The Hindu Business Line : Crafting double-digit growth

To maintain growth in a sustained manner, the secret is in giving due importance to our roots, that is, agriculture and the village industries sector and intervene to craft their growth.

THE AGRICULTURAL and allied sector still holds the potential to transform the economy.

"India is a nation of unfulfilled greatness. Its potential has lain fallow, under-used."

— Mr Lee Kuan Yew, Minister Mentor of Singapore, at the 37th Jawaharlal Nehru Memorial Lecture.

`India has arrived' says the media. Undoubtedly for India everything seems to be on the right track, a burgeoning stock market; eight-figure salaries for management graduates; and malls abuzz with nauve riche in designer labels.

It is estimated that almost $21 billion was added to the $140 billion foreign exchange reserves in just one year. The GDP growth for 2005-06 is an impressive 8.1 per cent and the country can expect to sustain this growth rate for sometime now.

While the growth rate has shown a steady rise, the per capita foodgrains availability has declined to an all-time low of 438 gm per day. The prices of essential foodgrains are going through the roof — wheat by more than 10.7 per cent and pulses by almost 19 per cent. Agriculture and allied industries (largest employing sector, with 410 million dependents) continue to stagnate. With over 17,000 farmer suicides reported in the past few years, the future of almost two-thirds of the population still remains uncertain.

Depressing unemployment rate

Equally depressing is the unemployment rate, which went up between the 1993-94 and 2004. On the basis of current daily status (unemployed on an average in the reference week), for males it increased from 5.6 per cent to 9.0 per cent in the rural areas and from 6.7 per cent to 8.1 per cent in the urban areas.

This clearly indicates that there is a growing mismatch and disparity among the masses. The trend is not just limited to a specific class, rather the divide — urban-urban, urban-rural, and rural-rural — is taking on a new paradigm altogether. This is causing events of despair — rising crime rate, power jostling, and mass unrest such as the Naxalite movement.

Relooking at roots

The key question is how long will we be able to maintain the high growth rate? It can be sustained provided the roots, that is, agriculture and allied village industries such as handicrafts, are strengthened and helped to grow. The agricultural and allied sector still holds the potential to transform the economy.

We have one of lowest land productivity and a poor marketing and supply infrastructure. Lack of professional support and non-usage of technology also contribute to the social and economic woes of the rural population, which still lives a life of mere sustenance.

Of late, there is a positive trend in the agriculture sector with corporates entering agri-businesses and creating positive synergies in this sector. Most of these organisations have a technology component integral to their business plans whether it is in the form of setting off citizen/customer interface or using technology to streamline the supply chain.

Bouquet of products

But an important aspect here is not just to concentrate on the developed States but also on the laggards.

The need of the hour is to develop a bouquet of products, which not only meets the national demand but also caters to the international market.

The professional assistance coupled with technology intervention will not only mean better prices for farmers but also address issues of land consolidation, food processing, supply chain management and marketing. A win-win situation.

The same model needs to be replicated in handicrafts and other village industries, which are facing an equally critical situation.

A sector supporting almost 20 million craftsmen and nearly 80 million people (an average of four per family) is going through a bad phase. The Chinese onslaught is threatening to wipe out the craft-belts of Benaras, Bhadoi, Kanjeevaram, Gujarat and Kashmir. The craftsmen are left with no option but to resort to unskilled jobs, which have little respect for skills and practices mastered over generations. This is leading to mass unrest in these areas and festering into the Naxalite movement.

Irony of sorts

The situation is all the more ironic because the Government is planning to spend huge amounts on such schemes as the Rural Employment Guarantee Programme even as established sources with huge employment potential are being ignored.

This leads one to conclude that if the Government provided its support to this section, it would not only save the largest employable sector of the country but would have to spend nothing on schemes such as the REGP.

Given the massive skillsets of its people and their numbers, India has the potential to emerge as the largest supplier to the world crafts market (estimated to be worth around $150 billion) and all that is needed is some help from the corporate and the government sector.

If one is able to achieve a stable growth rate of 6-7 per cent in this sector alone, one can easily achieve a double-digit growth not to mention the peace and employment, which will come along with it.

(The author is associated with Kalpavriksh Environmental Action Group, Pune.)

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