The prevalence of disparities in the living standard across households is the outcome of income inequality. Inequality can be defined as a deviation from equality where any individual unit is receiving less than his proportionate share of aggregate income. This state is referred to as relative deprivation, whereas absolute deprivation is equated with poverty, wherein one is not getting sufficient enough to survive. Households are not only poor; they also suffer from vast inequality in incomes, in assets and in access to essential services as well as pervasive insecurity. Theoretically and empirically, the effectiveness of self-help groups has mentioned in earlier literature, access to economic opportunities is proxies by SHG membership. Self-help groups play today a major role in poverty alleviation in rural areas. The impact of SHGs on individual members, family, community life, changes in skills, knowledge, attitudes, successful outcomes, and the development of human and social capital. With this background this research paper examines the effectiveness of women SHGs in the promotion of the development of social and human capital through micro enterprise development to work towards reducing income variations of SHG households. The results indicate that the OSHG households make

significant improvement in their incomes and less inequality in income distribution compared to NSHG households and concludes that self-help groups have impact on income distribution