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Speech of Shri V. Vasanth Kumar

Fri 09th Oct 2009 09:26 AM
Speech of Shri V. Vasanth Kumar
Speech of Shri V. Vasanth Kumar

Speech of Shri V. Vasanth Kumar, Minister of Rural Development, Govt. of A.P.

Respected Prime Minister, Dr.Manmohan Singh ji, respected Union Minister of Rural Development and Panchayati Raj, Dr.C.P Joshi ji, respecred MOSs Rural development, respected State Government Ministers Panchayat Raj and Rural Development , respected members of planning commission, Secretary Rural Development, Secretary PR Govt of India, and senior officers of Rural Development & Panchayat Raj from Govt of India and state Governments, ladies and gentlemen, I deem it a great honour to be present here today to participate in the Conference of State Ministers of Rural Development and Panchayati Raj and to listen to valuable message of the Hon’ble Prime Minister and the Union Minister of Rural Development.

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I am here with a heavy heart. In the passing away of Dr. Y. S. Rajasekhara Reddy, one of the greatest political leaders in post-independence era, I have lost my mentor, my people lost their messiah, their father, their mother and their  greatest benefactor. Never in the history of any State in the country, in any five years period, so many developmental and welfare programmes were implemented as in Andhra Pradesh under the leadership of Dr. Reddy. For the first time, state government took a decision to universalize food security, shelter, social security pensions, access to health care and education. We have provided health insurance cover upto Rs.Two lakhs per person for about 80% of our State’s population. He was the epitome of inclusive growth and his belief was that every citizen should be part of the growth process. We have taken up construction of 67 lakh houses for weaker sections, 35 lakhs have been completed and the rest are in progress. Under the concept of ‘saturation’ of social safety nets, we have sanctioned 55 lakh new pensions to the old aged, widows, physically handicapped etc.


Under ‘food security’, we have been supplying rice at Rs.2/- per kg., for about 80% of our population. We are implementing a scheme to completely reimburse the entire tuition fees to the eligible students among SC, ST, OBC, Minority communities, and  to economically backward communities. We have been supplying 1500 crore units of power per annum free of cost to farmers, besides giving them interest subsidy of 4% per annum on crop loans. It is not as if Dr. Reddy’s contribution has been only in the fields of agriculture and rural development. Under his leadership, Andhra Pradesh has emerged as one of the fastest growing States in the Country.
It is unfortunate that we do not have him with us any more. In A.P we are determined to walk in the foot steps left behind by him and complete in full shape all the development programmes that he had initiated for the poor.

That is our real tribute to him. I deem it an honour to share A.P’s experiences in poverty eradication and offer our views on the proposed National Rural Livelihoods mission.
The Government of Andhra Pradesh recognized the potential of organizing rural poor women into Self Help Groups in order to unleash their energies and to enable them to come out of poverty. To achieve this task, the Government of Andhra Pradesh setup a dedicated State Level Mission for eradication of poverty with dedicated District Level Units and Mandal Level i.e. Sub-District Level Units.   The task given to the Mission was to organize all the poor in the rural areas of the State and establish a strong network of institutions of poor women and nurture them continuously till they come out of poverty. 

Dr. Reddy’s vision was that every poor family in the rural areas should be part of this network. Thanks to his insistence and drive we have reached out to 1.0 crore rural poor women, who are organized into 8,50,000 Self Help Groups.  These S.H.Gs have been federated into 35,525 Village Level SHG federations, which cover all villages in the state. They are in turn federated into 1099 Mandal Level federations and 22 District Level Federations. We have covered 90% of the rural poor households with this ‘saturation’ approach.


The formation of SHGs or federations is meaningful only if they are strengthened with need based and continuous capacity building programmes.  In Andhra Pradesh I am happy to report that over the last nine years we have spent an amount of Rs.680.0 Crores for capacity building of the SHGs and their federations, the staff of the Mission, and other line departments.  It is this investment that is responsible for the vibrancy of the women’s empowerment programme in our state.
Our late Chief Minister was tremendously  impressed with the capabilities of the poor women and their ability to seize even small opportunities and convert it into regular income streams.  He formulated the “Pavala Vaddi” scheme, interest subsidy scheme for those SHGs who repay their Bank loans promptly.  Any interest paid by them above 3 percent per annum is reimbursed by the State Government. 

This scheme also gave courage to the bankers to finance  the SHGs liberally. In the five years prior  to ‘Pavala Vaddi’ i.e. 1999 to 2004 the banks in Andhra Pradesh cumulatively lent Rs.1600.0 Crores.  However, in the five years after Pavala Vaddi i.e. from 2004 to 2009 the Banks have lent an amount of Rs.19,200.0 Crores, an unparalleled increase of 12 times in 5 years. Bankers’ confidence in financing S.H.Gs stems from the strong support given by the C.M for loan recovery and the close support provided by the state level mission and the district and sub-district  and sub-district units.


Another unique achievement in A.P is the concept of debt swapping and total financial inclusion. In select villages, Banks finance S.H.G members to come out of the debt trap and repay the high cost loans of money lenders. Banks finance upto Rs.500,000 per group. So far we have covered 6000 villages and in the next 3 years we will complete all the villages in the state.
The Government of Andhra Pradesh believes that an investment  of at least Rs.1,00,000/- (Rupees One Lakh only), in terms of ‘small’ and ‘big’ loans is needed by a typical S.H.G member over a period of 5 to 8 years, to come out of abject poverty.  Our Late Chief Minister promised the women SHG members of Andhra Pradesh that each one of them would be a “Lakhpathi”.  We need to mobilize another 80,000.0 Crores in the next 5 – 6 years from financial institutions to actualize the dreams of our late Chief Minister. 


In Andhra Pradesh we recognize that separate route for poverty eradication lies in upgrading the skills of rural youth through training in employable skills and placement in private sector.  From inception of this programme, through the aegis of Employment Generation and Marketing Mission (EGMM) of Dept of Rural development, we have been able to train and place 2,00,000 youth in urban areas with regular salaried income.
Dr.Reddy was very concerned about social security for S.H.G members and his latest innovation was ‘Abhaya hastam’, a co-contributory pension scheme. Each S.H.G member contributes Rs.365 per year and the State Government matches this saving and both the amounts are invested in a pension fund. A member on attaining the age of 60 years gets a monthly pension of not less than Rs.500 per month, going upto Rs.2200 per month.

 This has become a very popular scheme and 1.0 crore women are going to be enrolled under this scheme, making it the largest co-contributory pension scheme in the world for the unorganized poor. It also has an insurance cover.
Dr.Reddy was of the view that for the transformation in rural areas to happen quickly all Government line departments must work closely with Self Help Groups and their federations.  I am very happy to report that all important line departments like Agriculture, Animal husbandry, Dairy, Health, Education, Land Administration, Tribal Welfare, etc., are working very closely with the SHG federations.  We also have a remarkable convergence of NREGS with the SHG federations and this convergence is helping the SHG members to access all services under NREGS.
Coming to the National Rural Livelihoods Mission, we welcome the mission wholeheartedly. We are in complete agreement with  the strategy proposed for the Mission, the structure of the Mission, the functioning of the Mission and the funds flow mechanism.  To us it is not new, since we have been working in a mission mode for a long time. We have experienced the effectiveness of this approach.

With your kind permission, I would like to offer a few suggestions based on our long experience with promoting SHGs and SHG federations, through a dedicated State Level Mission:

1. Flexibility. NRLM should recognize that different States are at different stages of evolution in this area and have different priorities and therefore we request a flexible approach.

2. Strong federations. A.P’s experience shows that S.H.Gs and SHG federations require continuous support for a period of  10 to 12 years for them to facilitate each member to access adequate financial resources from the Banks and have sustainable livelihoods. Adequate support should be provided to the federations of SHGs at village, mandal / block level and district level.

3. Community resource persons. In Andhra Pradesh we were able to scale-up the program to cover all the villages in the State in a short period of time because of our investment in developing a large cadre of Community Resource Persons, best practicing SHGs members. 
4. Interest subsidy. Provision of interest subsidy has played a very important role in the success of SHGs in Andhra Pradesh.  It proved to be a turning point in the SHG movement. The provision of Interest subsidy should be for all SHGs accessing bank loans. 

5. Risk management. Risk mitigation and coping with risks are very important in preventing families from slipping back into poverty. The Mission should be the nodal agency for Life Insurance Schemes like Aam Aadmi Bhima Yojana, Jana Shree Bhima Yojana and Health Insurance Schemes.

6. Sensitive support organization. One of the critical lessons learnt by us is that previous efforts in poverty eradication have grossly underestimated the handholding support required for the poor. Dedicated structures staffed by committed people are required at state level, district level and block level. We have made such investments and are reaping the benefits. Hence, our strong recommendation is that the administrative costs should be enhanced from 5% of the programme cost to 10 %. If we don’t invest in building good and competent  human resources, the larger programme investment will not yield the desired results.

7. Urban mission.  In A.P, we have already set up a similar mission for urban poor and I would like to appeal to GoI  to take measures to set up similar mission for urban poor across the country.

NREGS: National Rural Employment Guarantee Scheme was launched on 2nd February 2006 from Andhra Pradesh by Madam Sonia Gandhi, Chairperson UPA and Dr. Manmohan Singh, Prime Minister of India.  Dr. YS Rajasekhar Reddy, late Chief Minister of AP, has accorded highest priority for effective implementation of NREGS in the state of AP.  He used every opportunity to highlight the Rights and entitlements of the wage seekers and the non-negotiable principles to be followed in implementation of NREGS.  He clearly saw the potential of NREGS in transforming poverty geography of Andhra Pradesh.  In his interactions with the village communities during his visits to villages he always used to get feed back from the poor at the grass roots on implementation of the NREGS. 

His support helped shaping Andhra Pradesh as a Model State in the implementation of NREGS. The Department of Rural Development had nurtured best practices such as distribution of wages right from day one, through postal savings bank accounts of the wage seekers, usage of computer software for managing all transactions of NREGS, transaction based MIS in the public domain which enable tracking of every house hold, every work and every rupee and payment of minimum wages to the wage seekers. 
NREGS investments in AP were deployed to expand the livelihoods base in the rural areas. 3.25 lakh acres of Horticulture plantation is taken up under NREGS.   8000 MI Tanks are fully restored and rehabilitated. 5.91 lakh acres of lands of the poor have been developed.
Dr. YS Rajasekhar Reddy provided unconditional political support to the processes of Social Auditing of the NREGS in the state.  The State has brought out social auditing rules and established an independent Society for Social Auditing, Accountability and Transparency and earmarked required budget for conduct of social auditing of NREGS in every habitation.

Dr. YS Rajasekhar Reddy had deep commitment towards the cause of Scheduled Castes and Scheduled Tribes. NREGS investments are channelized in such a way that lands belonging to SCs & STs are developed.  Wherever, there is feasibility, support for irrigation facilities and horticulture was extended to lands belonging to SCs, STs.  30,000 acres of Rubber Plantation for Tribals in agency area of East Godavari district and 1 lakh acres of Coffee  plantation for Tribals in agency area of Visakhapatnam district are taken up under NREGS. 
Our late CM has rolled out a special package for relief and rehabilitation of bonded labour in Mahabubnagar district and Tribals of agency areas for expanding their livelihood base through NREGS.

I would like to take this opportunity to impress upon Minister of Rural Development, GOI to take immediate action on certain issues critical to implementation of NREGS:

1) What NREGS has achieved by delivering wages directly to labour is laudable, but the expenditure could not be substantially converted into productive assets due to lack of technical manpower. Towards consolidation of what has been done in NREGS so far,   I feel that the wage employment should result in building durable assets for the poor.  Building technical backbone with qualified engineers and quality control teams should be taken up on priority. 

2) The second biggest problem is our inability to deliver wage payments in time.   A deeper analysis of reasons for such delays reveals that the DOP staff at the delivery level i.e., at Sub Post Offices and Branch Post Offices have to handle enormous manual work for maintaining the accounts of Crores of wage seekers which is proving to be beyond their capacity. Therefore, a lot needs to be done to computerise them, provide sufficient staff, upgrade cash conveyance practices, etc., on war footing so as to meet the statutory obligation of making timely payments. 

3) Lastly, to increasing the scope of works under NREGS, I request that;
i) Construction of weaker section houses, may be dovetailed with NREGS. 
ii) At least two or three unskilled workers in each habitation for maintaining village sanitation, may be covered under NREGS.  
iii) Agriculture operations be included in the permissible works category.
iv) Construction of Individual Sanitary Latrines may be dovetailed under NREGS.
In addition, I would like to request for provision of 100 days of employment to each individual, instead of Family and extension of similar wage employment programme for the benefit of unskilled workers in urban areas also.
Finally , I wish that this one day conference of Rural Development and Panchayat Raj Ministers of all State Governments  would definitely help in formalizing features of proposed NRLM and addressing emerging issues regarding implementation of NREGA.