Developing Alternate Industries for Rural Economic Development

Developing Alternate Industries for 

Rural Economic Development

 

By Agastya Vinchhi

In collaboration with 1 Million for 1 Billion (1M1B)
 

Introduction

The objective of this research paper is to provide a model for rural economic development for India. This research is inspired by my experiences of working with underprivileged women in rural areas of Andhra Pradesh, India in helping them with their livelihood, in increasing their income levels and in helping them provide sustainable business.

 

I conducted a detailed survey and collated the responses to help figure out the right approach to developing the rural economy. My survey was conducted among women in villages in order to provide a holistic and diverse growth opportunity.

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Indian Rural Economy

India is a heavily agricultural economy. 68 percent of the country’s population and 72 percent of the workforce belong to the rural areas. Agriculture sector employs 64 percent of the rural workforce but manages to produce only 39 percent of the total output (including agriculture and non-agriculture) in rural areas. In 2019, 46% of the total workforce of India was employed directly in agriculture and they produced only 16% of GDP.

 

Agricultural productivity is very poor and is growing only at 3 percent per year in the last decade.

 

Poverty in rural India is rampant with the average annual earning of a small and marginal farmer household at ₹79,779 or about US$ 1,100 in 2015-16, according to the Committee on Doubling of Farmers’ Income. The disparity in per capita rural and urban income has remained persistently high, with an average urban worker earning over eight times an average agricultural worker. The widening urban-rural divide is also evident in the inequalities in consumption, quality of life, and availability of physical and social infrastructure. 

 

To ensure inclusive economic growth, there is an urgent need to focus on transforming the agrarian economy to pull the maximum number of people out of subsistence farming and give them a much more remunerative role.

 

Developing Indian Rural Economy

There are many initiatives that are in play and that need to come together in order to increase the per capita income and improve the livelihood of rural folks. Some of the important ones are:

• Development of alternate industries in rural areas

• Development of physical and digital infrastructure

• Education and human capital development

• Improvement of connectivity with urban areas for smoother business

• Migration of labor to urban areas for better earning prospects

 

Focus of my research and my approach is in developing alternate industries that can utilize the local talent and local resources to grow the earnings potential, and develop a flourishing ecosystem of growth.

 

In order to understand the underlying issues, and to focus the energies and resources for optimal results, I conducted a survey among women in rural areas. Results of the survey have helped me provide concrete recommendations on how to develop the rural economy.

 

Design of the Survey Conducted

A detailed survey was designed to understand

• How development of non-agricultural activities plays a key role

• Key strategies that can be adopted to develop these industries

• How this will impact the lives of underprivileged in rural areas

 

Survey was conducted in person in three rural districts across two states of India among 600 women. This was done in October 2020 with help from local workers of an organization called 1m1b that works with youngsters on societal impact projects. The women selected for the survey came from poor non-agricultural backgrounds and it was a random sample.

 

Following questions were asked as part of the survey:

1. What is your age?

   1. Less than 18 years

   2. 19 years to 24 years

   3. 25 years to 30 years

   4. 31 years to 40 years

   5. 41 years to 54 years

   6. 55 years or more
       

2. What is your education level?

   1. 4th standard or less

   2. 5th standard to 8th standard

   3. 9th standard to 12th standard

   4. Graduate

   5. Post Graduate
       

3. What is your marital status?

   1. Married

   2. Unmarried
       

4. How many children do you have?

   1. Zero

   2. One

   3. Two

   4. Three or more
       

5. How many elderly people are there in your household?

   1. Zero

   2. One

   3. Two

   4. Three or more
       

6. What has been your individual income per month in the last one year?

   1. Zero

   2. Rs. 1 to Rs.999

   3. Rs. 1,000 to Rs. 1,999

   4. Rs. 2,000 to Rs. 3,999

   5. Rs. 4,000 or more
       

7. What has been your family income per month in the last one year?

   1. Zero

   2. Rs. 1 to Rs. Rs. 5,999

   3. Rs. 6,000 to Rs. 12,999

   4. Rs. 13,000 to Rs. 23,999

   5. Rs. 24,000 or more
       

8. What is your primary occupation?

   1. Agricultural labour

   2. Non Agricultural labour

   3. Skilled work in making products

   4. Artisan work

   5. Any other item. Please state here _____________________
       

9. What help do you need in your work or business? [Check all that apply]

   1. Skill building, training

   2. Business mentoring

   3. Availability of finance

   4. Marketing and market connect

   5. Internet connectivity

   6. Help with machines and infrastructure

   7. Any other item. Please state here _____________________
       

10. What kind of skill building and training do you need?

    1. Please state all here _____________________
        

11. Which local and traditional industries would you like to work on that we can promote?

    1. Please state all here _____________________
        

12. If you can get the help you need, how much can you grow your income?

    1. By 20% or less

    2. By 21% to 50%

    3. By 51% to 100%

    4. By 101% to 200%

    5. By 201% or more
        

13. Do you have access to any of the following? [Check all that apply]

    1. Bank account

    2. Debit card

    3. Borrowing from bank

    4. Borrowing from money lender
        

14. Do you need access to better and easier small finance schemes?

    1. Yes

    2. No
        

15. What are the challenges with the existing small finance schemes?

    1. Credit record, credit score

    2. Collateral requirement

    3. Complexity of application process

    4. Middlemen

    5. Any other item. Please state here _____________________
        

16. Do you have health insurance?

    1. Yes

    2. No
        

17. Do you have access to free or reasonably priced health care?

    1. Yes

    2. No
        

18. What are your healthcare challenges?  [Check all that apply]

    1. Don’t know what to do and where to go

    2. Loss of time and productivity

    3. Loss of money

    4. Uncertainty due to unforeseen health circumstances

    5. Any other item. Please state here _____________________
        

19. How will marketing and market connect help you?  [Check all that apply]

    1. Increase in business

    2. Avoid middlemen, so better control

    3. Better profitability

    4. Consistent business

    5. Better pricing

    6. Any other item. Please state here _____________________
        

20. Please rank the following intervention that can help you in the order of importance (a. being most important)

    1. Marketing and market access

    2. Access to small finance

    3. Help with machines and other infrastructure

    4. Health care

    5. Any other item. Please state here _______________________
        

21. Please add any other comments that can help us understand what help you need _______________________________________________________

____________________________________________________________

 

Survey Results

 

The results I found from the survey data were not surprising. 59% of women surveyed were between 25 and 40 years of age. There were a few older women also. 88% of them were married and 67% had one or two children. 54% had an education level of 8th Grade or below. 

 

76% of these women had income levels of less than Rs. 2000 (about US$ 28) per month and 39% of women no income per month. 13% of women said that their family income levels are less than Rs. 6000 (about US$ 81) per month.

The breakdown of these statistics are shown in image below.