India:Rural non farm sector needs focus

The priority should be on building an entrepreneurial culture among the rural youth, and help them set up rural ventures with bank finance The rural non-farm sector has assumed significance since it reduces rural folks' over dependence on agriculture and also provides an alternate source of livelihood for farmers especially in the challening times they live in in terms of crop losses, fall in prices of farm produce, etc. It also helps in arresting large-scale migration of small and marginal farmers and agricultural labourers to urban areas in search of livelihood opportunities during lean periods.      NABARD has evolved several refinance and promotional schemes over the years and has been making constant efforts to liberalise, broadbase and refine/rationalise the schemes in response to the field level needs. The focus has been on providing a greater credit flow and linkages for small, cottage and village industries, handicrafts and other rural crafts and service sector in the decentralised sector in the rural areas.      Building entrepreneurial culture among the rural youth and helping them to set up rural ventures with bank finance and earn own livelihood has been a priority for NABARD. Developing markets for the rural nonfarm sector products has been another area where NABARD had taken many initiatives in the past. NABARD has also been actively involved in promoting innovations in rural areas by creating a separate Rural Innovation Fund for this purpose. The objective of the fund is to provide grant funding to innovations with scaling up potential in farm, non-farm and micro finance sectors, which could result in more livelihood opportunities and employment creation in rural India. These innovations could also aim at facilitating access to financial and business promotion services for the poor. Over 500 such innovations have been funded during the last seven years and many of them have been replicated/upscaled. Some of the innovations funded cover new areas like providing clean drinking water to villages on a self  sustaining model to creation of Producer Organisations in rural areas to handle procurement, processing and marketing of rural produce.  Focus on greater credit flow      NABARD is constantly evolving its promotional schemes over the years and has been making efforts to refine and rationalise them. The focus has been on greater credit flow and provision of linkages between rural producers/enterprises and different forms of rural finance or other service providers and work on imbibing a credit culture.  Future of NFS/MSME      In view of the huge potential available in non farm sector and MSMEs, the service sector particularly has emerged as a major area in view of phenomenal growth in information technology and related sectors. The financial institutions are also taking this opportunity as thrust areas and have started funding them especially since central and state governments are encouraging subsidy support for the technopreneurs who are willing to start on their own.      Taking note of the changing scenario in the financial and social ecosystems, NABARD could play a proactive and enhanced role by:      Trying to have tie-ups with ITIs (1,500) and Skill Development Centres (5,000) to provide skill training as our channel partners.      Promoting training in emerging areas like automobile, telecommunication and transport sectors through private polytechnics/colleges and vocational colleges.      Tapping the huge potential for providing vocational education to school drop outs numbering about 210 lakh every year with focus on under-developed states and Left Wing Extremism-affected areas.      The National Vocational Qualification Framework (NVEQF) will go live from academic year 2012-13 in polytechnics, engineering colleges and other colleges under the university system. It is a framework that provides a common reference for linking various qualifications. It could change the lives of 30 per cent of the work force of the country.      Our experiment under RIF with the PANIIT Alumini Association in providing skill training under the Gurukul set up with assured placement has proved the above observation. Therefore the replication of this model will go a long way in enabling the untapped human resource for a more useful creation of skilled workforce with sustainable income generation and gainful employment moving from a grant based to a loan based approach. MAHINDER KUMAR CGM, DPD-NFS, NABARD