Bolstering Rural Youths to Build a ‘New, Developed India’

20 Jan 2023

The post-pandemic recovery in India has heightened discussions over bridging the urban-rural gap and improving development and prosperity of rural communities. Over 65% of India’s population and 68% of the country’s youth resides in the rural parts of the country for whom development encompasses both economic advancement and broader social reform. Increased public participation in rural development programmes, decentralisation of planning, better implementation of land reforms, increased access to finance and skilling are all required to give better chances for economic growth in rural India.

Skilling Needs of Rural Youth 

As of 18th January 2023, the unemployment rate in rural India is 6.40% against the average country’s unemployment rate of 7.18%. There’s no denying the fact that the rural economy can receive a boost by ensuring suitable livelihood opportunities and skilling is critical to combating development issues in both the agricultural and non-farm areas of employment.

Employability has become heavily dependent on upskilling to cater to the demands of the evolving, knowledge-intensive economy. There is a rising demand for skilled manpower and an increasing gap in skill demand and supply. Hence, the youth especially in tier 2 and tier 3 cities are benefiting from latest trends in skilling. Currently, green jobs and digital skilling are gaining prominence in the wake of ongoing technological advancements supported by Indian digitisation drive.

The Evolving Opportunities in Rural India

Alongside, the Ministry of Rural Development has ensured that the Government will keep launching various schemes to boost employment in rural India. Under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 11.37 cr rural households and 289.24 cr rural dwellers have availed employment till 15th December, 2022.  Currently, the Government is also implementing three schemes for employment generation- Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) and Skill development through Rural Self Employment and Training Institutes (RSETIs) , all of them proving to be enablers. 

Additionally, Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is a part of the Skill India Mission and is enabling skill-based training of rural youth. Prime Minister’s Employment Generation Programme (PMEGP) is another initiative that aims at generating self-employment opportunities through the establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth. 

Today, entrepreneurship is a major area of engagement for rural communities. As newer generations of farmers and FPOs become digitally savvy, new business models are emerging across the agriculture value chain, from inputs and harvesting to processing and distribution. Information and transparency initiatives are addressing existing inefficiencies and formalising a traditionally informal sector.

As traditional agriculture transitions to agri-business, the need for faster and better access to cash and credit is increasing. While cash is still the dominant method of payment in rural India, Unified Payments Interface (UPI) transactions doubled in the past year. Multiple factors fuelled the swift uptick, including Aadhaar building a digital identity that enabled services like Know Your Customer (KYC) and e-sign. Access to banking facilities also increased. Pradhan Mantri Jan Dhan Yojana (PMJDY), part of the National Mission on Financial Inclusion, opened more than 40 Cr bank accounts by 2021. The Indian government is also pushing for digital and UPI payments post-demonetisation, and digital payment players like Paytm and PhonePe have expanded rapidly in the market.

There has been a significant increase in access to credit in the rural ecosystem, too. Agri credit has grown ~10% in the last five years, from ~INR 8 lakh Cr in FY15 to ~INR 14 lakh Cr in FY20. Rural microfinance gross loan portfolios also grew, rising from ~INR 132.9K Cr in March 2020 to ~INR 146.7K Cr in March 2021.

Industry Intervention

The CII Development Initiatives has enlisted wide scale industry support to unlock the growth potential of rural India. In creating tangible rural assets for sustainable development, CII has focused attention on improving rural income and employment levels, rural infrastructure development, education and healthcare facilities, and promotion of rural businesses.  

CII partners the Ministry of Panchayati Raj, Government of India, in promoting Rural Business Hubs (RBHs) across the country. Within this framework of partnership, initiatives have been taken to link up Indian corporates with different Panchyati Raj Institutions (PRIs) to identify and develop rural business clusters. While this would help the rural businesses to move up the economic value chain, the corporate would discover new markets and sourcing options.

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