Rural areas in India at present contribute more than 65 percent to the country’s labour force. Therefore, the growing trend of rural manufacturing opens up a new horizon of change for the country’s heartland. It is likely that rural India will contribute a major chunk towards the overall manufacturing output of the country by 2025 and it is estimated to be around 25 percent. This change will provide the unemployed, especially the agricultural dependent regions a chance to develop and adapt. Availability of skilled workers and friendly government policies in addition to these factors is what makes the potential for growth in rural manufacturing even higher. Through utilization of these opportunities, the heartland of India is all set to be a manufacturing powerhouse, which is a key driver of economic growth and inclusive development across the nation.
Let’s go down to the roots to discover how the growth of rural manufacturing is indeed unlocking the door to new possibilities for Indian countryside.
The dawn of rural manufacturing, undoubtedly, is a harbinger of hope as it offers a new lease of life to the hinterland and promises to bring about a transformation in the employment scenario. Data shows that the rural areas which are usually the victims of having few job opportunities, may have a revolutionary impact on them. They are able to penetrate into manufacturing, and as a result, they can absorb a large part of Indian workforce when it comes to unemployment. This trend is of special importance for regions where farming is dominant, where the diversification of jobs is critical for sustainable development. In addition to that, rural employment opportunities that are provided for urban migration curtailing, in fact, boost local economies as well as poverty reduction, which in turn, leads to inclusive growth and improves the living standards of millions across the country.
Khadi and Village Industries Commission (KVIC) is the evidence of the employment generation in the heartland of India which is the rural manufacturing’s power. Since its foundation in 1957, KVIC has been encouraging rural entrepreneurs and employment generation through an initiative of reviving traditional crafts and industries. The establishment of many micro and small enterprises in the rural area has been made possible by the PMEGP scheme of the KVIC which leads to millions of jobs being created. The program does not only rejuvenate the local economies but also helps keep the cultural heritage alive. It highlights the fact that rural manufacturing is highly empowering and has potential to open up a range of opportunities, thus changing the lives and communities of almost all the Indian rural areas.
“Mobility towards urban areas has led to depressed wages in their industries. Meanwhile, the National Rural Employment Guarantee Scheme (NREGS) works as a floor for rural wages, raising the cost of labour in these areas,” says Satyaki Roy, Associate Professor, Institute for Studies in Industrial Development, to Economic Times.
Emergence of infrastructure as a foundation of unleashing rural manufacturing becomes an imperative for India's hinterland. Numbers show that we can no longer afford to ignore this issue as many of the rural areas hardly have the basic amenities that are crucial for industrial growth. Nowadays the percentage of rural population of India lacking all-weather roads is above 60 percent. With investments in infrastructure that includes roads, power supply and industrial parks, rural manufacturing can prosper, it will draw investment and provide easy transportation of goods. These projects not only improve connectivity but also contribute to the emergence of ancillary businesses, which in turn create an enabling environment for economic growth. In the long run, the soundness of infrastructure is a prerequisite for development, and to open fresh possibilities and prospects for India's hinterland.
An instance of Maharashtra Industrial Development Corporation's (MIDC) in Aurangabad, Maharashtra is a demonstration of infrastructure development impact on rural manufacturing. In the case of infrastructure development, the strategic investments in the roads, electricity and water supply have boosted the clusters of industries which has brought more businesses to the area and in turn, generated jobs. The AITL project, a brainchild of MIDC, has brought about a highly conducive environment for industrial units to set up their base, and this has eventually resulted in a surging economic development in the region. This success story that has happened is a strong proof that the infrastructure development can act as a catalyst for the rural manufacturing, which in turn can open the doors for many new opportunities and promote inclusive development in the heartland of India.
“Until a couple of months ago, the outlook for rural demand was weak given it’s an El Nino year, which is associated with poor rains and food production. However, many rural workers instead turned to the many construction jobs on offer as the government accelerated capex, while robust housing demand kept property development up, supporting rural employment and ensuring a floor below which wages did not fall,” writes Pranjul Bhandari, Chief India Economist, HSBC in an article for Indian Express.
Skill development assumes a pivotal role to tap the power of manufacturing in India’s hinterland. From statistics we can see how the urgency rises because of the fact that more than 80 percent of Indian workforce is not formally vocationally trained. Through the introduction of sector-specific training programs that meet the needs of agriculture, rural residents can gain the skills required to work effectively in today's advanced industry. The PMKVY (Pradhan Mantri Kaushal Vikas Yojana) alone has already trained millions of individuals in various skills, equipping them to get employment opportunities in manufacturing. Besides bridging the skill gap, these projects also spur new thinking and creativity which in turn open up new avenues of opportunities for the rural areas.
The partnership between National Skill Development Corporation (NSDC) and Rural Development and Self Employment Training Institute (RUDSETI) in Karnataka is a case in point to emphasize the conversion power of training in rural manufacturing. With this cooperation, thousands of youth in the rural areas have been trained in various vocational skills which are industry oriented and focused on sectors such as manufacturing. These are qualified workers who not only got employment in nearby factories but also are starting their own business initiatives, which is a driver of economic growth and prosperity in their localities. The story of this success is a good example of how skill enhancement can create new opportunities and provide a solid base for the manufacturing sector of rural India.
Sunil Gupta, COO, Vedanta Ltd – Aluminium Business said at an event, “India has the youngest population in the world and our country’s progress lies in leveraging this demographic dividend, imparting them with the right skills as the landscape of work evolves.”
The future for rural manufacturing in India holds a promise of enormous opportunities for the country's hinterland, which is set to revolutionize the economic growth and development. According to statistical data, the rural areas will contribute to a significant share of India's manufacturing output which could reach up to 25 percent in the coming years. In addition to creating millions of jobs, such change will bring about infrastructure development and technological advancement of rural areas. The rural manufacturing industry is well positioned to lead the way as a major development force for the economic growth of the country.
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