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Stepping Out of Vulnerability

November, 2022

The Vulnerability Reduction Fund (VRF) under the Deen Dayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM) is a powerful tool helping vulnerable households across India cope with external shocks and internal vulnerabilities. This initiative has supported communities in states like Bihar, Jharkhand, Meghalaya, Odisha, and Tripura by offering timely financial aid for food security, healthcare, and livelihood creation, especially during crises like the COVID-19 pandemic.

States have innovatively adapted VRF to their unique contexts. In Odisha, VRF supported the development of nutrition gardens (Mo Upakari Bagicha), helping women like Soni, who sustained their families and earned livelihoods during the pandemic. In Tripura, facing food shortages and supply disruptions, VRF was crucial in providing basic food and household items during the COVID-19 lockdown. Bihar classified VRF into a Food Security Fund (FSF) and Health Risk Fund (HRF), using it extensively to support returning migrants with essential resources. Meghalaya focused on livelihoods, particularly piggery farming, while also encouraging innovative community efforts like voluntary sales days to raise funds for VRF. Jharkhand has implemented state-specific vulnerability mapping and a web-based application to streamline VRF disbursement.

The VRF’s flexibility—available as grants or low-interest loans—makes it accessible for vulnerable households, helping them address food insecurity, health emergencies, and livelihood challenges. The quick turnaround time for fund disbursement (within seven days of Village Organisation approval) ensures timely support. During the COVID-19 pandemic, the fund played a critical role in mitigating the impacts of job losses, migrant laborers’ return, and food and health crises. By strengthening social inclusion and resilience, VRF continues to be a lifeline for many communities across India.

Resource Type Report

Authors Alpaxee Kashyap | Seema Bhaskaran