Republic of India Livelihoods in intermediate towns

10. Social Dynamics of Rural Non-farm Economy: Concluding Comments

As would be the case with most other states of India, Bihar has its diversity: socio-cultural as well as economic and developmental. Economic and developmental process are also influenced or shaped by the proximity of a particular region/sub-region to power centers, the caste and community composition of the area and the advantages and limitations of its given ecological realities. The dynamics of emerging non-farm economy are thus likely to vary across districts and sub-regions of the state of Bihar.

Notwithstanding its high growth rates over the past decade and more, Bihar remains one of the least developed regions of the country with high poverty and poor performance on most indicators of human development. Bihar has also not witnessed any significant growth in the manufacturing sector of its economy over the past two decades. In fact, industrial growth has been virtually absent in the region. However, interestingly, its rural non-farm economy has grown, almost at par with the pace at the national level (see Table 1).
What is then, the nature and reason for the growth of the non-farm economy in rural Bihar? Through this research we have been able to identify three broad factors that have contributed to the rise of the non-farm economy in rural Bihar. First and foremost is the decline of agriculture. This decline has been all round: economic, social and political. Given the growing density of population in the region and uncertainty caused by frequent floods and drought, abetted by a lack of investments in building agricultural infrastructure by the state, agriculture is no longer a viable occupation for a large majority of the rural population. The holdings have become so small that they can’t even fulfill the subsistence needs of the local population. Agriculture has also declined socially. As is the case with most other regions of the country, younger generations, even in families where the land holdings are large, no longer view agriculture as an aspirational occupation. The political churning that the region has experienced over the last three decades has also made the agriculturally dominant groups marginal to the local politics and power structure.
The second, and perhaps even more important, factor has been the growing outmigration from Bihar. Motivated or compelled by “push” of the local economic situation, young men began to move out, sometime in the 1970s, to far off places for work. Initially a small proportion of them went to places like Punjab and Calcutta, the trend continuing into the decades of the 1980s and 1990s. By turn of the century nearly three-fourths of the rural households in districts like Madhubani had at least one male members of the family working outside the village, mostly in far off cities and towns and some even abroad.
Unlike the usual process of migration, which tends to be one way with people moving from rural to urban centres, resulting in a steady process of urbanization, most of the migration from Madhubani district and much of rural of Bihar tends to be circular in nature. Consequently, despite such high rates of migration, Bihar has seen no spurt in its urban population or desertion of it rural settlements. However, the seasonal and circular out-migration of labour from Bihar is changing many dimensions and dynamics of the region. The rise of the rural non-farm economy is one such change.
The circular migration of working Biharis means that while the young men go out for work, their parents and wives stay back in the village. A direct implication of this is that not only do they regularly come back to the village to visit their families every few months (generally twice in a year), most of them also return for good at the end of their working life, when they are 45 to 50 years of age and can no longer bear the hardships of life as a migrant worker. In the interim, they send regular remittances to support their families. A share of these remittances is invested in the land being cultivated by the family left behind; the rest is available for meeting the consumption needs of the family. The remittances also create a demand for a variety of goods and services, from groceries for domestic consumption to medical stores and educational centers, schools and tuition centers. The local entrepreneurs, many of whom have themselves been migrants, open shops and other outlets to fulfill these needs.
The third important factor that has encouraged the growth of non-farm economy is the recent expansion of road and communication networks. Not only are towns like Madhubani well connected to the state capital and other towns of the region through good quality highways, the local areas, the rural settlements, are also well connected through pucca roads. Cell phones and digital networks have also reached the interiors of Bihar. Besides making physical movement and communication possible, they also make migration convenient and easier.
However, as mentioned above, our survey and close qualitative observations demonstrate, the local non-farm economy, which has been steadily growing over the past three decades, remains a subsistence economy. Even though the traditional jajmani type relations have disintegrated, a good proportion of occupational categories continue to be structured around caste lines. Many of these caste related occupations also happen to be low-income, low-value occupations. More importantly, those from the traditionally “low” status communities, the SCs and EBCs, are more likely to be working in the low value non-farm activities than the “others”. In other words, within the non-farm sector, their occupations are often located at the lower end of the occupational hierarchy. They also tend to work from temporary premises, which adds to their vulnerability. The activities that generate higher income and carry superior status tend to be the monopolies of the traditionally upper castes or the upper OBC, the trading caste.
The local non-farm economy is not based on modern technology, except where technology itself is a source of employment, such as cell phone repair shops. Even in such cases, their social organization remains low skill based and almost universally informal. Even those dealing with things like modern medicine, are likely to be working without any formal qualifications and licenses from the relevant departments.
The non-farm economy of the two settlements also does not seem to be generating any surplus. Its expansion is mostly horizontal and there is little evidence of it acquiring any kind of dynamism of its own beyond its current form of low-end commercial enterprises. Most of the enterprises are self-owned and appear to be temporary in nature. Those involved with these activities also do not see their current occupations taking them very far.
Decline of agriculture and disintegration of traditional power structure does not seem to be giving way to a dynamic market driven economy of an equal society. Expansion of non-farm economy has meant a growing economic dominance of the trading castes, such as the Suris in Bhagwatipur. Money lending businesses, which too are controlled by the traditional goldsmiths and those from the trading castes, seems to be flourishing in the two settlements. The poor often borrow money at high interest rates, ranging from 3 to 10 percent monthly interest rates, which keep them trapped in the subsistence economy, even when they go out for work or have their own petty business in the village.
During the last three decades, the rural landscape of Bihar has witnessed fairly radical changes in its social and political relations. The decline, and near disappearance of the semi-feudal patriarch has not only transformed the dynamics of the local and regional levels of politics, it has also opened-up possibilities of economic change. The ‘revolution of aspirations’ is not merely an urban reality. The poor in rural Bihar also aspire for a better life, for which they are willing to travel out of the village and to work hard, wherever they can find a job. The discourse of “economic backwardness” generally tends to discount the significance of social and political process. However, it is important to situate economic changes in the larger historical processes, regionally, nationally and globally.