Kochi: A Congress party attempt in Kerala to reach out to the grass roots through the launch of Janasree, a sustainable development plan involving the poor and low-income groups, has set off a controversy.
The programme is being seen as a parallel to the much-acclaimed, state-supported, decade-old state poverty eradication mission, Kudumbasree, involving women below the poverty line.
The Congress programme was officially launched by Union finance minister P. Chidambaram here on Saturday where he said such efforts will go a long way in achieving the goal of inclusive development and banks should come forward to provide credit linkages to the Janasreeself-help groups (SGH).
But the state’s ruling Communist Party of India (Marxist) sees a threat to the Kudumbasree programme and Centre-state relations from the launch of the programme. And the state government will oppose any move for grant of Union funds directly to Janasree, bypassing the state government or its local bodies.
“This programme will also scuttle the effective microfinance system in the state put in place by Kudumbasree. The presence of multiple microfinance credit agencies will only help in destroying the financial discipline of the system,” warns Thomas Issac, Kerala’s finance minister.
However, both Oommen Chandy, the opposition leader, and M.M. Hassan, Congress leader and chairman of Janasree, claim the movement is not a parallel to Kudumbasree, which was for women below the poverty line. Janasree involved all people, including those below and above the poverty line, they say.
Work on this programme started a few months ago. It currently has 30,000 SGHs and by the end of March it is expected to be raised to 50,000, involving 1 million people. With poverty eradication and sustainable development at the theme, the programme will look at microfinance, developing entrepreneurial skills, organic farming, environment protection, e-literacy and similar programmes.
On whether Kudumbasree members would be attracted to Janasree, Hassan said those dissatisfied with Kudumbasree could leave it and join the new programme. He added that though Congress workers were behind the programme, it was not part of the party organization and would have an independent status.
Chidambaram, while inaugurating the programme, said in a country where more than 50% of people did not have a bank account, it was imperative to bring all people into the financial system for the growth of the economy. “There are around 30 lakh SHGs in the country which have received credit of around Rs18,000 crore from banks. In Kerala there are over 1.19 lakh SHGs and the credit given so far is over Rs800 crore. This microfinancing has seen nearly full repayment to the tune of 95-99%,” he said.
The pending Micro-Financial Sector (Development and Regulation) Bill for regulating microcredit finance agencies will be passed soon. This will give such “not-for-profit” agencies more operational freedom, Chidambaram said, adding that the Janasree movement was not aimed at scuttling the ongoing Kudumbasree programme which was being supported by successive governments.
But, Issac was quick to react, saying the programme was for getting Central funds, bypassing the state government and local bodies, and his government will do all it can to oppose this.
Kudumbasree, officially launched in May 1998 with the objective of eradicating absolute poverty in 10 years through community action under the leadership of local self-governments through SGHs and neighbourhood groups of women below poverty line, has gone a long way in empowering women.
The groups have been organizing thrift collection, internal lending and microenterprises at individual and collective levels. Successful tales of running catering and canteen services at bus stands and offices in several places across the state, besides handling of solid waste in corporations and municipalities have added to the programme attracting attention.
The Kerala budget for 2007-08 has provided Rs26 crore for the activities of Kudumbasree, which was over and above the Rs30 crore for disbursement the previous year.
“When there is already such a state-supported programme working successfully, it was unfortunate that the Union finance minister has extended support to a politically motivated movement that will break the financial discipline of microfinance in the state,” Issac adds.