By- Dr.Avnish Jolly :With its rapidly growing economy, India is now recognized as an important economic power. Concerns on who are the beneficiaries of this hitherto unseen economic development has been engaging the minds of the Government for sometime. In November 2004, the Prime Minister Dr. Manmohan Singh had observed that “the benefits of rapid economic growth unleashed through the reforms of the last two decades, need to flow to all sections of society, particularly rural India… We cannot allow India to be divided into two distinct zones, one a modern, competitive, prosperous one and the other a stagnant, backward one.” He also visualised the Panchayats as the medium to transform Rural India to 700 million opportunities.
The Ministry of Panchayati Raj developed these ideas into the Rural Business Hubs initiative which aims at developing an integrated relationship between rural producers and business partners for mutually beneficial cooperation, the entire process being facilitated by the Panchayats. This initiative is built on the idea of convergence of resources available under Central / State Governments schemes, institutional credit and partnerships at the local level. The Ministry planned to promote atleast one RBH in each of the 6000 Development Blocks of the country.
The unique features of this model are:
• Linking rural producers with the wider market through a professional marketing partner and developing this as an integrated business relation benefiting both sides and therefore, sustainable.
• Panchayats / Rural Local Self Governments – the democratic grass root level institutions playing the key role of planning and implementing plans for economic development, wherein the plans are based on local resource endowments, felt needs of people and relative absorptive capacity.
Other important features of this initiative are:
• Based on economic activity, not charity,
• Any economic activity could be taken up but RBHs are ideally suited for agriculture/horticulture/handloom/handicraft marketing where production is decentralized,
• Located in rural areas,
• Generating rural employment/livelihood.
The 4-P Model
The RBH initiative has been developed in partnership with the Confederation of Indian Industry (CII) as a 4-P model (Public-Private-Panchayat-Partnership) with clearly laid out roles and responsibilities for each of the partners. Panchayats perform the key role of identifying skills and endowments of people and natural resources, address the concerns of local inhabitants, establish and sustain community linkages, extend institutional support to viable business initiatives that benefit the rural populace and at a later stage, integrate the economic development plan emerging from RBH initiative with the decentralised district planning process. The business partners would perform the roles of identifying local skills / products that have wider market potential, prepare Business Plans acceptable to the community and provide sustainable local employment. The Central/ State Governments would support the initiative through conducive policy regime, dovetailing government schemes, bridging critical gaps in infrastructure etc.
A National RBH Council Co-Chaired by Minister PR and Past President CII and Minister of State (Commerce) as Vice Chairman, is leading the initiative since December 2004. Similar Councils have come up in 15 States.
The initiative works on convergence of resources from Central / State Governments, financial institutions and other partners.
The Exim Bank has signed MoU with Ministry through which the Bank will provide assistance in identifying the exporters, especially from the SME sector, who can source the products from RBHs with transparent pricing being ensured. The Banks will also provide enhanced visibility to identified RBH products in international markets by linking them with the Bank’s rural portal and displaying them at their overseas offices.
The International Finance Corporation (IFC) has extended financial assistance to CII for identifying RBHs in North Eastern Region and three RBHs have been initiated, based on this study.
The National Research Development Corporation (NRDC) under Department of Science & Technology has converged with the RBH initiative on Sumak Carpets in Nagaland and TIFAC has done so in case of essential oil project in Bihar. Spices Board is involving the PRIs in their joint initiative with ITC in the North East while Export Promotion Council for Handicrafts is doing so in Bastar, NABARD in Bidar, Eastern Zone Cultural Centre Kolkata in Purulia, Handloom Export Promotion Council in Nagapattinam and Punjab National Bank in Bharatpur. Convergence has also been achieved in case of a few Special SGSY Projects in Karnataka and World Bank assisted DPIP in Rajasthan.
131 MoUs across 15 States have been signed so far for setting up RBHs. 28 of them involving Sumak Carpets, Pottery products, handloom, handicraft, fresh fruit & vegetable and processing of agri produces are functional. Another 22 covering folk arts, handicrafts, compressed bricks, vermi compost and agri processing are ready to take of. Partners have been identified and the RBH process is under way in case of 27 other proposals covering handloom, handicraft, woollen products, agri produce, bio diesel, essential oil etc.
The Ministry, in consultation with State Governments, has identified 33 focus districts for setting up RBHs. District level Workshop have been held in seven of these districts and potential economic activities identified. Similar Workshops are scheduled in the remaining districts. CII has constituted a National Council consisting of rural facing companies interested to set up RBHs. First meeting of the Council was held recently. Members of this Council are expected to participate in the District Workshops and identify economic activities for setting up RBHs in their area of interest.
*Inputs from the Ministry of Panchayati Raj