Chapter IIIBox 3.5: Rural Business HubsThe 73rd Constitutional Amendment, 1992, has mandated panchayats as Institutions of Self Governmentto plan and implement programmes of economic development and social justice. Over14 years, panchayats across the country have achieved varying levels of success in delivering basicservices. Though some of panchayats have also been promoting economic development of localresources by supporting micro-credit and micro-enterprises etc, government interventions in thedirections of promoting rural industry and economic growth have largely been ignored or neglectedby the panchayats. The need has been to encourage and involve panchayats in economic developmentof rural areas and also to help private and public sector entrepreneurs to link with panchayats,for enhancing local business potential. Further the private and public sector lack information andcontrol with elected representatives of the people at the local level. Therefore, in June 2004, theMinistry of Panchayati Raj and Hon’ble Prime Minister initiated the concept of the Rural BusinessHubs (RBH) aimed to promote rural industries and increase rural non-farm incomes through providingregular livelihood opportunities. RBH involves a bottom-up approach where private, publicand Panchayati Raj Institutions participate as main stakeholders. Panchayats are the local units fordecentralised governance at village, block and district levels, and are managed by elected representativesof the people. The partnership envisages involving local organisations, companies, NGOsand the government for local economic development, through identification of industrial clustersand involving poor households in cluster development. Local firms are thus utilised for enterprisedevelopment and augmenting skills of the poor. Infrastructure development is overseen by thepanchayats, and inward investment is provided through seed capital by the ministry, and furtherfunds flow is envisaged through other official schemes for poverty reduction, regional developmentand cluster development.improving livelihoods of the poor. A successful example of state-level programmes in Madhya Pradeshthat have been scaled up and integrated into a statewide strategy is given in Chapter V.8. <strong>Development</strong> discourse now recognises that growth does not necessarilyreduce povertyDespite impressive growth, India has an estimated 300 millon people living in poverty. The 11th Planrecognises that some who have low or no access to employment need special measures. These includethe poor, those living in remote and backward regions, and groups of population that are especiallydisadvantaged by gender, caste, ethnic origin, age or disabilities. Employment is recognised as the mostcritical need of this vulnerable segment. It is more severe in the districts where agricultural productivityis low and rural infrastructure is inadequate to attract investment. Therefore as per earlier measures, thepoorer and remote districts were the first ones to get the employment-oriented relief programmes.70The Indian government’s experience of having launched the National Food for Work Programme(NFFWP), which was launched in 150 districts, was that it was useful to meet the high demand for wageemployment in these areas, and also created the minimum infrastructure for supporting livelihoodsfor the poor. The experience of NFFWP and an earlier scheme of the Maharashtra government werecombined to launch the National Rural Employment Guarantee Scheme (NREGS) in 2004. The strengthsof NREGA, and accompanying weaknesses are now well accepted in current discourse. The success ofNREGA is predicated upon access to information, high quality and speed of execution, and intensivemonitoring of all aspects of programme implementation. However, an analysis of the impedimentsshows that the existing bureaucratic machinery is just not willing to adhere to the strict provisions ofNREGA and often actively sabotages its implementation. (See Promoters: Chapter V for a detaileddiscussion on NREGA)70
Policy: Pathways to Sustainable LivelihoodsStudies highlight that both the number and quality of human resources deployed so far are completelyinadequate for shouldering the complex and manifold responsibilities of NREGA implementation(Ambasta, Shankar and Shah, <strong>2008</strong>). If NREGA has to achieve its potential as a major measure forlivelihoods protection, the government will need to dedicate adequate and well qualified personnelrequired at each level for NREGA, and continuously build their capacities, as well as provide sufficientfinancial resources.The 11th Plan has taken steps in this direction, by prioritising:• Preparation of a Labour Budget, Annual Shelf of Projects, and Perspective Plan;• Vigilance and Transparency• Public Accountability, through use of the Right to Information Act• Financial Management, by establishing a non-lapsable Central Employment Guarantee Fund• Empowering Workers to claim entitlements under the Act, by enhancement of knowledge levels,development of literacy skills, organising workers, and enhancing social security levels of workersStudieshighlightthat boththe numberand qualityof humanresourcesdeployedso far arecompletelyinadequateforshoulderingthe complexandmanifoldresponsibilitiesofNREGAimplementation.• Linkages with other development programmes, such as National Rural Health Mission (NRHM),National Mission for Literacy and Elementary Education, and other livelihood and infrastructureinitiatives to ensure basic human entitlements to the workers and to strengthen the natural resourcebase of livelihoodsThe inclusion of NREGA workers under the cover of various life and health insurance schemes willalso raise their security thresholds. The invitation to open savings accounts of workers in banks andpost offices is a major step that will eliminate much of the leakages in the pipeline, and will encouragethrift and small savings among them. However, the decision to open one account for wife and husbandis retrograde, as it is likely to reduce access and control of the woman over her own wage earnings.Other social protection measures include social security through microinsurance, compensation foraccident at work, death and old age pensions for workers in the unorganised sectors, and welfare schemesfor other categories of those disadvantaged. In 2002, social security was offered through a number ofinstitutional structures to certain categories of the unorganised workers. These were under the insuranceindustry, welfare funds set up under the Acts of the central or the state governments. All these measureswere financed from resources outside the Central Plan budget. The 10th Plan envisaged the preparationof a comprehensive perspective plan to provide social security cover to all workers in agriculture, smallestablishments and in the informal sector. The central government drafted legislation for the welfare ofunorganised workers. The Plan also envisaged that the insurance industry would pursue the developmentof social security schemes for agricultural labour. It proposed that the present provision of the centralgovernment, of about Rs 1,000 crore every year, under the National Family Benefit Scheme (NFBS),which includes old age pension for the poor, and some payment on death of the family breadwinner,would be tied up with an insurance company.The needs of these special interest groups have been considered and relevant solutions have beendesigned, with new approaches being tried in recent years. New schemes have been introduced, and newBills have been placed in Parliament, some have been enacted too. The performance of these policiesis, however, not yet fully assessed and a more concerted effort in outlining achievements will be neededby the middle of the 11th Plan to refine and consolidate many of these measures.Theperformanceof thesepolicies is,however,not yet fullyassessedand a moreconcertedeffort inoutliningachievementswill beneeded bythe middle ofthe 11th Planto refine andconsolidatemany of thesemeasures.71
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ChapterPage NoForeword 6Preface 8Ab
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Chapter Iresponse, risks and shocks
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Mona DikshitMona Dikshit has been a