ENABLING RURAL FOLK TO OVERCOME POVERTY

By Lennart Bage, The Hindu, May 9, 2005

This year, as the first five-year review of progress towards the
Millennium Development Goals approaches, India can be proud of its
accomplishments. In January, the Millennium Project report announced that
India was on a better track than several other developing countries to
reach the Millennium Development Goals (MDGs) by the target date of 2015.
The Beijing +10 meeting, held to assess the progress of commitments to
improve the lives of women, shows that India is making strides in
addressing gender equality issues. This is also the Year of Microcredit,
and India, through its numerous self-help groups and innovations in
financial services to poor people, serves as an inspiration to other
developing nations.

Since 1979 the International Fund for Agricultural Development (IFAD) has
been working with the Government of India to help reduce poverty in some
of the country's most remote and fragile areas, targeting the poorest and
most marginalised people. Mutual learning and information exchange has
been an important feature of IFAD's work with India.

India's commitment to reducing poverty is reflected in the numerous
initiatives it has taken, leading to the progress made over the last
decades. But the country still faces a major challenge to reduce poverty
on a larger scale. Millions of poor people in rural areas will continue to
suffer under the weight of extreme poverty unless progress is made in
addressing the plight of vulnerable groups. Three-fourths of India's poor
population, or 193 million people, live in rural areas. Scheduled Tribes
and Scheduled Castes are among the poorest in India and constitute 40 per
cent of the internally displaced population. These groups, and especially
women, suffer a higher incidence of poverty, greater vulnerability and
lower social status than others. Targeting rural poverty, particularly
among Scheduled Tribes and Scheduled Castes, and women, will better enable
India to reach its full development potential in a sustainable manner.

IFAD has provided India with more funding than it has to any other
country. IFAD is dedicated to working closely with the Government of India
to improve the lives of women and other vulnerable groups.

IFAD also uses its expertise to reap benefits for the rural poor that go
far beyond its initial investment. It does this by testing and
implementing institutional and technical innovations that can be carried
forward by others. One example is the Jharkhand-Chhattisgarh Tribal
Development Programme, to ensure household food security, livelihood
opportunities and an improved overall quality of life. The programme was
designed so that it could be easily replicated by government and other
agencies.

Another example of an innovative approach is the promotion of self-help
groups (SHG). IFAD through its support to the Tamil Nadu Women's
Development Project piloted the SHG methodology, which is now recognised
as an appropriate methodology for microfinance in the country. In
addition, the Maharashtra Rural Credit Project piloted the SHG-bank
linkage methodology that has since been upscaled at the national level by
the Government, NABARD and other institutions.

IFAD places empowerment at the heart of its projects and programmes in
India. A main goal of our work is to empower people with the skills and
assets they need to lift themselves out of poverty.

IFAD supports investment projects and programmes in the populous states of
central India where levels of rural poverty are some of the highest in the
country. Programmes in Orissa, Jharkhand and Chhattisgarh are benefiting
608,000 tribal poor people by helping them improve their livelihood
opportunities. IFAD is supporting the Small Industry Development Bank of
India through the National Microfinance Support Programme. This programme
will reach 1.3 million poor people in underserved areas, helping them to
develop an extensive, national microfinance sector which will provide
technical assistance so rural poor people can start, expand or diversify
income-generating activities.

IFAD has also responded quickly to the tsunami disaster by approving a $
30 million loan package to support recovery of livelihoods of affected communities in Tamil Nadu. Promoting grassroots institutions is the
cornerstone of IFAD's strategy in India.

(Lennart B[macr]ge is president of the International Fund for Agricultural
Development (IFAD), a specialised agency of the United Nations, and is
currently on an official visit to India)