| Sumario: | The study intends to analyse the effectiveness of tribal Self-Help Groups (SHGs) promoted under the watershed programme in the Nabarangpur district of Orissa on the basis of primary data obtained from 200 SHG members in four tribal dominated blocks where watershed programme is currently being implemented. The marginal changes are analysed by comparing their present socio-economic status with their past--the immediate preceding time when they were not the members of any SHG. It is found that due to the watershed promoted SHG programme, there is an increase in the Gross Cropped Area (GCA) and in the yield of plantation and horticultural crops. Increased milk production, meat production and shifting from traditional crop production to cash crops are also reported. This indicates a good deal of crop diversification, which is possible due to the efforts of the SHGs in watershed areas. The households from the lower income groups are now in the higher income group. Mean annual household income, mean Per Capita Per Day Consumption (PCPDC) of cereals and pulses, and Monthly Per Capita Consumption Expenditure (MPCE) have increased. This indicates increased consumerism and development in the rural areas propelled by the forces of microfinance activities. As per the outcome of the study, it is viewed that due to the tremendous socio-economic merits associated with this programme, the sustainability of the programme is of crucial importance. Convergence of the rural development programmes with the microfinance programmes can lead to sustainability.
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