The call for ‘Make in India’ is timely and has been well received. There are plans to strengthen the manufacturing and services sector through various strategies. The issue is how can these strategies be tailored to further reduce rural poverty, estimated at four times the number of urban poor?
Micro, small and medium enterprises (MSMEs) in the manufacturing and services sectors, barring handicrafts and handlooms, are concentrated in 1,250-odd industrial and services clusters situated mostly in the metropolises and relatively well-off rural India.
Hence, there is limited scope to touch that part of rural India where poverty is extreme. Among the poor, the most disadvantaged sections include those belonging to the SC and ST communities, minorities and women. Add to this the fact that the share of women in the labour force has fallen sharply in recent years.
The challenge, therefore, is threefold: how to (a) create more industrial opportunities in sections of rural India untouched by ‘industrial India’, by (b) involving the poorest, and among them the most disadvantaged, and (c) upscale it in a sustainable manner.
In a recent experiment done by the Foundation for MSME Clusters with the support of an ACC Limited supported CSR project in Lakheri, a small township in Bundi district of Rajasthan, these issues were addressed.
An assessment study suggested that basic stitching skills were prevalent among most of the women in Lakheri. Sewing machines were available in one in every 10 households.
Keeping this in mind, around 100 women were provided with basic skills in embroidery, design and professional approach.
However, after the basic training, the professional part of the training gathered momentum when actual orders were placed through buyers. Unskilled women are getting transformed into entrepreneurs. More women from nearby rural areas are now willing to go through the next training process and enter this trade.
Lakheri is seeing the birth of a textiles handicrafts cluster.
The process suggests that rural India can be converted into manufacturing hubs through appropriate understanding of the local resource — raw material or skill. Such skill or raw material or environment, based on local comparative advantage, needs to be harnessed through professional training and linked to markets. It is the market that does the teaching thereafter, creating centres of specialisation (clusters).
Gradual processIdeally, the process should start with a mix of the not-so-poor or relatively better-offs, having some capacity to take risk.
In Lakheri too, the process was initiated with these two categories of women based in the townships, who had placed a higher level of trust on the process of transformation compared to the villagers who, probably due to limited resources, wanted to see the results before being part of the process. It is only in stage two that the process will spread to the poorest.
The process is often self-propagating. As skill evolves locally, the need to get skills from outside also falls, making the process more locally sustainable.
Providing management skills will further strengthen the process, thus effectively leading to the creation of rural clusters. But there is a clear need for professional technical support and handholding.
A rudimentary calculation suggests that assuming a cost of ₹20 lakh for a group of 10 villages, and a handholding process of three years that will provide continuous livelihood for around 300 families, this process will demand an outlay of approximately ₹36,000 crore.
Assuming a probability of success as half, it can create livelihood for around 1 crore poor and marginalised in rural India in 3 to 4 years. Support can come from CSR funding and schematic support.
Such production points need not be working full-time, thereby creating a work-life balance that will enhance women’s employment and lead to gender mainstreaming.
Of course, there can be a number of variants to this model. All these will make the ‘Make in India’ campaign further inclusive.
The writer is the director of Foundation for MSME Clusters. The views are personal