Professional Documents
Culture Documents
Mapping Rural Economy and Market
Mapping Rural Economy and Market
Mapping Rural Economy and Market
Sanjay Kaul
Structure of presentation
Rural economy Emerging opportunities and potential Concerns Stagnant agriculture; high poverty Unemployment; negligible surpluses Limited impact of Government programmes Widening gaps The rural economy: A market or production base? Rural India as production base Households as business partners Importance of non-farm sector
Structure of presentation
Augmenting and sustaining rural growth Context of innovation Key strategies for Government and private sector Rural markets Existing character Reforming rural markets NCDEX initiative for electronic spot exchanges Changes required
from 2.7 % per annum in 1983-94 to 1.07% per annum in 1994-2000. (55th round of NSSO) This rate is practically half the growth rate in the labour force. by use of tractors and combine harvesters has compounded the problem. (from 9.5% in 1993-94 to 15.3% in 2004-05) among agricultural labour households, which represents the poorest group. Exposes poor to market risks and increases transient poverty, whereby households move in and out of poverty due to labour market fluctuations from 41% of rural poor in 1993-94 to 47% in 1999-00. In addition to open unemployment, large sections of the agricultural labour force are disguisedly unemployed, leading to distress migration to urban areas.
Sharp increase in unemployment Growing dependence of rural households on casual labour market
While road connectivity has improved, asset creation has been thinly spread and quality of assets poor. Even at locations where useful infrastructure has been created, much of their usefulness lost due to poor maintenance and lack of ownership by the local community.
10
Much greater investments in irrigation, rural connectivity and electricity Poverty alleviation programmes should go beyond minimal concerns of providing safety nets. Government must move from welfare schemes such as NREGA to growth investments. Move away from regulating to freeing rural markets.
The main design challenge for the Government is implementation of development plans focusing on the livelihood base of the rural poor
Poor should be equipped with assets and skills for livelihood outside agriculture.
11
Augmenting and sustaining rural incomes: Key strategies for the private sector
Economic reform must enrich the rural poor Otherwise the poor will become hostile to reform. Existing rural incomes are spent on sustenance. Additional incomes will be spent on goods and services Huge opportunity in agriculture along the entire value chain. Need to go beyond contract farming into an equity sharing model. Freeing of rural markets can significantly contribute in enhancing rural incomes. However, share of agriculture will further decline. Non-farm sector is an important source of rural incomes contributes over one third of the total rural household income
12
Augmenting and sustaining rural growth: Key strategies for the private sector
Manufacturing would provide rural India with sustainable growth and contribute to poverty reduction. Small scale industrial activity in rural areas is widespread but many of the smallest enterprises have low productivity. A key pre-requisite for the future expansion of manufacturing activities is improvement of the skills of the rural population. Skilled and educated rural population will find it easy to move from farming to more productive areas. Business models can have contractual relationships between small rural-based manufacturers and large urban-based entities. Produce of rural enterprises need to be marketed effectively.
13
Augmenting and sustaining rural growth: Key strategies for the private sector
Private sector could seize the potential of disguised unemployed
At least 30 million households available for diversifying into nonfarm activities without affecting agriculture production base. Technology can make a significant difference to the lives of such rural households. Also need to empower the rural population through use of technology and knowledge.
14
15
16
17
18
20
Changes required
Single Model Act with the following provisions
Recognition of e-auction/trading through private mandis Establishment of private mandis with limited infrastructure requirements Exclusion from the provisions of APMC Act/ mandi bye-laws Exemptions from licensing requirements for all participants of private mandis Enabling direct purchase from farmers Allowing free movement of mandi tax paid goods across States to give pan-India reach Simplification of post sale requirements / compliances
21
Thank You
22