(GIST OF KURUKSHETRA) Unlocking Rural Industrial System

[AUGUST-2022]

Unlocking Rural Industrial System

Context:

Rural economy constitutes 46 percent of national income. Rural Industrialisation can act as a key to further unlock economic and social development of a country. Rural livelihoods and decent work for all are yoked to rural economies, holistic development of rural communities, poverty alleviation, mitigate urban-rural divide and yield in delivering targets under Sustainable Development Goals (SDGs).

Classification of Rural Industries

Industries are units that manufacture goods or articles for consumption by the mass and generate employment. ‘Rural industries’ are non-farm activities dependent on rural resources, primarily meant for employment generation through effective utilisation of locally available resources, human power and technologies that are native or home-grown. These are popularly known as small-scale industries/village industries/rural industries. Rural industry includes khadi, village industries, handloom, handicraft, sericulture, coir and service industries situated in the rural areas. Agriculture and allied sectors are the main sources of livelihood and engage about 60 percent of the rural population.

There are different types of rural Industries in India classified on the basis of scale and primary functions. As per the Eighth Plan, four groups of industries are classified that can be expanded or developed in rural areas, viz.

(i) Traditional Village Industries - include Khadi, leather tanning, woodwork, artisan industries, cotton cloth, handloom, power loom and fabrics, handicrafts, coir, sericulture and wool development, etc.
(ii) Heavy Industries - include mini-steel plants, fertilizer plants which use bio-mass, pesticide manufacturing plants using biological inputs, ancillary engineering units, etc.
(iii) Medium Group Industries - includes minicement plants which use molasses or coal as
energy, minor paper plants, etc.
(iv) Light Industries - include animal feed and fodder industries, industries producing building materials like hinges, screens, doors and windows frames and roofing materials, improved agricultural implements and machinery, etc.

Rural industrialisation would result in three kinds of employment opportunities viz. regular employment for relatively better educated; casual employment of a daily wage type for less educated; and self-employment for entrepreneurs.

Start-ups: Bringing the Spirit of Entrepreneurs in Rural Areas:

Start-ups can be a catalyst in promoting rural industrialisation. ‘Startup India’ is a flagship initiative of Government of India which aims at building a strong ecosystem for nurturing innovation and start-ups in the country. Under Start-up India Initiative, entities including micro enterprises are recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) as Start-ups.
All initiatives under the Start-up India are inclusive and are implemented across states, cities, towns and rural areas. Under Start-up India Initiative benefits are provided to eligible start-ups through Start-up India Seed Fund Scheme (SISFS), Fund of Funds for Start-ups (FFS) Scheme, Ease of Procurement, Income Tax Exemption for 3 years, Support for Intellectual Property Protection, International Access to Indian Start-ups, National Start-up Awards, etc.

Allied sectors -Animal Husbandry, Dairying and Fisheries Sector:

Future Industries India is the largest milk producer in the world. Dairy sector contributes around 65-70 percent to the livestock GVA. Annual milk production in the country has grown by 6.4 percent (CAGR) in the past 5 years. Dairy is a high priority sector for the Government of India due to its socio-economic significance, employing 80 million farmers directly.
Livestock sector has been a stable source of income across agricultural households accounting for about 15 percent of their average monthly income. The Livestock sector has grown at a CAGR of 8.15 percent over the last five years ending 2019-20.
To boost the livestock sector and make the dairy sector more remunerative, Hon’ble Prime Minister has announced a Rs. 15,000 crore Animal Husbandry Infrastructure Development Fund (AHIDF) under AatmaNirbhar Bharat Abhiyan stimulus package. This is an interest subsidy, centre sector scheme that envisages promotion of investment by private players and MSMEs in dairy, meat processing and animal feed plants that may create 3.5 million jobs.

Conclusion:

Rural industrialisation can play an important role in achieving multiple development objectives like employment generation, structural transformation (through shifting labour from agriculture), and poverty alleviation among others. Rural Industrialisation can be expedited by scaling up development programmes to enhance participation of rural population. Skill development, start-ups with financial assistance, access to education, healthcare, and new technology can play a significant role in rural development.