Post Date: 10-Feb-2026

🧭 Knowledge Drop-119

DAY NRLM: Next Phase of Rural Women’s Empowerment

Syllabus: GS2 | Government Policy & Intervention

Context

The Deendayal Antyodaya Yojana–National Rural Livelihoods Mission (DAY NRLM) is entering a new phase, often referred to as NRLM 2.0, as it prepares for the next five-year cycle from 2026–27 to 2030–31. This transition comes after more than a decade of large-scale community mobilisation and financial inclusion led by rural women’s institutions.

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What is DAY NRLM?

DAY NRLM is a flagship poverty alleviation and women empowerment programme launched in 2011 by the Ministry of Rural Development. It aims to reduce rural poverty by enabling poor households, especially women, to access sustainable livelihoods through strong, community-based institutions.

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Core Objective

The central goal of DAY NRLM is to organise rural poor women into Self-Help Groups (SHGs) and build their capacities so that they can:

• Access affordable credit,
• Start and expand livelihood activities,
• Improve household incomes and social status, and
• Participate actively in local governance and decision-making.

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Institutional Architecture

DAY NRLM operates through a three-tier community structure:

• Self-Help Groups (SHGs): Small groups of 10–20 women promoting savings, internal lending, and collective action.
• Village Organisations (VOs): Federations of SHGs at the village level that coordinate activities, resolve issues, and implement programmes.
• Cluster-Level Federations (CLFs): Sub-block level, formally registered bodies that anchor livelihoods, financial services, social action, and convergence with government schemes.

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Scale and Reach

DAY NRLM has achieved an unprecedented scale in rural India:

• Nearly 10 crore rural households mobilised into about 91 lakh SHGs.
• These are federated into 5.35 lakh Village Organisations and 33,558 Cluster-Level Federations.
• SHGs have leveraged over ₹11 lakh crore in bank credit, with a low NPA of around 1.7%.
• The number of ‘Lakhpati Didis’ (women earning over ₹1 lakh annually) has crossed two crore, reflecting tangible income gains.

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Why DAY NRLM Matters

1. Political and Social Empowerment
Several States now route Direct Benefit Transfers (DBTs) directly to women, such as Ladli Laxmi (Madhya Pradesh), Maiya Samman (Jharkhand), Ladki Bahin (Maharashtra), and the recent ₹10,000 transfer to over one crore women in Bihar. This reflects growing policy trust in women’s collectives.

2. Financial Inclusion
Through SHG–Bank linkage, revolving funds, and community investment funds, DAY NRLM has mainstreamed rural women into formal finance.

3. Livelihood Promotion
The mission supports farm and non-farm enterprises across sectors such as livestock, fisheries, food processing, services, and rural enterprises.

4. Skill Development and Entrepreneurship
Capacity building, entrepreneurship training, and business planning have helped women shift from subsistence activities to income-generating enterprises.

5. Social Empowerment and Convergence
The programme promotes leadership, gender equity, health, nutrition, and education, while converging with schemes in agriculture, animal husbandry, food processing, and social protection. Successful models like Kudumbashree (Kerala) and Jeevika (Bihar) offer replicable lessons nationwide.

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Looking Ahead: The Next Phase (2026–31)

DAY NRLM represents a community-led development model that has:

• Shifted rural households from subsistence to entrepreneurship,
• Strengthened grassroots democracy,
• Built financially credible community institutions, and
• Enabled large-scale DBT delivery through women’s collectives.

As the programme enters its next appraisal cycle, the focus is expected to move towards:

• Stronger and more autonomous CLFs,
• Higher-order entrepreneurship and access to scale-up finance,
• Better market access and branding for SHG products, and
• Deeper institutional convergence with professional support systems.

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The Road Ahead: Beyond Debt

While credit has been central to NRLM’s success, the next phase must explore equity, venture capital, and blended finance models, potentially through partnerships with SIDBI, NBFCs, neo-banks, and other financial institutions. This shift is essential to support enterprise scaling and long-term sustainability.

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Conclusion

DAY NRLM stands as one of the largest women-led development initiatives in the world. Its next phase offers an opportunity to move from financial inclusion to enterprise-driven, market-linked, and institutionally strong rural women’s economies, capable of redefining rural livelihoods in India.

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