Social Development : Time for Social Entrepreneurship to Take Off The success of any rural transformation initiatives, accordingly, depends on their ability to generate income from beyond the local economy
By Srinivas Uppaluri •
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The 2018 budget raised a number of eyebrows for its emphasis on the rural poor, a move that was quickly decried by critics as being unabashedly populist. And yet, the rising unemployment figures in the country's still agrarian rural sector cannot be as easily dismissed.
Through the years, governments, organisations and individuals have tried to address the looming concern of rural empowerment in India in various ways. I remember working with an NGO in Tamil Nadu which aimed to educate children from underprivileged backgrounds in the hopes of improving their future employment prospects. The NGO soon found that many of these children dropped out from school in the 8th or 9th standard, because they were required to financially provide for their families.
The challenge that these youth were facing was that while they were too educated to work on the fields, they were still not qualified enough to hold office jobs. Neither did they have the necessary resources to start a business. The NGO attempted to address the latter by encouraging these children to begin saving from a young age, offering a matching contribution. These measures would give the children a small capital of Rs4-5,000 to start their own enterprise.
This was when the NGO encountered their second roadblock: although the children had some capital at their disposal, they did not have any innovative ideas about using and growing this money. They would usually set up a small tea or food stall, which would cater to the needs of the people in their own neighbourhoods and localities. While such a system could lend some measure of economic development, it was still largely limited as its income came from the village itself, and not from external sources, such as other villages and states. This money would go on to be used by the youth and their families to purchase goods and services from other establishments that were also within the same village – the funds were was being circulated over and over, without any additional income coming in. In comparison, industrial and commercial hubs such as Mumbai and Bangalore grow and flourish on the basis of the wealth they draw in from other states and countries.
The success of any rural transformation initiatives, accordingly, depends on their ability to generate income from beyond the local economy. This influx of wealth is vital to help Indian villages to move beyond sustenance and towards growth. In India, many rural transformation initiatives are focused entirely on agriculture,or khadi and handloom manufacturing based of the Gandhian ideal of self-sustenance. These (as well as CSR funds) can be excellent starting points, but must be complemented by a more contemporary understanding of self-sufficiency as well as newideas to generate wealth. We must also improve market access for our rural populations, and give them the means and skills to create products that will be consumed by markets around the world.
In Malaysia, for instance, the country's post-independence rural development and economic empowerment policies led to the creation of trade-free zones and manufacturing hubs creating electronics components for global markets.
In India, creating a manufacturing or a tailoring unit, for instance, will help local communities create products that can be exported to domestic and international markets. The funds earned can help the village to create its own schools, hospitals and other vital infrastructure to improvethe quality of life. Such measures will also prevent brain drain from villages to overpopulated and overstrained urban centres.
Instead of only providing relief, we must promote social entrepreneurship in these sectors by first developing our educational systems to imbibe the necessary skills. We must put in place stronger legislation that facilitates the creation of such units, and protects the interests and investment of the rural stakeholders. And finally, we must develop the right leadership that can facilitate this change, and put in place strong infrastructure that can support this enormous transformation.
