“The emergence of the Self-Help Groups (SHGs) in contemporary times points to the slow but steady withdrawal of the State from developmental activities.” Examine the role of the SHGs in developmental activities and the measures taken by the Government of India to promote the SHGs.

India's SHG movement — around 90 lakh groups mobilising over 10 crore rural women under DAY-NRLM — is sometimes read as evidence of the State retreating from development. In reality, SHGs have expanded through active State promotion; they function as community partners of the State rather than substitutes for it.

Role of SHGs in Developmental Activities

• Financial inclusion: the SHG-Bank Linkage Programme pioneered by NABARD in 1992 is the world's largest microfinance initiative, channelling collateral-free credit to the unbanked with repayment rates well above 95 per cent.
• Livelihoods and enterprise: SHG federations run collective farms, producer groups and rural enterprises; the Lakhpati Didi initiative targets 3 crore members earning over ₹1 lakh annually, with more than a crore already there.
• Last-mile service delivery: Bank Sakhis, Krishi Sakhis and Pashu Sakhis extend banking and extension services; SHGs ran community kitchens and produced masks and sanitisers during COVID-19.
• Empowerment externalities: greater female mobility, savings discipline, reduced dependence on moneylenders, and a pipeline of women leaders into panchayats.

Measures Taken by the Government to Promote SHGs

• DAY-NRLM's universal social mobilisation, with Revolving Funds and Community Investment Funds as seed capital.
• Interest subvention on SHG loans for prompt repayment, and enhancement of the collateral-free lending ceiling to ₹20 lakh.
• e-Shakti digitisation of SHG records, marketing support through SARAS fairs and GeM onboarding, and newer platforms like Namo Drone Didi.

Far from signalling withdrawal, the SHG story marks the State's repositioning from sole provider to enabler — supplying capital, capacity and market access while communities drive implementation. The SHG is, in effect, the community interface of the developmental State. Deepening bank linkage in the under-covered eastern and north-eastern States and professionalising federations would consolidate this partnership model of development.