“The emergence of the Self-Help Groups (SHGs) is contemporary times points to the slow but steady withdrawal of the state form developmental activities”. Examine the role of the SHGs in developmental activities and the measures taken by the Government of India to promote the SHGs. There has been a discernable shift from government to governance in India. The trinity of state, society and market have come together in as effort to establish good governance. It acknowledges the recognition that the state is a miniscule entity which needs societal support and effort for meaningful impact. NGOs, Civil Society Organizations, Self Help Groups (SHGs) have been nurtured and encouraged to play a constructive role. Self Help Groups in particular have played an important role in poverty alleviation and livelihood enhancement. A small group, comprising members from similar socio-economic background come together to form a SHG. Major functions of SHG are, Creating awareness Promoting savings and thrift Internal lending Maintaining accounts Discussing problems Encouraging participation SHGs have played an important role in Poverty alleviation Increasing employment opportunities Raising awareness Raising the status of its members in society Promoting income generating activities Self Help Groups has evolved as an important mechanism in filling the gap in the formal credit system which has been inadequate as well as not been able to be integrated into the overall rural social and Community development. Measures taken by Government of India (GOI): Priority Sector Lending: GOI has included SHG as a priority sector to mandate and enhance banks focus on them. SHG, have been allowed to run grain banks to secure the food security in food & care regions. Priyadarshini scheme has aimed at women empowerment and livelihood enhancement through SHGs. NABARD is the medal agency for its implementation. Deen Dayal Antodaya Yojana (earlier Ajeevika): National Rural livelihood mission was launched with focus on SHGs. The mission has sought to build Capacity through grass-root level institutions by putting in place a dedicated and sensitive support structure. Social mobilization initiatives such as SHGs have brought out the innate capabilities of people and aided sustainable livelihood enhancement.