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The Prime Minister, Dr. Manmohan Singh, has called upon the private and public sector entrepreneurs to connect with Panchayati Raj institutions to establish the necessary linkages for exploiting their business potential. Addressing the valedictory session of the national presentation on Rural Business Hubs, he said that for ensuring inclusive and equitable growth, there was need to integrate the rural areas into modern economic processes. "We cannot allow India to be divided into two distinct zones – one a modern, competitive, prosperous one and the other a stagnant, backward one", he added. He complimented the Ministry of Panchayati Raj for establishing Rural Business Hub, which he suggested at the Chief Ministers’ Conference.
The Prime Minister said that the private sector has been hesitant to venture into the rural areas for want of local partners and the panchayats had not approached the private sector for participation in rural development because they hardly knew where to go for establishing contact with potential private entrepreneurs. "There is no reason why panchayats cannot be the DISCOMS of rural India, which can ensure better supply of power, better bill collection, and overall higher consumer satisfaction. Similar possibilities exist in the field of rural credit and finance where banks need to address the constraints that bedevil our existing institutional mechanisms. Could Panchayats be explored as alternative credit delivery and loan recovery agencies?", he added. The Prime Minister referred to the emergence of a Panchayati Raj ‘biradari’, which is evolving by consensus. He also pointed to the enormous potential in the agro industry and rural industry for transforming the rural economy.
Following is the text of the Prime Minister’s speech:
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I am glad, indeed extremely happy, to be with this unique gathering consisting of representatives of our industrial and financial sectors on the one hand and the representatives of our grassroots democratic institutions, the Panchayats on the other.
I am very glad that the Ministry of Panchayati Raj have acted so quickly on the suggestion I made at the Chief Ministers Conference in June that our Panchayati Raj Institutions should involve themselves in establishing Rural Business Hubs, which might promote rural prosperity and diminish poverty in India, as they have done so effectively in China.
The Presentations, which you have witnessed during the course of this day, would have alerted you to the enormous possibilities that exist for the promotion of a partnership between the private sector and the panchayats in every corner of our country. If the private sector, or for that matter the public sector, has hitherto been somewhat hesitant about venturing into remote rural areas, this is primarily because they need local partners. And if our panchayats have not approached the private sector, or the public sector, for participation in rural development, that is largely because panchayat leaders hardly know where to go to establish contact with potential private sector entrepreneurs.
As we work to make India a progressive, just, humane and prosperous society, we need to ensure that the processes of economic growth reach out to the far corners of our country and in particular to the most disadvantaged regions and the disadvantaged sections – the Scheduled Castes, the Scheduled Tribes and the Other Backward Classes. The benefits of rapid economic growth, unleashed through the reforms of the last two decades, need to flow to all sections of society, particularly to those living in rural India. Even now, almost 3/4th of our population resides in rural areas and almost the same proportion is still dependent on agriculture for sustenance. If we have to ensure inclusive and equitable growth, we need to knit and integrate our rural areas into the modern economic processes that are rapidly transforming our country. We cannot allow India to be divided into two distinct zones, Bharat versus India, one a modern, competitive, prosperous one and the other a stagnant, backward one. We have to bridge this distance. We have to bridge this gulf.
It is in this context, that I spoke of the need to establish Rural Business Hubs. This is the reason I have been emphasizing the need to invest much more in agriculture, irrigation, rural infrastructure, roads, electricity, education and health. We attach great importance to integrating agricultural markets across the country and removing the constraints under which they function so that our farmers get far better prices for their produce through efficient, non-distorted markets.
Our initiatives in agriculture and rural infrastructure and our emphasis on empowering grassroots democracy through panchayats will, I hope, open up a vast array of opportunities – opportunities for businesses to expand into rural areas in a way not possible in the past and opportunities for our people in rural areas to log onto a virtuous growth cycle we intend and we must generate.
During the day, you must have heard a number of possibilities that exist for a constructive partnership between panchayats and industry. I would like to draw your attention to some of these possibilities. In agriculture there is great scope for taking advantage of the panchayats to assess and meet local needs for supplying inputs, for meeting storage and post-harvest needs, for engaging in contract farming and direct procurement, for marketing agri-produce and for agro-processing. My colleague – Mani Shankar Aiyar has referred to these possibilities in his own, inimitable way.
Agro-industry, and Rural Industry in my view, are still largely untapped areas in the context of the enormous potential they hold for transforming our rural economy. Poultry, fishery, animal husbandry, handlooms, handicrafts and a host of non-farm occupations offer a whole range of business opportunities and panchayat-industry partnerships. Some firms like ITC and Hindustan Lever have already shown the way through innovative initiatives. There is much more to be done and it is for business to spot this opportunity and it is for the government to provide every encouragement to these processes.
In the field of energy, there are revolutionary possibilities in using the potential of panchayats as an effective institutional intermediary for promoting non-conventional energy such as biogas, bio-fuel from JETROPA plantations and solar energy. In more conventional energy forms, like electricity, there is the possibility of panchayats being engaged as the last-leg distributors of electrical energy. I believe there is no reason why panchayats cannot be the DISCOMS of rural India, which can ensure better supply of power, better bill collection, and overall higher consumer satisfaction. Similar possibilities exist in the field of rural credit and finance where banks need to address the constraints that bedevil our existing institutional mechanisms. Could Panchayats be explored as alternative credit delivery and loan recovery agencies?
This National Presentation has offered a unique opportunity for bridging the gap between the private sector and the panchayats. The Panchayats offer the hands of no less than thirty lakh elected representatives, stretching across the length and breadth of the country to our industry. These thirty lakh representatives reflect the entire social profile of the country, including Scheduled Tribes, Scheduled Castes and Other Backward Classes and, above all, more than ten lakhs of women. Not only are they available as local partners, they are also well-organized at all the three tiers. They are instruments that are readily at hand for harnessing the entire intellectual talent of the district, civil society at large, and the experience and expertise available on the spot to realize our hopes for spreading prosperity through Rural Business Hubs.
Indeed, this bridge with the people and the prospects for accelerating growth is available to both the private sector and to the public sector. I am glad so many public sector enterprises have also participated in today’s seminar.
Over the last three months, through a series of Round Tables of Panchayati Raj Ministers organized in different parts of the country, we have seen the emergence of a Panchayati Raj ‘biradari’, which is evolving, by consensus, a mutually agreed road-map to realize the aims and objectives of the Constitutional amendment for Panchayati Raj which we passed more than a decade ago. If Rajiv Gandhi were here today, he would have been the most happy person today.
The deliberations of the ‘biradari’ have revealed that while panchayats have shown their efficiency in delivering services related to minimum basic needs, they are yet to take off in respect to economic empowerment. Such economic empowerment, spread through our lakhs of village panchayats, is entirely feasible, provided they draw up local area plans based on local resource endowments, meet the felt needs of the people, and are tailored to the absorptive capacity of the grassroots. No single body is more capable of knowing what are the local felt needs, based on local resource endowments, and what is the feasible local absorptive capacity than the Panchayati Raj Institutions. Therefore, all that private and public sector entrepreneurs need to do is to connect with Panchayati Raj institutions either directly or through the Panchayati Raj departments of State governments, to establish the necessary linkages for exploiting their business potential. There can be no better facilitators for such solutions than the freely elected local representatives of the community, reflecting, as they do, the social profile of the community as a whole.
I congratulate the Panchayati Raj Minister – my colleague, Shri Mani Shankar Aiyar for working tirelessly and with great zeal towards promoting the empowerment of Panchayats and I wish and extend my fullest support to his initiatives.
This is of course not the first attempt at establishing Rural Business Hubs. But if past efforts have been fitful and present prospects appear brighter that is largely because we have, for the first time since Independence, a Ministry of Panchayati Raj in New Delhi to coordinate the linkage between the panchayats, on the one hand, and private and public enterprises, on the other. Secondly, we have the CII motivating private enterprises to look to the panchayats as partners. Finally, we have the Ministry of Small Industries and Rural Agro Industries, headed by my colleague, the great Gandhian, Shri Mahabir Prasad and the Ministry of Food Processing Industries, to partner the Ministry of Panchayati Raj in facilitating this rural industrial revolution. I conclude by welcoming to our Capital the one thousand and more Panchayati Raj representatives who have taken the trouble of participating in this seminar. I look forward to meeting you individually tomorrow morning on the lawns of Teen Murti Bhawan.
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