🏙️ DAY-NULM
Comprehensive guide to urban poverty alleviation, covering detailed legacy NULM components and 2026 updates like PM SVANidhi and NAMASTE
Overview
Urban poverty requires multi-dimensional support, from individual entrepreneurship to large-scale community mobilization. For over a decade, the DAY-NULM (Deendayal Antyodaya Yojana - National Urban Livelihood Mission) was India's flagship mission for the urban poor.
2024-2026 Transition: While DAY-NULM officially concluded its mission phase on September 30, 2024, its framework remains the foundational "operating system" for urban poverty support. Most active Self-Help Groups (SHGs) in cities were formed under NULM. Today, urban support has evolved into more targeted missions like PM SVANidhi and NAMASTE which run alongside legacy social banking schemes like DRI.
Foundational Framework: DAY-NULM
Launched on 24.09.2013, NULM replaced the older SJSRY scheme. It is funded in a 75:25 ratio (90:10 for NER states) between the Centre and States.
1. Target Beneficiaries & Social Inclusion
The mission mandates specific reservations to ensure that the most vulnerable urban residents are included:
- Women: Minimum 30% of all beneficiaries.
- SC/ST: Targets are proportionate to their local population in each city.
- Differently-abled: 5% reservation.
- Minorities: 15% of targets are earmarked for minority communities.
2. Individual Enterprises (SEP-I)
The Self Employment Programe Individual component helps an individual urban poor person set up a small business like a shop or a repair center.
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Overview
Urban poverty requires multi-dimensional support, from individual entrepreneurship to large-scale community mobilization. For over a decade, the DAY-NULM (Deendayal Antyodaya Yojana - National Urban Livelihood Mission) was India's flagship mission for the urban poor.
2024-2026 Transition: While DAY-NULM officially concluded its mission phase on September 30, 2024, its framework remains the foundational "operating system" for urban poverty support. Most active Self-Help Groups (SHGs) in cities were formed under NULM. Today, urban support has evolved into more targeted missions like PM SVANidhi and NAMASTE which run alongside legacy social banking schemes like DRI.
Foundational Framework: DAY-NULM
Launched on 24.09.2013, NULM replaced the older SJSRY scheme. It is funded in a 75:25 ratio (90:10 for NER states) between the Centre and States.
1. Target Beneficiaries & Social Inclusion
The mission mandates specific reservations to ensure that the most vulnerable urban residents are included:
- Women: Minimum 30% of all beneficiaries.
- SC/ST: Targets are proportionate to their local population in each city.
- Differently-abled: 5% reservation.
- Minorities: 15% of targets are earmarked for minority communities.
2. Individual Enterprises (SEP-I)
The Self Employment Programe Individual component helps an individual urban poor person set up a small business like a shop or a repair center.
- Age: Minimum 18 years.
- Maximum Loan: Up to ₹2 Lakh.
- Margin Money: This is the borrower's own contribution. It is NIL for loans up to ₹50,000, and 5% to 10% for higher amounts.
- Collateral: NIL. Banks are covered under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), ensuring they have no risk.
- Repayment: Usually 5 to 7 years, which includes a moratorium (a "payment holiday") of 6-18 months.
3. Group Enterprises (SEP-G)
The self employment programme group component helps groups (minimum 3 members) who want to start a joint business.
- Project Cost: Maximum of ₹10 Lakh per group (or ₹2 Lakh per member).
- Inclusion: At least 70% of members must belong to urban poor families.
- Repayment: Same as individual loans (5-7 years).
Interest Subsidy Procedure for Banks
There are two procedures for interest subsidy settlement:
- Procedure I: Monthly settlement of claims from banks. ULB releases the subsidy, and pending claims addressed quarterly.
- Procedure II: A designated public-sector bank in each state acts as a nodal bank. Data on interest subsidy is uploaded and disbursed via Direct Benefit Transfer (DBT).
Credit Card for Enterprise Growth
- Targets entrepreneurs seeking immediate, short-term capital.
- Aims to replace high-interest informal lending with bank-backed Credit Cards or MUDRA Card.
- ULBs facilitate beneficiary identification and bank linkage for these cards.
City Livelihood Centers (CLCs)
- CLCs support in setup (licenses, certifications, legal needs), operation, tech, marketing, packaging, and accounting for lasting business success.
Loan Coding under NULM
- Loans are classified under the Non-Farm sector.
- Unique codes assigned for various loan types like SEP-I, SEP-G, SHG, and WSHGs.
4. Interest Subsidy for SHGs
To encourage banking, the government provides an interest subsidy to bridge the gap between bank rates and affordable rates:
- Standard Rate: The subsidy brings the effective interest rate down to 7% p.a. for loans up to ₹3 Lakh.
- Prompt Repayment Incentive: Women SHGs that pay their installments on time get an extra 3% subvention, making their effective interest rate only 4%.
5. SHG-Bank Linkage
- Account Opening: Banks are advised to open Savings Bank Accounts for all eligible SHGs, whether registered or unregistered.
- Savings Linked Loans: Banks can offer loans based on group savings.
- Typical ratio: 1:1 to 1:4 (Loan amount is 1 to 4 times the savings).
- Matured SHGs: For well-functioning and matured SHGs, banks have discretion to lend beyond 4 times the savings.
6. Education & Training
- EDP Training: Beneficiaries must undergo 3-7 days of Entrepreneurship Development Training (EDP) before the loan is released.
- Processing Time: Banks are expected to process loans within Max 15 days.
The Successor Mission: D-JAY-S (2024 Onwards)
Deendayal Jan Aajeevika Yojana – Shehari (D-JAY-S) is the official successor to DAY-NULM. It is currently in a pilot/early roll-out phase as the new Mission on Urban Poverty Alleviation under MoHUA (Ministry of Housing and Urban Affairs).
Current Status (Jan 2026)
- Pilot Launch: Started on 1st October 2024 in 25 diverse cities for 3 months, with a 1-month preparatory period and an outlay of about ₹180 Crore.
- Expansion: Subsequent directions extend this pilot design to all Urban Local Bodies (ULBs) across the country.
- Coverage Goal: About 2.5 Crore urban poor households to be brought under socio-economic upliftment measures.
- State Implementation: States have begun receiving central grants under D-JAY-S for FY 2024-25 and 2025-26.
Five Core Components (Exam-Important)
The new mission is structured around five components:
- Community-led Institution Development: SHGs, federations, and worker collectives.
- Financial Inclusion & Enterprise Development: Credit, micro-enterprise support, and skilling.
- Social Infrastructure: Shelters, livelihood centres, and worker facilitation centres.
- Convergence: Linking to other schemes like social security, health, and housing.
- Innovative & Special Projects: Pilots and model projects for specific cities/worker groups.
Priority Target Groups (Very Important)
The mission focuses on six vulnerable worker groups in urban areas:
- Construction Workers
- Transport Workers
- Gig/Platform Workers
- Domestic Workers
- Waste Workers
- Care Workers
These groups receive support in livelihoods, social security, and access to welfare boards/benefits.
Banking-Relevant Angles
For banking exams, remember these linkages:
- Continues the SHG-based mobilisation focus (DAY-NULM had ~1 crore urban poor households in SHGs, ~90% women).
- Emphasis on bank-linked SHGs and federations.
- Micro-enterprise loans to individuals/groups.
- Interest subvention/credit facilitation rather than pure capital subsidy.
- Linkage to Priority Sector Lending (small enterprises, SHG-bank linkage, small borrowers).
Active Targeted Missions: PM SVANidhi & NAMASTE
As urban needs have become more specialized, the government has launched targeted missions that operate with higher efficiency.
PM SVANidhi (Street Vendors)
Launched to provide collateral-free working capital loans to street vendors. It has been extended until March 31, 2030.
- Loan Tranches:
- 1st Loan: ₹15,000 (Repayable in 1 year).
- 2nd Loan: ₹25,000 (After 1st is repaid).
- 3rd Loan: ₹50,000 (After 2nd is repaid).
- Interest Subsidy: 7% per annum, credited quarterly.
- Digital Incentive: Vendors receive cashback for accepting digital payments (UPI).
NAMASTE Scheme (Sanitation Ecosystem)
The National Action for Mechanised Sanitation Ecosystem (NAMASTE) replaced the old SRMS in 2023.
- Objective: Achieving "Zero Fatalities" in sanitation work through 100% mechanized cleaning.
- Sanipreneurship: Providing capital subsidies and easy loans for workers to buy mechanized sanitation machines.
- Welfare: Mandatory PPE (Personal Protective Equipment) and Ayushman Bharat (PM-JAY) health insurance for all sanitation workers and their families.
DRI Scheme
The Differential Rate of Interest (DRI) scheme remains one of the most powerful tools for the "poorest of the poor" in 2026.
- The Rate: A fixed 4% p.a. Simple Interest (the lowest in India).
- Eligibility: Urban families with an annual income below ₹24,000.
- Loan Limit: ₹15,000 for productive activities.
- Special Benefits: Additional ₹20,000 for housing specifically for SC/ST members.
- Moratorium: Includes a 2-year grace period where only interest is paid.
Summary Cheat Sheet (Combined)
| Parameter | Key Details & Explanations |
|---|---|
| DAY-NULM | Urban Poor Livelihood; foundational legacy framework (ended Sept 2024). |
| D-JAY-S | Successor mission. Pilot Oct 2024 in 25 cities. Target: 2.5 Cr households. |
| D-JAY-S Components | 5: SHGs, Financial Inclusion, Social Infra, Convergence, Innovation. |
| D-JAY-S Target Groups | 6: Construction, Transport, Gig, Domestic, Waste, Care workers. |
| SEP-I / SEP-G | Individual (₹2L) & Group (₹10L) collateral-free business loans. |
| Interest Subsidy | Standard 7%; 4% for prompt-paying Women SHGs. |
| PM SVANidhi | Street Vendor Loans in 3 steps: ₹15k ➔ ₹25k ➔ ₹50k (till 2030). |
| NAMASTE | Focus on Mechanized Sanitation & Zero Fatalities. |
| DRI Scheme | Fixed 4% ROI; Limit ₹15k; Income < ₹24k (Urban). |
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