Lakhpati Didi: Reimagining Rural Development Through Women-Led Entrepreneurship

Policy Update

Tanvi Nerurkar

Introduction: From Welfare to Women-Led Development

India’s rural development policy has gone through three main phases. The first, called “women’s welfare,” saw women mostly as recipients of nutrition, health, and poverty relief. The second, “women empowerment,” developed alongside the Self-Help Group (SHG) movement in the 1990s and 2000s, focusing on savings, access to credit, and community involvement. The third and current phase, known as “women-led development,” now sees rural women as economic actors who can drive local development (Ministry of Rural Development [MoRD], 2023).

This evolution in policy thinking closely mirrors key theories of empowerment and participatory development. For example, Naila Kabeer’s empowerment framework demonstrates a shift from accessing resources to gaining agency and achieving outcomes, reflected in the movement from welfare to empowerment to women-led development. Similarly, Chambers’ participatory approaches emphasise enabling excluded groups here and enabling rural women to become active agents in moulding development outcomes. By placing these policy phases within these academic frameworks, the analysis gains a deeper understanding of how fundamental change for rural women can occur.

This shift is best seen in the Lakhpati Didi initiative, which was incorporated into the Deendayal Antyodaya Yojana–National Rural Livelihoods Mission (DAY-NRLM) on August 15, 2023. A “Lakhpati Didi” is an SHG member whose household earns more than ₹1,00,000 a year, or at least ₹10,000 a month, for at least four farming seasons or business cycles (MoRD, 2023). By focusing on income that lasts across several seasons, the policy aims to achieve long-term poverty reduction rather than short-lived gains.

Fig 1: Evolution of India’s rural development policy

The scale and ambition of this initiative are unmatched in India’s history of rural development. By early 2026, the programme had enabled over 3 crore (3.01 crore) women from Self-Help Groups (SHGs) to achieve Lakhpati Didi status, surpassing the earlier target ahead of schedule. Building on this progress, the Government has set an ambitious new target of creating 6 crore Lakhpati Didis by 2029–30. The Union Budget 2026–27 reinforced this commitment by allocating ₹17,280 crore to DAY-NRLM, representing a 20% increase over the previous year’s allocation and signalling continued investment in rural women’s livelihoods. This raises a key question: does the initiative bring lasting change to rural women’s economic status, or is it an impressive but ultimately fragile achievement?

This article systematically examines the Lakhpati Didi initiative by first analysing its institutional design and operational mechanisms, then evaluating empirical outcomes and identifying key structural challenges. Drawing on recent government data, budget analyses, and scholarly research, it traces the policy’s structure, achievements, and obstacles to long-term impact. The discussion concludes with actionable recommendations for strengthening entrepreneurial ecosystems in rural India, providing a clear pathway through the initiative’s design, implementation, results, limitations, and future directions.

Functioning: Institutional Architecture and Policy Design

Concept and Objectives

The Lakhpati Didi initiative is not solely a cash transfer or subsidy program. Instead, it is an “outcome framework” within the broader DAY-NRLM poverty-reduction plan (MoRD, 2023). Its goal is to help SHG members move beyond basic livelihoods by supporting income-generating activities in farming, related sectors, services, and non-farm businesses. The main aims are to boost steady household incomes, encourage women-led businesses, improve financial access, diversify rural livelihoods, and establish lasting community institutions.

The initiative uses a five-step approach: first, it identifies Potential Lakhpati Didis (PLDs) in SHGs; second, it builds skills through Master Trainers and Community Resource Persons (CRPs); third, it plans livelihoods and provides assets; fourth, it helps with credit and market access; and fifth, it offers ongoing support and mentoring for income security (Press Information Bureau [PIB], 2024). By July 2024, there were 6,611 Master Trainers, over 3 lakh CRPs, and 2.47 crore Potential Lakhpati Didis identified across India (PIB, 2024).

The DAY-NRLM Institutional Ecosystem

The programme draws its institutional strength from DAY-NRLM, which, as of June 2025, encompasses over 90 lakh SHGs mobilising more than 10 crore rural women across 28 states and 6 union territories (DD News, 2025). This is the world’s largest network of women’s community financial groups. The mission uses a three-level structure, i.e. SHGs, Village Organisations (VOs), and Cluster-Level Federations (CLFs) to build both social and financial support. Ministry of Rural Development (2023) and PIB (2024).

The implementation strategy rests on four interdependent pillars, summarised in Table 1.

Table 1: DAY-NRLM’s Four Pillars Supporting the Lakhpati Didi Initiative

Note. Adapted from Ministry of Rural Development (2023) and PIB (2024). 

MEDP: Micro Enterprise Development Programme; DDU-GKY: Deen Dayal Upadhyaya Grameen Kaushalya Yojana; CIF: Community Investment Fund; SVEP: Start-Up Village Entrepreneurship Programme.

Gender Budgeting and Fiscal Commitment

The initiative’s progress depends on strong financial support. The Interim Budget 2024–25 raised the Lakhpati Didi target from 2 crore to 3 crore women, showing the government’s support for the programme (GoI, 2024). The 2026–27 budget increased DAY-NRLM funding by ₹2,880 crore, bringing the total allocation to ₹17,280 crore, a 20% increase over the previous year (GoI, Ministry of Finance, 2024). This shift in funding focuses more on building women’s assets and skills than on providing support, aligning with current thinking on women’s economic empowerment. However, the effectiveness of this fiscal commitment will ultimately depend on the timely utilisation of funds, implementation efficiency, and the extent to which budgetary allocations translate into measurable improvements in livelihoods and enterprise outcomes.

Fig 2: The institutional four-pillar structure for functioning

Performance and Empirical Achievements

The programme’s scale and pace of achievement are without precedent in the history of India’s rural livelihoods. Table 2 presents key performance indicators as of 2025.

Table 2: Key Performance Indicators: Lakhpati Didi Initiative and DAY-NRLM (2023–2025)

Note. Compiled from PIB (2024), PRS India (2025), DD News (2025), Changeincontent (2026), and Global Alliance Against Hunger and Poverty (2024).

These numbers demonstrate a significant institutional effort. Reaching 1 crore Lakhpati Didis by June 2024 and then 1.5 crore by August 2025, with approximately 50 lakh new members added within just six months, highlights the programme’s growing momentum (PRS India, 2025). Setting a new target of 6 crore women by 2029 reflects the government’s confidence; however, it also raises concerns regarding the sustainability and quality of these incomes and businesses.

For instance, many SHG enterprises operate in low-profit sectors such as food processing or tailoring, where fluctuating market demand and limited access to higher-value markets can make it difficult for women to consistently maintain incomes above the Lakhpati threshold. Such structural vulnerabilities point to the potential fragility of income gains if market linkages, capacity building, and diversified revenue streams are not sufficiently developed.

Differences between states show how important local institutions are. Bihar and Uttar Pradesh led in forming SHGs and disbursed ₹1,23,326 lakh and ₹1,05,132 lakh in support during 2024–25, exceeding their targets (DD News, 2025). Southern states with stronger SHG networks have better rates of businesses moving up, while some districts in central and northeastern India are still behind in both SHG numbers and business results (PIB, 2024). By 2025, the SVEP had helped over 3.7 lakh micro-enterprises in sectors such as handicrafts and food processing (DD News, 2025), demonstrating both the programme’s wide reach and its focus on sectors ready for enterprise.

Impact: Entrepreneurship, Financial Inclusion, and Economic Robustness

Advancing Rural Entrepreneurship

The Lakhpati Didi initiative’s biggest impact is helping women become entrepreneurs, especially those who were often left out of the formal economy. By supporting SHG members to start businesses in dairy, poultry, food processing, tailoring, retail, and agri-services, the programme helps rural families earn money from different sources and rely less on seasonal farming. In 2024, the Ministry of Rural Development signed an agreement with the Ministry of Skill Development and Entrepreneurship to help rural women get formal job skills, facilitating some to become “Millionaire Didis”, a higher income level than the current goal.

SHG loan repayment rates have remained above 98%, demonstrating strong trust and discipline among women borrowers. This challenges old ideas about rural women’s creditworthiness and supports the case for more business loans for them (DD News, 2025).

Deepening Financial Inclusion

Since 2013, SHGs in DAY-NRLM have received over ₹11 lakh crore in loans from banks and other financial institutions (DD News, 2025). At the August 2024 Lakhpati Didi Sammelan in Jalgaon, Maharashtra, a ₹2,500 crore revolving fund was provided to 4.3 lakh SHGs, and ₹5,000 crore in bank loans was provided to 2.35 lakh SHGs, demonstrating the programme’s financial reach.

For instance, Meena Devi from a rural SHG in Bihar accessed a low-interest loan to expand her dairy business, enabling her to purchase additional livestock and diversify her family’s sources of income. By giving women access to savings, digital payments, insurance, and pensions, SHGs help families stay financially secure, even when business income is low or there are farming problems.

Enhancing to Rural Economic Robustness

When families earn income from multiple sources, they are less affected by bad weather, price changes, or market upheavals. The Namo Drone Didi scheme, started in November 2024, is a good example of new ideas coming together. The government covers 80% of the drone cost (up to ₹8 lakh), with a total budget of ₹1,261 crore for 2023–26. This allows women’s SHGs to rent out agricultural drones to farmers, helping them earn money, improve farm work, and become technology providers rather than just workers (PRS India, 2025). By June 2025, there were 3.5 lakh Krishi and Pashu Sakhis and almost 48,000 Bank Sakhis across India, offering important support and protection at the local level (DD News, 2025).

Structural Challenges

Despite impressive scale, the initiative faces a cluster of structural challenges that must be systematically addressed for outcomes to prove durable. Table 3 provides a diagnostic summary.

Table 3: Structural Challenges Facing the Lakhpati Didi Initiative

Note. Derived from PIB (2024), Changeincontent (2026)

The biggest concern is whether incomes will remain sustainable over time. Although the ₹1 lakh target is assessed across four farming seasons to minimise the effect of short-term fluctuations, factors such as market volatility, inflation, and the inherent risks facing small businesses mean that many women may continue to hover near the poverty line. Most businesses operate in low-profit sectors such as food processing, tailoring, and local retail, making significant income growth unlikely without targeted value-chain interventions.

Strengthening these value chains by facilitating producer aggregation, improving access to advanced processing technologies, and supporting integration with larger distribution and marketing platforms could enable women-led enterprises to increase profitability, move up the value chain, and better withstand external shocks. For example, in the dairy sector, a targeted intervention might include forming producer collectives that pool milk from SHG members, invest in modern chilling and pasteurization equipment, and establish linkages with larger retail chains or institutional buyers. This approach has been shown in regions like Gujarat’s Amul model to increase unit value, reduce spoilage, and provide more stable and higher incomes for women producers.

Limited market access makes things harder. Many SHG businesses focus on local markets and struggle with branding, packaging, and logistics. While production is increasing in some states, connecting to bigger markets is still slow. Events like the SARAS Aajeevika Melas, which had over ₹14 crore in sales at NOIDA Haat in 2024 (MoRD, 2024), help with visibility, but these occasional events cannot replace ongoing support for value-chain growth.

Digital competence gaps present a third constraint. While 44 lakh individuals have been enrolled in the Digital Aajeevika Register (PIB, A third challenge is the gap in digital skills. Although 44 lakh people have joined the Digital Aajeevika Register (PIB, 2024), many women, especially in tribal and remote areas, still struggle with online business, digital payments, and using e-marketplaces. Changeincontent (2026) points out that, for example, limited asset ownership, family responsibilities, and market risks keep many SHGs from moving into higher-value businesses. Naila Kabeer’s research also shows that earning money is not enough unless women also gain more say at home and social norms change (Kabeer, 1999). 

Way Forward: Building an Entrepreneurial Ecosystem

To address the challenges identified and achieve sustained impact, the Lakhpati Didi initiative must move beyond tracking numerical progress to focus on building a genuine entrepreneurial ecosystem. In this context, the following four key strategies are particularly critical.

First, SHGs should move beyond savings groups and become producer collectives. This change will help them work at a larger scale, manage supply chains, and negotiate better deals together. Farmer-Producer Organisations (FPOs) and Cluster-Level Federations can serve as models for this shift.

Second, digital tools need to be adopted faster. E-commerce, digital branding, and online payments can help rural women reach bigger markets, both in cities and abroad. The Ministry of Rural Development’s partnership with the National Cooperative Consumers’ Federation (NCCF), signed in March 2024, aims to purchase from FPOs and provide CLF products with better market access (MoRD, 2024). SHE-Marts, which are planned as community-owned shops, can help women become retail business owners, not just producers.

Third, the programme should work more closely with Skill India, PM Vishwakarma, and MSME development schemes. The J-PAL partnership for a Gender Impact Lab, started in March 2024, is a good example of building strong systems to track real business progress, not just income numbers (MoRD, 2024).

Fourth, longitudinal income tracking must accompany target measurement. The current emphasis on enumerating Lakhpati Didi’s should be complemented by tracking cohort retention above the ₹1 lakh threshold across five-year periods. This switch from output to outcome monitoring would significantly strengthen the evidence base for scaling investments.

Conclusion

The Lakhpati Didi initiative represents one of the most ambitious efforts in independent India to transform rural development by enabling women to become entrepreneurs rather than passive beneficiaries of welfare. Its strong institutional foundation in the world’s largest Self-Help Group (SHG) network, backed by sustained government commitment including the ₹17,280 crore allocation to DAY-NRLM for 2026–27 and the programme’s expanding scale, reflects a strategic shift towards women-led economic development. Yet, the programme’s long-term success cannot be assessed solely through enrolment figures or income targets.

Its true impact will depend on whether women are able to sustain and diversify their livelihoods, integrate into competitive value chains, and overcome persistent barriers such as limited market access, entrenched gender norms, and unequal opportunities in geographically and institutionally marginalized regions. Equally important is whether these economic gains translate into lasting empowerment through greater financial autonomy, enhanced decision-making within households and communities, increased leadership, and stronger participation in local institutions.

As Chambers (1997) argues in participatory development theory, lasting poverty reduction is achieved by strengthening people’s capacities rather than merely transferring resources. If supported by stronger enterprise development, value-chain integration, robust long-term monitoring, and multidimensional indicators of empowerment, the Lakhpati Didi initiative has the potential to become a defining model of inclusive, women-led rural transformation in India.

References

Changeincontent. (2026, February 3). Budget 2026–27: 20% hike in Livelihood Mission for women explained. https://www.changeincontent.com/budget-2026-27-livelihood-mission-women-empowerment/

DD News. (2025, October 23). How the Deendayal Antyodaya Yojana–National Rural Livelihood Mission is empowering rural communities across India. https://ddnews.gov.in/en/how-the-deendayal-antyodaya-yojana-national-rural-livelihood-mission-is-empowering-rural-communities-across-india/

Global Alliance Against Hunger and Poverty. (2024). India: Deendayal Antyodaya Yojana–National Rural Livelihood Mission (DAY-NRLM). https://globalallianceagainsthungerandpoverty.org/country-example/india-deendayal-antyodaya-yojana-national-rural-livelihood-mission-day-nrlm/

Government of India, Ministry of Finance. (2024). Interim budget 2024–25: Speech of Nirmala Sitharaman, Minister of Finance. https://www.indiabudget.gov.in

Government of India, Ministry of Finance. (2026). Union budget 2026–27. https://www.indiabudget.gov.in

Ministry of Rural Development. (2023). Lakhpati Didi initiative: Strategy and framework. Government of India.

Ministry of Rural Development. (2024, March 15). Memorandum of Understanding between Ministry of Rural Development and National Cooperative Consumers’ Federation of India (NCCF). https://lakhpatididi.gov.in/

Ministry of Rural Development. (n.d.). Financial assistance under Lakhpati Didi. Lakhpati Didi Portal. Retrieved June 23, 2026, from https://lakhpatididi.gov.in/financial-assistance/

Ministry of Rural Development. (n.d.). How do I become a Lakhpati Didi? Lakhpati Didi Portal. Retrieved June 23, 2026, from https://lakhpatididi.gov.in/how-do-i-become-a-lakhpati-didi/

Ministry of Rural Development. (n.d.). Power to empower: DAY-NRLM initiatives. Lakhpati Didi Portal. Retrieved June 23, 2026, from https://lakhpatididi.gov.in/power_to_empower/

Press Information Bureau. (2024, August 29). Lakhpati Didi scheme: A milestone in women’s economic upliftment (PIB Release No. 152064). Government of India. https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=152064

PRS Legislative Research. (2025). Analysis of the President’s address to Parliament, January 2025. https://prsindia.org/files/policy/Policy_President_Address/2025-26/Presidents_Address_Analysis_2025.pdf

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Kabeer, N. (1999). Resources, agency, achievements: Reflections on the measurement of women’s empowerment. Development and Change, 30(3), 435–464. https://doi.org/10.1111/1467-7660.00125 

Swain, R. B., & Wallentin, F. Y. (2009). Does microfinance empower women? Evidence from self-help groups in India. International Review of Applied Economics, 23(5), 541–556. https://doi.org/10.1080/02692170903007540

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About the Contributor

Tanvi is currently working as a Research & Editorial Intern at IMPRI. She holds a Bachelor’s degree in Architecture from VESCOA, University of Mumbai and is presently pursuing a Master’s in Urban Management at CEPT University, where she explores cities through research-driven policy approaches, adaptive governance frameworks, and sustainable development initiatives. Her objective is to contribute implementation-oriented policy research that supports the efficient functioning of cities and creates meaningful value for society at large. 

Reviewers

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Acknowledgement 

The author extends her sincere gratitude to the IMPRI team for their invaluable guidance throughout the process.

Disclaimer

All views expressed in the article belong solely to the author and not necessarily to the organisation.

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