Rural areas still in the grip of problems: Jain

Rural areas of the country still face several problems including insufficient water supply and unemployment, former member of the Planning Commission L C Jain said.

The ministry of rural development claims that more than 95 per cent of the rural area has water supply facilities but independent reports show that 50 per cent of the villages in the country face drinking water scarcity, Jain, who was in Anand on Tuesday to attend the 23rd convocation ceremony of the Institute of Rural Management, Anand, said.

According to the mid-term appraisal of the Planning Commission, despite good monsoons continuously for the last 12 years, drinking water problem is becoming more serious every year, he said.

"Over 84 per cent of the small and marginal farmers are still outside the co-operative net," Jain said.

"At the start of 1990s, the then finance minister Manmohan Singh assured the parliament that the economic reforms launched by him were well placed to foster a labour-intensive pattern of industrial production and that, in turn, will tame unemployment and poverty."

According to the review of the Planning Commission in 2002, the employment-generating capacity of the economy, especially the organised sector, vis-a-vis the GDP growth is declining fast over time. There has been an even more significant decline in the labour intensity, he said.

In late 1990s, the organised sector reached almost a near-jobless growth and in agriculture, employment growth touched near zero, he said.

"In 1995-96, the finance minister created the Rural Infrastructure Development Fund (RIDF) and parked it in Nabard. Defaulting nationalised banks were instructed that a sum equal to the annual shortfall in their lending to agriculture should be deposited with the RIDF. The banks saw an easy escape route in RIDF from the ordeal of lending to tiny holdings. The result was that the so called shortfalls galloped into waterfalls. Starting with Rs 350 crore in 1995-96, the shortfalls swelled to over 16,000 crore by 2002-03," he said.

"Only 50 per cent of the total projects sanctioned between 1995-96 and 2002-03 were for rural roads and bridges. Besides, it is only the relatively developed states which are able to tap the RIDF resources for large projects. The sanctioned projects for the RIDF at the end of 2002-03 to Andhra Pradesh totalled to Rs 3,650 crore, while the total for Bihar was Rs 456 crore," he said.

"Even in the matter of short-term credit for seasonal agricultural operations, the state-wise disparities were pronounced. In 2002-03, Andhra Pradesh's share in short-term advances was 20 per cent of the all India total, while that of Bihar was a mere 0.6 per cent and it was seven per cent for Uttar Pradesh. The share of the two most populous, poverty-stricken states, Uttar Pradesh and Bihar was less than 8 per cent." he said.