India is considered as one of the rapidly progressing big economies of the world with a very open and vibrant market supported by its democratic set up. However, unlike in many developed countries the success or the benefits of development were denied to millions of Indians residing in the rural areas. In other words a very few percentage of elite class residing in big cities or towns took away creamy layers from it and leaves few scraps for the majority.Despite best efforts from the government, this scenario continues even after 61 years of independence. Although governments in the past identified the panchayaths as ideal mediums to transform success at the top to bottom, the system has somehow failed to deliver thanks to wide spread of corruption involving both bureaucrats and politicians who forms a nexus to work within it. In an attempt to break these nexus and bring back development to rural areas, the Ministry of Panchayati Raj developed Rural Business Hubs (RBH) aims at developing an integrated relationship between rural producers and business partners for mutually beneficial cooperation, the entire process being facilitated by the Panchayaths. This initiative is built on the idea of convergence of resources available under Central / State Governments schemes, institutional credit and partnerships at the local level. The Ministry planned to promote at least one RBH in each of the 6000 Development Blocks of the country. Let’s examine the unique features of this model. It is linking rural producers with the wider market through a professional marketing partner and developing this as an integrated business relation benefiting both sides and therefore, sustainable. Panchayaths / Rural Local Self Governments – the democratic grass root level institutions playing the key role of planning and implementing plans for economic development, wherein the plans are based on local resource endowments, felt needs of people and relative absorptive capacity. Other important features of this initiative includes that it was based on economic activity, not charity and any economic activity could be taken up but RBHs are ideally suited for agriculture/horticulture/handloom/handicraft marketing where production is decentralized and is ideally located in rural areas and generating rural employment/livelihood. The RBH initiative has been developed in partnership with the Confederation of Indian Industry (CII) as a 4-P model (Public-Private-Panchayat-Partnership) with clearly laid out roles and responsibilities for each of the partners. Panchayaths perform the key role of identifying skills and endowments of people and natural resources, address the concerns of local inhabitants, establish and sustain community linkages, extend institutional support to viable business initiatives that benefit the rural populace and at a later stage, integrate the economic development plan emerging from RBH initiative with the decentralized district planning process. The business partners would perform the roles of identifying local skills / products that have wider market potential, prepare Business Plans acceptable to the community and provide sustainable local employment. The Central/ State Governments would support the initiative through conducive policy regime, dovetailing government schemes, bridging critical gaps in infrastructure etc. A National RBH Council Co-Chaired by Minister PR and Past President CII and Minister of State (Commerce) as Vice Chairman, is leading the initiative since December 2004. Similar Councils have come up in 15 States. The initiative works on convergence of resources from Central / State Governments, financial institutions and other partners. The Exim Bank has signed MoU with Ministry through which the Bank will provide assistance in identifying the exporters, especially from the SME sector, who can source the products from RBHs with transparent pricing being ensured. The Banks will also provide enhanced visibility to identified RBH products in international markets by linking them with the Bank’s rural portal and displaying them at their overseas offices. The International Finance Corporation (IFC) has extended financial assistance to CII for identifying RBHs in North Eastern Region and three RBHs have been initiated, based on this study. The National Research Development Corporation (NRDC) under Department of Science & Technology has converged with the RBH initiative on Sumak Carpets in Nagaland and TIFAC has done so in case of essential oil project in Bihar. Spices Board is involving the PRIs in their joint initiative with ITC in the North East while Export Promotion Council for Handicrafts is doing so in Bastar, NABARD in Bidar, Eastern Zone Cultural Centre Kolkata in Purulia, and Handloom Export Promotion Council in Nagapattinam and Punjab National Bank in Bharatpur. Convergence has also been achieved in case of a few Special SGSY Projects in Karnataka and World Bank assisted DPIP in Rajasthan. 131 MoUs across 15 States have been signed so far for setting up RBHs. 28 of them involving Sumak Carpets, Pottery products, handloom, handicraft, fresh fruit & vegetable and processing of agri produces are functional. Another 22 covering folk arts, handicrafts, compressed bricks, vermi compost and agri processing are ready to take off. Partners have been identified and the RBH process is under way in case of 27 other proposals covering handloom, handicraft, woollen products, agri produce, bio diesel, essential oil etc. The Ministry, in consultation with State Governments, has identified 33 focus districts for setting up RBHs. District level Workshop have been held in seven of these districts and potential economic activities identified. Similar Workshops are scheduled in the remaining districts. CII has constituted a National Council consisting of rural facing companies interested to set up RBHs. First meeting of the Council was held recently. Members of this Council are expected to participate in the District Workshops and identify economic activities for setting up RBHs in their area of interest.
(Source: Commodityonline.com)
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