Moving Forward Towards Rural Economic Transformation
Moving Forward Towards Rural Economic Transformation
Moving Forward Towards Rural Economic Transformation
March 2020
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Public Disclosure Authorized
Public Disclosure Authorized
Public Disclosure Authorized
Progress and results achieved to date through the NRLP and the DAY-NRLM:
1. Approved on July 5, 2011 at a cost of US$ 1000 million (SDR 635.8 million).
2. It was envisaged that MoRD would reach all remaining rural poor throughout the country through its own resources using the institutions created and supported by the NRLP at the
national and state level.
3. Assam, Bihar, Chhattisgarh, Jharkhand, Gujarat, Maharashtra, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, West Bengal, Karnataka and Tamil Nadu
households. Another notable innovation
and achievement of the project has been
the community driven strategy that has
made DAY-NRLM truly a programme for
rural women and by rural women. Since
the launch of the project, nearly 295,000
community professionals and community
resource persons (CRPs) from amongst the
SHGs have been trained to undertake and
further implementation of all verticals of the
project on the ground.
2. Financial inclusion
restructuring in January 2016 in select setting up of a National Mission Management cumulatively leveraged nearly US$38 billion
geographies. By the end of the first phase Unit (NMMU) that has engaged technical of financing from formal financial institutions
of the NRLP in June 2018, 7 states had experts to support the implementation of the since the launch of the DAY-NRLM in 2011.
availed of these livelihood funds to promote DAY-NRLM; (b) the development of standard The US$ 500 million investment of the Bank
12 producer collectives, involving113,000 program guidelines; and (c) the development leveraged an investment of US$ 2 billion from
farmers with an overall budget of US$ of the financial management, procurement the GoI for the DAY-NRLM. Convergence
24 million. Across the DAY-NRLM, these management, human resource management initiatives with welfare schemes targeted at
approaches have expanded to 9 States and an MIS for the uniform roll out of the SHG members supported through the NRLP
involving 147,000 farmers. program across all states. and the DAY-NRLM, account for a significant
volume of additional resources. And finally,
4. Technical assistance to the National 5. Maximizing Finance for Development States have leveraged technical assistance
Rural Livelihood Mission (MFD) via partnerships with multiple stakeholders
across the development and private sector,
The NRLP has supported the DAY-NRLM The NRLP and the DAY-NRLM provide an while at the National level, partnerships such
program with technical assistance that has outstanding operational example of how to as the one with the Bill and Melinda Gates
enabled the MoRD to successfully expand the leverage resources under the principles of Foundation and TATA Trusts enable technical
project to all 29 states and 5 union territories MFD. A total of 65.7 million rural women, assessments and learning for improved
of the country. The NRLP has enabled (a) the enrolled in 5.94 million SHGs, have impact.
6. Female Labour Force Participation Among the most important reasons for schemes of DAY-NRLM for skill training and
(FLFP) the decline in rural FLFP in India was a placements viz. the Deendayal Upadhyaya-
reduction in agricultural jobs. The DAY- Grameen Kaushalya Yojana (DDU-GKY)
Between 1972 and 2013, FLFP in NRLM has therefore encouraged a shift and the Rural Self Employment Training
India declined from 31.8 percent to from casual farm labor towards self- Institutes (RSETI) sponsored by Public
26.7 percent. The DAY-NRLM program employment in high value agriculture and Sector Banks, which provide free residential
design was centered on the premise that non-farm businesses. According to a recent trainings to rural poor youth and facilitate
entrepreneurship can transition more study, there is a significant increase in placements and self employment.
women into the labor force through self- the number of self-employment livelihood
employment and help by creating livelihood activities in farm (5.4 percent) and non-farm The NRETP takes cognizance
opportunities for other women, as female (0.7 percent) activities in the DAY-NRLM of the clear and significant
entrepreneurs are more likely to hire female treatment areas. There is a 5.5 percent economic benefits of increased
workers. The program was tailored to increase in the Work Participation Rate female employment and
foster positive and sustainable impacts on (WPR), and overall 13.6% more women will continue to pursue the
female labor force participation, livelihoods, have been retained in the labor force in integrated approach adopted
income, assets, skill development and the DAY-NRLM areas. This has in a large under the DAY-NRLM.
household welfare. measure been supported by the two sub-
Intervention
From NRLP to NRETP to improve the impact of the program. in Gram Sabhas, the program now
Building on the aspirations of rural needs to help promote higher order
The World Bank’s partnership with MoRD households actively engaging in the economic transformation. The National
is predicated on bringing innovation and DAY-NRLM and accessing public services Rural Economic Transformation Project
leveraging global and national learning through convergence and participation (NRETP) was conceived of as the next
4. Labor and Welfare Impacts of a Large-Scale Livelihoods Program: Quasi-Experimental Evidence from India by Vivek Pandey, Abhishek Gupta, and Shivani Gupta. https://open-
knowledge.worldbank.org/handle/10986/31873
5. Mission Antyodaya (rural.nic.in/more/mission-antyodaya) is a program of the MoRD, which seeks convergence impacts across a number of target Gram Panchayats. In areas that
overlap with the project, NRLP will complement Mission Antyodaya’s objectives through project investments to SHGs/POs and by providing technical assistance for identifying the
scope for convergence and for monitoring.
Empowering Women and Rural Households
Over the last decade, 27 million women environments, lack of access to formal female businesses is unmet
have shifted from farm to non-farm finance, business development services, and the data suggests that
sectors but the decline in agricultural jobs infrastructure and technology. More than female networks and access
has not been offset by other employment 90% of household enterprises are self- to business and advisory
for women. Diversification of employment financed indicating an unmet demand of services are important
evident across the economy has left US$ 520 billion. determinants of enterprise
women behind with a significantly lower growth.
proportion of rural women benefitting Lack of education and skills remains the
from non-farm employment. In the last biggest constraint for women. The NRETP will build on the initial
decade, 5 million additional women successes of the NRLP and the DAY-
joined the non-farm sector while the rest A 10% increase in education NRLM and continue to emphasize
withdrew from the labor force for possible is correlated with an women’s access to economic
reasons of safety, job immobility, lack of 18% increase in female opportunities. The NRETP also
skills, increased education opportunities entrepreneurship. Women’s anticipates the additional efforts required
and increased male earning potential. ownership of enterprises is to engage women entrepreneurs and
also highly correlated with ensure that women are recognized and
Women face significant constraints to increased labor participation accorded rights in the ownership and
entrepreneurship stemming from low by women. An estimated 73% management of emerging producer
levels of skill, inhospitable enabling of demand for finance for collectives and rural enterprises.
phase of the NRLP, through additional .1. Institutional and Human Capacity community institutions (VOs and CLFs); (d)
financing of US$ 250 million via an IBRD Development financing for community organizations (SHG
loan, to focus on the upward graduation federations and producer collectives) mainly
of livelihoods/economic activities. The Under NRETP, a significant component for VCD for farm and non-farm commodities,
NRETP is mandated to identify and finance finances technical assistance consultancies, enterprise and skill development; (e) end-to-
approaches to achieve these ambitions human resources, training and development end value chain investments for high value
and to coordinate with the objectives of the of training material/approaches, in order to commodities and innovative pilots involving
Mission Antyodaya program of the Ministry place skilled professionals and technical community organizations and; (f) facilitation
of Rural Development in order to accelerate agencies to work with the DAY-NRLM at of higher order financing for producer
economic transformation and increase the national, state and district levels. This collectives and skills development and
convergence of existing government approach centers on (a) the retention and provision of digital financial services.
programs with the DAY-NRLM, building on recruitment of professionals with business
the NRLP outcomes. management expertise and client systems 3. Maximizing Finance for Development
tailored to implement a market-based (MFD)
What does NRETP focus on? approach, (b) an emphasis on sourcing of
technical support from agencies (Public, In line with the intention to innovate and
Investment support for economic initiatives: Private and NGOs) with expertise in rural identify impactful interventions, and to crowd
The initiatives under the DAY-NRLM enterprise development, (c) state-to-state in the efforts of a range of development
have demonstrated that the approach learning; and other capacity building partners, the NRETP is financing pilot
of building strong social and financial support for Mission Antyodaya. initiatives that support innovative livelihoods
capital can provide a launch pad for a activities in agriculture, livestock, non-farm
new generation of economic initiatives The NRETP is also focused on expanding enterprises, youth employment, nutrition
such as the promotion of high value support for mainstreaming environmental activities among others, for rural poor
agriculture commodities and value chain and social sustainability of investments households, in partnership with private
development (VCD) through improvements made under the project. New training sector, public sector and civil society
in market access, rural enterprise and skill modules on specific aspects of resource organizations. This approach includes
development, and the introduction of digital efficiency and minimization of adverse convergence of a number of government
finance innovations. impacts of climate change have been programs including those of the Ministry of
developed and rolled out. Rural Development, piloted under the NRLP
Results to date indicate that these through convergence funds.
investments are starting to transform a 2. State Livelihood Support
significant proportion of SHGs into viable The program also aims to
economic agents with the potential to Support under the NRETP aims to increase facilitate the convergence of
engage with an evolving rural economy. the uptake of economic activities like value private sector, philanthropy,
DAY-NRLM fundamentally aims to chain development (VCD), enterprise and social enterprises, impact
address voice, agency and economic skills development. Specifically, the activities investors and other
opportunities for rural women, making intended to be financed financed include development partner supported
this program the largest social, financial (a) support to the SRLMs, with a focus on programs to achieve targeted
and economic empowerment program districts that will be selected for project impacts in chosen/pre-defined
for women across India and the world. coverage; (b) support to strengthening development/village clusters.
From mobilizing community professionals existing community
and community resource persons, to institutions (VOs and CLFs)
training and empowering women Business to ensure the sustainability
Correspondents (BCs), the program has of all interventions under
maintained and furthered it’s avowed aim of DAY-NRLM (c) mobilization
women’s empowerment. The NRETP seeks and strengthening of
to build further on this strong foundation producer collectives,
created in the 13 states under the aegis of including support to
the DAY-NRLM and NRLP. strengthening existing
Key Lessons and the Way Forward
The South Asia Agriculture and Rural The next few years of this support to DAY- • Similarly, there is a need to build on
Growth discussion notes (1-8) endeavors NRLM must also address the following and streamline external partnerships,
to capture a number of lessons from the concerns: particularly in the area of livelihoods.
NRLP approach which the NRETP will • How to ensure that community • While maintaining the gender focused
continue to build on. The program will institutions are sustainable and interventions of the NRLP, the NRETP
significantly advance gender mainstreaming remain inclusive and participatory, must now seek to reorient and
and the women’s economic empowerment such that it evolves in consonance expand it’s scope to support stronger
agenda through specific interventions with the needs of its members and rural economies.
on women-led producer collectives and with local government functions and
enterprises, building upon the experiences has strong mechanisms in place to For geographies experiencing high-levels
of the Start Up Village Entrepreneurship be able to ensure sustainability of the of social exclusion and poverty, the NRLP
Programme (SVEP) and upgrading of skills interventions under DAY-NRLM and and DAY-NRLM project design continues
in selected self-employment occupations NRETP beyond the project period. to be relevant in demonstrating the
for women SHG members and youth. • Since there is no demonstrated foundations for implementing participatory
Further, interventions and strategies on pathway for interventions, a trial rural livelihoods programs. However,
digital payments, financial inclusion and and error approach is needed for given resource constraints, livelihood
literacy, business correspondents and adaptive learning and appropriate interventions need to align and evolve
enterprise financing are expected to lead course correction. The program must with community needs. Scale-up efforts
to significant financial empowerment of build systems to track and monitor should continue to remain socially inclusive,
rural women. Support to Mission Antyodaya and maintain the flexibility to develop building on the strong foundation of
will strengthen women’s advocacy and tailor-made interventions. CBOs and include grievance redressal
agency in the delivery of social safety • How can we ensure improved mechanisms.
nets and entitlement services for the rural convergence – both at the inter-
poor. Nutrition sensitive agriculture and ministerial and department level. Further, as the NRETP supports
interventions on food handling and hygiene Since the beneficiary base of multiple the transition to rural economic
will benefit women and household health. government programs remains the transformation, there is a
Program monitoring will continue to track same, a holistic approach to targeting need to ensure pathways for
and report on gender, inclusion, citizens’ and delivery of schemes for poor and communities to self-manage
engagement and women’s economic vulnerable households, would lead to and self-govern.
empowerment. more efficient resource allocation.
We are grateful for the generous support from the Ministry of Rural Development, the Bill & Melinda Gates Foundation, the
Department for International Development, and various State Rural Development departments. We would like to thank the
respective state governments, project staff, and World Bank task team members for their contributions to the implementation of
these approaches and on-ground activities.
Disclaimer: The findings, interpretations, and conclusions expressed in this note are entirely those of the author(s) and should not
be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the
countries they represent.