Promotion of self-employment is one of the ways in which the Government of India has been trying to alleviate poverty. The modified version of the self-employment scheme called Swarnjayanti Gram Swarozgar Yojana (SGSY), launched in 1999, aims to promote micro-enterprise through credit-cum-subsidy. This paper analyses interstate performance of the scheme. Although the scheme in its holistic form is relatively new, the early evidences hold some important lessons that can be used to improve the design and implementation of the scheme. In particular, it is found that: contrary to the popular belief, subsidy does not seem to explain interstate performance of the scheme; effectiveness of lending institutions is crucial for the performance of a scheme that promotes micro-enterprise through credit-cum-subsidy; because the scheme requires matching contribution from the states, its performance depends also on states' fiscal position as well as the priority they attach to the objective of poverty alleviation.

Enabling the poor to generate livelihood in a sustainable manner is a far more durable strategy than merely supporting them through regular transfers. However, generation of livelihood is not so easy as it involves undertaking several activities ranging from mobilising the poor to enabling them to prepare a plan of activity to providing them with critical inputs such as credit and skills, to ensuring better and fairer prices of their produce and so forth. All this requires a thoughtful approach, a high level of coordination among multiple agencies, together with a close involvement of the agencies helping the poor to generate income in the first place.

Like many other developing countries, India has been pursuing self-employment programme for the past several years. The earlier version of the programme called Integrated Rural Development Programme (IRDP) had several weaknesses that greatly restricted its effectiveness. Removing the lacunas of IRDP, the Government launched a holistic self-employment programme called Swarnjayanti Gram Swarozgar Yojana (SGSY) about 10 years ago. This paper analyses the interstate performance of the scheme. Although the scheme in its holistic form is relatively new, the early evidences hold some important lessons that can be used to improve the design and implementation of the scheme.

Generation of employment, especially for the poor, has been one of the major areas of the successive governments. Currently, two of the Centrally Sponsored Schemes (CSSs) of the Ministry of Rural Development that directly deals with creation of employment for the poor are Sampoorna Grameen Rozgar Yojana (SGRY) and Swarnjayanti Gram Swarozgar Yojana (SGSY). While SGRY is meant to provide wage employment, the aim of SGSY is to promote self-employment in the rural areas. This paper focuses on SGSY only.

Governance And Public Policy Journal, Poverty Reduction, Self-Employment Programme, Integrated Rural Development Programme, IRDP, Sampoorna Grameen Rozgar Yojana, SGRY, Swarnjayanti Gram Swarozgar Yojana, SGSY, Poverty Alleviation, Planning Commission, Local Governments, Self-Help Groups, SHGs, Non-Government Organisations, NGOs, Community Organisations.