21 July, 2015

Socio-Economic Census makes case for Rural Incomes beyond Farming



 

The first set of findings from the Socio-Economic Caste Census (SECC) 2011, released by the government earlier this month, raise some serious concerns. Unfortunately, there has been a limited discussion on relevant policy questions that the SECC raises. Despite some limitations and drawbacks, the SECC remains an extremely valuable data source for policy makers. We must evaluate whether our present policies are in sync with the status quo presented by the SECC. Our politicians and commentators need to look beyond caste data and give due attention to the socio-economic dimension of the study.


The SECC shows that the main income source of about half of the rural households (51 percent) is manual casual labour. More than half of the rural households (56 percent) are landless. The figures among SCs are worse than the national average as 67 percent households depend on manual casual labour and 70 percent are landless. .
Lalu Prasad Yadav and Nitish Kumar who have been agitating for release of the caste data should probably show some concern about these figures as they are particularly worrying for Bihar. The state has the highest proportion of households dependent on manual casual labour. It is the main source of income for more than 7 out of 10 households in the state. Also the proportion of landless households is greater than the national average in Bihar at 65 percent.
These figures clearly point towards an urgent need for generating alternate rural employment. People currently working as manual labourers need to be provided better paying stable employment. This is only possible by shifting people out from agriculture to the secondary sector/manufacturing. This has become the prime objective of the central government as the Prime Minister Modi declared that his government would focus on generating jobs in the coming years. The three flagship initiatives – Digital India, Skill India and Make in India are essentially focused on job generation. It is impossible to create employment without successful implementation of these three programmes. Also, among the 30 percent who depend on cultivation, many would only be small and marginal farmers due to inadequate land or low productivity. Some of these individuals might prefer shifting out of agriculture if alternate employment opportunities are available.
Income from non-agricultural activities is the main source of income for only 1.6 percent of rural households. Rural self employment could be a major employment generator if adequate access to credit is provided to small entrepreneurs. The government’s MUDRA Bank programme which has been launched specifically with the objective of providing credit to micro business owners and self employed people could bridge this gap.
Expanding irrigation network for increasing agricultural productivity
The SECC showed that close to 40 percent of the land in rural India is unirrigated. In major states like Uttar Pradesh, Maharashtra and Karnataka, this figure is greater than the national average at 55 percent, 47 percent and 50 percent respectively. Also, only 37 percent of the land has assured irrigation for two crops.
The heavy dependence on the Monsoon increases the risk factor for farmers and makes their income unstable. Thus, expansion of irrigation is necessary for increasing farm incomes and reducing risks for farmers. Also, land is a scarce resource and is bound to get acquired for infrastructure and industrial development. If we want to ensure that a decline in land under agriculture does not lead to fall in food production, we must work on improving agricultural productivity. This requires assured irrigation facilities for the farms. The government has been taking steps in this direction and the Cabinet recently approved Rs. 55,000 crore Pradhan Mantri Krishi Sinchai Yojana with the objective of expanding irrigation facility across the country.
Mobile Coverage for JAM Trinity

Overall mobile coverage is quite substantial as 71 percent of the rural households in the country have mobile phones. Disaggregating this figure reveals high inter-state differences. Apart from the North-East states, some major states like West Bengal, Odisha, Chhattisgarh and Madhya Pradesh have low coverage. In fact in Chhattisgarh, less than one third of the rural households have mobile phones.
The government plans to extend the benefits of government schemes in the form of direct cash transfers through the ambitious JAM (Jan Dhan – Aadhar – Mobile) Trinity. The basic idea is to link the Aadhar Card of all beneficiaries with their bank accounts and provide access to banking services through the mobile phones. This would help in reducing leakages of subsidies and bring down the subsidy bill. Over the years, Aadhar has made considerable progress and Jan Dhan Yojana has been successful in expanding bank account coverage. A larger level roll out of the JAM Trinity is not possible without wider mobile coverage. The states with low coverage also have a high proportion of the country’s poor. Thus, they require special focus and concentrated efforts under the government’s Digital India initiative.
One must be cautious that the SECC findings are based on revealed data and such studies often have underreporting. Thus, the data points should essentially be considered to be lower bounds. Even after accounting for this, we must realize that the study shows a dismal picture of the status quo requiring critical interventions for change. The Modi government has initiated these changes through a combination of programmes. While Make in India is expected to generate jobs and help increase incomes, others like Jan Suraksha are aimed at providing immediate risk protection.

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