Can Chandrababu Naidu win a third successive term for the Telugu Desam Party in Andhra Pradesh? The TDP is a key constituent of the BJP-led alliance in Delhi , so the TDP’s fate could determine the BJP’s too.
Voters typically oust incumbents. Naidu gets media plaudits for converting Hyderabad to Cyberabad, but computer software matters little in rural areas, where three-fourths of the population lives. His electricity and fiscal reforms have stumbled. So, why should he get re-elected?
Possibly, because he has empowered women massively through Self Help Groups (SHGs). This is missed by metropolitan newspapers focussing on technology and economic reform. The rapid growth of women’s SHGs may be Naidu’s biggest achievement.
This could pay handsome electoral dividends. Women have traditionally been a powerful force in the state. Ten years ago, they organised a strong anti-arrack movement. The TDP backed this by promising prohibition, and swept into power in the 1994 state election.
However, prohibition hit state finances so badly that it had to be abandoned. For women, this was a betrayal. But the TDP subsequently wooed them with empowerment through a different route: microfinance (small loans) to SHGs.
Grameen Bank in Bangladesh first showed that groups of poor rural women can borrow and use money productively, repaying loans with interest at unsubsidised rates (up to 20 per cent). The group guaranteed repayment of loans to individual members, using social pressure, and repayment rates exceeded 95 per cent.
India first attempted microfinance through the Integrated Rural Development Programme (IRDP), giving loans to the poor. But politicians told borrowers not to repay. So IRDP became a political patronage that made the poor dependent on politicians, not empowerment.
While IRDP withered and died, one of its components, Development of Women and Children in Rural Areas (DWACRA), achieved fair results in Andhra Pradesh thanks to flexible rules and collaboration with NGOs and the Literacy Mission. DWACRA gave loans to SHGs, not individuals, and this worked much better.
A new dimension was added to this process in 1992 when NABARD, the rural lending wing of the Reserve Bank of India , decided to finance SHGs through the formal banking system. This drew inspiration from Grameen Bank, and used NGOs as facilitators. It stressed the need for viable, credit-worthy SHGs, and devised a rating system to identify the best and most deserving.
Microfinance means not just money for women but voice, the ability to assert rights within the family and society. This has been buttressed by the anti-arrack movement and literacy mission. Women with voice pay more attention to education and family planning. Fertility plummeted in Bangladesh in the teeth of opposition from mullahs. In Andhra Pradesh, population growth fell from 2.42 per cent annually in 1981-91 to 1.39 per cent annually in 1991-2001.
Another dimension was added to SHGs in 2000 by Velugu, a programme introduced in six districts, aided by $111 million from the World Bank. Velugu provided additional funds, enabling SHGs to hire skilled people instead of being dependent on free services from NGOs. This took empowerment one step further. Velugu also financed a Community Investment Fund for small local infrastructure.
Velugu II has now been launched to cover the whole state. In Velugu, SHGs federate into Village Organisations, which in turn federate into Mahila Mandal Samakhyas. These have become political power centres, and will gain clout when eventually they federate at the state level. In Maharashtra , sugar co-operatives similarly gained political clout, but were top-down outfits. Velugu works from bottom up, with the lowest tier electing each higher tier. This represents grassroots power.
Naidu was quick to grasp the political potential of SHGs: Andhra Pradesh accounts for 40 per cent of all SHGs financed by NABARD. His cadres have strong links with Velugu. The chairman of the nodal state agency implementing Velugu is Naidu himself.
By empowering women, Naidu seeks to empower himself. SHGs typically have 16-20 members, and poor families typically have six members. So each SHG benefits around 100 people. By now, over half a million SHGs have received bank finance in the state, making 50 million beneficiaries in all in a state of 76 million people.
Of these, 61 per cent say they have been released from the grip of moneylenders. That looks good enough to win an election. Critics decry Naidu for using SHGs as a political tool. How silly! Democracy succeeds best when the personal interest of politicians coincides with the public interest. The CPM in West Bengal empowered itself by empowering panchayats and winning five elections in a row. If Naidu can do the same by harnessing women’s power, he deserves to become a role model.