LF govt claims better micro-credit structure than Nobel winner

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Oct 2006
India , October, 19 2006 - State’s system of funding self-help groups very successful, claims minister; Oppn alleges CPI(M) stranglehold

FIVE days after Bangladesh’s Mohammad Yunus and his Grameen Bank shared the Nobel peace prize for 2006, West Bengal’s Minister for Self-Help Groups (SHGs) bragged about the Left Front Government’s far-sighted policy of encouraging these basic units of micro-credit.

Minister Rekha Goswami also attributed the Left Front’s sweeping victory in the 2006 Assembly elections to its sharpened focus on micro-credit for the past few years. What she did not say is that the CPI(M) monitors the 4,05,427 self-help groups, covering a total population of nearly 5 million adults extensively via its committees at the ground level.

In fact, funding for each SHG of around 12 members is recommended by the panchayat bodies, the CPI(M) branch and local committees that guide these bodies. With the CPI(M) dominating the panchayat system, hardly a few rupees can go to any SHG without the party’s knowledge.

The SHG micro-credit structure falls into two categories. One is supported by the regional rural banks and the state cooperative banks, which are in turn reimbursed by the National Bank for Agriculture & Rural Development (NABARD). There are 2.45 lakh SHGs in this category. In the other category, there are 1.6 lakh SHGs supported by the Union Government under the Swarnjayanti Gram Swarojgar Yojana (SGSY).

Goswami said the government has set aside Rs 38 crore as subsidy for sanctioned loans under the SGSY. “We have been stressing micro-credit since the nineties, but have been able to make it work very successfully for the past two or three years,” she said.

The West Bengal model, she claimed, was far superior to the one created by Mohammad Yunus and his Grameen Bank in Bangladesh. “In Bangladesh, the government does not support Yunus,” she said.

Her comment was picked up by Opposition leader Saugata Roy, who said the whole SHG business should be left to non-governmental organisations (NGOs). “Micro-credit has been politicised in West Bengal because of the government’s role,” said Roy.

He alleged that the Left Front makes the SHGs work for it during election campaigns. “What Mohammad Yunus has done in Bangladesh is free from politics,” said Roy. By roping in SHGs and controlling them, the CPI(M) aims to wipe out the opposition at the grassroots, added Roy.

In fact, the Left Front government wants the number of SHGs in the state to increase to around 1 million, involving 12 million adults in a total population of 80 million.



Source : Express India
 

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