combined working group meetings are generally held by presidents for facilitating integration of various departmental programmes. Probably the best performance is noted in all cases where Ashraya programmes are formulated and implemented. The identification of destitutes as well as in the preparation of projects for rehabilitation of

6.2.6

6.2.7

71

these families, one may say the NHGs have acquitted creditably. Every step is discussed with the approval of the ADS and CDS general bodies. It is also important that several other initiatives such as Jagrata Samiti12, Haritha Mitram13 and the like by and large have been working well. The quality of outcome of such initiatives differs from panchayat to panchayat. 6.2.8 Ideally, the Kudumbashree formulated as an interdepartmental initiative has to address the multiple causes and consequences of poverty in a coherent fashion. With all their best efforts Kudumbashree for all practical purposes has become an agency of the local government. In multiplying the responsibilities for formulation of projects and implementing them, the burden on poor women who already have their routine domestic chores to attend to has only increased. How far are the poor women folk autonomous bodies with a will and individuality of their own? The answer leaves many things to be desired. How the CBO can be made more autonomous yet made more effective in decentralisation is an issue that remains to be addressed? A frank and open dialogue with the CBO, bureaucracy and political parties may be a useful first step.

12 This samiti in the Karakulam Gram panchayat consisting of the gram panchayat president, the chairperson of the CDS, women members of panchayats, a women advocate, the circle inspector, a doctor and important local women activists have done excellent services in attending to and alleviating the complaints of women. 13 The Harita Mithram is yet another successful initiative of the panchayat to help NHG members to undertake income earning agricultural operations.

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CHAPTER 7 KUDUMBASHREE AND WOMEN EMPOWERMENT
7.1 Empowerment is an oft-used concept in development literature particularly with reference to women. The term ‘Women’s empowerment’ has come to be associated with women’s struggle for social justice and equality. Generally it is used to describe a process wherein the powerless or disempowered gain a greater share of control over resources14, decisionmaking and acquire greater social mobility, social space and dignity. Avowedly a ‘Women-oriented poverty alleviation programme’, empowerment of women is one of the major objectives of the Kudumbashree. Poor women are the means as well as the end of this programme. Although the concept of empowerment is nowhere defined officially to use as a reference point, we try to measure empowerment from five major angles: Organisational Empowerment Economic Empowerment Knowledge Empowerment Leadership Empowerment and Social Capital 7.2 First we present the overall picture based on the first four variables and then proceed to give more details under each item. Besides that we use the controversial concept of social capital as a convenient tool to highlight certain aspects relating to empowerment. Although we use some of the conceptual categories of Putnam (1993, 1995) and World Bank (2001) we eschew their narrow perspective and view social capital more comprehensively and includes the social and political environment that enables norms and values to influence and shape social structures. The households covered in the field investigation comprise 15 per cent SC/ST categories and 47 per cent backward classes, making a total of 62 per cent. Our investigation of women empowerment tries to focus on these categories in particular because they are admittedly the most disadvantaged group requiring greater empowerment.

Bina Agarwal (1994) has argued that ‘the gender gap in the ownership and control of property is the single most critical contributor to the gender gap in economic well being, social status and empowerment’ [Agarwal (1994):1455]
14

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7.3

In Table 7.1 we try to summarise the improvements as perceived by the members as regards the various types of capabilities, skills resources etc captioned under the four heads, organisational, economic, leadership and knowledge empowerments acquired by them after joining the Kudumbashree. The perceptions of the members about themselves are indeed important. Table 7.1 shows that economic empowerment has the least impressive impact15. It is distressing to note that as high as 75.6 per cent reported no improvement in assets and 59.4 per cent no improvement in income. Only less than 2 per cent said that their conditions have ‘greatly improved’. Even so we underscore the fact that 39 per cent reported fair improvement in income and 23 per cent in assets. Several studies on micro credit however, point out that income improvement is the major benefit [See Neera Burra etal (2005)]. However the reported progress in other areas of empowerment is impressive indeed. It is important that a large majority have affirmed that there has been ‘fairly’ good improvement in regard to the ability to collectively bargain (68.25%), ability to plan projects (62.5%), ability to address a group (62.2%), besides improvement in overall capabilities, (62.4%). This is to be seen along with a respectable proportion of ‘greatly improved’ households which in regard to ability to organise group activity goes as high as 32.4 per cent. Considerable progress is reported in regard to awareness of women’s rights, and gender discrimination. That more than 90 per cent women have reported ‘feeling of self confidence’ is no mean achievement. It is abundantly clear from Table 7.1 that after joining the CBO the social position of members among family members and relatives, neighbourhood and the wider community has registered impressive improvement. That about one fifth did not report any visible improvement equally affirms the fact that there is no room for complacency.

In our interactions with individual NHG members, as well as in groups, we are told that lack of adequate income is their major problem. To quote a NHG member from Vembayam Panchayat: “In this world of rising aspirations in a hierarchical society, such as ours income is the most crucial variable”.
15

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Table 7.1 Distribution of members according to type of Empowerments after joining the NHG
Not Improved Not Improved Fairly Improved Fairly Improved Greatly Improved Greatly Improved Empowerment Total % Total

%

%

Organisational Empowerment
Ability to collectively bargain for a common cause Social position among family members and relatives Social position among neighbours and other people in the community Skill / ability to plan projects Ability to organise group activity

892

12.90 4720 68.25 1304 18.85 6916 100.00

1492 21.57 3920 56.68 1504 21.75 6916 100.00 1196 17.29 4054 58.62 1666 24.09 6916 100.00 644 9.31 4327 62.57 1945 28.12 6916 100.00 796 11.51 3879 56.09 2241 32.40 6916 100.00 4111 5231 992 2836 59.44 75.64 14.34 41.01 2698 1609 5639 3495 39.01 23.26 81.54 50.53 107 76 285 585 1.55 1.10 4.12 8.46 6916 6916 6916 6916 100.00 100.00 100.00 100.00

Economic Empowerment
Income Asset holdings Savings Chance of getting bank loan

Leadership Empowerment
Address a group Feeling of self confidence Overall capabilities

1151 16.64 4299 62.16 1466 21.20 6916 100.00 714 10.32 3824 55.29 2378 34.38 6916 100.00 493 7.13 4318 62.43 2105 30.44 6916 100.00 1289 18.64 3662 52.95 1965 28.41 6916 100.00 1288 18.62 3193 46.17 2435 35.21 6916 100.00 1458 21.08 3414 49.36 2044 29.55 6916 100.00

Knowledge Empowerment
Awareness of Women’s Empowerment Awareness of Women’s rights Awareness on gender discrimination

7.4 Organisational Empowerment
7.4.1 Undoubtedly, it is the socially disadvantaged groups or castes that need greater empowerment. Table 7.2 shows the distribution of members according to select indicators of organisational empowerment by different social groups. One important inference that conspicuously stands out is that tribal groups have reported the lowest percentage in regard to ‘greatly improved’. Much different is the story of the SC or the so-called dalits who have made great improvement. It is significant that SC/ST groups have reported higher than total average ‘fairly improved’ status in regard to ability to collectively bargain for a common cause, and social position among neighbours and among the larger community. Probably it is not

%

75

wide of the mark to note here that Amartya Sen considers ‘bargaining skill’ as an important non-material capability in determining outcomes. [See Sen’s paper on ‘Gender and Cooperative conflicts in Bina Agarwal etal (2006)]. On the whole the situation is highly remarkable especially because the counter factual situation would have been much different.

Table 7.2 Distribution of members according to Organisational empowerment after joining the NHG
Not improved % Fairly improved Fairly improved % Greatly improved Not improved Greatly improved % Total Empowerment Total %

Ability to collectively bargain for a common cause 129 15.38 575 68.53 SC 43 21.08 147 72.06 ST 387 11.70 2328 70.40 BC & OBC 333 12.98 1670 65.08 General 12.90 68.25 892 4720 Total

135 14 592 563 1304

16.09 6.86 17.90 21.94 18.85

839 204 3307 2566 6916

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 76

Social position among family members and relatives 205 24.43 446 53.16 188 22.41 839 SC 74 36.27 112 54.90 18 8.82 204 ST 797 24.10 1867 56.46 643 19.44 3307 BC & OBC 416 16.21 1495 58.26 655 25.53 2566 General 56.68 21.75 1492 21.57 3920 1504 6916 Total Social position among neighbours and other people in the community 134 15.97 516 61.50 189 22.53 839 SC 50 24.51 138 67.65 16 7.84 204 ST 695 21.02 1845 55.79 767 23.19 3307 BC & OBC 317 12.35 1555 60.60 694 27.05 2566 General 58.62 24.09 4054 1666 6916 1196 17.29 Total Skill / ability to plan projects 95 11.32 516 61.50 228 27.18 839 SC 53 25.98 140 68.63 11 5.39 204 ST 262 7.92 2138 64.65 907 27.43 3307 BC & OBC 234 9.12 1533 59.74 799 31.14 2566 General 9.31 62.57 644 4327 1945 28.12 6916 Total Ability to organise group activity 135 16.09 450 53.64 254 30.27 839 SC 76 37.25 109 53.43 19 9.31 204 ST 328 9.92 1929 58.33 1050 31.75 3307 BC & OBC 257 10.02 1391 54.21 918 35.78 2566 General 11.51 56.09 6916 796 3879 2241 32.40 Total

7.4.2

In order to throw more light into the various variables of organisational empowerment we have also made an education – wise break up which is reported in Table 7.3. Not surprisingly those who report the highest percentage of ‘Not improved’ with reference to all the variables used are the ‘Illiterates’. They are also invariably the group that reported relatively lowest percentage in the ‘Greatly improved’ group be they be ability to collectively bargain, plan project or organise group activity. They are even worse when it comes to improving their social position within their neighbourhood or in the larger community. Generally speaking the Table shows that those with better schooling and education have achieved greater ‘empowerment’ compared to their peers. Even so, the most hopeful signal again is that in the “fairly improved” category, illiterates and those below primary have reported a good record in their own evaluation of progress in empowerment.

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Table 7.3 Education status -wise distribution of members according to organisational Empowerment indices after joining the NHG
Empowerments /Educational Status ability to collectively bargain for a common cause Social position among family members and relatives Social position among neighbours and other people in the community Skill / ability to plan projects Ability to organise group activity

Illiterate Literate below primary Primary SSLC Degree and above Others ALL

Not improved % Fairly improved % Greatly improved % Not improved % Fairly improved % Greatly improved % Not improved % Fairly improved % Greatly improved % Not improved % Fairly improved % Greatly improved % Not improved % Fairly improved % Greatly improved %

22.19 11.62 13.94 12.13 7.57 9.68 12.90

70.03 75.32 65.30 68.46 72.25 67.74 68.25

7.78 13.07 20.76 19.41 20.18 22.58 18.85

32.56 31.94 23.15 18.71 12.61 17.74 21.57

56.48 57.71 54.82 56.62 66.06 56.45 56.68

10.95 10.34 22.04 24.67 21.33 25.81 21.75

25.07 23.05 19.65 14.84 9.40 14.52 17.29

63.40 63.52 55.97 58.38 64.68 58.06 58.62

11.53 13.43 24.38 26.78 25.92 27.42 24.09

29.39 16.33 10.14 6.24 2.52 8.06 9.31

59.08 66.06 63.85 61.75 60.55 58.06 62.57

11.53 17.60 26.00 32.01 36.93 33.87 28.12

34.01 21.23 13.47 6.99 3.90 9.68 11.51

52.45 55.35 56.27 56.84 54.13 51.61 56.09

13.54 23.41 30.26 36.17 41.97 38.71 32.40

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7.5
7.5.1

Economic Empowerment
We have seen in Table 7.1 that in regard to income and asset holding the progress record is very poor. In Table 7.4 we try to examine whether there is any marked difference when we disaggregate the income and savings variables into rural (with phase – wise break-up) urban categories. Invariably there is a very high reported response in regard to savings under the ‘fairly improved’ group. This as we have already noted is not the result of additional income generated, but out of compulsions to save (thrift) to repay the loans taken or to enable oneself to be eligible for loan. The Table shows that income improvement is by and large static. In the rural areas as we move from Phase I to Phase III, there is a progressive improvement in the increase in income. It is important that over 96 per cent of urban groups do not report any improvement in income. This self-perception shows not only that the income of members have not significantly improved but equally also that the aspirations regarding economic improvement remain largely unrealised. To live like the Jones’s is a contagion in social Kerala.

Table 7.4 Self Perception of the Members regarding increase in Income & Savings after joining the NHG
Assets Phase / Empowerment % Distribution of members according to increase in Income after joining the NHG Not Improved % Fairly Improved % Greatly Improved % Total % Distribution of members according to increase in savings after joining the NHG Not Improved % Fairly Improved % Greatly Improved % 11.66 14.05 17.77 19.14 14.34 82.44 82.50 78.42 80.86 81.54 5.90 3.45 3.82 0.00 4.12 Total % 100.00 100.00 100.00 100.00 100.00 79

Phase I Phase II Phase III Urban All districts 7.5.2

61.75 56.87 50.73 96.47 59.44

36.77 41.37 47.74 3.02 39.01

1.47 1.76 1.53 0.50 1.55

100.00 100.00 100.00 100.00 100.00

The best way to measure empowerment is to see the economic impact on the disadvantaged social categories. Table 7.5 gives the social group-wise distribution of members reckoned in terms of increase in income, assets, savings and chance of getting bank loans. Here increase in income and assets is the crucial factor. Around 91 per cent of STs and 82 per cent of the SCs have not reported improvement in assets and in regard to income, about 82 per cent of STs and 64 per cent of backward class have also reported no progress. As we have already noted the increase in savings although important is not a sign of great improvement for the very poor. This ‘forced’ saving is a sign of poverty and can be at the expense of much needed

consumption. There is also reported progress in regard to the increase in borrowing capabilities. The chances of getting loans have ‘greatly improved’ for a relatively larger percentage and the SC/ST groups also figure there although it is the general category that shows the highest percentage (10.83%) of greatly improved.

Table 7.5 Social category-wise Distribution of members according to Economic Empowerment after joining the NHG
Empowerment

Not increased

Not increased %

Fairly increased

Fairly increased %

Greatly increased

Greatly increased %

Social category

Total 839 204 3307 2566 6916 839 204 3307 2566 6916 839 204 3307 2566 6916 839 204 3307 2566 6916

Increase in Asset holdings

SC ST BC & OBC General Total SC ST BC & OBC General Total SC ST BC & OBC General Total SC ST BC & OBC General Total

485 167 2129 1330 4111 685 186 2468 1892 5231 108 16 544 324 992 383 87 1430 936 2836

57.81 81.86 64.38 51.83 59.44 81.64 91.18 74.63 73.73 75.64 12.87 7.84 16.45 12.63 14.34 45.65 42.65 43.24 36.48 41.01

342 36 1136 1184 2698 149 18 803 639 1609 706 185 2647 2101 5639 402 103 1638 1352 3495

40.76 17.65 34.35 46.14 39.01 17.76 8.82 24.28 24.90 23.26 84.15 90.69 80.04 81.88 81.54 47.91 50.49 49.53 52.69 50.53

12 1 42 52 107 5 0 36 35 76 25 3 116 141 285 54 14 239 278 585

1.43 0.49 1.27 2.03 1.55 0.60 0.00 1.09 1.36 1.10 2.98 1.47 3.51 5.49 4.12 6.44 6.86 7.23 10.83 8.46

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Chance of getting bank loan

7.6 Knowledge and Leadership Empowerment
7.6.1 In Tables 7.6 and 7.7 we present the social category-wise break-up of the improvement in knowledge and leadership empowerment. Knowledge empowerment is measured in terms of three simple variables viz. awareness in regard to women empowerment, women’s rights and the practice of gender discrimination. Significantly and interestingly it is the ST categories that have recorded fairly better improvement in regard to all the three variables and responded better than even ‘general’ categories. Even so, it is important to note that it is the SC groups that reported the highest (much above the general average) ‘Not improved’ percentage. When it comes to ‘greatly improved’, it 80

Increase in Savings

Increase in Income

Total %

is the backward class and ‘general’ categories that have reported higher percentages.

Table 7.6 Social category-wise Distribution of members according to Knowledge Empowerment after joining the NHG
Not improved Not improved % Fairly improved Fairly improved % Greatly improved
Awareness of Awareness of Awareness of Empowergender women’s women’s ment discrimination empowerment rights

Greatly improved %

Social category

Total 839 204 3307 2566 6916 839 204 3307 2566 6916 839 204 3307 2566 6916 Total 839 204 3307 2566 6916 839 204 3307 2566 6916 839 204 3307 2566 6916

SC ST BC & OBC General Total SC ST BC & OBC General Total SC ST BC & OBC General Total

232 53 558 446 1289 239 49 564 436 1288 245 51 646 516 1458

27.65 25.98 16.87 17.38 18.64 28.49 24.02 17.05 16.99 18.62 29.20 25.00 19.53 20.11 21.08

398 133 1789 1342 3662 367 136 1505 1185 3193 383 136 1619 1276 3414

47.44 65.20 54.10 52.30 52.95 43.74 66.67 45.51 46.18 46.17 45.65 66.67 48.96 49.73 49.36

209 18 960 778 1965 233 19 1238 945 2435 211 17 1042 774 2044

24.91 8.82 29.03 30.32 28.41 27.77 9.31 37.44 36.83 35.21 25.15 8.33 31.51 30.16 29.55

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Table 7.7 Social category-wise Distribution of members according to leadership Empowerment after joining the NHG
Empowerm ent

Greatly Improved %

Not Improved

Not Improved %

Fairly Improved

Fairly Improved %

Greatly Improved

Social category SC ST BC & OBC General Total SC ST BC & OBC General Total SC ST BC & OBC General Total

150 45 609 347 1151 110 32 360 212 714 57 24 275 137 493

17.88 22.06 18.42 13.52 16.64 13.11 15.69 10.89 8.26 10.32 6.79 11.76 8.32 5.34 7.13

524 142 2018 1615 4299 482 150 1853 1339 3824 551 165 2030 1572 4318

62.46 69.61 61.02 62.94 62.16 57.45 73.53 56.03 52.18 55.29 65.67 80.88 61.38 61.26 62.43

165 17 680 604 1466 247 22 1094 1015 2378 231 15 1002 857 2105

19.67 8.33 20.56 23.54 21.20 29.44 10.78 33.08 39.56 34.38 27.53 7.35 30.30 33.40 30.44

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Overall Feeling of selfCapabilities confidence

Ability to address a group

Total %

Total %

81

7.6.2

In Appendix 7A we try to probe more in regard to knowledge empowerment by asking the progress regarding discussion of public issues, improvement in regard to reading habits and about training that they received. Consistent with the socio-political tradition of Kerala, the proportion of the members discussing public issues is very high. Even formal illiterates are no exception. There is significant improvement in developing reading habits which range from 32.8 per cent for illiterates to about 82 per cent for those with SSLC qualifications. The most disturbing aspect, however, is that the majority have not received any training. Those who have not received training range from 69 per cent for those with degree and above to 89.34 per cent for illiterates. Probably it is the latter who ought to have been subjected to more training, because they deserve empowerment more than others. Leadership empowerment is sought to be captured in terms of ability to address a group, feeling of self-confidence and improvement in overall capabilities. Here again it is the STs who have responded well reckoned in terms of fairly improved and it is significant that 81 per cent of them reported increase in overall capabilities, 73 per cent in self-confidence and 70 per cent ability to address a group. Starting from a low base, they have responded remarkable progress and occupy the highest percentage in the ‘fairly improved’ panel compared to all others including the SCs. Definitely the Kudumbashree has played a significant empowering role. Although it may not be strictly relevant to the empowerment of women, we have collected information whether harassment against women has increased or not. Table 7.8 gives the education – wise distribution of members according to atrocities/ harassment after joining NHGs. There is only a marginal reduction and that too for a negligible minority. For the overwhelming majority (the percentage ranges from 86.9 per cent among Degree holders and above 93 per cent as regards illiterate members) the situation remained the same. Educational qualifications do not seem to be a mitigating factor to change the discriminatory practices towards women. It is not wide of the mark to note here that as per the reports of the Crime Records Bureau, the number of atrocities committed against women have increased from 3313 in 1995 to 8087 in 2005, more than 2.4 times increase in a decade. It is satisfying that for Kudumbashree members the overall increase reported has been as low as 0.26 per cent.

7.6.3

7.6.4

82

Table 7.8 Education-wise Distribution of members according to harassment after joining NHG
Educational Status Illiterate Literate below primary Primary SSLC Degree and above Others ALL Educational Status
Illiterate Literate below primary Primary SSLC Degree and above Others ALL

Decreased to a great
extent

%
2.02 2.36 3.07 2.96 4.36 4.84 3.01

Decreased to some extent 14 30 176 205 27 3 455 Increased to a greater extent
1 1 5 10 1 0 18

%
4.03 5.44 7.50 6.46 6.19 4.84 6.58

Remained the sane 323 501 2043 2805 379 54 6105
Total 347 551 2346 3174 436 62 6916

%
93.08 90.93 87.08 88.37 86.93 87.10 88.27

7 13 72 94 19 3 208 Increased to some extent
2 6 50 60 10 2 130

%
0.58 1.09 2.13 1.89 2.29 3.23 1.88

%
0.29 0.18 0.21 0.32 0.23 0.00 0.26

%
100.00 100.00 100.00 100.00 100.00 100.00 100.00

7.7 Social Capital
7.7.1 Social Capital16 is a term very much in currency in development discourse in recent times. Robert Putnam (1993, 1995) who pioneered and popularised the concept defines it as a resource that characterises societies and refers to such features of social organisation like trust, norms and net works that can help to improve the efficiency of society by facilitating coordinated actions. Putnam (1995) distinguishes between two types of social capital: bonding social capital which refers to the norms that bind a group together and bridging social capital which refers to the relationship with heterogeneous group outside the group. Kudumbashree could be considered as having bonding social capital which refers to the connections among people who share similar demographic characteristics and goals. Bridging capital refers to the connection between heterogeneous groups. Apart from these, there are the positive vertical relations the poor people have with higher officials and others. This is referred to as linking capital. We used certain questions in our field

This term is employed more because of its frequent use in the development literature and because we thought it can help the discussion. We do not approve of World Bank’s claim that it is a ‘missing link’ in development. Not only that, we endorse the basic arguments of John Harriss (2001).
16

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investigations to gauge these relationships. Table 7.9 shows that there is remarkable improvement in social capital by way of willingness to cooperate with others and prevalence of mutual trust. In Table 7.9(a) we report the progress made in regard to select variables which represent bond and link capital viz. trust of the community in the member, cooperation with representatives of local government (LG), trust of the member in the LG, trust of the officials in the member and vice versa. It could be seen from Table 7.9(a) that not only that the trust of the community in the members has reportedly increased, cooperation with representatives of the local government, trust of members in the local government, and mutual trust of members and officials have tremendously improved. 7.7.2 As part of our field study we have asked three more questions to measure the extent of bonding, bridging and linking capital. We have asked whether there has been social, economic, political and religious cooperation of members with members of the same groups or other groups. We have summed up the findings in Appendix 7B. There is reportedly bonding and bridging cooperation besides enhanced cooperation of the poor women with the officials who traditionally kept away from them. To the question addressed to NHG secretaries (794 in total) as to whether they try to mediate in resolving conflicts within family members of their group or of that of non-members, the response was generally in the negative in regard to both cases [See Appendix 7(C)]. This shows that bonding social capital does not extend much into a bridging capital. Impressionistic or anecdotal accounts have not much place in reports based on hard facts. Even so the stories such as of a young woman who lost her earning husband leaving the burden of educating and marrying children on her, a woman who lost her only male child and whose husband is a drunkard and a woman who now lives a positive life having escaped a suicide attempt17 are among the several successful cases shared with the author. They are recorded here to show how Kudumbashree does supply significant bonding ‘social capital’ along with physical capital support. In short as a community-based organisation, the CDS of Kudumbashree is indeed a unique CBO with important social capital characteristics. Viewed from different angles and measured by multiple variables, we noted the remarkable progress in empowerment except in regard to sustained economic empowerment. That 3200 Kudumbashree CBO members contested the 2005 Local Body elections and 1408 of them won is a great sign of empowerment.

7.7.3

7.7.4

The woman who was the Chairperson of a CDS, said:.....Now I am creative and enjoy the meaning of fellowship through KDS”.
17

84

This includes 1212 gram panchayat members spread over 414 GPs [See Appendix 7D]. 7.8 To sum up, there is a direct linear association between Kudumbashree and women’s empowerment. The outcome is the result of several collective strategies. Economic empowerment is the Achilles heel of the empowerment spectrum. It is significant that the SC/STs notably the latter have ‘fairly improved’ be it ability to collectively bargain, to plan projects and to organise group activities besides improving their social position within their own groups and within the wider community. There is a strong case to promote KDS among the tribals. Somewhat unexpected finding is about economic empowerment measured in terms of improvement in assets and income. The reported increase in saving could be out of postponement of several essential consumption and asset requirements. Nearly 91 per cent STs and 82 per cent SCs have not reported any increase in income or assets. There is general improvement for borrowing capability for the majority of the poor. Even so, reckoned in terms of leadership empowerment increase in self confidence and general gender rights awareness building especially among SC/ST groups KDS have an impressive record. We also noted impressive bonding and linking social capital.

Table 7.9 Distribution of members according to improvement in Social capital
Social capital
Willingness to co-operate with others Mutual trust with members and others

Remained the same
662 476

%
9.57 6.88

Improved
6254 6440

%
90.43 93.12

Total
6916 6916

%
100.00 100.00

Table 7.9 (a) Distribution of members according to Social capital
Social capital
Trust of the community in the member Co-operation with representatives of LSGI Trust of member in the LSGI Trust of the Officials in the member Co-operation of Officials with the member

Decreased
13 31 62 26 26

%
0.19 0.45 0.90 0.38 0.38

Remained the same
1079 646 1098 1257 1164

%
15.60 9.34 15.88 18.18 16.83

Increased
5824 6239 5756 5633 5726

%
84.21 90.21 83.23 81.45 82.79

Total
6916 6916 6916 6916 6916

%
100.00 100.00 100.00 100.00 100.00

85

Appendix 7A Education Status-wise Distribution of members according to knowledge
Knowledge Empowerment
Educational

Discussed public issues Yes 289 471 1985 2804 391 56 5996 % 83.29 85.48 84.61 88.34 89.68 90.32 86.70 No 58 80 361 370 45 6 920 % 16.71 14.52 15.39 11.66 10.32 9.68 13.30
Total

Developed reading habit % 100 100 100 100 100 100 100 Yes 114 319 1631 2588 333 47 5032 % 32.85 57.89 69.52 81.54 76.38 75.81 72.76 No 233 232 715 586 103 15 1884 % 67.15 42.11 30.48 18.46 23.62 24.19 27.24
Total

Received training % 100 100 100 100 100 100 100 Yes 37 80 436 852 135 18
1558

Status Illiterate Literate below primary Primary SSLC Degree and above Others ALL

% 10.66 14.52 18.58 26.84 30.96 29.03 22.53

No 310 471 1910 2322 301 44 5358

% 89.34 85.48 81.42 73.16 69.04 70.97 77.47

Total

% 100 100 100 100 100 100 100

347 551 2346 3174 436 62 6916

347 551 2346 3174 436 62 6916

347 551 2346 3174 436 62 6916

86

Appendix 7 B Distribution of members according to Nature of Co-operation
Social capital Co-operation with Co-operation with members of other members of the same caste / religion caste/ religion /status /status group group High % Medium % Low % Total %

Social co-operation Economic co-operation Political co-operation Religious co-operation Social co-operation Economic co-operation Political co-operation Religious co-operation Social co-operation Economic co-operation Political co-operation Religious co-operation

5183 4678 2884 3746 4871 4341 2473 3112 3968 3963 2343 2420

74.94 67.64 41.70 54.16 70.43 62.77 35.76 45.00 57.37 57.30 33.88 34.99

1452 1718 2183 2334 1793 2123 2589 2734 1876 1808 2193 2465

20.99 24.84 31.56 33.75 25.93 30.70 37.43 39.53 27.13 26.14 31.71 35.64

281 520 1849 836 252 452 1854 1070 1072 1145 2380 2031

4.06 7.52 26.74 12.09 3.64 6.54 26.81 15.47 15.50 16.56 34.41 29.37

6916 6916 6916 6916 6916 6916 6916 6916 6916 6916 6916 6916

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Co-operation with other agencies/ organisations

87

Appendix 7 C Distribution of NHG Secretaries according to resolving conflicts with in family members and conflicts in which the members or their family are not involved
Measure Very often Often Rarely Never All Resolving conflicts within family members Number % 19 2.39 150 18.89 343 43.20 282 35.52 794 100.00 Conflicts in which then members or their family are not involved Number % 5 0.63 160 20.15 278 35.01 351 44.21 794 100.00

Appendix 7 D Distribution of Candidates from Kudumbashree CBOs who won 2005 Local body elections by type of LGs
Local Body Corporation Municipality District Panchayat Block Panchayat Gram Panchayat Total Number of Candidates Elected 14 92 7 83 1212 1408

88

CHAPTER 8 KUDUMBASHREE AND MICRO ENTERPRISES –
SOME CASE STUDIES
It is widely held that micro enterprises contribute to economic growth, and equity. Some consider them as important vehicles through which low income people can escape poverty. The Kudumbashree mission views micro enterprises as an instrument for providing gainful employment to women below poverty line thereby enhancing their living standards. The focus is on self-employment. The realisation of this goal depends on the economic viability of the micro projects. For this we have made a case study of the KDS – sponsored units in the Venganoor Panchayat in the Thiruvananthapuram district. We also have made use of another field study covering nearly 400 KDS units spread through out the state. The purpose of this Chapter is to draw some lessons for further improvement.

8.1 Kudumbashree Micro Enterprises – the Macro picture
8.1.1 As per the details furnished by the Kudumbashree mission, there were 1051 individual enterprises and 2789 group enterprises registered under Kudumbashree by the end of 2006 in rural areas [See Table 8.1]. Under the 50K project called Yuvashree intended for providing 50,000 jobs for educated youth, the number of individual enterprises comes to 274 and group enterprises registered to 358 by the end of 2006 [See Table 8.1(a)].

Table 8.1 Micro enterprise units functioning in various districts in Rural Areas (as on 31st December, 2006)
Sl. No. 1 2 3 4 5 6 7 8 9 Districts Trivandrum Kollam Pathanamthitta Alappuzha Kottayam Idukki Ernakulam Thrissur Palakkad Individual Enterprises Subsidy No Sanctioned 242 1,623,900 177 1,317,000 1 7,500 31 2,17,440 8 60,000 200 1,459,850 0 0 33 240,300 17 126,000 Group Enterprises Subsidy No Sanctioned 265 14,349,969 197 7,785,000 154 4,843,500 206 9,485,000 61 3,187,500 475 22,902,450 239 12,524,000 184 8,896,495 242 10,974,750

89

10 11 12 13 14

Malappuram Kozhikode Wayanad Kannur Kasargode Total

95 120 6 10 111 1051

642,350 888,000 45,000 75,000 745,500 7,447,840

207 285 59 111 104 2789

13,544,250 15,648,500 3,240,000 5,274,810 5,126,900 1,37,783,124

[Source: Kudumbashree Mission].The number of enterprises mentioned above are those excluding units under SJSRY.

Table 8.1(a) District wise micro enterprise units functioning under Yuvasree (50K)
Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Districts Trivandrum Kollam Pathanamthitta Alappuzha Kottayam Idukki Ernakulam Thrissur Palakkad Malappuram Kozhikode Wayanad Kannur Kasargode Individual Enterprises Subsidy No Sanctioned 6 45,000 15 112,500 2 15,000 29 207,765 6 45,000 12 90,000 13 97,500 48 360,000 4 30,000 69 495,825 25 195,000 7 52,500 25 187,000 13 97,500 Group Enterprises Subsidy No Sanctioned 20 1,100,000 35 1,825,000 9 460,000 58 3,000,000 1 50,000 15 850,000 39 1,875,800 20 960,500 25 1,175,000 20 942,500 31 1,710,000 45 2,504,153 17 1,165,000 23 1,222,500

Total 274 [Source: Kudumbashree Mission]. 8.1.2

2,030,590

358

18,840,453

Table 8.1 shows that in rural areas, individual micro enterprises are concentrated in a few districts like Thiruvananthapuram, Kollam, Idukki and Kozhikode. The distribution of group enterprises exhibited a slightly different pattern. With the exception of Kottayam and Wayanad districts they are almost evenly distributed in the state. One interesting feature is the fairly good concentration of both individual and group enterprises in Idukki district accounting respectively for 19 per cent and 17 per cent of the total. As regards subsidy for micro enterprises units, there is a maximum ceiling limit of Rs.7500 per person for individual units and Rs.1 lakh in the case of group enterprises (10 persons group) and Rs.1.25 lakhs for 50K enterprises, all these subjected to an overall ceiling limit of 50 per cent of the total project cost of the enterprise. The total subsidy given by the state to group enterprise (as per the information furnished by Kudumbashree mission) till the end of 2006 amounted to Rs.13.78 crore or Rs. 49499 per group while that for individual enterprises amount to Rs.74.48 lakhs or 90

Rs.7086 per unit. Regarding Yuvasree enterprises, total subsidy released to individual units in all the districts amounted to Rs.20.30 lakhs or Rs.7410per unit and that for group enterprises came to Rs.1.88 crore or Rs.52627 per group. Clearly the Yuvasree enterprises enjoy larger subsidy per unit. [These figures relating to subsidy are those released by Government and not those actually availed. The availed figures will normally be much less since it is related to the project cost of each enterprise. But these data are not available with the Kudumbashree Mission].

8.2 A Brief profile of Micro Enterprises in Thiruvananthapuram District
8.2.1 Thiruvananthapuram district accounts for 23 per cent of the individual and 10 per cent of group enterprises registered in the state under Kudumbashree. Regarding subsidy sanctioned, individual enterprises absorbed 21 per cent and group enterprises nearly 10 per cent of the total subsidy sanctioned for the whole state. Regarding Yuva Sree Enterprises (meant for young educated youth) the share of Thiruvananthapuram district is negligible, with only 2 per cent of the total individual enterprises and 6 per cent of the group enterprises.

Table 8.2 Micro enterprises Thiruvananthapuram District*
Thiruvananthapuram District Sector No of Group units 96 31 14 6 16 17 14 11 15 5 2 No of Individual Yuvashree units 151 87 Venganoor Panchayat No of Group units 3 3 2 3 17 1 13 2 1 4 2 2 2 1 2 1 1 No of Individual Yuvashree units 91 72

Agriculture
Goat Rearing Dairy Food Processing Others

Industries
Kerashree Weaving Nutrimix Others

Services
Hotel / Catering Direct Marketing / Provision Store Others

3

2

1

Total

227

242

18

38

165

4

* Data furnished for Thiruvananthapuram district related to an earlier period compared to that furnished in Table 8.1

91

8.2.2

A sector wise break up of micro enterprises in Thiruvananthapuram district is given in Table 8.2. Out of 227 group units about 147 come under agriculture (65 per cent), 58 come under industries (26 per cent) and the rest 9 per cent registered under the services sector. The composition of individual units shows a high concentration in the agriculture sector (98 per cent) and only 2 per cent confined to industries and services sectors. In the case of group and individual enterprises, the units under agriculture comprise goat-rearing, dairy and food processing. Kerasree (coconut oil making), weaving and nutrimix are important units coming under industries sector. Under services sector, most of the units run catering, hotel and provision stores. We have selected Venganoor Panchayat for a case study since out of 78 panchayats in Thiruvananthapuram district, this panchayat alone accounts for 17 per cent of the group enterprises and 68 per cent of the individual micro enterprises registered in the district.

8.2.3

8.3
8.3.1

A Case study of Micro enterprises in Venganoor Panchayat
The composition of micro enterprises registered in Venganoor Panchayat (2006) is presented in Table 8.3. The most important criterion for the choice of the units was their readiness to cooperate and provide information.

Table 8.3 Micro Enterprises in Venganoor Panchayat – Total units registered and units selected for case study
Types of Enterprises (i) Group Enterprises (ii) Individual Enterprises (iii) Yuva Sree (50K) Enterprises Total Number registered 38 165 4 Number selected for case study 20 6* 4

* Two dairy units & goat- rearing, though categorised as individual in practice are working as group enterprises for the purpose of availing of loan and repayment.

8.3.2

The 38 group enterprises consisted of 13 different types of products, with the largest number of units registered (17) coming under weaving. For the purpose of the study, all the 13 groups were chosen. But the number of units selected from other groups is limited to two in each group. Since the total number of units in each group is also less than 3 in most cases (except weaving), the case study is almost a census with regard to group enterprises. The same is the case with Yuvasree (50K) group, where all the four units registered are included in the case study. In the case of individual enterprises, though there are 165 units in total, 72 units were 92

registered under dairy and 91 under goat rearing. The other two types registered were detergent manufacturing and clinical laboratory where only one unit each was registered. Hence under individual enterprises, two units each were selected from dairy and goat rearing and one each from the remaining two groups. Thus altogether 30 units were selected for the case study (20 under group enterprises, 6 under individual and 4 under Yuvasree). The selection details are shown in Table 8.3. The 30 selected units are classified under 3 broad sectors viz. agriculture, industry and services. Thus the sectoral classifications of the total selected units are as follows: 10 under agriculture related, 12 under industry and 8 under service sector. A detailed account of the sample units is given in section 8.4.

8.4 The Sample units: More details:
8.4.1 The common feature noticed in the functioning of micro enterprises is that a good number (30 to 40%) of enterprises turned out to be non-functional after one or two years of their initial working. The number of working and non-working units among the 30 units selected for case study in Venganoor Panchayat are furnished in Table 8.4.

Table 8.4 Working and Non Working Enterprises by Type
Type of Enterprise
Working NonWorking

Number of Members At the At the time of beginning enquiry 10 38 10 46 35 5 45

SC/ST Members At the At the time of beginning enquiry 10 1 5 1

I. Agriculture
i. Herbal & General Nursery ii. Goat Rearing iii. Rabbit Rearing iv. Dairy units 4 1 4 1 -

Total II. Industries
i. Paper Bag ii. Ready Made / Garments iii. Handloom iv. Nutrimix v. Kerasree vi. Craft Units vii. Paper Cup viii. Detergent unit

9
1 1 2 2 -

1
2 2 1 1

104
13 10 20 10 20 20 10 1

85
7 8 20 9 1 10 -

11
7 2 5 10 14 10 1

6
4 2 4 1 10 -

Total

6

6

104

55

49

21

93

III. Services
i. I.T.Unit ii. Provision iii. Catering iv. Clinical Lab v. Hire service vi. Canteen 1 2 2 1 1 1 10 15 15 1 10 10 6 9 12 1 4 4 3 1 2 1 2 1 -

Total Grand Total

6 21

2 9

61 269

28 168

12 72

6 33

8.4.2

Out of 30 units selected for case study in Venganoor Panchayat, 21 are working and 9 were either closed down or not functioning at the time of enquiry. A detailed analysis of working units as well as closed units in the sample selected is presented in Section 8.5 and Section 8.6.

8.5
8.5.1

Analysis of working units
Out of 30 units selected for case study, only 21 or 70 per cent were working at the time of enquiry and nine were either closed down or went out of business. A sector-wise break up of the working units is given in Table 8.5.

Table 8.5 Economic profile of the working units
Number of Workers Investment (Rs.000’)
Own Fund Loans Sub sidy Loan out standing % out standing

Sector

No. of Units

At the Beginning

At the Time of Enquiry

I. Agriculture
1. Goat Rearing 2. Rabbit Rearing 3. Dairy units 4 1 4 38 10 46 35 5 49 33 5 76 360 65 989 174 75 340 150 40 640 43 62 65

Total II. Industries
1. Paper Bag 2. Ready Made / Garments 3. Handloom 4. Nutrimix

9
1 1 2 2

94
13 10 20 10

89
7 8 20 9

114
13 5 20 20

1414
100 100 180 190

589
100 100 200 100

830
44 20 190

59
44 11 100

Total III. Services
1. Computer Unit 2. Direct Marketing 3. Catering Unit 4. Clinical Lab

6
1 2 2 1

53
10 15 15 1

44
6 9 12 3

58
14 15 30 3

570
143 189 98 40

500
100 150 50 8

254
61 85 3 25

45
43 45 3 63

Total

6

41

30

62

470

308

174

37 94

8.5.2

Out of the 21 working units nearly 50 per cent are in the agriculture sector and the remaining equally distributed under industry and services. Most of the units are registered as group enterprises after 2003-04 and at the time of enquiry (April 2007) nearly 25 per cent of the ‘sponsors’ have left the business mainly because of inadequate returns and lack of co-operation among members. Though all the enterprises listed in Table 8.5 have availed bank loans and subsidy, loans outstanding at the time of enquiry vary from enterprise to enterprise. The loan outstanding for units registered under agriculture sector amounts to nearly 60 per cent, those under industries and service sectors are of the order of 45 per cent and 37 per cent respectively. Since majority of the enterprises in all the sectors started functioning in 2004 or later, 60 per cent of the units could repay 40 per cent or more of the loan availed. This is a welcome sign. A sector by sector analysis is given under 8.5.3.

8.6
8.6.1

Units under Agriculture Sector:
Enterprises coming under agriculture sector include goat-rearing, rabbitrearing and dairy units. Out of 10 units selected under ‘Agriculture’ all except one were working at the time of enquiry. The key indicators of the working units under Agriculture are presented in Table 8.6.

Table 8.6 Employment/Wages pattern of the working units in the Agricultural sector
No. of Persons employed

Wages Paid (Rs.’000) 03-04 45 15 45 04-05 34 11 180 60 72 84 336 180 05-06 50 25 180 60 11 266 251 336 180 06-07 40 20 180 60 25 266 251 336 180

No

Name of Unit Sangam Goat Rearing Unit Karthika Goat Rearing Unit Sambhavana NHG, Venganoor (Goat Rearing) Sangamam NHG, Uchakada (Goat Rearing) Prabodino Rabbit Rearing Unit Kamadhenu Dairy Unit Nandini Dairy Unit Archana Dairy Unit, Venganoor Sunandhini Dairy Unit

Activity Goat Rearing Goat Rearing Goat Rearing Goat Rearing Rabbit Rearing Dairy Dairy Dairy Dairy

At the Beginning 10 5 10 12 10 12 10 14 10

At the Time of Enquiry 5 4 9 12 5 14 12 14 9

1 2 3 4 5 6 7 8 9

Total

93

84

-

-

-

-

95

Table 8.6 shows that among the units studied, goat-rearing and rabbitrearing are the least remunerative, since these units could not afford to pay a daily wage of more than Rs.20 for its members, a wage rate far below the subsistence level. But in the case of dairy units, the remunerative nature of their enterprise is reflected in the wages obtained by their members which ranged from Rs.25 to 80 per day. Unlike in other units, this persuaded the organisers of these enterprises to remain in business. Some economic indicators of the performance of the enterprises under agriculture sector are presented in Table 8.7.

Table 8.7 Select Economic indicators of Agriculture – Based Enterprises
No Name of Unit Total Input
(Rs.’000)

Total Output
(Rs.’000)

Profit/ Loss
(Rs.’000)

Gross Value Added
(Rs.’000)

Net Value added per worker (Rs)

Wages per Worker (Rs.)

Profit per worker (Rs.)

1 2 3 4 5 6 7 8 9

Sangam Goat 398 415 17 158 14,220 12,400 (-)1700 Rearing Unit Karthika Goat 188 189 1 64 11,520 11,600 200 Rearing Unit Sambhavana NHG, 976 1011 35 233 19,064 16,818 3182 Goat Rearing Sangamam NHG, 1169 1213 44 275 20,625 16,250 3666 Goat Rearing Prabodhini Rabbit 80 68 (-)12 29 2,610 3,600 (-)1200 Rearing Unit Kamadhenu Dairy 2157 2333 176 825 53,036 43,143 12,571 Unit Nandini Dairy 2033 2181 148 777 58,275 48,833 12,330 Unit Archana Dairy 3074 3264 190 1265 81,321 72,000 13,571 Unit, Venganoor Sunandhini Dairy 2206 2378 172 823 74,070 58,500 17,200 Unit Note: Value added is estimated by deducting the total value of all inputs, except wages, rent and interest from the total value of output. Net value added is arrived at by deducting depreciation.

8.6.2

Goat-rearing and rabbit-rearing in general are found to be unremunerative, since wages paid and net value added per worker are low. Profit per worker is also low and there is substantial losses in the two cases. Dairy units are functioning relatively better, since their net value added and profit per worker are comparatively higher for these units. Also, in the case of dairy units, the difference between net value added per worker and wages per worker is higher. This signifies that the performance of these units are better than others. The performance indicators of these enterprises given in Table 8.8 provide more insights into their working. 96

Table 8.8 Performance Indicators of units under agriculture
No. Units Gross Input/ Output % Fixed Capital Per employee (Rs) Wages/ Gross Value added % Net value added per employee (Rs) Profit per Fixed Capital %

1 2 3 4 5 6 7 8 9

Sangam Goat Rearing Unit Karthika Goat Rearing Unit Sambhavana NHG, Venganoor Sangamam NHG, Uchakada (Goat Rearing) Prabodhini Rabbit Rearing Unit Kamadhenu Dairy Unit Nandini Dairy Unit Archana Dairy Unit, Venganoor Sunandhini Dairy Unit

96 99 96 96 117 92 93 94 93

8,500 8,600 16,545 16,500 5,500 24,857 24,166 29,000 27,100

78 87 71 71 124 73 75 79 71

14,200 11,520 19,064 20,625 2,610 53,035 58,275 81,321 74,070

20.0 2.3 19.2 22.2 (-)21.8 50.6 51.0 46.8 63.5

[See the Appendix 8A for details]

8.6.3

All the indicators given in Table 8.8 have direct relevance to the nature of functioning of an enterprise. The rate of profit is low in general for the units falling under the agricultural sector. It is very difficult to consider these units as providing adequate livelihood sustenance. The input-output ratio ranges from 92 (more or less the same for all the dairy units) to 117. In the case of Rabbit rearing units, the value of input far exceeds the value of output and do not generate any surplus. Ratio of wages to value added is also high (around 80%) in most of the cases, which signifies that other factors of production are not getting adequate returns. When profit as a percentage of fixed capital is considered, rabbit rearing is a loss making venture while goat rearing units make only nominal profits. But the profits to fixed capital ratio is high for dairy units, the percentage ranged from 50 to 64.

8.7.
8.7.1

Units under the Industrial Sector:
Working units under industrial sector can be classified into four categories viz. paper-bag-making, readymade garments, handloom units and nutrimix production enterprises. The basic details relating to these enterprises are furnished in Table 8.9.

97

Table 8.9 Micro Enterprises under Industrial Sector
No Name of Unit Activity No. of Persons At the At the Time of Beginning Enquiry Wages Paid (Rs.’000) Total 03-04 04-05 05-06 06-07

1 2 3 4 5 6

Pioneer Paper Bag Unit Thiruvonam Ready made Garments Sree Devi Handloom Unit Thejas Handloom Unit Winner Nutrimix Unit (Baby Food) Thanima Nutrimix Unit (Baby Food)

Paper Bag Manufacture Readymade Dress Handloom Handloom Nutrimix Manufacture Nutrimix Manufacturer

13 10 10 10 5 5
56

7 8 10 10 4 5
45

108 45 -

105 180 45 50 -

74 180 180 198 20 20
-

84 144 180 198 54 68
-

371 549 405 446 74 88
-

Table 8.9 shows that except in the handloom units, employment had declined. It can be seen that wages obtained by the organising members differ from one category to another and also from year to year. The paper bag unit started in 2004 with 13 workers could get a daily wage of Rs.30 but gradually owing to lack of demand for the product, the organising members one by one left the business and the wages earned also had fallen. The garment-making unit also started in 2004, is engaged in embroidery works and reckoned in terms of performance indicators are functioning satisfactorily. The working partners’ engaged in this business could get a daily wage in the range of Rs. 40 to 50. The two handloom units started in the middle of 2004-05 are also making profits. Though wages obtained by the partners (10 members) in the initial year was too low (about Rs.15/- per day), they could get an average daily wage of around Rs.60 in the last two years owing to increase in larger turn over of business. The organisers reported that though a yarn bank was functioning in the panchayat area, they could not utilise its services, since it was not fully operational. Each nutrimix unit making nutritive products is managed by a group of 5 women. Started on a modest scale in 2005, they still continue without much progress. Though the wages obtained by the partners were low in the initial year, at the time of enquiry, both the units could pay average daily wage rate in the range of Rs.50 to Rs.60. At the time of interview, the organisers of both the units complained that they had no adequate space to run the business and wanted the panchayat to provide this basic requirement. They further informed that they were not getting sufficient order from the social welfare department, which would have improved their business considerably. (Details of the working of these units are given in Table 8.10). 98

Table 8.10 Important Indicators of enterprises in the Industry Sector
No Name of Unit Total Input
(Rs.’000)

Total Output
(Rs.’000)

Profit/ Loss
(Rs.’000)

Value Added
(Rs.’000)

Net Value added per worker (Rs.)

Wages per Worker (Rs.)

Profit per worker (Rs.)

1 2 3 4 5 6

Pioneer Paper Bag Unit Thiruvonam Readymade Garments Sree Devi Handloom Unit Thejas Handloom Unit Winner Nutrimix Unit Thanima Nutrimix Unit

1060 1677 1980 2112 415 429

1095 1717 2025 2170 458 458

35 40 45 58 43 29

485 616 468 522 145 145

33,577 55,440 42,120 46,980 26,100 26,100

28,538 54,900 40,500 44,600 14,800 17,600

2692 4000 4500 5800 8600 5800

8.7.2

In general all the six units working under industries sector are earning profits although not to the extent desired. In the case of all units, the value added per worker is only marginally high when compared to wages per worker, indicating a low rate of return. This is the case with all the enterprises, except perhaps the nutrimix units whose performance are relatively better. They have immense potential to expand business provided panchayats take proper initiative to buy these projects for the use of Anganwadies located within the jurisdiction of each panchayat. The detailed working of these six enterprises is analysed in Table 8.11:

Table 8.11 Performance indicators of the enterprises in the Industrial Sector
No Units Gross Input/ Output % Fixed Capital Per employee (Rs) Wages/ Gross Value added % Net Value added as % of fixed Capital Profit as % of Fixed Capital %

1 2 3 4 5 6

Pioneer Paper Bag Unit Thiruvonam Ready made Garments Sree Devi Handloom Unit Thejas Handloom Unit Winner Nutrimix Unit Thanima Nutrimix Unit [See Appendix 8B for details]

96 98 97 97 90 93

2,307 4,000 19,000 19,000 10,000 10,000

76 89 86 85 51 61

1455 1,386 222 247 261 261

116.6 100.0 23.7 30.5 86.0 58.0

8.7.3

The indicators given in 8.11 reflect the performance of these six enterprises. On the whole the rate of return is far below a reasonable minimum. Inputoutput ratio is abnormally high in all cases, nutrimix units being the prominent exception. Their capital efficiency is high because the net value 99

added per worker per fixed capital is high. They are labour-intensive as the fixed capital investment per worker ranges only from Rs.2,307 in the paper bag units to Rs.19,000 in the handloom unit.

8.8
8.8.1

Units under Services Sector:
Out of the 8 units selected under service sector, 6 were working and two were non functional. Among the six working units, one was a computer training centre, two were engaged in the supply of provisions, two were catering units and one a clinical laboratory. The latter is an individual venture, though subsequently two other members also joined. Some basic indicators of the six units are given in Table 8.12.

Table 8.12 Basic Indicators of the Working Units under Service Sector
No Name of Unit Activity No. of Persons At the At the Time of Beginning Enquiry Wages Paid (Rs.’000) 03-04 04-05 05-06 06-07

1 2 3 4 5 6

Techno Universe Computer services Sri Lakshmi Provision Stores Aiswarya Direct Marketing Unit Thripthy Catering unit in C-Dit Devi Catering Unit Devi Clinical Laboratory

Computer Training Supply of Provision Supply of Provision Catering Service Catering Service Clinical Lab

10 10 5 10 5 1
41

6 5 4 8 4 3
30

75 25 14 -

108 84 22 150 24 14
-

99 72 24 134 24 54
-

108 72 25 134 25 54
-

All the service units, except those who left for want of sufficient return, manage to survive with nominal profit. Regarding wages obtained, the computer unit though started with low returns could pick up later and now earning an average daily wage of Rs.50. But in the case of two provision stores, the income earned were below subsistence level, which ranges between Rs. 16 to 30 per day. Out of the two catering services, one functioning in C-Dit Complex is performing well, and the partners could get an average daily earnings above Rs.50. The other catering service is not functioning satisfactorily since the earnings obtained by the members are far below the subsistence level, around Rs.20 per day only. The clinical laboratory unit is functioning well and though it started as an individual enterprise could attract two more working members and all of them are earning a 100

daily wage of Rs.60 and above. Some basic data regarding the working of the above six enterprises are provided in Table 8.13.

Table 8.13 Basic Data on the Working of the Enterprises under Service Sector
No Name of Unit Total Input
(Rs.’000)

Total Output
(Rs.’000)

Profit/ Loss
(Rs.’000)

Gross value Added (Rs.’000)

Net Value added per worker (Rs.)

Wages per Worker (Rs.)

Profit per worker (Rs.)

1 2 3 4 5
6

Techno Universe Computer services Sri Lakshmi Provision Stores Aiswarya Direct Marketing Unit Thripthy Catering unit in C-Dit Devi Catering Unit Devi Clinical Laboratory

881 1558 494 2132 709
243

902 1585 508 2168 732
280

21 27 14 36 23
37

505 318 112 486 139
185

45,450 28,620 20,160 48,600 25,020
55,500

39,000 22,800 14,200 44,300 17,400
40,666

2100 2700 2800 3600 4600
12,330

8.8.2

The most remunerative enterprise as per the data shown in Table 8.13 is the clinical laboratory, where profit and net value added per worker are comparatively high. Aiswarya direct marketing service is the least remunerative business since profit and net value added per worker are the lowest. Other enterprises lie in between, where profit ranged between Rs. 23,000 and Rs.36,000 per annum. Judged by the difference between net value added per worker) and wages per worker, (as reflected in the highest profit per worker) the most remunerative is the clinical laboratory. Judged by the same criterion, the performance of other enterprises is also comparatively good. A deeper insight into the working of the above units can be obtained from the performance indicators presented in Table 8.14

Table 8.14 Performance Indicators of the units under Service Sector
No.

Units
Techno Universe Computer services Sri Lakshmi Provision Stores Aiswarya Direct Marketing Unit Thripthy Catering unit in C-Dit Devi Catering Unit Devi Clinical Laboratory [See Appendix 8 C for details]

Gross Input/ Gross Output %

Fixed Capital Per employee (Rs)

Wages/ Gross Value added

% 77 72 63 91 62 66

Profit per fixed capital %

1 2 3 4 5 6

97 98 97 98 97 87

19,000 3,500 6,000 4,800 8,400 13,300

11.1 77.1 46.7 75.0 54.7 92.5

101

8.8.3

Gross input to output ratio is high for all enterprises which shows of the low profit obtained. For the computer and clinical laboratory units fixed capital per employee ranges from 13,000to Rs.19,000. Wages constitute more than 60 per cent of the gross value added in the case of all enterprises, which is indicative of the low share obtained by other factors of production. Profit as a percentage of fixed capital is very low in the case of Techno Computer Services, since this unit has a very high capital investment. For other units, this ratio varies from 46 to 92, depending on the profit and the capital intensity of the project. It is the clinical laboratory unit that fetches the highest return per fixed capital.

8.9 Analysis of closed units
8.9.1 As part of the case study, an analysis of the working of the closed units (9 nos.) in the sample have also been attempted to identify the problems that led to the closure. This is presented in detail in Appendix 8 D. Absence of good market for the products made, stiff competition from branded items, inadequate earnings, lack of managerial capabilities and absence of teamwork were the main reasons for poor performance.

8.10 Lease Land Farming
8.10.1 Lease land farming popularly called ‘Harithasree’ is another fascinating activity launched by KDS Mission which is now generally considered as beneficial both to the landless poor women of NH Groups as well as to land owners who are not interested in farming especially in paddy cultivation. When paddy cultivation is fast becoming a non-remunerative activity, Kudumbashree found this as an opportunity for its members to intervene and energise this traditional farming activity. Lease land farming which was initiated during 2002-03 has now grown to the status of a micro enterprise which at present covers 820 gram panchayats. So far 31710 NHGs consisting of 307960 families had participated in the programme and more than 52873 acres of land had been brought under cultivation. The cultivation is done by non-owner labourers. Thus it is a great step forward in realising the long standing slogan of ‘land to the tiller’ through this indirect route because the land reform legislation of 1970 has given ownership rights to the former tenants and not to the real tillers. The district-wise details of lease land farming undertaken through NHGs are presented in Table 8.15. In terms of area covered and families covered the land-hungry Alappuzha district tops the list. It is significant that over 3 lakh families are covered as part of this project.

102

Table 8.15 District wise details of lease land farming as on January 31, 2007
No. District No. of NHGs covered No. of families involved Area cultivated (in acres)

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Trivandrum Kollam Pathanamthitta Alappuzha Kottayam Idukki Ernakulam Thrissur Palakkad Malappuram Kozhikode Wayanad Kannur Kasargode Total

2019 1304 1126 6382 985 6759 2391 298 2518 2021 2044 734 2088 1041 31710

21159 4922 11344 86004 10006 61103 27950 2710 17726 11359 12877 10202 23009 7589 307960

2486.52 2627.65 1670.00 11239.78 1762.15 8314.00 5194.42 388.00 3914.81 2870.00 2850.00 6849.00 2233.20 473.65 52873.18

8.10.2 As part of our study of Venganoor Panchayat we made a case study of two leased land farms also. 8.10.3 In Venganoor Panchayat lease-land farming is undertaken in 65 acres, by 40 neighbourhood groups involving 500 families. The crops selected for cultivation in these farms were vegetables (25 acres), plantain (30 acres) and tapioca (10 acres). Because of time and resource constraints, the detailed analysis is confined to two NHGs only which had undertaken this activity. [For details see Appendix 8 E]. 8.10.4 In the two NHGs studied, the area under cultivation was 100 cents each. In the first NHG, only plantain and banana were cultivated, while in the second NHG farm banana, plantain, vegetable and tapioca were grown. Data were collected for three year’s prior to the date of enquiry, viz. 200304, 2004-05 and 2005-06. The details regarding the performance of the two NHGs in the implementation of this programme are given in Appendix 8 E. The data indicate that 2003-04 was a drought affected year and hence all the farming activities of the two selected NHGs ended in a net loss, which varied between Rs.530/- and Rs.1,350/- per year. In the second and third years, the receipts as well as profits of the two NHGs exhibited a steady increase including the net return per member of the group (including wages). If we do not cost the value of own labour the profit margin may be higher. We have put the imputed value of own consumption at a 103

conservative rate. The annual rate of return per person in absolute terms may not be very high. Even so lease land farming as a means of livelihood is a good supplementary income. The maximum annual return which a member received in the first group was Rs.3369/- and in the second group Rs.2600. This amount when worked out to monthly earnings is far below subsistence level. One of the limitations of this venture as revealed from the case study is that the availability of land for lease land farming is limited in our state, the possibility of extending this activity on a larger scale is not high. Secondly this being a very small scale activity, the neighbourhood groups should be protected by some insurance cover against drought or crop failure. The conclusion one can make is that this venture can at best be considered as a source of supplementary income to participating families and not as a primary means of livelihood except in districts like Wayanad where large sized holdings could be made available.

8.11 Viability of KDS Micro enterprises: More evidences:
8.11.1 An important shortcoming of KDS micro enterprises is that many go sick or are not sustainable. At least this was what we noted in the Venganoor Panchayat. In Table 8.16 we present more evidences which cover 393 randomly selected micro enterprise units spread over the districts of Thiruvananthapuram, Kollam, Malappuram, Palakkad and Wayanad. That 35 per cent of these units seem to be unsustainable does not tell a promising story regarding the future of these enterprises. That 80 per cent of the traditional industry sector comprising dry flower-making, ornamental fisheries and handicrafts made by Adivasis are above the break even point is an encouraging sign. Out of the 257 cost efficient units in the Table (See Table 8.16), 137 units are agriculture-related (including food processing). Nearly one third are not cost efficient. The costing in Table 8.16 (unlike in the Venganoor case study) does not include the imputed value of own labour or the benefits accruing to members due to own consumption as in the case of lease land farming (in Wayanad 5 acre and 10 acre plots are typical size) where vegetables, rice, egg, milk, meat (of own goat, rabbit, chicken etc) which the family consumes. In such cases the viability numbers could be higher. Probably economic viability can improve if you choose relatively modern products with improved technology (e.g. See rubber products, and chemical products in Table 8.16.

104

Table 8.16 Distribution of Micro Enterprises by type of product/services and cost efficiency
Item Food Processing Agriculture Sector Service Sector Marine Products Paper Products Rubber Products Traditional Industry Garment Unit Chemical Industry Assembling Unit Handicrafts Leather Products Cost Efficient (Break even No % 54 68.35 83 68.60 45 54.88 2 50.00 11 61.11 2 100.00 8 80.00 15 62.50 17 80.95 1 50.00 12 63.16 7 63.64 NonBreakeven No % 23 29.11 38 31.40 33 40.24 2 50.00 6 33.33 0 0.00 2 20.00 7 29.17 4 19.05 1 50.00 6 31.58 4 36.36 No Change No 2 0 4 0 1 0 0 2 0 0 1 0 % 2.53 0.00 4.88 0.00 5.56 0.00 0.00 8.33 0.00 0.00 5.26 0.00 No 79 121 82 4 18 2 10 24 21 2 19 11 Total % 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Total 257 65.39 126 32.06 10 2.54 393 100.00 Source: Data provided by Dr.Mary George who collected the data as part of her project on Technological sustainability of Women enterprises under Kudumbashree Note: Breakeven is the point which equilibrates total cost and total revenue. All units above this point are treated as cost efficient although the range in return may vary very widely

8.12 Views and suggestions of the organisers of the Micro Enterprises
8.12.1 It is always good and certainly important to know the views of the organisers of the micro enterprises. We asked certain question to the 30 Kudumbashree, entrepreneurs of Venganoor Panchayat we studied. They were asked to narrate the problems they faced and their suggestions for improvement. The problems mentioned by them are categorised under five heads: viz. (i) Non- availability of assured market (ii) Competition from branded products (iii) Non availability of raw material (iv) Non availability of working capital and (v) other reasons like non availability of power, cost of raw materials, labour problems etc. Their views on different aspects of running the business were also recorded.

105

Table 8.17 Problems & Suggestions reported by Micro Entrepreneurs
I. (i) (ii) (iii) (iv) (v) Problem Non Availability of Assured market Competition from branded products Non Availability/difficulty in getting raw material at concession rates Non Availability of Working Capital Other problems (Power, cost of raw materials, labour problems etc. Views and Suggestions Help from Kudumbashree No Help Received Help (ii) Training received from KDS Yes No (iii) (a) Experience in getting Assistance Timely – Yes No Adequate – Yes No (b) Repayment Schedule Easy Not Easy (iv) Empowerment (a) Development of business skill (b) Economic Empowerment (c) Social Empowerment (v) Improvement in standard of living Yes No 18 (60%) 12 (40%) Yes No Yes No Yes No 26 (87%) 4 (13%) 17 (57%) 13 (43%) 27 (90%) 3 (10%) 26 (87%) 4 (13%) 25 (84%) 5 (16%) 28 (93%) 2 (7%) 27 (90%) 3 (10%) 12 –(40%) 18 (60%) No. of Entrepreneurs reporting Affected business Not Affected 16 14 8 22 17 16 5 13 14 25

II (i)

8.12.2 The organisers’/entrepreneurs’ views regarding the important problems are mixed, mainly depending on the nature of their business. Non availability of assured market, though an important problem, nearly 50 per cent of the micro enterprise leaders did not ‘mention’ it as an issue. Competition from branded products also is not an important concern for most of them. Non-availability of raw materials at concessional rates and lack of working capital seem to be important issues. Being tiny enterprises 106

labour problems and non-availability of power are not serious issues concerning them. 8.12.3 Regarding views and suggestions, the feedback we received from the organisers are summarised below: [See Table 8.17]. Nearly 40 per cent of the organisers expressed the view that they were not getting any support from KDS mission except subsidy. However it is very significant that 90 per cent got some training from the Mission. But they were not sure as to whether they matched their specific needs. The financial assistance received was reported to be timely and adequate for a large majority. Shortage of working capital was a major problem. Regarding empowerment, majority of the organisers reported social empowerment and economic empowerment. Nearly 60 per cent of the entrepreneurs’ reported improvement in their standard of living. Some recommendations based on their suggestions are presented below: ♦ Majority of the organisers of micro enterprises start the units because of the need to earn a livelihood. Unless backed up by tremendous fostering care such enterprises bear within themselves the seeds of their own failure. Before sanctioning an enterprise and releasing subsidy, it is suggested that the general back ground of the organisers and their capacity to undertake a particular enterprise should be evaluated by the Mission. Also, the feasibility of a particular unit in a locality has also to be studied in detail before sanction is issued. A feasibility study cell managed by qualified personnel should be set up at district or state level for undertaking this job. ♦ Before actual execution of the project, the selected entrepreneurs should be given in-depth training in different aspects of undertaking a business enterprise. Training should also be focussed on the accounting practices to be followed in a business concern. The maintenance of accounts should be periodically monitored to give corrective guidelines. ♦ Though marketing the product is primarily the responsibility of the organisers, most of the tiny micro enterprise organisers do not have the skill or finance to undertake the publicity and propaganda necessary to market their products. Hence the Kudumbashree Mission should undertake the responsibility of organising common marketing strategies for 107

units registered under them and producing a variety of products. This can be envisaged as a centralised co-operative set up with branches in different districts and sub-units under them. This comprehensive marketing chain (similar to that established under AMUL in Gujarat) should be carefully planned and established under the supervision and control of KDS Mission. This co-operative set up should also undertake to buy the products produced by micro enterprises giving them cash on the spot. This arrangement, if effectively implemented, will be helpful to micro entrepreneurs in solving their problem of shortage of working capital. ♦ The KDS mission when sanctioning group enterprises should examine whether the number constituting the group can get effective employment from this venture. The case studies clearly show that the partners constituting a group gradually leaving business after one or two years mainly because of inadequate return and lack of opportunity for work for all the partners. This happens in more than 50 per cent of the cases studied. This can be avoided if sufficient precaution is taken while sanctioning the enterprises by KDS mission. ♦ The partners of nearly 50 per cent of the micro enterprises studied at Venganoor panchayat could get only the subsistence level income from the enterprises. This is mainly because of (a) the low turnover of the enterprise and (b) more than the optimum number of persons involved who can be accommodated by the enterprise. The second point has to be safe guarded by the KDS Mission while sanctioning an enterprise. ♦ The purchase of machinery and equipments necessary for the enterprises is at present arranged by the KDS Mission. But in the course of interview, majority of the ‘entrepreneurs’ explained that the machinery acquired by them is either of low quality or not appropriate for their purpose. This ultimately resulted in heavy loss to the organisers. KDS Mission may do well to avoid such problems. ♦ In the course of interaction, the entrepreneurs complained that the repayment schedule now fixed by the banks is based upon both loan and subsidy with the result that they are bearing a higher instalment amount. This is a questionable practice on the part of banks which should be immediately looked into by the KDS Mission. Out of 30 entrepreneurs interviewed, 21 or 70 per cent reported good cooperation from the banks in sanctioning loan while 9 of them held a different view.

♦ A major unhealthy trend we noticed (Group Enterprises)is the difference of opinion among the partners and lack of collective effort to run the business. Lack of team work is a dangerous tendency which ultimately ruins the entire business. This tendency resulted in (i) the exit of 50 per cent of the 108

partners within a period of 2 years of starting the business and (b) delay or even stoppage of repayment of bank loan availed. This unhealthy development can be prevented by effective monitoring and supervision on the part of the Kudumbashree functionaries. ♦ It is understood that there is no effective follow up or monitoring of the working of micro enterprises under the Mission. Though there is a charge officer in every panchayat looking after Kudumbashree activities, he/she is not aware of the progress of work of these enterprises. The details regarding the enterprises which have availed bank loan and subsidy are not systematically kept or even available with the charge officer in the majority of the panchayats. Most of the entrepreneurs selected for case study reported that they were not getting any technical support from the Mission except perhaps some orientation training at the beginning which is too inadequate to run any business venture. It is suggested that a full-fledged monitoring machinery should be established under KDS Mission to undertake this task. ♦ From the case study, it is found that nearly 35 per cent of the micro enterprises registered are either closed down or non-functional. It is surprising that there is no revival plan for these failing units. A revival package has also to be thought of and implemented wherever necessary.

109

Appendix 8 A: Performance Indicators – Agriculture Sector Units (Rs. in ‘000)
Land and building Plant and Machiner y At the beginnin g At present 2003-04 2004-05 2005-06 2006-07 2003-04 2004-05 2005-06 Loans Total Input 21 Total Total Own fund Sectors & units 2006-07 20 Sl. No Working Capital Subsidy No of workers Investment Fixed Capital wage Material input

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

Agriculture Working
1 Sangamam Goat Rearing Unit Nedinjal Karthika Goat Rearing Unit Karikuzhi Venganur Samabhavana NHG Goat rearing Uchakkada Venganoor Sangamam NHG Goat rearing Ward No XII, Uchakkasda. Probodhini Rabbit
rearing unit Azhakulam Kamadhenu Dairy Unit

10

8

5

70

30

5

80

85

0

34

50

40

124

20

0

67

100

80

247

2

5

4

5

35

15

3

40

43

0

11

25

20

56

10

0

23

55

44

122

3

11

11

11

127

62

55

127

182

0

55

55

55

165

34

0

240

252

265

757

4 5 6 7 8 9

12 10 12 10 14 10

12 5 14 12 14 9

12 5 20 17 23 16

128 65 214 198 336 241

67 75 90 75 100 75

60 35 60 50 70 50

138 20 288 240 336 221

198 55 348 290 406 271

15 0 0 0 0 45

60 0 72 84 336 180

60 11 266 251 336 180

60 25 266 251 336 180

195 36 604 586 1008 585

36 60 42 35 49 30

87 0 0 0 0 118

262 0 210 197 657 470

275 11 630 590 660 470

289 28 650 600 665 470

913 39 1490 1387 1982 1528

Nandini Dairy Unit Archana Dairy Unit, Venganoor. Sunandhini Dairy Unit, chavadinada Venganoor.

(Cont...............)

110

Year of starting

Interest and others input Sl. No Sectors & units

Total input

Output Total output

Profit (Out put Input)

Profit per worker (in Rs)

Interest
41

Gross Value added (Profit + Wages +interest+ Rent)

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

1

2

22

23

24

25

26

27

28

29

30

31

32

33

34

35

2006-07

Total

Total

36

37

38

39

40

42

Agriculture Working
1 2 Sangamam Goat Rearing Unit Nedinjal Karthika Goat Rearing Unit Karikuzhi Venganur Samabhavana NHG Goat rearing Uchakkada Venganoor Sangamam NHG Goat rearing Ward No XII, Uchakkasda. Probodhini Rabbit rearing unit Azhakulam Kamadhenu Dairy Unit Nandini Dairy Unit Archana Dairy Unit, Venganoor. Sunandhini Dairy Unit,chavadinada Venganoor.
0 0 7 2 10 4 10 4 27 10 0 0 108 36 160 84 130 68 398 188 0 0 112 36 168 85 135 68 415 189 17 1 158 64 1700 200 Nov04 Nov04 Mar04 Jan04 Nov05 Dec04 Dec04 Mar04 Jan04 17 7

3

0

17

18

19

54

0

312

325

339

976

0

322

335

354

1011

35

233

3182

33

4

4

18

19

20

61

106

340

354

369

1169

111

352

365

385

1213

44

275

3666

36

5

0 0 0 0

0 11 11 10

2 25 24 36

3 27 25 38

5 63 60 84

0 0 0 0

0 293 292 1003

24 921 865 1032

56 943 876 1039

80 2157 2033 3074

0 0 0 0

0 310 311 1078

18 1008 935 1092

50 1015 935 1094

68 2333 2181 3264

-12 176 148 190

29 825 777 1265

(-)1200

5 45 43 67

6 7 8 9

12571 12330 13571

8

27

28

30

93

171

677

678

680

2206

181

725

732

740

2378

172

823

17200

66

111

Rent

Appendix 8 B: Performance Indicators – Industrial Sector Units (Rs. in ‘000)
Investment Subsidy Own fund Fixed Capital Land and building Plant and Machinery wage Working Capital No of workers Sectors & units At present At the beginning Sl No Material input Total Input
20

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06
18

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

19

1

2

3

4

5 6

Pioneer Papper Bag Unit, Vellar Kovalam Thiruvonam readymade Garments Kalluvettankuzhi Sree Devi Handloom Unit Mangalathukonam Thajas Handloom unit Mangalathukonam Winner Nutrimix unit, Chavadinada Thanima Nutrimix unit , Nellivela

13

7

13

100

100

0

30

30

108

105

74

84

371

60

140

130

120

140

2006-07

Loans

Total

Total

530

10

8

5

100

100

0

40

40

45

180

180

144

549

85

83

332

332

340

1087

10

10

10

90

100

60

130

190

0

45

180

180

405

50

0

170

680

680

1530

10 5 5

10 4 5

10 10 10

90 45 45

100 50 50

60 0 0

130

190

0 0 0

50 0 0

198

198 54 68

446 74 88

36 37 37

0 0 0

180 0 0

720 68 68

720 243 243

1620 311 311

50 50

50 50

20 20

(Contd...............)

112

Total input

Output Total output

Profit (Out put Input)

Year of starting

Interest
40

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

Total

Total

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

41

1

2

3

4

5 6

Pioneer Papper Bag Unit, Vellar Kovalam Thiruvonam readymade Garments Kalluvettankuzhi Sree Devi Handloom Unit Mangalathukonam Thajas Handloom unit Mangalathukonam Winner Nutrimix unit , Chavadinada Thanima Nutrimix unit , Nellivela

45

42

36

36

159

293

277

230

260

1060

300

285

240

270

1095

35

485

2692

Jan-03

27

52

3

13

15

10

41

131

525

527

494

1677

135

532

540

510

1717

40

616

4000

Jan-04

27

0

4

20

21

45

0

219

880

881

1980

0

225

900

900

2025

45

468

4500

Jan-04

18

0

4

20

22

46

0

234

938

940

2112

0

240

965

965

2170

58

522

5800

Nov04

18

0 0

0 0

6 6

24 24

30 30

0 0

0 0

94 94

321 335

415 429

0 0

0 0

98 98

360 360

458 458

43 29

145 145

8600 5800

Jan-06

13 13

15 15

Jan-06

113

Rent

Sl No

Sectors & units

(Profit + Wages + interest+ Rent)

Profit per worker (Rs)

Non Material input (Interest and others inputs)

Gross Value added

Appendix 8 C: Performance Indicators – Service Sector Units (Rs. in ‘000)
Working Capital No. of Workers At the beginning Investment Subsidy Fixed Capital Land and building Wage Material input

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

2006-07

Loans

Total

Total

Sl No

Plant and Machinery

At present

Own fund

Sectors & units

20

Services working
1 Techno Universe Computer unit Azhakulam. Sreelekshmi Provision Store Muttakkad Aiswariya Direct marketing unit Chavadinada Thripthy Catering Unit C-Dit compound Thiruvallam. Devi catering unit Chavadinada Venganoor Devi Clinical Laboratory, Vezhinjam 10 6 14 143 100 0 190 190 75 108 99 108 390 47 15 36 42 38 131

2

10

5

10

139

100

0

35

35

0

84

72

72

228

122

0

350

450

450

1250

3

5

4

5

50

50

0

30

30

0

22

24

25

71

57

0

120

130

137

387

4

10

8

15

48

0

0

48

48

25

150

134

134

443

14

89

531

506

506

1632

5

5

4

15

50

50

0

42

42

14

24

24

25

87

0

92

158

158

165

573

1

3

3

40

8

0

40

40

0

14

54

54

122

25

0

9

33

35

77

6

(Contd...........)

114

Total Input

(Profit + Wages + interest + Rent)

Profit per labour

Non material Inputs (Interest and others input) 2003-04 2004-05 2005-06 2006-07 2003-04 Sl No Sectors & units

Total input

Output Total output

Profit

Gross Value added

Year of starting

(Out put Input)

Interest
40 36 32 15 7 18 11

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

Total

Total

1

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

41

Services working
1

Techno Universe Computer unit Azhakulam. Sreelekshmi Provision Store Muttakkad Aiswariya Direct marketing unit Chavadinada Thripthy Catering Unit C-Dit compound Thiruvallam. Devi catering unit Chavadinada Venganur Devi Clinical Laboratory, Vezhinjam

15

37

277

31

360

105

181

418

177

881

109

188

420

185

902

21

505

2100

Nov03

58

2

0

18

30

32

80

0

452

552

554

1558

0

456

562

567

1585

27

318

2700

Sep04

31

3

0

12

12

12

36

0

154

166

174

494

0

160

168

180

508

14

112

2800

May04

12

4

6

19

15

17

57

120

700

655

657

2132

125

712

664

667

2168

36

486

3600

Feb04

5

16

11

12

10

49

122

193

194

200

709

126

198

200

208

732

23

139

4600

Sep03

11

6

0

5

19

20

44

0

28

106

109

243

0

30

122

128

280

37

185

12330

Jan05

15

115

Rent
0

Appendix 8 D Performance Indicators – Closed Units (Sector-Wise) (Rs. in ‘000)
Total wages Investment Subsidy
Own fund Loans

Fixed Capital
Plant and Machinery Land & building 2003-04 2004-05 Total

Wage
2005-06 2006-07

Total input
No of Employees (Actual)

Working Capital

Sectors & units

Agriculture
Aiswariyapoornima Herbal and general Nursery Thozhickal KOVALAM 10 65 100 0 20 20 40 79 0 0 119 11 0 83 112 0 0 195

Industries
Aiswariya Kerashree Unit Kattachalkuzhi Prakrithy Kerashree unit Vennioor Popular Jute center K S Road Kovalam Classic Palm Craft Unit K.S Road Kovalam
Prakrithy Ecofriendly Products Azhakulam

13 13 10 40 10 2

134 140 50 0 170 35

116 108 100 0 100 8

0 0 0 10 0 0

145 143 34 30 98 15

145 143 34 40 98 15

54 30 Nil Nil Nil Nil

108 60 Nil 18 Nil

108 36 3 32 0

15 9 3 9 24

285 135 6 59 24 0

9 10 10 10 6 1

52 21 15 8 59 0

518 330 0 0 0 0

980 661 0 24 0 0

1030 601 34 39 0 0

150 129 23 13 92 0

2678 1721 57 76 92 0

Detergent manufacturing Unit

Services
Subash Hire Service Brother Canteen, Public Office Not Started 10 75 100 0 140 140 Nil Nil 0 10 0 0 0 0 0

(Contd...........)

116

Total Input

2003-04

2004-05

2005-06

2006-07

Net value added per worker ( in Rs)

Output 2003-04 2004-05 2005-06 Total output Sectors & units 2006-07

Profit (Out put - Input)

Year of closing

Year of stating

Interest

Agriculture
Aiswariyapoornima Herbal and general Nursery Thozhickal KOVALAM

0

56

0

0

56

-149

(Profit + Wages +interest + Rent )

-6

Negative

Sep-03

Mar-05

12

Rent 2 6 6 8 9 0 0 6 0 0

Gross Value added

Industries
Aiswariya Kerashree Unit Kattachalkuzhi Prakrithy Kerashree unit Vennioor Popular Jute center K S Road Kovalam Classic Palm Craft Unit K.S Road Kovalam
Prakrithy Ecofriendly Products

515 355 Nil

990 660 Nil

1042 551 30

140 128 23

2687 1694 53

9 -27 -4

336 150 19

30240 13500 1710

Oct-03 Oct-03 Dec-05

Jun-06 Jun-06 Sep-06

36 36

Nil

25

40

13

78

2

61

5490

Jun-04

Dec-06

Azhakulam Detergent manufacturing Unit

Nil Nil

Nil

0 0

90

90 0

-2 0

43 0

3870 Nil Not started

Nov-06 Jan-05

Apr-07 Jun-06

15

Services
Subash Hire Service

117

Appendix 8 E Lease land farming - A case study of two NHGs in Venganoor Panchayat
Group Leader Crops& area Rajamma Imputed value of own labour Total input Expenditure Expenses (purchase / Labour ) Profit/ Loss including imput labour
-13500 29270 33690 49460 -5300 23500 26600 44800

Payment of interest during the year

Total expenses

Main products (Value0

Byproducts(va lue)

Repayment of loan during the year

Loan taken

2003-04 Draught affected

Bananna 50 cents, Plantain 50 cents Bananna 50 cents, Kappa vazha 40 cents, Plantain 10 cents Banana 50 cents, Kappa vazha 40 cents, Plantain 10 cents Total

32500

12500

45000

15000

0

0

0

45000

18000

500

500

19000

-26000

-1350

38250

13250

51500

0

7200

1560

8760

60260

71780

2000

2500

76280

16020

2927

2004-05

46850 117600 Lalitha 28000

14000 39750

60850 157350 Area

0 15000

7200 14400 100 cents

1560 3120

8760 17520

69610 174870

84300 174080

2000 4500

3000 6000

89300 184580

19690 9710

3369 4946

2005-06

Group Leader 2003-04 Banana 28 cents, Draught Plantain 21 cents affected vegetable 10 cents Tapioca 40 cent 2004-05 Banana 28 cents, Kappavazha 22
cents, vegetables 20 cents tapioca 30 cent

12000

40000

50000

0

4500

4500

44500

25200

1000

1000

27200

17300

-530

30000

13000

43000

0

7000

4500

11500

54500

60000

1500

3500

65000

10500

2350

2005-06

Banana 28 cents, Kappa Vazha 22 cents, vegetables 15 cents Tapioca 35 cent Total

35000

14000

49000

0

10000

4000

14000

63000

69600

2000

4000

75600

12600

2660

93000

39000

132000

50000

17000

13000

30000

162000

154800

4500

8500

167800

5800

4480

118

Share /person

Area 100 cents Expenses Total

(Amount in Rs) Receipts Products consumed (Value ) Profit/ Loss Total

Year

CHAPTER 9 AN EVALUATIVE SUMMING UP
9.1 The Kudumbashree of Kerala is more than a micro finance institution. It is a women-based poverty alleviation project cast in a mission mode under the leadership of local governments. Poverty reduction and women empowerment are its major avowed goals. Built on self-help group initiatives of women, it is an outgrowth of the UBSP of the Government of India successfully implemented in the Alappuzha municipality in the early 90s. From a simple microfinance institution18, KDS has progressively expanded its roles and responsibilities. Though it is still anchored on financial intermediation, its area of operation expanded to include community health, education, basic needs like housing, sanitation and drinking water supply, destitute identification and rehabilitation, leaseland farming and development of micro enterprises. In brief it is emerging as a women’s agency as well as a delivery mechanism. The KDS model is different from the Grameen Bank model and many of its counterparts in India and elsewhere. Any meaningful evaluation of a project has to be related to its objectives and targets. This study whose detailed objectives are spelt out in chapter one is no exception. The major objective of the KDS mission is “to eradicate absolute poverty in ten years through concerted community action under the leadership of local governments” by facilitating self-help groups of poor women identified on the basis of a well-defined nine-point criteria [See Para 1.2.2]. The nine-point criteria used to identify poor women families have been modified subsequently. The major instruments for strategising these objectives are thrift and credit societies and development of micro enterprises. Through these efforts it is hoped that women empowerment could be achieved and that it could make a sustained impact and change in the lives of the poor. It was our task to investigate how far the major objectives have been achieved and to offer some recommendations for streamlining and reorienting the Mission. For selecting the sample households we have used a multi-stage random sampling method. Covering the three administrative regions of KDS and at the same time spanning the three natural regions of lowlands, midlands

9.2

9.3

Even as a micro finance institution with more than .3 per cent of the micro finance institutions of the world, KDS occupies an important place in the microfinance map of the world.
18

and highlands we have selected six districts viz. Alappuzha, Kollam, Ernakulam, Idukki, Kannur and Wayanad. From this we have chosen at random 54 CDS, 162 ADS, 794 NHGs and 6916 households. Of these 6519 are rural households and the rest are urban. This is a fairly good sample by any reckoning. It was not our purpose to blow up and to make aggregate estimates, but to obtain a fairly good account of the field realities. 9.4 On apriori grounds, the demographic and socio-economic background of the poor households will be different from the general pattern. However, the general notion that poor households have a larger family does not seem to hold good in the case of the sample households. The average family size is only 4.28 as against the census figure of 4.7. That over 7 per cent of the sample households are degree holders and 46 per cent have schooling up to SSLC is indicative of the high level of general literacy. The widespread belief that the poor are generally illiterates or near literates does not seem to be valid. The poor comprise predominantly of the backward and other backward communities. Even so, it is significant that 37 per cent belong to the forward communities. Poverty cuts across caste. Over 70 per cent of those who have full time employment, and 97 per cent of the casually employed are either self-employed or wage employed the former being the dominant pattern. Even those members who report themselves as Above Poverty Line (APL), (See Chapter 3 and 4) have to struggle to make both ends meet. Much of poverty in Kerala probably remains camouflaged. NHGs in Kerala are not a dormant lot. They are alive and kicking. The weekly meetings are regularly held. In all the rural NHGs, above 75 per cent attendance has been the normal pattern. The most significant aspect of KDS over these years has been the spectacular growth in the number of NHGs since the inauguration of their office in mid-2000. With the growth of NHGs especially in the rural areas, the number of poor families enrolled also naturally increased. The number of poor families (technically identified as poor based on the 4/9 criteria) as per official records heading towards 3.8 million in a state with over 7.2 million households. This is well over 50 per cent of total households. Based on the 2001 census data of households the proportion of NHG households to total households in gram panchayats ranges from 45 per cent in Kollam district to 90 per cent in Kannur district with a state average of 63.5 per cent. For urban areas the percentage (based on 2001 census) works out to 30. In both cases the percentages will be much less if we make allowance for growth in the number of families during the last 5-6 years. Even so these are exaggerated numbers and cannot be considered as reflecting Kerala reality.

9.5

9.6

ii

9.6.1

It may not be out of place to compare the official estimates of poor based on the NSS 61st round (2004-05) of household consumer expenditure using the calorific norms employed by the Planning Commission. The estimates based on 61st round data places the BPL figure at 4.79 million people or roughly 1.02 million households and the percentage of poor works out to 13.2 per cent for rural areas and 20.6 per cent for urban areas. [See Para 3.04]. While admitting that estimates of poverty based on calorific norms are defective (For some important criticisms, see Para 4.1.2) one can firmly say that Kudumbashree numbers of poor families are exaggerated. We have give more corroborative evidence based on our field investigation. Technically most NHG households in Phase III should belong to the BPL group based on the 4/9 criteria. From our interactions with NHG members, it was clear that they were aware of the measuring criteria. Out of the 1440 sample households that fall in Phase III set, 34.8 per cent reported that they were APL (above poverty line). Irrespective of the phases the overall self-evaluation of rural sample households as to whether they belonged to APL or BPL 32.2 reported as APL families. The corresponding urban figure was 23.4 per cent. For the urban households which have a longer history, the APL percentage can be reasonable. The reported proportion of APL families ranges from 11.5 per cent in the Wayanad district (which is a tribal pocket) to as high as 60 per cent in Idukki district (Phase III). As a sort of supplementary evidence, we have sought the views of NHG secretaries as well. Their reports show a percentage range of APL families from 20.5 per cent in Wayanad district to 38 per cent in Ernakulam district. Omitting two out of the nine variables viz. SC/ST member, children below 5 years used in the original nine-point we tried to evaluate the poverty level of the sample households and found that only a negligible percentage fall in the BPL bracket. There has been reported improvements in the drinking water and sanitation facilities, employment and in the number of families taking three meals per day. [For details See Part II of Chapter4]. These evidences sound somewhat strange and paradoxical. Three inferences come out most prominently. One, the nine-point criteria were not strictly followed. [Several secretaries reported that ward members recommended NHG members and even initiated the formation of NHGs without reference to the selection criteria]. Two, the traditional 9-point criteria have been modified and no longer serves as a bench-mark for any measure of poverty. The wide and somewhat open ended modification of the 9-point criteria to include women-headed households, presence of a widow, divorcee, abandoned lady, unwed mother, ‘mentally or physical

9.6.2

9.6.3

iii

challenged person/chronically ill member in the family and so on are also imprecise ascriptions which open wide the gate to non-poor categories. Three, the poor who graduate as non-poor are not properly escorted out. If all the above inferences are not valid, the pace at which the poor becomes non-poor is unbelievably rapid. Every one knows that Kerala is not passing through such a sweeping and dynamic transformation. Some suggestions are given below: 9.6.4 A meaningful poverty assessment should help (a) to identify the poor from the non-poor (b) measure the magnitude and depth of poverty over time and space and (c) throw policy insights for reducing poverty progressively. We have shown how the 9-point index of KDS, particularly its modified version has been defective on this score [See Para 4.2]. ♦ There is need to evolve a poverty line measurement or an entitlement index that will take note of the emerging ground realities of Kerala. The Planning Commission’s measurement of poverty based on calorific norms is at best a macro measure and is operationally irrelevant for identifying the poor from the non-poor. The Government may consider the report on ‘Identifying the Poor: Working Towards an Entitlement Index’ by Oommen (2006), or may do well to appoint a Technical Committee for this specific purpose. ♦ In view of the clear mixing up of APL and BPL, KDS and/or government may consider the question of introducing a sort of auxiliary membership to those who consider themselves as APL or identified to be so on the basis of well-defined criteria It is important to note that poverty is a multi-dimensional deprivation and KDS has to play a powerful role as a women’s empowerment programme in the future. The strategy of graduating the non-poor out is a matter for consideration. ♦ Some effort to rank and map NHGs within a CDS according to the real composition of BPL could be a welcome step to target assistance. ♦ The micro-enterprise programme be strengthened along with a definite agenda to escort the non-poor into better fields and new pastures.[See Chapter 8]. 9.7 Unlike the general pattern of micro-finance anchored on bank loans, KDS is primarily an own savings-based micro finance with the savings of the members likely to reach Rs.800 crore soon and credit based on that heading towards Rs.2000 crore. This is definitely big when we note that the iv

cumulative total micro credit disbursed as on September 2007 by all commercial banks (private and public) in Kerala is only a little over Rs.670 crore. [See State Level Banker’s Committee 94th meeting Background notes). The total savings of tribal NHGs by 2006 year end was around Rs.7.8 crore and the savings per tribal NHG around Rs.35,000/. The Thrift and Credit Societies (T&CSs) act as virtually unstructured intermediaries at the door steps of the poor households and facilitate the mobilisation of small thrift that surely might not have been saved at all but for this. Only 44 per cent of the NHGs resort to bank-linked credit and the loans they avail of form only 21 per cent of the loans disbursed to members. There is tremendous potential for expanding bank linked credit to the KDS members. 9.7.1 Not all KDS members are tied to Thrift and Credit Societies (TDS) in their portfolio choice. More than 26 per cent reportedly resort to a wider savings portfolio. Interestingly 27 per cent of those who take to a wider portfolio save in post offices and 17-18 per cent in chit funds. Over 39 per cent of the rural sample and nearly 47 per cent of the urban sample households take to insurance cover. The poor of Kerala are surely an enlightened lot. Borrowing is important for 84 per cent members. The purpose wise break up of the loans availed by members show that at least as far as the KDS loans were concerned there was some measure of prudential spending. The proportion of loan expenditure spent on daily consumption needs ranges from 7.8 per cent for highland members to 25.7 per cent for coastal members. In urban areas it goes as high as 31.5 per cent. In all cases education and medical expenses are important items and along with housing account for over 50 per cent of the loan expenditure. As regards outstanding debt, the liability of TCS loans is as low as Rs.4023 while the average from all other sources works out to Rs.19236 and ranges from Rs.14566 in highlands to Rs.28927 in the coastal region and in a rare case going as high as Rs.70,000. On an average members take up to 20 per cent from non-institutional sources. This is not a healthy trend. There is visible divergence between the average savings and the outstanding liabilities. The most hopeful sign is that members in general do not consider the interest rate regime as intolerable or unbearable. The multiplication of micro finance agencies poses a great threat to the KDS as a micro finance agency in the state. Several self-help groups sponsored by a wider range of sponsors such as Church, SNDP and other communal outfits and NGOs throw up a big challenge. Although our survey shows that only 9 per cent of KDS members take to such sources, the percentage

9.7.2

9.7.3

9.7.4

v

could be much higher. A KDS officer attached to Chirayinkeezh panchayat who issued a warning notice to NHG members reported that it had no effect. The NHGs which function as a subset of the local bodies stand on a different footing from other SHGs. More than 58 per cent of the secretaries we have contacted reported that they received assistance from other agencies and 99 per cent of this came from panchayats. There are various ways through which the KDS CBO interact with the local government and the agency role they play is different from other outfits with limited interests. We recommend that dual membership should be strongly disapproved. No KDS member should take membership in other SHGs at the same time. Divided loyalties can be counter productive. 9.8 The success and sustainability of KDS depends in a big way on the process of convergence at the local government level especially at the level of the antipoverty efforts of the various line departments. Progress made leaves many things to be desired. This is not to underestimate the progress made in regard to plan formulation and projectisation at the local level, where KDS has been assigned a critical role. Given the innumerable tasks particularly relating to plan formulation, project preparation etc that are assigned to the CBOs of KDS, it is a moot question whether they are eminently equipped for all these! The tasks which KDS have to undertake multiply everyday because the delivery of several services at the cutting edge level is transferred to them. While the women whose responsibilities and burden as a family member (housewives mostly) continued, their obligations and activities as a KDS CBO also have expanded. Overloading has to be reduced and activities rationalised. At any rate, care has to be taken not to reduce the NHGs as an appendage of the Mission bureaucracy or the panchayat bureaucracy. The CDS systems are subsystems of local governments, but not subordinate to them. The autonomy of CDS must be respected and fostered. Poor women are the means as well as the end of KDS activities. As a women-based collectivity KDS does contribute to enhance women’s struggle for gender justice and equality. That more than 90 per cent of women members have reported enhanced self-confidence after joining the KDS is indeed a great achievement. Importantly 75 per cent reported that their social position among peer groups, neighbourhood and wider community has improved. Of course there is no room for complacency. The best part is the remarkable progress in organisational and leadership capabilities of the SC/ST categories. The fairly respectable improvement in ‘bargaining skill’ which Amartya Sen considers an important non-material capability in determining outcomes among the socially vulnerable groups is no small achievement. It is significant that 81 per cent of STs reported that

9.9

vi

their general capabilities have ‘fairly improved’, 73 per cent in regard to improvement in self-confidence and 70 per cent in regard to capability to address a group. Interestingly enough it is the ST categories that recorded fairly good improvement in regard to awareness about women’s empowerment, women’s rights and gender discrimination. It is not clear why the highest percentage of ‘not improved’ is reported by the SC categories. 9.9.1 The reported progress in economic empowerment is not very high. Although there is significant growth in savings the sacrifice and the opportunity cost of it is very high especially for the very poor among them. The poor progress reported in regard to economic empowerment reckoned in terms of income, wealth and household assets needs examination. At any rate, that 91 per cent of the STs and 82 per cent of the SCs in the sample and 64 per cent of all backward classes have reported nil progress in asset-building should be a matter of concern. As regards knowledge empowerment, while there is good progress in reading habits, discussion of public issues and the like, there is very little progress in regard to training received. Those who have not received training range from 69 per cent as regards members holding degrees to 89 per cent for illiterates. Probably the most disquieting aspect is that Kudumbashree women are no exception when it comes to harassment as there is only very marginal reduction among them. Even this is significant compared to the all-Kerala picture. In brief, KDS has played a positive empowering role. All the parameters used to measure social capital affirm that there was bonding capital besides enhanced co-operation with officials who traditionally kept them away. Empowerment is the total resultant of various forces the most prominent being their functional linkage with the local bodies rather than access to microfinance. With all the empowerment KDS has to travel a long way to become an agency for social change in the State of Kerala deeply entrenched in patriarchical values. That 3200 Kudumbashree members contested the 2005 local body elections and 1408 of them won the elections is something to write home about. The KDS Mission considers micro enterprises (supported by bank loans or TCS loans) as the most important instrument for creating employment and income to the poor women. At the end of December, 2006 in the rural areas there were 1051 individual enterprises and 2789 group enterprises. Even these are concentrated in a few districts. Given the crying need to enhance sustainable income for the large number of poor families their number

9.9.2

9.9.3

9.10

vii

has to be increased with a fairly even geographical spread. An analysis of the costs and returns of 393 micro units spread over the districts of Thiruvananthapuram, Kollam, Malappuram, Palakkad and Wayanad shows that 35 per cent do not break even. With poor value added per worker and wages paid below subsistence level the continued functioning of some of the agriculture related enterprises are somewhat surprising. Dairy units and lease land farming are better perfomers in the agricultural sector. In Kerala with a dominant group of part time farmers lease land farming in which over 3 lakh NHG members are engaged is a welcome trend although it is important only as a supplementary income source for the poor. Modern micro enterprises (e.g. rubber products, clinical laboratory, computer centres) perform far better than traditional enterprises. There is need for technological upgradation and promotion of modern micro enterprises. 9.10.1 Before sanctioning a project and releasing subsidy (KDS mission should not be treated as a subsidy disbursing agent) the viability of the enterprises in a locality should be subjected to a simple feasibility study by a Cell constituted on a permanent basis at the mission head quarters. 9.10.2 Although KDS mission provides training they are too general to be of use to the immediate needs of the potential or actual entrepreneur. 9.10.3 KDS mission should organise common marketing strategies for units registered under them for a variety of products. This can be done through a co-operative marketing chain. They can buy the product of micro enterprises on the spot so that units should not be starved of working capital. 9.10.4 There is no monitoring and corrective mechanism to provide help and guidance to KDS supported micro enterprises. This must be rectified. 9.10.5 Some units complained that the repayment schedules now fixed by banks was based both on loans and subsidies. This is to be examined. 9.11 Kudumbashree needs significant redefining of its future roles and goals. Before we close this chapter we may make some general observations that also will be helpful in the redesigning of Kudumbashree. They are given in bullet form below: ♦ Given the different phases chosen in the implementation of KDS as a poverty reduction strategy, the target of eradicating poverty in ten years cannot be at a point of time. Even so, it cannot go beyond

viii

March 2013 by which time the Phase III KDS will complete ten years. It is time to think of a new vision and a restructuring strategy. Dismantling is difficult and probably unwarranted. ♦ It is important to recognise that the spirit of voluntarism of the ‘Alappuzha model’ CDS days is on the decline. ♦ Empowerment of poor women (not always the BPL category given the emerging KDS scenario) has to continue in Kerala which is predominantly a patriarchical society notwithstanding what scholars like Amartya Sen or Robin Jeffrey take it to be. ♦ Our study has shown the presence of various harassment of women among KDS women also despite the revealed public action potential of KDS women against social evils like domestic violence, illicit liquor etc. ♦ A highly consumerist society with a strong tendency to live like the bigwigs around, the poor and not-so-poor borrow and run into indebtedness. It is a matter for consideration how the Mission could make useful interventions to reduce indebtedness especially of the non-institutional variety. ♦ The monthly review meeting is a good monitoring and accountability mechanism. But it should not be a target oriented bureaucratic exercise. It should be a platform for sharpening collective vision and concerted action. ♦ The whole strategy of capacity building needs reexamination through a training needs assessment exercise. The income expenditure statement of KDS given in Appendix 9A shows that only a negligible proportion of the total expenditure is spent on capacity building while there is a high unspent balance every year. In 2004-2005, the amount spent on capacity building was only 2.8 per cent of total income and 6 per cent of the total expenditure. Over 90 per cent of expenditure is accounted for by staff salary and administrative cost. ♦ Updated auditing by the Controller and Auditor general is needed to ensure transparent public scrutiny. 9.12 To conclude, Kudumbashree a micro finance agency with a difference is at a critical stage of its evolution. In less than a decade KDS has come a long

ix

way. Although flawed KDS has contributed to the expansion of elementary capabilities, be it health care, gender equity, employment and the like. Poverty as measured by KDS of course leaves many things to be desired. While the need for a new criteria of measurement of poverty has to be addressed the reasons for the poor, non-poor mixing up also have to be investigated. Surely those who genuinely graduate are not escorted out. Women’s empowerment has made significant strides. But agency of women has to undergo change. KDS is surely at the threshold of a new phase. This is the time for consolidation, correction and also for redesigning a relevant strategy or new architecture for its future.

Appendix 9A Income and Expenditure Highlights (Rs. Lakhs)
Expenditure Carry Training Other Year Income over Staff & other Total Administrative Balance Salary related Expenditure items 561.67 113.61 69.49 12.04 195.14 2000-01 756.81 (74) (58) (36) (6) 18.05 127.18 83.55 34.50 245.23 2001-02 263.28 (7) (52) (34) (14) 135.68 145.04 75.75 21.06 241.85 2002-03 377.53 (36) (60) (31) (9) 81.94 19.70 125.88 139.88 2003-04 367.40 227.52 (36) (9) (55) (38) 237.42 148.29 136.21 15.5 300.00 2004-05 537.42 (44) (49) (45) (6) [Source: Income & Expenditure statement for various years furnished by KDS Mission]

x

REFERENCES
Agarwal Bina, Jane Humphries and Ingrid Robeyns (2006): Capacity Freedom and Equality: Amartya Sen’s Work from a Gender Perspective, Oxford University Press. Deaton Angus and Valerie Kozel, ed (2005), The Great Indian Poverty Debate, Macmillion. Dev Mahendra S, C.Ravi (2007): ‘Poverty and inequality: All-India and States 1983-2005’, Economic and Political Weekly, February 10. Harriss John (2001): Depoliticising Development: The World Bank and Social Capital, Left Word. Himanshu (2007): ‘Recent trends in Poverty and inequality: Some Preliminary results’, Economic and Political Weekly; February 10. Manna.G.C (2007): ‘On Calibrating the Poverty line for Poverty estimation in India’, Economic and Political Weekly, July 28, 2007. Mehta Jaya, Shanta Venkatramanan (2000): ‘Poverty Statistics, Bermicide’s Feast?’ Economic and Political Weekly, July 1. NABARD and Local Administration Department (1997): Poverty Eradication Mission, Kerala State, Thiruvananthapuram NABARD (1999): Task Force on Supportive Policy and Regulatory Framework for Micro Finance, Mumbai Neera Burra etal (2005): Micro Credit, Poverty and Empowerment, New Delhi, Sage, 2005. NSSO (2005): Debt and Investment Survey, Government of India, New Delhi. Oommen MA (1999): The Community Development Society of Kerala, Institute of Social Sciences, New Delhi. Patnaik Utsa (2004): ‘Alternative ways of estimating poverty and implications for policy: A Critical appraisal from the Indian experience’, Centre for Economic Studies and Planning, New Delhi. ___________ (2007), ‘Neoliberalism and Rural Poverty in India’, Economic and Political Weekly, July 28. Planning Commission (1993): Report of the Expert Group on Estimation of proportion and Number of Poor, Government of India, New Delhi.

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Putnam Robert (1993): Making Democracy: Civic Traditions in Modern Italy. _____________ (1995): ‘Bowling Alone: America’s Declining Social Capital’ Journal of Democracy, 6:1. Sen Amartya (1981): Poverty and Famines, Oxford University Press. ____________ (1985): Commodities and Capabilities, North Holland, Amsterdam. ____________ (1992): Inequality Reexamined, Claserdan Press, Oxford. ____________ (1999): Development as Freedom, Oxford University Press. ____________ (2006): ‘Gender and cooperative conflict’ in Bina Agarwal, etal ed (2006) State Planning Board, Economic Review, Various Years. Vasimalai MP, K.Narindir (2007): ‘Micro Finance for Poverty Reduction: The Kalanjiam way’ Economic and Political Weekly, March 31. Yunus Mohommod (1997): Micro credit Summit, Opening Plenary, Washington, DC,

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