Investing in livelihoods and market linkages in rural India for economic development and COVID-19 second waves

More than 65 percent of the total Indian population reside in rural India and contribute 25-30 percent to the country’s GDP. The first wave of the COVID-19 pandemic triggered a massive migration back to rural villages with most migrant labourers and income generators returning to rural India, jobless.

The second wave of this global crisis reached rural hinterlands, exposing the lack of health infrastructure, sanitation, resources, and income opportunities opening vulnerabilities in a significant manner.

In order to address this, and improve economic development in rural India, the market systems must rethink its involvement in rural India, embracing a social-lens, or solutions driven lens to tackle both income opportunities, address access challenges, and build new markets in rural India.

Despite many ground initiatives initiatives to promote rural economic development, we have not seen long-term, sustainable development in rural villages for several reasons. The challenges have included: initiatives lacking market linkages, or short-term projects that do not provide long term jobs for the entrepreneurs.

Challenges

Meera Bai, from Alwar Rajasthan says, “I am grateful for learning how to sew, and having a machine, but who will pay for my raw materials, what should I make? And who will buy it. I have the skills, I have the equipment, but I do not have a business.”

While spending time with a few officials, we have heard them say, “We have finally moved away from having women make “papad,” and now creating meaningful products, but we believe success is getting them on amazon. However, nobody is buying the products. So, what have we accomplished?”

This lack of market linkages directly impacts income opportunities. And with the rise of COVID-19, the requirements of targeted interventions are only growing. All this can be helped by investing in market-based livelihood opportunities, or rural entrepreneurship and innovative social business ideas in rural India.

Social enterprises as a solution

There is a unique role for social enterprises to intervene and build livelihood opportunities through market-linkages while addressing basic infrastructure, and resource challenges in rural India. The interventions are grounded locally, designed with inclusivity, combine both market-based linkages and business philosophies.

We have seen interventions in financial inclusion, agriculture, and most recent, social commerce as avenues to drive income opportunities in villages. Social businesses are investing in microentrepreneurs, especially women – in skills development, in digital inclusion, in market linkages, in capital investments, and in local employment in a way that addresses challenges, but also brings larger market systems to the table.

They have also become the last-mile thought partner, seeing rural families as customers, and helping drive insights on how to best build marketplaces. The concept is mutually beneficial as it allows development and growth for both ends.

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Entrepreneurship

Entrepreneurship ideas in different spheres like agriculture, finance, sales and more have thrived well in rural India due to the convenience, opportunity and flexibility they have created in people’s lives.

From financial inclusion to accessibility at scale, micro-level entrepreneurship has only made lives easy.

Market opportunity

Social businesses investing in microentrepreneurs have created a two-way connection: for larger companies, access to new markets, and rural communities, new income opportunities. These entrepreneurship opportunities are gender inclusive emphasising gender equality and are helping rural people connect to a larger economy.

Networks of entrepreneurs in rural areas are helping companies with data collection and marketing campaigns, awareness, resulting in companies curating products and services specifically for rural India.

Rural women are accessing new skills, digital tools, market linkages due to a connection fabricated via microentrepreneurship becoming a plausible solution for unemployment. Farmers can now sell their produce at convenient prices from their own villages to larger companies due to a robust network.

Village entrepreneurs act as assisted service providers for rural customers in everything from bill payments, to loan access and to doorstep delivery.

Role of social entrepreneurs amidst COVID-19:

Social entrepreneurs play a vital role as advocates for, providers of, and innovators in the COVID-19 response efforts. India’s second wave and responses to that hold vital lessons for other regions battling new waves of infection — across four vital areas of need.

Backing social entrepreneurs in their efforts, to maximize their reach and scale and to integrate into mainstream response systems, is critical and urgent and opportunistic.

The World Economic Forum identified 50-such social enterprises that have been combining their mission for impact and business lens to drive solutions in relief, treatment, prevention, vaccine access, and livelihoods in India.

Conclusion

Investing in rural economic development is the need of the hour; building local supply chains, digital and gender inclusive business models, and working with a social business lens can become a game changer to both improve income opportunities for rural citizens, address large access gaps, drive solutions to large challenges, and open markets for businesses.