Change rural India into vibrant wealth creator

Blog | Premchand Palety

A few days back, I had a discussion on corruption in public distribution systems with Jasvir Singh, a 1992 batch IPS officer with an impeccable track record of integrity. At present, he is the Superintendent of Police (vigilance) in the food and civil supplies ministry of Uttar Pradesh (UP).

Based on investigations conducted by him, he calculated that 95% of the foodgrain meant for below poverty line (BPL) families in UP is stolen by a nexus of politicians, bureaucrats and contractors. The stolen foodgrain is sold in Nepal and also in open markets in India. This, according to him, is a several-thousand-crore-rupees scam that directly hits the poor. He also observed that the poor in the eastern districts are increasingly losing faith in the state and turning to Naxalites who are greeted with gur (jaggery) when they visit their village.

In other states, too, going by media reports, it seems doles given by the Centre and states under various yojanas (schemes) have not been effective enough due to corruption at different levels. If poverty has to be tackled in a radical way, a different approach needs to be adopted.

Where politicians and bureaucrats have failed, our institutes in the area of rural management, cooperatives and agri-business can step in and take the challenge of elevating the “other” India.

Sectoral B-schools such as the Institute of Rural Management, Anand, and the National Institute of Agricultural Extension Management (MANAGE), have shown that they can be change agents by facilitating socioeconomic development in rural areas. Unfortunately, we don’t have even 10 such institutes, while there are more than 1,200 regular B-schools.

The Hyderabad-based MANAGE has done some pioneering work in creating agripreneurs among farmers. The institute has facilitated the setting up of agri-clinics and agri-business centres in different states to offer professional extension services to farmers. There are now more than 4,500 agripreneurs who have started a successful enterprise with the help of the institute. Similarly, some cooperatives, self-help groups and microfinance ventures have achieved considerable success. They have, in fact, ushered in a silent revolution by leveraging technology and modern management techniques in reaching out to the poor.
The Amul story is now well known. Started as a small cooperative in 1946 in the village of Anand in Gujarat, it has now evolved into a more than Rs2,200 crore enterprise, in the process changing fortunes of many petty farmers.

SKS Microfinance started by Vikram Akula is using advanced technology—smart cards—to make venture capital available to poor women. The organization has so far given loans to about 700,000 poor women who are now involved in some kind of entrepreneurial activity.

Similarly, ITC’s e-Choupal has facilitated the access of farmers directly to the markets using the Internet. Launched in June 2000, e-Choupal services today reach out to more than 3.5 million farmers across nine states.

The above examples can be replicated on a much larger scale if an institutional framework is set up. We are now in the era where technological advancement in different areas like communications, energy generation, biotechnology and genetic engineering have thrown open enormous possibilities to uplift rural India. Many of these technologies have still to be tapped to their full potential.

One example is biomass-based power plants. They are small thermal plants, where instead of coal, locally available biomass such as wood waste, rice husk and so on is used. Such power plants, which are eco-friendly, are running successfully in Andhra Pradesh, Karnataka and Tamil Nadu. This kind of distributed generation, besides creating employment, will also meet the local energy needs of rural areas for a better quality of life. Other than electricity generation, biomass can be converted into plastics, lubricants and fuel.

Similarly, innovative applications of biotechnology can drastically increase the productivity of farmers even in arid areas.

Instead of setting up Indian institutes of management in backward areas, the government should set up institutes of rural management and agri-business whose primary objective would be to create rural entrepreneurs. Such institutes will not only disseminate knowledge but also help in creating an interface between entrepreneurs, financial institutions and national-level scientific institutes. The curriculum, too, should be custom-made, depending upon the availability of resources and conditions in different regions. Ideally, every backward district should have one such institute and for admission, preference should be given to children of farmers in nearby areas. These institutes will act like a catalyst in radically developing rural India. Our rural poor can be converted from dole seekers to vibrant wealth creators by leveraging technology.

Relying on traditional yojanas will at best result in incremental improvement in the life of the rural poor and may even further alienate them from the state.

Premchand Palety is director of Centre for Forecasting & Research (C fore) in New Delhi, from where he keeps a close eye on India’s business schools.