The Hindu Business Line : Back to the village

On Monday, the Union Commerce Minister, Mr Kamal Nath, told a conference in New Delhi that growth was meaningless if it did not reach the rural masses who form the bulk of the nation’s population. In terms of numbers, this is axiomatic: Growth in a given society will be the most productive if the largest number of people are benefitted by it. The point of this piece is: Why has this truth been underscored at this point of time?

Making ‘noises’

The reason, of course, is clear, namely, the prospect of Lok Sabha elections looming ahead in the wake of the India-US nuclear deal controversy. If this is so, what the reference, at this juncture, to growth and its impact on the rural populace suggests is that politicians are very fast off the mark when it comes to making the right noises at the right time, the inference being that they (with honourable exceptions) usually do not do so at other times. But the problem is that not much is accomplished beyond making ‘noises’, which is the last thing required for a country such as India where implementation of growth policies is much more problematic than their formulation. As the Commerce Minister rightly said: “When I go to my district in Madhya Pradesh, what good would it do if I tell the people there that India is growing at 9.3 per cent. We must make sure that the growth impulses are felt in all parts of the country, particularly in the rural areas”.

Growth impulses

What are these “growth impulses” that the Minister is talking about? One such impulse can be increased employment opportunities, which Mr Kamal Nath has mentioned. But such employment can be of at least two types: One the result of normal investment by either the public or private sector or by both, and the other through specific Government employment-generation projects (such ast the rural employment guarantee scheme) which have their basis in poverty-alleviation programmes instead of normal profit-linked investment decisions. In India, there is a need for both methods of increasing rural employment, which should in the ordinary course lead to an increase in the income of rural households and, thereby, an improvement in their standard of life. The point is that the task of artificially injecting employment in the rural areas is so absurdly large that whatever the authorities can do in the sphere is minute compared to what is needed, the limiting factor being the availability of resourses with the Government for such projects.

Rural potential

What this means is that for a growth of 9.3 per cent to be really effective for the rural population (as reported, the Commerce Minister puts the number of people dependent on agriculture at 630 million), the normal profit-led investment should increasingly find its way into the semi-urban and rural areas, which would not only be self-sustaining (if the decision to set up the projects has been taken sensibly) but would also release precious official resources for use elsewhere in the economy.

Clearly, for such proliferation of business enterprises in the rural areas, in the requisite numbers, the Government of the day will have to devise suitable policies. That this is easier said than done is indicated by the experience of the past, the onus perhaps falling more on the State governments than on the Centre for such an initiative. Words, words, words, is all that one can say when referring to the Commerce Minister’s homily on growth and the Indian villager, which is unfortunate considering the potential that the rural population holds for rapid economic progress.

RANABIR RAY CHOUDHURY

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Growth must be inclusive, equitable: Kamal Nath

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