India's growth may hurt if rural-to-urban migration not checked: Adani

Billionaire Gautam Adani on Thursday said India's growth may be hampered unless rural-to-urban migration is not tackled by developing a model to keep local population employed locally in rural areas.

Addressing students of Anand-based Institute of Rural Management in Gujarat, he called for cluster-based policies and adoption of digital technologies to promote agriculture and food processing units.

"The total number of migrant workers in India exceeds 100 million. One in four workers in India is a migrant. Some migration is beneficial. However, unless we tackle the issue of continued increase in rural-to-urban migration, India's growth will be hampered," he said.

The rural-urban imbalance reflects the inequality of opportunities that need to be addressed, he added.

"I am sure all of you vividly remember the recent moving images of tens of millions of migrant workers trying to get back to their villages because of the Covid-19 crisis," he said. "More than ever before, we must now develop a model of a rural economy wherein local populations can be employed locally. This will mean that we need to rethink how our local economies are structured and clustered."

Adani, who heads India's largest infrastructure conglomerate that spans from ports to power, cited the example of Israel that merged learnings from a rural kibbutz-based culture with modern technology and made self-sufficiency an absolute mantra.

"The Covid-19 crisis has forced upon us a chance to rethink the rural development model," he said.

He said Prime Minister Narendra Modi has outlined a vision of 'Aatmanirbhar Agriculture' that calls for transforming farmers into entrepreneurs.

 

"India already has a head start as the world's largest producer of milk, pulses, banana, mango and papaya, and the second-largest producer of rice, wheat, sugarcane, groundnut, vegetables, fruit and cotton. This is a great launchpad," he said.

At the same time, there are four underlying challenges shrinking arable land as a result of over-cultivation, overgrazing, urbanisation, and chemical overuse; unpredictability as a result of climate change, water availability and the knock-on impact on output; current lack of productivity and supply chain inefficiencies; and shortage of value-adding processing facilities in terms of numbers, scale, and locations.

"The common opinion is that success in agriculture is based on scale. While this is generally true, recent advances in areas like digitisation, seed quality, and weather forecasting, combined with smart policymaking and general public awareness, have opened up the agriculture sector in several ways," he said.

Outlining the aspects that will define the agriculture landscape, he said there is an increasing realisation that the concept of clustering and agriculture efficiency go hand-in-hand.

"Cluster policies are crucial for small-scale farmers and agribusiness. It enables them to achieve higher productivity, higher value-added production, and to minimise the back-breaking costs of logistics, storage, wastage, and interference from the middlemen," he said.

India is made up of over 700 districts and each district is a potential self-sufficient microcluster, he said.

 

A cluster is a geographic concentration of interconnected businesses and institutions that help build an array of competitive entities.

This approach can be used to develop targeted clusters of 15 to 20 proximate villages with populations of 30-40 lakh, he said.

Adani said the coronavirus pandemic has exposed fundamental faultines in the current way societies engage and consume.

"Going ahead, globalisation and trade will be different, national and international policies will be different, healthcare will be different, and supply chains will be different," he said.

However, India will continue its journey to be the world's third-largest economy by 2030.

Stating that food processing is key, he said the unorganised food processing sector in India comprises about 25 lakh units, 66 per cent of which are in rural areas.

These units contribute 74 per cent of employment in this sector.

"While India is the second-largest food producer in the world, less than 10 per cent of the total produce is processed into value-added products. As a comparison, the US processes 65 per cent. Developing countries such as the Philippines, and Brazil process as much as 75 per cent of their produce," he said.

He also added that the primary reasons for India's low food processing numbers is the lack of processing facilities at the right locations.

This has a cascading impact on storage, wastage, and price realisation.