In the Absence of Significant Growth of Industrial and Service Sectors, Agro-Based Rural

1

ROLE OF NON-GOVERNMENT SECTOR IN DEVELOPMENT

Dr. N.G. Hegde

BAIF Development Research Foundation

Warje, Pune 411 029

Increasing Poverty

India is one of the poorest countries in the world, accounting for about 30% of the world’s poor. The per capita GNP in India is US$ 340, as compared to US $ 620 in China and US $ 2740 in Thailand. Poverty in rural India is even more drastic and torturous because of the dependence of the poor on degraded natural resources, which are over-exploited by the growing population. The rural families are threatened not only by lower income and inadequate opportunities for employment, but also by ill health, illiteracy, addiction to vices, and above all, lack of confidence to survive with dignity. A large number of them particularly the landless and small holders migrate to urban areas in search of employment and live in slums. As a result, over 35-40% of the urban people are deprived of their basic eminities.

In the absence of significant growth of industrial and service sectors, agro-based rural development programmes hold the key for socio-economic upliftment in the country. Rural development in India has to focus on sustainable management of natural resources such as land, livestock, water and vegetation. These resources are in a state of neglect. Over 50% of the land resources are underutilised and left barren. About 80% if the livestock is unproductive and survive on free grazing on community lands and forests. Over 75% of the rain water flows back to the sea, causing floods and soil erosion, instead of irrigating agricultural crops, over 45% of the forests are denuded and the crop yields are only 50% as compared to that in China. While the productivity of the natural resources are heavily eroded, over 75% of the rural people are underemployed and a majority of them are living in poverty. The poor people are not only faced with a grim situation of insecurity of food but also suffer from ill health, illiteracy and lack of confidence. It is necessary to address all these issues and change the attitude of the rural poor to take active part in sustainable development.

Scope for Development

The rural development in India is a slow process. Further more, the rate of development is not able to cope with population growth. The slow rate of progress in rural development can be attributed to lack of initiatives, lack of technical skills, lack of resources and poor management of the programmes. The programme demands a multi-disciplinary team with a diversified activities to tackle the problems at the micro-level. The programme should be operated with sound management principles, such as identification of opportunities, selection of suitable technologies, procurement of inputs, training of participating families in skills, linkage with market outlets, etc. to enhance the production as well as the profitability.

Most of the rural development programmes, are presently being implemented by the Ministry of Rural Development. Although the Government has accepted the responsibility of uplifting the poor so far they have not been successful in fulfilling the expectations of the poor. Apart from the Government programmes, a large number of voluntary agencies are also engaged in development although their resources and coverage are limited.

The problems of rural development can be classified into the following categories :

Lack of managerial tools to implement the schemes successfully.

Lack of resources to widely replicate successful programmes.

In both the above situations, there is good scope for the non-government agencies to help the economically backward communities to enhance their income. In the absence of suitable interventions from the non-government sector, there will be a wider disparity between the rich and the poor, which may lead to class war. On the contrary positive involvement of private sector for developing the weaker sections of the society will help in building the purchasing power of the poor. This in turn would help in expanding the business and profitability.

Role of Non-Government Sector

The development experiences after independence in India over the last 50 years have indicated that the involvement of private and non-government sectors are crucial for development on all fronts. Indeed the government should involve the non-government sectors in all development programmes while the government should confine their role in planning and monitoring. This is true in industrial development, education, health services and rural upliftment.

Today most of the government industrial undertakings are operating the business with high degree of inefficiency both in terms of quality of services and profitability. The government hospitals are used to treat minor illness. Most of the people, even the poor prefer to go to private doctors and hospitals, inspite of free services in government hospitals. Educational institutions run by the government have the same saga. In all the above sectors it has been proved very well that the private sectors can manage these activities very efficiently ensuring social justice and equity. Thus the government withdraw from the implementation of these activities and confine monitoring operations without directly indulging in implementation. It is right time for the government to withdraw from industrial production, health and education services. The government can provide subsidies particularly to the weaker sectors of the society to avail of these services.

Critical Inputs for Development

With regard to rural development apart from the money, management and technical skills are more crucial for the success. It has also been observed that mere capital investment will not be able to promote rural development as there is an inadequacy of infrastructure to deal with the programme.

The factors effecting the rural development are lack of resources, suitable technologies, skilled personnel, lack of initiative among the beneficiaries and inadequate infrastructure to organise input supply and marketing. These are related more to managerial aspects rather than the availability of finance. The technical and extension departments of the government involved in rural development are not able to tackle these problems effectively unless the rural development programmes are operated as a business activity.

To tackle the problems in rural areas, the Government has already been encouraging the non-government organisations to take active part. However, there is a need for coordinated effort to set the goal and the role of various agencies to ensure effective implementation and avoid duplication. Presently, the involvement of industries and the voluntary organisations in rural development are often ignored by the Government and hence the money spent in development has not been well appreciated. There is also a need to establish a close network between the Government agencies, research institutions, industiral sector and voluntary organisations to effectively coordinate and promote agribusiness and micro enterprises both in rural and urban areas.

It is advantageous to promote local voluntary organisations to motivate the local people for sustainable development instead of direct involvement of the business sector, as NGOs have closer contacts with the local people and good knowledge about the natural resources. They are able to understand the problems of development at the micro level and come up with suitable programmes. Industries in turn can strengthen the voluntary organisations by way of financial support, development of marketing network and management systems which can ensure optimum productivity and profitability.

Apart from the financial and marketing aspects, there is also a need to provide information services for improving the productivity and encashing the opportunity. Such services call for direct involvement of the private sector in the development of the rural and urban areas particularly the weaker sectors of the society.

Conclusion

The industries have excellent opportunities to involve and provide financial and managerial skills not only as a commitment of a good corporate house but also as an opportunity for business development. However, it is advisable to involve committed voluntary organisations as an intermediate organisation between the donor agencies and the poor communities. As the private sector may not have adequate resources available to take over the entire responsibilities to provide health care, education and self employment opportunities for the poor, it is also time for the government to consider routing their resources through the non-government sectors. This would certainly enhance the speed of development and reduce the gap between the rich and the poor in the country.

April 17, 2000

To,

Mr. Sudhir Rao

Programs Manager

Sir Ratan Tata Trust

Bombay House

Homi Mody Street

Mumbai 400 001

Dear Mr. Rao,

Thank you for your letter of April 04, 2000. As requested by you, I am sending herewith a note on “Role of Non-Government Sectors in Development” to be incorporated in an essay on ‘Enhancing Indian Private Capital Flow to Nonprofit Activities’.

With best regards

Yours sincerely

(DR. N. G. HEGDE)

PRESIDENT

Encl : a/a.