A road map to strengthen India’s rural economy

Go Global By Hindustan Times June 12, 2020

The coronavirus disease (COVID-19)-induced pandemic has thrown up several socioeconomic challenges for India, the most critical being how to revive the economy. To cross this hurdle, India needs to re-engineer and reconfigure its socioeconomic set-up. One of the key drivers of this reconfiguration would be the behaviour of migrant labourers. This will be crucial because the proportion of the labour-dependent informal sector in the economy is high.

India has an estimated 497 million workers, of which about 94% work in the unorganized sector. A large percentage of this population has been severely hit by COVID-19.

During the lockdown, despite severe restrictions, many returned to their villages by whichever means available. The less-adventurous workers stayed back, but without any income. With uncertainty about the lockdown and no cash left, most remain desperate to get back to their homes, even though the Union government has now allowed several businesses and industries to open in some zones.

The reasons behind this desire to return home are not far to seek. They feel that the village ecosystem provides them emotional security, and to a large extent, food security.

Now the crucial question is: What will be the behaviour pattern of migrant labourers once the lockdown is completely or substantially lifted, and after things start returning to normal?

There is a strong belief that many migrant labourers may not return to their workplaces due to uncertainties, apart from the requirements for the harvest season in rural areas. The memories of the hardships they faced during the lockdown and the difficulties they experienced during their return to their villages will not fade from their minds soon.

This is an unprecedented situation. But this also provides an unprecedented opportunity for the nation. Over the years, India has witnessed a phenomenal increase in rural-to-urban migration, due to declining opportunities in rural areas, dwindling returns from agriculture, and rapid urbanisation/industrialisation in cities.

This has led to a mushrooming of slum-clusters in cities, resulting in a severe strain on the urban infrastructure such as water, sewage, transport, and on social resources. It seems like the coronavirus has pushed a reset button to ensure seamless reverse migration from urban cities to rural areas, and we, if we so desire, have an opportunity to capitalize on this situation.

In the effort to jump-start the economy, mainly the micro, small and medium enterprises (MSMEs) sector, we could try and integrate these reluctant-to-return migrant workers into India’s rural economy. This may also be an occasion to realize the dream of Mahatma Gandhi, by making his concept of gram swaraj a reality.

It is well-known that people in many districts have certain skill sets, which have been inherited, evolved and nurtured through successive generations. When a labourer, skilled or otherwise, migrates to a big city, he subsequently pulls in a few more of his village folk to that city for employment.

After this reverse migration, these skilled migrants are available in a cluster in rural areas. This can be leveraged to set up an MSME unit and provide it with credit, technical know-how, and market support. For example, Uttar Pradesh chief minister Yogi Adityanath mooted a plan of setting up one type of industry in one district in Uttar Pradesh. This could be an ideal time to give such plans a functional shape.

It is time for the Union ministry of MSME and the state governments to come up with a workable plan to encourage a cluster of the cottage, small and medium enterprises in villages and mofussil towns.

These enterprises may take a while to come up. In the interregnum, an action plan could be drawn to expand the scope of development works under the Mahatma Gandhi National Rural Employment Guarantee Scheme.

The educated among the skilled labourers could lead this MSME effort, especially in the food and fruit processing sectors. The Centre’s Micro Units Development and Refinance Agency bank could be a big help here.

This article was written by Desh Deepak Verma from Hindustan Times and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.