Self - employment Generation in Rural Assam

Author: Anjan Kumar Sarma

Published in The Assam Tribune, dated December 30, 2023

Image Source: Internet

The north-eastern region (NER) of India boasts vast economic potential. Boasting rich deposits of natural resources like oil, gas, coal and limestone, it also holds significant agricultural land cultivated with agro-horticultural products like tea, bamboo and rubber. Additionally, its strategic location bordering South Asian countries and proximity to Southeast Asia makes it crucial to India's Act East policy. However, despite its wealth of natural capital, strategic position and government initiatives, NER's contribution to the national GDP remains limited at 2.8 per cent. Notably, the secondary sector's contribution stands at a mere 18 per cent of the region's income. Challenging terrain, inadequate infrastructure and a limited business ecosystem are major impediment and fostering industrial growth.

The unemployment rate in NER stands at 5.73 per cent, exceeding the national average of 3.4 per cent. Assam bears the highest unemployment burden, ranking third within the entire country. Furthermore, the youth unemployment rate in NER is alarmingly high at 18.1 per cent, significantly above the national average of 13.1 per cent. The region lacks sufficient industrial development, hindering job-creation opportunities. Low agricultural productivity and income limit economic opportunities in rural areas. A significant mismatch exists between the skills possessed by the educated youths and the demands of the job market. Govt. jobs remain the primary source of employment in the region, limiting diversification and hindering private sector growth.

Assam's economy: Assam's economy reigns supreme in the NER. However, compared to the national scene, it remains relatively small. In FY2029, its GDP contributed a mere 1.7 per cent to the national GDP, and its share in national exports stood at a meagre 0.1 per cent. Moreover, Assam's GDP per capita lagged behind the national average and even other NE states. Contributing factors to this disparity include the State's predominantly rural character, with 85.9 per cent of its population residing in rural areas as per the 2011 census. Examining the economic structure, Assam still relies heavily on the primary sector encompassing agriculture, forestry, fishery, mining and quarrying.

Despite possessing abundant natural resources and a large young population (under 40 years of age), Assam has not yet fully realized its economic potential. Its landlocked, largely rural character, coupled with its underdeveloped infrastructure, results in an economy dominated by low-value-added, natural resource-based products. This limits its integration with regional and global value chains.

The recent "North East Economic Corridor Study" conducted by the Asian Development Bank emphasizes the need for aggressive infrastructure and industrial development, particularly corridor-based industrial development, to propel Assam's economic growth. Skilled human resource remains a significant concern hindering employability.

The primary driver of Assam's economy, the agricultural sector faces several challenges like small landholdings limiting economies of scale, single-time cultivation limiting full utilization of the land, lack of farm mechanization and limited post-harvest management infrastructure including insufficient market linkage. Flood devastation, particularly impacting on agriculture, is a recurring challenge. Many young people from rural areas migrate to cities within and outside Assam, often facing limited opportunities themselves, leading to low-paying jobs or unemployment. While intended to support the rural low-income population, the Govt-led beneficiary-oriented schemes have inadvertently demotivated some young people from engaging in economic activities, fostering an environment of dependence rather than entrepreneurial spirit.

Rural entrepreneurship fosters balanced regional development by empowering communities and reducing migration to urban areas. Despite the challenges, rural entrepreneurship has the potential to transform the State's economic landscape. Assam's startup policy implementation aims to create an entrepreneurial hub in the NE, focusing on generating employment, nurturing startups and stimulating a culture of entrepreneurship. However, the State needs to prioritize sustainable ventures that create both employment and wealth. Service-based models, leveraging existing skill sets, may be more successful than product-based models in the NE context. There are some promising opportunities for rural youths in Assam.

Technology-driven farming: Innovations in agricultural practices, such as farm mechanization, post-harvest management and market-linked infrastructure present significant opportunities. The FPO/FPC model can be particularly beneficial for small landholdings in Assam, allowing for year-round production and diversification beyond traditional paddy cultivation. Options like flower cultivation, exotic vegetable farming and hydroponics can yield higher returns in smaller areas. There are many examples across other Indian States.

Post-harvest management: With government programmes like SFURTI (Scheme of Fund for Regeneration of Traditional Industries) offering grants for food processing and handicraft industries, potential exists for establishing small units at the village level to process local agricultural outputs like turmeric, chilli, garlic, ginger and spices. Setting up cold chain infrastructure and warehousing facilities can also help store perishable goods efficiently. SHG products can be marketed outside Assam with proper quality standardization, packaging and branding.

Handloom and handicraft: The National Rural Livelihood Mission has played a significant role in promoting local handicrafts and handlooms. Digital marketing, proper certification, price standardization and branding are essential for attracting a wider national and international market. Every region boasts unique products and designs that need proper market linkage to thrive.

Rural tourism: Beyond traditional tourist spots, there is growing demand for rural experiences like camping, nature walks, local food, etc. Integrating rural tourism with activities like vegetable farming, tea gardens and fishing can offer unique experiences for tourists. Govt. initiatives to improve last-mile connectivity and support local entrepreneurs in developing and managing such ventures are crucial. Homestay development also has great potential as a source of employment, but professional management, and consistent improvement are key to success.

Bamboo farming: Increased focus on ethanol blending with petrol and diesel is expected to lead a significant rise in demand for bamboo over the next few years. The Assam Bio-refinery has substantial annual requirements that need to be met through local production. While the State bamboo mission promotes bamboo cultivation, actual implementation needs further acceleration. Govt. plans for bamboo-based industries and parks offer further opportunities. Growing bamboo on available land and establishing primary processing units can generate income and employment.

Water supply and waste management: Central government programmes like Jal Jeevan Mission and Swachh Bharat Mission - Gramin are focused on providing drinking water and managing waste at the village level. User committees are being formed to manage these schemes, but a local entrepreneurship/SHG/model involving trained youths/woman groups can be more sustainable. This model could involve collecting tariffs, carrying out operation and maintenance activities and ensuring regular water supply. Similar models are successfully implemented in states like Kerala, Gujarat and Maharashtra.

Rural entrepreneurship holds the key to unlocking holistic economic growth for Assam. The State's industrial and startup ecosystem must shift its focus towards rural areas gradually, actively promoting and nurturing rural entrepreneurs. This requires tailored hand-holding support, comprehensive information sharing and the development of adequate logistics infrastructure.