1

STUDY TEAM AND SUPPORT STAFF

Prof.M.A.Oommen, Malcolm.S.Adiseshiah Chair, Institute of Social

Sciences, New Delhi

Shri.N.Gopalakrishnan Nair, Consultant.

Dr.R.P.Nair, Institute of Social Sciences, Thiruvananthapuram

Shri.D.Mohanan, Institute of Social Sciences, Thiruvananthapuram

Ms.Preetha.P.Nair, Institute of Social Sciences, Thiruvananthapuram

2
 ACKNOWLEDGEMENT
This Report is a bit delayed, for which I tender my apologies to the
Kudumbashree Mission. Mr.T.K.Jose initiated the project and took keen
personal interest. Ms.Sarada Muraleedharan who succeeded him was also
equally interested. My sincere thanks to them. Dr.R.P.Nair’s help both
physical and intellectual is thankfully acknowledged. He and Mr. Mohanan
helped particularly in doing the field work regarding micro enterprises.
Mr.N.Gopalakrishnan Nair was always ready to help. Preetha.P.Nair did
the computer work cheerfully. I am grateful to them all.

M.A.Oommen

3
 CONTENTS
Pages

Acknowledgement

List of Tables

List of Figures

List of Appendic
Appendices

Chapter 1: Introduction 1

Salient Features of KDS

A Brief History of KDS
The structure of Kudumbashree CBOs
The Objectives of the Study
Methodology
Sampling Design
Questionnaires
Questionnaire for NHG households
Questionnaire for the Secretaries of NHGs

Chapter 2: Kudumbashree Households: A Socio # Economic 15

Profile

Chapter 3: Revisiting the Kudumbashree Poor 22

The Economic Status: Evidence from the field
Self – Evaluation
Evaluation by Secretaries
A criteria - based analysis

4
Chapter 4: The Nine#
Nine#Point Index: A Progress Report and 31
a Critique

The Official Poverty Line

The KDS Index: Some general criticisms

Chapter 5: Thrift and Credit Societies: A Critical 39

Evaluation

Thrift and Loans: The Macro Picture

The Micro Scenario
Purpose of loans and debt liabilities

Chapter 6: Local Governments, Kudumbashree and 54

Convergence

Local Government, Kudumbashree and the Plan

61
Chapter 7: Kudumbashree and Women Empowerment
Organisational Empowerment
Economic Empowerment
Knowledge and Leadership Empowerment
Social Capital

Chapter 8: Kudumbashree and Micro

Micro Enterprises 77
– Some Case Studies

Kudumbashree Micro Enterprises – the Macro picture

A Brief profile of Micro Enterprises in Thiruvananthapuram District
A Case study of Micro enterprises in Venganoor Panchayat
The Sample units: More details
Analysis of working units
Units under the Agriculture Sector
Units under the Industrial Sector
Units under Services Sector
Analysis of closed units
Lease Land Farming
Viability of KDS Micro enterprises: More evidences:
Views and suggestions of the organisers of the Micro Enterprises

5
Chapter 9: An Evaluative Summing Up 107

117
References

LIST OF TABLES
Pages

Table 2.1: Percentage distribution of Respondent Households 16

according to Family size

Table 2.2: Percentage distribution of Members according to 16

Physical conditions

Table 2.3: Distribution of members according to level of 17

education

Table 2.3 (a): Distribution of members who are head of the 17

households according to level of education

Table 2.4: Distribution of members who are head of the 17

households according to social status and level of
education

Table 2.4 (a): Distribution of members who are head of the 18

households according to social status

Table 2.5: Distribution of members according to Occupation and 18

Nature of employment

Table 3.1: Trend in the number of NHGs formed and families 23

covered (2000#01 # November 2006)

Table 3.2: Distribution of sample households according to 26

BPL/APL status, natural region and Phase: Rural &
Urban

Table 3.3: Distribution of members according to Economic 27

status as reported by Secretaries

6
Table 3.4: A Social Class#wise distribution of poor and non#poor 28
based on the 4/ 9 Point Criteria

Table 4.1: Improvement in housing conditions after joining the 35

NHG

Table 4.1(a): A break#up of the Improvement in the housing 35

conditions

Table 4.2: Pattern of Food Consumption before and after joining 36

NHG

Table 4.3: Source of Drinking Water before and after joining 36

NHG
Table 4.4: Sanitation Facility before and after joining NHG 36

Table 4.5: No of those employed in the family before and after 37

joining NHG

Table 4.6: Alcohol addicts in the family before and after joining 37
NHG

Table 5.1: Overall trend in Thrift and Loans (Mar 2001 to Nov 40
2006)

Table 5.2: Overall trend in Thrift and Loans per family (Mar 2001 41
to Nov 2006)

Table 5.3: District#wise Trend in Linkage Banking 45

Table 5.4: Portfolio pattern of Households not depending solely 46

on Thrift and Credits

Table 5.5: Purpose#wise distribution of loans availed: A Phase/ 47

Region# wise breakup

Table 5.6: Distribution of members who availed loans by source 49

Table 5.6(a): Source#wise and region#wise break#up of debt 50

liability at the end of June 2006

Table 6.1: Distribution of NHGs according to participation in 56

various activities

Table 7.1: Distribution of members according to type of 63

Empowerments after joining the NHG

Table 7.2: Distribution of members according to Organisational 64

7
 empowerment after joining the NHG

Table 7.3: Education status #wise distribution of members 66

according to organisational Empowerment indices
after joining the NHG

Table 7.4 Self perception of the Members regarding increase in 67

Income & Savings after joining the NHG

Table 7.5: Social category#wise Distribution of members 68

according to Economic Empowerment after joining
the NHG

Table 7.6: Social category#wise Distribution of members 69

according to Knowledge Empowerment after joining
the NHG

Table 7.7: Social category#wise Distribution of members 69

according to leadership Empowerment after joining
the NHG

Table 7.8: Education#wise Distribution of members according to 71

harassment after joining NHG

Table 7.9: Distribution of members according to improvement in 73

Social capital

Table 7.9 (a): Distribution of members according to Social capital 73

Table 8.1: Micro enterprise units functioning in various districts 77

in Rural Areas

Table 8.1(a): District wise micro enterprise units functioning under 78

yuvasree (50K)

Table 8.2: Micro enterprises Thiruvananthapuram District 79

Table 8.3: Micro Enterprises in Venganoor Panchayat – Total 80

units registered and units selected for case study

Table 8.4: Working and Non Working Enterprises by Type 81

Table 8.5: Economic profile of the working units 82

Table 8.6: Employment/Wages pattern of the working units in 83

the Agricultural sector

Table 8.7: Select Economic indicators of Agriculture – Based 84

Enterprises

8
Table 8.8: Performance Indicators of units under agriculture 85

Table 8.9: Micro Enterprises under Industrial Sector 86

Table 8.10: Important Indicators of enterprises in the Industry 87

Sector

Table 8.11: Performance indicators of the enterprises in the 87

Industrial Sector

Table 8.12: Basic Indicators of the Working Units under Service 88

Sector

Table 8.13: Basic Data on the Working of the Enterprises under 89

Service Sector

Table 8.14: Performance Indicators of the units under Service 89

Sector

Table 8.15: District wise details of lease land farming as on 91

January 31, 2007

Table 8.16: Distribution of Micro Enterprises by type of 93

product/services and cost efficiency

Table 8.17: Problems & Suggestions reported by Micro 94

Entrepreneurs

List of Figures

Fig: 1.1: The Role of Kudumbashree CBOs in Women 5

Empowerment: A diagrammatic Presentation

Fig 3.1: Trend in the formation of NHGs (2000#01 – Nov 23

2006)

Fig 3.1 (a): Trend in the Number of Families covered 2000#01# 24

Nov 2006

Fig: 5.1(a): Trend in Thrift & Loan (Rural) 42

9
Fig: 5.1(b): Trend in Thrift & Loan (Urban) 43

Fig: 5.1(c): Trend in Thrift & Loan (Tribal) 43

Fig: 5.2: Thrift Loan Ratio 44

Fig: 6.1: Decentralised Planning And Kudumbashree: A 57

Stylised Presentation

List of Appendices
Appendix 2A: Percentage distribution of households according to 20
Natural region and phase
Appendix 2B: Distribution of NHGs by Regularity of holding 21
meetings and nature of Attendance

Appendix 3A: District wise distribution of Progress of NHGs (March 29

2001#Nov 2006)

Appendix 3B: BPL (APL) Percentage Distribution by Natural 30

Region and by Phases

Appendix 5A: Average debt liability – by source of debt 52

10
Appendix 5B: District#wise percentage distribution of 53
Secretaries according to opinion on the rate of
interest charged by banks on loans
Appendix 7A: education status#wise distribution of members 74
according to knowledge

Appendix 7B: Distribution of members according to Nature of Co# 75

operation

Appendix 7C: Distribution of NHG Secretaries according to 76

resolving conflicts with in family members and
conflicts in which the members or their family are not
involved

Appendix 7D: Distribution of Candidates from Kudumbashree CBOs 76

who won 2005 Local body elections by type of LGs

Appendix 8A: Performance Indicators – Agriculture Sector Units 98

Appendix 8B: Performance Indicators – Industrial Sector Units 100

Appendix 8C: Performance Indicators – Service Sector Units 102

Appendix 8D: Performance Indicators – Closed Units (Sector#Wise) 104

Appendix 8E: Lease land farming # A case study of two NHGs in 106
Venganoor Panchayat

Appendix 9A: Income and Expenditure Highlights 116

11
 CHAPTER 1
INTRODUCTION
This chapter is introductory. In Part I of this chapter we provide a brief
backdrop to the study. The second part of the chapter is devoted to explain the
objectives and methodology of the study.

I
Formally inaugurated in May 1998 and launched in April 1999, but fully
operationalised by 2003, the Kudumbashree (KDS) is ‘a women-oriented anti-
poverty programme’ cast in a mission mode under the leadership and patronage
of panchayats and municipalities. As the Mission statement puts it:

“To eradicate absolute poverty in ten years through concerted community action
under the leadership of Local Self Governments by facilitating organisation of the poor
combining self-help with demand led convergence of available services and resources to
tackle the multiple dimensions and manifestations of poverty holistically”. The economic
base of this self help initiative (popularly called ‘Ayalkoottams’) is built on the
concept and strategies of micro finance.

1.1 Salient Features of KDS

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1.1.1 Although the basic idea of KDS is derived from microfinance, in its
organisational form and operational dimension it has evolved with several
unique features. Broadly speaking, micro finance means providing
financial services to the poor, long excluded by mainstream banking and
financial market. Neoliberals, NGOs as well as several governments of the
world now support it for their own reasons. Micro finance as a prominent
financial service emerged in the 1970s, notably after Muhammad Yunus of
Bangladesh started the Grameen Bank, and began to offer financial services
to the poor once excluded from formal banking primarily because they
lacked physical collateral. Today micro finance has emerged as an industry
in which even big multi-national and national commercial banks are
interested because the poor and their collectives have demonstrated their
credit worthiness through prompt repayment in a world where their richer
counterparts have a record of mounting non-performing assets and bad
debts or even create sub-prime lending hazards.

1.1.2 The Task Force appointed by NABARD in the latter part of 1990s consider
micro finance as the provision of thrift, credit and other financial services
and products of very small amounts to the poor in rural, semi-urban and
urban areas enabling them to raise their income levels and improve living
standards [NABARD (1999)]. The underlying assumption here is that the
loan money will be used primarily on income-generating schemes which
enable the loans or micro credit to be liquidated in the process. The major
features of micro credit are:

It involves loans without collateral

Loans are generally advanced to individuals or groups who are
members of collectives often called self-help groups (SHGs). An
SHG is a substitute for physical collateral and is referred in the
literature as providing ‘social collateral’. The formation of groups
has the twin advantage of lowering transaction costs and improving
repayments, through peer pressures and through the sheer need for
sustainability.

Micro credit is viewed as a method of promoting market-led growth.
Yunus even goes to the extent of describing this phenomenon as
privatizing economy [Yunus M (1997)]. By increasing the
purchasing power of the poor, a larger market potential is created.

1.1.3 From humble beginning in far flung areas of the developing world such as
Bangladesh, India, Indonesia, Africa and Latin America, micro credit
graduated into a major industry in contemporary world. Three different
approaches have been identified in the evolution of micro finance: the
Latin American model, the Grameen Bank model and the SHG-based

13
 model. Latin American model is a commercial model. It tries to ally with
the formal financial system rather than donors or government-targeted
programmes. Emphasis on social and community development of the poor
and marginalized women is totally absent in such a model. Instead the
main focus is on enterprise creation and growth. The Grameen model is
basically centred on small women groups and poverty. The self-help group
based model popularised and institutionalised by the National Bank for
Agriculture and Rural Development (NABARD) through the commercial
banking system is the common pattern in India. KDS does not fall into any
one of these, though its economic base partakes the micro finance paradigm
and its organisational pattern evolved from the community development
society that originated in the Alappuzha municipality in the early 1990s.

1.1.4 In what ways KDS distinguishes itself from other micro finance
organisation? This question is answered by outlining the emerging features
of KDS.
1.1.5 One, KDS is not a commercial institution. It is a community-based
organisation (CBO) of the poor identified on the basis of a 9-point criteria.
(See section 1.2.2). It has three tiers with the neighbourhood groups of poor
women (NHGs) at the bottom, the Area Development society (ADS) at the
intermediate level and the community development society (CDS) at the
apex level. [For details see section 1.3). By now most poor families in the
state have come under the CBOs and are net-worked. Contrary to the
extant income poverty approach of the Government of India (GOI), KDS
has developed a holistic approach to poverty alleviation.

1.1.6 Two, in the KDS community organisation the neighbourhood groups

(NHGs) of poor women at the bottom level act as micro financial
intermediaries called Thrift and Credit Societies (TCSs). At the
intermediary level there is a cluster of 8-10 NHGs called Area Development
Society and at the top level of local government the community
development society (CDS) is formed by federating all ADSs under the
local government. During their weekly meetings, small savings brought by
members are collected. The Secretary of the NHG takes up the
responsibility of thrift and credit operations at the NHG level. Collection of
savings, account keeping, loan disbursement, repayment collection etc is
done by the secretary. Each TCS has a thrift register and the weekly
savings are accounted in the register. The savings thus mobilised is
deposited in a commercial bank. Thus the TCS of KDS functions as a
micro-finance intermediary. Kudumbashree promotes the savings of the
poor by encouraging the formation of Thrift and Credit Societies (TCSs).
Almost simultaneously with the inauguration of the CDS programme in

14
 Alappuzha in 19931, the Government of Kerala (GoK) adopted the idea
behind the Self Help Groups (SHGs) which have already gained currency in
India through the efforts of NGOs like MYRADA (Mysore Resettlement
and Development Agency) and promoted by NABARD to bring financial
services to the reach of the poor and the informal sector. Now CDS in
Kerala is an institution that covers all the municipalities and panchayats.

1.1.6.1 The most important rationale in bringing financial services to the door steps
of the poor households is the economy in the transaction costs. For formal
banks it will be costly to mobilize the small savings of the poor families
lying scattered. Equally prohibitive is the cost to the conventional banks in
financing a large number of these families who require credit frequently
and in small quantities and that too not backed by collateral securities. It is
in this context that the intervention of NABARD and the mediation of CDS
on behalf of their TCS assume significance in providing ‘unconventional’
banking and alternative financial services to poor women. An important
and probably unique aspect of the micro finance system of KDS is that
several individual members and the majority of NHGs do not avail of bank
credit and rely only on their own ‘thrift’/savings [See Chapter 5].

1.1.7 Three, KDS through its micro finance structure and through its many-
faceted activities seeks to empower poor women who are identified using
the nine-point poverty criteria [See section 1.2.2]. The empowering process2
is worked through the three-tiered community-based organisation referred
to as community development society (CDS). The multi-pronged approach
focusses on human resource development, community health, child welfare
through ‘Balasabha’, basic minimum needs, rehabilitation of poorest of the
poor (the Ashraya Project), lease land farming, housing, besides micro
finance and micro enterprise development. The term ‘empowerment’ is
used here as a process whereby the powerless women gain a greater share
of control over resources and decision-making be it in their family or other
social institutions to which they get associated. A stylised diagrammatic
presentation is given in Fig 1.1.

1.1.8 Four, KDS has the patronage and support of the State Government as well
as the local governments. It now functions as part of the participatory
planning process and functions as a delivery mechanism at the local level.
It is a fact that the CDS has over these years demonstrated the potential to
function as a sub-system of the municipalities and panchayats integrating
the various antipoverty programmes and function as their delivery system.

1See next section (1.2) for a brief history of Kudumbashree.

2 It is logically untenable and practically impossible to envisage the empowerment process as a 12-
stage flow process as the State Planning Board (2002) Economic Review (p327) has done.

15
The strength and viability of the CDS system is derived largely from the
fact that it is functionally linked to the local bodies.

16
Fig 1.1

The Role of Kudumbashree CBOs in Women Empowerment:

A diagrammatic Presentation

WOMEN
EMPOWERMENT

Economic Social
Empowerment Empowerment

Decision Making
Asset Creation and
income generation
Participation in
Planning and
Micro Enterprises implementation
process

Social Co-operation
reciprocity and Trust
Micro Finance (Own CBOs (Social Capital)
Thrift + Bank Loan)

1.1.9 Five, the most conspicuous feature of the programme is its emphasis on
poverty reduction with a target to abolish absolute poverty in ten years.
Officially it is characterised as “a planned, mighty onslaught on poverty”.

1.1.10 In brief, KDS is a micro finance-centred CBO with several unique features.
The spectrums of activities taken are much wider than that of the Grameen
Bank of Bangladesh of Nobel prize fame. In approach and functions they
stand poles apart. While both work on the principle of mutual trust and
faith which help both in ensuring a very high rate of repayment (90-95%)
the Grameen Bank has considerable control and supervision in regard to
repayment compared to KDS where the spirit of voluntarism is dominant.
One Taka per member per week is compulsory under the Grameen. More
over every member has to contribute 5 per cent of the loan amount as

17
 Group Tax, besides 25 per cent of interest payments to Group Contingency
Fund. The Grameen Bank worker is a ubiquitous presence and attends
weekly meetings of members. Grameen Bank’s charter on social
development approved in 1984 contains 16 principles (such as solidarity,
courage, hard work, discipline etc) to which each group member (only 5
members in a Grameen Group as against an average of 15-40 members for
KDS) has to take an oath of allegiance. Even without such formalities the
KDS women shoulder greater social responsibilities and as this report
strongly demonstrates enjoy greater empowerment reckoned in terms of
several parameters. The chief defect of KDS and probably that of such
micro credit institutions like Grameen Bank is that they do not envisage any
systemic change or structural change in favour of the poor. The poor have
to rise by their own bootstraps. The odds against such an approach are
very high and could not be expected to bring about radical social and
structural changes. We may also note that KDS is a state created CBO and
not part of the tribe of adversarial CBOs who keep a critical distance from
the state and struggle for alternate forms of mobilisation and goals.

1.2 A Brief History of KDS

1.2.1 Kudumbashree did not emerge out of the blue. In India the idea of
providing credit to the poor goes as far back as the cooperative movement.
But linking banking to the supply of credit to the priority sector and even
the weaker sections and expanding the outreach of banking to remote rural
areas could be traced to the bank nationalisation of 1969. The much
publicised subsidised credit programme called IRDP (Integrated Rural
Development Programme) launched by the Government of India with the
help of the commercial banking in early 1980s failed to take off as a
sustained project. Beneficiaries did not have a choice over the purpose and
amount of credit. Credit target was the overriding concern of banks and
implementing officials. It was in this background that NABARD took the
initiative of group lending by promoting self-help groups during 1986-87,
with the help of Mysore Resettlement and Development Agency
(MYRADA). On the basis of an all-India survey of the micro finance in the
country, NABARD launched a SHG-linked banking project in 1991. It was
the success of this project and the general endorsement of the scheme by
the Reserve Bank that micro finance began to progress in the country.
Broadly speaking, Kudumbashree of Kerala is an outgrowth of the broad
micro finance initiative in the country. Looking back we may say that it
was the result of a tripartite initiative in which not only NABARD, but also
the UNICEF and the urban poverty cell of the Local Administrative
Department, Government of Kerala were involved. The basic idea was to
evolve a poverty eradication mission identifying poor women through a

18
 multiple criteria and form them into a community based organisation (as
against seeing them as benefit-receivers) which in turn worked as a micro
finance intermediary.

1.2.2 In the early 1990s, certain important initiatives taken by the UNICEF in the
Alappuzha town enthusiastically supported by the functionaries of the
Urban Basic Services (UBS) project of the Government of India already
functioning in the Alappuzha municipality (fully backed up by the
Government of Kerala (GoK)) triggered a new process in the history of
urban poverty eradication in the state and probably in the whole country.
The most important initiative was to rectify the shortcomings in the
identification and targeting of the poor, and the manner of enlisting
community participation. In 1991, UNICEF initiated a community-based
nutrition programme (CBNP) in the Alappuzha municipality on an
experimental basis to improve the nutritional and health levels of the poor
especially women and children. As part of this, UNICEF, Chennai office
jointly with the Alappuzha municipal UBS team conducted a survey of 5728
households in the town to develop a simple measure of poverty that would
enable local community members and volunteers to identify the multiple
factors that characterise poverty. Based on this survey nine factors were
identified and any family with four or more of these is classified as poor.
The nine factors3 designed for identifying the poor are:

♦ Scheduled Castes and Tribes

♦ Only one or none of adult family members being employed.
♦ Kutcha or thatched house.
♦ Lack of household sanitary latrines.
♦ Non-availability of safe drinking water.
♦ Family having two meals or less per day.
♦ Alcohol or drug addicts in the family.
♦ Family having at least one illiterate member.
♦ Family having at least one child below 5 years.

3 The Kudumbashree has modified the index and the current version is given below:
Revised Poverty Index or Risk parameters (Urban Areas)
1. No Land/less than 5 cents of land.
2. No house/dilapidated house.
3. No sanitary latrine.
4. No access to safe drinking water within 150 meters.
5. Women headed house hold/presence of a widow, divorcee/abandoned lady/unwed
mother.
6. No regularly employed person in the family.
7. Socially disadvantaged groups (SC/ST)
8. Presence of mentally or physically challenged person/chronically ill member in the family.
9. Families without colour TV.

19
1.2.3 Proper identification of the poor is an important first step. But organizing
them into a community-based set up is equally important. Kerala’s
contribution consists in taking steps towards organizing the poor women
into a three-tier system and giving statutory recognition to it. Through
several rounds of interaction with the community especially women by the
officers of the UBSP (Urban Basic Services for the Poor) who took steps to
initiate the process of community organization in Alappuzha with the
active cooperation of ICDS supervisors, and Anganwadi workers the CDS
structure was made a reality. In 1993, a model byelaw for CDS developed
by the state UBSP cell together with the Alappuzha UBSP received the state
government approval. On February 6, 1993, the Alappuzha community
development society (CDS) was formally inaugurated and this has come to
be characterised as the ‘Alappuzha model’. All the households in the other
57 towns (in total 784000 households) were surveyed and using the 4/9
(any four out of nine), 192000 of them or 24.5 per cent were identified as
poor. In the meantime in 1994 the entire district of Malappuram,
admittedly the most backward district of the state, with more than 600,000
households were surveyed and poor were identified using the nine-point
index with minor modifications with the help of the Literacy Mission and
local women volunteers assisted by the Anganwadi functionaries. In a
span of two years from the inauguration of the CDS system in Alappuzha
in February 1993, it has been extended to the entire municipal towns of the
state, besides the panchayat areas of the Malappuram district. The
Malappuram ‘model’ which was an extension of the CDS system to the
rural areas was made possible again thanks to the UNICEF’s Community
Based Nutrition Programme and Poverty Alleviation Project [CBNP and
PAP]. Because of the success experienced in Alappuzha and Malappuram,
the GOK resolved to extend the programme further to the entire state under
the name ‘Kudumbashree’ a Malayalam word which means prosperity to
the family. It was conceived as a ‘poverty eradication mission’ and the
original project prepared by NABARD and the Local Administration
Department in 1997 was entitled ‘Poverty Eradication Mission Kerala state: A
Woman based participative programme to eradicate poverty in Kerala by 2007’. It
is useful to spell out below the mission objectives given in the Report which
became the objectives of the KDS mission.

Identifying the poor families by the community through a poverty

index.

Empowering the poor women to improve the productivity and
managerial capacitities of the community organising them into
CDSs.

Encouraging thrift and investment through credit by developing
CDS to work as informal banks of the poor.

20

Improve incomes of the poor through improved skills and
investments for self-employment.

Ensuring better health and nutrition for all.

Ensuring basic amenities like safe drinking water, sanitary latrines,
improved shelter and overall environment improvement.

Ensuring a minimum of primary education for all children belonging
to risk families.

Enabling the poor to participate in the decentralisation process
through the CDS, as a subsystem of the local bodies.

1.2.4 It is clear from the above objectives that the CDS with its micro finance
activities is the kingpin of the whole KDS programme and eradication of
poverty through women empowerment is envisaged as an integral and
viable part of the programme.

1.2.5 In the panchayat areas, KDS was introduced in three phases. The KDS
office was set up in June 2000, and the first phase was till September 2002,
the second phase was till March 2003. Now KDS covers the entire village
panchayat areas in the country. Undoubtedly, the launching of the people’s
plan campaign triggered an accelerated growth during the latter part of the
Ninth Plan and the period since then.

1.3 The structure of Kudumbashree CBOs

1.3.1 The lowest tier of the CBO consists of the Neighbourhood Groups (NHGs)
comprising 15-40 women members selected from poor families identified
using the nine-point criteria detailed above. The NHG members elect their
secretary and president besides three volunteers to be in charge of
community health, income generation activities and infrastructural
development. In weekly meetings not only the members bring their thrift
(or instalments due by those who have availed of loans), they discuss their
livelihood problems and seek solutions. This is in sharp contrast to the
Grameen model where weekly savings is compulsory and the bank staff go
to collect them.

1.3.2 The second or intermediate tier called Area Development Society (ADS) is
formed at the ward level by federating 8-10 NHGs. The Area Development
Society is managed by representatives elected from the various federating
NHGs. To dovetail their activities with that of the local government (LGs),
a ward level monitoring and advisory committee is formed under the
chairmanship of the elected ward member of the LG. This arrangement
helps to include the priorities of the poor into the plans of the local
governments.

21
1.3.3 At the panchayat level in the rural areas and at the municipality level in the
urban areas, stands the community development society (CDS), a body
registered under the charitable societies Act of the state. A CDS is formed
by federating various ADSs. It is through this apex body that the
Kudumbashree operates.

1.3.4 In the original Alappuzha and Malappuram ‘models’ of organization of the

poor along with the local self governments, there was a provision for
preparing a micro plan at the NHG level and a mini plan at the ADS level
coordinated at the CDS level. This was not faithfully implemented. The
GOK has now come up with a very innovative initiative to prepare an anti-
poverty sub-plan in which all local governments are partners. The
Government has issued detailed procedures for preparing such a plan. All
local governments have to prepare a sub plan which is conceived as a
bottom up planning exercise by the CDS system. A long-standing criticism
of the head-count ratio based on a poverty line is the possibility of
neglecting the poorest of the poor, the destitutes. An important component
of the anti-poverty sub plan is the detailed package of care services for the
poorest of the poor called Ashraya.

II
The Objectives and Methodology of the Study

1.4 The Objectives of the Study

1.4.1 The project has been in effective operation for seven to eight years now. It
is high time, a comprehensive evaluation of the project is undertaken to
assess the performance of the programme, to examine the extent to which
the declared goals have been achieved, to identify the weaknesses of the
programme, if any, and to suggest possible conceptual and operational
improvements. The present study is an attempt in this direction. More
specifically, the broad objectives of the study are:-

i. To evaluate critically, the conceptual and operational relevance and

significance of the nine point index and to suggest modifications to
suit the changing situations and to evolve new criteria.
ii. To estimate the thrifts savings, investment in productive activities,
expenditure on household durables, outstanding liabilities, and so

22
 on with a view to obtaining a detailed picture of the economic
position of the households.
iii. To find out the quantitative and qualitative improvements in the
level of living of the NHG members covered by the Kudumbashree
programme.
iv. To investigate the functioning and effectiveness of the community
based organisations of Kudumbasree, and to analyse the linkage
between Kudumbasree and the local bodies.
v. To critically examine the viability of the micro enterprises under the
Kudumbasree and assess their economic and social impact,
especially on the members of NHGs.
vi. To analyse the role of the CBOs in promoting convergent action to
ensure timely availability of requisite facilities and
vii. To evaluate the role played by Kudumbasree in relation to women
empowerment.

1.5 Methodology

1.5.1 The study is primarily empirical. The data from the field is supplemented
by secondary sources. Besides secondary sources and the field investigation
[See Sampling design below] we held elaborate discussions with a wide
cross section of functionaries at the panchayat level, mission coordinators,
CDS Chairpersons and ordinary members. We have interacted rather
closely with the functionaries from over 150 panchayats in the Kollam and
Thiruvananthapuram Divisions by attending their monthly review
meetings. The sampling design for field investigation is outlined below.

1.6 Sampling Design:

1.6.1 The study has used a multi-stage random sampling. The Poverty
Eradication Mission has divided the state into three regions for the purpose
of administration. Each region consists of a few districts. The following are
the three regions and the districts in each:

Region I: Thiruvananthapuram, Kollam, Pathanamthitta and

Alappuzha.
Region II: Kottayam, Idukki, Ernakulam, Thrissur and Palakkad.
Region III: Malappuram, Kozhikode, Wayanad, Kannur and
Kasargode.

1.6.2 The survey covers both the rural and urban areas. In the rural areas, from
each region two districts are selected in such a way that each region will
have substantial areas falling under each of the three natural divisions viz.

23
 highland, midland and lowland. In many studies and surveys conducted in
the past in the state and the experience with the implementation of rural
development programmes, it has been clearly shown that the natural
resource endowments, the pattern of economic activities, the lifestyles, and
even the level of cooperation of the people, differ significantly among
natural regions. Therefore, it will be useful to ensure adequate
representation in the sample of each of these three natural divisions. Thus,
from each region two districts were selected in such a manner that these
two districts together will have substantial areas falling in each of the three
natural divisions. The districts selected from each of the regions are as
follows:

Region Sample districts

I Alappuzha and Kollam
II Eranakulam and Idukki
III Kannur and Wayanad

1.6.3 A total of 54 CDS/village panchayats were selected for the study. These 54
CDS/village panchayats were first allocated to the selected districts of each
region in proportion to the total number of CDS/village panchayats in the
selected districts. It has been ensured that from each region, there will be
three panchayats from each natural division, one each belonging to Phase I,
Phase II and Phase III. It may be mentioned here that the phase of the
project is important because usually in Phase I project areas only the
preliminary work will be in progress. In Phase II areas, the project may be
half way through and in the Phase III areas the project will be in its final
stages. So, for representative sampling and for a meaningful interpretation
of the survey results, a phase-wise analysis is helpful. Attempt has also
been made to include, as far as possible, the different grades into which the
sample CDS is categorised.

1.6.4 From each selected CDS/Panchayat, three ADS were selected at random
and from each selected ADS, five neighbourhood groups (NHGs) were
selected also at random. From each selected NHG, ten households were
selected at random. To sum up, through the sampling procedure, the study
intended to cover 54 CDS, 162 ADS, 810 NHGs and approximately 8000
families (of members of NHGs). The selection is done from a district-wise
list of CDS, ADS and NHGs, supplied by the Poverty Eradication Mission.
Because of non-response from a few CDS/NHGs, the actual number of
families surveyed in rural areas were only 6519.

24
1.6.5 From the urban areas, the survey covered one City Corporation and two
municipalities. As suggested by the Kudumbashree office, Kozhikode City
Corporation, the Thalassery municipality from Kannur district and the
Cherthala municipality from Alappuzha district were selected. In the
urban sector, a total of 40 NHGs were selected for the study 20 from the
corporation and 10 each from the two municipalities. From each NHG, 10
families were surveyed. Thus, in all 400 families in the urban areas were
covered by the survey. The actual survey covered 397 urban households.
Thus 6916 households were surveyed in total.

1.7 Questionnaires

1.7.1 Two sets of questionnaires were used to canvass the information necessary
for making an evaluation of the performance of the Kudumbashree project,
one meant for NHG member households and the other to secretaries of
NHGs. The first questionnaire which covered 6916 households is very
important because the informant is the person who
saves/borrows/undertakes production activity and has to be constantly in
touch with other members as well as the officials and the financing
institutions. The NHG member is also the person who gets the direct
benefit of the project. The second questionnaire is meant for the secretary of
the NHG. In total 794 secretaries were covered. Among the local level
functionaries concerned with the Kudumbasree project, the secretary is
perhaps the most important link. She necessarily, has to be thoroughly
familiar with the activities carried by the NHGs in her jurisdiction and is
eminently suitable to provide information on the same.

1.8 Questionnaire for NHG household

1.8.1 The household questionnaire is very elaborate with a total of 123 questions
regarding the diverse aspects and activities of the Kudumbasree project.
This questionnaire is divided into four parts A, B, C and D. Part A is meant
for collecting information on the identification particulars of the NHG
member. The details of savings of the member in the thrift and credit
society and particulars of other savings, if any, are also collected. The uses
to which the loans taken by the NHG member (thrift loan plus bank loan),
the items of assets which the member has created with the credit and the
source-wise details of the current debt liability of the member were also
ascertained in this part.

1.8.2 Part B attempts to ascertain from the member, the improvements, if any, in
a number of indicators after the member joined the NHG. The questions
here incorporate also some of the nine points considered for designating a

25
 family as poor. Important among these are the condition of the house,
literacy status, additional employment generated, sanitation, drinking
water, pattern of food consumption, land owned and its value etc.

1.8.3 Part C deals with questions on women empowerment. There are four sub
divisions under this organisational empowerment, economic
empowerment, leadership empowerment and knowledge empowerment.
There are, in all, 45 questions in this part, meant for eliciting information on
the various dimensions of empowerment. Part C is very important as it
attempts to measure the improvements which took place in the members
personal abilities as well as in the members social position as a result of her
participation in the NHG activities.

1.8.4 Part D attempts to measure the ‘social capital’ (see para 7.7 for definition)
generated consequent on the working of the community-based mechanism
in the operation of the Kudumbasree programme. Changes in the variables
such as the willingness of the member to cooperate with other group
members, mutual trust with other members of the group as well as other
people, the cooperation received from other members, the mutual trust and
cooperation received from different sections of society and the like are
information collected in this section.

1.9 Questionnaire for the Secretary of the NHG

1.9.1 The questionnaire canvassed from secretaries is arranged in two parts A

and B. Besides the identification particulars of the concerned NHG and
ADS, general particulars about the secretary such as her age, marital status,
educational qualification, economic status etc. are ascertained so that the
general background of the main functionary of the NHG can be
understood. Other information collected in Part A include the total
membership of the NHG, the age profile of the members, the regularity of
the NHG meetings, NHG's linkages with the banking institutions and so
on. Part B includes questions intended to assess the activities and progress
of the NHG during the tenure of office of the present incumbent. Important
among them are the functioning of the thrift and credit societies under the
NHG, particularly the amount of thrift mobilised, loans given, bank loans
arranged, particulars about the members availing the loans, the purpose for
which the loans are taken, the type of assistance provided by the NHG to
the members, general pattern of decision making in the group, capacity
building programmes initiated by the NHG, micro enterprises run by the
group, approximate monthly turnover, promptness in keeping the various
registers, account books and other records.

26
 CHAPTER 2
KUDUMBASHREE HOUSEHOLDS:
A SOCIO-ECONOMIC PROFILE

2.1 The CBOs of Kudumbashree have been working over seven years by now.
Long before that some of them especially those in urban areas and
Malappuram district worked as community development societies as we
explained in Chapter 1. But very little is known about the socio-economic
characteristics of the CBO members except that they were selected on the
basis of a nine-point poverty criteria. This chapter tries to give a brief socio-
economic profile of KDS members based on the field investigation of 6916
households with nearly 30,000 population.

2.2 In Appendix 2A we present the distribution of the sample households by

region by phase, by rural-urban division and by districts. We followed a
multiple stratification to make the sample to include the various stages and
locations of the neighbourhood households. Appendix 2A shows that the
majority of the sample households are from the midlands (44%), followed
by the highlands (34%) and then the coastal (16.56%). The urban coverage
is nearly 6 per cent. The idea is not to make aggregate estimates but to
highlight the various dimensions of a group of people brought under the
generic title of poor and formed part of the CDS/KDS collectivity.

2.3 A common notion among people is that poor have a large family size, are
either illiterate or only with low education levels and comprise mostly of
the socially backward castes. Tables 2.1, 2.2, 2.3, 2.3(a) and 2.4 throw light
on these attributes. Table 2.1 shows that more than 88 per cent of the
sample population falls in the 3-6 size class. Indeed the 3-4 represents the
mode. The average family size is 4.28 for the sample population and it
ranges from 4.18 in Idukki to 5.09 in Kozhikode (Corporation). The
presence of large families in urban areas is due to the inclusion of a colony
in Kozhikode Corporation area comprising mostly Tamil population where
more than one family live in a single house. Actually in Kerala very poor
households of SC/ST families and fisher folk are compelled to live in the
space of small shelters.

27
 Table 2.1
Percentage distribution of Respondent Households according to
Family size
Family size Rural Urban All
1-2 6.60 10.10 6.80
3-4 57.60 37.50 56.50
5-6 32.00 34.50 32.20
7-8 3.70 16.90 4.40
9-11 0.10 1.00 0.10
All 100.00 100.00 100.00

Table 2.2
Percentage distribution of Members according to
Physical conditions
Physical Condition Rural Urban All
% % %
Orthopedically handicapped 0.4 2.0 0.5
Eyesight impaired 8.8 12.6 9.0
Hearing impaired 0.7 0.5 0.7
Normal 90.1 84.9 89.8
Total 100.0 100.0 100.0

2.4 KDS members do not constitute a physically challenged population as may

be seen from Table 2.2. Orthopedically handicapped population comprises
only 0.4 per cent of the rural members, although among the urban members
it is as large as2 per cent. Eye disease seems to constitute a high proportion
and probably needs remedial attention. It may be noted here that the KDS
mission has launched a special programme called Ashraya to rehabilitate
the physically challenged poor through the local governments.

2.5 We may discuss the level of education and caste-wise social distribution
together with the help of Tables 2.3, 2.3(a), 2.4 and 2.4(a). That over 7 per
cent of the sample members are degree holders or with some professional
qualification and 46 per cent have SSLC schooling show that poverty is not
confined to illiterates. The majority among the degree holders as well as
illiterate comprise the other backward classes [See Table 2.4 and 2.4(a)].
Out of the sample population of 6916 households 3246 are OBC and 2566
belong to general categories making a total of nearly 84.1 per cent. The
urban sample does not compare well with that of the rural in that 78 per
cent of them are with primary school and below qualifications. It is also
significant that over two thirds (66.6 per cent) who are heads of households

28
 are either illiterate or only with primary level education. Among the poor,
it is important to note that there is a dominant presence of the advanced
communities (37.1%) and a significant majority of them have a poor
educational background [See Table 2.4 and 2.4(a)].

Table 2.3
Distribution of members according to level of education
Level of Education Rural Urban All
Illiterate &Literate below primary 13.00 13.60 13.00
Primary 32.00 64.60 33.90
SSLC 47.50 20.70 45.90
Degree and above 6.60 0.80 6.30
Others 0.90 0.30 0.90
All 100.00 100.00 100.00

Table 2.3 (a)

Distribution of members who are head of the households according to
level of education
Head of Not Head
Head of the Not Head of the of the
All All %
Level of Education household the household household household
% %
Illiterate & Literate
270 628 898 25.2 10.7 13.0
below primary
Primary 443 1903 2346 41.4 32.6 33.9
SSLC 323 2851 3174 30.2 48.8 45.9
Degree and above 28 408 436 2.6 7.0 6.3
Others 6 56 62 0.6 1.0 0.9
All 1070 5846 6916 100.0 100.0 100.0

Table 2.4
Distribution of members who are head of the households according to
social status and level of education
Social Literate below Degree
Illiterate Primary SSLC Others All
status primary & above
SC 28.1 18.3 10.2 12.4 14.3 0.0 14.1
ST 7.0 5.6 2.3 3.4 0.0 16.7 3.6
BC 0.8 2.8 0.7 0.9 0.0 0.0 1.0
OBC 51.6 39.5 55.2 51.1 53.6 66.6 51.6
General 12.5 33.8 31.6 32.2 32.1 16.7 29.7
All 100.0 100.0 100.0 100.0 100.0 100.0 100.0

29
 Table 2.4 (a)
Distribution of members who are head of the households according to
social status
Head of the Not Head of
Social Head of the Not Head of All
All
household the household
status household the household %
% %
SC 151 688 839 14.1 11.8 12.1
ST 39 165 204 3.6 2.8 2.9
BC 11 50 61 1.0 0.9 0.9
OBC 551 2695 3246 51.6 46.0 47.0
General 318 2248 2566 29.7 38.5 37.1
All 1070 5846 6916 100.0 100.0 100.0

2.6 The poverty situation of the KDS members is captured well in Table 2.5
which gives a fairly detailed account of the employment pattern. About 42
per cent are reportedly unemployed. Those who are employed are self
employed engaged primarily in non-agricultural business or work as part
time or casual labourers. Over 70 per cent of those who have full time
employment and 90 per cent of part time and over 97 per cent of the
casually employed are either engaged in non-agricultural self employment
or wage employment. Self employment is the dominant pattern. Even
when they report themselves as ‘APL’ [See Chapter 3] several of them could
be considered as struggling to keep the wolf out of the door.

Table 2.5
Distribution of members according to Occupation and
Nature of employment
Occupation Full time Part time Casual All
Agricultural Labour 1.6 0.8 0.3 0.4
Self employed in agriculture,
fishing 9.4 7.1 0.9 2.3
Self employed in non-
agriculture, business 55.4 64.2 58.5 33.9
Workers head load and
general 15.7 25.7 38.9 17.7
Workers (Construction) 0.4 0.2 0.1 0.1
Workers (Plantation) 0.0 0.0 0.2 0.1
Employed Small scale trade 0.9 0.3 0.2 0.2
Others 15.9 1.7 0.9 1.9
Pension / Remittance 0.7 0.0 0.0 0.5
Unemployed 0.0 0.0 0.0 42.1
All 100.0 100.0 100.0 100.0

30
2.7 NHGs in Kerala are generally alive and kicking except in the urban areas in
certain cases. [See Appendix 2 B for details). In most cases meetings are
held regularly. Exceptions are very rare. In all the rural NHGs, above 75
per cent attendance is the regular pattern. Attendance falling in the 40-60
per cent range is very rare except in urban areas [See Appendix 2 B].

31
 Appendix 2A
Percentage distribution of households according to Natural region and phase
Coastal Mid Land High Land
District Phase Phase Phase Phase Phase Phase Phase Phase Phase Urban Total
All All All
I II III I II III I II III
Alappuzha 1.82 1.81 1.81 5.44 3.79 5.81 3.70 13.30 0 0 0 0 1.43 20.17
Ernakulam 1.59 1.74 1.29 4.61 2.96 6.29 2.82 12.07 1.60 0.00 0.00 1.60 0.00 18.29
Idukki 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.51 5.19 1.78 10.48 0.00 10.48
Kannur 0.00 1.30 0.00 1.30 6.02 3.50 1.59 11.10 3.60 1.88 2.31 7.79 1.45 21.65
Kollam 1.63 1.62 1.95 5.21 1.92 3.53 1.82 7.27 1.78 1.82 1.76 5.36 0.00 17.84
Kozhikode 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.86 2.86
Wayanad 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.13 6.58 0.00 8.70 0.00 8.70
All 5.05 6.46 5.05 16.56 14.69 19.13 9.93 43.75 12.62 15.47 5.86 33.95 5.74 100.00

32
 Appendix 2 B
Distribution of NHGs by Regularity of holding meetings and nature of Attendance
whether NHGs hold regular meetings Usual Attendances of members
Phase Region Yes No Total Above 75 % 60% to 75 % 40 % to 60% All
Count % Count % Count % Count % Count % Count % Count %
Costal 36 92.3 3 7.7 39 100.0 26 66.7 13 33.3 0 0 39 100.0
Midland 118 100.0 0 0.0 118 100.0 93 78.8 23 19.5 2 1.7 118 100.0
I
High Land 100 99.0 1 1.0 101 100.0 74 73.3 27 26.7 0 0.0 101 100.0
Total Phase I 254 98.4 4 1.6 258 100.0 193 74.8 63 24.4 2 0.8 258 100.0
Costal 56 98.2 1 1.8 57 100.0 47 82.5 8 14.0 2 3.5 57 100.0
Midland 154 99.4 1 0.6 155 100.0 112 72.3 41 26.5 2 1.3 155 100.0
II
High Land 116 100.0 0 0.0 116 100.0 97 83.6 19 16.4 0.0 116 100.0
Total Phase II 326 99.4 2 0.6 328 100.0 256 78.0 68 20.7 4 1.2 328 100.0
Costal 42 100.0 0 0.0 42 100.0 30 71.4 12 28.6 0 0.0 42 100.0
Midland 83 97.6 2 2.4 85 100.0 63 74.1 21 24.7 1 1.2 85 100.0
III
High Land 44 100.0 0 0.0 44 100.0 33 75.0 11 25.0 0 0.0 44 100.0
Total Phase III 169 98.8 2 1.2 171 100.0 126 73.7 44 25.7 1 0.6 171 100.0
Urban 35 94.6 2 5.4 37 100.0 18 48.6 14 37.8 5 13.5 37 100.0
All 784 98.7 10 1.3 794 100.0 593 74.7 189 23.8 12 1.5 794 100.0

33
 CHAPTER 3
REVISITING THE KUDUMBASHREE POOR

Kudumbashree is a poverty mission which seeks “to eradicate absolute

poverty in ten years through concerted community action”. This chapter and the
one that follows (Chapter 4) are meant to critique the progress made in eradicating
poverty. We also try to critique the conceptual foundations of the nine-point
index along with the progress made. Technically the poor are to be identified
using the 4/9 criteria and the graduation process out of poverty is also through
the progress in eliminating most of these criteria. This chapter has two parts –
Part I analyses the overall picture of progress. Part II shows the field situation as
revealed from the NHG secretary schedules and household surveys.

I
3.01 KDS which commenced work in early 1999 was the obvious continuum of
the urban poverty alleviation programme via the community development
society (CDS) network. It has by then covered all the urban local bodies
and the entire rural local bodies of the Malappuram district. It now covers
all the rural areas and has extended its activity domain to the tribal areas.
Table 3.1 shows the trend in the number of NHGs formed, families covered
and families per NHG of the rural, urban and tribal areas from April 2000
through November 2006. [The graphical presentations of the trend in
growth of NHGs and families there of are given in Fig 3.1 and 3.1(a)]. The
Table given as Appendix 3A gives the district- wise distribution of the
progress in the total number of NHGs and families. We give below certain
broad inferences from these tables.

3.02 KDS as officially reported has registered a spectacular growth in the

number of NHGs and families covered. The number of NHGs increased
from 37458 in 2001 to over 1.77 lakhs in November 2006. During the same
period the number of families covered increased from 8.67 lakhs to 37.35
lakhs. This comprised the rural, urban and tribal groups. In rural areas
except in the Malappuram district, it was introduced as a phased
programme. Overall , during the period from 2000 April to November
2006, the number of NHGs in rural areas registered a growth of 464 per cent
with a simple average growth rate of 77 per cent per annum and the
corresponding increase in the number of families was 386 per cent with a
simple average growth of 64 per cent. The overall growth of NHGs in
urban areas was only 59 per cent and the growth of the number of families
163 per cent. This may appear less spectacular, but it is also striking

34
 because the entire municipalities/corporations were covered, even before
the KDS project was launched.

Table 3.1
Trend in the number of NHGs formed and families covered (2000-01 -
November 2006)
No of NHGs formed No. of Families covered Families /NHG
Year
Rural Urban Tribal Total Rural Urban Tribal Total Rural Urban Tribal Total
2000-01 28973 7538 947 37458 654621 196000 16400 867021 22.59 26.00 17.32 23.15
2001-02 93052 7848 1010 101910 1843631 196000 12164 2051795 19.81 24.97 12.04 20.13
2002-03 107745 7863 1190 116798 2068227 247165 15096 2330488 19.20 31.43 12.69 19.95
2003-04 122704 7947 2049 132700 2462322 273347 24846 2760515 20.07 34.40 12.13 20.80
2004-05 143983 8667 2049 154699 2837977 292207 24846 3155030 19.71 33.71 12.13 20.39
2005-06 153117 10687 2036 165840 3020500 292207 32802 3345509 19.73 27.34 16.11 20.17
2006-07
163426 11987 2232 177645 3183529 515715 35880 3735124 19.48 43.02 16.08 21.03
(06Nov)

Fig 3.1

Trend in the Formation of NHGs (2000-01 - Nov 2006)

200000

180000

160000
Neighbourhood Groups

140000

120000
Rural
Urban
100000 Tribal
Total
80000

60000

40000

20000

0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
(06Nov)

Year

35
Fig 3.1 (a)

Trend in the Number of Families Covered (2000-01 - Nov 2006)

4000000

3500000

3000000
No. of Families

2500000

2000000 Rural
Urban
Tribal
1500000 Total

1000000

500000

0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
(06Nov)
Year

3.03 The number of NHGs per GP increased from 29 in March 2001 to 165 in
2006. The average number of families per NHG for gram panchayats works
out to 22 for March 2001 and that for ULBs, 26. The size shot upto 43 for
ULBs, while it declined to 19 for GPs by November 2006 (See Appendix
3A). Clearly while in urban NHGs more members were added, in the rural
areas new NHGs were formed. On the basis of discussions with certain
focus group members we may safely say that 85 to 90 per cent group were
alive and active.

3.04 The remarkable progress made in the growth of NHGs (See Table 3.1 and
Appendix 3A) makes it imperative to reexamine the methodology of
admitting NHG members and the process of implementation. The
percentage of NHG households covered to the total households (as per 2001
Census) in the gram panchayats which was only 13 per cent in March 2001
rose to 63.54 per cent in November 2006 (if we project a 5 per cent growth in
new families by 2006, the percentage will be reduced to 60). The
corresponding growth in the municipal areas was from 11.42 per cent to
over 30 per cent. In November 2006, the percentage of NHG families
covered ranges from 45.46 per cent in the Kollam district to over 90 per cent
in the Kannur District. Assuming that the projected number of families in

36
 2006 will be around 72 lakhs, the KDS poor will be over 50 per cent. This
surely is not a realistically tenable number. The head count ratio of Kerala
(population below the poverty line) based on the NSS 61st round household
consumer expenditure survey for rural areas works out to 13.2 per cent for
rural areas and 20.16 per cent for urban areas for 2004-05 [Himanshu (2007):
498] which roughly corresponds to the period of our enquiry. Mahendra
Dev and Ravi (2007) have estimated the number of poor (also based on NSS
(61st round) consumer expenditure) to be around 4.79 million which at an
average family size of 4.5 works out to 10.6 lakh families. Actually several
secretaries have confessed that the process of selection has not strictly
followed the 4/9 criteria. The picture of poverty is exaggerated
considerably if we were to accept the KDS numbers.

II
3.1 The Economic Status: Evidence from the field

3.1.1 The success of Kudumbashree is to be measured by the magnitude of

poverty reduction. For this we have used three measures:

(i) Each sample household was asked to report whether it belonged to the
(Above Poverty line) APL/BPL (Below poverty line) category. This is an
important self-evaluation particularly because they are generally aware
of the nine-point index.
(ii) NHG –wise situation analysis of poor/non-poor as reported by the
secretaries in the sample.
(iii) A status study based on the major measurable criteria of the nine point
index.

3.2 Self – Evaluation

3.2.1 Table 3.2 gives the distribution of sample households according to

BPL/APL status for ULBs and by natural region and the three phases for
rural areas. A more disaggregated picture area-wise and phase-wise is
given in Appendix 3B. For urban areas 23.4 per cent continues to be APL
and only the rest (76.6%) poor. The overall picture of APL in rural areas is
much higher at 32.2 per cent. On apriori basis the presence of APL can be
explained by the fact that those who graduated from BPL category have not
been escorted out. Also, this may be because the identification criteria were
not strictly followed.

3.2.2 The households in Phase III identified by 4/9 criteria, technically should
comprise only the poor. But in Phase III in all the regions we find a mix of

37
 APL and BPL. In phase III, the proportion of APL is as high as 38 per cent
for highland and 37 per cent for coastal areas with an overall average for
the rural areas (phase III) being 34.8 per cent. On the whole the proportion
of APL ranges from 30.6 per cent in the Wayanad district to 35.9 per cent in
the Ernakulam district. When we examine region-wise, the APL proportion
goes as high as 45.1 per cent in the midland region of Kollam. In
Alappuzha, Kannur and Wayanad, the percentage of BPL households is
higher in Phase II and III (See Appendix 3B). The proportion of APL
families ranges from 16.5 per cent in Wayanad district (in Phase II) to as
high as 60.2 per cent in the Idukki district (Phase III). Clearly as more
panchayats were added in Phase II and III, the norms of selection seems to
be relaxed.
Table 3.2
Distribution of sample households according to BPL/APL status:
Natural Region and Phase Rural & Urban
Economic Coastal Midland
District status Phase Phase Phase Phase Phase Phase
I II III All I II III All
APL 122 159 129 410 370 444 219 1033
All % to Total 35.0 35.6 37.0 35.8 36.4 33.6 31.9 34.1
Sample BPL 227 288 220 735 646 879 468 1993
Districts % to Total 65.0 64.4 63.0 64.2 63.6 66.4 68.1 65.9
Total 349 447 349 1145 1016 1323 687 3026
% 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
District
Economic Highland All (Rural)
status Phase Phase Phase Phase Phase Phase
All All Urban Total
I II III I II III
APL 255 244 154 653 747 847 502 2096 93 2189
All % to Total 29.2 22.8 38.0 27.8 33.4 29.8 34.8 32.2 23.4 31.7
Sample BPL 618 826 251 1695 1491 1993 939 4423 304 4727
Districts % to Total 70.8 77.2 62.0 72.2 66.6 70.2 65.2 67.8 76.6 68.3
Total 873 1070 405 2348 2238 2840 1441 6519 397 6916
% 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

3.2.3 Two broad conclusions can be drawn from Table 3.2 and Appendix 3B.
One, the identification of the poor, based on the 4/9 criteria has not been
strictly followed. Our discussions as well as interactions with members
have convinced us that several external factors notably the ward members
influence the choice of the NHG members. Rational and criteria – based
formation is rendered difficult in such a context. It may also be because the
mission authorities are indifferent or not strict in following the criteria.
Two, there is no programme to escort out those who graduate from the BPL
situation.

38
3.3 Evaluation by Secretaries
3.3.1 NHG secretaries quite often unanimously elected by the groups are the key
functionaries of the programme at the grassroots level. The secretaries
were asked to report on the economic status of their members. The
responses of the secretaries are reported in Table 3.3.

Table 3.3
Distribution of members according to Economic status as reported by
Secretaries
No. of No: of members % of APL
District
NHGs APL BPL Total to Total
Alappuzha 154 1100 1900 3000 36.67
Ernakulam 167 1029 1686 2715 37.90
Idukki 84 334 1019 1353 24.69
Kannur 157 679 2513 3192 21.27
Kollam 155 719 1890 2609 27.56
Kozhikode 17 169 469 638 26.49
Wayanad 60 176 682 858 20.51
All 794 4206 10159 14365 29.28

3.3.2 The 794 secretaries of the NHGs covered had a total membership of 14365.
Table 3.3 shows that 29.28 per cent were APL families and only around 71
per cent BPL families. The APL proportion ranged from 20.5 per cent in the
Wayand region to around 38 per cent in Ernakulam. This corresponds
broadly with the findings of the self evaluation of individual families
reported in Table 3.2.

3.4 A criteria based analysis

3.4.1 Families with less than four of the nine criteria4 are identified as non-poor.
Families having more than 4 criteria out of 6916 families covering the poor
adds up only to 443 or 6.4 per cent. The non-poor constitute an

4The nine-point criteria we have used (latter refinements are not taken into account) are given
below:
(a) Kutcha House
(b) No access to safe drinking water
(c) No access to sanitary latrine
(d) Illiterate adult in the family
(e) Family having not more than one earning member
(f) Family getting barely two meals a day or less
(g) Presence of children below 5 year in the family
(h) Alcoholic or drug addict in the family
(i) Scheduled caste or scheduled Tribe family.

39
 overwhelming majority of 93.6 per cent. To investigate further we give in
Table 3.4 a disaggregated picture by broad social classes such as SC/ST
categories and other backward classes. The Scheduled Tribes have the
single largest majority (36.8%) followed by Scheduled Castes, (21.1%).
Interestingly even among the SC/ST categories also non-poor constitute a
significant majority. Among the backward classes who comprise 3307
households only 120 or just 3.7 per cent constituted the poor. On the whole
the poor constitute only 6.4 per cent of the total sample households. There
could be some under estimate.

Table 3.4
A Social Class-wise distribution of poor and non-poor based on the4/ 9
Point Criteria
Social After joining NHG
Category Poor % Not Poor % All %
SC 177 21.1 662 78.9 839 100.0
ST 75 36.8 129 63.2 204 100.0
BC & OBC 120 3.7 3187 96.3 3307 100.0
General 71 2.8 2495 97.2 2566 100.0
All 443 6.4 6473 93.6 6916 100.0

3.4.1 To conclude the major findings of the chapter are:

 37.4 lakh family-strong membership of Kudumbashree definitely convey an

exaggerated picture of the nature and magnitude of poverty in the state.
The total families as per 2001 census were only around 67.3 lakhs in the
state and now around 72 lakhs. That over 50 per cent of the families in the
state are poor cannot be considered as indicating the real situation.
 The methodology of identification of the poor and its actual
implementation at the ward level leave many things to be desired.
 The omission of meals criterion in the revised index along with a somewhat
loose and open ended definition of women-headed households [See para
1.2.2 and foot note No.3) and families without colour TV have left the
identification of poor delightfully ambiguous one. Presence of mentally or
physically challenged persons/chronically ill members in the family also
could be interpreted widely to open the gate wider. [See Chapter 4]. Under
such a situation KDS fails to serve as a platform or organisation of the really
deprived.
 There is no mechanism to escort out the non-poor. At any rate the place of
the non-poor in the NHG/ADS/CDS level probably has to be clarified and
defined.

40
 Appendix 3A
District wise distribution of Progress of NHGs (March 2001-Nov 2006)
%Households
No of Families
No of NHGs No of NHGs Rate of covered to
No of House Rate of Families covered Rate of covered per Rate of
formed per GP growth Total
District GPs/ holds growth growth NHG growth
ULBs (2001 % % % %
households
Mar Nov Mar Nov Mar- Nov- Mar Nov- Mar- Nov-
Census)
-01 -06 -01 -06 01 06 -01 06 01 06
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Trivandrum 78 505653 2413 16740 593.74 58495 344165 488.37 30.94 214.62 593.74 24.24 20.56 -15.19 11.57 68.06
Kollam 1 69 491734 1489 12085 711.62 24310 223550 819.58 21.58 175.14 711.62 16.33 18.50 13.30 4.94 45.46
Pathanamthitta 54 268498 647 6426 893.20 17280 131304 659.86 11.98 119.00 893.20 26.71 20.43 -23.49 6.44 48.90
Alappuzha 73 345928 2187 12691 480.29 51216 254434 396.79 29.96 173.85 480.29 23.42 20.05 -14.39 14.81 73.55
Kottayam 2 74 368727 1371 10310 652.01 16803 215042 1179.78 18.53 139.32 652.01 12.26 20.86 70.18 4.56 58.32
Idukki 3 51 252256 1897 8829 365.42 34028 161983 376.03 37.20 173.12 365.42 17.94 18.35 2.28 13.49 64.21
Ernakulam 88 364881 1252 12189 873.56 29684 206828 596.77 14.23 138.51 873.56 23.71 16.97 -28.43 8.14 56.68
Trissur 92 459526 4680 15512 231.45 96075 281736 193.25 50.87 168.61 231.45 20.53 18.16 -11.53 20.91 61.31
Palakkad 4 90 455911 736 19365 2531.11 13881 330352 2279.89 8.18 215.17 2531.11 18.86 17.06 -9.55 3.04 72.46
Malappuram 5 100 552722 4645 12810 175.78 167000 298810 78.93 46.45 128.10 175.78 35.95 23.33 -35.12 30.21 54.06
Kozhikode 6 77 364557 2499 13311 432.65 56973 280803 392.87 32.45 172.87 432.65 22.80 21.10 -7.47 15.63 77.03
Wayanad 25 160398 1178 7156 507.47 18205 120248 560.52 47.12 286.24 507.47 15.45 16.80 8.73 11.35 74.97
Kannur 81 237932 3197 10509 228.71 50613 215305 325.39 39.47 129.74 228.71 15.83 20.49 29.41 21.27 90.49
Kasargode 39 181536 782 5493 602.43 20058 118969 493.12 20.05 140.85 602.43 25.65 21.66 -15.56 11.05 65.53

Total GPs @ 991 5010259 28973 163426 464.06 654621 3183529 386.32 29.24 164.91 464.06 22.59 19.48 -13.78 13.07 63.54

Total ULBs 58 1716097 7538 11987 59.02 196000 515715 163.12 129.97 206.67 59.02 26.00 43.02 65.46 11.42 30.05
Tribal 8Dist - - 947 2232 135.69 16400 35880 118.78 - - - 17.32 16.08 -7.18 - -
Grand Total - 6726356 37458 177645 374.25 867021 3735124 330.80 - - - 23.15 21.03 -9.16 12.89 55.53
(Source Kudumbashree; Statistical Hand book 2005 )
@Total number of Panchayats increased to 999 by bifurcation with effect from 23.7.2005. Kollam 2, Kottayam 1, Idukki 1 Palakkad 1,
Malappuram 2, and Kozhikode 1. For purpose of analysis only the old 991 Panchayats have been considered.

41
 Appendix 3B
BPL (APL) Percentage Distribution by Natural Region and by Phases
Districts / Coastal Midland High land All
Natural Phase Phase Phase Phase Phase Phase Phase Phase Phase Phase Phase Phase
Region Total Total Total Total
I II III I II III I II III I II III
57.9 60.0 78.4 65.4 67.6 74.1 61.7 68.8 0.0 0.0 0.0 0.0 64.4 70.8 67.2 67.8
Alappuzha
(42.1) (40.0) (21.6) (34.6) (32.4) (25.9) (38.3) (31.2) (0.0) (0.0) (0.0) (0.0) (35.6) (29.2) (32.8) (32.2)
71.8 71.7 44.9 64.3 63.4 54.9 64.1 59.2 57.7 0.0 0.0 57.7 64.1 58.6 58.1 60.3
Eranakulam
(28.2) (28.3) (55.1) (35.7) (36.6) (45.1) (35.9) (40.8) (42.3) (0.0) (0.0) (42.3) (35.9) (41.4) (41.9) (39.7)
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 65.8 67.4 39.8 62.2 65.8 67.4 39.8 62.2
Idukki
(0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (34.2) 32.6) (60.2) (37.8) (34.2) 32.6) (60.2) (37.8)
0.0 54.4 0.0 54.4 63.9 80.6 88.2 72.7 77.1 88.5 72.5 78.5 68.9 77.7 78.9 73.7
Kannur
(0.0) (45.6) (0.0) (45.6) (36.1) (19.4) (11.8) (27.3) (22.9) (11.5) (27.5) (21.5) (31.1) (22.3) (21.1) (26.3)
66.4 69.6 60.7 65.3 54.9 60.2 69.8 61.2 81.3 70.6 70.5 74.1 67.2 65.1 66.8 66.3
Kollam
(33.6) (30.4) (39.3) (34.7) (45.1) (39.8) (30.2) (38.8) (18.7) (29.4) (29.5) (25.9) (32.8) (34.9) (33.2) (33.7)
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 69.4 83.5 0.0 80.1 69.4 83.5 0.0 80.1
Wayanad
(0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (30.6) (16.5) (0.0) (19.9) (30.6) (16.5) (0.0) (19.9)
65.0 64.4 63.0 64.2 63.6 66.4 68.1 65.9 70.8 77.2 62.0 72.2 66.6 70.2 65.2 67.8
All Dist Rural
(35.0) (35.6) (37.0) (35.8) (36.4) (33.6) (31.9) (34.1) (29.2) (22.8) (38.0) (27.8) (33.4) (29.8) (34.8) (32.2)

(Percentage of APL families is given in the bracket

42
 CHAPTER 4
THE NINE-POINT INDEX: A PROGRESS REPORT
AND A CRITIQUE
This chapter has two parts. Part I of this chapter is a brief critique of the
nine-point index to drive home the need to modify it or even to evolve alternate
ways of identifying the poor. In India debates relating to measure of poverty
continue to be dominated by the poverty line and head count ratio anchored on
accepted calorie norms with rural-urban differentiation. Although it is out of
place to go through the ‘The great Indian poverty debate5’ we may contextualise
the discussion with reference to a brief critique of the official poverty line. Part II,
presents the progress made in regard to seven out of the nine criteria6. The
criteria relating to SC/ST and children below five years are obviously not suitable
candidates to scale progress and hence omitted. This chapter is to be seen along
with the previous one.

I
4.1 The Official Poverty Line:

4.1.1 A meaningful poverty assessment should be based on sound conceptual

foundations and must serve at least four purposes:

(1) Identify the poor from the non-poor

(2) Find out how deep is poverty through an appropriate scale that
facilitates comparison over time and space
(3) Make a meaningful aggregation about the magnitude of poverty in a
jurisdiction, be it a country, a state or panchayat or whatever the level of
aggregation required and
(4) Throw policy insights for reducing poverty progressively. The official
poverty line (PL) as well as the 9 point index of KDS cannot be said to be
based on sound conceptual foundations and do not satisfy most of these

5
The Great Indian Poverty Debate’ is the title of a book edited by Deaton and Kozel (2005) which
discusses the on going debate on poverty in India since the 1990s. The authors consider the poverty
debate ‘great’.
6 Under the Ashraya scheme to rehabilitate the poorest of the poor (destitutes) the 9-point criteria

have been modified. Besides 8/9 criteria another eight criteria such as families without land, those
who spend night in streets or sleep in the verandas of shops, families headed by unwed mothers,
families subjected to chronic illness etc. are also used. [For details of this see ‘State Planning Board
(2007): pp.364-66).

43
 purposes. While the official income poverty line anchored on a minimum
calorific norm of 2400 Kcal per capita per day in rural areas and 2100 Kcal
per capita per day in urban areas7 has been subjected to considerable
scholarly debate (and it still continues), the KDS 9-point criteria have not
attracted much review8.

4.1.2 Although we do not want to go into the details of the official PL and the
debates we may briefly mention some of its important shortcomings. One,
the underlying conceptual foundation is weak. It is not comprehensive. As
Amartya Sen (1985, 1992, and 1999) has elaborated, there is a great need to
consider the quality of human resources, their capabilities and functionings
in any poverty conceptualisation. For him poverty is capability
deprivation. Capability refers to the freedom one has to choose from a
range of functionings, which means achieving what one wants to do or be.
Poverty in this perspective would mean absence of elementary capabilities.
The basic question in poverty reduction is one of expansion of elementary
capabilities, namely, education, health care, employment, gender equity
and women empowerment and provisioning of social and economic
security. Of course, we affirm that the elementary capability of being
adequately nourished recognised in the official PL is an important aspect of
the conceptual foundations of poverty. Second, the PL takes no notice of
the fact that when the income of one individual or group of individuals
close to a PL falls poverty is reduced. It thus violates the axiom that a
reduction of income of any one below the PL given everything else, must
increase the poverty measures [See Sen (1981): Appendix C]. Three, the
most glaring mistake is that the updated official poverty lines based on the
adjusted prices of the 1973-74 consumption expenditure class, do not
correspond to the calorie norms of 2400 Kcal and 2100 Kcal for rural and
urban areas. [For good empirical proof of this see Mehta, Venkataraman
(2000), Utsa Patnaik (2004, 2007), and G.C.Manna (2007) among others].
Utsa Patnaik (2007) gives an elaborate Table based on 55th NSS round data
for 1999-2000 and shows that 2400 calorie based head count ratio (HCR)
will come to 74.5 per cent and not the official HCR of 27.4 per cent based on
the adjusted prices of the 1973-74 expenditure class [See U.Patnaik (2007)].
In brief, even as a nutritional norm-based measure, the HCR is weak. Four,
at best it is useful only as an aggregated measure of poverty in a state or
economy and has no use in identifying a poor family. It was precisely
because of this that the Ministry of Rural Development conducted BPL

7 The Planning Commission Expert Group (1993): identified the total household monthly consumer

expenditure whose food expenditure met these calorie norms, from the 28th NSS round consumer
expenditure survey for 1973-74 and for later years was updated using Agricultural Labour
Consumer price index for rural areas and that of industrial workers for urban areas.
8 The only exception is the detailed review in Oommen (1999).

44
 surveys. Five, in the official PL approach, the nutritional norm leaves non-
food requirements as an empirical component. How much non-food
preferences have been at the expense of food items is not known. This is
particularly so, when it comes to catastrophic payments to meet emergency
health requirements.

4.1.3 In India although there are a large number of economists who reverentially
appreciate the calorie norm-based approach, most discerning scholars have
found it weak and wanting. Long before Planning Commission endorsed
the PL approach, Amartya Sen after examining the theoretical and practical
problems of conceptualising and measuring poverty held that the head
count measure is “quite unacceptable as an indicator of poverty” [Sen
1981:11]. It is in this setting that we have to evaluate the 4/9-point index of
KDS. It is primarily to be seen as a tool of identification of the poor. It is
not used or meant to be used as an aggregate measure for evaluative
judgements about the level of poverty in a society or jurisdiction.
Although it had no apriori theoretical conceptual foundations, the CBO
which provides the support base today when they evolved it formulated
the index on the basis of a field survey in Alappuzha municipal town. An
elaborate critique of the 9-point index, its conceptual, statistical and
empirical basis was made by M.A.Oommen (1999) as part of an evaluative
exercise. We do not propose to go over it again. In Section 4.2 we spell out
some important criticisms of the Index to help further revision and /or
modification of it.

4.2 The KDS Index9: Some general criticisms

 Any four criteria out of nine in the KDS index means, all criteria are
treated as equally important. They however are not independent and
equally important. Weighting is needed to reflect the priorities of the
community. It can be fixed using statistical weighting devices or by
community-based preference ordering which each panchayat may
adopt.

 No land/less than 5 cents is important and must be retained. Inclusion

of other assets can be problematic although consideration of ownership
of the pair of clothing is an essential item that is important.

 Income is important because it indicates a universal purchasing power

which can remove many of the deprivations like lack of food, illiteracy,
kutcha house, lack of latrines etc. But in view of the difficulty of getting
correct information this need not be included.

9 The comments here refer to the revised Nine-point Index [See Foot note.3. given in Chapter 1].

45
  No house or Kutcha house is admittedly a sign of poverty. This
criterion should be retained.

 Absence of sanitary facilities and non-availability of and non-

accessibility to safe drinking water are important and their inclusion in
the revised criteria is justifiable.

 Family getting less than two meals a day is probably the most
important criterion of poverty. The omission of this in the revised
index has to be viewed seriously because a poverty measure that
omits this elementary capability is basically flawed.

 ‘Women headed household/presence of a widow, divorcee/abandoned

lady/unwed mothers are more an open ended criterion than a specific
measure.

 The criterion relating to employment has to be made more precise.

Presence of adults seeking employment in a family is a great
deprivation. Even if there is only one earning member, the family need
not be poor because a single earner may command a large salary income
or inherited wealth etc. The type of employment or occupation that
fetches income for the family is also important.

 An SC/ST family need not necessarily be poor. They are not essential
attributes or expressions of poverty. Indeed SC/ST families have been
subjected to very high traditional deprivations. They need special
entitlements and affirmative action. Inclusion of an ethnic factor as a
measure is logically incorrect especially when you want to measure
progress overtime of the community in general. Again inclusion of
‘presence of mentally or physically challenged person/chronically ill
member in the family is also opening wide the gate of admission. Thus,
basically only three factors – Kutcha house, family having no earning
member and family getting less than two meals a day are basic
attributes of poverty.

II

4.3 This part presents the progress made by the sample households in regard to
the major parameters after joining the KDS project. This is the most
obvious way to evaluate progress. As we have noted in Part I,
improvements in housing and pattern of food consumption are crucial
parameters in poverty reduction. Tables 4.1, 4.1(a) and 4.2 present the

46
 situation before and after joining the NHG in regard to these two
parameters.

Table 4.1
Improvement in housing conditions after joining the NHG
Item No of Houses % of Improvement to Total
No Improvement 5826 84.24
Renovation / Maintenance 593 8.57
Addition / Extension 208 3.01
New Construction 289 4.18
Total 6916 100.00

Table 4.1(a)
A break-up of the Improvement in the housing conditions
Improvement in the condition of house because of joining NHG
Present House No Renovation/ Addition / New
All
Improvement maintenance Extension construction
Thatched 461 57 14 14 546
Tiled 3359 294 76 80 3809
Concrete 1420 151 90 141 1802
Others 539 84 24 50 697
Partially Concrete 47 7 4 4 62
All 5826 593 208 289 6916

4.3.1 Only 16 per cent of the 6916 households surveyed have reported
improvement in the housing conditions after joining the KDS Mission.
About 18 per cent of the thatched households improved their housing. It is
important to note that more than 50 per cent of the new houses constructed
were concrete structures.

4.3.2 As regards the traditional three meals pattern, [See Table 4.2] there is some
visible improvement. There is a decline in the households with one meal
per day by 16 per cent and those with only two meals have progressed even
more remarkably. The percentage of families with three meals has also
improved. Although not spectacular, this needs special mention.

47
 Table 4.2
Pattern of Food Consumption before and after joining NHG
Before Joining
After Joining NHG Increase/ Decrease
No. of Meals NHG
No % No % No %
One Meal per day 286 4.14 246 3.56 -40 -16.26
Two Meals per day 644 9.31 494 7.14 -150 -30.36
Three Meals per day 596`7 86.28 6150 88.92 183 2.98
Others 19 0.27 26 0.38 7 26.92
All 6916 100.00 6916 100.00 - -

4.3.3 Tables 4.3 and 4.4 show the progress with reference to two important health
– related parameters viz. safe drinking water and sanitary facilities. There
is good improvement especially in regard to attached sanitary facility and
own pipe connections along with decline in public well and public tap.
There is significant reduction (29.21 per cent) in the proportion of
families taking to open defecation. Even so it is a matter of grave concern
that 9.7 per cent of the households still take to open defecation.

Table 4.3: Source of Drinking Water before and after joining NHG
Before Joining After Joining Increase
Item NHG NHG /Decrease
No % No % No %
Public Well 739 10.69 717 10.37 -22 -3.07
Public Tap 1337 19.33 1307 18.90 -30 -2.30
Own Well 3218 46.53 3216 46.50 -2 -0.06
Own Pipe 430 6.22 478 6.91 48 10.04
Tank Supply 9 0.13 10 0.14 1 10.00
Ponds 158 2.28 158 2.28 0 0.00
Others 890 12.87 895 12.94 5 0.56
More than One Source 135 1.95 135 1.95 0 0.00
All 6916 100.00 6916 100.00

Table 4.4: Sanitation Facility before and after joining NHG

Before joining After joining Increase
Item
NHG NHG /Decrease
No % No % No %
Open defecation 867 12.54 671 9.70 -196 -29.21
Outside house 5143 74.36 5140 74.32 -3 -0.06
Attached 704 10.18 916 13.24 212 23.14
Others 143 2.07 124 1.79 -19 -15.32
Outside and attached 59 0.85 65 0.94 6 9.23
All 6916 100.00 6916 100.00 - -

48
 Table 4.5
No of those employed in the family before and after joining NHG
Before joining
Item /No After joining NHG Increase /Decrease
NHG
Persons
No % No % No %
None 156 2.26 134 1.94 -22 -16.42
One 4586 66.31 3207 46.37 -1379 -43.00
Two 1688 24.41 2867 41.45 1179 41.12
More than Two 486 7.03 708 10.24 222 31.36
All 6916 100.00 6916 100.00

4.3.4 Gainful employment is an important factor that contributes to the income

and well-being of a family. There is definite and reportedly remarkable
improvement as is well exemplified in Table 4.5. Equally significant is
the reduction in alcoholism among the houses surveyed [See Table 4.6].
It is to be noted that this is happening in a state where liquor
consumption and alcoholism has assumed pathological proportions.

4.3.5 Finally, we may examine the situation in regard to illiteracy. [Not reported
in Tables]. Excluding children below five years the 6916 families have a
total population of 28254. Of this 234 or about 0.8 per cent constitute
illiterates falling in the age group 5-17. This surely is not a high
proportion. But because they are from very poor households one may
have to revisit to examine the cause of this vulnerable situation. More
serious is probably the case of the adults above 18 comprising a total
population of 1439 or a little over 5 per cent. That there are people who
are not covered by adult literacy programmes or school programmes in
the KDS family categories is a matter that should attract the attention of
those who manage the Mission.

Table 4.6
Alcohol addicts in the family before and after joining NHG
Before joining After joining Increase
Item /No NHG NHG /Decrease
No % No % No %
No addict 5773 83.47 5958 86.15 185 3.11
One addict 1093 15.80 921 13.32 -172 -18.68
Two addict 29 0.42 22 0.32 -7 -31.82
More than two addict 21 0.30 15 0.22 -6 -40.00
All 6916 100.00 6916 100.00 - -

49
4.4 To conclude, item-wise analysis does not show that there has been uniform
progress, although in certain areas such as that of employment growth and
reduction in alcoholism the progress made has been quite impressive. That
poor households are moving into the proverbial three meals a day
syndrome is also a welcome sign. Although the progress cannot be
attributed to KDS activities alone, overall achievements have been
something to write home about.

50
 CHAPTER 5
THRIFT AND CREDIT SOCIETIES: A CRITICAL
EVALUATION
This chapter is devoted to examine the role and progress of Thrift10 and
Credit societies of Kudumbashree. Admittedly the poor are short of savings.
They need credit for a variety of purposes such as for meeting daily consumption
needs, for shelter, children’s education, health care, for meeting social needs such
as marriages, festivals, besides for productive purposes to earn the income needed
for survival and progress. The poor on their own surely cannot meet these needs
individually, while a lot of them are achievable through the self-help
groups/neighbourhood groups. In this chapter first we present a macro overview
of thrift and credit mediated through Thrift and Credit Societies (T & CSs) of
Kudumbashree. This is followed by an analysis of some issues related to purpose
of loans, debt liabilities etc based on the field investigation.

5.1 Thrift and Loans: The Macro Picture

5.1.1 Tables 5.1 and 5.2 show the overall trend in the thrift and loans from March
2001 through November 2006 of the Kudumbashree CBO. The basic data
relating to thrift and loans are from the Kudumbashree office which receive
reports from their Mission Centres (we are aware that such reported
aggregates are not always precise) could be treated as revealing the overall
magnitudes and trends. The overall thrift (savings) which was only Rs.
31.79 crore in March 2001 rose six times in two years to reach Rs. 184.29
crore and then quantum jumped to Rs. 697.61 crore by November 2006.
Currently it is heading towards Rs. 800 crore. This fabulous growth (surely
because of coverage and intensity of mobilization) of nearly 22 times in five
years has very little parallel in the history of micro finance in the world11.
This works out to Rs.39270 per NHG and Rs.1874 per family in November
2006. Interestingly nearly 93 per cent of the aggregate saving is contributed
by the rural NHGs (See Table 5.1) whose average per NHG works out to

10
Thrift is a better word to refer to the frugal savings of the poor than the term savings used in the
economics literature where it is the surplus arrived after meeting consumption.
11 Two authors in a recent paper claim that the Kalanjiam community Banking Programme

controlled by poor women with a savings total of Rs. 74.44 crore by members (covering
villages/slums in 31 districts of Tamil Nadu, Andhra Pradesh, Karnataka, MP, Orissa, Rajasthan,
Maharastra and Pondicherry) is “the largest micro finance programme in Asia and probably the
largest programme in the world” surely is based on inadequate knowledge. [See M.P.Vasimalai
etal (2007)].

51
 Rs.39539 and per family Rs.2038. It is remarkable that the tribal NHGs have
stepped up the thrift per family from Rs. 142 in 2001 to Rs.2218 in
November 2006. Table 5.2 clearly shows that there has not been much
growth in the thrift per family of urban NHGs which stayed within the
range of Rs.729 in March 2001 to Rs. 1,341 in March 2006. Actually in two
years there was a decline compared to the previous year. The lack of
impressive growth in the thrift of the urban NHGs may be because of the
larger opportunities of formal portfolios open to them.

Table 5.1: Overall trend in Thrift and Loans (Mar 2001 to Nov 2006)
(Amount in Rs.)
Rural
No of NHGs Thrift per Loan per
Year Thrift Loan
formed NHG NHG
Mar-01 28724 172753615 6014.26 82157662 2860.24
Mar-02 93052 903510975 9709.74 800253374 8600.07
Mar-03 107745 1635202807 15176.60 1981590544 18391.48
Mar-04 122704 2879949978 23470.71 5117085458 41702.68
Mar-05 143983 4413895241 30655.67 9686426420 67274.79
Mar-06 153117 5949299905 38854.60 14214712935 92835.63
Nov-06 163426 6461714885 39539.09 18250090968 111671.89
Urban
Mar-01 7538 142890060.00 18955.96 137729155.00 18271.31
Mar-02 7848 166012238.00 21153.45 188273020.00 23989.94
Mar-03 7863 199098559.00 25320.94 209587470.00 26654.90
Mar-04 7947 224524316.00 28252.71 230165508.00 28962.57
Mar-05 8667 286167644.00 33018.07 313100207.00 36125.56
Mar-06 10687 391769702.00 36658.53 433723110.00 40584.18
Nov-06 11987 436388809.00 36405.17 486406430.00 40577.83
Tribal
No of NHGs Thrift per Loan per
Year Thrift Loan
formed NHG NHG
Mar-01 947 2333921 2464.54 66690 70.42
Mar-02 1010 5064521 5014.38 2203592 2181.77
Mar-03 1190 8626455 7249.12 4939333 4150.70
Mar-04 2049 35691344 17418.91 42517566 20750.40
Mar-05 2049 35691344 17418.91 42517566 20750.40
Mar-06 2036 54114722 26578.94 107612661 52854.94
Nov-06 2232 77998663 34945.64 143236185 64173.92
Total
Mar-01 37209 317977596.00 8545.72 219953507.00 5911.30
Mar-02 101910 1074587734.00 10544.48 990729986.00 9721.62
Mar-03 116798 1842927821.00 15778.76 2196117347.00 18802.70
Mar-04 132700 3140165638.00 23663.64 5389768532.00 40616.19
Mar-05 154699 4735754229.00 30612.70 10042044193.00 64913.44
Mar-06 165840 6395184329.00 38562.38 14756048706.00 88977.62
Nov-06 177645 6976102357.00 39269.91 18879733583.00 106277.88

52
 5.1.2 As regards loans made out of thrift also, Kerala has a very notable record.
The thrift loan trend which was low in the early years picked up fast for
rural, urban and tribal categories. The thrift loan ratio of all categories is
well exemplified in Figures 5.1(a), 5.1(b), 5.1(c) and overall it ranges from
0.69 in 2001 to 2.71 in 2006. The aggregate loan disbursed increased from
just Rs. 21.9 crore in 2001 to Rs. 1887.97 crore, 86 times increase in five
years. The latter figure as a percentage of the total bank advances
(including cooperative banks) in 2006 works out to 3.3 per cent. The thrift
loan per family works out to Rs. 5072.8 in 2006 as against Rs.328 in 2001
whereas the per NHG loan increased from Rs.5911 to over Rs.1.06 lakhs
during the same period. This is literally self help par excellence because
these are made out of their own savings/thrift. The T&CSs act as virtually
unstructured intermediaries at the door steps of the poor households and
facilitate the mobilization of small thrift that surely might not have been
saved at all but for this. The small savings pooled at the ADS level form the
collective capital of the Kudumbashree CBO.

Table 5.2
Overall trend in Thrift and Loans per family (Mar 2001 to Nov 2006)
(Amount in Rs.)
Rural
No of Thrift Thrift Loan Loan Thrift
Year NHGs Thrift per per Loan per per Loan
formed NHG family NHG Family ratio
Mar-01 28724 172753615 6014 378 82157662 2860 180 0.48
Mar-02 93052 903510975 9710 532 800253374 8600 471 0.89
Mar-03 107745 1635202807 15177 810 1981590544 18391 981 1.21
Mar-04 122704 2879949978 23471 1183 5117085458 41703 2103 1.78
Mar-05 143983 4413895241 30656 1565 9686426420 67275 3435 2.19
Mar-06 153117 5949299905 38855 1979 14214712935 92836 4727 2.39
Nov-06 163426 6461714885 39539 2038 18250090968 111672 5756 2.82
Urban
Mar-01 7538 142890060 18956 729 137729155 18271 703 0.96
Mar-02 7848 166012238 21153 847 188273020 23990 961 1.13
Mar-03 7863 199098559 25321 806 209587470 26655 848 1.05
Mar-04 7947 224524316 28253 821 230165508 28963 842 1.03
Mar-05 8667 286167644 33018 979 313100207 36126 1072 1.09
Mar-06 10687 391769702 36659 1341 433723110 40584 1484 1.11
Nov-06 11987 436388809 36405 846 486406430 40578 943 1.11
Tribal
Mar-01 947 2333921 2465 142 66690 70 4 0.03
Mar-02 1010 5064521 5014 416 2203592 2182 181 0.44
Mar-03 1190 8626455 7249 571 4939333 4151 327 0.57
Mar-04 2049 35691344 17419 1437 42517566 20750 1711 1.19

53
Mar-05 2049 35691344 17419 1437 42517566 20750 1711 1.19
Mar-06 2036 54114722 26579 1652 107612661 52855 3285 1.99
Nov-06 2232 77998663 34946 2218 143236185 64174 4073 1.84
Total
Mar-01 37209 317977596 8546 475 219953507 5911 328.51 0.69
Mar-02 101910 1074587734 10544 564 990729986 9722 519.76 0.92
Mar-03 116798 1842927821 15779 808 2196117347 18803 962.65 1.19
Mar-04 132700 3140165638 23664 1150 5389768532 40616 1973.05 1.72
Mar-05 154699 4735754229 30613 1510 10042044193 64913 3201.20 2.12
Mar-06 165840 6395184329 38562 1919 14756048706 88978 4428.86 2.31
Nov-06 177645 6976102357 39270 1874 18879733583 106278 5072.85 2.71
Source: Aggregate figures from Kudumbashree. All others are worked out by the author.

Fig: 5.1(a)

Tren d in Th rift & Lo an (R u ra l)

20000000000

18000000000

Th rift
16000000000
Lo an
14000000000
Thrift & Loan

12000000000

10000000000

8000000000

6000000000

4000000000

2000000000

0
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Ye ar

54
Fig: 5.1(b)
Th rift & Lo a n (Urba n )
600000000.00

Th rift
Lo an
500000000.00

400000000.00
Thrift & Loan

300000000.00

200000000.00

100000000.00

0.00
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Year

Fig: 5.1(c)
Th rift & Loa n (Tribal)

160000000

140000000 T h r ift
Loa n
120000000
Thrift & Loan

100000000

80000000

60000000

40000000

20000000

0
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Yea r

55
Fig: 5.2
Th rift Lo an R atio
3

R ur al
2.5 Ur b a n
T r ib a l
T ot a l

2
Thrift Loan R atio

1.5

0.5

0
Year Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Nov-06

Year

5.1.3 Micro credit the world over is predominantly commercial bank-linked, the
Kudumbashree is a conspicuous exception. Table 5.3 presents the district-
wise trend in the growth of bank linked credit of KDS. The table shows
that from Rs.63.54 crore in December 2003, it grew to Rs. 406.36 crore in
January 2007, a 6.4 times increase in four years time. Even with this growth
it is only 21 per cent of the Thrift Credit issued in 2006 by the KDS. Only 44
per cent of the NHGs take bank-linked credit today. Although this is a
significant progress compared to 2003 when only 20 per cent of the NHGs
took to bank-linked credit. The three districts of Kollam, Alappuzha and
Wayanad account for over 34 per cent of the bank-linked credit. Kollam
which accounted for the largest share in 2003 (14.58%) continues to hold the
premier position although with a reduced percentage share (12.59%).
While Thrissur which held the second position in 2003 with 11.56 per cent,
it fell to 6.31 per cent in 2007, Palakkad with a measly sum of Rs.1.07 crore
by way of bank-linked credit in 2003 rose to 36.55 crore or over 36 times
and accounts for 9 per cent of the total bank linked credit in January 2007.

56
 Table 5.3
District-wise Trend in Linkage Banking
(Rs. In Lakhs)
Dec-03 Nov-04
No of Loan % Loan / No of Loan % Loan /
District
NHG's disbursed Dist NHG's disbursed Dist
Thiruvananthapuram 1499 365.91 5.76 2501 638.71 4.91
Kollam 1912 926.55 14.58 3489 1776.31 13.66
Pathanamthitta 894 176.67 2.78 1076 471.33 3.62
Alappuzha 2363 719.33 11.32 4598 1530.06 11.77
Kottayam 1104 280.92 4.42 2798 673 5.18
Idukki 1400 431.30 6.79 1865 578.21 4.45
Ernakulam 1581 325.25 5.12 4415 922.22 7.09
Thrissur 1875 734.62 11.56 4283 2067.31 15.90
Palakkad 1161 107.18 1.69 1370 268.15 2.06
Malappuram 537 604.41 9.51 2536 1032.08 7.94
Kozhikode 1394 442.14 6.96 2555 728.16 5.60
Wayanad 2173 629.80 9.91 3520 1282.08 9.86
Kannur 1432 381.54 6.00 2262 712 5.48
Kasargod 1824 229.09 3.61 2409 323.07 2.48
Total 21149 6354.71 100.00 39677 13002.69 100.00
Nov-05 Jan-07
Thiruvananthapuram 6351 2245.76 7.87 8983 3508.79 8.63
Kollam 5626 3304.77 11.58 7526 5117.08 12.59
Pathanamthitta 1957 1415.77 4.96 2429 2409.87 5.93
Alappuzha 8414 3856.81 13.51 9241 4702.88 11.57
Kottayam 3364 1130.09 3.96 3366 2172.27 5.35
Idukki 3260 2097.69 7.35 3927 2807.06 6.91
Ernakulam 6830 1605.68 5.63 5873 2156.96 5.31
Thrissur 4847 2396.71 8.40 5269 2566.04 6.31
Palakkad 6179 2216.42 7.76 9824 3655.55 9.00
Malappuram 3766 1429.93 5.01 4360 1745.65 4.30
Kozhikode 4287 1717.62 6.02 5377 2790.63 6.87
Wayanad 6050 3163.24 11.08 5950 4070.78 10.02
Kannur 3410 1226.47 4.30 4106 1932.38 4.76
Kasargod 2021 736.92 2.58 2449 1000.75 2.46
Total 66362 28543.88 100.00 78680 40636.69 100.00
Source: Economic Review various years

5.2 The Micro Scenario

5.2.1 Being ‘tiny’ savers the possibility of KDS households taking to a wide range
of portfolio options is out of question. Only 26 per cent (1790 households
out of 6916) reportedly resort to savings options outside their thrift and

57
 credit societies. The pattern of portfolio choice is shown in Table 5.4 which
shows that there is not much difference as between the rural and urban
areas except that urban households have a higher proportion (46.5%) of
insurance protection or contractual savings. A significant proportion of
households take to post office savings in both the rural and urban areas (27
per cent). Chit fund also occupy a dominant position in the portfolio of the
KDS clients.

Table 5.4
Portfolio pattern of Households not depending solely on
Thrift and Credits
Post Chit More
Insurance Others All
office fund than one
Rural 468 324 680 49 211 1732
% To Total 27.02 18.71 39.26 2.83 12.18 100.00
Urban 16 10 27 0 5 58
% To Total 27.59 17.24 46.55 0.00 8.62 100.00
Total 484 334 707 49 216 1790
% To total 27.04 18.66 39.50 2.74 12.07 100.00

5.2.2 Another noteworthy aspect is that despite the mushrooming of non-

Kudumbashree micro-finance institutions, KDS members seem to hold on
to them loyally. Only 8-9 per cent of KDS members are members of other
caste/communal and NGO self help groups that are fast growing in the
state. It may be that many may not have reported truthfully. The
impression that we gathered from discussions with officials lead us to
believe that this is a case of underreporting. The KDS charge officer in
Chirayinkizh gram panchayat even issued a strongly worded circular
(No.1/07-CDS) against dual/multiple membership. Discussions with the
officer have shown that such circulars had no effect. The Mission surely,
has to take serious note of this. Divided loyalties can be counter productive
because the Mission has wider social goals than simple micro credit. More
over NHGs of KDS are conceived as a subset of the local government. The
easy facility of borrowing from one and repaying to another and seeking to
make the best out of differential interest rates can not be in the interests of
building a viable micro finance foundation.

5.3 Purpose of loans and debt liabilities

5.3.1 Only 5810, out of the 6916 households surveyed or 84 per cent have
reportedly borrowed money. May be for the rest who do not borrow it
becomes a place of prudential regular savings. Quite often it is alleged that

58
 the poor and the not-so-poor indulge in reckless spending. Table 5.5 which
shows the purpose-wise distribution of loans taken by KDS members,
broken into phases and rural and urban categories proves this allegation
wrong. The proportion spent on daily needs among the rural categories is
as low as 7.86 per cent for Phase I, highland families and the highest in
25.73 per cent for Phase III coastal areas. In urban areas daily consumption
needs (31.56 per cent) account for the single largest item with housing
coming as a close second. Except the highland NHG members, in all phases
in all rural and urban areas, housing by and large occupies the highest
proportion. This is followed by working capital for micro enterprises.
Festivities do not figure prominently. Invariably in all cases education and
medical expenses are important items and along with housing account for
over 50 per cent of the expenditure. The poor and the not-so-poor recourse
to prudential spending. That poor households borrow for education and
health care is a healthy sign because capability deprivation is the hall-mark
of poverty.
Table 5.5
Purpose-wise distribution of loans availed: A Phase /
Region- wise breakup
Phase I
Purpose Coastal Mid Land High Land Total
Daily needs 33 15.21 85 11.90 69 7.86 187 10.34
Education 31 14.29 81 11.34 123 14.01 235 12.99
Medical expenses 11 5.07 89 12.46 113 12.87 213 11.77
Housing 62 28.57 240 33.61 191 21.75 493 27.25
Marriage 20 9.22 78 10.92 68 7.74 166 9.18
Income generating purpose 34 15.67 75 10.50 241 27.45 350 19.35
Redemption of loan 22 10.14 43 6.02 38 4.33 103 5.69
Festivities 0 0.00 2 0.28 0 0.00 2 0.11
Others 4 1.84 21 2.94 35 3.99 60 3.32
All 217 100 714 100 878 100 1809 100
Phase II
Purpose Coastal Mid Land High Land Total
Daily needs 34 14.53 153 15.79 155 13.10 342 14.33
Education 32 13.68 142 14.65 179 15.13 353 14.79
Medical expenses 25 10.68 113 11.66 229 19.36 367 15.38
Housing 84 35.90 278 28.69 169 14.29 531 22.25
Marriage 27 11.54 71 7.33 76 6.42 174 7.29
Income generating purpose 17 7.26 131 13.52 256 21.64 404 16.93
Redemption of loan 9 3.85 42 4.33 67 5.66 118 4.95
Festivities 0.00 1 0.10 3 0.25 4 0.17
Others 6 2.56 38 3.92 49 4.14 93 3.90
All 234 100 969 100 1183 100 2386 100

59
 Phase III
Daily needs 79 25.73 110 18.21 62 16.15 251 19.38
Education 57 18.57 101 16.72 55 14.32 213 16.45
Medical expenses 31 10.10 75 12.42 60 15.63 166 12.82
Housing 75 24.43 133 22.02 55 14.32 263 20.31
Marriage 19 6.19 45 7.45 27 7.03 91 7.03
Income generating purpose 21 6.84 102 16.89 91 23.70 214 16.53
Redemption of loan 18 5.86 29 4.80 13 3.39 60 4.63
Festivities 0 0.00 1 0.17 1 0.26 2 0.15
Others 7 2.28 8 1.32 20 5.21 35 2.70
All 307 100 604 100 384 100 1295 100

Purpose Urban All

Daily needs 101 31.56 881 15.16
Education 23 7.19 824 14.18
Medical expenses 29 9.06 775 13.34
Housing 96 30.00 1383 23.80
Marriage 36 11.25 467 8.04
Income generating purpose 16 5.00 984 16.94
Redemption of loan 7 2.19 288 4.96
Festivities 0 0.00 8 0.14
Others 12 3.75 200 3.44
All 320 100 5810 100
Figures in Italics are percentages

5.3.2 It is important to find out the magnitude of the debt liabilities of the KDS
members. How much are they borrowing from sources other than Thrift
and Credit Societies and Banks? Do non-institutional sources constitute an
important component? What is the order of magnitude of the debt
liabilities? Are the interest charged by TCS/Banks very high as to
discourage borrowing? Tables 5.6, 5.6(a) and Appendix 5.A and 5B are
expected to provide answers to these questions. These Tables show that in
terms of numbers the majority of the members borrow from T&CSs
followed by cooperatives and banks. While the average debt liability of
Thrift and Credit society loan is as low as Rs.4023 for all categories and
ranges from Rs.2093 for coastal phase III, to Rs.5106 for coastal phase 1 in
rural areas, in regard to banks, the average debt liability is as high as Rs.
47345 and Rs.31451 with cooperative societies and ranges from Rs.36858 for
high land, Phase II to Rs. 69285 to coastal Phase II and that of cooperative,
from Rs.18341 for midlands Phase II to Rs.52124 for midlands (Phase I).
The average debt from all sources works out to Rs.19236 and ranges from
Rs.14566 in highlands (Phase II) to Rs.28927 (Phase II) in the coastal regions.
The disturbing existence of the liabilities to non-institutional providers is a
serious threat to the sustainability of the indebted families. It may well be

60
 that the KDS loan is repaid by incurring liabilities from institutional
agencies. Indebtedness is on the high side because the average amount of
cash loans per household (cultivator and non-cultivators households) as
reported in the 59th NSS round as on 30.6.02 for rural Kerala is only
Rs.19663 [See Government of India (2005)]. It is important that non-
institutional agencies are not a dominant presence except that of money-
lenders in certain urban areas. Non-institutional sources account for about
20 per cent which roughly corresponds to the 18.7 per cent of NSS 59th
round [See Government of India (2005)]. The indebtedness of the poor is
very high. There is visible divergence between the average savings and
average debt liability of the members.

5.3.3 In Appendix 5B we give a Table that gives a district-wise percentage

distribution of secretaries according to their opinion on the rate of interest
charged by banks. Only a little over 5.4 per cent consider the rate of interest
‘very high’, with a range from zero in most districts to 18.8 per cent in the
tribal district of Wayanad. Although Kozhikode and Kannur secretaries do
not consider the rate of interest as ‘very high’, 54.5 per cent of those
reported in Kannur and 50 per cent in Kozhikode reported it as ‘high’.
Even so it is interesting to note that over 44 per cent in Kollam and 30 per
cent in Kannur with an all-district average of 19.5 per cent consider the
interest on borrowing as low. In all probability this is reflective of the
usurious rates prevailing in alternative sources.

Table 5.6
Distribution of members who availed loans by source
Phase I
Source Coastal Midland High Land All
Private Money lenders 8 3.7 52 7.3 53 6.0 113 6.2
Friends / Relatives 2 0.9 18 2.5 38 4.3 58 3.2
T & CS of KDS 111 51.2 359 50.3 390 44.4 860 47.5
Co-operative 21 9.7 93 13.0 160 18.2 274 15.1
Banks 46 21.2 158 22.1 213 24.3 417 23.1
Others 29 13.4 34 4.8 24 2.7 87 4.8
All 217 100.0 714 100.0 878 100.0 1809 100.0
Phase II
Private Money lenders 10 4.3 96 9.9 74 6.3 180 7.5
Friends / Relatives 22 9.4 37 3.8 84 7.1 143 6.0
T & CS of KDS 99 42.3 465 48.0 654 55.3 1218 51.0
Co-operative 45 19.2 152 15.7 85 7.2 282 11.8
Banks 43 18.4 182 18.8 243 20.5 468 19.6
Others 15 6.4 37 3.8 43 3.6 95 4.0
All 234 100.0 969 100.0 1183 100.0 2386 100.0

61
 Phase III
Private Money lenders 19 6.2 56 9.3 33 8.6 108 8.3
Friends / Relatives 17 5.5 10 1.7 32 8.3 59 4.6
T & CS of KDS 174 56.7 328 54.3 184 47.9 686 53.0
Co-operative 43 14.0 97 16.1 46 12.0 186 14.4
Banks 42 13.7 100 16.6 79 20.6 221 17.1
Others 12 3.9 13 2.2 10 2.6 35 2.7
All 307 100.0 604 100.0 384 100.0 1295 100.0

Urban Total
Private Money lenders 65 20.3 466 8.0
Friends / Relatives 9 2.8 269 4.6
T & CS of KDS 133 41.6 2897 49.9
Co-operative 16 5.0 758 13.0
Banks 93 29.1 1199 20.6
Others 4 1.3 221 3.8
All 320 100.0 5810 100.0

Table 5.6(a)
Source-wise and region-wise break-up of debt liability at the end of
June 2006
Phase I
Source Coastal Midland High Land All
Private Money lenders 41000 1.10 1224402 7.44 973801 5.31 2239212 5.81
Friends / Relatives 8000 0.21 624001 3.79 792201 4.32 1424206 3.70
T & CS of KDS 566788 15.16 1302560 7.91 2141802 11.68 4011173 10.41
Co-operative 743201 19.88 4847597 29.46 3880496 21.16 9471343 24.58
Banks 2219100 59.35 7255802 44.09 9776104 53.32 19251109 49.96
Others 161130 4.31 1203165 7.31 771000 4.20 2135306 5.54
All 3739218 100.0 16457527 100.0 18335404 100.0 38532349 100.0
Phase II
Private Money lenders 122500 1.81 1444550 6.64 897450 5.21 2464509 5.39
Friends / Relatives 675000 9.97 1054552 4.85 1253524 7.27 2983090 6.52
T & CS of KDS 246203 3.64 1966485 9.04 2853271 16.56 5065972 11.07
Co-operative 1678001 24.79 5084795 23.37 2298103 13.34 9060946 19.80
Banks 2979251 44.01 10852806 49.87 8956518 51.98 22788668 49.80
Others 1068000 15.78 1359199 6.25 973271 5.65 3400491 7.43
All 6768954 100.0 21762387 100.0 17232136 100.0 45763677 100.0
Phase III
Private Money lenders 334700 7.48 675002 7.26 437999 5.63 1447716 6.72
Friends / Relatives 319000 7.13 108000 1.16 1016301 13.06 1443309 6.70
T & CS of KDS 364130 8.14 845617 9.10 835268 10.74 2045032 9.49
Co-operative 1142858 25.55 1779096 19.14 1767499 22.72 4689499 21.76

62
Banks 1713302 38.30 5474200 58.88 3323601 42.72 10511200 48.77
Others 599056 13.39 415500 4.47 399100 5.13 1413673 6.56
All 4473046 100.0 9297414 100.0 7779768 100.0 21550428 100.0
Urban Total
Private Money lenders 215300 3.64 6366736 5.70
Friends / Relatives 255156 4.31 6105761 5.46
T & CS of KDS 533835 9.03 11656012 10.43
Co-operative 618000 10.45 23839788 21.33
Banks 4215997 71.30 56766975 50.79
Others 75000 1.27 7024471 6.29
All 5913288 100.0 111759742 100.0

5.4 To conclude, KDS with over Rs. 800 crore of savings and over Rs.1900 crore
of loans, is emerging as a major micro finance institution in the country. It
has turned out to be a unique non-banking intermediary catering for the
poor. The Thrift and Credit Societies have made and continue to make a
significant contribution to both the savings and borrowings of the poor.
Contrary to popular notion our study shows that KDS has a good track
record of prudential management of micro credit. Even so, the yawing
mismatch between the mounting debt liabilities and their saving assets is
likely to pose a serious threat in the years to come.

63
 Appendix 5.A
Average debt liability – By Source of debt
Phase 1
Source Coastal Midland High Land All
Private Money lenders 5125.0 23546.2 18373.6 19815.9
Friends / Relatives 4000.0 34666.7 20847.4 24555.2
T & CS of Kudumbashree 5106.2 3628.3 5491.8 4664.1
Co-operative 35390.5 52124.7 24253.1 34566.8
Banks 48241.3 45922.8 45897.2 46165.5
Others 5556.2 35387.2 32125.0 24543.6
All 17231.4 23149.8 20883.1 21300.2
Phase II
Private Money lenders 12250.0 15047.4 12127.7 13691.7
Friends / Relatives 30681.8 28501.4 14922.9 20860.6
T & CS of Kudumbashree 2486.9 4229.0 4362.8 4159.2
Co-operative 37288.9 33452.6 27036.5 32130.9
Banks 69284.9 59630.8 36858.1 48693.5
Others 71200.0 36735.1 22634.2 35794.4
All 28927.1 22458.6 14566.5 19180.0
Phase III
Private Money lenders 17615.8 12053.6 13272.7 13404.6
Friends / Relatives 18764.7 10800.0 31759.4 24462.7
T & CS of Kudumbashree 2092.7 2578.1 4539.5 2981.1
Co-operative 26578.1 18341.2 38423.9 25212.2
Banks 40792.9 54742.0 42070.9 47561.5
Others 49921.3 31961.5 39910.0 40390.1
All 14570.2 15393.1 20259.8 16641.1

Urban Total
Private Money lenders 3312.3 13662.4
Friends / Relatives 28350.7 22697.9
T & CS of Kudumbashree 4013.8 4023.4
Co-operative 38625.0 31450.7
Banks 45333.3 47345.0
Others 18750.0 31784.7
All 18479.0 19235.6

64
 Appendix 5B
District-wise percentage distribution of Secretaries according to
opinion on the rate of interest charged by banks on loans
Opinion on the rate of interest charged (No )
District Very high High Medium Low Total
Alappuzha 0 9.6 80.8 9.6 100.0
Ernakulam 14.3 21.4 51.0 13.3 100.0
Idukki 0.0 24.0 72.0 4.0 100.0
Kannur 0 54.5 15.2 30.3 100.0
Kollam 2.5 34.6 18.5 44.4 100.0
Kozhikode 0 50.0 50.0 0.0 100.0
Wayanad 18.8 31.3 43.8 6.3 100.0
All 5.4 26.1 49.0 19.5 100.0

65
 CHAPTER 6
LOCAL GOVERNMENTS, KUDUMBASHREE AND
CONVERGENCE

6.1 Poverty as well as development quintessentially are holistic concepts. Even

so development administration and anti-poverty programmes as evolved
and implemented in the country as well as in the Kerala state have been
pursuing a sectoral and fragmented approach. Each line department sees
development like the proverbial blind men’s vision and understanding of
an elephant. Kudumbashree mission although one may not see the concept
of convergence in its every day policy parlance and practice the institution
is grounded on a holistic approach in its anti-poverty efforts.
Kudumbashree Mission officials formed with officials drawn from 19
departments enabled convergence in a big way. As many as 27
departments have tried to work through the panchayat system. As a
subsystem of local government KDS is expected to promote and practice
convergence. This chapter examines briefly the way convergence has been
practised by the Kudumbashree which has been evolving as an integral
part of the local government.

6.1.1 The convergence approach has a history which goes as far back as the
UBSP. We have already noted how KDS evolved out of UBSP and the CBO
it promoted. {See Chapter 1 See also Oommen (1999)]. The UBSP
Guidelines 1990 says: “Wherever resources are available under the schemes
of other government departments these are to be converged and pooled
with the resources available under this programme with a view to
providing an integrated package of physical and social amenities to the
urban poor”. Kudumbashree extended this basic principle to the rural local
bodies. Actually the first project note on the poverty eradication mission
(the name ‘Kudumbashree’ came later) prepared in early 1997 by NABARD
and the Local Administration Department of the Government of Kerala
conceived the Mission as a convergence project through the three-tiered
community development society (CDS), which is a CBO. To quote from the
Report for the first phase covering 1997-2002: “Many ongoing programmes
implemented by various government departments and agencies targeted at
poor can be implemented through the CDS. The CDS would function as an
extended arm of the government and local bodies in implementation of the
programmes. Social welfare programmes directed at poor in the areas of
education, literacy, health, human resource development, empowerment of
women, skill upgradation, vocational training, fight against social evils,

66
 environmental improvement and such other areas could be implemented
through the CDS system”. Indeed, a total approach to poverty eradication
is what is envisaged. The Report expected the convergence programme to
benefit all the 1.5 million poor families (estimated) ‘with every family
benefiting from at least 8 to 9 convergence programmes’. These are ideally
well targeted, but the relevant question is how much of it could be carried
out in practice.

6.1.2 The inauguration of the devolution of nearly one-third of state plan outlay
to the local bodies as a grant on the basis of a comprehensive methodology
of participatory planning has added a new dimension to the concept of
convergence. Technically the devolution of defined functions, with finance
and functionaries to the local governments sets the necessary condition for
a proper convergence of activities at the local level. The effectiveness of
convergence depends on the quality of decentralized planning and the
orientation of the technical and bureaucratic personnel at the local level
towards concerted planning and implementation. Actually the officers and
technical personnel long used to receiving orders from above now have the
onerous task of studying local development issues and seeking solution or
get actively involved in the process. Surely capacity-building and
reorientation of attitudes are important. Not much however have
happened in practice.

6.1.3 Treating KDS as a sub-system of the local governments may mean that
these CDSs are not independent CBOs. The tasks the NHGs have to
shoulder have kept on increasing. KDS is not only directly involved in the
business of antipoverty programmes, they are equally well associated with
the women component plan, micro enterprise, activities related to health,
sanitation, education, natural resource management, tourism and so on,
besides being entrusted with the task of mobilisation of people for gram
sabha meeting or even for certain political mobilisation. The Women
Component Plan (WCP) for which 10 per cent of the plan outlay is
earmarked is largely managed by the women members of the three tier
system. They are associated with all the employment programmes as well
as the recent flagship programme of National Rural Employment
Guarantee Programme (NREGP). Thus KDS has become the focal point of
every development activity at the cutting edge level. We do not think that
the information relating to the query: ‘mention the areas you are actively
associated in your engagement with the local bodies’, sought from NHG
secretaries could reflect a picture of convergence. However, we report the
responses in (Table 6.1).

67
 Table 6.1
Distribution of NHGs according to participation in various
activities
Activities No. of NHG’s Participated % to Total
Health awareness Campaign 110 13.85
Immunisation 71 8.94
Medical Camps 20 2.52
Cleaning Environment 228 28.72
Others 35 4.41
Multiple Response 330 41.56
All 794 100.00

6.1.4 It is clear from Table 6.1 that environmental sanitation and health-related
activities have been the major component. The item multiple response is
indicative of the innumerable activities in which NHG office bearers and
members are involved. This Table however does not seem to have
captured the wider coverage to which the NHG members get involved.

6.2 Local Government, Kudumbashree and the Plan

6.2.1 In Kerala’s decentralization regime, the CDS is treated as the community

wing of the local bodies. The UBSP assumed that convergence of inputs
and services of various departments and agencies for poverty eradication
can be made possible as each department or agency can use the CDS system
as its sub-system. This did not meet with much success in practice. The
decision to devolve one-third of state plan to local bodies and the
reemergence of CDS in Kudumbashree Mission since 1998 added a new
dimension to convergence efforts under the local governments. What
started out as a trial and error experimentation in decentralization during
the 9th plan in Kerala was sought to be institutionalized during the 10th plan
and currently in the 11th plan.

68
Fig 6.1

DECENTRALISED PLANNING AND KUDUMBASHREE

UDUMBASHREE: A
STYLISED PRESENTATION
Working Groups (Participation)
Watershed Manage ment,

Development, Other than

Education, Culture,
Poverty Reduction

Women & Children

Development of

Development of

Development of
Caste

Water Supply &

e

Schedule Tribe
Social Security
Local Economic

Infrastructure
Schedule Cast

Governance
Sanitation
Agriculture
Agriculture

Energy
Sports
Health

Kudumbashree

Situation Analysis.
Primary & Secondary
Survey

Stake Holders Environment Creation Facilitation

Consultations (ADS) (Participation) (participation)
(participation)

Panchayat/Municipality Meeting (Policy Decision)

Gram Sabha/Ward Sabha Meeting: Felt Need Assessment/

Determination of priorities

Working Group Preparation of Development Reports/Draft Plan

Development Seminar

Working Group Projectisation, Panchayat/Municipality finalization & approval

Vetting of Plans by Technical Advisory Groups

Approval of Plan by DPC

69
6.2.2 Fig 6.1 presents a stylized picture of decentralized planning as is done or
directed to be performed in the state. This is presented to highlight the key
role played by Kudumbashree in the formulation of the five year plans. It
could be seen that working groups play the critical role in plan formulation.
Significantly enough the only agency that is represented in all the 13
working groups is the Kudumbashree. In three of them viz. poverty
reduction, development of scheduled castes and tribes, and development of
women and children there are two representatives each from
Kudumbashree. In theory at least the Kudumbashree has been assigned a
prominent role in plan formulation as well. The major burden of
implementation of several programmes also now falls on the shoulders of
the Kudumbashree.

6.2.3 Based on the 11th plan guidelines [G.O (MS) 128/07/LSGD dated 14/05/07]
Kudumbashree Mission prepared a set of detailed instructions in
Malayalam clearly indicating the role of Kudumbashree functionaries in the
various working groups and how co-ordination of different programmes is
to be done. To cite one example, regarding local economic development,
the role of Kudumbashree at panchayat level is mentioned as follows:

(i) The services of investigators who were engaged in the study of

the working of micro enterprises should be made available to
the concerned working group.
(ii) The leaders of the micro enterprises which are working
successfully should be associated with the activities of the
working group.
(iii) The working group should be appraised of the reason for the
success and failure of enterprises.
(iv) The working group should utilize the experiences of CDS and
ADS members who played a key role in the organization of
these enterprises.

6.2.4 It is clear that in building the data, in monitoring and evaluating the micro
enterprises, the KDS, CBO has an important role to play. Also the details
regarding the role of Kudumbashree functionaries in the development
seminar given in the guidelines show the importance given to the
Kudumbashree CBOs. The guidelines also stipulate that Kudumbashree
shall prepare project reports based on the recommendations of the
development seminar. Guidelines also insist that employment generation
programmes of various departments like agriculture, animal husbandry,
industries, SC & ST should be linked with the plan programmes prepared

70
 by the panchayat. But the moot question is whether these CBOs are
eminently equipped to carry out these important tasks.

6.2.5 The institutionalization of the planning process and the involvement of the
Kudumbashree’s CBO structure in the planning process have enhanced the
quality of people’s participation. Our enquiries at the gram panchayat level
show that although the routine procedures are not strictly followed,
Kudumbashree’s involvement has been substantial. Whether they are
qualified and properly equipped is a doubtful question. Our field
investigation has shown that about 38 per cent of the secretaries have not
received any training at all. This is a serious failure because the
Kudumbashree functionaries are generally a deprived set of people and
they need special skills in project preparation, plan formulation, and the
like, besides the entrepreneurial and management skills needed by the
micro enterprises they may identify for productive investment.

6.2.6 Training programmes are now organized by Kudumbashree mission at

state level, district level and at NHG level. State level training programmes
are meant for panchayat presidents, Vice president/Chairperson of Women
Task Force and Key Resource persons of Gram Panchayats. The district
level training is intended for SHG leaders, voluntary organizations, youth
clubs, panchayat members etc. The training programmes at NHG level are
meant for its members and office bearers. The general focuss has been on
the procedures to be observed in thrift and credit operations of SHGs. The
nature and maintenance of minutes books, pass books and account books
are dealt in detail in the training programmes. The course contents of this
training programmes also include building up of leadership/
communication skills and education regarding poverty and its
manifestation. But as per the information available, it is doubtful whether
any specific training programme is envisaged for the preparation of project
reports based on local resource endowments. Also for running micro
enterprises its organization, execution and marketing of products etc – no
effective programme is being organized by the Kudumbashree mission.
[See Section 8 under Chapter 8].

6.2.7 Though the plan guidelines mention about a convergence workshop, most
panchayats in our enquiry have not convened that. However, it is
important to note that combined working group meetings are generally
held by presidents for facilitating integration of various departmental
programmes. Probably the best performance is noted in all cases where
Ashraya programmes are formulated and implemented. The identification
of destitutes as well as in the preparation of projects for rehabilitation of

71
 these families, one may say the NHGs have acquitted creditably. Every
step is discussed with the approval of the ADS and CDS general bodies. It
is also important that several other initiatives such as Jagrata Samiti12,
Haritha Mitram13 and the like by and large have been working well. The
quality of outcome of such initiatives differs from panchayat to panchayat.

6.2.8 Ideally, the Kudumbashree formulated as an interdepartmental initiative

has to address the multiple causes and consequences of poverty in a
coherent fashion. With all their best efforts Kudumbashree for all practical
purposes has become an agency of the local government. In multiplying
the responsibilities for formulation of projects and implementing them, the
burden on poor women who already have their routine domestic chores to
attend to has only increased. How far are the poor women folk
autonomous bodies with a will and individuality of their own? The answer
leaves many things to be desired. How the CBO can be made more
autonomous yet made more effective in decentralisation is an issue that
remains to be addressed? A frank and open dialogue with the CBO,
bureaucracy and political parties may be a useful first step.

12 This samiti in the Karakulam Gram panchayat consisting of the gram panchayat president, the

chairperson of the CDS, women members of panchayats, a women advocate, the circle inspector, a
doctor and important local women activists have done excellent services in attending to and
alleviating the complaints of women.
13 The Harita Mithram is yet another successful initiative of the panchayat to help NHG members

to undertake income earning agricultural operations.

72
 CHAPTER 7
KUDUMBASHREE AND WOMEN EMPOWERMENT

7.1 Empowerment is an oft-used concept in development literature particularly

with reference to women. The term ‘Women’s empowerment’ has come to
be associated with women’s struggle for social justice and equality.
Generally it is used to describe a process wherein the powerless or
disempowered gain a greater share of control over resources14, decision-
making and acquire greater social mobility, social space and dignity.
Avowedly a ‘Women-oriented poverty alleviation programme’,
empowerment of women is one of the major objectives of the
Kudumbashree. Poor women are the means as well as the end of this
programme. Although the concept of empowerment is nowhere defined
officially to use as a reference point, we try to measure empowerment from
five major angles:

Organisational Empowerment

Economic Empowerment

Knowledge Empowerment

Leadership Empowerment and

Social Capital

7.2 First we present the overall picture based on the first four variables and
then proceed to give more details under each item. Besides that we use the
controversial concept of social capital as a convenient tool to highlight
certain aspects relating to empowerment. Although we use some of the
conceptual categories of Putnam (1993, 1995) and World Bank (2001) we
eschew their narrow perspective and view social capital more
comprehensively and includes the social and political environment that
enables norms and values to influence and shape social structures. The
households covered in the field investigation comprise 15 per cent SC/ST
categories and 47 per cent backward classes, making a total of 62 per cent.
Our investigation of women empowerment tries to focus on these
categories in particular because they are admittedly the most
disadvantaged group requiring greater empowerment.

14Bina Agarwal (1994) has argued that ‘the gender gap in the ownership and control of property is
the single most critical contributor to the gender gap in economic well being, social status and
empowerment’ [Agarwal (1994):1455]

73
7.3 In Table 7.1 we try to summarise the improvements as perceived by the
members as regards the various types of capabilities, skills resources etc
captioned under the four heads, organisational, economic, leadership and
knowledge empowerments acquired by them after joining the
Kudumbashree. The perceptions of the members about themselves are
indeed important. Table 7.1 shows that economic empowerment has the
least impressive impact15. It is distressing to note that as high as 75.6 per
cent reported no improvement in assets and 59.4 per cent no improvement
in income. Only less than 2 per cent said that their conditions have ‘greatly
improved’. Even so we underscore the fact that 39 per cent reported fair
improvement in income and 23 per cent in assets. Several studies on micro
credit however, point out that income improvement is the major benefit
[See Neera Burra etal (2005)]. However the reported progress in other areas
of empowerment is impressive indeed. It is important that a large majority
have affirmed that there has been ‘fairly’ good improvement in regard to
the ability to collectively bargain (68.25%), ability to plan projects (62.5%),
ability to address a group (62.2%), besides improvement in overall
capabilities, (62.4%). This is to be seen along with a respectable proportion
of ‘greatly improved’ households which in regard to ability to organise
group activity goes as high as 32.4 per cent. Considerable progress is
reported in regard to awareness of women’s rights, and gender
discrimination. That more than 90 per cent women have reported ‘feeling
of self confidence’ is no mean achievement. It is abundantly clear from
Table 7.1 that after joining the CBO the social position of members among
family members and relatives, neighbourhood and the wider community
has registered impressive improvement. That about one fifth did not report
any visible improvement equally affirms the fact that there is no room for
complacency.

15In our interactions with individual NHG members, as well as in groups, we are told that lack of
adequate income is their major problem. To quote a NHG member from Vembayam Panchayat:
“In this world of rising aspirations in a hierarchical society, such as ours income is the most crucial
variable”.

74
 Table 7.1
Distribution of members according to type of Empowerments after
joining the NHG

Improved
Improved

Improved

Improved

Improved

Improved

Total %
Greatly

Greatly
Fairly

Fairly

Total
Not

Not

%
Empowerment

Organisational Empowerment
Ability to collectively bargain for a
common cause 892 12.90 4720 68.25 1304 18.85 6916 100.00
Social position among family members
and relatives 1492 21.57 3920 56.68 1504 21.75 6916 100.00
Social position among neighbours and
other people in the community 1196 17.29 4054 58.62 1666 24.09 6916 100.00
Skill / ability to plan projects 644 9.31 4327 62.57 1945 28.12 6916 100.00
Ability to organise group activity 796 11.51 3879 56.09 2241 32.40 6916 100.00
Economic Empowerment
Income 4111 59.44 2698 39.01 107 1.55 6916 100.00
Asset holdings 5231 75.64 1609 23.26 76 1.10 6916 100.00
Savings 992 14.34 5639 81.54 285 4.12 6916 100.00
Chance of getting bank loan 2836 41.01 3495 50.53 585 8.46 6916 100.00
Leadership Empowerment
Address a group 1151 16.64 4299 62.16 1466 21.20 6916 100.00
Feeling of self confidence 714 10.32 3824 55.29 2378 34.38 6916 100.00
Overall capabilities 493 7.13 4318 62.43 2105 30.44 6916 100.00
Knowledge Empowerment
Awareness of Women’s Empowerment 1289 18.64 3662 52.95 1965 28.41 6916 100.00
Awareness of Women’s rights 1288 18.62 3193 46.17 2435 35.21 6916 100.00
Awareness on gender discrimination 1458 21.08 3414 49.36 2044 29.55 6916 100.00

7.4 Organisational Empowerment

7.4.1 Undoubtedly, it is the socially disadvantaged groups or castes that need

greater empowerment. Table 7.2 shows the distribution of members
according to select indicators of organisational empowerment by different
social groups. One important inference that conspicuously stands out is
that tribal groups have reported the lowest percentage in regard to ‘greatly
improved’. Much different is the story of the SC or the so-called dalits who
have made great improvement. It is significant that SC/ST groups have
reported higher than total average ‘fairly improved’ status in regard to
ability to collectively bargain for a common cause, and social position
among neighbours and among the larger community. Probably it is not

75
 wide of the mark to note here that Amartya Sen considers ‘bargaining skill’
as an important non-material capability in determining outcomes. [See
Sen’s paper on ‘Gender and Cooperative conflicts in Bina Agarwal etal
(2006)]. On the whole the situation is highly remarkable especially because
the counter factual situation would have been much different.

Table 7.2
Distribution of members according to Organisational empowerment
after joining the NHG

improved

improved

improved

improved

improved
improved

Greatly

Greatly
Fairly

Fairly

Total

Total
Not

Not

%
Empowerment

Ability to collectively bargain for a common cause

SC 129 15.38 575 68.53 135 16.09 839 100.00
ST 43 21.08 147 72.06 14 6.86 204 100.00
BC & OBC 387 11.70 2328 70.40 592 17.90 3307 100.00
General 333 12.98 1670 65.08 563 21.94 2566 100.00
Total 892 12.90 4720 68.25 1304 18.85 6916 100.00
Social position among family members and relatives
SC 205 24.43 446 53.16 188 22.41 839 100.00
ST 74 36.27 112 54.90 18 8.82 204 100.00
BC & OBC 797 24.10 1867 56.46 643 19.44 3307 100.00
General 416 16.21 1495 58.26 655 25.53 2566 100.00
Total 1492 21.57 3920 56.68 1504 21.75 6916 100.00
Social position among neighbours and other people in the community
SC 134 15.97 516 61.50 189 22.53 839 100.00
ST 50 24.51 138 67.65 16 7.84 204 100.00
BC & OBC 695 21.02 1845 55.79 767 23.19 3307 100.00
General 317 12.35 1555 60.60 694 27.05 2566 100.00
Total 1196 17.29 4054 58.62 1666 24.09 6916 100.00
Skill / ability to plan projects
SC 95 11.32 516 61.50 228 27.18 839 100.00
ST 53 25.98 140 68.63 11 5.39 204 100.00
BC & OBC 262 7.92 2138 64.65 907 27.43 3307 100.00
General 234 9.12 1533 59.74 799 31.14 2566 100.00
Total 644 9.31 4327 62.57 1945 28.12 6916 100.00
Ability to organise group activity
SC 135 16.09 450 53.64 254 30.27 839 100.00
ST 76 37.25 109 53.43 19 9.31 204 100.00
BC & OBC 328 9.92 1929 58.33 1050 31.75 3307 100.00
General 257 10.02 1391 54.21 918 35.78 2566 100.00
Total 796 11.51 3879 56.09 2241 32.40 6916 100.00

76
7.4.2 In order to throw more light into the various variables of organisational
empowerment we have also made an education – wise break up which is
reported in Table 7.3. Not surprisingly those who report the highest
percentage of ‘Not improved’ with reference to all the variables used are
the ‘Illiterates’. They are also invariably the group that reported relatively
lowest percentage in the ‘Greatly improved’ group be they be ability to
collectively bargain, plan project or organise group activity. They are even
worse when it comes to improving their social position within their
neighbourhood or in the larger community. Generally speaking the Table
shows that those with better schooling and education have achieved greater
‘empowerment’ compared to their peers. Even so, the most hopeful signal
again is that in the “fairly improved” category, illiterates and those below
primary have reported a good record in their own evaluation of progress in
empowerment.

77
 Table 7.3
Education status -wise distribution of members according to organisational Empowerment indices after joining
the NHG
Social position Social position
/Educational Status

ability to collectively
among family among neighbours Skill / ability to plan Ability to organise
Empowerments

bargain for a
members and and other people in projects group activity
common cause
relatives the community

improved
improved

improved

improved

improved

improved

improved

improved

improved

improved

improved

improved

improved

improved

improved
Greatly

Greatly

Greatly

Greatly

Greatly
Fairly

Fairly

Fairly

Fairly

Fairly
Not

Not

Not

Not

Not
%

%
Illiterate 22.19 70.03 7.78 32.56 56.48 10.95 25.07 63.40 11.53 29.39 59.08 11.53 34.01 52.45 13.54

Literate below
11.62 75.32 13.07 31.94 57.71 10.34 23.05 63.52 13.43 16.33 66.06 17.60 21.23 55.35 23.41
primary

Primary 13.94 65.30 20.76 23.15 54.82 22.04 19.65 55.97 24.38 10.14 63.85 26.00 13.47 56.27 30.26

SSLC 12.13 68.46 19.41 18.71 56.62 24.67 14.84 58.38 26.78 6.24 61.75 32.01 6.99 56.84 36.17
Degree and
7.57 72.25 20.18 12.61 66.06 21.33 9.40 64.68 25.92 2.52 60.55 36.93 3.90 54.13 41.97
above
Others 9.68 67.74 22.58 17.74 56.45 25.81 14.52 58.06 27.42 8.06 58.06 33.87 9.68 51.61 38.71

ALL 12.90 68.25 18.85 21.57 56.68 21.75 17.29 58.62 24.09 9.31 62.57 28.12 11.51 56.09 32.40

78
7.5 Economic Empowerment

7.5.1 We have seen in Table 7.1 that in regard to income and asset holding the
progress record is very poor. In Table 7.4 we try to examine whether there is
any marked difference when we disaggregate the income and savings
variables into rural (with phase – wise break-up) urban categories. Invariably
there is a very high reported response in regard to savings under the ‘fairly
improved’ group. This as we have already noted is not the result of additional
income generated, but out of compulsions to save (thrift) to repay the loans
taken or to enable oneself to be eligible for loan. The Table shows that income
improvement is by and large static. In the rural areas as we move from Phase
I to Phase III, there is a progressive improvement in the increase in income. It
is important that over 96 per cent of urban groups do not report any
improvement in income. This self-perception shows not only that the income
of members have not significantly improved but equally also that the
aspirations regarding economic improvement remain largely unrealised. To
live like the Jones’s is a contagion in social Kerala.

Table 7.4
Self Perception of the Members regarding increase in Income & Savings
after joining the NHG
Distribution of members Distribution of members
Assets according to increase in according to increase in
Income after joining the NHG savings after joining the NHG
Empower-

Improved

Improved

Improved

Improved

Improved

Improved
ment %

Greatly

Greatly
Phase /

Fairly

Fairly
Total

Total
Not

Not
%

%
Phase I 61.75 36.77 1.47 100.00 11.66 82.44 5.90 100.00
Phase II 56.87 41.37 1.76 100.00 14.05 82.50 3.45 100.00
Phase III 50.73 47.74 1.53 100.00 17.77 78.42 3.82 100.00
Urban 96.47 3.02 0.50 100.00 19.14 80.86 0.00 100.00
All districts 59.44 39.01 1.55 100.00 14.34 81.54 4.12 100.00

7.5.2 The best way to measure empowerment is to see the economic impact on the
disadvantaged social categories. Table 7.5 gives the social group-wise
distribution of members reckoned in terms of increase in income, assets,
savings and chance of getting bank loans. Here increase in income and assets
is the crucial factor. Around 91 per cent of STs and 82 per cent of the SCs
have not reported improvement in assets and in regard to income, about 82
per cent of STs and 64 per cent of backward class have also reported no
progress. As we have already noted the increase in savings although
important is not a sign of great improvement for the very poor. This ‘forced’
saving is a sign of poverty and can be at the expense of much needed

79
 consumption. There is also reported progress in regard to the increase in
borrowing capabilities. The chances of getting loans have ‘greatly improved’
for a relatively larger percentage and the SC/ST groups also figure there
although it is the general category that shows the highest percentage (10.83%)
of greatly improved.
Table 7.5
Social category-wise Distribution of members according to Economic
Empowerment after joining the NHG
Empower-

increased

increased

increased

increased

increased

increased
category

Greatly

Greatly
Social

Fairly

Fairly

Total

Total
ment

Not

Not

%
SC 485 57.81 342 40.76 12 1.43 839 100.00
Increase in

ST 167 81.86 36 17.65 1 0.49 204 100.00

Income

BC & OBC 2129 64.38 1136 34.35 42 1.27 3307 100.00

General 1330 51.83 1184 46.14 52 2.03 2566 100.00
Total 4111 59.44 2698 39.01 107 1.55 6916 100.00
SC 685 81.64 149 17.76 5 0.60 839 100.00
Asset holdings
Increase in

ST 186 91.18 18 8.82 0 0.00 204 100.00

BC & OBC 2468 74.63 803 24.28 36 1.09 3307 100.00
General 1892 73.73 639 24.90 35 1.36 2566 100.00
Total 5231 75.64 1609 23.26 76 1.10 6916 100.00
SC 108 12.87 706 84.15 25 2.98 839 100.00
Increase in
Savings

ST 16 7.84 185 90.69 3 1.47 204 100.00

BC & OBC 544 16.45 2647 80.04 116 3.51 3307 100.00
General 324 12.63 2101 81.88 141 5.49 2566 100.00
Total 992 14.34 5639 81.54 285 4.12 6916 100.00
SC 383 45.65 402 47.91 54 6.44 839 100.00
getting bank
Chance of

ST 87 42.65 103 50.49 14 6.86 204 100.00

loan

BC & OBC 1430 43.24 1638 49.53 239 7.23 3307 100.00
General 936 36.48 1352 52.69 278 10.83 2566 100.00
Total 2836 41.01 3495 50.53 585 8.46 6916 100.00

7.6 Knowledge and Leadership Empowerment

7.6.1 In Tables 7.6 and 7.7 we present the social category-wise break-up of the
improvement in knowledge and leadership empowerment. Knowledge
empowerment is measured in terms of three simple variables viz. awareness
in regard to women empowerment, women’s rights and the practice of gender
discrimination. Significantly and interestingly it is the ST categories that have
recorded fairly better improvement in regard to all the three variables and
responded better than even ‘general’ categories. Even so, it is important to
note that it is the SC groups that reported the highest (much above the general
average) ‘Not improved’ percentage. When it comes to ‘greatly improved’, it

80
 is the backward class and ‘general’ categories that have reported higher
percentages.
Table 7.6
Social category-wise Distribution of members according to Knowledge
Empowerment after joining the NHG

improved

improved

improved

improved

improved

improved
Empower-

category

Greatly

Greatly
Social

Fairly

Fairly

Total

Total
ment

Not

Not

%
empowerment

SC 232 27.65 398 47.44 209 24.91 839 100.00

Awareness of Awareness of Awareness of
women’s

ST 53 25.98 133 65.20 18 8.82 204 100.00

BC & OBC 558 16.87 1789 54.10 960 29.03 3307 100.00
General 446 17.38 1342 52.30 778 30.32 2566 100.00
Total 1289 18.64 3662 52.95 1965 28.41 6916 100.00
SC 239 28.49 367 43.74 233 27.77 839 100.00
women’s

ST 49 24.02 136 66.67 19 9.31 204 100.00

rights

BC & OBC 564 17.05 1505 45.51 1238 37.44 3307 100.00
General 436 16.99 1185 46.18 945 36.83 2566 100.00
Total 1288 18.62 3193 46.17 2435 35.21 6916 100.00
discrimination

SC 245 29.20 383 45.65 211 25.15 839 100.00

ST 51 25.00 136 66.67 17 8.33 204 100.00
gender

BC & OBC 646 19.53 1619 48.96 1042 31.51 3307 100.00
General 516 20.11 1276 49.73 774 30.16 2566 100.00
Total 1458 21.08 3414 49.36 2044 29.55 6916 100.00

Table 7.7
Social category-wise Distribution of members according to leadership
Empowerment after joining the NHG
Empowerm

Improved

Improved

Improved

Improved

Improved

Improved
Greatly

Greatly
Fairly

Fairly

Total

Total
Not

Not
ent

%
Social category

SC 150 17.88 524 62.46 165 19.67 839 100.00

Ability to
address a

ST 45 22.06 142 69.61 17 8.33 204 100.00

group

BC & OBC 609 18.42 2018 61.02 680 20.56 3307 100.00
General 347 13.52 1615 62.94 604 23.54 2566 100.00
Total 1151 16.64 4299 62.16 1466 21.20 6916 100.00
Feeling of self-

SC 110 13.11 482 57.45 247 29.44 839 100.00

confidence

ST 32 15.69 150 73.53 22 10.78 204 100.00

BC & OBC 360 10.89 1853 56.03 1094 33.08 3307 100.00
General 212 8.26 1339 52.18 1015 39.56 2566 100.00
Total 714 10.32 3824 55.29 2378 34.38 6916 100.00
SC 57 6.79 551 65.67 231 27.53 839 100.00
Capabilities

ST 24 11.76 165 80.88 15 7.35 204 100.00

Overall

BC & OBC 275 8.32 2030 61.38 1002 30.30 3307 100.00
General 137 5.34 1572 61.26 857 33.40 2566 100.00
Total 493 7.13 4318 62.43 2105 30.44 6916 100.00
81
7.6.2 In Appendix 7A we try to probe more in regard to knowledge empowerment
by asking the progress regarding discussion of public issues, improvement in
regard to reading habits and about training that they received. Consistent
with the socio-political tradition of Kerala, the proportion of the members
discussing public issues is very high. Even formal illiterates are no exception.
There is significant improvement in developing reading habits which range
from 32.8 per cent for illiterates to about 82 per cent for those with SSLC
qualifications. The most disturbing aspect, however, is that the majority have
not received any training. Those who have not received training range from
69 per cent for those with degree and above to 89.34 per cent for illiterates.
Probably it is the latter who ought to have been subjected to more training,
because they deserve empowerment more than others.

7.6.3 Leadership empowerment is sought to be captured in terms of ability to

address a group, feeling of self-confidence and improvement in overall
capabilities. Here again it is the STs who have responded well reckoned in
terms of fairly improved and it is significant that 81 per cent of them reported
increase in overall capabilities, 73 per cent in self-confidence and 70 per cent
ability to address a group. Starting from a low base, they have responded
remarkable progress and occupy the highest percentage in the ‘fairly
improved’ panel compared to all others including the SCs. Definitely the
Kudumbashree has played a significant empowering role.

7.6.4 Although it may not be strictly relevant to the empowerment of women, we

have collected information whether harassment against women has increased
or not. Table 7.8 gives the education – wise distribution of members according
to atrocities/ harassment after joining NHGs. There is only a marginal
reduction and that too for a negligible minority. For the overwhelming
majority (the percentage ranges from 86.9 per cent among Degree holders and
above 93 per cent as regards illiterate members) the situation remained the
same. Educational qualifications do not seem to be a mitigating factor to
change the discriminatory practices towards women. It is not wide of the
mark to note here that as per the reports of the Crime Records Bureau, the
number of atrocities committed against women have increased from 3313 in
1995 to 8087 in 2005, more than 2.4 times increase in a decade. It is satisfying
that for Kudumbashree members the overall increase reported has been as low
as 0.26 per cent.

82
 Table 7.8
Education-wise Distribution of members according to harassment after
joining NHG
Decreased
Decreased to Remained
Educational Status to a great % % %
some extent the sane
extent
Illiterate 7 2.02 14 4.03 323 93.08
Literate below primary 13 2.36 30 5.44 501 90.93
Primary 72 3.07 176 7.50 2043 87.08
SSLC 94 2.96 205 6.46 2805 88.37
Degree and above 19 4.36 27 6.19 379 86.93
Others 3 4.84 3 4.84 54 87.10
ALL 208 3.01 455 6.58 6105 88.27
Increased to
Increased to
Educational Status % a greater % Total %
some extent
extent
Illiterate 2 0.58 1 0.29 347 100.00
Literate below primary 6 1.09 1 0.18 551 100.00
Primary 50 2.13 5 0.21 2346 100.00
SSLC 60 1.89 10 0.32 3174 100.00
Degree and above 10 2.29 1 0.23 436 100.00
Others 2 3.23 0 0.00 62 100.00
ALL 130 1.88 18 0.26 6916 100.00

7.7 Social Capital

7.7.1 Social Capital16 is a term very much in currency in development discourse in

recent times. Robert Putnam (1993, 1995) who pioneered and popularised the
concept defines it as a resource that characterises societies and refers to such
features of social organisation like trust, norms and net works that can help to
improve the efficiency of society by facilitating coordinated actions. Putnam
(1995) distinguishes between two types of social capital: bonding social capital
which refers to the norms that bind a group together and bridging social
capital which refers to the relationship with heterogeneous group outside the
group. Kudumbashree could be considered as having bonding social capital
which refers to the connections among people who share similar demographic
characteristics and goals. Bridging capital refers to the connection between
heterogeneous groups. Apart from these, there are the positive vertical
relations the poor people have with higher officials and others. This is
referred to as linking capital. We used certain questions in our field

16 This term is employed more because of its frequent use in the development literature and because
we thought it can help the discussion. We do not approve of World Bank’s claim that it is a ‘missing
link’ in development. Not only that, we endorse the basic arguments of John Harriss (2001).

71
 investigations to gauge these relationships. Table 7.9 shows that there is
remarkable improvement in social capital by way of willingness to cooperate
with others and prevalence of mutual trust. In Table 7.9(a) we report the
progress made in regard to select variables which represent bond and link
capital viz. trust of the community in the member, cooperation with
representatives of local government (LG), trust of the member in the LG, trust
of the officials in the member and vice versa. It could be seen from Table
7.9(a) that not only that the trust of the community in the members has
reportedly increased, cooperation with representatives of the local
government, trust of members in the local government, and mutual trust of
members and officials have tremendously improved.

7.7.2 As part of our field study we have asked three more questions to measure the
extent of bonding, bridging and linking capital. We have asked whether there
has been social, economic, political and religious cooperation of members with
members of the same groups or other groups. We have summed up the
findings in Appendix 7B. There is reportedly bonding and bridging
cooperation besides enhanced cooperation of the poor women with the
officials who traditionally kept away from them. To the question addressed to
NHG secretaries (794 in total) as to whether they try to mediate in resolving
conflicts within family members of their group or of that of non-members, the
response was generally in the negative in regard to both cases [See Appendix
7(C)]. This shows that bonding social capital does not extend much into a
bridging capital.

7.7.3 Impressionistic or anecdotal accounts have not much place in reports based on
hard facts. Even so the stories such as of a young woman who lost her earning
husband leaving the burden of educating and marrying children on her, a
woman who lost her only male child and whose husband is a drunkard and a
woman who now lives a positive life having escaped a suicide attempt17 are
among the several successful cases shared with the author. They are recorded
here to show how Kudumbashree does supply significant bonding ‘social
capital’ along with physical capital support.

7.7.4 In short as a community-based organisation, the CDS of Kudumbashree is

indeed a unique CBO with important social capital characteristics. Viewed
from different angles and measured by multiple variables, we noted the
remarkable progress in empowerment except in regard to sustained economic
empowerment. That 3200 Kudumbashree CBO members contested the 2005
Local Body elections and 1408 of them won is a great sign of empowerment.

17The woman who was the Chairperson of a CDS, said:.....Now I am creative and enjoy the meaning
of fellowship through KDS”.

84
 This includes 1212 gram panchayat members spread over 414 GPs [See
Appendix 7D].

7.8 To sum up, there is a direct linear association between Kudumbashree and
women’s empowerment. The outcome is the result of several collective
strategies. Economic empowerment is the Achilles heel of the empowerment
spectrum. It is significant that the SC/STs notably the latter have ‘fairly
improved’ be it ability to collectively bargain, to plan projects and to organise
group activities besides improving their social position within their own
groups and within the wider community. There is a strong case to promote
KDS among the tribals. Somewhat unexpected finding is about economic
empowerment measured in terms of improvement in assets and income. The
reported increase in saving could be out of postponement of several essential
consumption and asset requirements. Nearly 91 per cent STs and 82 per cent
SCs have not reported any increase in income or assets. There is general
improvement for borrowing capability for the majority of the poor. Even so,
reckoned in terms of leadership empowerment increase in self confidence and
general gender rights awareness building especially among SC/ST groups KDS
have an impressive record. We also noted impressive bonding and linking
social capital.

Table 7.9
Distribution of members according to improvement in Social capital
Remained
Social capital % Improved % Total %
the same
Willingness to co-operate with
662 9.57 6254 90.43 6916 100.00
others
Mutual trust with members 476 6.88 6440 93.12 6916 100.00
and others

Table 7.9 (a)

Distribution of members according to Social capital
Remained
Social capital Decreased % % Increased % Total %
the same
Trust of the community in the
13 0.19 1079 15.60 5824 84.21 6916 100.00
member
Co-operation with
31 0.45 646 9.34 6239 90.21 6916 100.00
representatives of LSGI
Trust of member in the LSGI 62 0.90 1098 15.88 5756 83.23 6916 100.00
Trust of the Officials in the
26 0.38 1257 18.18 5633 81.45 6916 100.00
member
Co-operation of Officials
26 0.38 1164 16.83 5726 82.79 6916 100.00
with the member

85
 Appendix 7A
Education Status-wise Distribution of members according to knowledge
Knowledge
Empower- Discussed public issues Developed reading habit Received training
ment
Educational
Yes % No % Total % Yes % No % Total % Yes % No % Total %
Status
Illiterate 289 83.29 58 16.71 347 100 114 32.85 233 67.15 347 100 37 10.66 310 89.34 347 100
Literate
below 471 85.48 80 14.52 551 100 319 57.89 232 42.11 551 100 80 14.52 471 85.48 551 100
primary
Primary 1985 84.61 361 15.39 2346 100 1631 69.52 715 30.48 2346 100 436 18.58 1910 81.42 2346 100

SSLC 2804 88.34 370 11.66 3174 100 2588 81.54 586 18.46 3174 100 852 26.84 2322 73.16 3174 100
Degree and
391 89.68 45 10.32 436 100 333 76.38 103 23.62 436 100 135 30.96 301 69.04 436 100
above
Others 56 90.32 6 9.68 62 100 47 75.81 15 24.19 62 100 18 29.03 44 70.97 62 100

ALL 5996 86.70 920 13.30 6916 100 5032 72.76 1884 27.24 6916 100 1558 22.53 5358 77.47 6916 100

86
 Appendix 7 B
Distribution of members according to Nature of Co-operation
Social capital High % Medium % Low % Total %
members of other members of the same
caste/ religion /status
Co-operation with Co-operation with

Social co-operation 5183 74.94 1452 20.99 281 4.06 6916 100.00
group

Economic co-operation 4678 67.64 1718 24.84 520 7.52 6916 100.00

Political co-operation 2884 41.70 2183 31.56 1849 26.74 6916 100.00

Religious co-operation 3746 54.16 2334 33.75 836 12.09 6916 100.00
caste / religion

Social co-operation 4871 70.43 1793 25.93 252 3.64 6916 100.00
/status group

Economic co-operation 4341 62.77 2123 30.70 452 6.54 6916 100.00
Political co-operation 2473 35.76 2589 37.43 1854 26.81 6916 100.00

Religious co-operation 3112 45.00 2734 39.53 1070 15.47 6916 100.00
Co-operation with

Social co-operation 3968 57.37 1876 27.13 1072 15.50 6916 100.00
other agencies/
organisations

Economic co-operation 3963 57.30 1808 26.14 1145 16.56 6916 100.00

Political co-operation 2343 33.88 2193 31.71 2380 34.41 6916 100.00

Religious co-operation 2420 34.99 2465 35.64 2031 29.37 6916 100.00

87
 Appendix 7 C
Distribution of NHG Secretaries according to resolving conflicts with
in family members and conflicts in which the members or their family
are not involved
Resolving conflicts within Conflicts in which then members
Measure family members or their family are not involved
Number % Number %
Very often 19 2.39 5 0.63
Often 150 18.89 160 20.15
Rarely 343 43.20 278 35.01
Never 282 35.52 351 44.21
All 794 100.00 794 100.00

Appendix 7 D
Distribution of Candidates from Kudumbashree CBOs
who won 2005 Local body elections by type of LGs
Local Body Number of Candidates Elected
Corporation 14
Municipality 92
District Panchayat 7
Block Panchayat 83
Gram Panchayat 1212
Total 1408

88
 CHAPTER 8
KUDUMBASHREE AND MICRO ENTERPRISES –
SOME CASE STUDIES

It is widely held that micro enterprises contribute to economic growth, and

equity. Some consider them as important vehicles through which low income
people can escape poverty. The Kudumbashree mission views micro enterprises
as an instrument for providing gainful employment to women below poverty line
thereby enhancing their living standards. The focus is on self-employment. The
realisation of this goal depends on the economic viability of the micro projects.
For this we have made a case study of the KDS – sponsored units in the
Venganoor Panchayat in the Thiruvananthapuram district. We also have made
use of another field study covering nearly 400 KDS units spread through out the
state. The purpose of this Chapter is to draw some lessons for further
improvement.

8.1 Kudumbashree Micro Enterprises – the Macro picture

8.1.1 As per the details furnished by the Kudumbashree mission, there were 1051
individual enterprises and 2789 group enterprises registered under
Kudumbashree by the end of 2006 in rural areas [See Table 8.1]. Under the
50K project called Yuvashree intended for providing 50,000 jobs for
educated youth, the number of individual enterprises comes to 274 and
group enterprises registered to 358 by the end of 2006 [See Table 8.1(a)].

Table 8.1
Micro enterprise units functioning in various districts in Rural Areas
(as on 31st December, 2006)
Individual Enterprises Group Enterprises
Sl.
Districts Subsidy Subsidy
No. No No
Sanctioned Sanctioned
1 Trivandrum 242 1,623,900 265 14,349,969
2 Kollam 177 1,317,000 197 7,785,000
3 Pathanamthitta 1 7,500 154 4,843,500
4 Alappuzha 31 2,17,440 206 9,485,000
5 Kottayam 8 60,000 61 3,187,500
6 Idukki 200 1,459,850 475 22,902,450
7 Ernakulam 0 0 239 12,524,000
8 Thrissur 33 240,300 184 8,896,495
9 Palakkad 17 126,000 242 10,974,750
89
 10 Malappuram 95 642,350 207 13,544,250
11 Kozhikode 120 888,000 285 15,648,500
12 Wayanad 6 45,000 59 3,240,000
13 Kannur 10 75,000 111 5,274,810
14 Kasargode 111 745,500 104 5,126,900
Total 1051 7,447,840 2789 1,37,783,124
[Source: Kudumbashree Mission].The number of enterprises mentioned above are those excluding units
under SJSRY.

Table 8.1(a)
District wise micro enterprise units functioning under Yuvasree (50K)
Individual Enterprises Group Enterprises
Sl.
Districts Subsidy Subsidy
No. No No
Sanctioned Sanctioned
1 Trivandrum 6 45,000 20 1,100,000
2 Kollam 15 112,500 35 1,825,000
3 Pathanamthitta 2 15,000 9 460,000
4 Alappuzha 29 207,765 58 3,000,000
5 Kottayam 6 45,000 1 50,000
6 Idukki 12 90,000 15 850,000
7 Ernakulam 13 97,500 39 1,875,800
8 Thrissur 48 360,000 20 960,500
9 Palakkad 4 30,000 25 1,175,000
10 Malappuram 69 495,825 20 942,500
11 Kozhikode 25 195,000 31 1,710,000
12 Wayanad 7 52,500 45 2,504,153
13 Kannur 25 187,000 17 1,165,000
14 Kasargode 13 97,500 23 1,222,500
Total 274 2,030,590 358 18,840,453
[Source: Kudumbashree Mission].

8.1.2 Table 8.1 shows that in rural areas, individual micro enterprises are
concentrated in a few districts like Thiruvananthapuram, Kollam, Idukki
and Kozhikode. The distribution of group enterprises exhibited a slightly
different pattern. With the exception of Kottayam and Wayanad districts
they are almost evenly distributed in the state. One interesting feature is
the fairly good concentration of both individual and group enterprises in
Idukki district accounting respectively for 19 per cent and 17 per cent of the
total. As regards subsidy for micro enterprises units, there is a maximum
ceiling limit of Rs.7500 per person for individual units and Rs.1 lakh in the
case of group enterprises (10 persons group) and Rs.1.25 lakhs for 50K
enterprises, all these subjected to an overall ceiling limit of 50 per cent of
the total project cost of the enterprise. The total subsidy given by the state
to group enterprise (as per the information furnished by Kudumbashree
mission) till the end of 2006 amounted to Rs.13.78 crore or Rs. 49499 per
group while that for individual enterprises amount to Rs.74.48 lakhs or
90
 Rs.7086 per unit. Regarding Yuvasree enterprises, total subsidy released to
individual units in all the districts amounted to Rs.20.30 lakhs or Rs.7410per
unit and that for group enterprises came to Rs.1.88 crore or Rs.52627 per
group. Clearly the Yuvasree enterprises enjoy larger subsidy per unit.
[These figures relating to subsidy are those released by Government and
not those actually availed. The availed figures will normally be much less
since it is related to the project cost of each enterprise. But these data are
not available with the Kudumbashree Mission].

8.2 A Brief profile of Micro Enterprises in Thiruvananthapuram District

8.2.1 Thiruvananthapuram district accounts for 23 per cent of the individual and
10 per cent of group enterprises registered in the state under
Kudumbashree. Regarding subsidy sanctioned, individual enterprises
absorbed 21 per cent and group enterprises nearly 10 per cent of the total
subsidy sanctioned for the whole state. Regarding Yuva Sree Enterprises
(meant for young educated youth) the share of Thiruvananthapuram
district is negligible, with only 2 per cent of the total individual enterprises
and 6 per cent of the group enterprises.

Table 8.2
Micro enterprises Thiruvananthapuram District*
Thiruvananthapuram District Venganoor Panchayat
Sector No of No of No of No of
Group Individual Yuvashree Group Individual Yuvashree
units units units units
Agriculture
Goat Rearing 96 151 3 91
Dairy 31 87 3 72
Food Processing 14
Others 6 2
Industries
Kerashree 16 3
Weaving 17 17
Nutrimix 14 13 2
Others 11 1 2 4 1 1
Services
Hotel / Catering 15 1 2 1
Direct Marketing
/ Provision Store 5 2
Others 2 3 2 2 1
Total 227 242 18 38 165 4
* Data furnished for Thiruvananthapuram district related to an earlier period compared to that
furnished in Table 8.1

91
8.2.2 A sector wise break up of micro enterprises in Thiruvananthapuram district
is given in Table 8.2. Out of 227 group units about 147 come under
agriculture (65 per cent), 58 come under industries (26 per cent) and the rest
9 per cent registered under the services sector. The composition of
individual units shows a high concentration in the agriculture sector (98 per
cent) and only 2 per cent confined to industries and services sectors. In the
case of group and individual enterprises, the units under agriculture
comprise goat-rearing, dairy and food processing. Kerasree (coconut oil
making), weaving and nutrimix are important units coming under
industries sector. Under services sector, most of the units run catering,
hotel and provision stores.

8.2.3 We have selected Venganoor Panchayat for a case study since out of 78
panchayats in Thiruvananthapuram district, this panchayat alone accounts
for 17 per cent of the group enterprises and 68 per cent of the individual
micro enterprises registered in the district.

8.3 A Case study of Micro enterprises in Venganoor Panchayat

8.3.1 The composition of micro enterprises registered in Venganoor Panchayat
(2006) is presented in Table 8.3. The most important criterion for the choice
of the units was their readiness to cooperate and provide information.

Table 8.3
Micro Enterprises in Venganoor Panchayat – Total units registered and
units selected for case study
Total Number Number selected
Types of Enterprises
registered for case study
(i) Group Enterprises 38 20
(ii) Individual Enterprises 165 6*
(iii) Yuva Sree (50K) Enterprises 4 4
* Two dairy units & goat- rearing, though categorised as individual in practice are
working as group enterprises for the purpose of availing of loan and repayment.

8.3.2 The 38 group enterprises consisted of 13 different types of products, with

the largest number of units registered (17) coming under weaving. For the
purpose of the study, all the 13 groups were chosen. But the number of
units selected from other groups is limited to two in each group. Since the
total number of units in each group is also less than 3 in most cases (except
weaving), the case study is almost a census with regard to group
enterprises. The same is the case with Yuvasree (50K) group, where all the
four units registered are included in the case study. In the case of
individual enterprises, though there are 165 units in total, 72 units were

92
 registered under dairy and 91 under goat rearing. The other two types
registered were detergent manufacturing and clinical laboratory where
only one unit each was registered. Hence under individual enterprises, two
units each were selected from dairy and goat rearing and one each from the
remaining two groups. Thus altogether 30 units were selected for the case
study (20 under group enterprises, 6 under individual and 4 under
Yuvasree). The selection details are shown in Table 8.3. The 30 selected
units are classified under 3 broad sectors viz. agriculture, industry and
services. Thus the sectoral classifications of the total selected units are as
follows: 10 under agriculture related, 12 under industry and 8 under service
sector. A detailed account of the sample units is given in section 8.4.

8.4 The Sample units: More details:

8.4.1 The common feature noticed in the functioning of micro enterprises is that
a good number (30 to 40%) of enterprises turned out to be non-functional
after one or two years of their initial working. The number of working and
non-working units among the 30 units selected for case study in Venganoor
Panchayat are furnished in Table 8.4.

Table 8.4
Working and Non Working Enterprises by Type
Number of Members SC/ST Members
Non- At the At the
Type of Enterprise Working At the At the
Working time of time of
beginning beginning
enquiry enquiry
I. Agriculture
i. Herbal & General 1 10 - - -
-
Nursery
ii. Goat Rearing 4 - 38 35 - -
iii. Rabbit Rearing 1 - 10 5 10 5
iv. Dairy units 4 - 46 45 1 1
Total 9 1 104 85 11 6
II. Industries
i. Paper Bag 1 - 13 7 7 4
ii. Ready Made / - 10 8 2 2
1
Garments
iii. Handloom 2 - 20 20 - -
iv. Nutrimix 2 - 10 9 5 4
v. Kerasree - 2 20 - 10 -
vi. Craft Units - 2 20 1 14 1
vii. Paper Cup - 1 10 10 10 10
viii. Detergent unit - 1 1 - 1 -
Total 6 6 104 55 49 21

93
III. Services
i. I.T.Unit 1 - 10 6 4 2
ii. Provision 2 - 15 9 4 1
iii. Catering 2 - 15 12 3 2
iv. Clinical Lab 1 - 1 1 1 1
v. Hire service - 1 10 - - -
vi. Canteen - 1 10 - - -
Total 6 2 61 28 12 6
Grand Total 21 9 269 168 72 33

8.4.2 Out of 30 units selected for case study in Venganoor Panchayat, 21 are
working and 9 were either closed down or not functioning at the time of
enquiry. A detailed analysis of working units as well as closed units in the
sample selected is presented in Section 8.5 and Section 8.6.

8.5 Analysis of working units

8.5.1 Out of 30 units selected for case study, only 21 or 70 per cent were working
at the time of enquiry and nine were either closed down or went out of
business. A sector-wise break up of the working units is given in Table 8.5.

Table 8.5
Economic profile of the working units
Number of Workers Investment (Rs.000’)
No. of At the Loan out % out
Sector Units At the Own Sub - standing standing
Time of Loans
Beginning Fund sidy
Enquiry
I. Agriculture
1. Goat Rearing 4 38 35 33 360 174 150 43
2. Rabbit Rearing 1 10 5 5 65 75 40 62
3. Dairy units 4 46 49 76 989 340 640 65
Total 9 94 89 114 1414 589 830 59
II. Industries
1. Paper Bag 1 13 7 13 100 100 - -
2. Ready Made /
1 10 8 5 100 100 44 44
Garments
3. Handloom 2 20 20 20 180 200 20 11
4. Nutrimix 2 10 9 20 190 100 190 100
Total 6 53 44 58 570 500 254 45
III. Services
1. Computer Unit 1 10 6 14 143 100 61 43
2. Direct Marketing 2 15 9 15 189 150 85 45
3. Catering Unit 2 15 12 30 98 50 3 3
4. Clinical Lab 1 1 3 3 40 8 25 63
Total 6 41 30 62 470 308 174 37
94
 8.5.2 Out of the 21 working units nearly 50 per cent are in the agriculture sector
and the remaining equally distributed under industry and services. Most
of the units are registered as group enterprises after 2003-04 and at the time
of enquiry (April 2007) nearly 25 per cent of the ‘sponsors’ have left the
business mainly because of inadequate returns and lack of co-operation
among members. Though all the enterprises listed in Table 8.5 have availed
bank loans and subsidy, loans outstanding at the time of enquiry vary from
enterprise to enterprise. The loan outstanding for units registered under
agriculture sector amounts to nearly 60 per cent, those under industries and
service sectors are of the order of 45 per cent and 37 per cent respectively.
Since majority of the enterprises in all the sectors started functioning in
2004 or later, 60 per cent of the units could repay 40 per cent or more of the
loan availed. This is a welcome sign. A sector by sector analysis is given
under 8.5.3.

8.6 Units under Agriculture Sector:

8.6.1 Enterprises coming under agriculture sector include goat-rearing, rabbit-
rearing and dairy units. Out of 10 units selected under ‘Agriculture’ all
except one were working at the time of enquiry. The key indicators of the
working units under Agriculture are presented in Table 8.6.

Table 8.6
Employment/Wages pattern of the working units in the Agricultural
sector
No. of Persons employed Wages Paid (Rs.’000)
At the
No Name of Unit Activity At the
Time of 03-04 04-05 05-06 06-07
Beginning
Enquiry
Sangam Goat Rearing Goat
1 10 5 - 34 50 40
Unit Rearing
Karthika Goat Rearing Unit Goat
2 5 4 - 11 25 20
Rearing
Sambhavana NHG, Goat
3 10 9 45 180 180 180
Venganoor (Goat Rearing) Rearing
Sangamam NHG, Uchakada Goat
4 12 12 15 60 60 60
(Goat Rearing) Rearing
Prabodino Rabbit Rearing Rabbit
5 10 5 - - 11 25
Unit Rearing
6 Kamadhenu Dairy Unit Dairy 12 14 - 72 266 266
Nandini Dairy
7 Dairy 10 12 - 84 251 251
Unit
Archana Dairy Unit,
8 Dairy 14 14 - 336 336 336
Venganoor
Sunandhini Dairy
9 Dairy 10 9 45 180 180 180
Unit
Total 93 84 - - - -

95
 Table 8.6 shows that among the units studied, goat-rearing and rabbit-
rearing are the least remunerative, since these units could not afford to pay a daily
wage of more than Rs.20 for its members, a wage rate far below the subsistence
level. But in the case of dairy units, the remunerative nature of their enterprise is
reflected in the wages obtained by their members which ranged from Rs.25 to 80
per day. Unlike in other units, this persuaded the organisers of these enterprises
to remain in business. Some economic indicators of the performance of the
enterprises under agriculture sector are presented in Table 8.7.

Table 8.7
Select Economic indicators of Agriculture – Based Enterprises
Gross Net Value Wages
Total Total Profit/ Profit per
Value added per per
No Name of Unit Input Output Loss worker
Added worker Worker
(Rs.’000) (Rs.’000) (Rs.’000) (Rs.)
(Rs.’000) (Rs) (Rs.)
Sangam Goat
1 398 415 17 158 14,220 12,400 (-)1700
Rearing Unit
Karthika Goat
2 188 189 1 64 11,520 11,600 200
Rearing Unit
Sambhavana NHG,
3 976 1011 35 233 19,064 16,818 3182
Goat Rearing
Sangamam NHG,
4 1169 1213 44 275 20,625 16,250 3666
Goat Rearing
Prabodhini Rabbit
5 80 68 (-)12 29 2,610 3,600 (-)1200
Rearing Unit
Kamadhenu Dairy
6 2157 2333 176 825 53,036 43,143 12,571
Unit
Nandini Dairy
7 2033 2181 148 777 58,275 48,833 12,330
Unit
Archana Dairy
8 3074 3264 190 1265 81,321 72,000 13,571
Unit, Venganoor
Sunandhini Dairy
9 2206 2378 172 823 74,070 58,500 17,200
Unit
Note: Value added is estimated by deducting the total value of all inputs, except wages, rent and
interest from the total value of output. Net value added is arrived at by deducting depreciation.

8.6.2 Goat-rearing and rabbit-rearing in general are found to be unremunerative,

since wages paid and net value added per worker are low. Profit per
worker is also low and there is substantial losses in the two cases. Dairy
units are functioning relatively better, since their net value added and profit
per worker are comparatively higher for these units. Also, in the case of
dairy units, the difference between net value added per worker and wages
per worker is higher. This signifies that the performance of these units are
better than others. The performance indicators of these enterprises given in
Table 8.8 provide more insights into their working.

96
 Table 8.8
Performance Indicators of units under agriculture
Gross Net value Profit per
Fixed Capital Wages/ Gross
Input/ added per Fixed
Units Per employee Value added
No. Output employee Capital
(Rs) %
% (Rs) %
1 Sangam Goat Rearing Unit 96 8,500 78 14,200 20.0
Karthika Goat Rearing
2 99 8,600 87 11,520 2.3
Unit
Sambhavana NHG,
3 96 16,545 71 19,064 19.2
Venganoor
Sangamam NHG,
4 96 16,500 71 20,625 22.2
Uchakada (Goat Rearing)
Prabodhini Rabbit Rearing
5 117 5,500 124 2,610 (-)21.8
Unit
6 Kamadhenu Dairy Unit 92 24,857 73 53,035 50.6
7 Nandini Dairy Unit 93 24,166 75 58,275 51.0
Archana Dairy Unit,
8 94 29,000 79 81,321 46.8
Venganoor
9 Sunandhini Dairy Unit 93 27,100 71 74,070 63.5
[See the Appendix 8A for details]

8.6.3 All the indicators given in Table 8.8 have direct relevance to the nature of
functioning of an enterprise. The rate of profit is low in general for the
units falling under the agricultural sector. It is very difficult to consider
these units as providing adequate livelihood sustenance. The input-output
ratio ranges from 92 (more or less the same for all the dairy units) to 117. In
the case of Rabbit rearing units, the value of input far exceeds the value of
output and do not generate any surplus. Ratio of wages to value added is
also high (around 80%) in most of the cases, which signifies that other
factors of production are not getting adequate returns. When profit as a
percentage of fixed capital is considered, rabbit rearing is a loss making
venture while goat rearing units make only nominal profits. But the profits
to fixed capital ratio is high for dairy units, the percentage ranged from 50
to 64.

8.7. Units under the Industrial Sector:

8.7.1 Working units under industrial sector can be classified into four categories
viz. paper-bag-making, readymade garments, handloom units and nutrimix
production enterprises. The basic details relating to these enterprises are
furnished in Table 8.9.

97
 Table 8.9
Micro Enterprises under Industrial Sector
No. of Persons Wages Paid (Rs.’000)
At the

Total
03-04

04-05

05-06

06-07
No Name of Unit Activity At the
Time of
Beginning
Enquiry
Paper Bag
1 Pioneer Paper Bag Unit 13 7 108 105 74 84 371
Manufacture
Thiruvonam Ready - Readymade
2 10 8 45 180 180 144 549
made Garments Dress
Sree Devi Handloom
3 Handloom 10 10 - 45 180 180 405
Unit
Thejas Handloom
4 Handloom 10 10 - 50 198 198 446
Unit
Winner Nutrimix Unit Nutrimix
5 5 4 - - 20 54 74
(Baby Food) Manufacture
Thanima Nutrimix Nutrimix
6 5 5 - - 20 68 88
Unit (Baby Food) Manufacturer
56 45 - - - - -

Table 8.9 shows that except in the handloom units, employment had
declined. It can be seen that wages obtained by the organising members differ
from one category to another and also from year to year. The paper bag unit
started in 2004 with 13 workers could get a daily wage of Rs.30 but gradually
owing to lack of demand for the product, the organising members one by one left
the business and the wages earned also had fallen. The garment-making unit also
started in 2004, is engaged in embroidery works and reckoned in terms of
performance indicators are functioning satisfactorily. The working partners’
engaged in this business could get a daily wage in the range of Rs. 40 to 50. The
two handloom units started in the middle of 2004-05 are also making profits.
Though wages obtained by the partners (10 members) in the initial year was too
low (about Rs.15/- per day), they could get an average daily wage of around Rs.60
in the last two years owing to increase in larger turn over of business. The
organisers reported that though a yarn bank was functioning in the panchayat
area, they could not utilise its services, since it was not fully operational. Each
nutrimix unit making nutritive products is managed by a group of 5 women.
Started on a modest scale in 2005, they still continue without much progress.
Though the wages obtained by the partners were low in the initial year, at the time
of enquiry, both the units could pay average daily wage rate in the range of Rs.50
to Rs.60. At the time of interview, the organisers of both the units complained
that they had no adequate space to run the business and wanted the panchayat
to provide this basic requirement. They further informed that they were not
getting sufficient order from the social welfare department, which would have
improved their business considerably. (Details of the working of these units
are given in Table 8.10).
98
 Table 8.10
Important Indicators of enterprises in the Industry Sector
Net Value Wages Profit
Total Total Profit/ Value
added per per per
No Name of Unit Input Output Loss Added
worker Worker worker
(Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000)
(Rs.) (Rs.) (Rs.)
1 Pioneer Paper Bag Unit 1060 1095 35 485 33,577 28,538 2692
Thiruvonam Readymade 4000
2 1677 1717 40 616 55,440 54,900
Garments
3 Sree Devi Handloom Unit 1980 2025 45 468 42,120 40,500 4500
4 Thejas Handloom Unit 2112 2170 58 522 46,980 44,600 5800
5 Winner Nutrimix Unit 415 458 43 145 26,100 14,800 8600
6 Thanima Nutrimix Unit 429 458 29 145 26,100 17,600 5800

8.7.2 In general all the six units working under industries sector are earning
profits although not to the extent desired. In the case of all units, the value
added per worker is only marginally high when compared to wages per
worker, indicating a low rate of return. This is the case with all the
enterprises, except perhaps the nutrimix units whose performance are
relatively better. They have immense potential to expand business
provided panchayats take proper initiative to buy these projects for the
use of Anganwadies located within the jurisdiction of each panchayat.
The detailed working of these six enterprises is analysed in Table 8.11:

Table 8.11
Performance indicators of the enterprises in the Industrial Sector
Fixed Wages/ Profit as
Gross Net Value
Capital Gross % of
Input/ added as
No Units Per Value Fixed
Output % of fixed
employee added Capital
% Capital
(Rs) % %
1 Pioneer Paper Bag Unit 96 2,307 76 1455 116.6
Thiruvonam Ready -
2 98 4,000 89 1,386 100.0
made Garments
Sree Devi Handloom
3 97 19,000 86 222 23.7
Unit
4 Thejas Handloom Unit 97 19,000 85 247 30.5
5 Winner Nutrimix Unit 90 10,000 51 261 86.0
6 Thanima Nutrimix Unit 93 10,000 61 261 58.0
[See Appendix 8B for details]

8.7.3 The indicators given in 8.11 reflect the performance of these six enterprises.
On the whole the rate of return is far below a reasonable minimum. Input-
output ratio is abnormally high in all cases, nutrimix units being the
prominent exception. Their capital efficiency is high because the net value

99
 added per worker per fixed capital is high. They are labour-intensive as the
fixed capital investment per worker ranges only from Rs.2,307 in the paper
bag units to Rs.19,000 in the handloom unit.

8.8 Units under Services Sector:

8.8.1 Out of the 8 units selected under service sector, 6 were working and two
were non functional. Among the six working units, one was a computer
training centre, two were engaged in the supply of provisions, two were
catering units and one a clinical laboratory. The latter is an individual
venture, though subsequently two other members also joined. Some basic
indicators of the six units are given in Table 8.12.

Table 8.12
Basic Indicators of the Working Units under Service Sector
No. of Persons Wages Paid (Rs.’000)
At the
No Name of Unit Activity At the
Time of 03-04 04-05 05-06 06-07
Beginning
Enquiry
Techno Universe Computer
1 10 6 75 108 99 108
Computer services Training
Sri Lakshmi Provision Supply of
2 10 5 - 84 72 72
Stores Provision
Aiswarya Direct Supply of
3 5 4 - 22 24 25
Marketing Unit Provision
Thripthy Catering unit Catering
4 10 8 25 150 134 134
in C-Dit Service
Catering
5 Devi Catering Unit 5 4 14 24 24 25
Service
Devi Clinical
6 Clinical Lab 1 3 - 14 54 54
Laboratory
41 30 - - - -

All the service units, except those who left for want of sufficient return,
manage to survive with nominal profit. Regarding wages obtained, the computer
unit though started with low returns could pick up later and now earning an
average daily wage of Rs.50. But in the case of two provision stores, the income
earned were below subsistence level, which ranges between Rs. 16 to 30 per day.
Out of the two catering services, one functioning in C-Dit Complex is performing
well, and the partners could get an average daily earnings above Rs.50. The other
catering service is not functioning satisfactorily since the earnings obtained by the
members are far below the subsistence level, around Rs.20 per day only. The
clinical laboratory unit is functioning well and though it started as an individual
enterprise could attract two more working members and all of them are earning a

100
 daily wage of Rs.60 and above. Some basic data regarding the working of the
above six enterprises are provided in Table 8.13.

Table 8.13
Basic Data on the Working of the Enterprises under Service Sector
Gross Net Value Wages Profit
Total Total Profit/
value added per per per
No Name of Unit Input Output Loss
Added worker Worker worker
(Rs.’000) (Rs.’000) (Rs.’000)
(Rs.’000) (Rs.) (Rs.) (Rs.)
Techno Universe
1 881 902 21 505 45,450 39,000 2100
Computer services
Sri Lakshmi Provision
2 1558 1585 27 318 28,620 22,800 2700
Stores
Aiswarya Direct
3 494 508 14 112 20,160 14,200 2800
Marketing Unit
Thripthy Catering unit in
4 2132 2168 36 486 48,600 44,300 3600
C-Dit
5 Devi Catering Unit 709 732 23 139 25,020 17,400 4600
6 Devi Clinical Laboratory 243 280 37 185 55,500 40,666 12,330

8.8.2 The most remunerative enterprise as per the data shown in Table 8.13 is the
clinical laboratory, where profit and net value added per worker are
comparatively high. Aiswarya direct marketing service is the least
remunerative business since profit and net value added per worker are the
lowest. Other enterprises lie in between, where profit ranged between Rs.
23,000 and Rs.36,000 per annum. Judged by the difference between net
value added per worker) and wages per worker, (as reflected in the highest
profit per worker) the most remunerative is the clinical laboratory. Judged
by the same criterion, the performance of other enterprises is also
comparatively good. A deeper insight into the working of the above units
can be obtained from the performance indicators presented in Table 8.14

Table 8.14
Performance Indicators of the units under Service Sector
Gross Input/ Fixed Capital Wages/ Gross Profit
Units Gross Per employee Value added per fixed
No.
Output % (Rs) % capital %
1 Techno Universe Computer services 97 19,000 77 11.1
2 Sri Lakshmi Provision Stores 98 3,500 72 77.1
3 Aiswarya Direct Marketing Unit 97 6,000 63 46.7
4 Thripthy Catering unit in C-Dit 98 4,800 91 75.0
5 Devi Catering Unit 97 8,400 62 54.7
6 Devi Clinical Laboratory 87 13,300 66 92.5
[See Appendix 8 C for details]

101
8.8.3 Gross input to output ratio is high for all enterprises which shows of the
low profit obtained. For the computer and clinical laboratory units fixed
capital per employee ranges from 13,000to Rs.19,000. Wages constitute
more than 60 per cent of the gross value added in the case of all enterprises,
which is indicative of the low share obtained by other factors of production.
Profit as a percentage of fixed capital is very low in the case of Techno
Computer Services, since this unit has a very high capital investment. For
other units, this ratio varies from 46 to 92, depending on the profit and the
capital intensity of the project. It is the clinical laboratory unit that fetches
the highest return per fixed capital.

8.9 Analysis of closed units

8.9.1 As part of the case study, an analysis of the working of the closed units (9
nos.) in the sample have also been attempted to identify the problems that
led to the closure. This is presented in detail in Appendix 8 D. Absence of
good market for the products made, stiff competition from branded items,
inadequate earnings, lack of managerial capabilities and absence of
teamwork were the main reasons for poor performance.

8.10 Lease Land Farming

8.10.1 Lease land farming popularly called ‘Harithasree’ is another fascinating
activity launched by KDS Mission which is now generally considered as
beneficial both to the landless poor women of NH Groups as well as to land
owners who are not interested in farming especially in paddy cultivation.
When paddy cultivation is fast becoming a non-remunerative activity,
Kudumbashree found this as an opportunity for its members to intervene
and energise this traditional farming activity. Lease land farming which
was initiated during 2002-03 has now grown to the status of a micro
enterprise which at present covers 820 gram panchayats. So far 31710
NHGs consisting of 307960 families had participated in the programme and
more than 52873 acres of land had been brought under cultivation. The
cultivation is done by non-owner labourers. Thus it is a great step forward
in realising the long standing slogan of ‘land to the tiller’ through this
indirect route because the land reform legislation of 1970 has given
ownership rights to the former tenants and not to the real tillers. The
district-wise details of lease land farming undertaken through NHGs are
presented in Table 8.15. In terms of area covered and families covered the
land-hungry Alappuzha district tops the list. It is significant that over 3
lakh families are covered as part of this project.

102
 Table 8.15
District wise details of lease land farming as on January 31, 2007
No. of NHGs No. of families Area cultivated (in
No. District
covered involved acres)
1 Trivandrum 2019 21159 2486.52
2 Kollam 1304 4922 2627.65
3 Pathanamthitta 1126 11344 1670.00
4 Alappuzha 6382 86004 11239.78
5 Kottayam 985 10006 1762.15
6 Idukki 6759 61103 8314.00
7 Ernakulam 2391 27950 5194.42
8 Thrissur 298 2710 388.00
9 Palakkad 2518 17726 3914.81
10 Malappuram 2021 11359 2870.00
11 Kozhikode 2044 12877 2850.00
12 Wayanad 734 10202 6849.00
13 Kannur 2088 23009 2233.20
14 Kasargode 1041 7589 473.65
Total 31710 307960 52873.18

8.10.2 As part of our study of Venganoor Panchayat we made a case study of two
leased land farms also.

8.10.3 In Venganoor Panchayat lease-land farming is undertaken in 65 acres, by 40

neighbourhood groups involving 500 families. The crops selected for
cultivation in these farms were vegetables (25 acres), plantain (30 acres) and
tapioca (10 acres). Because of time and resource constraints, the detailed
analysis is confined to two NHGs only which had undertaken this activity.
[For details see Appendix 8 E].

8.10.4 In the two NHGs studied, the area under cultivation was 100 cents each. In
the first NHG, only plantain and banana were cultivated, while in the
second NHG farm banana, plantain, vegetable and tapioca were grown.
Data were collected for three year’s prior to the date of enquiry, viz. 2003-
04, 2004-05 and 2005-06. The details regarding the performance of the two
NHGs in the implementation of this programme are given in Appendix 8 E.
The data indicate that 2003-04 was a drought affected year and hence all the
farming activities of the two selected NHGs ended in a net loss, which
varied between Rs.530/- and Rs.1,350/- per year. In the second and third
years, the receipts as well as profits of the two NHGs exhibited a steady
increase including the net return per member of the group (including
wages). If we do not cost the value of own labour the profit margin may be
higher. We have put the imputed value of own consumption at a

103
 conservative rate. The annual rate of return per person in absolute terms
may not be very high. Even so lease land farming as a means of livelihood
is a good supplementary income. The maximum annual return which a
member received in the first group was Rs.3369/- and in the second group
Rs.2600. This amount when worked out to monthly earnings is far below
subsistence level. One of the limitations of this venture as revealed from
the case study is that the availability of land for lease land farming is
limited in our state, the possibility of extending this activity on a larger
scale is not high. Secondly this being a very small scale activity, the
neighbourhood groups should be protected by some insurance cover
against drought or crop failure. The conclusion one can make is that this
venture can at best be considered as a source of supplementary income to
participating families and not as a primary means of livelihood except in
districts like Wayanad where large sized holdings could be made available.

8.11 Viability of KDS Micro enterprises: More evidences:

8.11.1 An important shortcoming of KDS micro enterprises is that many go sick or

are not sustainable. At least this was what we noted in the Venganoor
Panchayat. In Table 8.16 we present more evidences which cover 393
randomly selected micro enterprise units spread over the districts of
Thiruvananthapuram, Kollam, Malappuram, Palakkad and Wayanad. That
35 per cent of these units seem to be unsustainable does not tell a promising
story regarding the future of these enterprises. That 80 per cent of the
traditional industry sector comprising dry flower-making, ornamental
fisheries and handicrafts made by Adivasis are above the break even point
is an encouraging sign. Out of the 257 cost efficient units in the Table (See
Table 8.16), 137 units are agriculture-related (including food processing).
Nearly one third are not cost efficient. The costing in Table 8.16 (unlike in
the Venganoor case study) does not include the imputed value of own
labour or the benefits accruing to members due to own consumption as in
the case of lease land farming (in Wayanad 5 acre and 10 acre plots are
typical size) where vegetables, rice, egg, milk, meat (of own goat, rabbit,
chicken etc) which the family consumes. In such cases the viability
numbers could be higher. Probably economic viability can improve if you
choose relatively modern products with improved technology (e.g. See
rubber products, and chemical products in Table 8.16.

104
 Table 8.16
Distribution of Micro Enterprises by type of product/services and cost
efficiency
Cost Efficient Non-
No Change Total
Item (Break even Breakeven
No % No % No % No %
Food Processing 54 68.35 23 29.11 2 2.53 79 100.00
Agriculture Sector 83 68.60 38 31.40 0 0.00 121 100.00
Service Sector 45 54.88 33 40.24 4 4.88 82 100.00
Marine Products 2 50.00 2 50.00 0 0.00 4 100.00
Paper Products 11 61.11 6 33.33 1 5.56 18 100.00
Rubber Products 2 100.00 0 0.00 0 0.00 2 100.00
Traditional Industry 8 80.00 2 20.00 0 0.00 10 100.00
Garment Unit 15 62.50 7 29.17 2 8.33 24 100.00
Chemical Industry 17 80.95 4 19.05 0 0.00 21 100.00
Assembling Unit 1 50.00 1 50.00 0 0.00 2 100.00
Handicrafts 12 63.16 6 31.58 1 5.26 19 100.00
Leather Products 7 63.64 4 36.36 0 0.00 11 100.00
Total 257 65.39 126 32.06 10 2.54 393 100.00
Source: Data provided by Dr.Mary George who collected the data as part of her
project on Technological sustainability of Women enterprises under Kudumbashree

Note: Breakeven is the point which equilibrates total cost and total revenue. All
units above this point are treated as cost efficient although the range in return may
vary very widely

8.12 Views and suggestions of the organisers of the Micro Enterprises

8.12.1 It is always good and certainly important to know the views of the
organisers of the micro enterprises. We asked certain question to the 30
Kudumbashree, entrepreneurs of Venganoor Panchayat we studied. They
were asked to narrate the problems they faced and their suggestions for
improvement. The problems mentioned by them are categorised under five
heads: viz. (i) Non- availability of assured market (ii) Competition from
branded products (iii) Non availability of raw material (iv) Non availability
of working capital and (v) other reasons like non availability of power, cost
of raw materials, labour problems etc. Their views on different aspects of
running the business were also recorded.

105
 Table 8.17
Problems & Suggestions reported by Micro Entrepreneurs
No. of Entrepreneurs reporting
I. Problem
Affected business Not Affected
(i) Non Availability of Assured market 16 14
(ii) Competition from branded products 8 22
(iii) Non Availability/difficulty in getting
17 13
raw material at concession rates
(iv) Non Availability of Working Capital 16 14
(v) Other problems (Power, cost of raw
5 25
materials, labour problems etc.

II Views and Suggestions

(i) Help from Kudumbashree
No Help 12 –(40%)
Received Help 18 (60%)
(ii) Training received from KDS
Yes 27 (90%)
No 3 (10%)
(iii) (a) Experience in getting Assistance
Timely – Yes 25 (84%)
No 5 (16%)
Adequate – Yes 28 (93%)
No 2 (7%)
(b) Repayment Schedule
Easy 26 (87%)
Not Easy 4 (13%)
(iv) Empowerment
(a) Development of business skill Yes 26 (87%)
No 4 (13%)
(b) Economic Empowerment Yes 17 (57%)
No 13 (43%)
(c) Social Empowerment Yes 27 (90%)
No 3 (10%)
(v) Improvement in standard of living
Yes 18 (60%)
No 12 (40%)

8.12.2 The organisers’/entrepreneurs’ views regarding the important problems

are mixed, mainly depending on the nature of their business. Non
availability of assured market, though an important problem, nearly 50 per
cent of the micro enterprise leaders did not ‘mention’ it as an issue.
Competition from branded products also is not an important concern for
most of them. Non-availability of raw materials at concessional rates and
lack of working capital seem to be important issues. Being tiny enterprises

106
 labour problems and non-availability of power are not serious issues
concerning them.
8.12.3 Regarding views and suggestions, the feedback we received from the
organisers are summarised below: [See Table 8.17].

Nearly 40 per cent of the organisers expressed the view that they
were not getting any support from KDS mission except subsidy.
However it is very significant that 90 per cent got some training from
the Mission. But they were not sure as to whether they matched
their specific needs.

The financial assistance received was reported to be timely and

adequate for a large majority.

Shortage of working capital was a major problem.

Regarding empowerment, majority of the organisers reported social

empowerment and economic empowerment. Nearly 60 per cent of
the entrepreneurs’ reported improvement in their standard of living.

Some recommendations based on their suggestions are presented below:

♦ Majority of the organisers of micro enterprises start the units because of the
need to earn a livelihood. Unless backed up by tremendous fostering care
such enterprises bear within themselves the seeds of their own failure.
Before sanctioning an enterprise and releasing subsidy, it is suggested that
the general back ground of the organisers and their capacity to undertake a
particular enterprise should be evaluated by the Mission. Also, the
feasibility of a particular unit in a locality has also to be studied in detail
before sanction is issued. A feasibility study cell managed by qualified
personnel should be set up at district or state level for undertaking this
job.

♦ Before actual execution of the project, the selected entrepreneurs should be

given in-depth training in different aspects of undertaking a business
enterprise. Training should also be focussed on the accounting practices to
be followed in a business concern. The maintenance of accounts should be
periodically monitored to give corrective guidelines.

♦ Though marketing the product is primarily the responsibility of the

organisers, most of the tiny micro enterprise organisers do not have the
skill or finance to undertake the publicity and propaganda necessary to
market their products. Hence the Kudumbashree Mission should
undertake the responsibility of organising common marketing strategies for

107
 units registered under them and producing a variety of products. This can
be envisaged as a centralised co-operative set up with branches in different
districts and sub-units under them. This comprehensive marketing chain
(similar to that established under AMUL in Gujarat) should be carefully
planned and established under the supervision and control of KDS Mission.
This co-operative set up should also undertake to buy the products
produced by micro enterprises giving them cash on the spot. This
arrangement, if effectively implemented, will be helpful to micro
entrepreneurs in solving their problem of shortage of working capital.

♦ The KDS mission when sanctioning group enterprises should examine

whether the number constituting the group can get effective employment
from this venture. The case studies clearly show that the partners
constituting a group gradually leaving business after one or two years
mainly because of inadequate return and lack of opportunity for work for
all the partners. This happens in more than 50 per cent of the cases studied.
This can be avoided if sufficient precaution is taken while sanctioning the
enterprises by KDS mission.

♦ The partners of nearly 50 per cent of the micro enterprises studied at

Venganoor panchayat could get only the subsistence level income from the
enterprises. This is mainly because of (a) the low turnover of the enterprise
and (b) more than the optimum number of persons involved who can be
accommodated by the enterprise. The second point has to be safe guarded
by the KDS Mission while sanctioning an enterprise.

♦ The purchase of machinery and equipments necessary for the enterprises

is at present arranged by the KDS Mission. But in the course of
interview, majority of the ‘entrepreneurs’ explained that the machinery
acquired by them is either of low quality or not appropriate for their
purpose. This ultimately resulted in heavy loss to the organisers. KDS
Mission may do well to avoid such problems.

♦ In the course of interaction, the entrepreneurs complained that the repayment

schedule now fixed by the banks is based upon both loan and subsidy with the
result that they are bearing a higher instalment amount. This is a questionable
practice on the part of banks which should be immediately looked into by the KDS
Mission. Out of 30 entrepreneurs interviewed, 21 or 70 per cent reported good co-
operation from the banks in sanctioning loan while 9 of them held a different view.

♦ A major unhealthy trend we noticed (Group Enterprises)is the difference of

opinion among the partners and lack of collective effort to run the business.
Lack of team work is a dangerous tendency which ultimately ruins the
entire business. This tendency resulted in (i) the exit of 50 per cent of the

108
 partners within a period of 2 years of starting the business and (b) delay or
even stoppage of repayment of bank loan availed. This unhealthy
development can be prevented by effective monitoring and supervision on
the part of the Kudumbashree functionaries.

♦ It is understood that there is no effective follow up or monitoring of the

working of micro enterprises under the Mission. Though there is a charge
officer in every panchayat looking after Kudumbashree activities, he/she is
not aware of the progress of work of these enterprises. The details
regarding the enterprises which have availed bank loan and subsidy are not
systematically kept or even available with the charge officer in the majority
of the panchayats. Most of the entrepreneurs selected for case study
reported that they were not getting any technical support from the Mission
except perhaps some orientation training at the beginning which is too
inadequate to run any business venture. It is suggested that a full-fledged
monitoring machinery should be established under KDS Mission to
undertake this task.

♦ From the case study, it is found that nearly 35 per cent of the micro
enterprises registered are either closed down or non-functional. It is
surprising that there is no revival plan for these failing units. A revival
package has also to be thought of and implemented wherever necessary.

109
 Appendix 8 A: Performance Indicators – Agriculture Sector Units (Rs. in ‘000)
No of
Investment Fixed Capital wage Material input
workers

Working
Subsidy

Capital
Sl.

Machiner
Plant and
Land and
beginnin

building
present

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07
Sectors & units

At the

Loans

Input
Total

Total

Total
Own
fund
No

At
g

y
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Agriculture Working
Sangamam Goat
1 Rearing Unit 10 8 5 70 30 5 80 85 0 34 50 40 124 20 0 67 100 80 247
Nedinjal
Karthika Goat
2 Rearing Unit 5 4 5 35 15 3 40 43 0 11 25 20 56 10 0 23 55 44 122
Karikuzhi Venganur
Samabhavana NHG
Goat rearing
3 11 11 11 127 62 55 127 182 0 55 55 55 165 34 0 240 252 265 757
Uchakkada
Venganoor
Sangamam NHG
4 Goat rearing Ward 12 12 12 128 67 60 138 198 15 60 60 60 195 36 87 262 275 289 913
No XII, Uchakkasda.
Probodhini Rabbit
5 10 5 5 65 75 35 20 55 0 0 11 25 36 60 0 0 11 28 39
rearing unit Azhakulam
6 Kamadhenu Dairy Unit 12 14 20 214 90 60 288 348 0 72 266 266 604 42 0 210 630 650 1490
7 Nandini Dairy Unit 10 12 17 198 75 50 240 290 0 84 251 251 586 35 0 197 590 600 1387
Archana Dairy Unit,
8 14 14 23 336 100 70 336 406 0 336 336 336 1008 49 0 657 660 665 1982
Venganoor.
Sunandhini Dairy
9 Unit, chavadinada 10 9 16 241 75 50 221 271 45 180 180 180 585 30 118 470 470 470 1528
Venganoor.

(Cont...............)

110
 Gross

Profit per worker

Interest and others input Total input Output Profit Value

Year of starting
added

Interest
(in Rs)

Rent
Sl.

Total output
Sectors & units

+interest+
(Out put -
No

(Profit +
2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

Wages
Input)

Rent)
Total

Total
1 2 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Agriculture Working
1 Sangamam Goat Nov-
0 7 10 10 27 0 108 160 130 398 0 112 168 135 415 17 158 1700 17
Rearing Unit Nedinjal 04
2 Karthika Goat Rearing
Nov-
Unit Karikuzhi 0 2 4 4 10 0 36 84 68 188 0 36 85 68 189 1 64 200 7
04
Venganur
3 Samabhavana NHG
Mar-
Goat rearing 0 17 18 19 54 0 312 325 339 976 0 322 335 354 1011 35 233 3182 33
04
Uchakkada Venganoor
4 Sangamam NHG Goat
Jan-
rearing Ward No XII, 4 18 19 20 61 106 340 354 369 1169 111 352 365 385 1213 44 275 3666 36
04
Uchakkasda.
5 Probodhini Rabbit
Nov-
rearing unit 0 0 2 3 5 0 0 24 56 80 0 0 18 50 68 -12 29 (-)1200 5
05
Azhakulam
6 Kamadhenu Dairy Dec-
0 11 25 27 63 0 293 921 943 2157 0 310 1008 1015 2333 176 825 12571 45
Unit 04
7 Nandini Dairy Unit Dec-
0 11 24 25 60 0 292 865 876 2033 0 311 935 935 2181 148 777 12330 43
04
8 Archana Dairy Unit, Mar-
0 10 36 38 84 0 1003 1032 1039 3074 0 1078 1092 1094 3264 190 1265 13571 67
Venganoor. 04
9 Sunandhini Dairy
Jan-
Unit,chavadinada 8 27 28 30 93 171 677 678 680 2206 181 725 732 740 2378 172 823 17200 66
04
Venganoor.

111
 Appendix 8 B: Performance Indicators – Industrial Sector Units (Rs. in ‘000)
No of

Working Capital
Investment Fixed Capital wage Material input
workers

Subsidy
Sl

Total Input
Machinery
At present
beginning

Own fund
Sectors & units

Plant and
Land and
building

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07
At the

Loans

Total

Total
No

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
1 Pioneer Papper Bag
Unit, Vellar 13 7 13 100 100 0 30 30 108 105 74 84 371 60 140 130 120 140 530
Kovalam
2 Thiruvonam
readymade
10 8 5 100 100 0 40 40 45 180 180 144 549 85 83 332 332 340 1087
Garments
Kalluvettankuzhi
3 Sree Devi
Handloom Unit 10 10 10 90 100 60 130 190 0 45 180 180 405 50 0 170 680 680 1530
Mangalathukonam
4 Thajas Handloom
unit 10 10 10 90 100 60 130 190 0 50 198 198 446 36 0 180 720 720 1620
Mangalathukonam
5 Winner Nutrimix
5 4 10 45 50 0 50 50 0 0 20 54 74 37 0 0 68 243 311
unit, Chavadinada
6 Thanima Nutrimix
5 5 10 45 50 0 50 50 0 0 20 68 88 37 0 0 68 243 311
unit , Nellivela

(Contd...............)

112
 Non Material input Gross

Profit per worker

(Interest and others Total input Output Profit Value
inputs) added

(Rs)
Total output

interest+ Rent)
Sectors & units

(Out put -
Sl

starting

Interest
2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

Year of
Wages +
(Profit +
Input)
Total

Total

Rent
No

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41
Pioneer Papper
1 Bag Unit, Vellar 45 42 36 36 159 293 277 230 260 1060 300 285 240 270 1095 35 485 2692 Jan-03 27 52
Kovalam
Thiruvonam
readymade
2 3 13 15 10 41 131 525 527 494 1677 135 532 540 510 1717 40 616 4000 Jan-04 27
Garments
Kalluvettankuzhi
Sree Devi
3 Handloom Unit 0 4 20 21 45 0 219 880 881 1980 0 225 900 900 2025 45 468 4500 Jan-04 18
Mangalathukonam
Thajas Handloom
Nov-
4 unit 0 4 20 22 46 0 234 938 940 2112 0 240 965 965 2170 58 522 5800
04
18
Mangalathukonam
Winner Nutrimix
5 unit , 0 0 6 24 30 0 0 94 321 415 0 0 98 360 458 43 145 8600 Jan-06 13 15
Chavadinada
Thanima Nutrimix
6 0 0 6 24 30 0 0 94 335 429 0 0 98 360 458 29 145 5800 Jan-06 13 15
unit , Nellivela

113
 Appendix 8 C: Performance Indicators – Service Sector Units (Rs. in ‘000)
No. of
Investment Fixed Capital Wage Material input
Workers

Working Capital
Land and building
Subsidy
At the beginning

Total Input
Sectors & units

Machinery
At present

Own fund
Sl

Plant and

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07
Loans

Total

Total
No

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Services working
1 Techno Universe
Computer unit 10 6 14 143 100 0 190 190 75 108 99 108 390 47 15 36 42 38 131
Azhakulam.
2 Sreelekshmi
Provision Store 10 5 10 139 100 0 35 35 0 84 72 72 228 122 0 350 450 450 1250
Muttakkad
3 Aiswariya Direct
marketing unit 5 4 5 50 50 0 30 30 0 22 24 25 71 57 0 120 130 137 387
Chavadinada
4 Thripthy Catering
Unit C-Dit
10 8 15 48 0 0 48 48 25 150 134 134 443 14 89 531 506 506 1632
compound
Thiruvallam.
5 Devi catering unit
Chavadinada 5 4 15 50 50 0 42 42 14 24 24 25 87 0 92 158 158 165 573
Venganoor
Devi Clinical
Laboratory, 1 3 3 40 8 0 40 40 0 14 54 54 122 25 0 9 33 35 77
6 Vezhinjam
(Contd...........)

114
 Non material Inputs Gross
(Interest and others Total input Output Profit Value

Profit per labour

input) added

(Profit + Wages

Year of starting
Total output

+ interest +
Sl Sectors & units

(Out put -

Interest
2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07
No

Input)

Rent)
Total

Total

Rent
1 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41
Services working
1 Techno Universe
Nov-
Computer unit 15 37 277 31 360 105 181 418 177 881 109 188 420 185 902 21 505 2100 36 58
03
Azhakulam.
2 Sreelekshmi
Provision Store 0 18 30 32 80 0 452 552 554 1558 0 456 562 567 1585 27 318 2700
Sep-
32 31
Muttakkad 04

3 Aiswariya Direct
May-
marketing unit 0 12 12 12 36 0 154 166 174 494 0 160 168 180 508 14 112 2800 15 12
04
Chavadinada
4 Thripthy Catering
Unit C-Dit Feb-
6 19 15 17 57 120 700 655 657 2132 125 712 664 667 2168 36 486 3600 04
7 0
compound
Thiruvallam.
5 Devi catering unit
Sep-
Chavadinada 16 11 12 10 49 122 193 194 200 709 126 198 200 208 732 23 139 4600 03
18 11
Venganur
6 Devi Clinical
Jan-
Laboratory, 0 5 19 20 44 0 28 106 109 243 0 30 122 128 280 37 185 12330 11 15
05
Vezhinjam

115
 Appendix 8 D Performance Indicators – Closed Units (Sector-Wise) (Rs. in ‘000)
Investment Fixed Capital Wage Total input

Total wages

Employees

Working
Subsidy

Capital
(Actual)

Total Input
Machinery
Own fund

No of
Plant and
building
Land &

2003-04

2004-05

2005-06

2006-07

2003-04

2004-05

2005-06

2006-07
Loans

Total
Sectors & units

Agriculture
Aiswariyapoornima
Herbal and general
10 65 100 0 20 20 40 79 0 0 119 11 0 83 112 0 0 195
Nursery Thozhickal
KOVALAM
Industries
Aiswariya
Kerashree Unit 13 134 116 0 145 145 54 108 108 15 285 9 52 518 980 1030 150 2678
Kattachalkuzhi
Prakrithy Kerashree
13 140 108 0 143 143 30 60 36 9 135 10 21 330 661 601 129 1721
unit Vennioor
Popular Jute center 10 50 100 0 34 34 Nil Nil 3 3 6 10 15 0 0 34 23 57
K S Road Kovalam
Classic Palm Craft
Unit K.S Road 40 0 0 10 30 40 Nil 18 32 9 59 10 8 0 24 39 13 76
Kovalam
Prakrithy Ecofriendly
10 170 100 0 98 98 Nil Nil 0 24 24 6 59 0 0 0 92 92
Products Azhakulam
Detergent
2 35 8 0 15 15 Nil 0 1 0 0 0 0 0 0
manufacturing Unit
Services
Subash Hire Service Not
Started
Brother Canteen,
10 75 100 0 140 140 Nil Nil 0 10 0 0 0 0 0
Public Office
(Contd...........)

116
 Gross

Net value added

per worker ( in

Year of closing
Year of stating
Output Profit Value
added

Interest

Rent
Rs)
+interest
(Out put

(Profit +

+ Rent )
- Input)
2003-04

2004-05

2005-06

2006-07
Sectors & units

output

Wages
Total
Agriculture
Aiswariyapoornima
Herbal and general
Nursery Thozhickal
KOVALAM 0 56 0 0 56 -149 -6 Negative Sep-03 Mar-05 12 2
Industries
Aiswariya
Kerashree Unit
Kattachalkuzhi 515 990 1042 140 2687 9 336 30240 Oct-03 Jun-06 36 6
Prakrithy Kerashree
unit Vennioor 355 660 551 128 1694 -27 150 13500 Oct-03 Jun-06 36 6
Popular Jute center
K S Road Kovalam Nil Nil 30 23 53 -4 19 1710 Dec-05 Sep-06 9 8
Classic Palm Craft
Unit K.S Road
Kovalam Nil 25 40 13 78 2 61 5490 Jun-04 Dec-06 0 0
Prakrithy Ecofriendly
Products
Azhakulam Nil Nil 0 90 90 -2 43 3870 Nov-06 Apr-07 15 6
Detergent
manufacturing Unit Nil 0 0 0 0 Nil Jan-05 Jun-06 0 0
Services
Subash Hire Service Not
started

117
 Appendix 8 E
Lease land farming - A case study of two NHGs in Venganoor Panchayat
Group Leader Rajamma Area 100 cents (Amount in Rs)
Expenses Receipts

including imput

Share /person
Crops& area

interest during

Total expenses
Imputed value

Main products

Byproducts(va

Profit/ Loss

Profit/ Loss
of own labour

Repayment of
Expenditure
Total input

loan during

Payment of
Loan taken
(purchase /

consumed

labour
Expenses

Products
Labour )

the year

the year

(Value )
(Value0
Year

Total

Total
lue)
2003-04 Bananna 50 cents,
Draught Plantain 50 cents 32500 12500 45000 15000 0 0 0 45000 18000 500 500 19000 -26000 -13500 -1350
affected
Bananna 50 cents,
Kappa vazha 40
38250 13250 51500 0 7200 1560 8760 60260 71780 2000 2500 76280 16020 29270 2927
cents, Plantain 10
2004-05 cents
Banana 50 cents,
Kappa vazha 40
46850 14000 60850 0 7200 1560 8760 69610 84300 2000 3000 89300 19690 33690 3369
cents, Plantain 10
2005-06 cents
Total 117600 39750 157350 15000 14400 3120 17520 174870 174080 4500 6000 184580 9710 49460 4946

Group Leader Lalitha Area 100 cents

2003-04 Banana 28 cents,
Draught Plantain 21 cents -
28000 12000 40000 50000 0 4500 4500 44500 25200 1000 1000 27200 -5300 -530
affected vegetable 10 cents 17300
Tapioca 40 cent
2004-05 Banana 28 cents,
Kappavazha 22
cents, vegetables 20 30000 13000 43000 0 7000 4500 11500 54500 60000 1500 3500 65000 10500 23500 2350
cents tapioca 30 cent

2005-06 Banana 28 cents,

Kappa Vazha 22
cents, vegetables 35000 14000 49000 0 10000 4000 14000 63000 69600 2000 4000 75600 12600 26600 2660
15 cents Tapioca
35 cent
Total 93000 39000 132000 50000 17000 13000 30000 162000 154800 4500 8500 167800 5800 44800 4480

118
 CHAPTER 9
AN EVALUATIVE SUMMING UP

9.1 The Kudumbashree of Kerala is more than a micro finance institution. It is

a women-based poverty alleviation project cast in a mission mode under
the leadership of local governments. Poverty reduction and women
empowerment are its major avowed goals. Built on self-help group
initiatives of women, it is an outgrowth of the UBSP of the Government of
India successfully implemented in the Alappuzha municipality in the early
90s. From a simple microfinance institution18, KDS has progressively
expanded its roles and responsibilities. Though it is still anchored on
financial intermediation, its area of operation expanded to include
community health, education, basic needs like housing, sanitation and
drinking water supply, destitute identification and rehabilitation, lease-
land farming and development of micro enterprises. In brief it is emerging
as a women’s agency as well as a delivery mechanism. The KDS model is
different from the Grameen Bank model and many of its counterparts in
India and elsewhere.

9.2 Any meaningful evaluation of a project has to be related to its objectives

and targets. This study whose detailed objectives are spelt out in chapter
one is no exception. The major objective of the KDS mission is “to eradicate
absolute poverty in ten years through concerted community action under
the leadership of local governments” by facilitating self-help groups of poor
women identified on the basis of a well-defined nine-point criteria [See
Para 1.2.2]. The nine-point criteria used to identify poor women families
have been modified subsequently. The major instruments for strategising
these objectives are thrift and credit societies and development of micro
enterprises. Through these efforts it is hoped that women empowerment
could be achieved and that it could make a sustained impact and change in
the lives of the poor. It was our task to investigate how far the major
objectives have been achieved and to offer some recommendations for
streamlining and reorienting the Mission.

9.3 For selecting the sample households we have used a multi-stage random
sampling method. Covering the three administrative regions of KDS and at
the same time spanning the three natural regions of lowlands, midlands

18Even as a micro finance institution with more than .3 per cent of the micro finance institutions of
the world, KDS occupies an important place in the microfinance map of the world.
 and highlands we have selected six districts viz. Alappuzha, Kollam,
Ernakulam, Idukki, Kannur and Wayanad. From this we have chosen at
random 54 CDS, 162 ADS, 794 NHGs and 6916 households. Of these 6519
are rural households and the rest are urban. This is a fairly good sample by
any reckoning. It was not our purpose to blow up and to make aggregate
estimates, but to obtain a fairly good account of the field realities.

9.4 On apriori grounds, the demographic and socio-economic background of

the poor households will be different from the general pattern. However,
the general notion that poor households have a larger family does not seem
to hold good in the case of the sample households. The average family size
is only 4.28 as against the census figure of 4.7. That over 7 per cent of the
sample households are degree holders and 46 per cent have schooling up to
SSLC is indicative of the high level of general literacy. The widespread
belief that the poor are generally illiterates or near literates does not seem to
be valid. The poor comprise predominantly of the backward and other
backward communities. Even so, it is significant that 37 per cent belong to
the forward communities. Poverty cuts across caste. Over 70 per cent of
those who have full time employment, and 97 per cent of the casually
employed are either self-employed or wage employed the former being the
dominant pattern. Even those members who report themselves as Above
Poverty Line (APL), (See Chapter 3 and 4) have to struggle to make both
ends meet. Much of poverty in Kerala probably remains camouflaged.

9.5 NHGs in Kerala are not a dormant lot. They are alive and kicking. The
weekly meetings are regularly held. In all the rural NHGs, above 75 per
cent attendance has been the normal pattern.

9.6 The most significant aspect of KDS over these years has been the
spectacular growth in the number of NHGs since the inauguration of their
office in mid-2000. With the growth of NHGs especially in the rural areas,
the number of poor families enrolled also naturally increased. The number
of poor families (technically identified as poor based on the 4/9 criteria) as
per official records heading towards 3.8 million in a state with over 7.2
million households. This is well over 50 per cent of total households. Based
on the 2001 census data of households the proportion of NHG households
to total households in gram panchayats ranges from 45 per cent in Kollam
district to 90 per cent in Kannur district with a state average of 63.5 per
cent. For urban areas the percentage (based on 2001 census) works out to
30. In both cases the percentages will be much less if we make allowance
for growth in the number of families during the last 5-6 years. Even so
these are exaggerated numbers and cannot be considered as reflecting
Kerala reality.

ii
9.6.1 It may not be out of place to compare the official estimates of poor based on
the NSS 61st round (2004-05) of household consumer expenditure using the
calorific norms employed by the Planning Commission. The estimates
based on 61st round data places the BPL figure at 4.79 million people or
roughly 1.02 million households and the percentage of poor works out to
13.2 per cent for rural areas and 20.6 per cent for urban areas. [See Para
3.04]. While admitting that estimates of poverty based on calorific norms
are defective (For some important criticisms, see Para 4.1.2) one can firmly
say that Kudumbashree numbers of poor families are exaggerated. We
have give more corroborative evidence based on our field investigation.

9.6.2 Technically most NHG households in Phase III should belong to the BPL
group based on the 4/9 criteria. From our interactions with NHG
members, it was clear that they were aware of the measuring criteria. Out
of the 1440 sample households that fall in Phase III set, 34.8 per cent
reported that they were APL (above poverty line). Irrespective of the
phases the overall self-evaluation of rural sample households as to whether
they belonged to APL or BPL 32.2 reported as APL families. The
corresponding urban figure was 23.4 per cent. For the urban households
which have a longer history, the APL percentage can be reasonable. The
reported proportion of APL families ranges from 11.5 per cent in the
Wayanad district (which is a tribal pocket) to as high as 60 per cent in
Idukki district (Phase III). As a sort of supplementary evidence, we have
sought the views of NHG secretaries as well. Their reports show a
percentage range of APL families from 20.5 per cent in Wayanad district to
38 per cent in Ernakulam district. Omitting two out of the nine variables
viz. SC/ST member, children below 5 years used in the original nine-point
we tried to evaluate the poverty level of the sample households and found
that only a negligible percentage fall in the BPL bracket. There has been
reported improvements in the drinking water and sanitation facilities,
employment and in the number of families taking three meals per day. [For
details See Part II of Chapter4].

9.6.3 These evidences sound somewhat strange and paradoxical. Three

inferences come out most prominently. One, the nine-point criteria were
not strictly followed. [Several secretaries reported that ward members
recommended NHG members and even initiated the formation of NHGs
without reference to the selection criteria]. Two, the traditional 9-point
criteria have been modified and no longer serves as a bench-mark for any
measure of poverty. The wide and somewhat open ended modification
of the 9-point criteria to include women-headed households, presence of
a widow, divorcee, abandoned lady, unwed mother, ‘mentally or physical

iii
 challenged person/chronically ill member in the family and so on are also
imprecise ascriptions which open wide the gate to non-poor categories.
Three, the poor who graduate as non-poor are not properly escorted out.
If all the above inferences are not valid, the pace at which the poor
becomes non-poor is unbelievably rapid. Every one knows that Kerala is
not passing through such a sweeping and dynamic transformation. Some
suggestions are given below:

9.6.4 A meaningful poverty assessment should help (a) to identify the poor
from the non-poor (b) measure the magnitude and depth of poverty over
time and space and (c) throw policy insights for reducing poverty
progressively. We have shown how the 9-point index of KDS,
particularly its modified version has been defective on this score [See
Para 4.2].

♦ There is need to evolve a poverty line measurement or an entitlement

index that will take note of the emerging ground realities of Kerala.
The Planning Commission’s measurement of poverty based on
calorific norms is at best a macro measure and is operationally
irrelevant for identifying the poor from the non-poor. The
Government may consider the report on ‘Identifying the Poor:
Working Towards an Entitlement Index’ by Oommen (2006), or may
do well to appoint a Technical Committee for this specific purpose.

♦ In view of the clear mixing up of APL and BPL, KDS and/or

government may consider the question of introducing a sort of
auxiliary membership to those who consider themselves as APL or
identified to be so on the basis of well-defined criteria It is important
to note that poverty is a multi-dimensional deprivation and KDS has
to play a powerful role as a women’s empowerment programme in the
future. The strategy of graduating the non-poor out is a matter for
consideration.

♦ Some effort to rank and map NHGs within a CDS according to the
real composition of BPL could be a welcome step to target assistance.

♦ The micro-enterprise programme be strengthened along with a

definite agenda to escort the non-poor into better fields and new
pastures.[See Chapter 8].

9.7 Unlike the general pattern of micro-finance anchored on bank loans, KDS is
primarily an own savings-based micro finance with the savings of the
members likely to reach Rs.800 crore soon and credit based on that heading
towards Rs.2000 crore. This is definitely big when we note that the

iv
 cumulative total micro credit disbursed as on September 2007 by all
commercial banks (private and public) in Kerala is only a little over Rs.670
crore. [See State Level Banker’s Committee 94th meeting Background notes).
The total savings of tribal NHGs by 2006 year end was around Rs.7.8 crore
and the savings per tribal NHG around Rs.35,000/. The Thrift and Credit
Societies (T&CSs) act as virtually unstructured intermediaries at the door
steps of the poor households and facilitate the mobilisation of small
thrift that surely might not have been saved at all but for this. Only 44
per cent of the NHGs resort to bank-linked credit and the loans they avail
of form only 21 per cent of the loans disbursed to members. There is
tremendous potential for expanding bank linked credit to the KDS
members.

9.7.1 Not all KDS members are tied to Thrift and Credit Societies (TDS) in their
portfolio choice. More than 26 per cent reportedly resort to a wider savings
portfolio. Interestingly 27 per cent of those who take to a wider portfolio
save in post offices and 17-18 per cent in chit funds. Over 39 per cent of the
rural sample and nearly 47 per cent of the urban sample households take to
insurance cover. The poor of Kerala are surely an enlightened lot.

9.7.2 Borrowing is important for 84 per cent members. The purpose wise break
up of the loans availed by members show that at least as far as the KDS
loans were concerned there was some measure of prudential spending. The
proportion of loan expenditure spent on daily consumption needs ranges
from 7.8 per cent for highland members to 25.7 per cent for coastal
members. In urban areas it goes as high as 31.5 per cent. In all cases
education and medical expenses are important items and along with
housing account for over 50 per cent of the loan expenditure.

9.7.3 As regards outstanding debt, the liability of TCS loans is as low as Rs.4023
while the average from all other sources works out to Rs.19236 and ranges
from Rs.14566 in highlands to Rs.28927 in the coastal region and in a rare
case going as high as Rs.70,000. On an average members take up to 20 per
cent from non-institutional sources. This is not a healthy trend. There is
visible divergence between the average savings and the outstanding
liabilities. The most hopeful sign is that members in general do not
consider the interest rate regime as intolerable or unbearable.

9.7.4 The multiplication of micro finance agencies poses a great threat to the KDS
as a micro finance agency in the state. Several self-help groups sponsored
by a wider range of sponsors such as Church, SNDP and other communal
outfits and NGOs throw up a big challenge. Although our survey shows
that only 9 per cent of KDS members take to such sources, the percentage

v
 could be much higher. A KDS officer attached to Chirayinkeezh panchayat
who issued a warning notice to NHG members reported that it had no
effect. The NHGs which function as a subset of the local bodies stand on a
different footing from other SHGs. More than 58 per cent of the secretaries
we have contacted reported that they received assistance from other
agencies and 99 per cent of this came from panchayats. There are various
ways through which the KDS CBO interact with the local government and
the agency role they play is different from other outfits with limited
interests. We recommend that dual membership should be strongly
disapproved. No KDS member should take membership in other SHGs
at the same time. Divided loyalties can be counter productive.

9.8 The success and sustainability of KDS depends in a big way on the process
of convergence at the local government level especially at the level of the
antipoverty efforts of the various line departments. Progress made leaves
many things to be desired. This is not to underestimate the progress made
in regard to plan formulation and projectisation at the local level, where
KDS has been assigned a critical role. Given the innumerable tasks
particularly relating to plan formulation, project preparation etc that are
assigned to the CBOs of KDS, it is a moot question whether they are
eminently equipped for all these! The tasks which KDS have to undertake
multiply everyday because the delivery of several services at the cutting
edge level is transferred to them. While the women whose responsibilities
and burden as a family member (housewives mostly) continued, their
obligations and activities as a KDS CBO also have expanded. Overloading
has to be reduced and activities rationalised. At any rate, care has to be
taken not to reduce the NHGs as an appendage of the Mission
bureaucracy or the panchayat bureaucracy. The CDS systems are sub-
systems of local governments, but not subordinate to them. The
autonomy of CDS must be respected and fostered.

9.9 Poor women are the means as well as the end of KDS activities. As a
women-based collectivity KDS does contribute to enhance women’s
struggle for gender justice and equality. That more than 90 per cent of
women members have reported enhanced self-confidence after joining the
KDS is indeed a great achievement. Importantly 75 per cent reported that
their social position among peer groups, neighbourhood and wider
community has improved. Of course there is no room for complacency.
The best part is the remarkable progress in organisational and leadership
capabilities of the SC/ST categories. The fairly respectable improvement in
‘bargaining skill’ which Amartya Sen considers an important non-material
capability in determining outcomes among the socially vulnerable groups is
no small achievement. It is significant that 81 per cent of STs reported that

vi
 their general capabilities have ‘fairly improved’, 73 per cent in regard to
improvement in self-confidence and 70 per cent in regard to capability to
address a group. Interestingly enough it is the ST categories that recorded
fairly good improvement in regard to awareness about women’s
empowerment, women’s rights and gender discrimination. It is not clear
why the highest percentage of ‘not improved’ is reported by the SC
categories.

9.9.1 The reported progress in economic empowerment is not very high.

Although there is significant growth in savings the sacrifice and the
opportunity cost of it is very high especially for the very poor among them.
The poor progress reported in regard to economic empowerment reckoned
in terms of income, wealth and household assets needs examination. At
any rate, that 91 per cent of the STs and 82 per cent of the SCs in the
sample and 64 per cent of all backward classes have reported nil progress
in asset-building should be a matter of concern.

9.9.2 As regards knowledge empowerment, while there is good progress in

reading habits, discussion of public issues and the like, there is very little
progress in regard to training received. Those who have not received
training range from 69 per cent as regards members holding degrees to 89
per cent for illiterates. Probably the most disquieting aspect is that
Kudumbashree women are no exception when it comes to harassment as
there is only very marginal reduction among them. Even this is significant
compared to the all-Kerala picture.

9.9.3 In brief, KDS has played a positive empowering role. All the parameters
used to measure social capital affirm that there was bonding capital besides
enhanced co-operation with officials who traditionally kept them away.
Empowerment is the total resultant of various forces the most prominent
being their functional linkage with the local bodies rather than access to
microfinance. With all the empowerment KDS has to travel a long way to
become an agency for social change in the State of Kerala deeply
entrenched in patriarchical values. That 3200 Kudumbashree members
contested the 2005 local body elections and 1408 of them won the elections
is something to write home about.

9.10 The KDS Mission considers micro enterprises (supported by bank loans or
TCS loans) as the most important instrument for creating employment and
income to the poor women. At the end of December, 2006 in the rural areas
there were 1051 individual enterprises and 2789 group enterprises. Even
these are concentrated in a few districts. Given the crying need to enhance
sustainable income for the large number of poor families their number

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 has to be increased with a fairly even geographical spread. An analysis
of the costs and returns of 393 micro units spread over the districts of
Thiruvananthapuram, Kollam, Malappuram, Palakkad and Wayanad
shows that 35 per cent do not break even. With poor value added per
worker and wages paid below subsistence level the continued functioning
of some of the agriculture related enterprises are somewhat surprising.
Dairy units and lease land farming are better perfomers in the agricultural
sector. In Kerala with a dominant group of part time farmers lease land
farming in which over 3 lakh NHG members are engaged is a welcome
trend although it is important only as a supplementary income source for
the poor. Modern micro enterprises (e.g. rubber products, clinical
laboratory, computer centres) perform far better than traditional
enterprises. There is need for technological upgradation and promotion
of modern micro enterprises.

9.10.1 Before sanctioning a project and releasing subsidy (KDS mission should
not be treated as a subsidy disbursing agent) the viability of the
enterprises in a locality should be subjected to a simple feasibility study
by a Cell constituted on a permanent basis at the mission head quarters.

9.10.2 Although KDS mission provides training they are too general to be of
use to the immediate needs of the potential or actual entrepreneur.

9.10.3 KDS mission should organise common marketing strategies for units
registered under them for a variety of products. This can be done
through a co-operative marketing chain. They can buy the product of
micro enterprises on the spot so that units should not be starved of
working capital.

9.10.4 There is no monitoring and corrective mechanism to provide help and

guidance to KDS supported micro enterprises. This must be rectified.

9.10.5 Some units complained that the repayment schedules now fixed by
banks was based both on loans and subsidies. This is to be examined.

9.11 Kudumbashree needs significant redefining of its future roles and goals.
Before we close this chapter we may make some general observations that
also will be helpful in the redesigning of Kudumbashree. They are given in
bullet form below:

♦ Given the different phases chosen in the implementation of KDS as a

poverty reduction strategy, the target of eradicating poverty in ten
years cannot be at a point of time. Even so, it cannot go beyond

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 March 2013 by which time the Phase III KDS will complete ten years.
It is time to think of a new vision and a restructuring strategy.
Dismantling is difficult and probably unwarranted.

♦ It is important to recognise that the spirit of voluntarism of the

‘Alappuzha model’ CDS days is on the decline.

♦ Empowerment of poor women (not always the BPL category given

the emerging KDS scenario) has to continue in Kerala which is
predominantly a patriarchical society notwithstanding what scholars
like Amartya Sen or Robin Jeffrey take it to be.

♦ Our study has shown the presence of various harassment of women

among KDS women also despite the revealed public action potential
of KDS women against social evils like domestic violence, illicit
liquor etc.

♦ A highly consumerist society with a strong tendency to live like the

bigwigs around, the poor and not-so-poor borrow and run into
indebtedness. It is a matter for consideration how the Mission could
make useful interventions to reduce indebtedness especially of the
non-institutional variety.

♦ The monthly review meeting is a good monitoring and

accountability mechanism. But it should not be a target oriented
bureaucratic exercise. It should be a platform for sharpening
collective vision and concerted action.

♦ The whole strategy of capacity building needs reexamination

through a training needs assessment exercise. The income
expenditure statement of KDS given in Appendix 9A shows that
only a negligible proportion of the total expenditure is spent on
capacity building while there is a high unspent balance every year.
In 2004-2005, the amount spent on capacity building was only 2.8 per
cent of total income and 6 per cent of the total expenditure. Over 90
per cent of expenditure is accounted for by staff salary and
administrative cost.

♦ Updated auditing by the Controller and Auditor general is needed to

ensure transparent public scrutiny.

9.12 To conclude, Kudumbashree a micro finance agency with a difference is at

a critical stage of its evolution. In less than a decade KDS has come a long

ix
 way. Although flawed KDS has contributed to the expansion of elementary
capabilities, be it health care, gender equity, employment and the like.
Poverty as measured by KDS of course leaves many things to be desired.
While the need for a new criteria of measurement of poverty has to be
addressed the reasons for the poor, non-poor mixing up also have to be
investigated. Surely those who genuinely graduate are not escorted out.
Women’s empowerment has made significant strides. But agency of
women has to undergo change. KDS is surely at the threshold of a new
phase. This is the time for consolidation, correction and also for
redesigning a relevant strategy or new architecture for its future.

Appendix 9A
Income and Expenditure Highlights (Rs. Lakhs)
Expenditure
Training Carry
Other
Year Income Staff & other over
Administrative Total
Salary related Balance
Expenditure
items
113.61 69.49 12.04 561.67
2000-01 756.81 195.14
(58) (36) (6) (74)
127.18 83.55 34.50 18.05
2001-02 263.28 245.23
(52) (34) (14) (7)
145.04 75.75 21.06 135.68
2002-03 377.53 241.85
(60) (31) (9) (36)
125.88 81.94 19.70 139.88
2003-04 367.40 227.52
(55) (36) (9) (38)
148.29 136.21 15.5 237.42
2004-05 537.42 300.00
(49) (45) (6) (44)
[Source: Income & Expenditure statement for various years furnished by KDS Mission]

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