1

STUDY TEAM AND SUPPORT STAFFProf.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

ACKNOWLEDGEMENTThis 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.Nairs 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

CONTENTSPages

Acknowledgement List of Tables List of Figures Appendic List of Appendices1

Chapter 1: IntroductionSalient 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 PoorThe 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 EvaluationThrift and Loans: The Macro Picture The Micro Scenario Purpose of loans and debt liabilities

39

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

54

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

61

Micro Chapter 8: Kudumbashree and Micro Enterprises Some Case StudiesKudumbashree 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 TABLESPages 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 FiguresFig: 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 AppendicesAppendix 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 loanseducation 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 INTRODUCTIONThis 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.

IFormally 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

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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 EMPOWERMENTEconomic Empowerment Social Empowerment Decision MakingParticipation 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 Banks 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.

1.21.2.1

A Brief History of KDSKudumbashree 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. Keralas 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 UNICEFs 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 peoples plan campaign triggered an accelerated growth during the latter part of the Ninth Plan and the period since then.

1.2.5

1.31.3.1

The structure of Kudumbashree CBOsThe 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

1.41.4.1

The Objectives of the StudyThe 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.

1.51.5.1

MethodologyThe 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.

1.61.6.1

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.

1.71.7.1

QuestionnairesTwo 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.

1.81.8.1

Questionnaire for NHG householdThe 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

1.91.9.1

Questionnaire for the Secretary of the NHGThe 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 PROFILE2.1 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 sizeFamily 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 conditionsPhysical 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 educationLevel 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 educationLevel 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 educationSocial 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 statusSocial 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 employmentOccupation 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 phaseDistrict 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 AttendancePhase 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 POORKudumbashree 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.

I3.01 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)Year2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 (06Nov)

No of NHGs formedRural Urban Tribal Total

No. of Families coveredRural Urban Tribal Total Rural

Families /NHGUrban 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.

II3.1 The Economic Status: Evidence from the field3.1.1 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 Evaluation3.2.1 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 & UrbanDistrict Economic status

CoastalPhase I Phase II Phase III All Phase I

MidlandPhase II Phase III All

All SampleDistricts

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

122 35.0 227 65.0 349 100.0Phase I

159 35.6 288 64.4 447 100.0

129 37.0 220 63.0 349 100.0All

410 35.8 735 64.2 1145 100.0Phase I

370 36.4 646 63.6 1016 100.0Phase II

444 33.6 879 66.4 1323 100.0Phase III All

219 31.9 468 68.1 687 100.0Urban

1033 34.1 1993 65.9 3026 100.0Total

District

HighlandPhase II Phase III

All (Rural)747 33.4 1491 66.6 2238100.0

All SampleDistricts

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 397100.0

2189 31.7 4727 68.3 6916100.0

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 Secretaries3.3.1 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 SecretariesDistrict 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 analysis3.4.1 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 CriteriaSocial 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 29.24129.97

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 12 593.74 711.62 893.20 480.29 652.01 365.42 873.56 231.452531.11

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 1Pathanamthitta

%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 PhasesDistricts / 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

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CHAPTER 4 THE NINE-POINT INDEX: A PROGRESS REPORT AND A CRITIQUEThis 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.

I4.1 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 these5

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 criticismsAny 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.

II4.3 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 NHGItem 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 conditionsPresent 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 NHGNo. 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 NHGItemPublic 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 NHGItem 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 NHGItem /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 NHGItem /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.

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CHAPTER 5 THRIFT AND CREDIT SOCIETIES: A CRITICAL EVALUATIONThis 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, childrens 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 Picture5.1.1 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 t