India: Rural development and challenges.

[purty_trash]

India's infrastructure, a positive story

There is a lot of capital asset building at the rural level, which does not come into the capital formation statistics. VINAYAK CHATTERJEE, CHAIRMAN OF FEEDBACK INFRASTRUCTURE SERVICES (P) LTD.

Mr Vinayak Chatterjee is passionate about infrastructure. As Chairman of Feedback Infrastructure Services (P) Ltd, a leading provider of professional and technical services in infrastructure, he has his finger on the pulse of the sector. Moreover, as Chairman of the Confederation of Indian Industry's National Task Force on Infrastructure — Monitoring and Advocacy, the 52-year-old is completely clued in on regulatory issues. He was a member of the Sam Pitroda committee on modernisation of Indian Railways.

When almost all other voices talk of gloom, in a recent interview in Chennai, this Economics (Hons) graduate from St Stephen's College, Delhi and MBA from IIM-Ahmedabad, gave a balanced scorecard — the positive developments and the NSG (not-so-good) areas, as he calls it. Excerpts from the interview:

POSITIVE DEVELOPMENTS

With all the battering that we do to the infrastructure sector, there is also some good news. First is that Gross Capital Formation in Infrastructure is increasing. The 10th Plan average was 5.1 per cent of GDP. It is expected to be 7.1 per cent in the 11th Plan and estimated to go up to 9.7 per cent in the 12th Plan.

In the early 1990s, we used to envy China at 9 per cent, saying can we ever match China when we were doing 3 per cent. This is tremendous good news, where across shades of different political dispensation we have had a silent movement of the tectonic plates of India's infrastructure geoplates.

To achieve this in the kind of polity and democracy we are, in a space of 15 years, has been a major structural shift.

Second, private-public-partnership is above expectations. During the 10th Plan, 25 per cent of our infrastructure was through PPP. The 10th Plan was largely driven by telecom and the early power projects. In the 11th Plan, the target was 30 per cent, but we are likely to do 37 per cent and in the 12th Plan there is reasonable confidence that we will do 50 per cent. This is a major change in India's infrastructure development.

In the 10th Plan, the investment was $220 billion, of which 25 per cent came through PPP.

In the 11th Plan, it is almost $480-500 billion of that 37 per cent, and 50 per cent of $1,000 billion in the 12th Plan.

The third is we constantly debunk the Planning Commission. India is one of the few countries that officially publishes a Plan and the system is willing to be tested and criticised against its performance or non-performance.

I have still not come across any other country that does this with that degree of meticulousness and rigour, of saying as a country we will look five years ahead, we will plan and prioritise. It is not that we are not achieving the figures.

When the Planning Commission announced the 11th Plan figures, there was general scepticism. As the 11th Plan has come to a close, we are likely to exceed the planned $500-billion spend on infrastructure.

A lot of capital investment in infrastructure is not officially captured. An irrigation canal is often written away as a revenue expenditure of the department rather than treating it as a balance sheet item in the books.

There is a lot of capital asset building at the rural level, which does not come into the capital formation statistics. There are metros that are happening, flyovers, storm water drains, if all of those were added up, the figure is likely to exceed $500 billion.

Along with that there has been significant capacity building – model concession agreements, creation of new institutions such as NHAI, IDFC, IIFC, viability gap funding, increased allocation in Budget…

NOT-SO-GOOD AREAS

There are three areas that are not so good, what I call the NSG. If you dissect these figures and put them into two broad baskets – aam aadmi areas – electricity, water supply, sanitation and irrigation that touch the common man directly.

I put everything else in the other area. Our failure rate has been the highest in the aam aadmi areas. That is a concern in the overall mix.

We must push things differently; maybe have pure EPC (engineering, procurement, construction) or annuity. We must prioritise through different methods. We must push the aam aadmi agenda. This has found resonance. The approach paper to the 12{+t}{+h} Plan talks about electricity and water as the two priorities.

A large portion of infrastructure development is the responsibility of the States. The expectation is that while the Centre would show the way, the States would quickly learn their lessons and would pick up the infrastructure development agenda. That is not happening.

The States' share is falling , while private sector is picking up. This is a matter of huge concern. In a federal structure we are seeing the politics getting more state-oriented and we are seeing greater devolution. Unfortunately the infra agenda, particularly PPP, is not being picked up with the rapidity one would have expected.

There are only a few frontline States, possibly, Tamil Nadu, Karnataka, Maharashtra, Gujarat and Punjab, which have picked up the PPP agenda.

The world that we are living in right now is in anxious times, the corporate world is looking at depleting order books.

Depleting order books resulting in strangling operational cash flows going for corporate debt restructuring, most infra companies are cash-strapped, declining profitability, rising debt… how badly they have leveraged their balance sheets, worrisome NPAs. Infrastructure NPAs have gone up significantly. Assets are on sale – road projects and power plants are on sale – because people want to de-leverage and become asset light. And disillusioned PE funds.

Most PE funds had invested in the boom time in 2004-05 and exit periods are normally seven years. So we are now at a time when the 2004-05 stocks are down. This is the current situation. I am saying that, one must get inside to understand the pain of players there.

This is an inflection cycle. We were at bottom at least two months ago when everything was going wrong. Now things have bottomed out.

There are far more road projects that are being awarded by the C P Joshi establishment, the appointment of the Pulok Chatterjee committee on power and coal, infuse some confidence that the Government is acting.

And the Presidential decree, while we may question the veracity of it, just gives a flavour that the Government is back to taking decisions. The secular graph is made of counter-cyclicalities and we are currently at this stage and likely to move up.

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CPI for farm, rural labourers rises in March

The All-India Consumer Price Index for agricultural and rural labourers (Base 1986-87=100) for March increased by 4 and 3 points at 625 and 626, respectively.

Among 20 States, the increase in the index for farm labourers varied between 1 and 11 points. Maharashtra clocked the maximum rise with 694 points, while Himachal Pradesh was lowest at 519 points.

In the case of rural labourers, Punjab with 691 points topped the index, while Himachal Pradesh with 539 points stood at the bottom, a Labour Ministry release said here on Friday.

The index for agricultural and rural labourers in Punjab saw the maximum increase of 11 points each, mainly due to the rise in the prices of milk, vegetables & fruits, gur, bidi, firewood, shirting cloth cotton (mill) and leather shoes.

The general inflation rate based on the CPI for farm and rural labourers rose from 6.34 per cent and 6.68 per cent in February to 6.84 per cent and 7.19 per cent, respectively, in March 2012. Inflation based on the food index for both the segments stood at 3.94 per cent and 4.10 per cent, respectively, during March.

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Tribal belt in central India not shared fruits of growth: Ramesh

New Delhi, April 20 (IANS) The tribal belt in central India has not shared fruits of high economic growth witnessed by the country over the past few years, Rural Development Minister Jairam Ramesh said Friday and added that the proposed Bharat Rural Livelihood Foundation (BRLF) will help take benefits of development to these areas.

Addressing a seminar on "Role of Private Philanthropy in Social Development," organised by Professional Assistance for Development Action (PRADAN) here, Ramesh said the tribals in central India feel marginalised.

"The primary objective of the foundation is to work in the central tribal belt," he said.

The BRLF is slated to have have a Rs.1,000 crore corpus, half of it from the private sector.

Ramesh said BRLF will be a lean organisation which will help scale up activities of organisations such as PRADAN, which work in rural areas to help people come out of poverty.

He said BRLF would have functionaries in place in "four to six months" and will be good channel for companies looking to fulfill their obligations of corporate social responsibility.

Ramesh also referred to the government's initiative of Prime Minister's Rural Development Fellows, which allows young post-graduates to work in rural areas for two years.

He said 156 young persons had been selected as fellows under the programme.

Ramesh said his ministry will provide funds for setting up university chairs for study in development practice.

The seminar had been organised to mark 30 years of PRADAN, an organisation working with the poor in marginalised and isolated villages of central and eastern India to enable them to live a life of dignity.

Founded in 1983, PRADAN has 400 professionals working across seven states and works with nearly 2.5 lakh families.

Deep Joshi, co-founder of PRADAN, said that country's rural population would remain sizeable despite trends towards urbanisation and part of the effort to improve lives of the marginalised sections had to go in raising their confidence.

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NGO slams rural jobs scheme implementation in Assam

Guwahati, April 19 (IANS) A survey of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNEGA) in Assam has revealed that only about 18 lakh households out the 43 lakh provided job cards in the state were provided with jobs in 2011-12, an NGO said Thursday.

The survey jointly carried out by North East Social Trust (NEST), a Guwahati based NGO, revealed that a total of 43.7 lakh households in Assam are provided with job cards in Assam in the last one year but out of this only 17,98,372 households are able to get jobs under the scheme.

"We have taken the help of data provided by the government of Assam regarding implementation of the ambitious act. But the figures show that 58.84 percent people, who were given job cards under the scheme, were not been able to get any job during the last financial year," said Tasaduk Ariful Hussain, executive director of NEST.

"This is not all. What is more frustrating is the fact that out of the 43.7 lakh households, only 45,490 (1.04 percent) households were provided with 100 days jobs. Out of those who worked under the MGNREGA, 73 percent households got employment for less than 30 days in the whole year," Hussain added.

Giving the detailed statistics, Hussain further revealed that Kokrajhar district could provide highest numbers of 100 days employment by giving employment to 23,216 households while in Dima Hasao (formerly known as North Cachar Hills) district, not even a single house hold could complete 100 days employment.

He also noted that no registration has taken place under the scheme in 12 panchayats in Assam last year. "Again in 12 Panchayats under Manikpur and Borobazar in Chirang district, there is no demand for work," he said and added that although Rajiv Gandhi Seva Kendras (RGSK) are supposed to be set up under all the panchayats as per the act, only 19 RGSK have been set up so far in Assam.

"Although the MGNREGA has made it mandatory to set up RGSKs in each Panchayats with proper facility for vocational training for the job card holders, yet this is largely ignored in Assam," he said.

"The MGNREGA is one of the best schemes of the central government particularly for a country like India and it can not only stop the migration from rural areas to urban areas but also fight hunger. Unfortunately, the government has not been able to implement it properly," he claimed.

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Farm takes a back seat in countryside makeover

Mumbai, April 20: Rural India is not about agriculture anymore.

A Credit Suisse study has busted one of the biggest myths that politicians and bureaucrats have peddled and perpetuated for years. Agriculture now accounts for only one-fourth of rural GDP — sharply down from about half a decade ago.

“Rural India... is no longer an agrarian economy exposed to the vicissitudes of an erratic monsoon,” say Credit Suisse analysts Neelkanth Mishra and Ravi Shankar in their report titled “The Great Indian equalisation”.

It’s industrialisation that is changing the face of the rural hinterland. The study says manufacturing GDP in rural India has grown at a compounded annual growth rate of 18 per cent between 1999 and 2009 and today accounts for 55 per cent of the manufacturing GDP. Almost 75 per cent of all new factories in the last decade have come up in rural India, says the study.

While one of the reasons for this development could be that there is little physical space available in cities, it has been also found that rural factories deploy more capital and employ more people.

This change is showing up in the nature of employment in rural India. There has been a sharp drop in male employment in agriculture in the past five years which “is equal to the shift away over the previous 27 years”, say Mishra and Shankar.

With the transition from agriculture to industry and services being very rapid in rural India over the past decade, the study noted that that the ratio of rural to urban per capita GDP has narrowed from 3 times to 2.5 times over the past decade. This, the authors say, runs contrary to the trend seen in other emerging economies.

At the individual level, because of these changes, much of the incremental job creation in manufacturing was accounted by construction apart from services such as trade, the report added.

On the consumption front, it is forecast that rural areas that are now urbanising are likely to see continued income growth and, therefore, healthy consumption. This could benefit items such as tobacco and building materials that are likely to gain from this structural shift.

Part of a larger cycle

As rural India becomes less dependent on the vagaries of the monsoon, it also gets linked to the national economic cycle against which it was immune so far.

“The transition of the workforce away from agriculture is, therefore, a much desired trend, and the acceleration since 2005, if sustained, can provide a structural support to overall GDP growth,’’ the report observed.

According to the 2011 census, the definition of urban area includes those places with a municipality, corporation, cantonment board or notified town area committee, a minimum population of 5,000, at least 75 per cent of male working population engaged in non-agricultural pursuits and a density of population of at least 400 per sq km.

Though the conventional perception of urbanisation is the migration of people from villages to cities, the report pointed out that in India, a meaningful part of urbanisation is just villages growing larger, merging together, moving away from agriculture, and, thus, being classified as towns.

It seems fantastic, actually. It probably needs to be confirmed by other studies as well.

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Centre plans flexifund rural schemes

NEW DELHI: The government is thinking of letting the states cherry pick the central schemes for rural welfare, a step back from centralized decision-making that it hopes could help quell the accusations that Centre was weakening the federal structure.

The idea behind the 'flexifund route' is to allow states the freedom to decide rural development schemes they want to implement and how much of allocation should each get. It would mark a departure from the present method of every scheme being implemented in every state.

Chief ministers have long sought flexibility in spending and implementation modalities of RD schemes, arguing that Centre's 'one size fits all' approach ignored state-specific needs. Hill states and those with desert pockets have often resented the stress on population-based approach since they are sparsely populated despite having a large surface area.

The dry states have a preference for schemes on water while they are redundant for states with good rainfall. South India stands at a different level of rural development against their northern counterparts.

If Planning Commission accepts the proposal mooted by RD minister Jairam Ramesh, the states would decide the money to be spent in different schemes out of the total rural budget allocated to them.

Pitching for the new approach, Ramesh wrote to plan panel deputy chairman Montek Singh Ahluwalia, "Such a measure could also, in one stroke, send a powerful signal about the UPA government's deep commitment to cooperative federalism."

The new approach is proposed to start as a pilot project in 25% districts of each state with a complete transition in four years.

As per the proposal, RD budget for all schemes in the select 25% districts would be pooled together "to start with a clean slate". The state and district administration, along with panchayat representatives, would draw up an annual plan deciding which scheme required how much focus in that district. The plan would fix an outcome target on each targeted front.

To determine the efficacy of the new approach, the outcome of rural schemes in 25% districts can be compared with the rest.

An alternative in executing the 'flexifund' approach is that states frame guidelines as per local needs to implement RD schemes. It is also to be done in a phased manner, starting with two schemes while the other schemes are implemented as per the existing method. Their performance would be compared later to assess the difference.

[Krishnamoorthy K]

Nice posts so far.

Hi all, for rural developments in Karnataka please refer to the thread 'Rural Karnataka'

[Krishnamoorthy K]

Equitymaster discusses the evolution of rural economy from being farm based manufacturing and service based and the opportunity that this trend offers.

Urbanization conventionally is known as mass movement of rural folk into urban India. This is also one of the key themes that companies have in mind while designing strategies for future operations. Over the years, the Indian economy has dramatically evolved from being an agrarian economy to a service economy. However, this has not undermined the role of rural India as the same has undergone face uplift in the meantime. So much so, that now urbanization needs to be redefined as modernization of rural India, that is, town culture making its way into the rural economy. The landscape that was once characterized by fields and bullock carts, now reverberates with cell phones and factory machines.

This means that the fortunes of a significant chunk of Indian population will not depend upon the vagaries of monsoon, but will move in line with the broad economic cycle. And we have statistics to back this. Agriculture, that constituted half of GDP around a decade back now accounts for just one fourth. The number of rural people opting for agricultural jobs as primary employment has consistently been declining (81% in 1978 to 55% in 2010). In the last decade, more than 70% of the manufacturing jobs, especially in construction, service and trade has been created in rural India. No wonder that the same contributes to around 55% of the country's GDP from manufacturing. Infact, per capita GDP in rural India has been surpassing that in urban India every year since more than a decade now.

It is in this trend that a massive opportunity in the form of untapped markets lies. Now that urban segments are getting saturated, it is time for companies from diverse industries like auto, paints, media, tobacco, healthcare and FMCG products to flock to rural markets. While the market opportunity is huge, what companies need to keep in mind is price sensitivity and other peculiarities of this segment of population. Once the demand meets the right strategy, the fortune at the bottom of the pyramid will be unveiled.

By Equitymaster – A leading 'independent' research initiative focused on providing well-researched and unbiased opinions on the National Stock Exchange.

Copyright © Equitymaster Agora Research Private Limited

msn

[Krishnamoorthy K]

Heena Khan

While the earlier growth in rural India came from the higher income group (agriculture) and very low income group (subsidies), there is now increasing disposable income with rural middle class that is the non-farm income

* But non-farm income keeps economy afloat

New Delhi, April 25:

The rural growth story is slowly losing sheen because of inflation and rising input costs. In fact, rural price level is higher than urban price level. The March Consumer Price Index number for rural India stood at 116.3, while that for urban India stood at 114.6.

Mr Ajay Sriram, Chairman and Senior Managing Director, DCM Sriram Consolidated Ltd, says the rural growth story has reached a plateau. “The purchasing power of the rural population, 70 per cent of which depends on agriculture, has eroded. After several years of increases in minimum support price, there is a moderation now leading to relatively lower increase in farm incomes. Coupled with increase in input costs, the farmer consumers are feeling an income squeeze and this has impacted the spending power of the rural consumers,” he says.

Income squeeze

His company has considerable exposure to agri-businesses under the verticals of sugar, urea and agri-inputs.

While the fast moving consumer goods (FMCG) sector continues to perform well, white goods such as consumer durables have been facing rough weather in the rural markets. Burdened by price hikes, the consumer durable industry witnessed a shrinkage of 6 per cent in calendar year 2011 in rural markets, according to a study by rural consultancy MART. The study covered 24 villages and 24 small towns across four regions — Uttar Pradesh, Maharashtra, Andhra Pradesh and West Bengal.

“Consumer durable industry growth has remained flat in both urban and semi-urban areas because of inflation and interest rate hikes. The rate of consumption has gone down,” says Mr Kamal Nandi, Vice-President, Godrej and Boyce.

Labour shortages

The Great India Road trip report by Religare points to labour shortages caused by rising wages in non-farming activities such as National Rural Employment Guarantee Act (NREGA). With relatively moderate increase in minimum support price, and better NREGA wages, and a boom in land prices, which have soared 5-10 times in the last 7-8 years, farming has been rendered uneconomical.

Mr S. Sivakumar, Chief Executive, Agri-Businesses, ITC, had another angle to add. “While the earlier growth in rural India came from the higher income group (agriculture) and very low income group (subsidies), we now see increasing disposable incomes with rural middle class that is the non-farm income. This is resulting in faster growth of categories like apparel, footwear and branded FMCG compared to durables. However, in line with rising input costs, the farm productivity growth must keep pace to sustain this trend in the medium term.”

The prices of key farm inputs like fertiliser have been surging. Di-Ammonium Phosphate (DAP) prices have doubled between April 2010 and December 2011 from Rs 9,350 a tonne to Rs 18,500 a tonne. Urea prices which are controlled by the government were revised on April, 1 2010 to Rs. 5,364.69 a tonne from Rs 4,830 a tonne. The government is currently contemplating another 10 per cent hike.
Demand boost

Interestingly, the Religare report mentions that automobile demand has remained robust. Hero MotoCorp Ltd, for instance, which has reach in more than 1 lakh villages across the country, sees 45 per cent of the total sales coming from rural India. Maruti Suzuki India Ltd too has seen the rural share in its sales rise from 5-6 per cent in 2005-06 to 26 per cent now.

However, the report points to increasing instance of private remittances used to buy automobiles. “The young customers who have migrated to larger towns return to buy high-end cars for their parents and families,” the Religare report says.

However, urban consumers are getting worse off faster than rural consumers. Data from the Ministry of Statistics and Programme Implementation indicates that while CPI index numbers for rural India is higher than urban India, the rate of growth or the inflation rate in urban India is higher.

heena.k@thehindu.co.in

The Hindu Business Line

[Krishnamoorthy K]

By James Crabtree

As India’s largest software developer, Tata Consultancy Services has a reputation for clever technologies dreamt-up in ultra-modern urban business parks. But that has not stopped the group heading out into the fields.

Sensing business opportunities in India’s vast agricultural sector, five years ago a team from the company’s Innovation Lab began to examine the problems faced by the nation’s farmers. Their research discovered a wide array of difficulties linked to poor information, from finding accurate market prices to limited advice on issues such as crop insurance, regulations, and even weather patterns.

The result was mKrishi, a mobile phone-based application developed by TCS that provides its users with access to online farming information, or connects them directly to experts working in Indian universities. The service remains small – in 2011 it was used by only by a few thousand farmers in five states – but the company cites it as an example of the way in which software and technology can be used to help some of India’s poorest communities.

“That has been one of our visions in terms of sustainability from the beginning, we have always said that we wanted to do more than just giving away money,” says Pradipta Bagchi, head of global communications at TCS. “We want to use the time of our people and our skills and technologies to actually come up with a solution to whatever the problem might be.”

In its short 30 years of operation, India’s technology sector has developed an impressive reputation for innovative approaches to corporate sustainability. Infosys, the nation’s second largest IT and software developer by revenue, was recently named as one of the world’s 10 greenest companies in an ranking produced by Newsweek magazine and two environmental research groups.

Other Bangalore-based companies groups such as Wipro and Cognizant also talk up their sustainability efforts, producing the type of glossy reports seen more commonly in larger western businesses. Meanwhile, TCS, one of the largest and most profitable parts of the larger $83bn Tata conglomerate, was named among the best five companies worldwide in the Financial Times 2011 “responsible business” awards, praised in particular for its innovative use of technology in the development of tools such as mKrishi.

This record in part reflects a professional approach to corporate governance in general. Much of India’s economy remains dominated by sprawling family-run companies and large state-backed groups, neither of which has an especially strong reputation for world-class management. By contrast, the software developers tend to look much more like leading western corporations, with relatively diverse institutional ownership and transparent business practises.

The production of professionally audited annual sustainability reports can sometimes reveal uncomfortable truths. Infosys’ 2011 publication, for instance, proclaims the company’s commitments to employing people with disabilities, but then admits it only managed to hire four in the past year. A note below the relevant table says simply: “We are renewing our efforts in this space”.

Yet it is the ability to use India’s technological skills to develop new answers to sustainability problems which TCS says makes its approach different from others in the field. In the early 2000s, for instance, researchers at one of the group’s labs in the western city of Pune discovered that burned rice husk ash could be used to purify water.

This became the first step in the creation of the Tata Swatch, a low-cost portable mass-market “nanotech” water filter, which TCS developed together with Tata Chemicals, another of conglomerate’s businesses. The Swatch purifier is now one of the most popular in India. It has also been used as part of TCS’s contribution to a number of disaster relief efforts, most recently its response to the 2010 Chilean earthquake.

But while TCS’s approach to sustainability can be charitable, the group is also trying to find ways to turn the area into a money-spinner, having set up an “eco-sustainability services” business unit in Mumbai. The group aims to persuade other companies to hire Tata to help them to monitor and analyse their use of resources such as water and electricity both in their own organisation and throughout their supply chain – ultimately aiming to reduce carbon and other emissions, while hopefully saving money at the same time.

ft

[purty_trash]

NABARD posts record performance in Maha in 2011-12

Pune, Apr 28 (PTI) The National Bank for Agriculture and Rural Development (NABARD) extended record support of Rs 6,023.18 crore for agriculture and rural development in Maharashtra during 2011-12, up 71% from Rs 3,532.49 in the previous year.

The refinance institution provided Rs 4,035.50 crore support to cooperative banks and gramin banks in the state to disburse crop loans to farmers, a growth of 79% from previous year ie 2010-11, according to a report released by the nodal agriculture bank's Maharashtra office here.

A sum of Rs 1,777.84 crore was advanced by Nabard to support creation of rural infrastructure like roads and bridges, irrigation projects and drinking water, besides new projects like rural warehousing, waste water management, public health and anganwadi centres. This was 58% more than in 2010-11.

"For the first time, a special allocation of Rs 2,000 crore was made to Nabard for warehouse financing under RIDF by the Finance Minister in the Union Budget for 2011-12. At the national level, NABARD achieved 100% utilisation of the fund during the year, by sanctioning warehousing projects to the state governments and private sector agencies through banks," it said.

Maharashtra stood at the top amongst all the states with a sanction of loan of Rs 460 crore (31% of all India total) under RIDF, it added.

"NABARD also provided support through various banks to the extent of Rs 50 crore under this Special Warehousing Refinance Scheme. This is expected to create around 7.65 lakh tonnes of warehousing infrastructure, particularly for storage of food grains in the state and would thereby help farmers avoid distress sale of their produce," the report, released by Chief General Manager M V Ashok said.
n initiative to support producers' organisation through credit and credit-plus activities was also launched by Nabard.

During the year, an amount of Rs 39.33 lakhs was sanctioned to Devanagri Producers Company, promoted by a Non- Governmental Oragnisation Yuva Mitra, for setting up Agrimall at Sinnar in Nasik district.

Proposals have been received from 25 other producers' organisations, formed under the Companies Act as well as the Cooperative Societies Act, and are under "active consideration," the Nabard report said.

To further the cause of scarce natural resources, seven new projects with a commitment of Rs 27.46 crore were sanctioned for implementation by NGOs under the Umbrella Project for Natural Resources Management (UPNRM).

Further to create much-needed infrastructure with private sector involvement and to promote livelihood opportunities in rural areas, Nabard disbursed an amount of Rs 92.74 crore subsidy to various banks on behalf of beneficiaries under the various Government of India Subsidy Schemes.

Under the SHG -- Bank Linkage Programme spearheaded by Nabard -- around 84,000 Self Help Groups (SHGs) were formed and savings-linked during the reporting year.

Of these, around 48,000 SHGs were also credit linked. Cumulatively 5,23,700 SHGs in the state have been disbursed Rs 1,624.30 crore till March 31, 2012.

Besides this, various promotional and developmental projects were sanctioned to NGOs and other agencies for formation and nurturing of SHGs, their training and capacity building as well as promoting of their products, it said.

During the year, 2,409 Farmers' Clubs were launched by different agencies with Nabard support, taking the total number of such clubs to around 8,253.

A project was sanctioned to Reuters Market Light (RML) for providing agriculture related advisories through SMS to members of the farmers clubs.

A unique rural sanitation project with loan amount of Rs 100 crore was sanctioned to an NGO to install 1,000 rural sanitation units in three districts of Vidarbha region, the report added.

[purty_trash]

Rural 'ATMs' to serivce all PSU banks' customers

MUMBAI: Today, when a bank customer in an Indian village withdraws cash, she approaches the bank's business correspondent, who is an agent representing the bank in a remote area. Unlike her counterparts in the city, she can't use automated teller machines, or ATMs, of any bank to withdraw or deposit money.

That's about to change. State-owned lenders, under the direction of the finance ministry, are instructing their business correspondents, or BCs, to deal with customers of all banks.

Irrespective of the bank a BC is attached to, the agent, armed with hand-held devices that work as mobile ATMs, will accept and give out cash to any villager with an account in any public sector bank.

The move, aimed at making banking transactions easier in rural India, could deepen financial inclusion, which has emerged as one of the top priorities of the government and the RBI. At present, each bank appoints a BC who moves around in select villages to enable bank customers carry out basic transactions.

In a recent meeting, DK Mittal, secretary, financial services, urged public sector banks to set up a system to enable business correspondents to provide any banking service within a given geographical area instead of acting on behalf of a single bank.

"Finance ministry wants inter-portability of BCs to make it easier for villagers on the move to do banking transactions," said a general manager in charge of priority sector who had attended the meeting. As of now, only 74,000 of the 6 lakh villages provide formal banking services by way of branches or business correspondents.

If the initiative succeeds, it will benefit migrant workers. Currently , they are unable to use banking services easily if their bank does not have a BC in the region they migrate to. But the proposal may impact existing business correspondents attached to banks. This is primarily because finance ministry has asked banks to cancel the current contracts with individual BCs or companies who provide BCs, and float a new tender for hiring a new set of BCs.

Also, each bank will be assigned to lead specific regions . For instance, SBI has been given the charge to appoint BCs for all banks in Bihar, North East, Uttarakhand and parts of Chhattisgarh , while Indian Overseas Bank will be in charge of BCs in Tamil Nadu and Kerala. The move will require banks to change their technology platform to make the handheld device - operated by BCs - to undertake banking transaction of customers of different banks within a region.

[kalkibhagwan]

Nabard posts record performance in Maha

The National Bank for Agriculture and Rural Development (NABARD) extended a record support of Rs 6,023.18 crore for agriculture and rural development in Maharashtra during 2011-12, up 71 per cent from Rs 3,532.49 in the previous year.

The refinance institution provided Rs 4,035.50 crore support to cooperative banks and gramin banks in the state to disburse crop loans to farmers, a growth of 79 per cent from previous year (2010-11), according to a report released by the nodal agriculture bank's Maharashtra office here.

A sum of Rs 1,777.84 crore was advanced by Nabard to support creation of rural infrastructure like roads and bridges, irrigation projects and drinking water, besides new projects like rural warehousing, waste water management, public health and anganwadi centres. This was 58 per cent more than in 2010-11.

"For the first time, a special allocation of Rs 2,000 crore was made to Nabard for warehouse financing under RIDF by the Finance Minister in the Union Budget for 2011-12. At the national level, NABARD achieved 100 per cent utilisation of the fund during the year, by sanctioning warehousing projects to the state governments and private sector agencies through banks," it said.

Maharashtra stood at the top amongst all the states with a sanction of loan of Rs 460 crore (31 per cent of all India total) under RIDF, it added.

"NABARD also provided support through various banks to the extent of Rs 50 crore under this Special Warehousing Refinance Scheme. This is expected to create around 7.65 lakh tonnes of warehousing infrastructure, particularly for storage of food grains in the state and would thereby help farmers avoid distress sale of their produce," the report, released by Chief General Manager M V Ashok said.

[purty_trash]

In rural Rayagada, India's digital graft-busting plan is put to the test

RAYAGADA, INDIA // The dreams of modern India rarely make it to Rayagada. The Indians of these eastern forests forage for sago leaves and wild mango to survive. Barely a third can sign their names. Most live without electricity. many have joined a Maoist insurgency fighting to overthrow the system.

Now, modernity is creeping in. Smart cards, fingerprint scanners and biometric identity software are transforming Rayagada into a laboratory to test a thesis with deep implications for the future of India: Can technology fix a nation?

The target here is the disastrously corrupt Public Distribution System, a US$15 billion (Dh55bn) food subsidy programme frozen in a pre-digital world, where bound journals hold falsified records scrawled in handwriting so illegible one reformer lamented "even God could not read it".

In just the initial stages of the pilot programme in the state of Orissa, 1,200 kilometres from New Delhi, officials have already saved millions of dollars and appear to be getting food to villagers barely clinging to this side of starvation. The once rare sight of women walking home with sacks of rice on their head on ration days is now routine. The once routine sight of children with bellies distended from hunger is now rare.

The early success has inspired a cascade of new ideas for using technology to seal yet more of the programme's enormous leaks - "an attempt to make the system foolproof", said Nitin Jawale, the chief administrator of the Rayagada district.

Indian officials are hoping new technologies - some yet to be invented - will tackle some of the country's most intractable problems: corruption, collapsing health and education systems, a dearth of opportunity for the poor.

"We see innovation as truly a game-changer, to move from incremental change to radical change," prime minister Manmohan Singh said last year in announcing plans for a $1bn venture capital fund to seed revolutionary new technologies.

The government is setting up innovation bodies in every state and has approved plans to bring broadband internet to India's 250,000 villages.

It is also recording retina scans, fingerprints and photographs of all 1.2 billion Indians. The monumental endeavour to give everyone an identity record and number for the first time worries privacy experts but has sent reformers into a brainstorming frenzy over ideas for using the new database.

"There is great opportunity over the next decade to redesign the nation," said Sam Pitroda, head of the government's National Innovation Council.

For a country repeatedly jolted by screaming corruption scandals, the fraud and theft tainting the Public Distribution System is the ever-present white noise in the background, losing an estimated 58 per cent of its subsidised grain, sugar and kerosene to so-called "leakages" - the scams that infest every part of the system.

Ration shop workers will claim the month's shipment never arrived, then sell it on the open market at as much as 10 times the subsidised price. They'll give confused and poorly educated recipients less than their full entitlement or substitute lower quality grain.

Since beneficiaries are registered at specific shops, they are subservient to the shopkeeper. Even the more honest workers sell off whatever rations are left at the end of the month. Or the grain may be diverted to the markets by the truckload before even reaching the shops.

Then, there are ghost ration cards given out under fake names, shadow cards in the hands of people other than the intended beneficiaries, and duplicate cards held by families registered at more than one shop. Sometimes, village thugs hold the cards as collateral for loan sharks, or collect the food themselves, distributing aid to the rightful recipients at their whim.

The system is meant to serve 400 million people, yet more than 250 million Indians are undernourished and 43 per cent of children under five are stunted.

The programme's failure is a symptom of the government dysfunction that has disillusioned many who were left out of India's economic growth and driven some to join the Maoists, branded the country's top internal security threat.

At a store in Rayagada, under a creaking fan, a woman named Chandramma in a ragged pink sari and a necklace adorned with safety pins slid her microchip-embedded card into a device and put her thumb on its glass fingerprint scanner. The shopkeeper used a stylus on the touch-screen to register her rice order.

She paid 2 rupees a kilogram as two barefoot men dumped rice on a digital scale with a tall display, easily visible to a customer.

Periodically, the machine uploads the day's data to a central server, ensuring that only the honestly distributed grain would be replenished the next month.

Chandramma had at first been wary of the technology. "I am an illiterate lady, I didn't trust whether this would work or not," she said. But officials patiently explained it, and, more important, she is getting her rice every month.

"At least we now know whoever should be getting [food] is getting it," said Orissa Food Secretary Madhu Sudan Padhy. "Without technology, how do we really keep track."

Other subsidies also need reform, such as those on kerosene, so cheap that many run their motorbikes on it, according to Jawale. Its smell pervades the streets of Rayagada.

Nandan Nilekani, the former head of outsourcing giant Infosys, heads the giant identification project as well as a panel tasked with fixing the ration system. He believes the reforms can go further.

Once everyone has an ID number, they won't need ration cards. Their information, stored on secure servers, can be verified by a cell phone hooked up to a retina- or fingerprint-scanner, he said. People could then get their rice at any ration shop, rewarding honest ones with more customers and driving the crooks out of business.

"The moment I can make my entitlement portable ... the bargaining power shifts to the beneficiary," Mr Nilekani said.

That plan would face the same major hurdle that the pilot project does: the lack of electricity in rural areas makes the card readers unusable.

[purty_trash]

Rise in reading, arithmetic skill

- Study shows students from the region doing a shade better than those in rest of rural India

Imphal, April 29: Rural secondary school students in the Northeast have better reading and arithmetic skills than the rest of the nation, an education survey has revealed, though the numerical knowledge in some states of the region is below the national average.

The survey was conducted by volunteers of the Annual Status of Education Report under a Delhi-based NGO, Pratham, for the Union human resource development ministry.

Among the Northeast states, Arunachal Pradesh, Mizoram, Nagaland, Sikkim and Tripura are doing better when compared to the national average. However, Assam, Manipur and Meghalaya are below the national level as far as arithmetic is concerned.

The report, titled Annual Status of Education Report (Rural) 2011, Northeast India Report (provisional), was released by MLA I. Ibohalbi Singh here yesterday.

The national report was released by human resource development minister Kapil Sibal on January 16.

The all-India average says 10.4 per cent of the students up to Class VII in rural areas could not read letters at all, while 16.9 per cent could read only Class I text. Only 38.3 per cent could read the Class II texts.

Regarding the knowledge of arithmetic, 9.5 per cent of the students could not even recognise numbers. Only 23.4 per cent could do subtraction, but not division. Only 22.9 per cent could do division.

The overall situation is slightly better in the northeastern states.

Private school enrolment in the age group of 6-14 in Manipur, Meghalaya and Nagaland is above the national figure of 25.6 per cent. The percentages in Manipur, Meghalaya and Nagaland are 71.1, 53.3 and 40.9.

Manipur has the highest figures in private school enrolment in the country, followed by Kerala, 60.8 per cent.

However, the percentage of out-of-school children in the age group of 6-14 in Arunachal Pradesh, Assam and Meghalaya is higher than the national figure. While the national out-of-school-children percentage is 3.3, Arunachal Pradesh, Assam and Meghalaya recorded 3.8, 4.2 and 5.8 per cent respectively.

Manipur, Mizoram, Nagaland and Tripura have out-of-school-children percentage of 1.1, 0.6, 2.0 and 1.3 respectively.

Retired professor of Manipur University, N. Mohendra Singh, said thanks to lack of proper policy and teaching-learning method in the primary level students could not do well in Manipur.

Ibohalbi urged governme-nts to use this data to take corrective measures and improve the education system.

[kalkibhagwan]

^ good news, although I dont get the concept of how they are better than the rest of the country??

[purty_trash]

They're doing better than the national average. By definition half the country has to do better than the national average, so that in itself is not such a big deal. The big deal is that they're in the most remote part of India and even then they're managing to keep up with the rest of the country.

[purty_trash]

Poison in India’s groundwater posing national health crisis

NEW DELHI: Depletion of groundwater and its increasing pollution could be leading to a silent, nationwide public health crisis as aquifers in many stretches across India are becoming unfit for drinking, according to the government's own figures.

Data submitted in Parliament by the water resources ministry on Monday shows groundwater in pockets of 158 out of the 639 districts has gone saline. It says in pockets across 267 districts, groundwater contains excess fluoride; in 385 districts, it has nitrates beyond permissible levels; in 53 there's arsenic and there's high level of iron in 270 districts.

Besides this, aquifers in 63 districts contain heavy metals like lead, chromium and cadmium, the presence of which in any concentration poses a danger.

The record submitted in answer to a question by Congress MP Shruti Chowdhry presents a countrywide map of where groundwater has become unfit for drinking and where contamination levels have breached government standards of safety.

In Delhi, a number of areas are not safe to draw groundwater from. Aquifers in north, west and southwest districts along the Najafgarh drain contain lead. The southwest district has cadmium and northwest, south and east Delhi have chromium, rendering the water not just bad but dangerous to drink.

Adding to the danger is the fact that only about 65% of the city's population (predominantly in the better-off localities) is serviced by the water supply system of Delhi Jal Board. Besides heavy metal contamination, fluoride has been found in aquifers in New Delhi and those in east, central, north, northwest, south, southwest and west Delhi.

Apart from these, areas in east, central, New Delhi, northwest, south, southwest and west contain nitrates.

The stealthily growing health crisis could be worse in rural India where facilities to even detect chronic health problems arising out of water contamination do not exist. Nearly 80% of India's rural drinking water comes from underground sources.

Drinking fluoride-laden water beyond safe levels can lead to fluorosis which hits teeth and bones. Arsenic causes problems in the nervous system, reduces IQ level in children and in extreme cases can also cause cancer. Chromium is a known carcinogen. Presence of nitrates in drinking water leads to what is commonly called as blue baby disease which hits infants and can lead to respiratory and digestive system problems.

These chemicals have appeared in the water sources either due to too much water being drawn from deeper and deeper in the ground, or due to industrial and human waste contamination.

Arsenic and fluoride are typically found in groundwater where chemicals have leeched from the bedrock due to over-exploitation of the source. Heavy metals are likely to flow in from industrial waste dumped untreated into water-systems. Nitrates are likely to appear in groundwater because of excess or repetitive use of fertilizers over time.

Government reports have shown that water withdrawal from underground aquifers is higher than the annual recharge levels in almost 15% of the country's geographical area. The number of wells are increasing rapidly and so are the depths to which people are plumbing to bring water out as the sources dry up.

[purty_trash]

FMCG companies benefitting from increasing rural demand: Sanjay Manyal, ICICI Securities

excerpt:

ET Now: Going ahead for the next quarters, what do you think will have more prominence? Would it be volume growth or do you believe HUL can probably do an encore on what they did this quarter in terms of how the cost of goods sold was contained and thereby there has been a margin expansion that has taken place?

Sanjay Manyal: Both the things really happen simultaneously. Rural demand is increasing because of various reasons, whether it is higher MSP prices or government's focus on rural India, and the company has been able to get the benefit of that by increasing its presence in those areas and witnessing volume growth. If you have a cost pressure, then you try to increase margins and you only can do that when the volumes are sustainable. So both the things really will happen simultaneously.

[purty_trash]

Govt seeks consultants help to set up Post Bank of India

NEW DELHI, MAY 1:
Moving a step closer to setting up a banking business, the Department of Posts has started scouting for a consultancy firm to prepare a road map for the proposed ‘Post Bank of India' (PBI).

The Department has already carried out a feasibility study for setting up Post Bank of India and has invited expression of interest from consultancy firms — domestic or foreign — to finalise the plans for the bank.

The DoP, according to an official document, “intends to obtain approval from the Cabinet and licence from RBI for creation of a full-fledged bank (PBI).”

The consultancy firm will provide inputs on issues such as organisational structure of PBI, requirement of seed money and its relationship with post offices.

[B]Rural-centred[/B]

The proposed PBI will provide banking services, including accepting of deposits from the public for the purpose of lending or investment.

The PBI will aim to “provide banking services with special focus on rural areas... ride on the Core Banking Solution which is proposed to be provided in all the post offices.”

PBI will also become an additional source of revenue generation for the DoP, besides creating a platform for financial inclusion programme of the Government.

Currently, DoP operates seven small savings schemes through a network of 1.54 lakh post offices and collects huge amounts for both State and Central Governments. It has over 250 million account holders.

In addition to deposit schemes, the PBI will provide loans to general public and corporates such as any regular bank.

The DoP also runs a Post Office Savings Bank, the oldest and largest banking institution in the country.

There are 171 commercial banks in the country.

Of the 93,080 bank branches, only 36.10 per cent are in rural areas and 24.76 per cent in semi-urban areas. The all-India average population served per branch is 13,503.

On the other hand, out of 1.55 lakh post offices, 89.8 per cent (1.39 lakh) are in rural areas covering an average population of 5,992 a post office.