Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM)

The Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) is the central government's main programme to help poor rural families earn a steady income. It does this by bringing poor rural women together into small groups called Self-Help Groups (SHGs), linking these groups to bank loans, and helping them start or grow small businesses and farm activities. It is run by the Ministry of Rural Development. As of 2025, it had brought about 10 crore rural households into around 90 lakh SHGs.

Why does it exist?

Many poor rural families depend on a single, uncertain source of income, such as daily wage work or a small farm. When they need money for a cow, seeds, a sewing machine or a medical emergency, banks often refuse them because they have no land papers or collateral (property to pledge). So they borrow from moneylenders at very high interest and fall into debt.

DAY-NRLM's idea is simple: one poor woman alone is weak in front of a bank, but a group of 10 to 20 women who save together, keep accounts and guarantee each other is strong. Once the group is trusted, banks lend to it, and members use the money to build a livelihood (a way of earning a living).

Where did it come from?

• 1999: The government started the Swarnjayanti Gram Swarozgar Yojana (SGSY) to help the rural poor become self-employed through SHGs and bank loans.
• 2009: A committee on credit-related issues under SGSY, chaired by Prof. R. Radhakrishna, found that SGSY had not made much impact. Only about 22% of SHGs could get bank credit for income-earning activities, and most were stuck in low-income traditional work. It recommended a full "livelihoods approach": organising the poor into strong groups and federations, improving access to credit and markets, building skills, and joining up different schemes.
• 2010–11: SGSY was restructured as the National Rural Livelihoods Mission (NRLM), formally launched as "Aajeevika" in June 2011.
• November 2015: It was renamed Deendayal Antyodaya Yojana – NRLM (DAY-NRLM). "Antyodaya" means the rise of the last person, that is, the poorest.

Kerala's Kudumbashree mission (started in 1998) and Andhra Pradesh's SHG movement were important models that NRLM learned from.

How does it work? The three-tier structure

DAY-NRLM builds community institutions step by step:

1. Self-Help Group (SHG): A group of usually 10 to 20 women, mostly from poor households, who meet regularly, save small amounts, and give small loans to each other from their pooled savings. The aim is to bring at least one woman from every poor rural household into an SHG.
2. Village Organisation (VO): About 10 to 15 SHGs in a village join together into a VO. It helps groups solve problems and links them to services.
3. Cluster Level Federation (CLF): Several VOs in a cluster of villages join into a CLF, which handles bigger tasks such as larger loans, marketing and training.

Think of it like a school: students (women) form a class (SHG), classes form a school (VO), and schools form a district-level body (CLF). Each level is stronger than the one below.

The money: how SHGs are funded

• Revolving Fund (RF): A grant of ₹20,000 to ₹30,000 per SHG, so the group can start lending internally and build a credit history.
• Community Investment Fund (CIF): Up to ₹2.5 lakh per SHG, given through the federations, for members' livelihood activities.
• Bank linkage: Banks give loans to SHGs. Since 2021, the RBI allows collateral-free loans up to ₹20 lakh per SHG under DAY-NRLM (raised from ₹10 lakh).
• Interest subvention: Women SHGs can get loans up to ₹3 lakh at 7% interest per year. In 250 identified districts, groups that repay on time get an extra 3% subvention, bringing the effective rate down to 4%.
• Funding pattern: Centre and states share costs 60:40; 90:10 for North-Eastern and Himalayan states.

Key parts and sub-schemes

DAY-NRLM works through several smaller programmes:

• Mahila Kisan Sashaktikaran Pariyojana (MKSP): Supports women farmers with sustainable farming, livestock and non-timber forest produce.
• Start-up Village Entrepreneurship Programme (SVEP): Helps SHG members set up small non-farm businesses in villages, such as shops, tailoring units or repair works.
• Aajeevika Grameen Express Yojana (AGEY): Helps SHG members run rural transport vehicles.
• Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY): Skill training and job placement for rural youth (launched in 2014).
• Rural Self Employment Training Institutes (RSETIs): Bank-led centres that train rural youth to start their own businesses.
• Lakhpati Didi initiative (2023): Aims to help SHG women earn at least ₹1 lakh a year. The target of 3 crore Lakhpati Didis was reached a year ahead of its March 2027 deadline, and a new goal of 6 crore by March 2029 has been set.

India's position and examples

DAY-NRLM is one of the largest women's community programmes in the world. By 2025, SHGs had received over ₹11 lakh crore in bank credit with a repayment rate of over 98%, which shows that poor women are reliable borrowers. Over 4.6 crore women farmers ("Mahila Kisans") have been supported. SHG women also play roles in other schemes, for example as bank correspondents ("Bank Sakhis") and in running community kitchens and village services.

Commonly confused concepts

• DAY-NRLM vs DAY-NULM: Deendayal Antyodaya Yojana had two parts. NRLM (rural) is run by the Ministry of Rural Development. NULM (National Urban Livelihoods Mission, for urban poor) was run by the Ministry of Housing and Urban Affairs.
• DAY-NRLM vs VB-G RAM G (earlier MGNREGA): VB-G RAM G is a legal guarantee of wage work: the state must give work when asked. DAY-NRLM is a scheme for self-employment and livelihoods through SHGs: there is no legal right to a loan or a job. One gives wages today; the other aims at steady income tomorrow.
• DAY-NRLM vs DDU-GKY: DDU-GKY is a part of DAY-NRLM focused only on skill training and wage jobs for youth. NRLM as a whole focuses on SHG-based self-employment.
• SHG vs Joint Liability Group (JLG): An SHG has 10 to 20 members who save first and then borrow. A JLG is a smaller group (often 4 to 10 people, often tenant farmers) formed mainly to take loans that all members guarantee together.

Issues, criticism and the way forward

• Low incomes: Many SHG activities remain small and traditional, such as petty trade or a few animals, so incomes stay low.
• Weak market links: SHG products often lack branding, packaging, storage and steady buyers.
• Uneven spread: Southern states have strong SHG networks; some northern and central states lag behind.
• Debt risk: Easy loans without a strong business plan can push some members into over-borrowing.
• Way forward: Experts suggest moving SHGs up the value chain (processing, packaging, cold storage), linking them to e-commerce and government buying, building producer groups, and joining NRLM with other schemes, such as rural job schemes, to create shared work-sheds and market infrastructure.

Concepts to Know

• Livelihood: The way a person earns a living, for example farming, a small shop or dairy.
• Collateral: Property or valuables a borrower pledges to a bank, which the bank can take if the loan is not repaid.
• Interest subvention: The government pays a part of the interest on a loan, so the borrower pays a lower rate.
• Bank linkage: Connecting an SHG to a bank so that it can open an account and get loans.
• Federation: A bigger body formed by many smaller groups joining together.
• Value chain: All the steps a product goes through, from raw material to the buyer. Moving "up" the chain means doing more of the higher-earning steps like processing and selling.