The developmental challenge in rural India

Somnath Chatterjee
The Hindu, 4 April

This is essentially about helping the rural sector realise its own potential by using the gains of modern science and technology and industrial development.

INDIA IS emerging as a major power with the economy registering high growth rates and our cities and urban centres beginning to display marks of affluence. Yet, there is no uniform development, the rural hinterland not being able to march in tandem with urban India. More than 70 per cent of our people live in villages — 80 per cent of our poor also live in rural areas. The benefits of economic growth are not percolating to more than two-thirds of the people. The visible symbols of development should not make us forget the problems of the rural areas.

The Indian economy is the fourth largest in the world. But the growth pattern is not uniform. While the rate of growth for manufacturing, services, and communications sectors has substantially improved, in vital sectors such as agriculture, infrastructure development, and community and social services, and in rural development as a whole, our performance is not appreciable.

Without the development of rural people, the country can never claim to be developed. In recent years, agricultural growth has fallen and so have investment and profitability of agriculture, net sown area under crops, and the area under irrigation. According to the Economic Survey 2006-2007, low yield per unit area across almost all crops has become a regular feature.

Rural India is in crisis. As Dr. M.S. Swaminathan, the distinguished agricultural economist, said, "The agrarian crisis has its roots in the collapse of the rural economy... Unemployment leading to out-migration of the asset-less is growing. The minimum support price mechanism is not operating for most commodities. At every level of the livelihood security system, there is a tendency to make profit out of poverty. Something is terribly wrong in the countryside... "

Today, finding themselves helpless in the face of adversities of various kinds, the peasantry in parts of the country is resorting to extreme measures. Repeated crop failures due to unpredictable climatic variations, inability to meet the rising cost of cultivation, and the increasing debt burden are among the factors leading to frustration. In such a scenario, meeting the challenges of rural reconstruction becomes a formidable and priority task.

Agriculture being the mainstay of our economy, it is imperative that we have a comprehensive and time-bound programme to extricate the sector from stagnation, if not deceleration. Larger irrigation facilities, better seeds and agri-inputs, and fertilizer at reasonable costs will have to be provided to farmers, along with finance and infrastructural and marketing facilities. Agriculture must become an income generating activity and farmers should not be left to the vicissitudes of weather, financial resources, and markets.

To increase productivity and employment generation in the sector, there is a need to bring about structural changes, primarily based on land reforms, as support prices and provision of cheap credit do not help beyond a point. Experience has shown that providing the poor with access to land is not anti-growth. In the rural growth strategy, the dynamism of small family farms plays an important role. Here are some facts about the agricultural turnaround made by West Bengal, mainly due to the extensive land reforms measures undertaken by the State Government over the last three decades.

Land reforms in West Bengal have had two important components: tenancy reforms, known as Operation Barga (share croppers) and the redistribution of land. Operation Barga gave 1.5 million bargadars, or registered tenants, permanent and heritable right to cultivate leased land. Of them, over 30 per cent were Dalits and 12 per cent Adivasis.

Some 1.1 million acres of agricultural land has been re-distributed in West Bengal among 2.9 million landless and marginal farmer families, 55 per cent of whom are from the Scheduled Castes and Scheduled Tribes. Apart from agricultural land, 6.8 lakh households below the poverty line have been given homestead land.

These institutional reforms in ownership of agricultural land unleashed the peasantry's productive forces, resulting in an increase in foodgrain production at the rate of 6 per cent per annum, making West Bengal the country's largest producer of rice and the second largest producer of potato. Its other positive impacts included increasing cropping intensity from 136 per cent in 1980 to 180 per cent today, the second highest in the country, contributing to a consistent share of 3.6 per cent for agriculture in the State's GDP, compared to the country's figure of 1.53 per cent.

Having the highest growth of per capita Net State Domestic Product during the 1990s resulted in a decline in the percentage of population below the poverty line from 60 per cent in 1977 to 21 per cent currently. This contributed to a rise in per capita calorie intake in rural Bengal by 9.6 per cent during 1983-84; nationally it decreased by 3 per cent during the period.

On the national scene, 87 per cent of our villages are in clusters of population of 2,000 or below. These provide small markets without efficient linkages and financing options for which the farmers have fallen prey to middlemen and moneylenders. In many cases, low quality agricultural inputs, sometimes even spurious products, affect productivity, and that tends to trap the farmer deeper in poverty.

We cannot afford to leave the agriculture sector to the vicissitudes of an imperfect market. Apart from ensuring short-term measures such as remunerative support prices and cheap agricultural credit, the state should make substantial long term investments in minor irrigation, water conservation, building rural roads and markets, electrifying villages, providing robust primary education and health facilities in the rural areas.

The efficacy and potential of the cooperative movement in addressing the problems of rural India stand proved. Since rural development essentially encompasses a multi-disciplinary approach, there must be an in-built mechanism to involve people's representation in the conceptualisation, planning, and management of any rural development programme, particularly relating to crop production, water conservation and minor irrigation. Self-help is the best help. Self-Health Groups are examples of the new "social economy" emerging in India. Collectively they represent a large network of grassroots entrepreneurs to generate incomes in rural areas. Today there are more than 25 lakh SHGs with nearly 75 lakh "swarojgaris". We must encourage them, for they can transform rural India by unleashing the entrepreneurial energies of ordinary Indians.

The developmental challenge in rural India is not about making a choice between the imperatives of industrial development and the compelling need for agricultural growth; it is essentially about helping the rural sector realise its own potential for development by using the gains of modern science and technology and industrial development as such. It does not make good economic or political sense to reduce the whole issue to one of a choice between one sector or the other. We have to strive for growth with a human face that is socially equitable and regionally balanced, where all the sectors and the entire population partake of the fruits of our growing economy.

Gross National Entitlement

We need to look at future progress with a new concept of Gross National Entitlement — where people, specially those from the vulnerable sections, will be entitled to earn their living, to have quality education, the right to access good healthcare, to obtain basic needs and indeed will be entitled to and actually have the freedom to live in dignity, instead of being forced to accept what is being doled out by the system.
This is not impossible or unrealistic. We have the examples of several countries, which by determined efforts have effectively addressed the problems of underdevelopment and inequity within very short span of time in recent decades. I recently visited Vietnam, leading a parliamentary delegation, and witnessed the incredible developments that country, which was exploited by long periods of colonialism and ravaged by imperialist wars, could achieve in a short period both in its urban and rural areas. All sections of our political spectrum should treat issues of rural India, where agriculture no doubt occupies the central position, as major national issues, transcending political and geographical barriers and partisan considerations so that the core of our national endeavour can be the speedy and comprehensive development of rural India. In this task the nation's primary duties will be to ensure quality education, adequate health care, sufficient infrastructure for development and for better and better standards of living. The future lies in the development of rural India and it cannot be subjected to partisan political confrontation.

We stand at a turning point that has the potential to bring rural India into the mainstream of economic development. No challenges come without opportunities. We have an unparalleled opportunity to harness the maturity in our economic system, the technological advancements brought about by the infotech revolution, and the potential of a global market to bring in a new dimension of development to rural India. There is an unmistakable realisation and emphatic acknowledgment not only in India but also abroad that if the 21st century is going to be the Asian century, then India will be playing a pivotal role in making that happen.

For that we have to carry on board our large rural populace as well to actualise the dream of developing the nation. The wheels of industry and commerce could rotate smoothly only with a strong agriculture and prosperous rural hinterland.

(Excerpted from Lok Sabha Speaker Somnath Chatterjee's address, on "Rural India: Developmental Challenges," at the 26th annual convocation of the Institute of Rural Management, Anand, Gujarat, on April 3.)