UNDP fosters partnerships to enable deprived households to improve skills. This helps people to diversify non-farm activities and increase access to credit, financial services and markets. We also support initiatives that help the poor develop livelihood plans in agriculture, forestry, fisheries, land resource development, rural tourism and handicrafts. Efforts also aim at addressing the challenge of financial inclusion through a range of financial products and services that reduce the vulnerability of the poor. Empowering women remains a key area of intervention.
Formalising India's Informal Economy: Livelihood Missions
The challenge of livelihoods continues to remain acute in India. Several social groups and regions have not benefited from accelerated economic growth over the last two decades. We foster partnerships to enable deprived households to improve skills. This helps people diversify non-farm activities and increase access to credit, financial services, and markets. Initiatives that help the poor develop livelihood plans in agriculture, forestry, fisheries, land resource development, rural tourism and handicrafts are also encouraged. UNDP promotes innovative institutional mechanisms that can strengthen links between the poor and the market such as the Rajasthan Mission on Skill and Livelihoods and the Jharkhand State Livelihoods Mission, which has benefited nearly 350,000 people in these two states.
Empowering Women in India
UNDP aims to advance social inclusion by promoting positive relationships among men and women, different groups and individuals within communities so that all identify with and belong to a community. For women in India, the challenge is particularly complex. Forty-nine percent of the poor are women and 96 percent of the women work in the informal economy. The 11th Five-Year Plan (2008-12) points out that “gender inequality remains a pervasive problem and structural changes are having an adverse effect on women.” UNDP in India with support from the IKEA Foundation adopts an integrated approach to achieve social, economic, and political empowerment of 50,000 women in 500 villages across eastern Uttar Pradesh. The project has now been scaled up to reach out to 2.2 million women and their families across four states – Gujarat, Maharashtra, Rajasthan and Uttar Pradesh.
Banking the Unbanked
Despite rapid strides in improving financial services, it is estimated that 40 percent of the adult population of India do not have access to basic banking services. Further, seventy percent of the workforce receives their income in cash. Informal loan through money lending at prohibitively high interest rates is widespread particularly in rural areas. UNDP seeks to address this challenge through a paradigm beyond access to credit, to a more comprehensive range of financial products – insurance, savings, pension, and remittances – in order to ensure greater security for the poor, and ultimately, pave the way for diversification of livelihoods.
India’s Poverty Profile: At a Glance
- 37.2% of the population lives below the national poverty line
- 41.8% of the rural population lives below the poverty line
- 80% of the rural poor belong to the marginalised caste and tribal communities. More than 90% of the overall workforce is employed in the informal economy
- 96% of the women work in the informal economy
- 27% of the rural households has access to formal credit
- 254 women per 100,000 births die due to maternity-related causes
Report of the Expert Group to Review Methodology for Estimation of Poverty, Planning Commission, Government of India, 2009; Report of the 11th Five-year Plan Working group on Poverty Alleviation Programmes, Planning Commission, 2006; Report on the Conditions and Promotion of Livelihoods on the Unorganized Sector, National Commission for Enterprises in the Unorganized Sector, 2007; 11th Five-Year Plan 2007/2008; National Family Health Survey - 3; National Sample Survey Office 59th Round (2003).
In collaboration with the Federation of Indian Chambers of Commerce and Industry, the paper outlines the constraints and challenges of financial services; impact of government and regulator policies to promote financial inclusion; and product-specific challenges in enabling greater access to financial services.
The report highlights the emerging landscape in India and key development challenges that face the country. In doing so it aims to identify key areas that can contribute to transformational change that empower people and build an inclusive, climate-resilient, sustainable development paradigm for 2013-17 and beyond.
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