Creating economic hubs

The parameters of the economy are to widen and engulf far more people than a globalised Manmohanomics had done. The only caution Modi has to ensure is that there is no lag in implementation.

In the past, many initiatives lost their steam after their formal launch. Hopefully there is a change in style of governance and it may ensure that India having taken the stride would be able to sustain the momentum.

Prime Minister Narendra Modi’s three announcements may broaden the prospects of economy. The National Agriculture Market (NAM), Gramoday Se Bharat Uday and Sagarmala – a plan to double port capacity – are likely to ensure a major shift from an urban-industry-based system to a farmer, rural, coast-based economy.

Another quite an event was the direction of the Road and Transport Ministry to the States for removal of speed-breakers on all national highways to save lives and ensure smooth road travel.

The speed bumps led to loss of 4726 lives, enormous man hours, misery for many families and terribly delayed journeys. The move would speed up road movement, minimize losses and add to faster economic activities.

The electronic NAM and Bharat Uday are major policy initiatives. It would ensure marketability of farm produce sans borders – a vision for empowerment of all by strengthening of the villages.

The government has accepted the farmers’ pleas and cries of villagers who together number 80 crore. This segment was ignored as the industry wanted focus to remain on it during the socialist euphoria and the globalization.

The NAM online system ensures connectivity to 21 wholesale mandis (local market) in eight States at the initial stages. This would gradually increase to 585 mandis by 2018.

Accordingly, farmers would be its direct beneficiaries but others such as the consumers or traders too would gain enormously. Rather than being out of the system, the traders would be very much part of it and would emerge as bigger facilitators.

The consumers, it is hoped, would benefit as it is expected to bring down the overall prices as many bottlenecks would be removed.The NAM importantly promises more options for sale. It increases access to markets through warehouse-based sales and thus obviates the need to transport farmers’ produce to the mandi.

For local traders, it offers the opportunity to access larger national market for secondary trading. Both the bulk buyers and exporters are likely to benefit from being able to participate directly in trading at the local mandis through the NAM e-platform. This is expected to reduce their intermediation costs.

However, all the positives will happen as and when NAM is fully functional. Farmers will initially be able to sell produce through the mandis within the State. It will gradually be extended to cover the country by 2017. Once this happens the farmers would have access to wholesale markets across the country.

In the next few years, the eventual goal of “one nation one market” for agriculture and horticulture produce may hopefully become a reality. Some hurdles such as dismantling of the Agriculture Produce Marketing Committee Act (APMC), which regulates the farm market in States, still remains.

Though some States have agreed to amend or do away with APMC Act, a lot still remains to be done in this sphere. So despite the Central government providing the software free of cost to States and grant of Rs 30 lakh per mandi as a one-time measure, the actual momentum may take a bit of time.

Only two States – Bihar and Kerala – presently do not have such law. Each State has different kinds of mandis and the e-market would link these. Gujarat has castor seed, chana and wheat mandis, Telangana has paddy, turmeric, maize and onion; Haryana has mustard and wheat; Jharkhand flowers; Himachal shelling peas.

So, soon a trader located in any corner of the country can access any of these markets. Similarly, a farmer can see the prices of his produce in different markets and sell at the best price.

The Gram Uday (GU) would be a major step to energise the rural economy. It would not only supplement the farm activities but would also ensure that overall economic activities are geared up to meet the expectations of increased economic activities.

The RSS has already started village clusters for integrated development in many States. The Government is likely to follow the model to make villages self-sustaining economic and production units. It aims at creating “samarasta” (harmony) in socially-divided villages and orient and gear these to work together for overall development of the society.

The GU programme is a realization that “50 cities and 50 individuals doing good business” cannot turn the fortunes of India. Modi wants to combine Mahatma Gandhi’s ‘Gram Swaraj’ and BR Ambedkar’s social harmony.

The ‘Stand Up India’, ‘Skill India’ and similar other programmes are aimed at creating entrepreneurs in 1.25 lakh bank clusters in the rural India alone. And, the GU aims at ensuring substantial development to strengthen the foundation of villages.

The Rs 1 lakh crore Sagarmala is likely to double port capacity by 2025, by linking the ports and inland waterways. Thus, it creates the highways for development of hinterlands.

It can provide faster movements for farm and rural cluster produced goods, integrate SEZs, smart cities, industrial and logistics parks. Apart from creating jobs, it can ensure a sustainable model of development. The project was conceived by Former Prime Minister Atal Behari Vajpayee. Modi has simply revived it.

The Sagarmala can save up to Rs 35,000 crore through optimal use of multi-modal transport as port capacity increases to 3000 million tonnes by 2025 from 1555 million tonnes now. It is expected to boost exports to $10 billion.

Undeniably, people have seen many such programmes being launched and being dumped too. Sometimes this has happened by the same political dispensation or other by different political set-ups.

Many programmes launched during the NDA-I were dumped by UPA-I. NDA-II has to ensure that these programmes do not become victims of whims and fancies of anyone. It should remember that tailoring a programme is not difficult but continuing it, is a herculean task.

Modi has made a good beginning and raised aspirations. Now he has to ensure a system that makes his political plans widely acceptable. The success of an economic vision depends on successful political sustainability.

The Prime Minister has to ensure this so that the change he envisages continues and the country’s hinterlands become the hub of economy.