RURAL ROCKSTARS
As villages outstrip cities on growth, we profile 20 achievers whose success stories were forged away from the city lights. Meet India’s new grassroots gurus.
The underlying visual of many in urban India is a rural India marked by thatched roofs, kutcha roads, and uneducated people who work in farms. But the village has changed dramatically from the days of Sholay. Rural India has been growing more rapidly than urban India in the last few years and studies by many organisations are only now capturing what my colleagues at Indicus had gathered some time back. Rural unemployment fell by 3.9 million in the period between 200405 and 2009- 10, according to the National Sample Survey ( NSS). Incomes are also growing faster— a 2011 Credit Suisse report found per capita GDP in rural India has grown 1.5 per cent more than urban India: 6.2 per cent in rural areas against 4.7 per cent in urban ones. As per a CRISIL report penned by Dhamakriti Joshi using NSS data, rural household expenditures grew by Rs 3.7 trillion between 2009- 10 and 2011- 212, compared to less than Rs 3 trillion in urban India. The growth in rural India was 2 percentage points higher during the pe-
riod. Meanwhile, education attainment is improving more rapidly than in urban India; even in household assets, more two- wheelers and TVS are being used by India’s rural inhabitants ( see graphs).
These changes have occurred not merely because of productivity improvements in agriculture ( marginal), or NREGA ( slightly more than a drop in the ocean) or even higher minimum support prices ( few commodities covered for a small part of rural economy). There have been massive and obvious, though undocumented, productivity improvements in rural India, including in its manufacturing and services sectors. Today, manufacturing and services account for almost three- fourths ( 73 per cent to be precise) of the rural economy, and will only grow in future.
These productivity improvements have occurred on the back of three developments in the 2000s. First, the spread of the telecom network across India— rural penetration rose from barely 0.7 per cent of the households in 2000, to greater than 33 per cent in 2011, and there is more to come. The overall growth of telecom has been of the order of 19 times in the period as opposed to six times in urban India. The network, unlike in many other countries, has been able to provide highly affordable services even to those at the bottom of the pyramid. It has been well documented that daily wage labourers are using them to find better daily job options, farmers and fishermen for better prices for their produce and youth for greater education options.
The second major improvement has been the building of a good rural road network which will eventually connect all villages to each other and to a large marketplace. Between 2004 and 2008, rural roads under the Pradhan Mantri Gram Sadak Yojana grew more than three times to 1,61,000 km. In 2004, barely 2 per cent of all roads were rural, and this had increased to 5 per cent by 2008. The growth is actually more, but the latest data is not yet available. Many private transport services run on these roads, motorcycles have become more feasible as 24x7 and allyear- round private means of transport, transport of goods and services to villages has become possible at cheaper and regular rates. Together, all of these have led to another major impact on rural productivity. Strange though, India’s urban- centric academia has not even attempted to capture these revolutionary developments and their impact on productivity.
The third major development has perhaps been the most important, and it is a result of the improvements in communications and transport. Human capital in rural India is improving at a very fast
pace. Many government schools do not function— that is well known— but that they are improving is less appreciated. Today, there is rarely a child that is not in school in rural India. Teachers are more willing to teach in the hinterland as travel between the nearest town and the village becomes easier. Youth are travelling to nearby urban centres for education. Consequently, between 2004 and 2010, NSS data shows that among the working age groups in rural India, secondary, higher secondary, graduates and postgraduates have grown by 45, 60, 39 and 28 per cent respectively.
As the examples featured in this issue show, at least some of the better educated are electing to stay back in rural India. This group of rural achievers is very different from the ones in the past. They are not only driven by the passion or idealism of remaking rural India, but there is also a conviction that they and their families can lead happy, fulfilling lives in villages. They are benefiting from the progress, as they are also contributing to it. It is this Indian who is changing rural India the most— not an idealist, but a realist who sees opportunities, and actively participates in the great surge that rural India is making.
We are therefore starting to see the emergence of a virtuous cycle. As bettereducated people utilise greater opportunities, they will create further openings for others. They will, in turn, ensure that at least some of the better- educated workforce and dynamic entrepreneurs elect to work in rural India. Some of these people may even live in urban India, as a good transport system makes it possible to travel long distances.
Indian policymakers have, however, not realised the two most important characteristics of such cycles. One, that they are, typically, shortlived, and tend to die out unless there is a free flow of people, as well as goods and services to and from such areas with the outside world. And two, rural India can only grow if urban India operates efficiently.
Many lazy thinkers have identified NREGA and higher agricultural support prices as the key reason behind rural India’s surge, with little data to prove that claim. If the great surge in rural India is due to welfare, then India has discovered a completely new growth model! Growth can only be sustained if there are productivity improvements, and those can only be sustained if the economy is open. But rural India is still only a partially open economy. Laws, infrastructure, procedures, practices and corruption are working together to create a collection of highly walled islands. Once in a while, technology seeps in through these walls and creates a positive wave. This is essentially what has occurred since the latter part of the 2000s. But whether it is irrigation, mandis, highways, warehouses, training institutes or strange laws, a lot remains the same in rural India. Much as we see dynamism today, we shall see fatigue eating into rural India. Reforms and investment allowed urban India to get somewhere, and some of that trickled down. But, just as the urban economy is now getting tired of hope, so too will rural India, and soon.
Cities and villages are nothing but a collection of closely packed homes with some markets strewn about in between. But the larger collection of human beings in cities have a role to play in sustaining and providing the scale for the smaller collection that resides in each village. Cities enable villages to benefit from economies of scale. So if rural India needs to grow, Indian cities need to function well. There was a reason why the great agriculture- centric Indus Valley Civilisation withered away once its cities were lost.
There is little one can expect or hope from the Government at this time, but policymakers of the future, please note. Rural India can and should grow rapidly, but for that we need to free it from the many artificial barriers our elders have put in its path.
REFORMS AND INVESTMENT ALLOWED URBAN INDIA TO GET SOMEWHERE, AND SOME OF THAT TRICKLED DOWN
TO RURAL INDIA.