Cover story : Will the Privatisation of PSBs be Good for Financial Inclusion?

CPRDP&SSD organises one-day online training programme for FES professionals on the strategy for the Action Research Project (Phase-1) Interventions in FES clusters
CGSD organises 5-day national online training on Gender Mainstreaming for Rural Development
Capacity building programme for charge officers/representatives of SAGY – II (2019-24)
CGGPA Organises webinar on Social Accountability Tools and Techniques for Good Governance
CHRD organises Management Development Programme on Rural Development Leadership for Block Development Officers
Workshop-cum-ToT on Good Governance through Community Participation in Rural Development – Tools and Techniques
Online training programme on Transgender: Inclusion and Empowerment
Azadi ki Amrut Mahotsav: CDC organises webinar ‘Estimating, Identifying and Programming for the Poor: Some Pre and Post COVID Issues’
NIRDPR Celebrates World Environment Day

Will the Privatisation of PSBs be Good for Financial Inclusion?

A 360-Degree View on Privatisation of PSBs

Illustrative image

The Government made its intentions clear to privatise two Public Sector Banks (PSBs) in the Union Budget for FY 2021-22 as part of disinvestment drive to garner Rs. 1.75 lakh crore. The issue of privatisation of PSBs is as old as the nationalisation itself. The government led by late Smt. Indira Gandhi nationalised 20 large private sector banks in two tranches (1969 & 1980) to shift from ‘class banking’ to ‘mass banking’, i.e. to i) enhance the presence of banks in semi-urban and rural India; ii) channelise institutional credit to vulnerable sections, Micro Small & Medium Enterprises (MSMEs), agriculture & allied sectors; and iii) make PSBs as instruments of social justice, and ultimately to achieve financial inclusion. Narasimham committee in 1998 and PJ Nayak committee in 2014 recommended lowering the government’s stake to below 50 per cent in order to free PSBs from dual regulators [Reserve Bank of India (RBI) and the Ministry of Finance] and to ensure a level playing field with their private counterparts. However, the government should exercise caution to avoid repetition of widespread failure of private banks in 1960s. Given the magnitude of financial exclusion of bottom of the pyramid population, absence of financial/digital literacy and lack of access to affordable, and borrower friendly credit to MSMEs in the country even today, let us have a 360-degree view on privatisation of PSBs in India.

Merits: i) Privatisation is expected to improve efficiency in PSBs with regard to credit delivery and customer service and spur competition/innovation in the banking sector. While return on assets of private banks stood at 0.51 per cent, PSBs had the corresponding figure at -0.26 per cent as of March, 2020. While gross non-performing assets (GNPAs) of PSBs were at 10.3 per cent, GNPAs of private banks stood at 5.5 per cent as of March, 2020 (Report on Trend & Progress of Banking in India, RBI, 2020). As per the latest Financial Stability Report released by RBI, the GNPAs of PSBs may escalate to 17.6 per cent by September, 2021 under severe stress scenario. While the government lost 23 paise, on an average, for every Rupee of tax payers’ money invested in PSBs, investors of private banks gained 9.60 paise during the FY 2019 (Economic Survey, 2019-20).

ii) The government invested approximately Rs. 2.71 lakh crore in PSBs during the period 2017-21. Given the shoe-string budget of the government, privatisation of PSBs will largely ease its burden while mobilising the much needed capital resources, thereby complying with the stringent Basel III norms. If the government is keen to disinvest in PSBs, it needs to clean up the balance sheets of PSBs (through creation of Bad Bank) first; otherwise, it may amount to a sell-off at unattractive valuations. Of course, the government may accelerate the privatisation of PSBs if the issue of ‘moral hazard’ resurfaces due to creation of Bad Bank. Post-privatisation, the discerning market will determine PSBs’ intrinsic worth and closely monitor their questionable corporate governance practices. This will be a win-win situation for all stakeholders.

iii) Privatised banks will be able to attract the professionals and build human capital, thereby aligning top management pay structures linked to performance. The banks may announce employee stock option plans for rewarding their key managerial personnel to retain the talent.

Demerits: i) Privatisation of PSBs may result in ‘Crony Capitalism’ and social objectives such as achieving universal financial inclusion and providing intuitional credit to MSME sectors will take a backseat due to ‘reverse nationalisation of PSBs’. COVID-19 shattered the lives and livelihoods across the world; unemployment rate reached its peak level in India (23 per cent) during this crisis period (United Nations Organization – UNO’s report, 2020). As the pandemic pushed the above poverty line population into below poverty line category at least for a decade, elimination of poverty by 2030 as per the UNO’s Sustainable Development Goals will be a pipedream.

ii) Privatisation of PSBs may not be a panacea since consumer protection and grievance redressal will be given least priority by the ‘for-profit private banks.’ Private banks also indulge in the regulatory arbitrage by levying hidden charges on the naive customers under the garb of ‘fine print’. Nearly half of total complaints received from the customers were pertaining to private banks as against their share of 32 per cent in total assets of Indian banking industry (Report on Trend & Progress of Banking in India, RBI, 2020).  

iii) Corporate governance practices need to be improved in existing private banks too as can be seen from the latest fiascos of Lakshmi Vilas Bank (LVB) and Yes Bank. In 2004, Global Trust Bank, promoted by Ramesh Gelli, failed and forcibly merged with Oriental Bank of Commerce, by Reserve Bank of India (RBI). Global Trust Bank had excessive exposure to capital market and violated the norms of RBI which precipitated its fall and loss of trust among its stakeholders. Similarly, Yes Bank would have become a ‘No Bank’, lest the RBI and State Bank of India come to its rescue on time. Rana Kapoor, the then CEO of Yes Bank, took unilateral credit decisions, which escalated its non-performing assets (NPAs) beyond the threshold levels. In fact, the aggregate credit exposure of Yes Bank on – Anil Dhirubhai Ambani Group, Cox & Kings, Dewan Housing Finance Ltd., Essel group, Infrastructure Leasing & Financial Services, and Jet Airways – stressed assets, was more than its net worth. This ‘individual-driven Yes Bank’ focused on junk credit market in India and floated 101 step-down subsidiaries and indulged in round-tripping/money laundering activities. Therefore, RBI did not mince words in its letter addressed to Yes Bank’s board, and stated that persistent governance and compliance failures reflected on its highly irregular credit management (including divergence in NPAs), and serious deficiencies in its governance practices. Ms. Chanda Kochar, Ex-CEO of ICICI Bank is another fallen angel in Indian private banking sector as she had not made several mandatory and appropriate disclosures which she should have done to avoid conflict of interest. According to Sri Krishna Committee report (2019), she was a member of credit committee of the bank that had sanctioned a loan of Rs.3,250 crore to Videocon group companies, which in turn invested Rs. 64 crore in her husband’s (Deepak Kochar) enterprise, viz. NuPower Renewables Ltd. The list of governance failures in the Indian private banks is endless. While some are out in the public, many are not so. As such, private banks are not holy cows in the corporate governance space.

The way forward:

As private banks are not immune to failures, the PSBs should have truly independent board of directors, and must grant loans based on sound commercial logic rather than ‘directed lending approach’ from their political masters. PSBs should focus on mitigation of operational risk and prevention of frauds through robust internal audit, sound risk management architecture, and functioning whistle blower policy. For instance, majority of the frauds in Indian banks, in terms of value, belongs to PSBs (79.9 per cent in 2019-20 and 88.5 per cent in 2018-19).

There is an urgent need to infuse a sense of higher order accountability among the top management of Indian private banks to promote a strong risk culture. Constant eternal vigilance of private banks is the need of the hour to ensure high quality of governance, to uphold the fiduciary trust of depositors and also to prevent systemic risk thereby ensuring financial stability in the markets.

As the credit growth is at a decadal low due to economic slowdown induced by COVID-19, privatisation of PSBs may be experimented in a calibrated manner. In order to make the privatisation model work, the RBI should strengthen the regulatory surveillance mechanism through rigorous norms and imposition of heavy penalties on banks for non-compliance of guidelines. Banks may be given special incentives by the government if they achieve financial inclusion and priority sector lending targets. The government may resort to direct benefit transfers (DBTs) instead of loan waivers after privatisation of PSBs. Further, the banks should allocate sufficient funds to upgrade their technological platforms for their digital transformation and to provide high-end customer experience. They need to be customer-savvy to win the latter’s trust in digital banking and act as firewalls against possible cyber attacks from China and other unscrupulous actors. Constant eternal vigilance of the stakeholders is the need of the hour for privatisation of PSBs in the interest of the nation.

Dr. M. Srikanth
Associate Professor and Director (Finance), DDU-GKY,
National Institute of Rural Development and Panchayati Raj.

Dr. Krishna Reddy,
Assistant Professor,
University of Hyderabad.

Cover story Illustration V.G. Bhat

CPRDP&SSD organises one-day online training programme for FES professionals on the strategy for the Action Research Project (Phase-1) Interventions in FES clusters

Two online refresher training programmes for two batches of FES (Foundation for Ecological Security) professionals on the strategy for the Action Research Project interventions in FES clusters during 2021-21 was organised by the Centre for Panchayati Raj, Decentralised Planning and Social Service Delivery, NIRDPR, Hyderabad on 24th and 25th June, 2021.

The Foundation for Ecological Security (FES) is a philanthropic organisation with its main focus on natural resource management, economic development, etc. NIRDPR is supporting FES professionals who are working in FES Panchayat clusters through capacity building and training interventions on Panchayat matters with a focus on institutional strengthening and enablement of quality GPDP.

Owing to the COVID-19 pandemic, the progress of the Action Research Project has lost its momentum to some extent. In order to boost the progress and to discuss various relevant issues, two online refresher training programmes were organised by NIRDPR with the following main objectives:

Dr. Anjan Kumar Bhanja, Associate Professor, CPRDP&SSD, NIRDPR delivered the welcome note and in a nutshell, highlighted the objectives of the refresher training programmes. These training programmes were attended by 89 professionals representing Rajasthan, Gujarat, Andhra Pradesh, Maharashtra, Odisha, Madhya Pradesh, and Karnataka.

Shri V. K. Nukala, Senior Programme Management Consultant for Creating Model GP cluster, CPRDP&SSD, NIRDPR interacted with the professionals to assess the various achievement made so far through Action Research Project in FES GPs.

Shri Dilip Kumar Pal, Project Team Leader for Creating Model GP Clusters, CPRDP&SSD, NIRDPR highlighted various measures for the institutional strengthening of the project GPs. He emphasised the importance of Own Source Revenue (OSR) as well as the methods and source of generating OSR, citing beautiful examples. Further, he discussed how GPs can utilise its OSR for economic development of marginalised and vulnerable section of people. Dr. Anjan Kumar Bhanja, Associate Professor, CPRDP&SSD, NIRDPR sensitised participants on preparation of quality GPDP and discussed various measures to ensure quality GPDP. Further, he discussed the importance of data collection through community participation for the holistic and sustainable development of GPs. Using various examples, he explained the concept of situational analysis for formulation of quality Gram Panchayat Development Plan. Economic development can be achieved by preparing a skilling plan in every GP and it leads to employment generation in the form of self-employment or small-scale business opportunity. Shri V. K. Nukala discussed the importance and scope of skilling plan in a comprehensive manner. Citing practical examples, he explained the necessity and importance of skilling plan in every GP and also discussed how the skilling plan is prepared.

Shri Kartik Chandra Prusty, Programme Manager, FES expressed that it was quite an enriching experience to listen to the distinguished experts of NIRDPR during the refresher training on quality GPDP. “It was quite informative and interactive. It provided fuel to my team members and me to add value in the existing GPDP with special focus on human development, generation of own source revenues, and strengthening the institutional architecture of GP. I hope with this continued support from NIRDPR, we would able to facilitate quality GPDP in our cluster,” he said.
Shri Aman Kumar Verma, Project Manager of FES stated that the training helped him by enriching his outlook. “It was more like a knowledge platform for cross learning and adapting innovations,” he added.

The programme was coordinated by Dr. Anjan Kumar Bhanja, Associate Professor, CPRDP&SSD, NIRDPR with support from Project Management Unit Team of Model GP Clusters.

CGSD organises 5-day national online training on Gender Mainstreaming for Rural Development

Among the unprecedented development challenges emerging after the COVID-19 pandemic, gender-based vulnerabilities are the most prominent ones. In this context, the idea of gender and gender equality is crucial to ensure progress of sustainable development in rural areas. To design policies and implement them in a gender-responsive manner, it is important to understand the concept of gender mainstreaming. Gender mainstreaming ensures the practical integration of gender in all dimensions of governance. In this context, the Centre for Gender Studies and Development, NIRDPR organised a national training programme on understanding mainstreaming gender in rural development from 31st May, 2021 to 4th June, 2021.

The programme commenced with 52 participants consisting of 21 women and 31 men—all senior and middle level officials from the Rural Development and Panchayati Raj departments, SRLMS, faculty from SIRD and selected NGOs. Participants joined in from almost all the States of India with a major share from Odisha, Telangana, West Bengal and Bihar.

The sessions started with the introduction of the concepts of gender and gender socialisation in development by Dr. Ruchira Bhattacharya, Assistant Prof., CGSD. This was followed by a session on mainstreaming gender in MGNREGA by Dr. Jyothis Sathyapalan, Prof., Head, Centre for Wage Employment & Labour. On the 1st June, the training moved on to more core issues of gender with Dr. Radhika Rani, Associate Prof & Head, CAS and NRLM explaining FPO and OFPO based initiatives for gender mainstreaming. This was followed by a session on “Gender Mainstreaming in Entrepreneurship” by Dr. Partha Pratim Sahu, Associate Prof., CEDFI. On the 2nd June, Dr. Vanishree, Assistant Prof., CPR, DP &SSD, conducted a session on gender and GPDP. Further, Dr. Shivani Nag, expert invited from the Ambedkar University Delhi, engaged the participants on gender equity in education in India’s villages. On the 3rd of June, Dr. Rubina Nusrat, Assistant Prof., CESD conducted a session on Gender sensitivity in marginalisation discourse and it was followed by Dr. Surjit’s presentation on Food Systems and Value Chains for gender mainstreaming. On the final day of the programme, Dr. Rajesh Kumar Sinha delivered an in-depth session on gender in local governance.

After the sessions, participants were engaged in discussion and feedback by Dr. N. V. Madhuri, Head (i/c), CGSD. The course was coordinated by Dr. Ruchira Bhattacharya, CGSD and Dr. N. V. Madhuri, Head (i/c), CGSD with the technical support from Shri Praveen and Smt. Shanthi Shree, CGSD, NIRDPR.

The course was met with great enthusiasm and the participants expressed that the learning would be useful in their performance. Overall, the programme received a feedback score of 85 per cent effectiveness from the participants with 92 per cent score in knowledge, 94 per cent score in skill and attitudinal improvement.

Capacity building programme for charge officers/representatives of SAGY – II (2019-24)

The Centre for Human Resource Development, NIRDPR, Hyderabad organised a SAGY-SAMARTHYA training programme for the complete capacity building on planning process and effective implementation of the programme for the charge officers and representatives of Gram Panchayats of SAGY – II (2019-24) during 27th -29th May, 2021. The online programme was sponsored by SAGY Division of Ministry of Rural Development, Government of India.

Several in-house programmes were organised in the earlier phases for the benefit of the functionaries involved in the implementation of programme. The present programme was the first one devised for imparting training to the representatives of the Gram Panchayats along with charge officers.

The objectives of the programme were

  • To orient the participants about the importance of SAGY programme and its role in creating model villages
  • To equip the participants with the strategies of SAGY scheme for effective implementation
  • To impart the skills and techniques of Participatory Rural Appraisal (PRA) for effective planning processes, and
  • To demonstrate various successful rural development models to the participants.

Dr. G. Narendra Kumar, IAS, Director General, NIRDPR delivered the welcome speech. Highlighting the significance of SAGY programme, the DG said that the quality and success of the Village Development Plan (VDP) depend on the role played by the charge officers.

While interacting with the participants, Dr. Biswajit Banarjee, IAS, Joint Secretary, PPP & SAGY, MoRD highlighted the SAGY Guidelines based on which the Hon’ble Members of Parliament identify five Gram Panchayats (one per year) for developing them as Adarsh Gram during 2019-24. Till day, the MPs have identified more than 2,000 Gram Panchayats, he said and advised the charge officers to pursue the MPs in identifying five Gram Panchayats in their jurisdiction.  Dr. Biswajit Banarjee thanked NIRDPR for preparing online training modules for capacity building of charge officers of SAGY and also for making all the necessary arrangements.

Dr. Lakhan Singh, Assistant Professor and Programme Director, CHRD, NIRDPR made a presentation on course structure/design. Smt. Alka Upadhyay, IAS, Additional Secretary and Financial Adviser, MoRD, New Delhi opined that there is a need for concerted efforts to merge the VDP and GPDP. She also felt that the charge officers should take it as a challenge and opportunity to improve their skills and knowledge for the all-round development of the Gram Panchayats.

The programme was inaugurated by Shri Nagendra Nath Sinha, IAS, Secretary, Rural Development Department, Ministry of Rural Development, Government of India. In his inaugural speech, Shri Nagendra Nath Sinha felt that though the programme belongs to the Honourable Members of Parliament, the people in the villages should take lead in transforming their Gram Panchayats into model Gram Panchayats. In this connection, he cited a couple of examples of best practices/success stories from Gujarat, Tamil Nadu and Haryana where the government officials played a crucial role in mobilising and motivating the people in transforming the villages. Considering the possibility of water shortage in future, he also stressed upon the need to preserve and conserve water for the generations to come.

The sessions of training programmes were developed keeping in view the objectives of the programme and feedback of the participants on previous rounds of programmes. The sessions which were delivered in three days included overview on SAGY, successful models of rural development, use of Mission Antyodaya data for planning purpose, experience sharing on field visit to SAGY Panchayat, entry point activities/social mobilisation under SAGY, VDP framework, Baseline surveys, PRA tools and techniques, availability of resource envelope and convergence strategies, successful model villages of SAGY, observation from the post-project evaluation study of SAGY, low/less cost development, COVID-19 & livelihood approaches, and demonstration of MIS used in SAGY. The sessions were delivered by Shri Ram Pappu, Mission Sammriddhi, Shri Popatrao Pawar, Padma Sri Awardee, Deputy President, Hiware Bazar Gram Panchayat of Maharashtra, Dr. C. Kathiresan and Dr. Lakhan Singh from NIRDPR, Prof. Subhranshu Sekhar Sarkar, Tezpur University, Assam, Ms. Roop Avtar Kaur, Director, SAGY, Shri Sourabh Bhattacharjee, Programme Officer from SAGY division, MoRD, and Shri Atul Kumar Singh, NIC, New Delhi.

The participants were asked to evaluate the programme and the overall effectiveness as evaluated by them is 84 per cent.

The valedictory address was delivered by Dr. R. Murugesan, Prof. & Head I/c, CHRD and Regional Director, NERC-NIRDPR. He invited the charge officers to visit the NIRD-NERC Regional Centre, Guwahati in the event of facing any SAGY-related issues. Smt. Roop Avtar Kaur, Director (SAGY), MoRD, New Delhi appreciated the efforts of CHRD team at NIRDPR and SAGY division, MoRD in organising this programme successfully and effectively.

In total, 136 officers/representatives of PRIs from eight States and two UTs, namely Assam, Manipur, Nagaland, Puducherry, Sikkim, Goa, Tripura, Jammu & Kashmir, Meghalaya and Uttarakhand took part in this programme. The programme was coordinated and conducted by Dr. Lakhan Singh, Assistant Professor, Centre for Human Resource Development, NIRDPR, Hyderabad.

CGGPA Organises webinar on Social Accountability Tools and Techniques for Good Governance

A slide from the training programme

A webinar on ‘Social Accountability Tools and Techniques for Good Governance’ was organised for the faculty, scholars and students of Department of Economics, Dr. M.G.R. Educational and Research Institute, Chennai by the Centre for Good Governance and Policy Analysis (CGGPA), National Institute of Rural Development and Panchayati Raj on 11th June, 2021.

The webinar addressed the following objectives:

  • To expose participants to the concept of governance and good governance
  • To identify governance deficits and gaps in existing policies
  • To enable participants to learn about some of the important e-social accountability tools and techniques.

This  webinar  covered different topics related to social accountability tools for good governance including definition of  governance, deficit of governance, need and significance of good governance, elements and principals of  good governance; framework of good governance, what is the social accountability, and need of social accountability. It briefly discussed the tools and techniques of social accountability and how these tools can bring accountability and transparency for the effective service delivery in the system.

A total of 68 participants including faculty members, MPhil, Ph. D scholars and MBA- students of Department of Economics, Dr. M. G. R. Educational and Research Institute, Chennai participated in the webinar. Dr. K. Prabhakar, Assistant Professor, Centre for Good Governance & Policy Analysis (CGGPA) organised the webinar.  

CHRD organises Management Development Programme on Rural Development Leadership for Block Development Officers

The Centre for Human Resource Development, NIRDPR, Hyderabad organised 3rd Management Development Programme on Rural Development Leadership for Block Development Officers from 15th – 24th June, 2021 as part of the series of MDP programme for Block Development Officers.

The programme was designed on the lines of the MDP programme for prospective District Collectors keeping in view the importance of Block Development Officers (BDO), who hold a crucial post at block level and act as vital link for programmes which flow from district to village level. BDOs are at the forefront of the government interaction with the citizen and influences public attitude towards development.

The programme was organised by Dr. Lakhan Singh, Assistant Professor, Centre for Human Resource Development, NIRDPR, Hyderabad. The overall objective of the programme was to sharpen the fundamental competencies of officers such as knowledge, skills, traits, motives, attitudes, values and other characteristics that are needed to drive superior performance in rural development sector. However, the specific objectives were as follows:

  • To orient the participants on concepts of management and rural development relevant to block administration
  • To enable the participants to learn distinctions of different flagship programmes and its strategies to address the developmental issues
  • To make participants recognise their potentials addressing various social sector issues
  • To equip the participants on skills to prepare Block Development Vision Plan, and
  • To equip the participants with various local institutions to get quick solutions for their block-specific problems.

Dr. R. Murugesan, Prof., & Head, CHRD formally welcomed all the participants and talked in length about how this programme would be beneficial for BDOs in implementing rural development programmes effectively.

The programme covered topics such as rural development policies and programmes towards reduction of poverty and unemployment, adaptation to climate change, micro enterprises & rural development, rights-based development and social accountability through social audit mechanism, concepts, terminologies and procedural aspects of watersheds, issues of basic education in rural India, tools and techniques for transparency and accountability for good governance, National Rural Livelihoods Mission (NRLM), Gram Panchayat Development Plan: evidences from successful case studies, overview on Panchayati Raj and decentralised governance, Swachh Bharat Mission, role of MGNREGS in mitigating the impact of distress migration in rural areas, Pradhan Mantri Gramin Sadak Yojana, utilisation of resource envelopes available with Gram Panchayat, understanding of gender issues for rural development, health status of children in rural India, motivation and leadership style for effective delivery of services, communication, soft skills including behaviour in management, social justice issues of SC/ST, minorities, rural youth occupational aspirations and DDU-GKY, scenario of drinking water in rural India, role of low cost housing technologies, strategies to converge with other developmental programmes, etc.

The BDOs were entrusted with the task of preparing and presenting the block development vision plans to assess their existing vision as well as to improve their knowledge and skills to enable them to deliver their services as BDOs in a very effective manner.

In total, 69 BDOs (55 male and 14 female) from nine States and one UT, namely Andhra Pradesh, Bihar, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Meghalaya, Nagaland, Punjab, and Uttar Pradesh and Jammu & Kashmir, participated in this training programme.

Shri Arvind Chaudhary, IAS, Principal Secretary, Rural Development, Government of Bihar, interacted directly with the BDOs to assess their experiences and obtained their feedback. In his valedictory address, Shri Chaudhary cautioned the BDOs to maintain the physical well-being and do breathing exercises and meditation that can help them in delivering the desired results, particularly in the COVID-19 pandemic situation. He remarked that the government servants are expected to produce the desired results but not the excuses. He advised them to continue with the process of learning in order to overcome the issues confronting them. He further advised the BDOs to prioritise their works and classify them into urgent, very urgent, important and not important categories. He appreciated the efforts of NIRDPR in conducting the online programme. During the interaction with Shri Arvind Chaudhary, the BDOs opined that a similar course needs to be offered to the rest of the BDOs in the near future.

The BDOs were further asked to evaluate the programme through a structured questionnaire and their feedback reflected an improvement in their knowledge (98 per cent), skill (97 per cent) and attitude (98 per cent) after attending this programme.

Dr. Lakhan Singh, Programme Director thanked the BDOs and their sponsoring agencies for extending their continuous support for the successful conduct of the programme and wanted the results of the training to be clearly reflected in their area of operation while delivering the goods.

Workshop-cum-ToT on Good Governance through Community Participation in Rural Development – Tools and Techniques

  A regional online workshop-cum-Training of Trainers (ToT) on ‘Good Governance   through Community Participation in Rural Development – Tools and Techniques’ was organised by the Centre for Good Governance and Policy Analysis (CGGPA) during

A slide from the training programme

21st -25th June, 2021. Good Governance is about the processes for making and implementing decisions. It is not about making correct decisions, but about the best possible process for making those decisions, especially when the community takes a lead for the effective delivery of services as they are entitled. Good Governance is a combination of characteristics of accountability, transparency, public participation, following the rule of law, responsiveness and equitability, and it is inclusive, effective, efficient and participatory.

Community participation tools & techniques will enable development practitioners with the knowledge to generate demand for governance and ultimately improve governance at the local, regional, and national levels. Community participation tools & techniques are essential for learning, as many of the public policies are increasingly goal-oriented, aiming for measurable results, goals and decision-centric.

The ToT programme was intended to enhance the capacities of rural development practitioners on focused objectives: (a) To enlighten the participants on the concept of welfare State and its policies (b) To identify governance deficits and gaps in existing policies, (c) To enable participants to learn different community participation tools & Techniques, and (d) To apply those tools for analysing existing flagship programmes of rural development. This ToT programme was undertaken to cover main topics of Good Governance such as Concept, approaches and elements & importance, design & applicability of accountability & transparency tools and techniques like Public Expenditure Tracking Surveys (PETS), participatory budgeting, budget analysis, Community Score Card (CSC) and Citizen Report  Card ( CRC) with regard to good governance through community participation in rural development.

A total of 73 participants from the State of Haryana comprising RD practitioners, government officials, nodal officers, district planning officials, sectoral officers, officers from DRDA at the State and district level, SIRD and ETC faculty members, NGOs and CBOs attended the programme. The training programme contents were delivered through a judicious mix of lectures- cum- discussions and sharing the real-time case study examples for each of the tool discussed. At the end of the course, participants came forward with their plan of actions about how they would take forward key learnings. The programme activities were carried out to explain and discuss the topic-wise understanding with relevant case examples, and it was evaluated through discussions, quiz, etc.  

Dr. K. Prabhakar, Assistant Professor, Centre for Good Governance & Policy Analysis (CGGPA) organised this programme.

Online training programme on Transgender: Inclusion and Empowerment

     The Centre for Equity and Social Development (CESD), NIRDPR conducted an online training programme on ‘Transgender: Inclusion and Empowerment’ from 2nd to 28th June, 2021. The training programme was organised as part of the Azadi Ka Amrut Mahaotsav celebrations.

The main objectives of the training programme were to discuss the psychological, socio-economic problems of transgenders and to integrate the transgender community into the mainstream of society. In all, 35 officials from different sectoral departments, faculty from training institutions, officials from corporate sector and research scholars attended the programme.

The training programme focused on mainstreaming of transgender community into the society.  Transgenders face many problems in the society – they have been excluded from main activities of the society and are yet to be accepted by the society as human beings. This training programme was intended to bring awareness about the transgender community and their psychological, socio-economic problems and acceptance by the society as human beings.

In all, there were 11 conceptual online sessions besides the inaugural and valedictory sessions.

The sessions were interactive and participatory with focus on case studies for the better understanding of the subject. The inaugural address was delivered by Ms. Vyjayanthi, a transgender woman. Referring to her case study, Vyjayanthi said that her parents disowned her after coming to know that she was a transgender. During her school days, she had faced a lot of discrimination as the boys and girls did not accept her. This forced her to opt informal institutions like open universities to complete education. Vyjayanthi requested the participants to accept transgender people as human beings. 

During his interaction with the participants, Dr. S. N. Rao, Associate Professor & Head, CESD, NIRDPR mentioned that trans community members feel trapped in the wrong body. Becoming transgender is an expression of choosing right body at the right time. Transgender is an expression of many ways of expressing being human. Dr. S. N. Rao mentioned that transgender community was revered in epics as Lord Rama gave them the power to bless. In puranas, Tritiya Prakriti is an expression of transgender people. Arjun becoming Bruhannala in Mahabharatha and Lord Krishna becoming Mohini to marry Aravan (son of Arjun) were the instances that shows the expression of transgender. Till the reign of Mughals, transgenders were revered. The British period saw the discrimination of transgenders, which is continuing even now. But after passing of the Transgender Act, 2019, many States have accepted them and have accorded a pivotal position in the society.

Ms. Tripti Tandon, Advocate, Supreme Court, New Delhi, who discussed the Transgender Act 2019, noted that few States have not yet implemented the provisions of the Act. She added that the journey to bring the transgender community into the mainstream of the society has begun.

Dr. Rajesh Kumar, Director, National Resource Centre for Transgender, Delhi University mentioned that transgender community faces a lot of discrimination in educational institutions. “There were instances of the boys and girls leaving the class when the transgender students stepped in. But after awareness among the students about the transgenders, the students have started accepting the community,” he said. 

Dr. Aslam, another participant, mentioned that transgender community faces livelihood problems. “Even though they are skilled, once the employer comes to know about their gender, transgenders are removed from employment. They are forced into begging and prostitution,” he said.

Sister Amitha Polimetla mentioned that though transgenders are imparted training on different skills, finding employment remains a tough task for them. “For transgender community, getting identity cards is a Herculean task. The officials were not aware about the process of issuing identity cards,” she said, adding that she made several officials aware of this problem and helped many from the transgender community to secure identity cards. Sister Amitha Polimetla wanted the authorities to provide them employment to lead a life of dignity.

Ms. Gladis. S. Mathew mentioned that there is a hierarchal system among the transgender community, i.e. the Guru and chela system. “Though few transgender community members want to live with dignity, they are forced into begging and prostitution, by the attitude of Gurus. A new transgender has to pay Rs. 30,000 per month to the Guru. It is difficult to source the amount and finally, the new members fall into the trap of begging and prostitution,” she noted.

Ms. Swati Bidhan, Advocate, High court of Assam and a member of the transgender community observed that people in the North-Eastern region accept the transgenders, but discrimination persists in the mainland. “The empowerment process for transgender community has started. Even though it requires time, they will be empowered,” she said.

          Smt. Radhika Chakravarthy, Joint Secretary, MoSJE, GoI, delivering the Valedictory Address.

Shri Abinesh Kumar Ray, Consultant, NIRDPR pointed out that technical skills play a vital role in employment and career of transgender community.

Dr. Akash Deep Arora, Deputy Director of Indira Gandhi Panchayati Raj & Gramin Vikas Sansthan, Jaipur highlighted the four barriers – physical barriers, communication barriers, system barriers and attitudinal barriers – for inclusiveness of transgender community and added that the removal of these barriers would make inclusiveness of transgender community easy.

Dr. Rajaini Kanth mentioned that a change in mindset of the people is needed to accept the transgender community. Ms. Geeta Mishra, Prof., Amity University, Noida mentioned that the transgenders enjoyed a high status in puranas and epics up to the Mughal period. From the British period, the indignation of transgenders started and it continued till the Act was passed. Now, people have started understanding the transgender community, accepting them as human beings. The Tamil Nadu and Kerala governments have made transgenders part of the police force. They are also inducted in the central paramilitary forces. Prof. Geeta Mishra mentioned that transgender community is slowly being accepted as part of the mainstream.

Smt. Radhika Chakravarthy, Joint Secretary, Ministry of Social Justice and Empowerment (MoSJE) in her valedictory address noted that anyone could have born as a transgender. “The discrimination against them must be stopped and human diversity has to be accepted. The government is putting a lot of effort to ameliorate the conditions of transgender community by providing them scholarships for study, free gender reassignment surgery, hormonal therapy, shelter homes and pensions to the elderly. Rs. 215 crore was earmarked for the development of the community,” she said. The training programme was ended by the vote of thanks by the programme coordinator Dr. S. N. Rao.

Azadi ki Amrut Mahotsav: CDC organises webinar ‘Estimating, Identifying and Programming for the Poor: Some Pre and Post COVID Issues’

Prof. Santosh Kumar Mehrotra during the lecture

The Centre for Development Documentation and Communication, NIRDPR, organised a webinar on 30th June, 2021 as part of the Azadi ki Amrut Mahotsav marking the 75th year of India’s independence that coincides with the 40th year of Journal of Rural Development published by the Institute.

Renowned human development economist Prof. Santosh Kumar Mehrotra, Visiting Professor, Centre for Development, University of Bath, UK &  Ex-Professor of Economics, Jawaharlal Nehru University graced the occasion as the guest of honour and delivered a lecture on ‘Estimating, Identifying and Programming for the Poor: Some Pre and Post Covid Issues’. Altogether, 63 faculty members and staff from NIRDPR, NERC, SIRDs and ETCs attended the webinar that began at 4.30 PM and continued up to 6.30 PM.

Dr. Akanksha Shukla, Associate Professor & Head (i/c), CDC welcomed the guest of honour, faculty members of NIRDPR, SIRDs and other institutes. She further narrated the significance of the occasion and briefed about the journal. She also gave a detailed introduction about Prof. Santosh Kumar Mehrotra. 

Prof. Jyothis Sathyapalan, Head of School, said that Prof. Santosh Kumar Mehrotra has extensively contributed to the literature on poverty, employment, growth, etc., in Indian and international contexts. Stating that rural transformation, poverty alleviation, employment generation, etc., remain the major issues of our time, he invited Prof. Mehrotra to speak about the Indian scenario and the estimation of multiple dimensions of poverty and measurement in pre and post COVID periods.

Prof. Santosh Kumar Mehrotra began his lecture by recalling his long standing relationship with NIRDPR even before he became a part of the Planning Commission.

He said the lecture focusses on three sets of things – Estimates of poverty-past & present, Identification of poor – past & present and Programming for the poor as outlined in MoRD’s programmes.

Making preliminary remarks, he said India is in a stage of transition.

“From 1992, India is conducting National Family Health Survey. The last full survey – NFHS -5 – was conducted in 2019-20. 1n 2016, houses with electricity was 88 per cent with a difference in rural & urban areas. The households with water inside were 67 per cent – only one-third had to go out in search of water. Two-third households (67 per cent) had TV and 30 per cent had refrigerators. What is remarkable about this new India is that even in a poorest State like Bihar, 96 per cent of the households have electricity, 89 per cent have water inside house, 62 per cent have TV and 35 per cent have fridge as per NFHS-5. If this is the new India, we have already seen a turnaround, though there is an urban-rural gap,” he said.

“On the one hand, this is the new India. On the other, there is still very much the old India with hundreds of thousands below poverty line (Tendulkar poverty line). Stunting and malnutrition in children barely improved between the two surveys. Evidence around us shows that on top of high levels of poverty and malnutrition in our population, inequality is rising or rather has been rising rather sharply in the last few years. We must never forget that we have the largest number of poor people in terms of absolute poverty in the world. The number of poor people in our country is as much as the sub-Saharan Africa taken together,” Prof. Mehrotra noted.

Participants of the lecture

Estimation of poverty

Talking about the incidence of poverty or the head count ratio of the poor, he said 36.7 per cent of the population were below poverty line in 2004-05. “It fell sharply to 22.6 per cent in 2011-12, which is a remarkable decline at a time when we experienced an unprecedented growth. Since then, unfortunately, we never had a consumption expenditure survey; the 2017-18 survey results were not released, and a consumption expenditure survey needs to be done. But it is still possible to estimate the number of the poor based on the Periodic Labour Force Survey, which also collects data about consumption expenditure. We have the latest consumption expenditure from PLFS collected by the NSO. The incidence of poverty shot up from 22.6 per cent 28.4 per cent between 2012 and 2018. It has increased since then and as per the data of 2018-19, it is nearly 33 per cent. In other words, as the data would suggest, we are moving backwards. In 2004-05, the absolute number of the poor in our country was about 402 million and it had fallen by almost 140 million to 277 million by 2012. Unfortunately, the number has risen from 277 to 344 million and further in 2018-19, to 436 million – the number is larger than 2004-05. To find answer to question as to why poverty fell at an unprecedented rate until 2012, you have to look at the pre-2004 dynamic of poverty and head count ratio of the poor,” he said

“While writing the chapter on rural poverty and rural development for 11th five year plan, we analysed the data till 2004 and it was shocking to find that while the share of people below poverty line has been falling, the absolute number of the poor had not fallen. The absolute number of the poor was 320 million (as per Lakdawala poverty line) in 1973-74. In 83-84 & 93-94, we had the same number. In 2004, it dropped to merely 302 million. While growth picked up post 19-18, it was nowhere close to the rate we experience post 2003-04. Job growth in the non-farm sector had been relatively slow until2004-05. While the population has been growing, it was an achievement that the absolute number of poor was not increasing, but the fact to the matter is that the number of absolute poor remained stagnant for the 30 years. This dynamic changed dramatically after 2004-05. From 2004-2012, the growth in the non-farm job sector was remarkable with an addition of 7.5 million new jobs every year post 2004-05 when we were adding a small number of people to the labour force. As a result, millions were pulled out of agriculture,” Prof. Mehrotra said.

“Since independence till 2004-05, the absolute number of workers in agriculture had actually been increasing every year. Although the share of workers in the total workforce in agriculture had been falling slowly and non-farm jobs were growing slowly, the absolute numbers of workers in agriculture was growing till 2004. Plot sizes were shrinking, rural distress was growing, rural incomes were falling and hence, the absolute number of the poor was not falling until 2004-05. This changed dramatically then as the non-farm job growth shot up after workers were pulled out of agriculture at a rate of 5 million per annum. This was unprecedented in India’s history and resultantly, the labour market in agriculture in rural areas tightened, real wages increased as non-farm jobs pulled farmers away from agriculture. Incidentally, MGNREGA was also introduced in the beginning of 2005. As a result, the consumption expenditure increased and poverty declined. This dynamics continued till 2012. The NSO data shows that post 2013, the rate of non-farm growth fell from 7.5 million new non-farm jobs to below 3 million per annum, all the way till 2018-19. This slow growth of new non-farm jobs and increase in young people entering labour force resulted in growing unemployment by 2019. India faced a 45-year high open unemployment and youth unemployment tripled from 6 per cent in 2012 to 18 per cent in 2018. This was the reason behind the increase in the number of poor and the incidence of poverty,” he said.

“This was the situation in early 2020 when COVID came into the scene. This was followed by a massive, strict, nationwide lockdown at a very short notice. The resultant reverse migration revered the phenomenon that was taking place for the preceding 15 years where the absolute number of agriculture labour force had been dropping. Reverse migration pushed millions back to agriculture. The latest PLFS for the year 2019-20, which is yet to be released, indicates an increase in share of agriculture labour force. This is bad trend as structural transformation in a developing country like India essentially means the following: The share of agriculture in total GDP declines as it was falling by 14-15 per cent. Simultaneously, the share of agriculture in total labour force has been falling consistently and very rapidly post 2004-5 till 2018-19. Due to COVID, the reverse migration took place and millions went back to agriculture out of desperation and joblessness. So, we get a reversal of the process of structural transformation that had gathered momentum, particularly post 2004 until 2012, which had slow down until 2019. COVID resulted in a total reversal of the system with millions going back to agriculture,” he noted.

“On the other hand, agriculture has already surplus labour. The youngsters want to leave the vocation as result of education and wanted urban jobs in industry and services. As per NSO data, their parents don’t even want their wards to go into farming. And yet, they were forced back on account of a sudden stringent lockdown that destroyed millions of livelihoods in the urban areas. This is the crisis that we are facing. This has resulted in increase in the absolute number of the poor that we are going to see even further. By 2019, we have already seen an increase in the headcount ratio of poor and incidence of poverty but also the number of the absolute number of poor. We are going to see even further increase the numbers of the poor and the old India is returning – just the opposite of what we want to see,” Prof. Mehrotra noted and moved on to the next section.

Identifying the poor

“The MoRD censuses began in 1992 to identify the “poor” who would be the beneficiaries of government schemes and programmes, including but not only MoRD programmes. Many State governments have used the census date for the identification of the poor or BPL category. After the 1992 exercise, the next study was in 1997and the third was in 2002 and each of them had used quite radically different methods. The first one has used identifying the incomes of households. India’s workforce work in the informal sector and they are not registered anywhere; so incomes are mostly informal.  In India, 91% of work force has no social security.  The rest of 9% are the privileged ones having income security and long-term contracts – this is the meaning of informality. To try identifying poor people by measuring their income was a very poor method. Identification of BPL people according to the income method between 1992 and 1996 was an extremely flawed exercise. In 1997, it was changed to consumption which didn’t work very well and it actually deepened the exclusion and inclusion errors in the identification of the poor – those who were really poor got left out because of the methods and those who are not poor often got included. So you got even more distorted list of beneficiaries called BPL. In 2002, this method was again changed census conducted by MoRD, which used 13 questions to supposedly identify the poor,” he said. 

“As a result of the massive inclusion and exclusion errors that continued as a result of the third census of 2002, then the Government of India constituted committee in 2006. That was precisely the time I had joined the Planning Commission as the rural development advisor and the committee was called the NC Saxena committee. I happen to be the member secretary of this committee to design the methodology for the MoRD Census every 5 year and wrote a paper along with the colleague which is published in EPW in 2008 and the NC Saxena Committee report, which I was a part the drafting committee, became the basis of the design of the next census known as the SECC,” he noted

“How and why the design of SECC is far superior to three previous censuses? We felt that the biggest problems were the misidentification of the poor (those who should be in the list and are left out) and those who should be left out. The committee devised a method which would ensure this in a transparent objective manner.  We decided try and determine which households belong to one of three categories having indicators which were observable. In other words, the parameters of exclusion and inclusion were very clear. The three categories of households were (1) those who were totally excluded from the list, (2) those who were automatically included the list of possible beneficiaries and (3) third  category consisted of those who would be considered as deprived based on fulfilling any one of seven deprivation indicators Prof. Mehrotra said.

He further urged usage of the same design of next round of SECC in order to avoid massive increase or decrease in the number of absolute poor, and emphasized that it is critical to perform the survey quickly, and also the ground truthing and revision at village level every two years until the next census comes around.

Programming for the poor

In this part, he discussed programmes such as MGNREGA, NRLM, NSAP, PMAY and DDU-GKY.

“If you want to improve the efficiency and effectiveness of our anti-poverty interventions, we have to take the democratic decentralisation as enabled by the 1992-93 constitutional amendment truly serious. India is a highly centralised form of government and not about the recent developments but the entire period all the way to the 1992. The constitutional amendments have not been implemented in the way it should have. For instance, the constitutional amendments asked for 29 subjects to be transferred to the PRIs. In reality, a large number of states were not transferred all the 29 to PRIs.  Going by the constitutional amendments, the PRIS will get the three Fs – funds, functions and functionaries. This is important because, if you want serious accountability, less corruption, improved effectiveness of MoRD programmes, deep democratic decentralisation is absolutely essential,” he said.

He further highlighted the telling contrast between India and China. China is a one-party state having a unitary federal constitution whereas India is a multi-party electoral democracy with federal democracy. But China has a much more fiscally decentralised system of government and governance. Local governments there are extremely powerful – more than the provincial government. In China, 54 per cent of all public expenditure is undertaken by local government, which his equivalent to urban the local bodies/PRIs in India. The share in India is just 5 per cent. In China, 23 per cent of all taxes are collected by local governments while in India its 1 percent. This shows our PRIs are weak in spite of the constitutional amendment 30 years ago.


It is absolutely critical that the notion of synergy and the notion of convergence of MGNREGA with other programmes become very serious. Though MGNREGA has done good work in the areas of water and land conservation, the water crisis is growing. MGNREGA and watershed movement should become more convergent. In India, 80 pc of water usage in India is for agriculture, which is comparatively higher and we have to reduce water used for irrigation by adopting sprinkler and drip technology. Perhaps MGNREGS can come in here and equal importance needs to be given to watershed management and noted that the focus of Jal Jeevan Mission should just not be limited on providing household water connections.

In the post-COVID period, reverse migration is happening and poverty is increasing. Data from MGNRGA website shows that 80 million person-days were demanded and 62 million person-days were provided, which means nearly 20 per cent did not receive the work they were demanding. The possibility of extra days of work beyond the 100 days needs to be considered.

Further, the delay in wage payment under MGNREGA should be addressed. COVID testing in rural areas in relatively minimal due to shortage of sub-centres and PHCs. MGNREGA labour force should be utilised for construction of such centres. Revival of public health infrastructure should be given the priority by diverting funds from PMAY, which has been receiving massive funds.


There is a phenomenon of falling female labour force participation rate. Agricultural jobs performed by older poorly educated women have become mechanised. As they are unable to work on other sectors, they must join SHGs as more allocations have been given to NRLM recently. State-level federations of SHGs are extremely important in strengthening institutional development that needs to happen. The success story of Andhra model and Kudumbasree of Kerala was built upon creating institutions that provided handholding by professionals to the SHGs at the State level. As women cannot run business, SHGs are trying to play this part in non-farm sector. To approach banks, formulate projects, they need handholding. That institutional development has not happened in a strong way.

Women’s participation in MGNREGA is about 53 per cent average in country. In Kerala, 91 per cent of the workers in agriculture are women. MGNREGA wages in Kerala are lower the open market because it is a relatively high wage economy. Women SHGs play a key role in the implementation of MGNREGA in Kerala. The women SHGs from the Kudumbasree converged SHGs with the functioning of the Panchayats, which is very important.


The amount of the pension needs to be increased, particularly at the time of COVID and increasing poverty in rural areas. The identification of beneficiaries is still based 2002 MoRD census; it should be based on SECC.


The fiscal constraints of the Central government are very severe post COVID. Reduce allocation on PMAY to release resources as other programmes need more funds.


Most of the training programmes offered under DDUGKY are short-term ones despite the recent changes. These programmes won’t help youngsters earn jobs in formal sector. DDUGKY centres need placement counselling for trainees and local private sectors’ involvement. There is a need to link to local industry and service sector requirements in the districts where the centres are located.

He concluded the speech by saying that COVID is a once-in-a-century pandemic and lives and livelihoods have been impacted in an unprecedented way in the history of our country. Citing the recent announcement of Rs. 23,000 crore allocation for strengthening the public health infrastructure with a focus on paediatric care, he noted that the Centre and States taken together spent only 1.29 per cent of GDP on health. The National Health Policy of 2017 promises increased allocation for public health to 2.5 pc of GDP. It is critical that there is a convergence between government programmes and the new infrastructure that might be created as a result of this new allocation.

He further responded to few queries from the listeners on ICDS, MGNREGA, statistical apparatus for assessing poverty, poverty estimation polices.

Dr. Akanksha Shukla, Head (i/c), CDC proposed vote of thanks.

-CDC initiatives

NIRDPR Celebrates World Environment Day

National Institute of Rural Development and Panchayati Raj, Hyderabad celebrated the World Environment Day on 5th June, 2021. Lt. Col. Ashutosh Kumar, Registrar & Director (Admin.) was the Chief Guest on the occasion. In his address, he highlighted the importance of planting saplings in the context of the pandemic situation that reminded the world the significance of tress and oxygen.

As part of the event, children residing on the campus planted saplings and a name plate with the name of the child written on it was also fixed near the sapling for easy identification. The responsibility for nurturing the plant rests with the child who planted it and this initiative was introduced to encourage ownership and create awareness for a better and greener Earth amongst children.

NIRDPR celebrates International Yoga Day

National of Institute of Rural Development and Panchayati Raj celebrated the International Yoga Day on 21st June, 2021. In connection with the event, a yoga session was organsied for the staff of NIRDPR and SIRDs early in the day. Later, a talk on impact of yoga on the human body was also conducted, both the programmes were led by Swami Brahmachitt of the Art of Living Foundation, Bengaluru via Webex platform.

In the morning session, Swami Bhramachitt took a yoga class, followed by guided meditation. During the talk, he spoke at large about the human body and how the food and surroundings play a major role in the well-being of a person. He spoke about Annamaya Kosha (food), Pranayamaya Kosha (vital energy or breath), Mannomaya Kosha (mind), Vigyanamaya Kosha (Knowledge) and Anadamaya Kosha (bliss). Swami Bhramachitt mentioned how human body is affected by diseases and explained the ways to stay immune. The knowledge session was followed by Annamaya Kosha meditation.

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