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Ramesh proposes dedicated bank for women SHGs

New Delhi: With an eye on promoting self- employment among women, Government has proposed to bring down the interest rate on bank lendings to Self Help Groups at par with that on crop loans to farmers and set up a dedicated national bank for women SHG.

The decision was announced today by the new Rural Development Minister Jairam Ramesh, who said that he would take up both the proposals with Finance Minister Pranab Mukherjee.

Government hopes to more than double the number of SHGs in the country during ten years of the National Rural Livelihoods Mission (NRLM), which was described by Ramesh as the "most important flagship programme in UPA II" and compared with the UPA-I`s Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA).

The central government has already decided to set up a "Women`s SHG`s Development Fund" with a corpus of Rs 500 crore to empower women and promote their Self Help Groups (SHGs).

The measure was announced by Finance Minister Pranab Mukherjee during the presentation of the Union Budget for the current financial year.

"We need a NABARD type of institution for SHG. We have proposed a detailed paper for national bank for SHGs. We will take up the matter with the Finance Minister," Ramesh said.

Currently crop loan is available to farmers for an interest between 6 to 7 per cent, while the SHGs have to pay 12 per cent interest for loans.

The announcements came on a day when the ministry signed a credit agreement worth Rs 4,600 crore with World Bank for National Rural Livelihoods Project (NRLP).

The minister also announced change in the name of NRLM to "Aajivika" for easy understanding of the scheme`s purposes to common man.

"Nobody understands NRLM. We are going to change the name. It will be called Aajivika (livelihood). Aajivika word is known across the country," Ramesh said. The name change will, however, require the approval of the Union Cabinet.

The NRLP project, meanwhile, is expected to strengthen implementation of NRLM, one of the world`s largest poverty reduction initiative aimed at reaching 350 million people or almost a quarter of India`s population.

Lauding the initiatives of NDA-ruled Bihar in implementing NRLM, the minister said that it was "doing well".

He said Bihar was trying to replicate what Andhra Pradesh has done in the SHG model and urged other states to follow the "two states with maximum success".

Replying to questions, Ramesh also said that his aim will be to give special focus to development in Naxal-hit districts of the country.

Terming the NRLP a "critical project", Ramesh said that it will help scale the battle against poverty across the country through the activation of SHGs, skill building, and other livelihood interventions among BPL households.

He said two more proposals to sign similar agreements with World Bank are also in pipeline.

The minister hoped that the NRLP will help to extend the successes of the past livelihood initiatives to other lagging regions of the country. It will now support specific additional investments in 12 states with a high number of poor people. These states are Bihar, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tamil Nadu and Uttar Pradesh.

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