Modi’s rural vision may turn hinterlands into economic hubs

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Prime minister Narendra Modi’s three announcements may broaden the aspects of economy. The National Agriculture Market (NAM), Gramoday se Bharat Uday and Sagarmala – plan to double port capacity – are likely to ensure a major shift from an urban-industry-based system to a farmer, rural, coast-based economy.

The parameters of the economy are to widen and engulf far more people than a globalised Manmohanomics had done. The only caution Modi has to ensure is that there is no lag in implementation. In the past many initiatives lost their steam after their formal launch. Hopefully there is a change in style of governance and it may ensure that India having taken the stride would be able to sustain the momentum.

Another quite event was the direction of the road transport ministry to states for removal of speed breakers on all national highways to save lives and ensure smooth road travel. The speed bumps led to loss of 4726 lives, enormous manhours, misery for many families and delayed journeys. The move would speed up road movement, minimize losses and add to faster economic activities.

The electronic NAM and Bharat Uday are major policy initiatives. It would ensure marketability of farm produce sans borders – a vision for empowerment of all by strengthening of the villages.

The government has accepted the farmers’ pleas and cries of villagers who together number 8o crore. This segment was ignored as the industry wanted focus to remain on it during the socialist euphoria and the globalization.

The NAM online system ensures connectivity to 21 wholesale mandis in eight states at the initial statges. It would increase to 585 mandis by 2018.

Farmers would be its direct beneficiaries but others like the consumers or traders too would gain enormously. Traders would not be out in the system. They would emerge as bigger facilitators. The consumers it is hoped would benefit as it is expected to bring down the overall prices as many bottlenecks would be removed.

The NAM promises more options for sale. It increases access to markets through warehouse-based sales and thus obviates the need to transport farmers’ produce to the mandi.

For local traders, NAM offers the opportunity to access larger national market for secondary trading. The bulk buyers and exporters are likely to benefit from being able to participate directly in trading at the local mandis through the NAM e-platform. It is expected to reduce their intermediation costs.

This would happen as NAM is fully functional. Farmers will initially be able to sell produce through the mandis within the state. It will gradually be extended to cover the country by 2017. Once this happens the farmers would have access to wholesale markets all over the country.

The eventual goal of “one nation one market” for agriculture and horticulture produce may become a reality in the next few years. Some hurdles like dismantling of the Agriculture Produce Marketing Committee Act (APMC) still remains. This regulates the farm market in the states. Though some states have agreed to amend or do away with APMC Act, still a lot needs to be done in this sphere.

So despite the central government providing the software free of cost to states and grant of Rs 30 lakh per mandi as a one-time measure, the actual momentum may take a bit of time. Only two states – Bihar and Kerala – presently do not have such law.

Each state has different kind of mandis and the e-market would link these. Gujarat has castor seed, chana and wheat mandies, Telangana has paddy, turmeric, maize and onion; Haryana has mustard and wheat; Jharkhand flowers; Himachal shelling peas. A trader located in any corner of the country can access any of these markets. Similarly a farmer can see the prices of his produce in different markets and sell at the best price.

The Gram Uday (GU) would be a major step to energise the rural economy. It would not only supplement the farm activities but also would ensure that overall economic activities are geared up to meet the expectations of increased economic activities. The RSS has already started village clusters for integrated development in many states. The government is likely to follow the model to make villages self-sustaining economic and production units. It aims at creating “samarasta” –harmony – in socially divided villages and orient them to work together for overall development of the society.

The GU programme is a realization that “50 cities and 50 individuals doing good business” cannot turn the fortunes of India. Modi wants to combine Mahatma Gandhi’s ‘gram swaraj’ and BR Ambedkar’s social harmony. The Stand Up India, Skill India and similar other programmes are aimed at creating entrepreneurs in 1.25 lakh bank clusters in the rural India.

The GU aims at ensuring substantial development to strengthen the foundation of villages.

The Rs 1 lakh crore Sagarmala is likely to double the port capacity by 2025. It would link the ports and inland waterways. Thus it creates the highways for development of hinterlands. It can provide faster movements for farm and rural cluster produced goods, integrate SEZs, smart cities, industrial and logistics parks. Apart from creating jobs, it can ensure a sustainable model of development. The project was conceived by former prime minister Atal Behari Vajpayee. Modi has revived it.

The Sagarmala can save up to Rs 35,000 crore through optimal use of multi-modal transport as port capacity increases to 3000 million tonnes by 2025 from 1555 million tonnes now. It is expected to boost exports to $ 10 billion.

People have seen many such programs being launched and also being dumped. Sometimes it has happened by the same political dispensation at other by different political set-ups. Many programmes launched NDA-I were dumped by UPA-I. This government has to ensure that these programmes do not become victim of fancies of anyone. Tailoring a programme is not difficult but continuing it is a herculean task.

Modi has made a good beginning and raised aspirations. Now he has to ensure a system that makes his political system widely acceptable. The success of an economic vision depends on successful political sustainability. Modi has to ensure it so that the change he proposes continues and the country’s hinterlands become the hub of economy.

 

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