More public private partnerships are needed to create opportunities for the rural population
India might have created its mark in the services sector — especially in information technology — on the global map, but the development of the rural sector still has a lot of ground to cover. Discussing how to innovate rural entrepreneurship towards employment at the India Economic Summit, various speakers called for increased public private partnerships to create opportunities for the rural population. A series of innovative public-private partnerships in rural development are being rolled out across the country and 250,000 villages will be connected to broadband by 2012. “If we keep moving forward, we can create stable livelihoods in rural areas,” said Arvind Mayaram, Additional Secretary and Financial Adviser, Ministry of Rural Development of India.
“We expect these partnerships to be business relationships so that the model is sustainable and scalable.” At the same time, many villages are thriving by providing services. “When you combine village entrepreneurship with connectivity, you have a robust model,” he added.
Public-private partnerships have the potential to drive growth, particularly in the agricultural sector, but government’s role should be limited. “Government needs to create a healthy environment for entrepreneurship, but should not be restrictive. I believe in the power of entrepreneurship and in giving people economic freedom,” said Sriram Raghavan, Chief Executive Officer, Comat Technologies, India.
Mayaram however noted, “There is a need for risk sharing between the government and the private sector. The private sector cannot take the entire risk by asking the Government to stay away.”
India’s potential is “huge” according to Ben J Verwaayen, Chief Executive Officer, Alcatel-Lucent, France. Fifteen years ago, voice telephony penetration was just 1 per cent compared to 70 per cent today. “India started to grow when it combined talent and connectivity with the world. We need the same Internet penetration as we have seen with voice.”
Improvement in technology and connectivity in the uncharted territories of rural areas is also going to drive growth. Cellphone usage by fishermen in Kerala, and by farmers to find out market prices for farm produce, fertilisers and pesticides has helped them in bridging the urban-rural divide and keeping up with the market conditions.
“Despite connectivity there is no financial inclusion, no economic opportunity. We require infrastructure — rural and otherwise — and it can be provided only by the government,” said Om Prakash Bhatt, chairman, State Bank of India.
In order to enable the Indian farmer to reach from subsistence level to an income generating level, the use of technology would play an important role. “Genetic modification may be controversial, but it creates productivity for the farmer. Things like soil testing technology have to be made accessible to farmers through the public private partnership model,” said Ellen Kullman, Chief Executive Officer, DuPont, USA.
Even with technology as one of the factors in play, it alone cannot bring about a significant change. “Innovation is no just about technology, it is using human ability in a very different way. Rural India can fund its own way to make economic prosperity a reality,” said Verwaayen.
Highlighting the role of public sector banks in educating rural entrepreneurs, Bhatt talked about training centres being set up to educate semi-literate and illiterate people of rural areas on basic accountancy and small businesses. “Forty per cent of the people who participated in the week-long programme take loans from our bank to set up a new business,” Bhatt added.
The trend of rural tourism and the travel agent business is also catching up in rural areas. The government has also tied up with the Asian Development Bank to push the idea of sovereign lending to create rural infrastructure for rural tourism, Mayaram said.
Elisabeth Comstock, Senior Vice President and Chief Marketing Officer, General Electric USA, also spoke at the session.
