Towards a Robust Ecosystem for an Inclusive Tomorrow
 

In recent years farming as a viable source of livelihood, paltry itself for many years, has seen a rapid decline. With low agricultural product prices and fragmented land holdings, rural households now earn more income from wages than from crop farming. Wages have come to dominate the share of income of agricultural households accounting for 56%-70% of the income of households with less than 1 hectare of land. However, the creation of decent job opportunities and dignified livelihoods remains a challenge. Employment in the formal sector has been declining steadily and nearly 81% of India’s population is employed in the informal sector. The pandemic and the subsequent lockdown impacted the employment generation scenario in the country, deepening the inequalities across geographies and social groups. Over the next decade, India needs to create 90 million nonfarm jobs to maintain its growth trajectory.

Returning migrants have contributed to the growing unemployment in their home states, but along with them they have brought new skills and fresh ideas which have led to dynamic changes in the aspirations and behaviours, especially of the youth. With a large population of young adults entering the workforce, policy interventions that cater to the local aspirations for decent livelihood are urgently needed. These interventions should also open up entrepreneurship to other underserved and excluded groups like women and socially disadvantaged communities.

As per the Economic Survey 2020, entrepreneurship provides an alternate route to curbing unemployment and having a significant impact on local wealth creation. With our experience in the Work4Progress program, we have observed that creation of meaningful livelihoods is dependent on three interlinked factors - behaviour exhibited by various actors (micro), support available in the entrepreneurship ecosystem (meso), and the larger policy architecture (macro). Enabling entrepreneurship opportunities requires creating change at these levels through systemic solutions to further address socio-economic imbalances and avoid the ‘top-down’ organisational trap in creating impact at micro and meso levels. In this line, there is a need at the macro level to reconceptualise micro entrepreneurship and be more mindful of the interconnectedness among stakeholders and the aspirations of entrepreneurs. Policy measures have to be re-imagined and shaped by ground insights to trigger systemic shifts in the governance structures and process in creating a robust ecosystem for micro entrepreneurship.

New forms of collaboration between entrepreneurs, private companies, Government agencies and financial institutions to connect the three factors needed for creation of inclusive entrepreneurship such as the SAM-udyam, an Inclusive Entrepreneurship "Collaboratory" are needed to effectuate impact at the micro, meso, and macro levels.

The policies recommended to effectuate impacts at scale would be

• Create shared infrastructure for joint action and value retention at the local level

• Move beyond the delivery of schemes and leverage government resources to support innovation and source expertise

• Enable (long term) movement of processes towards formality through an ‘informal-formal’ hybrid model which would not impose formalisation upon rural enterprises

• Design programs to allow for greater autonomy at the meso level in governance structures and local decision-making, and helping district level agencies to connect more deeply with ground-realities from which they often find themselves detached and to be cognisant of emerging needs and opportunities.

The need for new pathways is quite apparent as rural households transition from farm to non-farm jobs and from subsistence to opportunity-driven enterprises. A fundamentally different ecosystem would need to emerge and make public policy initiatives much more effective in accelerating economic growth and social inclusion by empowering institutions at the micro and meso level actors.■

References:

• Patara, S. et al (2020) "India Needs to Move from Microenterprise Schemes to Building an Inclusive Entrepreneurship Ecosystem" in Mahajan, V. (Ed.) State of India's Livelihoods Annual Report 2020 (pp. 91-112), Delhi: Access Development Services
   

Shivankar Mohan
smohan@devalt.org