YS Jagan Alleges Government Policies Behind Sharp Fall in SHG Credit Growth
YSR Congress Party (YSRCP) president and former Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy has accused the TDP-led NDA coalition government of weakening the state's rural economy by allowing Self-Help Group (SHG) credit growth to decline sharply. He alleged that inadequate policy support for women's groups and the rollback of key financial incentives have affected rural livelihoods and reduced the flow of institutional credit.
In a post on X , Jagan claimed that the slowdown in SHG lending reflects the government's failure to sustain programmes that strengthened women's financial independence during the previous YSRCP administration. He said Andhra Pradesh's SHG movement has long been regarded as one of the strongest in the country, with lakhs of women relying on bank-linked credit for agriculture, dairy, retail businesses and other micro-enterprises.
Citing credit data, the former Chief Minister said SHG loan growth touched a record ₹49,696 crore in 2023-24 under the YSRCP government. According to him, the figure declined to ₹41,623 crore in 2024-25 and further slipped to around ₹41,105 crore in 2025-26 , indicating a fall of nearly ₹8,500 crore compared with the final full year of his government's tenure.
Describing SHG lending as the "lifeblood of the rural economy," Jagan said easy access to institutional credit enables women to invest in productive activities, generate additional income and improve household living standards. A sustained decline in lending, he argued, would discourage rural investments, reduce employment opportunities and weaken consumer spending , ultimately slowing economic activity across villages.
The YSRCP chief also linked the issue to the state's broader fiscal performance. He claimed that Andhra Pradesh's own tax revenue recorded a year-on-year growth of only 3.22 percent in 2025-26 , which, according to him, reflects declining purchasing power and sluggish economic activity. Lower household incomes and reduced cash circulation, he alleged, have also affected tax collections.
Highlighting the previous government's initiatives, Jagan said the YSRCP administration had released ₹4,969 crore as interest subvention to Self-Help Groups, significantly reducing the borrowing cost for women and encouraging timely loan repayment. Interest subvention is a widely used mechanism under the Deendayal Antyodaya Yojana–National Rural Livelihoods Mission (DAY-NRLM) , through which governments subsidise interest on SHG loans to improve access to affordable institutional credit. The Centre and states have consistently promoted SHG-bank linkage as a key instrument for financial inclusion and women's empowerment . Jagan further alleged that the coalition government had failed to maintain the same level of financial support for women's collectives, leading to slower credit expansion and increasing stress in the rural economy. He maintained that sustained investment in SHGs is essential for strengthening entrepreneurship, generating rural employment and improving household incomes.