In the last decade rural India has witnessed various transformations such as increasing rural income, a decent agricultural growth and better infrastructure which improved the livelihoods of rural populace. It, in turn, increased their disposable income and consumption power. This increasing prosperity formulated an inspiration among rural populace to avail better products and services.
Out of 6,43,000 villages in India, 10,000-odd creamy layer villages contribute around 50 percent of rural GDP. These villages have been instrumental for the growth of FMCG, automobile, IT & telecommunication sectors.
Today, rural market has become a priority segment for marketers. Around 50 percent of FMCG sales, over 50 percent of mobile consumers and two wheeler riders come from rural India.
In increasing rural income, many Central and State government programmes and schemes have played a vital role. R&M throws light on some of the major schemes.
Rashtriya Krishi Vikas Yojana
Rashtriya Krishi Vikas Yojana (RKVY) was launched during 2007-08 to reorient the current agricultural development strategies to meet the needs of the farmers. The prime objective of RKVY was to achieve 4 percent annual growth in agriculture during the 11th five year plan. During that period, an outlay of Rs 25,000 crore was allocated for the programme.
In 2012-13, the government further allocated Rs 9,317 crore to the programme. Similarly, in 2013-14 and 2014-15, it allocated Rs 9,954 crore each year, including its sub-schemes.
The RKVY focuses on the need for convergence and integration of various programmes implemented at district and state level into District Agriculture Plans (DAPs) and State Agriculture Plan (SAP). Each district is required to formulate a DAP by including the resources available from other existing schemes of the district, State and Central Government such as Backward Region Grant Fund (BRGF), Swarnajayanti Gram Swarozgar Yojana (SGSY), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), and tied and untied grants from the Central and State Finance Commissions.
Currently, there are six sub-schemes – Bringing Green Revolution to Eastern Region, Initiative on Vegetable Clusters, National Mission for Protein Supplements, Saffron Mission, Vidharbha Intensive Irrigation Development Programme and Crop Diversification – being implemented under RKVY.
Commenting on the RKVY scheme, former Union Minister and renowned economist, Prof. YK Alagh says, “It is very well designed scheme. In some areas it has succeeded very well. But, in some areas it could not work. It is highly dependent on the coordination between the state, district and local officials and agriculture department to execute the programme.”
Mahatma Gandhi National Rural Employment Guarantee Act
A lot has been said about Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) since its implementation. Though the programme has been facing corruption in disbursement of funds through fake job cards, but it has put a check on the migration of labourers from the rural areas.
On the other way, it has affected agricultural labour by increased wages. Moreover, the farming sector is also facing shortage of labourers. But another truth is that MGNREGA has increased rural income.
Prof Alagh says, “Of course, big and middle range of farmers are facing labour shortage due to MGNREGA. Farmers having less than one hectare of landholding sometimes work on their own field while sometimes on others fields. Thus, they don’t complain. But on the other side, it has made agriculture more efficient. The shortage of labourer forces farmers to adopt modernised technologies and machineries.”
Citing an example, he says, “When labourers from Bihar and Uttar Pradesh have stopped coming, farmers in Punjab and Haryana moved towards machineries and advanced technologies. For instance, they started using a Chinese machine for clearing the field to prepare it for the next crop. This Chinese machine was available at Rs 50,000. Then Singapore brought this machine at Rs 20,000. Now, this machine is made locally and is available at Rs 15,000 in Ludhiana. In the shortage of labourer, farmers are getting such kind of efficiencies which make better use of land and water.”
In larger view, the job guarantee programme created a platform to disburse more money in the rural areas. As a result, it increased rural income.
Pradhan Mantri Gram Sadak Yojana
Any infrastructure is good for the people and the market. Pradhan Mantri Gram Sadak Yojana (PMGSY) played crucial role in connecting villages to cities with all-weather-roads. It not only provided good connectivity in the villages, but also facilitated marketers to reach out to the rural consumers. Due to this, there has been a mushroom growth of village level retailers and entrepreneurs. With all-weather-roads and increasing rural aspirations, the sale of two wheelers and affordable small cars registered a sharp rise in the rural market. Today, world’s leading two wheeler manufacturing company, Hero MotoCorp sells around 55 percent of its motorcycles in the Indian villages.
For farmers PMGSY is playing important role to take their produce to the nearby cities and mandis to fetch better return. Introduced in 2000, PMGSY is still spreading its network in the villages. Impacting further, if any infrastructure project is on the construction mode, it also provides employment to the people. One can imagine how it has helped rural people in getting employment on national level.
Though 60 percent of rural population is still engaged in agriculture, and despite the fact this sector has been growing at 3-4 percent during the last decade, infrastructure projects and MGNREGA jointly have surpassed agriculture sector in generating rural income. While agriculture sector accounts for 35 percent in rural income generation, construction sector is generating around 37 percent. PMGSY has made a big difference in rural India.
Indira Awaas Yojana
Launched in 1985, though Indira Awaas Yojana (IAY), a flagship programme under Ministry of Rural Development, was formulated to provide houses to the people living below-poverty-line, but it marked a change in rural employment generation also. The beneficiaries are sole responsible for construction of the house and role of contractor is strictly prohibited.
The Central Government provides Rs 70,000 in the plain areas while Rs 75,000 is allocated for the hilly terrains. A larger amount goes to the construction labourers while a major part goes to brick manufacturers and cement companies. IAY played important role in the growing cement market in India. There has been a decent growth in brick manufacturing business which has made big entrepreneurs there. Now, they are running SUVs on the PMGSY roads.