A new 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 is a focused programme to address poverty through Society for Elimination of Rural Poverty. This goal can only be achieved by making the poor active partners in the process of social change. The distinguishing feature of the project is that the poor have a key role in all project strategies and interventions, including policy making as stake holders.

Velugu covers all households below the poverty line starting from the poorest of the poor irrespective of caste, creed and religion. The identification would be done in an open and transparent manner in the Gram Sabha. The Velugu project components include: Institutional and Human capacity building; Community Investment Fund; Educational support for girl child labour; Support to people with disabilities; Society for Elimination of Rural Poverty (SERP) under the Department of Rural Development.

Velugu Phase I project has with its grand success shown that the poor have tremendous potential to help themselves when organized.

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.


Mr.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 Mr. Naidu himself.

By empowering women, Mr.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 Mr. 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 Mr. Naidu can do the same by harnessing women’s power, he deserves to become a role model.