Returning workers can bring prosperity to rural areas
We have a model to follow: China’s Township and Village Enterprises (TVEs). It started with reforms in 1978 when the country invested in raising agricultural production, agricultural mechanisation and liberalisation of rural marketsUpdated: May 25, 2020 16:12 IST
We have treated our migrant workers abominably. With no money to pay rent or buy food, these workers had no choice but to start walking back to their villages. Will they return to work in the cities that treated them so cruelly? Hard to say, but for the time being, at least, they are likely to stay with their families and make do with whatever they have.
This tragedy is as much a humanitarian as an economic one. Workers have not just lost their livelihoods, they are now also staring at an uncertain future. Will the economy recover fast enough to absorb them again? Long periods of waiting and inaction will have a cost. Some of these people are unskilled labour, but many are skilled or semi-skilled. A large-scale deskilling could take place if they do not find work quickly because their skills will begin to rust and diminish if not used.
One way to solve this mess is to enable rural enterprises that provide jobs and income opportunities in villages. They will plug the inequalities between rural and urban India, and become an engine of growth where it is needed the most. The skilled manpower that has returned home will raise the standards of such enterprises, and the labour will find work close to home. The neglect and injustice meted out to villagers in India’s development story can finally begin to be made good. The crisis can have a positive outcome if we are able to turn the current adversity into an equitable and inclusive growth opportunity.
There is a great model which we can follow to establish rural industries: China’s Township and Village Enterprises (TVEs). It was based on value addition in the agriculture sector and rural subsidiary production. It started with reforms in 1978 when the country invested in raising agricultural production, agricultural mechanisation and liberalisation of rural markets. This helped start economic initiatives in villages and small towns. These enterprises were called TVEs, and went on to become the foundation for China’s formidable economic growth.
As agriculture production went up, TVEs absorbed the surplus labour released from traditional farming, created employment in the villages, and increased the incomes of farmers and rural citizens. Once farmers established viable TVEs based on agriculture, they began to branch out into other industrial sectors and services. This diversification and growth of rural industrialisation was encouraged by the government. It resulted in the TVE output’s value increasing dramatically, helping absorb nearly 30% of China’s rural labour force. By 1996, these rural enterprises accounted for nearly 50% of the country’s exports.
Despite their incredible success, they went into an abrupt decline after 1996. The reason was simple: The privatisation spree that overtook China as a prelude to its industrialisation boom. But, by then, it had created the conditions for an awe-inspiring economic success for the country.
Our migrant workers were employed in several manufacturing and services sectors such as hospitality, automobile, textiles and garments, packaging and construction. Many of them have niche training and experience. They can be the foundation on which to build a rural industrial base.
Rural enterprises will have significant advantages. They can compete with multinational products that are shipped to rural areas. Villages and mofussil towns have market opportunities, and rural enterprises can effectively cater to the consumer demands of farmers and other rural citizens. Once rural incomes start to rise – with an efficient and diversified agricultural and horticultural production unleashed from the tyranny of obstructive policies such as the Agricultural Produce Market Committee Act and the Essential Commodities Act – a TVE-like phenomenon will open up many more sectors for rural entrepreneurs.
Suman Sahai is a scientist and chairperson of the Gene Campaign
The views expressed are personal