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By Sunil Ray
One of the biggest development challenges facing India today is providing decent jobs for the millions who remain unemployed, particularly in rural India. It is also clear that the ‘business as usual’ paradigm with an unshakeable faith in ‘trickle down’ economics dependent upon large investments of corporate capital has failed to create these jobs. This is largely because the employment elasticity of corporate capital is too low, whereas the demand for jobs is growing at a much faster pace.
Even if all PSU and government vacancies are filled up, the jobs problem is nowhere near being solved, and is bound to aggravate further, particularly in rural India which is prone to recurrent droughts and floods
There just isn’t that much private capital being invested for a host of reasons, including structural issues that point to the lack of expansion of the size of the domestic market consequent to perpetually low consumption demand for goods and services on the one hand, and the private sector’s ambivalence toward policy and questionable commitment to India’s growth story on the other hand. The public sector cannot create enough jobs either. Even if all PSU and government vacancies are filled up, the jobs problem is nowhere near being solved, and is bound to aggravate further, particularly in rural India which is prone to recurrent droughts and floods, and hence remains vulnerable to uncertain agricultural performance.
The process demands an alternative mode of employment creation through new models like the collective entrepreneurship structure
The challenge of jobs can be approached with a different hue by looking at the educated unemployed holistically, and particularly to those spread across rural parts of the country. These youths, now often partially self-employed in odd localised jobs with little professional inputs, can open new spaces to fire up the rural economy, support low-capital entrepreneurship ventures and can transform the landscape. This is the potential of low capital-based but efficient local development process. The process demands an alternative mode of employment creation through new models like the collective entrepreneurship structure by looking at the so-called ‘niche structure’.
The niche structure is originally an ecological coinage that came as part of efforts to explain species coexistence despite their tendency, in principle, to exclude each other: the differences in niche act as factors stabilising coexistence. Species in themselves can change the environment by creating niche structures, and by doing so, the said species evolves on its own, but also influences others and drives change and evolution.
Such a structure can give rise to innumerable associated producers’ self–organisations in all kinds of activities, including manufacturing, processing, repairing, constructing, servicing such as education and health care services, trading, marketing, business etc
This writer has discussed this in a recent book chapter [“Employment Creation at Decentralised Level through Construction of Niche Structure”, in the book ‘Deepening Democracy’, Routledge India] that says an “alternative perspective of employment creation based on a deeper understanding of the material conditions of living of the majority of the people of the country is needed to bring about appropriate structural transformation.”
Niche structure
In the economic context, a new collective entrepreneurial structure or collective enterprising system for a variety of economic activities self-organised from within the community as a part of common functions like a niche structure. Such a structure can give rise to innumerable associated producers’ self–organisations in all kinds of activities, including manufacturing, processing, repairing, constructing, servicing such as education and health care services, trading, marketing, business etc.
This is a reinvention of workers’ cooperatives, an independent creation of the workers, not as a protégé either of the government or of large capital
They are collective enterprises (not individual ownership), but significantly not co-operatives either in the traditional sense. They work with a low capital base, and not as an appendage to the mainstream economic structure, maintaining relative autonomy. This is a reinvention of workers’ cooperatives, an independent creation of the workers, not as a protégé either of the government or of large capital. It can even take the support of the State but being fully conscious that it is not ruled by it. Here, workers themselves are owners.
What matters significantly is how one calibrates the utilisation of material resources and job creation. The production processes and services may be encouraged to grow with green technology. These are small scale ventures but energy-efficient, non-polluting and community-oriented. They have the potential to create local jobs through investment in green technologies. The local resource base comprising agricultural, natural, human and animal resources are expected to offer wider scope for opening up of varieties of self–managed collective entrepreneurial activities much beyond what is traditionally understood.
A multi-step model builds this ambitious plan, beginning with a committee at the zilla parishad comprising peoples’ representatives, technical experts, government officials. Next comes the task of delineating several agro climatic zones for new entrepreneurial activities based on the local ecosystem and resource base.
The local resource base comprising agricultural, natural, human and animal resources are expected to offer wider scope for opening up of varieties of self–managed collective entrepreneurial activities much beyond what is traditionally understood
An exercise in resource mapping covering natural resources, agri resources, skilled human resources apart from traditional skilled human resources, unemployed educated youth, animal resources and their by-products, status of manufacturing, servicing and processing and business, health care system, educational services from primary schools to coaching centers, repair works, status of agri marketing and of marketing of animals and their by–products will all have to be mapped.
With a good indication of viable entrepreneurial activities, the government must play a proactive role to facilitate the transformation, bringing into play scientific and technology institutions such as Central Food Technology Institute (CFTRI), Central Science and Technology Institute CSIR), agricultural universities or any other techno-scientific institutions for transfer of appropriate technology. The basic purpose is to explore what are the new product processing/service lines that can come up in this concerned "ecological" zone and what appropriate technology is required for the proposed entrepreneurial activities, both agro and non-agro based.
The government must play a proactive role to facilitate the transformation, bringing into play scientific and technology institutions
Study of feasibility from the supply and demand side, identification of unemployed youths who are willing to join in the formation of collectives, and investment and management of the seed capital in the public-private partnership mode will follow. Even if the initial investment is partly made by the government, it may be in the form of a cheap loan. It is only at this stage that targeted skill development programmes will deliver a multiplier effect to those willing to join this collective enterprise. The infrastructure available to the State for skill development can deliver at full potential here.
The sole objective is to develop the economy of the State through developing the rural economy from the bottom up. The only route which is discernible is creation of sustainable employment and income generation of the rural youth based on the growth of numerous low capital-based activities in the rural areas through the construction of the collective entrepreneurial structure. It is here that we can find extreme usefulness of the employment creation schemes as promised by the government of India in its budget.
Targeted skill development programmes will deliver a multiplier effect to those willing to join this collective enterprise. The infrastructure available to the State for skill development can deliver at full potential here
The newly conceived employment generation schemes as provisioned in the national budget have reasons to lend credibility to this model in practice. This will prove to be a significant source of increasing consumption demand (particularly when the small and medium enterprises have been witnessing secular decline for the last few years), the lack of which is constraining investment flow and, therefore, employment and employment creation. The rural economy which is caught up in a low-level equilibrium trap may then find a way to extricate itself from this corner.
(Sunil Ray is former Director, A N Sinha Institute of Social Studies, Patna and professor of Economics at the Institute of Development Studies, Jaipur. He was also Head, Economics Department and Dean of the school of Social Sciences, Central University of South Bihar) Pune-based economist)