Republic of India Livelihoods in intermediate towns
Policy Implication of Study Findings
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- Appendices
11. Policy Implication of Study FindingsThe limited nature of the study in two locations in one district of Bihar means that drawing broad policy and project design inferences must be undertaken with caution. More research across different locations are needed to further explore some of the main themes and findings of this study. However, the results of this study do have a number of policy and project design implications. Firstly, the largely subsistence nature of non-farm enterprises observed in Satghara and Bhagwatipur means that the assumption that growth of the non-farm sector is a sign of economic potential and income growth may not be true across locations. Therefore, government programs such as the Shyama Prasad Mukherjee Rurban Mission that are seeking to use the size and rate of growth of the non-farm sector as one of the indicators for selecting ‘economically dynamic’ sites for intervention need to exercise caution. Agriculturally vibrant locations with tradable surpluses may be more economically vibrant than locations with rapid non-farm sector growth. Rather than making an automatic dichotomy between farm and non-farm occupations, and assuming that one is more productive and economically dynamic than the other, it would be more prudent to focus on productivity and enterprise level indicators such as, for example, growth in incomes, size of enterprises in terms of number of employees and revenues; trade of goods and services with extra-local markets; local skill base; growth in use of institutionalized credit; and use of electrically powered machinery. Secondly, existing non-farm enterprises may not be appropriate targets for policies and programs seeking to enhance non-farm growth in a location. 97% of non-farm enterprises across both locations studied were self-owned without any employees. A bulk of these enterprises had a low-skill base; used no ‘modern’ technology or powered machinery; and generated no surplus or savings. More enterprise specific research is required to understand the dynamics at an enterprise level, but the findings of this study suggests that investing in such enterprises would not necessarily lead to enterprise growth without introduction of new, more productive technologies and enhancing the skill base of the owner-entrepreneur to be able to use these technologies. Thirdly, growth of the non-farm sector may not automatically result in inclusion of marginalized groups. Targeted interventions are needed to ensure inclusion marginalized castes and communities in specific non-farm occupations. Areas of focus for potential interventions include reducing barriers of entry of marginalized groups to non-traditional occupations; enhancing access to credit and ownership of productive assets. Fourthly, women seem to be severely underrepresented in non-farm occupations and also face gendered access to specific sets of occupations traditionally associated with them. Again, targeted interventions are needed to change aspirations, mindsets and barriers to entry to ensure greater access and inclusion of women to a wider set of non-farm occupations. Lastly, the wide prevalence of migration, its central role in rural households’ coping strategies, and its circular nature in the two locations studied points to the need for further research to identify intervention points that could enhance outcomes from migration for poor rural households. Remittances from migrants are playing a key role in enhancing household income and consumption levels, and driving demand for new products and services in sending areas. Also, approximately half the respondents currently engaged in non-farm activity in the two study locations reported having been migrant workers earlier. Intervention that seek to reduce costs of migrations and adjustment in destination locations, and build the skill-base of such migrants have the potential not only to enhance outcomes for migrants in destination areas, but could also have a positive impact on the sending locations as well. AppendicesAppendix 1: Comprehensive List of Non-Farm Activities and corresponding practicing caste and religion based communities.
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