CHAPTER II

REVIEW OF LITERATURE, METHODOLOGY AND

PROFILE OF THE STUDY AREA

The present chapter discusses Review of Literature which includes

studies related to micro finance, women empowerment and Self Help Groups.

Methodology is also given and the chapter ends with the Profile of the Study

Area.

2.1 REVIEW OF LITERATURE

A review of literature helps the researcher have a detailed knowledge

about the area of the study and enables him to get a clear picture of the various

aspects of the study. Various studies carried out elsewhere by others on the

related aspects could also be reviewed and the researcher could gather the

various dimensions and complexities of the particular study undertaken by him.

It would also help him in filling up the gap in a particular area of research,

pointed explorations of the possibilities of further research on the related

aspects of the subject of study are also possible.

33

The related literature on the present study had been reviewed under the

following heads.

1. Studies related to Micro Finance

2. Studies related to Self Help Groups

3. Studies related to Women Empowerment

2.1.1 Studies Related to Micro Finance

Modkey.M.D, (1999)1 stated that the SHGs usually generated a common

fund out of the small savings of persons or groups collected on a regular basis

by curtailing unproductive expenditure. Sometimes, the internal savings

generated were supplemented by the external resources loaned out or donated

by the voluntary agencies involved in promoting and strengthening the SHGs.

The credit needs of the members are usually assessed during the monthly

meetings. The SHGs collectively ensured prompt repayment of the bank loans.

The SHGs thus provided access to credit for the rural poor with low interest.

The proper utilisation of the loans and the repayments of the loans is made

routine by effective supervision.

1 Modkey M.D, “SHGs and Micro Credit: Sustaining Rural Women”, Social

Welfare, March 1999, p.19.

34

Sharma.K.C, (2001)2

said that women are empowered through SHG's

participation. It is evident from his study that SHG member participation in the

economic activities and decision making at the household level and society

level has been increasing. SHGs make the process of development

participatory, democratic, independent of subsidy and sustainable. Significant

changes were realized in terms of increase in income, assets, savings,

borrowing capacity and income generating activities.

Thelma kay, (2002-03)3 felt that micro credit programmes had played a

valuable role in reducing the vulnerability of poor through asset creation,

income and consumption smoothing, provision of emergency assistance and

empowering and emboldening women by giving them control over assets and

increased self-esteem and knowledge. He also pointed out that women who

generated increased income through self help groups reported that they had

gained greater respect within the household and women's decision making

power had been enhanced by their greater economic status.

2Sharma K.C, “Micro Financing through Self Help Groups”, Indian Journal of

Agricultural Economic”, Vol.56, No.3, July-September 2001, p.460.

3Thelma Kay, Emerging Social Issues Division, ESCAP, Bulletin on Asia Pacific

Perspectives, 2002-03.

35

A survey conducted by the Indian Institute of Public Opinion (2004)4, on

“performance of Micro Financing through SHGs” has made an attempt to

review as to why the formal financial Institution was not accessible for the

poorest of the poor women to cater to their micro credit needs and also to

evaluate the progress of micro financing programme in India and its impact on

rural women. It has been found that micro financing through SHG Bank

Linkage Programme of NABARD is working very effectively and the credit

needs of the rural poor are catered to by the rural financial institutions through

SHGs. It instills the propensity to enhance the beneficiary’s saving

potential, credit handling capacity and access to financial institutions, and

also inculcates entrepreneurial skills. Besides, SHGs combat poverty,

unemployment and lead to the socio economic empowerment of women.

Muhammad Yunus (2004)5 has traced the evolution of the ideas and

practice of micro credit as pioneered by the Grameen Bank. According to him

over the years micro credit programmes in Bangladesh have grown, providing

a wide range of services to meet the economic and social needs of its citizens,

4Monthly Public Opinion Survey, “Performance of Micro financing through SHGs”,

Indian Institute of Public Opinion, Vol.XLIX, No.16, July 2004.

5Muhammad Yunus, “Grameen Bank, Micro Credit and Millennium Development

Goals”, Economic Political Weekly, Sep 4, 2004. pp.4077-4080.

36

mostly poor women. The experiences of Grameen Bank in Bangladesh show

that micro credit is effective in helping poor people to use their own efforts and

creativity to meet their basic needs, which can be done on a sustainable basis.

Rajaram Dasgupta (2005)6, has examined the trend of micro credit in

agriculturally weaker sections and SHG, models for micro finance and policy

imperatives. It is observed from his study that per capita credit to the poor

extended by the Formal Financial Institutions (FFIs) is too small, although

there is a big demand and most of the FFIs fall short of the mandatory

requirement. One of the reasons identified in this study is a higher proportion

of Non Performing Assets (NPA) because of information gap and inadequate

monitoring due to the higher transaction cost. According to him, a

comprehensive policy is required for micro finance in which both FFI and

MFIs (Micro Finance Institution) have to take part and also effort is required to

develop the NGO - MFI sector without which microfinance cannot spread

widely.

6 Rajaram Dasgupta, “Micro finance in India Empirical Evidence, Alternative

Models and Policy imperatives”, Economic Political Weekly, Vol. XLII No: 13. March 19,

2005, pp. 1229-1237.

37

Christopher Dunford (2006)7 has said that when micro finance is

provided to relatively poorer women, it increases incomes and savings,

improves nutrition and health and empowers women. The heavy emphasis on

the experience of micro finance in Bangladesh is increasingly balanced by

evidence from elsewhere in the world. Moreover, it is clear that many micro

finance programmes reach a number of the very poor. The positive impact of

micro finance on the lives of substantial numbers of very poor people will very

likely grow and become more compelling in the next few years. It is evident

that with cautious confidence, micro finance can and do contribute to

achievement of the Millennium Development Goals.

Sanyasini Pattnaik (2007)8 said that those who had access to financial

services while participating in micro finance programmes were able to derive

appreciable benefits both at individual and household level. There is strong

indicative evidence that the impact is deeply felt by the women. The majorities

of women, though illiterate, save borrow, invest and repay and manage their

own SHG affairs, deal with banks for financial transaction, contribute to the

7Christopher Dunford, President, “Evidence of Micro Fiancés Contribution to

achieving the Millenium Development Goals”, Freedom form Hunger, USA, September

2006.

8 Sanyasini Pattnaik, “Scope of NGOs and Linkages in Inclusive Growth”, PNB

Monthly Reviews, Vol. 29. No: 02, Feb – 2007, pp.7-17.

38

household economy and improve their standing in the family and for the first

time in their lives take a positive view of the future.

M.P.Vasimalai and K.Narender (2007)9 discussed community banking

programme based on the principles of self help mutuality and ownership by

poor women. They said that the micro finance progamme has achieved some

success in the field. According to them, the foremost challenge faced by the

programme currently is the lack of promotional costs required to promote the

groups and their nested institutions, and also expanding social security

coverage, developing innovative products for drought mitigation coordination

of stakeholders and policy advocacy. Micro finance is not integrated into the

larger development perspective. There is a danger that it may result in over

indebtedness and financial bondage of the poor.

Kalyanasundaram.M (2007)10

has focused on the need of inclusion of

rural poor into the banking and finance system. He stated that, when poor

people unite together in the form of Self Help Group, it gives a social identity

9 Vasimalai.M.P and Narender.K, “Micro finance for Poverty Reduction: The

Kalanjiam way”, Economic Political Weekly, Vol XLII No: 13, March 31, 2007,

pp.1191-1196.

10

Kalyanasundaram.M, “Financial Inclusion through Micro Finance”, Udaipur,

Rajastan, May 5, 2007.

39

to them through which they are able to access the formal financial services.

SHG provides a platform for the poor people to participate as a group in

development activities. Hence SHG is seen as a prime and important tool for

financial inclusion of poor. Therefore the poorest of the poor, who may be left

out for various reasons should be included in the SHG system and the micro

fiancé federations should take the responsibility.

Shylendra.H.S.(2007)11

has made an attempt to critically assess the

overall merits and demerits of the micro finance bill and to draw relevant

implications for regulation of micro finance in the country. According to him

microfinance is an intervention which has emerged in response to the need to

address the challenge of financial inclusion. The NGOs have shown

considerable potential in contributing to the financial inclusion. Formal

institutions have failed, and therefore it has become necessary that NGOs are

helped in overcoming their constraints so that they are able to play the role of

financial intermediation more effectively. The bill aims at creating an enabling

provision for the NGOs to deliver micro finance in an integrated way. The aim

of financial inclusion is sought to be achieved only by regulating a narrow set

11

Shylendra.H.S, “Micro finance Bill: Missing Forests for the Trees”, Economic

Political Weekly, Vol XLII Nos: 21 & 28, July 14, 2007, pp.2910-2914.

40

of institution. However, the bill fails to recognize the reality that NGOs can

play only a supplementary role and that formal institution needs to contribute

in a major way for the cause.

Mnohar. R and Uthira.K12

said that the gap prevailing in rural areas

could be better met only by banks through micro credit facilities. It is found

that the micro credit programme have shown positive performance with respect

to coverage, disbursement of credit and recovery rates by acting as a

beneficiary oriented scheme. They clearly mentioned that while selecting a

group for finance it should be seen that the group should not have come into

existence solely for the purpose of obtaining a loan, but there should be a

genuine need to help each other.

Shamshad Akhtar (2008)13

said that global micro finance campaign and

initiatives have helped in extending the finance to poor. This has played a

significant role in changing the lives of the poor through economic

empowerment. He also pointed out that, in Asia, the number of micro finance

12

Mnohar.R and Uthira.K, “Micro credit. A panaca for Rural Economy”, Kisan

World, Nov - 2007, Vol : 34, No:11. pp. 32-34.

13

Shamshad Akhtar, “Inclusiveness, Growth and Gender Equity”, World Economic

Forum, Davos, 24 January, 2008.

41

beneficiaries has now reached 113 million 74 per cent of which are the poorest

and 65 per cent are women. Including families of the beneficiary clients, the

overall impact of micro finance is close to 465 million people. The micro

finance beneficiary in Asia is the largest constituting 85 per cent of the total

recorded micro finance client’s worldwide.

Loganathan.R (2008)14

, said that micro credit has a greater positive

effect on household welfare such as per capita household expenditure,

schooling, non-land household assets. According to him, when women are

capable of starting an enterprise they can get economic empowerment the first

and foremost benefit of women self help groups. Women SHGs create self

awareness and give a feeling of self confidence, solidarity and social security

to them. Women who generated increased income through SHG schemes had

gained greater respect within the house-hold. They could decide on spending

their own income. It has increased women’s mobility which would result in the

economic independence of poor rural women.

14

Loganathan.R, “Micro credit: A strategy for Attaining Empowerment of Women”,

Indian Economic Panorama, Jan – 2008, Vol. 17 No: 4. pp.31-33.

42

Geeta Manmohan, Monika Tushir and Sunita Chadha (2008)15

have

analysed the hurdles faced by the rural poor while dealing with banks, impact

of various poverty alleviation programmes initiated by banks, NGOs,

Governments, other institutes and challenges ahead. It has been observed from

their study that micro finance focuses on reducing poverty by providing

services through institutions that are funded by various donors and Government

subsidies. Besides, the people still depend largely on moneylenders, friends,

relatives etc. for meeting their small and frequent loan requirement for their

survival and growth. Micro finance appears ineffective as the maximum

number of people were found to be unaware about these programmes.

Gurmeet Singh (2009)16

has evaluated the rural credit delivery system in

India. It is observed from her study that as on 31stMarch 2007, 41,60,584

SHGs were maintaining savings bank accounts with an outstanding savings of

Rs. 3512.71 crores which covered more than 5.8crore poor households. The

spread of SHG Bank Linkage programme in different regions has been

uneven. 71% of the Linked SHGs are from the southern region consisting of

15

Geeta Manmohan, Monika Tushir and Sunita Chadha, “Rural Banking and Micro

finance” Southern Economist, May 15, 2008, pp. 9-12.

16

Gurmeet Singh, “Microfinance-An innovation in Rural credit system”,

Kurukshetra, Vol.57,No.4, February 2009,pp.3-6.

43

Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. The share of Southern

region has come down progressively over the years but it is still at 44 per cent.

Many states such as Uttar Pradesh and Bihar with high incidence of poverty

have shown poor performance under the programme.

Murlidhar and Lokhande.A (2009)17

said that Micro-finance programme

has a significant role to play in Indian economy for boosting micro

entrepreneurial activities for creating productive assets coupled with

employment generation. Self help groups have been instrumental in initiating

micro entrepreneurial activities among those poor people who have been

neglected so far and are far away from the process of social as well economic

development. One of the constraints is that the majority of SHGs use loan

amounts for unproductive purposes i.e. consumption needs and social needs.

Unproductive use of the borrowed funds resulted in irregularity in repayment

of loan amount, which adversely affects the progress of micro finance and

micro enterprises.

17

Murlidhar and Lokhande.A, “Micro finance initiatives in India”, Kurukshetra,

February 2009, vol.57, No.52, pp16-18.

44

2.1.2 Studies related to Self Help Groups

Namboodiri and Shiyani, (1996)18

have analysed the potential role of

SHGs in terms of their reach, and their linkage with banks for savings and for

credit for the weaker sections of the rural households. They examined the basic

characteristics, the coverage and the financial dependence of the SHGs formed

by the Panchmahal Vadodara Grameen Bank (PVGB) in Gujarat. The

operational area of the PVGB was confined to three districts in Gujarat,

namely, Panchmahals, Dahod and Vadodara, having 62 branches mainly spread

over the former two districts. The prospects of the SHGs in their rural financial

deepening could be broadly based on their strengths, weaknesses, opportunities

and threats. They constitute a self-sustainable system of community

organisations and by NGOs or Banks.

Mehrotra.C.K. (1997)19

has made a comparative study of the State banks

association with the self-help groups. He pointed out that with the help of the

reputed non-governmental organisations in the States like Tamilnadu, Kerala,

Karnataka and Andhra Pradesh, good progress has been made possible by the

18

Namboodiri and Shiyani, “Potential Role of Self-Help Groups in Rural Finance”,

Indian Journal of Agricultural Economics, Vol.56, July-September 1996, pp.22-27.

19

Mehrotra.C.K, “Linkage Banking – State Bank’s Experience”, State Bank of

India Monthly Review, Vol.36, No.2, February 1997, pp.63-71.

45

State Bank of India in the self-help groups’ schemes. He stated that the self-

help groups have promptly repaid 80 per cent to 90 per cent of the loans given

to the small scale units by the branches of the State Bank. The self-help groups

might eventually become viable units on account of their low transaction costs,

a high percentage of recovery and the mobilisation of the rural savings through

the informal system of the association of the individuals.

Nilanjan Sengupta (1998)20

has studied the different forms of

community organisations involved in people’s participation. He spoke of social

learning as an empowerment strategy for increasing the participation of the

people at the grass root level. Self help group member’s move towards the

economic empowerment by creating social awareness among the group

members. The social and psychological empowerment ensured development of

skills and consciousness for sustainability of any activity in the long run.

Puhazhendhi.R (1999)21

, examined the functioning of SHG’s,

performance, sustainability, empowerment of women, economic impact on the

20

Nilanjan Sengupta, “Empowerment: A Socio-Psychological Approach to Self Help

Group Formation”, Prajnan, Journal of Social and Management Sciences, Vol.XXVI,

No.4, January 1998, p.533.

21

Puhazhendh R, “Evaluation study of SHGs, Important findings of Evaluation

study in Tamil Nadu”, paper presented in a workshop, 26-27 August 1999,BIRD, Lucknow.

46

members, future potentials, etc. He observed that SHGs in Tamil Nadu are

performing well towards social change and transformation. The emerging

trends are leading to the positive direction of empowerment of members and

promotion of micro finance.

Jairath M.S, (1999)22

has examined the rationale of promoting self-help

groups and the procedures followed by these SHGs in Rajasthan. SHGs have

been promoted with the objective of empowering the rural poor women in the

State. They were promoted with the active participation of the NGOs and the

banks. In India, the SHGs had registered a growth of 86 per cent since 1994-95

to 1999-2000. As against this, the State witnessed a growth of 75.59 per cent

during the same period. The number of women SHGs had spectacularly risen

from 473 to 52,587 at the all India level whereas in Rajasthan it has increased

from a mere 30 in 1994-95 to 981 in 1999-2000 and the proportion of the

women groups in the total number of groups linked in the State stood at 31.2

per cent in 1993-94 and has improved significantly to 80 per cent in 1999 -

2000.

22

Jairath M.S, “Growth and Development of Self-Help Groups in Rajasthan”,

Indian Journal of Agricultural Economics, vol.56, No.3, July - September 1999, pp.7-12.

47

Lakshmi Kulshrestha.R and Archana Gupta (2001)23

have found that in

India, about 36 per cent of population was poor and extending banking services

to them was an important issue for their upliftment. Many measures including

extending the formal banking sector for serving the poor had been tried but all

these measures had not been very successful. To overcome this, the micro

financing system was adopted to serve the poor with small amounts of loans,

which were easily recoverable within a limited period. The formation of

groups of members cultivating the habit of thrift and savings and the recycling

of the savings among the members at minimum rates of interest was introduced

among village people. Micro Finance Operates on the Principle of “Borrower

Knows the Best”, where the default rate was very low and the amount of

savings increased considerably. The SHGs played a very important role in this

way to help the poor and to alleviate themselves from their poverty and to

bring the country also into the growth path. Since the poor had become too

numerous, self-help promotion had emerged as the new innovative approach.

23

Lakshmi Kulshrestha.R and Archana Gupta, “Self Help Groups Innovations in

Financing the Poor”, Kurukshetra, November 2001, pp.238-239.

48

Manjula.B (2000)24

has stated that the poor women members of the

Samatha Self- Help Groups of Ulloor were able to acquire a greater awareness

about their society, to increase technical expertise and ability to use and build

their own knowledge system and to develop a scientific awareness of their

economic, political and physical environments. It also helped them to come out

of their isolation and reinforced a sense of community consciousness in them.

The linkage of self-help groups with each other had contributed to the

emergence of new kinds of structures, which would also enhance the

decentralisation of power and enable women’s participation in economic and

social decision – making processes.

Dwarakanath, (2001)25

has studied the self employment generation under

the Development of Women and Children in Rural Areas (DWCRA). The

main objective of the DWCRA programme was to organise women into socio-

economic activity groups with the dual objectives of providing self-

employment opportunities and imparting social strength to them. Women in

India constitute 48 per cent of the total population of the country in which

24 Manjula.B, “Voice from the Spiral of Silence: A Case Study of Samatha Self Help

Groups of Ulloor”, International conference on Democratic Decentralisation, 22-23 May

2000, Kerala State Planning Board, Thiruvananthapuram.

25

Dwarakanath, “The Self Employment Generation Under (DWCRA)”,

Kurukshetra, Vol.49 (5), 2001, pp.33-41.

49

43.88 lakh women were engaged in the organised sector and 17.77 lakh in the

private sector. The World Micro-Credit Summit held in Washington 1977 had

realised that there were 10 million women who had been organised into self-

help groups (SHG). Grameen Bank of Bangladesh, Self Employment Women

Association (SEWA) of Gujarat, India and Working Women’s Forum (Tamil

Nadu) were some of the major initiatives which were attempting to address the

gigantic issue of poverty eradication.

Dasgupta.R (2001)26

, observed that micro-financing through informal

group approach has effected quite a few benefits-savings mobilized by the

poor, access to the required amount of appropriate credit by the poor, matching

the demand and supply of credit structure and opening new market for financial

institutions, reduction in transaction cost for both lenders and borrowers,

tremendous improvement in recovery, heralding a new realization of subsidy

loss and corruption less credit, and remarkable empowerment of poor women.

He suggested that SHGs should be considered as one of the best means to

eradicate social and financial problems of women.

26

Dasgupta.R, “An Informal Journey through SHG’s”, Indian Journal of

Agricultural Economics, Vol.56(3), July-Sep 2001.

50

Singh.D (2001)27

has studied the impact of SHGs on rural women in

Uttar Pradesh. He found out that after joining SHG, the average asset value

had increased by 46 per cent and the annual income per household by 28 per

cent. It is noted that the borrowing for the consumption purpose was

completely absent in the post SHG period i.e., the maximum loan was taken for

income generating purposes. SHGs replaced the money lenders because SHGs

provide credit at any time and for any purposes with lower interest when they

needed.

Manimekalai.N and Rajeswari.G (2001)28

found that micro financing

through SHGs has helped the women to initiate micro enterprises including

farm and nor-farm activities, trading and service units. It has developed a sense

of leadership, organizational skills and management of various activities of a

business, acquiring financing, identifying raw materials, marketing, etc. by

themselves.

27

Singh.D, “Impact of Self-Help Groups on the Economy of Marginalized Farmers

of Kanpur Dehat District of Uttar Pradesh (A Case Study)”, Indian Journal of Agriculture

Economics, Vol.56, No.3, July-September 2001, pp.463.

28

Manimekalai N, and Rajeswari, “Nature and Performance of Informal Self-Help

Groups - A Case from Tamil Nadu”, Indian Journal of Agricultural Economics, Vol.56,

No.3, July-September 2001, p.453.

51

Mahendra Varman.P (2005)29

observed from his study that there is a

positive association between the growth of SHGs and the increase in female

bank deposit accounts. His analysis also reveals that being a member in SHGs

having leadership experience in SHGs greatly influences the bank account

holding. Leadership experience in SHGs would improve an individual’s

banking habits much more than simply membership. If leadership position of

each SHG is systematically rotated over appropriate time each member in the

group gains a leadership experience and they will have more exposure to

formal banking systems which will inculcate banking habits at a higher

magnitude.

Usha Thorat (2006)30

said that the central theme of the Millennium

Development Goals (MDGs) is reduction of poverty in all its forms. The SHG

movement in India has enabled social and economic inclusion of women. The

intervention of micro finance has resulted in finding a united voice for the

women, getting bank finance for economic activities creation of social capital

29

Mahendra Varman .P, “Impact of Self Help Groups on Formal Banking Habits”

Economic and Political Weekly, April 23, 2006, Vol. XL, No: 17, pp.1705-1713.

30

Usha Thorat, “Financial inclusion and Millennium Development Goals”, CAB,

Pune, January 16, 2006.

52

and empowerment, and getting a large scale service ranging from health,

education, marketing apart from savings, loans and insurance.

Gangaiah.C, Nagaraja.B and Vasudevulu Naidu (2006)31

found out that

the micro finance provided by SHGs is productive enough and had a

favourable effect on employment and income generation. It is also observed

that the credit extended to rural women also had a quality improving effect on

the families of sample respondents, because majority of the women

beneficiaries utilized the income generated either for investing or improving

the educational and health requirements. These expenditures resulted in

qualitative improvement of human resources.

Revathi.K and Sumathi.I (2006)32

have analysed the working of SHGs in

Trichy town. They found that as an individual the SHG members may not be

able to get necessary bank funds and for the banks also it may be difficult to

finance individual small needs, but as a group it is beneficial to the groups as

well as to the banks SHGs enable the rural poor women even to save a small

31

Gangaiah.C, Nagaraja.B and Vasudevulu Naidu, “Impact of Self Help Groups on

Income and Employment”, Kurukshetra, March 2006, Vol. 54, No:5. pp.18-23.

32

Revathi.K and Sumathi.I, “Self Help Groupd Promote Growth”, Kisan World,

August 2006, Vol.33, No: 8, pp.11-12.

53

amount regularly. SHGs recognize every woman in productive employment to

add value to the economy. This necessarily will sport economic activities and

uplift more people below the poverty line. Also it was pointed out that since

women get empowered, there is an improvement in health and nutrition level

and schooling of their children.

Sudarsan Nayak (2006-2007)33

, discussed the role being played by

promoting and nurturing SHG – Bank linkage programme. Based on a study

from Kalahandi district of Orissa he inferred that SHG–Bank linkage

programme had reduced the incidence of poverty and many families came out

of BPL category. It enabled the poor to build assets for generating income

improved the rate of literacy, improvement in the school attendance and

reduced dropout in their families, empowered women by enhancing the

contribution to household income and better control in decision making process

of the family, reduction of child mortality, improved maternal health, housing

and nutrition, reduced dependency on village money lenders and non-

institutional sources. It has proved that the poor are bankable and can be a

partner with the mainstream financial institutions.

33

Sudarsan Nayak, “Empowerment of the Poor through Self Help Groups and Micro

Finance”, Cooperative perspective, April– March 2007, Vol.41, pp.42-46.

54

Divy Ninad Koul and Giresh Mohan (2009)34

have assessed the SHGs in

rural villages of Ratlam district in Madya Pradesh. Assessment was carried out

at the group level and the individual level. The SHGs have been classified as

tribal and non-tribal SHGs to analyse the differences. The study shows that the

savings were more in non - tribal SHGs and internal loans were more in the

tribal SHGs. The problems reported by groups were delayed repayment,

unavailability of bank loan in spite of need and lack of seriousness among

some members.

Premanchander.C (1993)35

analysed that the economic enterprises were

the means through which women empower themselves. The women

entrepreneurs had started enterprises such as handlooms, weaving units, basic

units and file making units and effectively managed them. The women

entrepreneurs expressed the fact that the increase in their empowerment was

directly related to the improvement in their status and their standard of living.

34

Divy Ninad Koul and Giresh Mohan, “Women’s Self Help Groups and

Microfinance”, Kurukshetra, Vol.57,No.4, February 2009,pp13-15.

35

Premanchander C, “Micro Enterprises for Rural Women”, Mital Publications,

New Delhi, 1993, p.119.

55

Usha Jumani (1997)36

has examined the role of women in small business.

She has expressed the main features of poor women's economic activities in the

overall context of women in an economy, as well as in the context of the small

business. In her view poor women working in the informal sector of the

economy were engaged in businesses of a small size using traditional labour

intensive skills, generating small incomes, in a highly decentralised manner

depending upon oral transactions with a lesser number of few people and based

on mutual trust. The credit needs of the poor women were small in their size

but the number of women who work in need of such a credit facility was very

large. A detailed system might be considered as important to record all the

banking transactions. According to her, to ensure a high rate of repayment a

band of dedicated officials and workers, who were able to involve themselves

in the progress of the poor women’s life should be created.

Veluraj (2001)37

has studied the status of women, the promotion of the

self-help groups, the involvement of the voluntary agencies and the linkage

programme of the NABARD. He said that Voluntary agencies played a vital

36

Usha Jumani, “Women in Business: Strengthening Women’s Economic

Activities”, Gender, Vol. 15, No.1, April 1997, pp. 8-19.

37

Veluraj, “Self Help Groups – An Alternative Approach to Empowerment of Rural

Women”, The Tamil Nadu Journal of Co-operation, Vol.15, No.1, April 1997, pp.7-10.

56

role in encouraging women entrepreneurs through their income generating

programmes. He opined that, importance has to be given to empower the

women in the rural areas with a view to confer rights of women who were

equal to those enjoyed by men and to achieve the objectives of the self-help

groups in the rural areas. He stated that the voluntary agencies should also

educate and make the self-help group members practice a reputed system of

accounting in order to regulate the management of funds.

Kamaraju S (2005)38

has made a study on 553 Self Help Groups

functioning in various villages of the Valangaiman Taluk. He observed from

the study that most of the loans were utilized for organizing cattle farming,

milk farming and maintaining a costly agriculture implements hiring center.

The twenty nine self help groups have their own fund of Rs.10 lakhs apart from

livestock and machinery. There is ample opportunity for multiplying the fund

and to increase the fund position of the groups. These groups helped a lot for

rehabilitating women who were earlier engaged in illicit brewing and provided

alternative employment opportunities by extending financial help. Thus self

help group concept gains momentum now-a-days because of its manifold effect

in the economic empowerment of poor women.

38

Kamaraju.S, “Self Help Group – Emerging Rural Enterprise”, Kisan World,

Vol.32, 100-8, August 2005, pp.25-26.

57

Arul Kamaraj.J.M (2005)39

said that SHGs have undertaken

entrepreneurial activities at a smaller level with minimum capital requirements.

In future, the input strength of the SHGs would pave the way for undertaking

mega projects, like projects performed by the joint stock companies, public

sector enterprises and the like. SHGs have power to create a socio-economic

revolution in the rural areas of our country. SHGs have proved that they could

indeed bring about a change in the mindset of the very conservative and the

tradition bound illiterate women in the rural areas. They made the rural women

contribute to the socio economic progress of the country.

Soundarapandian.M (2006)40

has made an attempt to analyse the growth

of micro finance in developing the rural entrepreneurship. From his study it is

clear that though there is a positive growth rate of SHGs in states but in terms

of the growth of SHGs there is a wide variation among states. He observed

that most of the women concentrated only on cooking powder preparation,

tailoring, typewriting, mulch animals rearing and fair by fair price shops. He

has observed the issues, practical experiences of micro entrepreneurs such as

39

Arul Kamaraj, “Self-Help Groups New Mantra for Women Empowerment”,

Reader’s Shelf, Vol.No.2, November 2005, p.16.

40

Soundarapandian.M, “Micro finance for Rural Entrepreneurs, Issues and

Strategies”, Kurukshetra, Sep 2006, Vol.54, No-11, pp.14-16.

58

management of information system, income enhancement process, financial

architecture and regulatory and supervisory role.

Natarjan (2007)41

analysed micro enterprises with micro credit through

SHG. According to him, micro enterprises contribute to an increased

diversification of household economic activities, increased retraces on

productive activities and improved economic security. The development of

micro enterprises for women is an appropriate way to alleviate poverty at the

grass roots level by empowering them in all aspects. This can be done

effectively by promoting and assisting SHGs in taking up micro enterprises.

Thus SHGs micro enterprise is the viable tool for promoting rural

entrepreneurship in a holistic approach which will further facilitate in

alleviating poverty and mitigating unemployment problem in rural India.

41

Natarjan, “Micro Enterprises, Self Help Groups and Rural

Entrepreneurship”, Third Concept, August 2007, Vol: 21, pp.49-52.

59

2.1.3 Studies Related to Women Empowerment

Mohandass, (1992) 42

has studied the relative impact of self-employment

programme for the educated unemployed youth of women beneficiaries in

Kerala. The objectives of the self-employment programme for the educated

unemployed youth (SEEUY) has been to encourage the educated unemployed

youth to undertake self-employment ventures in industry, services and in the

business sectors through the provision of a package of assistance. The

incidence of unemployment had been more among women. The favourable sex

ratio (1032 women for 1000 men compared to 934 at the national level), the

high female literacy of 65.7 per cent and the very low work participation rate

of 16.6 per cent had made the unemployment problem more acute among the

females. The study was undertaken in the Trichur district in Kerala State,

covering a sample of 128 beneficiaries for whom the significant impact of the

SEEUY programme was on employment generation. As the goal of the

scheme was to provide viable self-employment opportunities for the educated

unemployed, the impact of the scheme on net income generation had assumed

42

Mohandass, “Relative Impact of Self-Employment Programme for the Educated

Unemployed Youth of Women Beneficiaries in Kerala”, Journal of Rural Development,

1992, pp.157-174.

60

importance. The author had concluded that the coverage of the technically

qualified in the SEEUY programme was also quite inadequate.

Sithalakshmi and Jothimani (1994)43

have analysed the organisational

behaviour exhibited by women in the DWCRA programme. According to

them, if permanent changes should take place in the status of women, women

should be given intervention programmes (income generating projects) or they

should engage themselves in income-generating activities, which should be

backed by structural and institutional changes that allow them to have access to

skill, leadership, decision-making and economic independence. They had

concluded that the organisational behaviour of the DWCRA groups has directly

influenced the active status of the groups concerned. In other words, the

organisational behaviour of the women acted as a means of their

empowerment.

Muhammad Yunus (2000)44

analysed that the Grameen Bank worked in

40,000 villages in Bangladesh, extending loans to 2.4 million borrowers and 95

per cent of them were women. The borrowers were also the owners of the

43

Sithalakshmi and Jothimani, “Orgnaisational Behaviour as a Means of

Empowerment”, Kurukshetra, Vol.XLIII, No.7, 1995, pp.103-107.

44

Muhammad Yunus, “Empowerment and Grameen Bank”, Yojana, Vol. No.2,

February 2000.

61

Grameen Bank. They owned 92 per cent of the shares of the Grameen Bank

and the remaining 8 per cent was owned by the Government. The Grameen

Bank offered loans for all types of income generating activities. It also gave

housing loans. More than half a million houses had been built with the help of

Grameen loans. Grameen bank provided lease financing for the poor families

for buying equipments and for capital investments. Under this leasing

programme, one of the most exciting items that were brought to the poor

village women was a mobile telephone. By selling telephone service to the

villagers the mobile telephone owner had earned quite a significant amount of

money every month. The Grameen Bank had planned to provide financing for

an Internet Kiosk in the village once the telephone network was extended to the

village. Hopefully, someday e-commerce, e-service, and tele-medicine – would

become a reality for these villages. The Grameen Bank provided higher

education loans for all the children of the Grameen families who could enroll

themselves, in any of the institutions of higher learning.

Vijay.D.Kulkarni (2001)45

has explored the issue of changing the status

of women in the households through the empowerment that had been taking

place through the self-help group activity. He attempted to understand the

45

Vijay D. Kulkarni, “Empowerment of Women through Self Help Groups”,

Aswatha, Vol.3, No.4, 2001.

62

differences between members and the non-members of the self-help groups

from his study area. He found that the empowerment had taken place among

different classes and castes and had brought them together as women. These

women had learned to take decisions for them and had developed the capacity

to exercise a certain amount of control over the socio-economic and political

conditions that determine their immediate living conditions.

Agarwal, Deepthi (2001)46

, argued that women should not be viewed as

beneficiaries but as active participants in the process of development and

change. Empowerment of women can be effectively achieved if poor women’s

participation in various services related to their economic and social well

being. Simultaneously, Micro Credit and SHGs are also key elements of the

empowerment of the rural women and help them to improve their living

condition and acquire small capital assets.

Jaya S. Anand (2002)47

has evaluated the performances of a few selected

SHGs and NHGs (neighbourhood groups). She identified the factors that

contributed to their success and the role of the various promoting agencies. She

46

Agarwal, Deepthi, “Empowerment of Rural Women in India”, Social Welfare,

Vol.48, No.3, July 2001, pp. 28-29.

47

Jaya S. Anand, “Self Group in Empowering Women: A Case Study of selected

SHGs and NHGs”, Discussion paper No.38, KRPLLD, CDS, Thiruvananthapuram, 2002.

63

had discussed the differences in their approach in organising and managing the

SHGs and NHGs and examined the impact of SHGs on women empowerment.

She found that the members who earlier had some economic activity have used

the micro credit effectively for expansion and modification and they had

substantial benefits by joining the self- help groups. The impact in terms of

production has also differed according to the member’s initial socio-economic

status. She also found that the process of women empowerment took place only

when the SHGs had attained a satisfactory level of performance. A positive

change in the attitude of the beneficiaries had also been noticed. The micro

finance programme has enabled the poor to take up micro enterprises by

availing of the credit and without outside help.

Gurumoorthy (2002)48

opined that empowering women contributes to

economic and social development. Economic progress in any country whether

developed or under developed could be achieved through social development.

The self help groups disburse micro credit to rural women for the purpose of

making them enterprising women and encouraging them to enter into

entrepreneurial activities. Credit needs of the rural women are fulfilled totally

through self help groups. SHGs enhance equality of status of women as

48

Gurumoorthy T.R, “Self Help Groups - Empowerment Rural Women”,

Kurukshetra, Vol.48, No: 5, Feb. 2002, pp.12-14.

64

participants, decision makers and beneficiaries in the democratic, economic

social and cultural spheres of life. SHGs also encourage women to take part in

socio economic progress of our nation.

Sebastian Titus A.P, (2002)49

has examined the promotion of women

entrepreneurs through self-help groups. According to him, the women

entrepreneurs who have started small enterprises have expanded them into

large-scale units. Self-help group members made readymade garments and

exported them. A self help group of women in the Dindigul district of Tamil

Nadu has been running a unit providing agro-services with a total turnover of

Rs. 12 lakhs and more per annum. But many were not able to reach up to this

level. The reasons cited by him were the non-availability of funds for

investment, dearth of technical and managerial skills, inability to manage the

labour force, dual role burden of women, lack of professionalism and gender

bias.

49

Sebastian Titus A.P, “Promotion of Women Entrepreneurs through Self Help

Groups”, Khadigramodyog, the Journal of Rural Economy, Vol. XLIX, No.1, November

2002, pp.68-72.

65

Kala.G.S (2004) 50

said that, the women empowerment programmes have

been taken up by Tamil Nadu Women Development project implanted under

the “Mahalir Thittam”. This scheme is intended to promote economic

development and social empowerment of the poorest women through a

network of self help groups formed with active support of NGOs. The self help

groups are not only engaged in saving and internal lending activities but also

function as important sustainable rural structures for dissemination of

knowledge of health and nutrition, literacy, education, adopting of new

agriculture practices, farm and non-farm sector economic activities and help to

prepare women to take up a leadership position.

Prasad Acharya (2004)51

, analysed the response of women loan holders

of the Self Employment Development Programme (SEDP). The study found

that most of the women felt that violence had gone down as a result of

women’s access to loans for a number of reasons: the easing of economic stress

had reduced one of the causes of violence and the fact that women were now

seen to be sharing the responsibility for family provisioning with men rather

50

Kala.G.S “Economic Empowerment of Women through Self Help Groups”, Kisan

World, Vol: 31 No: 11, Nov 2004, pp.25-26.

51

Prasad Acharaya, “Micro Finance and Women’s Empowerment : Evidence

form Bangladesh”, a paper presented in the seminor on Rural Women and Economic

Empowerment of Women in South Asia, at Social Science Institute, Allahabad, India, 2004.

66

than constituting part of male responsibility. Women also felt that they had

great bargaining power within the family and could withhold cooperation if

husbands proved extremely abusive and domineering.

Archana Singh (2004)52

has found out that households with loans are

better off in terms of income and consumption patterns than those without.

Women tend to spend the benefits on family welfare, food, health and school

fees and less on investment in their own business. The education of girls

increased in households where women have taken loan.

Vel Suresh Kumar (2005)53

has stated that, India had a tremendous

growth of SHGs in different forms in different regions. In the south region the

movement of SHGs has shown good results in Andra Pradesh and Tamilnadu.

Most of the women are able to increase their income level and are participating

in the financial decisions in the family. Apart from the financial aspects, it also

becomes a platform for exchanging ideas regarding AIDS prevention, dowry,

nutrition, legal marital laws, literacy, sanitation, child care, etc. This not only a

52

Archana Singh, “Micro Finance for Women Empowerment: A Perspective”,

Kurukshetra, April 2004, pp. 31-35.

53

Vel Suresh Kumar, “Women Empowerment through Self Help Group”, Kisan

World, Vol.:32, No: 11, Nov 2005, p.31.

67

woman is benefiting through SHG but also her family and community as a

whole.

Sivamurugan.C and Anbumani.V (2006)54

have analysed that Self Help

Groups are self managed groups of women who have come together to promote

savings among themselves as well as pool savings for activities benefiting

other individuals or communities economic resources, which in turn empower

people through the values of equality, participation, accountability and

transparency. The empowerment of women through SHGs would lead to

benefits not only to the individual women and women’s groups but also to the

family and community as a whole through collective action for development.

Tracey L.Moyle, Maureen Dollard and Saswata Narayan Biswas

(2006)55

have examined the empowerment of women by addressing two

dimensions, economic and personal empowerment. For this they studies 100

SHG members from two rural Indian villages in North West India. Their study

reveals that the inclusion of women in income generating activities gives

54

Sivamurugan.C and Anbumani.V, “Empowerment of Women in India”, Third

concept, Vol:20, No:229, March 2006, pp.39-42.

55

Tracey L.Moyle, Maureen Dollard and Saswata Narayan Biswas, “Personal and

Economic Empowerment in Rural Indian Women: A Self Help Group Approach”,

International Journal of Rural Management, Sage Publication, New Delhi, Vol.:2. No: 2,

2006, pp.245-263.

68

support to the personal and economic empowerment of women. However,

income is low and it is optimistic to say that at their best, micro enterprise and

employment provide women with the means of survival, security and growth.

It is clear to see that the immediate effects of participating in self help groups

for women include an increase in economic strength, a sense of purpose and an

enhanced level of psychological well being. Their study identified a need to

further explore the long-term participation of women in self help groups,

especially in relation to other members and the psychological health and well

being of all members.

Suman Rohila and Bhuvaneshwari Swami (2007)56

argued that, in the

development policy of India the role and active participation of women in

social, economic and political field should be given proper weight to ensure all

sided development. By providing equality in the economic field for women,

they could establish social, economic, political cultural and human intimacy

with each other. They suggested that women should unite together to receive

education and the struggle for their rights, get awareness, generate income and

social mobility through SHGs for their social and economic empowerment.

56

Suman Rohila and Bhuvaneshwari Swami, “Women Empowerment Socio

Economic Development & Management”, Journal of Global Economy, Vol;3, No:1, Feb

2007, pp.73-75.

69

Indrabhusan Singh and Usha Kumari (2007)57

said that, Empowerment

of women involves economic opportunity, property rights, political

representation, social equality, personal rights and so on. But women in many

countries still lack the right to inherit property, own land, get an education,

obtain credit, earn income or work outside the home, control their fertility.

They are still widely under represented in involvement in decision making at

the household or social level. They argued that mobilizing women to take up

entrepreneurial and cottage industry activities through self help groups ensures

economic independence of women.

Abdul Raheem.A and Yasmeen Sultana.H (2007)58

have found out that

Self Help Groups have emerged as the most successful strategy in the process

of participatory development and empowerment of women. Many benefits

automatically follow with the provision of income-generating activities for

women. It helps to arouse self confidence. Women wish to be recognized as

an economic entity and as an individual in their own right. They have greater

exposure and awareness, generator control over self, leading to capability to

57

Indrabhusan Singh and Usha Kumari, “Rural Development and women

Empowerment”, Karukshetra, March 2007, Vol.:55, No: 5, pp.3-8.

58

Abdul Raheem.A and Yasmeen Sultana.H “Empowerment of women through Self

Help Group: A view”, Kisan World, March 2007, Vol – 34, No: 03, pp.48-55.

70

make informed choices. They get a platform to express themselow, share their

problems and gain social acceptance.

Vinayagamoorthy.A59

analysed the empowerment of women through

SHGs in north districts of Tamilnadu. It is found that the income of the women,

and household expenditure have been increased after joining SHGs. But

savings are increasing at a slow rate, because the incremental expenditure is

higher. Mostly the SHG members are spending for present consumption and

repay their monthly due within time and even some members pay their due in

advance, since the repayment of loan due is regular and within the time.

Jitendra Ahirrao (2009)60

said that SHG is a suitable means for the

empowerment of women. The impacts of SHGs on socio-economic status of

women were found significant. Microfinance programmes are currently being

promoted as a key strategy for simultaneously addressing both poverty

alleviation and women’s empowerment. Micro credits are enough for

innovative and hard working micro entrepreneurs to start small business such

as making handicraft items. From the income of these small businesses the

59

Vinayagamoorthy.A, “Women Empowerment through Self Help Groups: A case

study in the North Tamil Nadu”, www. Flyhighonline.com.

60

Jitendra Ahirrao, “Rural Women Empowerment through Microfinance”,

Kurukshetra, vol.57, No.4, February 2009, pp.23-25.

71

borrowers of micro credit can enjoy better life, food, shelter, health care and

education for their families and above all these small earnings will provide a

hope for a better future.

2.1.4 Research Gap

Though many studies have been conducted in India and a few studies in

Tamil Nadu covering certain aspects of women’s empowerment, a

comprehensive study covering the multi-dimensional aspects of women

empowerment through micro finance has not so far been made at the micro

level in Thoothukudi district of Tamil Nadu. To cover this research gap in the

rural area, the researcher has chosen this relevant topic for her research study.

72

2.2 METHODOLOGY

Designing a suitable methodology and selection of analytical tools are

important for a meaningful analysis of any research problem. In this section an

attempt is made to prepare a methodology of the present study. It includes

sample design, collection of data and tools of analysis.

Sample Design

In Thoothukudi district, there are 12 blocks namely Thoothukudi,

Srivaikuntum, Karunkulam, Tiruchendur, Udangudi, Alwarthiruunagari,

Sattankulam, Ottapidaram, Kovilpatti, Kayathar, Vilathikulam and Pudur. The

12 blocks were ranked according to the number of SHGs under Mahalir

Thittam scheme. The first five blocks namely Thoothukudi, Alwarthirunagari,

Vilathikulam, Ottapidaram and Kovilpatti were selected for the study. In each

selected block SHG members engaged in micro enterprises were identified

from the list obtained from Mahalir Thittam Scheme. A total sample of 609

forming five per cent of the SHG members, who are engaged in micro

enterprises from each block, was randomly selected by adopting simple

random sampling techniques.

73

Collection of Data

The study is based on both primary and secondary data. The primary

data were collected from the women Self Help Group members in Thoothukudi

District of Tamil Nadu by using interview schedules. The primary data

comprises socio economic conditions, Self Help Group details, micro

enterprises, marketing and their problems. The final structure of the interview

schedule was framed after the pre-test and pilot study. The secondary data were

collected from Books, Journals, RBI Bulletins, NABARD’s Annual Reports,

unpublished records of the Mahalir Thittam office in Thoothukudi district,

DRDA in Thoothukudi district, theses and Web sites.

Period of Study

The field survey was conducted from September 2009 to March 2010 for

the collection of primary data. The reference period of survey was 2009-2010.

Tools of Analysis

For analysing the primary data and the secondary data the following

statistical tools had been used.

74

Trend Analysis

Trend analysis was used in the chapter to analyse the growth and trend

of SHGs in India and Tamil Nadu.

Y= a + bt

Where,

Y = Growth of SHGs

t = Time in years

Compound growth rate (CGR) is worked out by using the following

formula

CGR = [(anti log b-1) ]x 100

‘t’ test

‘t’ test was used in the chapter to test whether there is any significant

difference between income, savings and indebtedness of the sample

respondents before and after the joining the SHGs.

The‘t’ test on paired observations is defined as

d

t nS

=

where,

_

d = The ‘mean’ of the differences

S = The standard deviation of the differences

n = The number of sample women beneficiaries

75

The value of S was calculated by using the following formula:

22 ( )

1

d n dS

n

−=

−

∑

n – 1= Degrees of freedom

Chi-Square test ( 2χ )

In order to examine the relationship between the income generation and

the size of the loan amount availed by the sample respondents, the Chi-square

test was used. The value of chi-square was calculated by using the following

formula

2

2 ( )O E

Eχ

−=∑

where

O = Observed Frequency

E = Expected Frequency

Row Total X Column Total

E =

Total no. of observation

Degrees of freedom = (r – 1) (c – 1)

r = Number of rows

c = Number of columns

76

Analysis of variance (ANOVA)

ANOVA analysis uses the ‘F’ statistic, which tests if the means of the

groups formed by an independent variable or a combination of independent

variables significantly differ. The ‘F’statistics calculates the ratio between the

variance within the group and variance between the group. In order to study

whether the average income generated by different activities is the same, the

ANOVA One –way classification was used. The ‘F’ ratio was calculated by

using the formula

Variance within the sample

F =

Variance between the samples

The ANOVA in Two-way classification is used to analyse the effect of

more than one independent variable on the same dependent variable. In order to

study the effect of educational level and age of the respondents on the income

generation the ANOVA in Two-way classification is used. The ‘F’ ratios were

calculated as follows:

1 2( , )v v

MSCF

MSE=

Where, 1 ( 1)v c= − and 2 ( 1)( 1)v c r= − −

1 2( , )v v

MSRF

MSE=

Where, 1 ( 1)v r= − and 2 ( 1)( 1)v c r= − −

77

Linear regression model

In order to study whether there is a structural difference in income

generation between the group activities and individual activities the simple

linear regression model was used. The estimated model is

Y = β0 + β1 D

where,

Y = income generated by the SHG members

D is a dummy variable where, D = 1 for group activity

D = 0 for individual activity

β0 and β1 are the parameters to be estimated.

Garrett’s Ranking

To examine the reason for joining SHGs and the problems faced by the

sample micro entrepreneurs, Garretts’ ranking technique was adopted. Garrett’s

ranking technique was used for knowing about the priorities given by the SHG

members for the various variables. The following formula has been used to

convert the order of the preferences into ranks:

Percent Position 100( 0.5)

ij

i

R

N

−=

Rij = Rank given by the ith factor, and

Nj = Number of factors ranked by the jth

individual

78

The per cent position of each rank thus obtained is converted into a score

by referring to the Table given by Garrett. The scores of all respondents for

each factor were then added together and divided by the number of respondents

experiencing that particular factor. The mean scores of each are thus arrived at,

and were arranged in descending order and corresponding ranks were allotted.

Gini ratio

Gini co-efficient of concentration ratio was used to measure the extent of

inequalities in the distribution of income in the households of SHG members

before and after, for those engaged in different activities in the study area. The

range of Gini ratio would be from 0 to 1. Gini ratio of 0 would mean that every

individual would reserve exactly that same income i.e., perfect equality in

distribution. Gini ratio of one means that an individual would reserve the

different income i.e., perfect inequality in income. Gini ratio was calculated by

using the formula.

1 1

1

( )( )

110,000

N

k k k k

k

P P Q Q

G− −

=

− +

= −∑

Where,

G = Gini coefficient of concentration

Pk = Cumulative % of frequency of SHG member

Qk = Cumulative % of income

N = Number of classes used in the analysis

79

Lorenz curve

Lorenz curve was drawn by plotting cumulative % of the values of the

variables (household income of the respondents) along the vertical axis and the

cumulative % of the households along the horizontal axis with the perfect

equality in the distribution of the variables the Lorez curve would coincide

with the diagonal, while with perfect inequality of the distribution, the curve

would coincide with the horizontal line and the right hand side vertical line of

the diagram. The nearer the curve was to the 450 line, the greater was the

equality of the distribution.

2.3 PROFILE OF THE STUDY AREA

The usefulness of any research study can be fully appreciated only when

the results are studied against the background information such as physical,

social and economic conditions of the region. The present study was

undertaken with the aim of highlighting the different aspects of banana

cultivation in Thoothukudi district.

80

2.3.1 District at a Glance

The district started functioning as the twentieth District in Tamil Nadu

with effect from October 20, 1980 with Thoothukudi as its headquarters. This

district is located between 80-05’ and 9

0-30’ of northern latitude and 77

0-05’

and 780-25’ of the eastern longitude.

This district is bounded by Virudhunagar and Ramanathapuram districts

in the north, Kanyakumari district in the south, the Gulf of Mannar in the east

and Tirunelveli district in the west. It is spread over an area of 4621 sq.kms.

2.3.2 Administrative Regions

The district now consists of eight taluks namely Thoothukudi,

Tiruchendur, Santhankulam, Srivaikuntam, Kovilpatti, Ottapidaram,

Ettayapuram and Vilathikulam. It comprises two revenue divisions, seven

revenue taluks and 12 development blocks. The administrative set up of the

district is as follows:

The district has 20 town panchayats, 2 municipalities and 465 revenue

villages. The district is industrially advanced by the majority of the industries

located in and around Thoothukudi.

81

2.3.3 Population Characteristics

The total population of the study area according to the 2001 census, was

15, 65,743 of which 7, 64,087 were males and 8, 01,656 females. More than 50

per cent of the population was non workers. Of the total workers, 4.55 per cent

were cultivators, 10.69 per cent were agricultural labours and 22.10 percent

were employed in other services including the household industry. The

population and number of workers in Thoothukudi district are presented in

Table 3.1. The population density in the district is 315 per sq.kms, against the

state average of 428 per sq.kms. The percentage of the urban population is

42.28 percent and that of rural population is 57.72 percent of the total

population. The literacy percentage of male is 70.7 per cent and female is 56

per cent. Total literacy per cent of this district is 71.5 per cent.

82

TABLE 2.1

POPULATION AND NUMBER OF WORKERS IS THOOTHUKUDI

DISTRICT (2009-10)

Sl.No. Category Number Percentage

1. Population

Male

Female

Total

1565743

764087

801656

15655743

48.80

51.20

100.00

2. Cultivators 71315 4.55

3. Agricultural Labourers 167387 10.69

4. Marginal Workers 88944 5.68

5. Other Workers 346036 22.10

6. Non-Workers 892061 56.98

Total Population 1565743 100.00

Source: Assistant Director of Statistics, Thoothukudi.

2.3.4. Climate and Rainfall

The district in general has a tropical climate except in the coastal areas.

The mean maximum temperature ranges from 29.5oC to 40.5

oC and the mean

minimum temperature varies from 18.4oC to 26.7

oC. May and August are the

83

hottest months and the lowest temperature is recorded during December and

January.

The district receives maximum rainfall from North-East and South-West

monsoons. The season-wise annual average rainfall of Thoothukudi district is

furnished in Table 2.2

TABLE 2.2

ANNUAL AVERAGE RAINFALL OF THOOTHUKUDI DISTRICT

(in mm.)

Year

South-West

Monsoon

(June-

September)

North-East

Monsoon

(October-

December)

Winter

Period

(January-

February)

Hot

Weather

(March-

May)

Total

2006-2007 78.58 270.36 31.8 67.31 448.05

2007-08 17.5 692.20 2.4 64.30 776.40

2008-09 107.3 519.91 7.2 74.8 709.21

2009-10 49.2 305.29 54.20 12.5 421.19

Source: Assistant Director of Statistics, Thoothukudi District.

2.3.5. Rivers

The main river source for the district is the Tambiraparani river. The

river flows through Srivaikuntam and Tiruchendur taluks and is the principal

irrigation source of the district.

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2.3.6. Soils and Minerals

The soils found in Thoothukudi are of three types namely Black loam,

Red sandy and alluvial soils. Black loamy soil is found in Kovilpatti,

Vilathikulam, and Ottapidaram taluks. Sathankulam and parts of Tiruchendur

and Thoothukudi taluks have red sandy soils. Alluvial soil is found in

Srivaikuntam and parts of Tiruchendur taluks. The soils such as acidic, alkaline

and saluro soils are found in the district. The acidic soil is found (1.15 per cent)

in Thoothukudi, Srivaikuntam and Alwarthirunagari blocks.

This district is rich in mineral resources. Coral limestone is found on the

east coast from Thoothukudi to Pamban. Lime shell and coral jelly are found

on Thoothukudi taluk. Common salt is produced in the innumerable salt pans

spread over nearly 17 Km. of coastal stretch from Veppoladai to Palayakuyal.

The salt produced here meets 30 per cent of the country’s needs.

In the coastal range from Thoothukudi to Pamban, high grade coral

limestone is found. Shell limestone is found near Arasur in Tiruchendur taluk.

85

2.3.7 Transport and Communication

The district has a road length of 2310 km. comprising 1232 kms., of

metalic road, 665 of non-metalic road and 413 kms. of kutcha road.

The district is served by 413 post offices covering 3270 persons per post

office. There are 61 telegraphic offices in the district, which serve an average

population of 22,140 per office. Similarly there is one radio set for every 31

person in the district.

2.3.8 Port

Thoothukudi was a famous port city even in the olden days. Valuable

commodities like pearls, chunks and salt were exported to various European

countries from the ancient Port of Korkai. The activity of the Port increased

enormously when large merchant vessels were able to berth in the Port.

2.3.9 Industries

Southern Petro-Chemical Industries Company (SPIC) was established in

1975 with a capital outlay of Rs.99 crores. The Heavy Water Plant (HWP)

utilising free hydrogen from the SPIC plant is of natural importance, as heavy

86

water is used as a moderator in atomic plants. Dhranga Dhara Chemical works

is the other major industry of the district.

Also a number of small scale industries like match industry and textile

industry are found in this district. Kovilpatti taluk is one of the major match

manufacturing taluks in the state with more than 2000 small scale units located

within the taluk.

2.3.10 Fisheries

Thoothukudi is a major fishing centre. It is also considered to be the only

pearl fishing centre in the whole of India. Fishing, next to agriculture, is an

important occupation of the district. Nearly 35,000 MT of marine fish are

produced per annum.

2.3.11 Forestry

The area under forestry is 12724 hectares which occupies 2.77 per cent

of the geographical area.

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2.3.12 Land-Use Pattern

Agro-climatic conditions of any region namely soil, irrigation, rainfall

and the like, besides the ownership pattern of land, determine their use. The

Thoothdukudi district extends over a geographical area of 4,59,054 hectares, of

which net sown area accounts for 41.02 per cent. The pattern of land utilization

reveals that 2.40 per cent of the total geographical area is under forest and 4.28

per cent is barren and uncultivable land. Land put to non-agricultural uses are

15.63 per cent and cultivable waste is 4.31 per cent, current fallows and other

fallows from 13.33 per cent and 10.12 per cent of geographical area

respectively. The pattern of land utilisation in Thoothukudi district is given in

Table 2.3.

88

TABLE 2.3

LAND USE PATTERN IN THE THOOTHUKUDI DISTRICT 2009-10

Sl.

No.

Classification Areas

(in Hectares)

Percentage

1. Forests 11012 2.40

2. Barren Uncultivable lands 19662 4.28

3. Land put to non-agricultural uses 71772 15.63

4. Cultivable waste 19779 4.31

5. Permanent pastures and other

grazing lands

5132 1.12

6. Land under miscellaneous tree

crops

35771 7.79

7. Current fallows 61189 13.33

8. Other fallows 46441 10.12

9. Net area sown 188296 41.02

10. Total geographical area 459054 100.00

Source: Assistant Director of Statistics, Thoothukudi District, 2009-10.

2.3.13 Operational Holdings

The average size of land holdings of the district is 1.54 hectares as

compared to 1.08 hectares in the state. Sixty-four per cent of the holdings are

below 1 hectare and holdings with less than 2 hectares accounts for 83.50 per

cent of the total number of holdings. Nearly 12 per cent of the holdings are

89

between two and five hectares. Holdings with more than five hectares

constitute 3.79 per cent of the total number. The distribution of land holdings

in Thoothukudi District in 2009-10 is shown in Table 2.4.

TABLE 2.4

SIZE-WISE DISTRIBUTION OF AGRICULTURAL HOLDINGS IN

THOOTHUKUDI DISTRICT (2009-10)

Size of

Holdings

(in Ha.)

Number of

Operational

Holdings

Percentage

to Total

Number of

Holdings

Area under

the Holdings

(in Ha.)

Percentage

to Total

Area

0 – 0.5 92118 41.11 22889.83 8.06

0.5 – 1.0 53040 23.67 37642.50 13.26

1.0 – 2.0 41956 18.72 59406.95 20.92

2.0 – 3.0 16101 7.18 39358.40 13.86

3.0 – 4.0 7940 3.54 27493.61 9.68

4.0 – 5.0 4460 1.99 19902.81 7.01

5.0 – 7.5 4595 2.05 27836.45 9.81

7.5 – 10.0 2035 0.91 17229.31 6.07

10.0 – 20.0 1524 0.68 20173.95 7.11

20.0 and above 333 0.15 11982.95 4.22

Total 224102 100.00 283916.76 100.00

Source: Assistant Director of Statistics, Thoothukudi District, 2009-10.

On the whole the majority of the holdings in the district are medium and

small size holdings, the average size of holdings range from 0.91 hectares in

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Srivaikuntam taluk to 2.03 hectarees in Vilathikulam taluk. The percentage of

holdings ranging from 0.1 to 2.0 hectares to total holdings in each taluk is 72

per cent, 76 per cent, 72 per cent, 92 per cent, 88 per cent and 86 per cent in

Kovilpatti, Ottapidaram, Vilathikulam, Sattankulam, Srivaikuntam,

Tiruchendur and Thoothukudi taluks respectively.

2.2.14 Irrigation

The main sources of irrigation in the district are through canals, tanks

and wells accounting for 3,873 hectares, 18,040 hectares and 20,527 hectares

of net area irrigated respectively during 2009-10. The gross area irrigated by

canals has decreased from 12.09 per cent in 2009-10. The gross area irrigated

by canals has decreased from 12.09 per cent in 1998-99 to 10.70 per cent in

2009-10. The gross area irrigated by tanks also has decreased from 44.10 per

cent in 1998-99 to 44.17 per cent in 2009-10. The gross irrigated by well has

increased from 38.82 per cent in 1998-99 to 45.12 per cent in 2009-10. The

areas irrigated by different sources are presented in Table 2.5.

91

TABLE 2.5

AREA IRRIGATED BY DIFFERENT SOURCES IN THOOTHUKUDI

DISTRICT

Year Net Area Irrigated Total Gross Irrigated Area

Canals Tanks Wells Canals Tanks Wells

1998-99 4873

(9.98)

22145

(45.34)

21825

(44.68)

7218

(12.09)

29323

(44.10)

23183

(38.82)

1999-2000 4346

(14.00)

16471

(53.07)

10219

(32.93)

6708

(13.60)

21611

(43.82)

21001

(42.58)

2007-08 3834

(9.35)

15899

(38.74)

21290

(51.90)

4785

(11.12)

16524

(38.41)

21717

(50.47)

2008-09 3945

(0.74)

19687

(43.61)

21508

(47.65)

4468

(9.52)

20505

(43.91)

21722

(46.52)

2009-10 3873

(8.13)

18040

(42.51)

20527

(48.37)

5354

(10.70)

22095

(44.17)

22570

(45.12)

Source: Assistant Director of Statistics, Thoothukudi District, 2009-10.

Note: Figures in brackets represent the percentage to total irrigated area.

Srivaikuntam and Tiruchendur taluks have the benefit of canal irrigation

besides tank and well irrigation systems. Irrigation by tanks is widely prevalent

in Thoothukudi and Tiruchendur taluks. Sattankulam and Kovilpatti taluks are

irrigated mainly by wells.

The total net area of the district irrigated was 48,843 hectares in

1998-99 and the gross area irrigated was 59,724 hectares in 1998-99. In this

period the net area sown and gross area sown accounted for 2, 08,053 hectares

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and 2, 22,471 hectares respectively. But in 2009-10, the net area irrigated and

gross area irrigated decreased from 21.95 per cent and 26.85 per cent in 1998-

99 to 21.54 per cent and 25.38 per cent in 2009-10 respectively. The net area

sown is increased from 93.52 per cent in 1998-99 to 95.38 per cent in 2009-10.

The area irrigated by different sources in Thoothukudi district is

furnished in Table 2.6.

TALE 2.6

NET AND GROSS AREA IRRIGATED AND SOWN IN

THOOTHUKUDI DISTRICT

(in Hectares)

Year Net Area

Irrigated

Gross Area

Irrigated

Net Area

Sown

Gross Area

Sown

1998-99 48843

(21.95)

59724

(26.85)

208053

(93.52)

222471

(100)

1999-2000 41039

(21.59)

49323

(25.95)

178718

(94.02)

190094

(100)

2006-07 41026

(22.18)

43029

(23.27)

181699

(98.25)

184932

(100)

2007-08

45145

(23.78)

46700

(24.60)

187898

(98.98)

189840

(100)

2008-09

42516

(21.54)

50101

(25.38)

188296

(95.38)

197413

(100)

Source: Assistant Director of Statistics, Thoothukudi District, 2009-10.

Note: Figures in brackets represent percentage to total.

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Area irrigated under major crops in Thoothukudi district is shown by

Table 2.7.

TABLE 2.7

AREA IRRIGATED UNDER MAJOR CROPS IN

THOOTHUKUDI DISTRICT

(in Hectares)

Year Pulses Banana Groundnut Coconut Cotton Chilies Betal

Leaves

1998-99 30120

(13.54)

9989

(4.49)

1100

(0.49)

3817

(1.72)

3100

(1.39)

4273

(1.92)

168

(0.09)

1999-

2000

22635

(11.91)

9468

(4.98)

639

(0.34)

4137

(3.18)

2205

(1.16)

4511

(2.37)

171

(0.09)

2007-08 14409

(7.79)

9256

(5.01)

564

(0.31)

4339

(2.35)

1574

(0.85)

4916

(2.66)

163

(0.09)

2008-09 17907

(9.43)

9507

(5.01)

656

(0.35)

4510

(2.38)

2217

(1.17)

4566

(2.41)

172

(0.09)

2009-10 21659

(10.97)

4972

(2.52)

1285

(0.65)

4694

(2.38)

2039

(1.02)

3780

(1.91)

180

(0.09)

Source: Assistant Director of Statistics, Thoothukudi District, 2009-10.

Note: Figures in brackets represent the percentage to gross irrigated area.

Table 2.7 reveals that area irrigated under pulses was 30120 hectares in

1998-99, but it has decreased from 13.54 per cent in 1998-99 to 10.97 per cent

in 2009-10. The area irrigated under banana was 9989 hectares in 1998-99,

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9468 hectares in 1999-2000 and 9256 hectares in 2007-08. In 2009-10, 4972

hectares (2.53 per cent) irrigated were under banana cultivation.

2.3.15 Cropping Pattern

The area under principal crops in Thoothukudi district is shown in

Table 2.8.

TABLE 2.8

AREA UNDER PRINCIPAL CROPS IN THOOTHUKUDI DISTRICT

(in Hectares)

Year Pulses Banana Groundnut Coconut Cotton Chilly

2006-07 30120

(13.53)

9989

(4.49)

4059

(1.82)

2723

(1.22)

30670

(13.79)

16414

(9.38)

2006–07 22635

(11.91)

9468

(4.98)

4321

(2.27)

2039

(1.07)

24832

(13.06)

18602

(9.78)

2007-08 14409

(7.71)

9256

(5.01)

4567

(2.47)

1527

(0.83)

18978

(10.26)

20347

(11.00)

2008-09 17907

(9.43)

9507

(5.01)

4627

(2.44)

1727

(0.91)

17660

(9.30)

20394

(10.74)

2009-10 21721

(11.01)

9472

(4.80)

4764

(2.41)

2762

(1.40)

17450

(8.84)

24342

(12.33)

Source: Assistant Director of Statistics, Thoothukudi District, 2009-10.

Note: Figures in brackets represent the percentage to gross sown area.

95

The most predominantly cultivated crop with an area of 30670 hectares

was cotton, followed by pulses (30,120 hectares), Chilly (16,414 hectares) and

banana (9,989 hectares), in 2006-07. During the year 2009-10, cultivated crop

with an area of 24,232 hectares was chilly followed by pulses, cotton and

banana with 21,721 hectares, 17,450 hectares and 9,472 hectares respectively.

The area under pulses has declined from 13.53 per cent in 2006-07 to 11.01 per

cent in 2009-10. The area under banana has increased from 4.49 per cent in

2006-07 to 4.80 per cent in 2009-10.