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Uncommon Ground | Sunil Mittal and Aruna Roy on Generating Rural Jobs

Uncommon Ground | Dec 12, 2008

This is an edited version of Rohini Nilekani’s Uncommon Ground, where she brings together titans of industry and leaders of civil society to explore eight themes that are highly relevant for our future development. In this episode, she moderates a discussion on employment with Sunil Mittal, Chairman and group CEO, Bharti Enterprises, and Aruna Roy, Magsaysay Award winner, founder of MKSS, and one of the key architects of The Right to Information Act and the National Rural Employment Guarantee.

Uncommon Ground brings together titans of industry and leaders of civil society to explore eight themes that are highly relevant for our future development. These conversations explore the middle ground between the ideological divisions that often polarise the business and voluntary sectors. In course of these rare dialogues between leaders who have sometimes been adversaries, a number of common concerns emerge. The host uniquely placed to moderate these discussions as she traverses both sides herself, demonstrates that the relationship between business, society and state need not be necessarily confrontational. Rich in insights, Uncommon Ground highlights the critical importance of dialogue in our democracy to create a shared vision of the future. It is a significant contribution to the ongoing debate on development and equitable growth in India.

 

Rohini Nilekani: Why is it critical for the state to guarantee its citizens the right to work?

Aruna Roy: I was working with crafts people in Tilonia for nine years, and at the time it was a very Gandhian period for me because I was learning exactly what rural people were asking for. The main employment issue for rural people is daily wage work, where they are hired by private companies or private homes, migrate elsewhere to work, or work at bigger farms or government programmes. They need employment where they could use a skill they already possess, like working with tools like the gaiti or fawda, or with the various implements of mud, plastering, and building. These are their skills, so one has to build from there. The right to employment is a people’s demand, so we wanted to fashion it in such a way that there was a piece of legislation and a commitment from the state to look after its people. This is how the National Rural Employment Guarantee (NREG) was conceived.

RN: In India, we have 400 million people in the labour force, but many fall into the unorganised sector. How do we allow people to transition from wage labour to other kinds of livelihoods? 

Sunil Mittal: The answer may lie in the history of how labour has been organised in India over the last 50 years. The premise of our state plan was that the state will be the provider of jobs. It was modelled on the basis of the Soviet Union’s Gosplan, with five-year plans that would see the nation through the economic build-up. But that was a failure, which we know now. While the state should play a large role in providing employment and cannot abdicate that responsibility to NGOs and corporate bodies, I believe that each one of us has a role to play in providing dignified livelihoods to our country’s citizens. I have grown up in Ludhiana, where there used to be thousands of people waiting for a contractor to come pick them up to give a few of them work. But now there’s a massive shortage of labour, thanks to our economic development. The problem now is their level of skill, so I think the biggest job for the nation today is skill building. 

AR: The issue is that out of the 93% of India’s unorganised labour sector, a very small fraction can be absorbed in the skilled sector, industry, and the private sector. There is no argument about skill building, it is vitally important. The younger generation who are finding themselves unemployed even with a college degree definitely want a skill upgrade. But I would also ask whether the private sector would commit to imparting skill learning, not necessarily with the motive of immediate absorption into their own industry, but with the goal of creating a larger skilled group in this country.

RN: How can corporates leverage this unorganised labour sector? And where does the responsibility of livelihood creation lie?   

SM: The reality is that there is a global workforce shortage right now. India is the only country, other than Saudi Arabia, which will have a young labour force available. There are about 300 million children between the ages of six to 16. We have a window of 10 years to skill these children to ensure a global workforce. This is where we need a public-private partnership because the state will not be able to achieve this on its own. A good example of this is the ITIs. The government has put out ITIs to the private sector, encouraging them to adopt ITIs and make them temples of learning. The government will also pay several crores of rupees to the private sector to modernise them. So work has started in this area.

AR: A large number of Indians today have been denied literacy, have not been able to engage with politics, and are not equal participants in our economy. This is not just the failure of the state, but the failure of our generation in not addressing any of these issues through social and economic reform. The private sector is also folding in on itself and not opening any doors. We can’t just blame the government for everything that has happened in the last 50 years; a fair share of responsibility lies with every group, including the private sector. The aim of NREG has been to give a leg up to that last person who has been denied all these opportunities. It follows a Gandhian ideal to plan such that even the last person would be covered. And the money that goes to them actually comes back into the market. We conducted a small survey in Dungarpur, and we found that the market had bounced because of the money. This is the first government program that has sent crores of rupees to the rural areas.

RN: What can the private sector do in terms of livelihoods and employment? 

AR: While we all believe that the state is very important in its primary obligation to the people, markets have always existed. One cannot wish markets away. The question is, what kind of market do we want? Do we want a market-globalisation or our national industries to develop? Will our Banarasi sarees be made in Banaras by the weavers who have done it over the centuries, or will they be made in China? Our national industry must be strengthened. But the problem lies when everything is dictated by the market. The moment we say anything is unilaterally the answer, it’s a problem. If we leave this issue to the government, private corporations would do even less because the government has an obligation. But the government is voted in and out every five years. So the private sector has to look past the markets and its own agenda of increasing shares. It will have to develop a link with these kinds of national issues and contribute in a transparent way.

SM: Corporates cannot take on the role of the state but we work alongside it, to more efficiently deliver what the state wants. This is where the public-private partnership model will be beneficial. For example, Punjab recognised that they have enough schools, but they are not functioning very well. They have just come out of a scheme called ‘Adarsh Schools,’ in which they are asking corporate India to participate in putting those schools together. My own foundation is working with many of those schools. But this is voluntary, not a mandated corporate activity. The role of the state is to provide resources, and the role of the private sector should be to have better, efficient execution of those projects.

RN: There’s also the question of rural areas and people who cannot access government resources. Meanwhile, corporations going into these rural hinterlands cause great unease. Why does this occur and what can be done to allay these fears? 

AR: People who live in today’s Maoist India are citizens who have been denied social and economic equality, participation in politics, and who are treated as the dregs of our society. It’s a challenge for us all today to address the issues that have made this population of Indians resort to violence because none of us would want to live like this. Instead of private industry going into forest areas just to do mining or take over a dam, they should have to also look at its ecology, environment, and the possible social off-spins.

SM: Inherently, there is suspicion about the motives of industry when they move into rural areas. It is deeply embedded in our psyche, and for the right reasons because rural India has been exploited for a long time. So when an industry moves into rural areas to try and acquire land, there is hue and cry. There is always a motive suspected behind what industry does. In the agricultural area, 640 million people need to be taken care of in rural India today — that’s most of our labour force. So we went into some of the North Indian states including Rajasthan to start doing contract farming. Contract farming is a new concept, and people feel very threatened about their land. We had a very successful model, we grew the finest vegetables that could be exported to the world, but it failed because the infrastructure beyond farming was not good enough. We were not able to export them beyond the farm.

RN: What is the future of rural livelihoods? Will access to markets outside of rural areas benefit farmers and labourers? 

SM: We have already seen that when we buy vegetables from the markets, farmers’ income levels have increased by three to four times. So straight away, organised retail buying from the farms puts money directly into the hands of farmers rather than middle men. In addition to this, the consumers will save money by buying these products. That relationship is being demonstrated today on a very small scale, but in a few years I think  people will see the benefit of organising the entire rural chain into organised retail. The fear that corporates will exploit farmers is not one that should occur because the balance of power in the agricultural area is not in the favour of corporates. Corporate India will spend millions of dollars in putting drip irrigation and technology, so the stakes are high and they will ensure that the farmer is happy. 

AR: I think losing control over one’s life is quite dangerous. If we look at the coffee farmers in South America, for example, we have seen what happens when farmers give up control of the product once they have grown it.  We have learnt lessons in economic history, so ideally we should be able to retain control. If you’re a farmer, the issue is not what kind of tomato you will grow, but do you control where you can sell it, who you can sell it to, and for what price? Today in India there is a dichotomy in which one set of policy is influenced by Soviet Union, and the other set is influenced by Washington. We do not have people with diverse points of view who are discussing and evolving an Indian model of development. Whether this is supported by governments or the corporate sector, the decision of the people involved must be paramount. We are seeing unrest in India today because that decision is so far away from the people it affects. The people do not trust the private sector because things are so opaque, and they only tell us how much profit is being made. We need a kind of ‘political commitment’ which is not party politics, but a relationship of power based on a sense of equality. 

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