Empowerment means strengthening the capacity of poor people to have a say in decisions that impact their lives. Supporting local community initiatives is one way to improve the extent to which policies and institutions respond to the needs of the poor.

The state of Andhra Pradesh in India is using a community development fund, supported by the Bank, to ensure local development needs are well funded, and that the people themselves set the priorities for spending. It also provides an example of how lessons learned from a single project can be applied to increase the poverty focus of other government programs.

Rural poverty in Andhra Pradesh, India's fifth largest state, fell more slowly than in India overall in the 1980s and 1990s. The state government set up a Rural Poverty Reduction Task Force in 2000 and a plan was devised to tackle poverty across this sector.

An important initiative of the program is to support women in poor households to organize themselves for collective action.

The World Bank supported the program with two loans, the first in 2000 for $111 million, and the second in 2003 for $150 million. Part of the resources from these projects have been used to help strengthen more than 99,000 women's self-help groups, and to link them to 6,100 village-level organizations. The two projects have invested about $25 million in 8,000 smaller projects benefiting 200,000 families, and they have placed more than 65,000 children in schools.

Not only have these achievements made poor households better off financially, but they have also raised their social status and increased their bargaining power. The community organizations supported by the project have also emerged as a significant social force. Recognizing their organizational skills and track record in both economic and social development, a new program in the state is involving the women's groups in the management and monitoring of basic health and education services at the community level. The groups are also leading campaigns on issues of domestic violence, girls' literacy, child labor, and untouchability-creating a powerful force for social and economic change.

Lessons learned from this project are also being applied to other poverty programs in Andhra Pradesh. For example, the way the project selects its beneficiaries is now being used to better direct rations cards, girls' education scholarships and other welfare programs to poor people.

To ensure the long-term success of the groups, their capacity to work more effectively with local service providers, and to secure financing from private banks, will need to be strengthened.