##while to devote some time to this. there are over 3 million shgs in india, many of which are already undertaking individual group micro - enterprises. a large number are also doing advocacy work and many especially in south india have formed federations. for economic viability and greater effectiveness, however, shgs should be provided means to start group enterprises, especially in the rural areas, and provided access to land and other means for this purpose. all self - employment programmes integrated into swarnajayanti gram swarojgar yojana ( sgsy ) in april 1999 has made rapid progress over time covering more than 31 lakh ( table 5 ). however, only 22 per cent of the shgs were provided with bank finance for undertaking income generating activities including micro enterprises. the bank assistance was abysmally low leading to low level of investment activity. this shortcoming has been attributed to failure of public intervention to enhance the credit absorption capacity of shgs as well as to the failures of credit delivery systems to reach the poor. the poor credit absorption capacity of poor can be illustrated by the prevalent credit - subsidy ratio under sgsy at about two, much below the target ratio of 3 : 1, partly due to failure to strengthen the demand side of the credit by improving the capacity of the poor to absorb credit for income generating activities ( goi, 2009 ). even in the better performing state of andhra pradesh, the income gain to a swarojgari from enterprise activities under sgsy was a mere rs. 1, 228 per month ( purushotham, 2008 ). government ’ s proposal for universalizing the shg coverage of all poor households by 2013 and increasing the proportion of assisted persons among swarojgaris to 50 per cent from the existing 22 per cent is a welcome initiative in this direction. ill - trained groups in sgsy would be a severe handicap in moving towards the eleventh five year plan goal of inclusive growth. the proposal to cover 1. 7 crore bpl households by 2015 under skill development and placement is to be seen as an encouraging step ( goi, 2008 ). well designed poverty alleviation programmes, if effectively implemented, not only supplement the poverty reducing effects of growth but also could promote pro - poor growth. there is need to design financial instruments that would help people to reduce their risk and vulnerability whether it is for smoothening incomes or ensuring higher education for family members or reducing exposure to health shocks. some of the other measures under

to governor luis maria linde for naming me director general for economics, statistics and research almost two and a half years ago. that was, unquestionably, the necessary step for taking me to where i am today. 3 / 5 thank you, governor, for your constant support over this period. i hope to be up to the task of the legacy you are leaving us. my thanks, too, to the members of the bank ’ s executive commission and governing council and, most particularly, to the deputy governor, javier alonso. javier, your help and far - reaching knowledge of the bank are making these first weeks in the job easier for me. but, above all, i should like to thank my colleagues over the course of the years. it would be impossible to list them all ; many are here today. the career of a banco espana employee can only fully be understood through the prism of the numerous interactions and discussions between us, which are the bedrock on which we build our knowledge and our particular human capital. it is a privilege to be part of this environment and to participate in such an enriching process. finally, the most singular thanks are for my family. without them none of this would have been possible. let me seize this opportunity to refer briefly to what should, in my view, be the two main objectives of the banco de espana at this juncture and which are related to our relevance and reputation. the first has to do with our insertion into the eurosystem and into the single supervisory mechanism. some think this means that the banco de espana has an increasingly diminished role, given that the main functions linked to monetary policy and supervision of the financial system are decided in that framework. however, i believe all of us who have experienced this environment have emerged with a very different lesson learnt. indeed, we cannot overstate the extraordinary potential this setting offers to an institution such as ours which has always valued, and legitimately so, the soundness of its judgement. with that conviction, we should devote most of our efforts to forging closer insertion, collaboration and coordination - based links with our european partners with an essential aim in mind : to reinforce our weight and ability to influence decision - making. this is a challenge and it is also an opportunity, but it is above all a responsibility to support, from the vantage of the banco de espana, the project for european construction. the second objective has to do with our contribution to financial and macroeconomic stability. after an unprecedented