Importance of self-employment in employment generation for rural India
Keywords: District Skill Committees, Wage employment, Self Employment, Agrarian Distress, Premature Deindustrialization, Skill demand-supply gap
Employment generation is one of the crucial sustainable remedies for both economic and social inequalities, especially in the context of rural India. Creation of employment opportunities in rural India will not just address the problem of distressed migration witnessed during lockdown due to COVID 19, but also it will set the platform to attract investment in both social and physical infrastructure in the long term.
District level institutions can play a more prominent role in unleashing the potential of agricultural products, local handicrafts and other local products of Self Help Groups (SHG) to energize the local rural economy.
The District Skill Committees (DSC) established under SANKALP initiative of Ministry of Skill Development and Entrepreneurship is trying to come out with viable plans for skill training and creation of employment opportunities. The planning and execution of these plans should ensure that employment generation is aligned with local economic profile, market conditions and institutional infrastructure.
DSCs are focusing on both wage employment and self-employment. Schemes like Pradhan Mantri Kaushal Yojna (PMKVY), Pradhan Mantri Kaushal Kendra (PMKK) and institutions of Industrial Training Institutes (ITIs) though focus on both kind of employment that is self-employment and wage employment. However, the emphasis of Central and State level institutions through these schemes is on wage employment as tracking of candidates and outcomes is measurable.
Nevertheless, in the case of many socio-economically backward districts, lack of industrial presence, lack of enthusiasm for jobs in the private sector and educational backwardness make the generation of wage employment opportunities very difficult. Especially the district which have a relatively higher share of rural population face problem of lack of enthusiasm for these skilling initiatives. In such cases, the creation of small enterprises based on the availability of locals resources and promotion of self-employment opportunities through Self Help Groups (SHGs) and Farmer Producer Organizations (FPOs) have more promising employment opportunities.
Focus on Self-Employment is crucial for employment generation not just from the perspective of rural India but also when we deal with unemployment from the national perspective. In past decades, policymakers have confronted two significant economic challenges. One is the agrarian distress which is reflected in the agitations by farmers throughout the country. Second, as termed by Economic Survey, is ‘premature deindustrialization’. The first problem refers to diverse challenges like pricing of agricultural commodities, availability of marketing infrastructure, changing climate impact, and lack of access to formal banking and insurance infrastructure. The second problem refers to India’s inability to utilize the industrial potential and direct shift towards the service sector.
Different district economies suffer from these two problems in their own way. For example, Hardoi, a district under Lucknow division of Uttar Pradesh has a fertile landscape, is connected to cities like Lucknow and Delhi, and shares boundaries with the industrial district of Kanpur. Despite having good connectivity and geographical advantages of Ganges basin, Hardoi stands at 59th rank in terms of Domestic Per Capita Income among 75 districts of Uttar Pradesh.
In view of the above two challenges, district economies should focus on reviving local clusters of farmers and women by giving them additional skills like grading and sorting. Reviving local resource-based enterprises can help institutions of Self Help Groups (SHGs) in gaining financial independence and freedom to explore in a big way in later phases. Creation of small and multiple enterprises will enhance not just the purchasing power of people but also in developing forward and backward market linkages.
DSC of Hardoi is working with women and farmers of the region by giving them requirement based skills through different organizations and are trying to improve the quality of already existing self-employment opportunities by raising their income. Focus on farmers and SHGs is crucial for Hardoi as around 87% population resides in rural areas. In one such initiative, DSC is helping a Cluster Level Federation (CLF) of Self Help Groups of Ballipur Gram Panchayat in establishing a brand of their own for their products of pickles.
To sum up, the challenge in employment generation thereby opening new doors of financial growth lies not just in addressing the skill demand-supply gap, but also in looking deeper into regional inequalities whose complexities increase in rural India. Development of institutional infrastructure for the creation of employment opportunities faces a fundamental challenge in the form of a diverse social and economic profile, market conditions and institutional infrastructure.
Therefore for many districts of India where agriculture is an important economic sector, focus on wage employment may not a viable strategy yet. Focus on Self Employment through institutions of cooperatives, Self-Help Groups, and Farmer Producer Organizations will push district economies in the creation of opportunities for self-employment and thus in raising the purchasing power of people of the region.
References
1. ‘SANKALP for Employment’ by Juthika Patankar and Dr Maneesh Mishra, published in Yojna, Nov-2020
2. District Domestic Product Estimates:2018–19 (Provisional): Uttar Pradesh Published by Directorate of Economics And Statistics Government Of Uttar Pradesh
