The time is just right to rejuvenate rural economic development with focus on market led local economic opportunities that are fully integrated with the value chain supplemented with financial services and efficient rural infrastructure that ensures security and dignity of local community.
Indian rural sector has transformed into a well-connected semi urban sector with the investments in basic services such as health and education. Moreover, with many government schemes bringing ‘urban’ amenities to rural areas—roads, housing, sanitation, gas cylinders, telecom connectivity and water connection to every home, workers see their villages in a new light. Apart from the social safety net of being with their families, small parcels of owned land and the certainty of shelter seem more reassuring to stay with family in the village.
Most people migrate from villages to cities for two reasons. The first, to find a more lucrative source of income, which a majority do. The second, to find better living conditions, including better educational opportunities than those available in villages. With improved education and healthcare in their own villages the emergence of reverse migration is unstoppable. Local youths are more interested in taking jobs in local rural industries based on agriculture or local economic opportunities and even wanting to be maiden entrepreneurs interested in creating their own start-ups.
Reverse migration, with people no longer willing to move out of villages, will have a number of impacts on the rural economy and way of life. There will be social and economic challenges in dealing with the hegemony in rural areas. Living on the margins in cities, without any social protection, the returned rural folks will have strong resilience and undying survival skills.
Fortunately, many of these labourers have acquired new skills working outside of villages—as part of the digital ecosystem (Uber or Ola drivers); working in factories (textiles or light engineering) or construction; or engaged in services and utilities (electricians or gym instructors) hence investments are looking rosy in fast-growing rural economic sector with assured sustainability and viability.
In the case of agriculture, there will be heightened demand for stability in farm income through increased irrigation, insurance, and climate adaptability. Remittance incomes from migrants in the cities were usually used to provide stability to the fluctuations of the agri-economy. In the absence of this, there will be a need to stabilise farm incomes.
To this end, the farming sector will see a new demand as well. There will be pressure for major agricultural reforms to boost income; and there could be increased appetite for risk or for more secure contract farming arrangements. There is already a greater openness to more risky, capital intensive, higher-return cash crops and farming—flowers, fruits, vegetables, dairy, fisheries, and poultry. Additionally, the supply chain between farmer, farmer producer companies, cooperatives, is going to witness the impetus for agro-processing to happen closer to production centres.
Given the possible supply chain reconfiguration highlighted above, a focus on agri- and allied processing facilities, supporting micro, small, and medium enterprises (MSMEs), and creating a space for more financing institutions and non-banking financial companies (NBFCs), can really strengthen local economy.
Then, as demand picks up over time, and as the government announces new packages and schemes for the poor, spending will eventually increase. And when it does, semi-urban development can emerge as a significant opportunity.
The punch line ‘India banayega Bharat’ has to repurpose our rural strategy with a focus on place-based economic opportunities, better services, better rural infrastructure, and ensuring security and dignity of labour.
India Chamber of Business and Commerce
New Delhi. INDIA
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