The National Rural Livelihood Mission (DAY-NRLM) Explained

The National Rural Livelihood Mission (DAY-NRLM) is the Government of India’s flagship poverty-reduction programme that organises poor rural women into Self-Help Groups (SHGs) and larger federations so that they can save, borrow from banks and build sustainable livelihoods. Launched in 2011 under the Ministry of Rural Development as a restructured successor to the Swarnajayanti Gram Swarozgar Yojana (SGSY), the mission is also known as Aajeevika and was renamed Deendayal Antyodaya Yojana-National Rural Livelihoods Mission in 2015.

Instead of giving individual subsidies, the National Rural Livelihood Mission builds permanent community institutions owned by the poor themselves. These institutions provide thrift, credit, skills, market access and a collective voice, and they now reach crores of rural households across almost every state and Union Territory.

Key Takeaways

• The National Rural Livelihood Mission was launched in June 2011 by the Ministry of Rural Development to replace the individual-subsidy approach of the Swarnajayanti Gram Swarozgar Yojana with a community-institution approach.
• DAY-NRLM organises rural poor women into Self-Help Groups of roughly ten to twenty members, which are then federated into Village Organisations and Cluster Level Federations.
• The Panchsutra of a Self-Help Group under DAY-NRLM are regular meetings, regular savings, regular inter-loaning, timely repayment and up-to-date books of accounts.
• The Lakhpati Didi initiative aims to help SHG members earn a sustainable annual household income of at least one lakh rupees through diversified livelihoods.
• The Drone Didi initiative trains women of SHGs to operate agricultural drones and offer spraying services to farmers for a fee.
• DAY-NRLM is implemented through State Rural Livelihoods Missions, which employ professional staff and trained community cadres such as Community Resource Persons and Bank Sakhis.

What is the National Rural Livelihood Mission?

The National Rural Livelihood Mission is a poverty-alleviation programme of the Government of India that mobilises rural poor households, especially women, into community institutions and links them to credit and livelihood opportunities. It is run by the Ministry of Rural Development and is officially called Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM).

The mission rests on a simple belief: the poor have strong survival instincts and a natural capacity to organise, but they lack access to institutions that serve their needs. DAY-NRLM therefore invests first in building those institutions, and only then in credit, skills and markets. The word Aajeevika means livelihood, and the programme was branded under that name in its early years.

The mission is designed to be demand-driven. Each State Rural Livelihoods Mission prepares its own plan, adapts the approach to local conditions and recruits staff, while the Ministry sets the framework and provides most of the funding.

How did the National Rural Livelihood Mission begin?

The National Rural Livelihood Mission began in 2011 as a restructuring of the Swarnajayanti Gram Swarozgar Yojana (SGSY), a self-employment scheme that the government had started in 1999. SGSY combined earlier programmes such as the Integrated Rural Development Programme (IRDP) into a single scheme focused on forming Self-Help Groups and providing bank credit with subsidy.

Reviews of SGSY found that coverage was uneven, that the subsidy-linked credit often produced weak assets, and that many groups did not graduate to sustainable livelihoods. A committee under the Planning Commission and other expert groups recommended a mission-mode, professionally staffed and saturation-oriented approach. The Cabinet approved the restructuring, and the National Rural Livelihoods Mission was launched in June 2011.

In 2015 the programme was renamed Deendayal Antyodaya Yojana-National Rural Livelihoods Mission, honouring the philosopher and political thinker Deendayal Upadhyaya. The renaming did not change the core institutional design.

Link with SHG-Bank Linkage

The idea of the SHG as a unit of banking was older than the mission itself. The National Bank for Agriculture and Rural Development (NABARD) piloted the SHG-Bank Linkage Programme in 1992, allowing banks to lend to informal groups on the basis of their savings record. DAY-NRLM scaled this idea nationally and added social mobilisation, training and federations around it.

What are the objectives of DAY-NRLM?

The main objective of DAY-NRLM is to reduce poverty by enabling poor households to access gainful self-employment and skilled wage employment, resulting in sustainable and diversified livelihood options. The mission is expected to achieve this through building strong institutions of the poor and improving their access to financial services and entitlements.

The programme’s stated aims can be summarised as follows.

• Mobilise every identified rural poor household into a Self-Help Group, with one woman member from each household.
• Create a three-tier community structure that gives the poor collective bargaining power and shared services.
• Improve access to affordable credit from banks and other formal institutions.
• Promote farm and non-farm livelihoods, including agriculture, livestock, fisheries, forest produce, crafts and micro-enterprises.
• Help the poor claim public entitlements such as pensions, food rations, insurance and housing.
• Build social capital, with a special emphasis on the inclusion of the most vulnerable, including Scheduled Castes, Scheduled Tribes, minorities, persons with disabilities and single women.

How does the National Rural Livelihood Mission work?

The National Rural Livelihood Mission works by moving through a defined sequence of social mobilisation, institution building, financial inclusion and livelihood promotion in each village. Trained community mobilisers first identify poor households through participatory methods, then help women form groups, and finally connect those groups to banks, markets and training.

Identification of the poor

DAY-NRLM relies on a Participatory Identification of the Poor (PIP) process, in which the community itself ranks households by vulnerability. This is combined with data from the Socio-Economic and Caste Census (SECC) of 2011 and, in some states, automatic inclusion criteria for the most deprived.

Intensive and non-intensive blocks

The mission divides its work into intensive blocks, where a dedicated team stays long enough to cover all poor households, and non-intensive blocks, where lighter support is provided through partners. Over time, states have been encouraged to expand intensive coverage so that every eligible household is reached.

Funding streams

The mission gives groups revolving funds and community investment funds. A revolving fund is a small grant that strengthens an SHG’s own pool of savings, while a community investment fund is a larger corpus given to federations to lend on to member groups and households for livelihood needs. Banks provide the bulk of the credit through cash-credit limits to groups.

What is the three-tier SHG structure?

The three-tier SHG structure under DAY-NRLM consists of the Self-Help Group at the neighbourhood level, the Village Organisation at the village level and the Cluster Level Federation at the block or cluster level. Each tier performs different functions and is governed by its elected members.

The federations are meant to be financially self-sustaining in the long run, earning income from service charges and interest margins. They also act as the interface between poor women and panchayats, banks, line departments and markets.

What is the Panchsutra of a Self-Help Group?

The Panchsutra of a Self-Help Group are the five basic principles that every SHG under DAY-NRLM is expected to follow: regular meetings, regular savings, regular inter-loaning, timely repayment and up-to-date books of accounts. These five practices are the discipline that makes groups creditworthy in the eyes of banks.

• Regular meetings build trust and give members a forum to discuss problems.
• Regular savings create the group’s own capital and teach financial habits.
• Regular inter-loaning circulates that capital among members at agreed interest rates.
• Timely repayment protects the group’s credit record with the bank.
• Up-to-date books of accounts ensure transparency and make grading and audits possible.

Groups are graded on these criteria before they receive revolving funds or bank loans. Bookkeepers from within the community, often called Bookkeeper Sakhis, are trained to maintain the records.

How does DAY-NRLM improve access to bank credit?

DAY-NRLM improves access to bank credit by linking Self-Help Groups to branches of commercial banks, regional rural banks and cooperative banks, and by providing interest relief to women’s groups that repay on time. The mission works with banks to open savings accounts for members and to sanction cash-credit limits against the group’s savings record.

Women’s SHGs have received loans at concessional interest rates through the interest subvention scheme, with additional relief for groups that repay promptly in a set of identified districts. Collateral requirements for group loans have been relaxed over the years in line with Reserve Bank of India guidelines.

Community cadres play a central role in this process. A Bank Sakhi or Bank Mitra, drawn from the SHG network, serves as a business correspondent agent who offers basic banking services at the doorstep. This model has taken banking to remote villages that no branch could economically serve.

What livelihood programmes does DAY-NRLM support?

DAY-NRLM supports a wide basket of farm and non-farm livelihood programmes, including sustainable agriculture, livestock rearing, non-timber forest produce, handicrafts and rural micro-enterprises. The mission treats livelihoods as a portfolio, encouraging each household to hold several sources of income instead of depending on a single one.

• Mahila Kisan Sashaktikaran Pariyojana (MKSP): promotes sustainable and climate-resilient agriculture among women farmers, including organic and low-cost methods.
• Start-up Village Entrepreneurship Programme (SVEP): supports small non-farm enterprises through enterprise loans and mentoring by community resource persons.
• Livestock and fisheries work: trains Pashu Sakhis for animal health services and supports goat, poultry, dairy and fish-farming activities.
• Value chain development: helps producer groups and producer companies of women aggregate, process and market produce.
• Aajeevika Grameen Express Yojana (AGEY): offers safe rural transport services run by community-based organisations.
• Market access: organises Saras Aajeevika Melas, where SHG products from many states are exhibited and sold.

Skill development for rural youth is handled by a closely related scheme of the Ministry of Rural Development, the Deendayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), which focuses on placement-linked training. Rural Self Employment Training Institutes (RSETIs), supported by banks, provide short-term entrepreneurship courses.

Who are the community resource persons and sakhis?

Community resource persons are trained women from the SHG network who provide peer support, training and services within DAY-NRLM, and they are often called Sakhis. They are paid through fees or honoraria, and many have built independent incomes by providing services across villages and states.

Because these cadres come from the same social background as the groups they serve, they are more trusted and cost less than outside consultants. The model has also created a visible group of rural women professionals.

What are Lakhpati Didi and Drone Didi?

Lakhpati Didi is a flagship initiative of DAY-NRLM that aims to help women of Self-Help Groups earn a sustainable annual household income of at least one lakh rupees, while Drone Didi is an initiative that equips SHG women with agricultural drones and the skills to use them. Both build on the institutional base already created by the mission.

Lakhpati Didi

The Lakhpati Didi target was highlighted by the Prime Minister in 2023, with an ambition of enabling about three crore rural women to cross this income threshold. A Lakhpati Didi is expected to earn the income through multiple livelihood activities over several agricultural seasons rather than from a one-time windfall. The mission supports this through livelihood planning, credit, training and market linkages for each member household.

Drone Didi

Under the Namo Drone Didi initiative, approved in late 2023, selected women SHGs receive drones for agricultural services such as spraying fertiliser and pesticide. Women are trained as drone pilots and technicians, and the group earns fees from farmers. The initiative is meant to modernise farm operations and to give rural women a technology-based occupation.

What impact has the mission had on poverty reduction?

The mission has contributed to poverty reduction by expanding financial inclusion, strengthening women’s participation in household and community decisions, and diversifying rural incomes. Crores of women are now members of SHGs promoted under DAY-NRLM, and the groups together hold substantial savings and have borrowed large amounts from banks with a good repayment record.

Evaluations and studies have generally found that SHG membership is associated with higher savings, better access to credit, reduced dependence on moneylenders, and greater mobility and voice for women. Some assessments also point out that outcomes differ across states, that livelihoods take years to mature, and that the poorest households can be hard to reach. The mission therefore focuses on deepening support through livelihood plans rather than counting groups alone.

Strengths and challenges

• Strengths include a large and disciplined community network, strong repayment behaviour of groups and a professional state-level staff structure.
• Challenges include uneven quality of SHGs across regions, limited market linkages for many products, and the need to make federations financially self-reliant.
• Reaching the poorest and most remote households, and ensuring that enterprises remain viable, are continuing priorities.

How does DAY-NRLM compare with SGSY?

DAY-NRLM differs from SGSY mainly in that it is a mission-mode, institution-building programme with professional staff, whereas SGSY was a scheme centred on individual or group subsidies linked to bank loans. The comparison below summarises the main shifts.

Who funds and monitors the National Rural Livelihood Mission?

The National Rural Livelihood Mission is funded mainly by the Government of India, with state governments contributing a share, and it is monitored by the National Rural Livelihoods Promotion Society and the State Rural Livelihoods Missions. The World Bank has also supported part of the mission through the National Rural Livelihoods Project, which focused on stronger delivery in selected states.

Monitoring uses management information systems that record the formation and grading of groups, bank linkages, savings and livelihood activities. Social audits, state reviews and independent evaluations add to this data. Gram Panchayats are encouraged to work with village organisations so that local planning reflects the needs of poor households.

Bottom Line

The National Rural Livelihood Mission shows that sustained investment in community institutions of poor women can widen access to savings, credit and enterprise in rural India. Its newer pushes, Lakhpati Didi and Drone Didi, aim to move members from survival to stable, higher incomes. The test of the mission remains the durability of livelihoods and the strength of its federations.

Frequently Asked Questions

What does DAY-NRLM stand for?

DAY-NRLM stands for Deendayal Antyodaya Yojana-National Rural Livelihoods Mission. It is run by the Ministry of Rural Development and was launched in 2011 as Aajeevika before being renamed in 2015. The mission works through Self-Help Groups and their federations.

Who can join a Self-Help Group under the National Rural Livelihood Mission?

Women from poor rural households can join a Self-Help Group under the National Rural Livelihood Mission, with one woman typically coming from each identified household. Households are selected through participatory identification and secondary data such as the Socio-Economic and Caste Census. Priority is given to vulnerable groups, including Scheduled Castes, Scheduled Tribes, minorities and persons with disabilities.

What is a Lakhpati Didi?

A Lakhpati Didi is a woman member of a Self-Help Group whose household earns a sustainable annual income of at least one lakh rupees from diversified livelihoods. The target is supported by DAY-NRLM through credit, training and market linkages. The government has set an ambition of reaching about three crore such women.

What is the Drone Didi initiative?

The Drone Didi initiative provides agricultural drones to women Self-Help Groups so that they can offer spraying and other services to farmers for a fee. Women are trained as drone pilots and technicians. The scheme links the DAY-NRLM network to modern farm technology and creates a new rural occupation.

How is DAY-NRLM different from SGSY?

DAY-NRLM differs from SGSY because it focuses on building three-tier community institutions with professional staff rather than giving subsidy-linked loans to individuals. It aims at saturating all poor households and supports diversified livelihoods and entitlements. SGSY, started in 1999, was restructured into the mission in 2011.

How do Self-Help Groups get bank loans?

Self-Help Groups get bank loans after they follow the Panchsutra and are graded by the mission for regular meetings, savings, inter-loaning, repayment and bookkeeping. The bank then opens a savings account and sanctions a cash-credit limit based on the group’s record. Women’s groups may also receive interest subvention that lowers the effective cost of borrowing.

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