It is too early to write either the epitaph or the success story of Prime Minister Narendra Modi’s ‘Make in India’ mission. Economists opine that under the liberalised, global economic framework, India has to pin its hope for economic salvation through integrating its economy more integrally with the global economy.
The Indian economy must evolve to position itself as a strong exporter of not only agricultural goods and other services but also of industrial products. In such a scenario, the Modi government’s zeal to woo foreign manufacturers to set up shop in India makes sense. To augment economic development of the country, there is a pressing need to promote the country as a favourable manufacturing destination for global manufacturers. The campaign is pivoted on India’s abundant human resources, including one of the cheapest labour markets in the world.
As the reporter had iterated in an earlier article for this publication, the ‘Make in India’ campaign also entails a specific paradox. In India, skilled labour is concentrated in urban spaces and is limited in rural settings. On the other hand, land is scarce in urban settings. The phenomenon of rural to urban migration is still real in the Indian context leading to over-exploitation of urban spaces.The ‘Make in India’ campaign, in order to really transform the Indian economy, needs to break urban boundaries and explore opportunities in India’s rurality. Rural India remains overtly agrarian in nature. The progress of agrarian techniques and relations has not been uniform throughout India. Whereas the Green Revolution states like Punjab and Haryana have pushed ahead to an era of mechanised farming and futuristic mega-farms, the rest of India has lagged behind. Similarly, states like West Bengal and Kerala had undertaken extensive land reforms unlike many other states. This has increased their productivity and empowered the rural masses.
The uncertainties of agrarian polices have pushed the Indian agriculture into a crisis. It is imperative to resolve this before embarking on the ambitious design of promoting rural India as a preferred manufacturing hub.
Despite the tall claims of the government, the question remains on whether rural India is equipped to project itself as a preferred manufacturing destination. India’s hinterland is riddled with contradictions – economic, social, and cultural. Large-scale caste violence has engulfed major Indian states with Dalits uniting against the exploitation and oppression of centuries. Land acquisition stills remain a burning issue with the rural masses. Apart from this, there is the inherent problematic of ownership and use of forest land by the tribal population. The Narmada Bachao Movement is an example. With such contradictions, it is no mean task to magically transform rural India and project it as a manufacturing destination.
To project rural India as a manufacturing destination the government can take a three-pronged approach. There should be heightened policy intervention on the developing infrastructure of rural India. It needs to be well-connected by roads and railways. Simultaneously, there has to be focus on rural electrification schemes and other infrastructural facilties involving education and health. Access to water sources is important. Secondly, there has to be an emphasis on skill development in rural India. In case of manufacturing units being set up in India’s hinterland, labour cannot be expected to flow from distant urban settings. Such manufacturing units need to be sustained by local labour. Thirdly, the contradictions in rural India need to be addressed. There must be efforts to contain caste violence and exploitation. Similarly, political power must flow into the rural masses through proper functioning of rural self-governing institutions. Landless rural masses must be brought under focused land reforms across the country.
An empowered rural India can only emerge from an agriculturally self-sufficient and successful rural India.
The present budget has allotted `87,765 crore for rural development. `2.87 lakh crore has been as Grant in Aid for Gram Panchayats and Urban Bodies. It translates to about `80 lakh for each Gram Panchayat. This can be used to significantly improve infrastructure of the countryside. The present NDA government has committed to 100% rural electrification by 2018. The government has earmarked a fund of `8500 crore for Deendayal Upadhayaya Gram Jyoti Yojna and Integrated Power Development Schemes.
There is a serious problem of connectivity in rural areas that will deter companies from setting up manufacturing units in rural India. The issue has partly been addresses by the central government by allotting `19,000 crore for the Pradhan Mantri Gram Sadak Yojana. The government is committed to link the remaining 65,000 eligible rural habitats, which require construction of more than two lakh kilometres of roadways, by 2019. Together with the capital expenditure of the Indian Railways, the total outlay on roads and railways will be `2, 18,000 crore in 2016-17. Additionally, nearly 10,000 km of National Highways has been approved. The achievements of these targets can truly transform rural India and make it a favoured destination for companies wanting to set up manufacturing units. There is a need to plan towards greater connectivity to ports from rural regions.
The government has tried to address the need of skilling the rural labour force by the implementation of the proposed 1500 Multi Skill Training Institutes across the country. In the 2016-17 Budget, the Finance Minister has set aside `1,700 crore in 2016-17 for these initiatives. The government has decided to set up a National Board for Skill Development Certification in partnership with industry and academia. It has proposed to scale up Pradhan Mantri Kaushal Vikas Yojana to skill one crore youth over the next three years. Ministry of Rural Development’s Deen Dayal Upadhyay Grameen Kaushal Yojana (DDU-GKY) which skills unemployed youths falling in the bracket of Below the Poverty Line (BPL) category to provide employability is a step in the right direction. The policy needs to be expanded to encompass a larger proportion of rural population as there is a sizeable proportion of rural impoverished masses that are just above the BPL but needs governmental help.
The government must encourage industries associated with the agrarian sector in rural India. The government must also aid in capital formation in the rural sector. Banking and easy credit must be available to prospective rural entrepreneurs.
MSMEs dealing with textiles, food processing, renewable energy, mining and tourism can be promoted in rural India. The government must take care to integrate them with the market. The policy must entail reviving the agriculture sector for the present. The government must also ensure the creation of better storage facilities of agricultural produce as each year hundreds of tonnes of farm produce are wasted due to lack of storage facilities.
Promoting rural India as a manufacturing hub requires certain structural changes. It cannot be a ‘top-down’ process. The changes needs to be organic and must start from ground up. The government must formulate policies that reflect the realities of Indian rural spaces.