Wednesday, August 27, 2008

Public Policy Forum - Creating Opportunities for Inclusive Growth

“Enhancing Participatory Public Policy Making”
Jamia Millia Islamia and Times Foundation Initiative

Excerpts from speech by R K Misra on 12th August, 2008
Creating Opportunities for Inclusive Growth –A case Study in Integrated Rural Development

R. K. Misra began his talk by asking the audience to define the term “Rural”. Some members defined it as being synonymous with poverty. Mr. Misra agreed that majority of the people in Indian villages are living in poverty. So, the question that needs to be tackled is, what is that one factor in our rural economy that leads to our rural population remaining poor throughout their lives? The plausible answer is: all of them are dependent on agriculture for their livelihood .There is a close correlation between rural areas, agriculture and poverty.
Mr. Misra explained how the rural population in India is by and large dependent on agriculture as a result of which the majority of people living in rural areas are poor. He pointed out that in the year 1947 the population of India was around 345 million and stands at around 1.1 billion now. In 1947, approximately 80% of the population lived in the villages, whereas around 60% of the population still lives in our villages.
Mr. Misra continued to note the contradictions persisting in the Indian economy. He said that the agricultural land which used to support 275 million people in 1947 is supporting 660 million now, which is a 2.5 fold increase. Even after factoring in the productivity gains, economic dependence of rural population on agriculture is excessive. While the Indian economy has made impressive gains, the share of agriculture in our GDP in 2006-07 has come down to less than 20% from approximately 80% in 1947. This means that recent economic growth and resulting job opportunities have only been created in the non-agricultural sectors of the economy, primarily the industries and off late the services sector. Unfortunately, these new job opportunities are not available to rural population due to their lack of education and the required skills.
Mr. Misra pointed out that the “Trickle Down” economic theory will not work for India’s rural poor as they do not have required skills to benefit from country’s economic resurgence which is driven primarily by growth in industry and service sectors.
Getting uneducated & unskilled rural folks to migrate and work in urban growth centres (where employment opportunities are available) is not a solution as most of them do not have required skills and end-up doing manual labour which earns them meagre amounts. This amount may be enough for two square meals but it certainly can’t afford them any urban comforts and amenities i.e. shelter, sanitation and potable water. They end-up becoming slum dwellers. In villages at least they have roof over their head and clean air/water.
Public policy experts have been trying their best to increase the income of the people in the rural areas by providing subsidies for agriculture and related inputs. However, irrespective of money spent on these efforts, rural poverty will remain as agriculture income alone can not sustain rural population even with much higher productivity levels given meagre land holdings of farmers in most of the states. Various efforts such as khadi and cottage industries have not been successful due to lack of forward integration, such as branding and marketing.
So how does one make the rural economy self sustaining?
Mr. Misra pointed out that there is a need to find non-agriculture based alternate income generation opportunities in and around villages where these people reside. There is a need to look at local skills, if any, and devise various projects based on these skills to supplement agricultural income without rural population having to leave their villages. Local skill development could be undertaken in the areas of handlooms, handicrafts, community dairy, poultry farming, bee-keeping, fishery, piggery, food processing, community farming of cash crops and through other related income supplementing opportunities.
Financial inclusion by way of micro-finance or bank loans is an integral part of this strategy as it provides the rural population a credit history and removes them from the clutches of local money lenders and brokers who siphon-off a majority of their entitlement from various government schemes and loans.
Mr. Misra elaborated by highlighting one such Integrated Rural Development Project of “Community Dairy Farm” which he calls the Rs. 1 Crore model. This is a 2 year pilot project being conducted in Sitapur District of Uttar Pradesh. The aim of this project is to make this village Panchayat (comprising of 9 villages) economically self-reliant by supplementing their current agricultural income.
The pilot Dairy will have high-yielding cows/buffalos owned by individual farmers but managed collectively at a common “Dairy Farm” to ensure quality feed, cattle health care & insurance, calf rearing and breed management. As farmers get comfortable and learn dairy business, they will have the option of managing their cattle on their own as per prescribed norms.
Mr. Misra said that funding for the project is being provided by way of micro-finance while specialized training to farmers will be imparted by the state government’s dairy department. This project is a Public Private Partnership project with the full support and involvement of the state government. The Government of Uttar Pradesh has approved this ‘Dairy Farm Project’ and has launched a ‘Dairy Farm Scheme’ with the necessary budgetary support for any farmer who wants to start this business anywhere in the state.
Apart from dairy, fishery, piggery and bee-keeping, Jathropa (bio-Diesel) plantation on fallow land and community farming of cash crops with assured purchase agreements with food processing companies are also part of this project. Private sector companies are being approached to provide water and sanitation, solar lighting and many other facilities as part of their CSR initiatives.
Apart from providing alternate income generation for farmers of these villages, the pilot project has also looked into the issues of youth unemployment. Every Quarter 10 youth (18-25 years) from these 9 villages, who have no or very little education are being given vocational training with assured employment in retail, hospitality and BPO industries earning anywhere between Rs. 5,000 to Rs. 12,000 per month. Their lives have changed. They are spreading the word and attracting other youth to this initiative. Please visit
Coming to children & students, Mid May Meal Scheme and Sarva Siksha Abhiyan has increased enrolment in government schools but quality of education has not improved. Efforts to improve quality of education in the Government schools in these villages are being made by way of training and motivating teachers and providing hostel facilities for the students so that they have conducive and hygienic environment to study to effectively compete with their urban counterparts. Hostel facility with dedicated teaching staff and warden is necessitated as children of illiterate parents do not have family support or help with their education, which is most vital. Please Visit
We hope to have a ‘Model Village’ which is economically self-sustained in 2 years time. The model is simple and replicable and is being executed in a ‘Public Private Partnership’ Mode. We will keep you all updated on the progress.