Topic 1 : It starts with the district
Introduction: India’s diversity is embodied in its districts. To the policymaker, understanding the full scale of this diversity is key to crafting policies. In this context, a multidimensional and localised index like the District Development Index for Maharashtra will prove invaluable.
More about the District Development Index
- The index captures a district’s progress by giving equal weightage to its potential for socio-economic development and its existing levels of socio-economic development.
- In addition to providing an immediate picture of district performance, the index is also built for the long term, so policymakers can tap into the potential presented by various districts.
How can a district become a unit for development tracking in India?
- The average district in India has nearly 1.86 million people, larger than the population of countries like Singapore (0.56 million) and UAE (0.94 million).
- This figure shows the gamut of governance required at the district level, and when socio-economic indicators reveal strides made at the district level, they are to be applauded.
- For example, a recent study by Sekhar Bonu and Anirudh Krishna looks at the inter-generational developments in education at the district level.
- Using NFHS-5 data, they reveal that the average level of the mother’s education equals or exceeds that of the father’s in as many as 195 districts (out of 707 districts studied).
- A generation previously, only 11 districts had more educated mothers than fathers. This points to the presence of intergenerational mobility at the district level.
- Other metrics of achievement, such as financial access, show steep gains.
- For instance, over 15 per cent of districts have more than 90 per cent of women who own and operate savings accounts.
- Similarly, health metrics also show visible improvements.
- For instance, over 91 per cent of districts have had more than 70 per cent of births in the last five years in health facilities.
- However, it is also essential to understand how progress is scattered across different districts.
- Bonu and Krishna’s study shows that some states, such as Karnataka, Arunachal Pradesh and Telangana, have both high-performing and poor-performing districts in terms of educational outcomes.
Disparities among districts
- There is also evidence of significant disparities in the income concentration across districts, as highlighted in the Harvard Business School-led ‘Competitiveness Roadmap for India’.
- For example, urban districts, which constitute 30 per cent of all districts in India, account for more than 55 per cent of all wages paid and close to 45 per cent of all jobs.
- Similarly, the average wage in the top 70 prosperous districts is three times higher than the average wage of the bottom 305 districts.
Which one works better: a top-down policy or a bottom-up policy
- What concerns the policymaker is whether improvements result from a top-down trickle effect or bottom-up growth.
- The presence of a contiguous set of districts within the same state indicates that the top-down policies play a role.
- However, “islands (laggard districts)” point to the need for specific intervention.
- Thus, an ideal set of policies should be a bouquet of varied measures for different localities and regions, tailored to their culture, urbanisation, development and demography.
- These should be bolstered by uniform interventions in infrastructure, public goods, livelihoods, policy enablers and good governance.
- Top-down policies continue to help address socio-economic issues at the district level in areas such as improved sanitation and hygiene (Swachh Bharat), provision of healthcare services (Ayushman Bharat), reducing malnutrition (POSHAN Abhiyaan) and rural job guarantee (MGNREGS).
- For instance, the Swachh Bharat Mission has led to 75 per cent of villages being defecation-free.
What could be the constituent of a bottom-up approach?
- Bottom-up policies are founded on three key pillars — data collection, best governance practices and incentivised collaboration between different departments.
The Aspiration District Programme: a bottom-up approach
- In this context, a commendable effort has been made through the Aspirational Districts Programme, launched in 2018.
- It has been instrumental in addressing critical gaps and fostering collaboration among diverse stakeholders to target efforts in the pockets of deprivation in crucial areas of health and nutrition, education, agriculture and water resources, etc.
- In the last six years, the programme has transformed the lives of about 25 crore people in 112 districts, with visible improvements in key indicators, such as health, financial inclusion and education, as tracked by NITI Aayog.
- For example, the percentage of pregnant women registered for ante-natal care within the first trimester rose from 68 per cent in 2018 to 89 per cent in 2023, and the percentage of underweight children below the age of six years declined from 20.6 per cent in 2018 to 9.2 per cent in 2023.
- Similar progress has been observed in the education sector, where transition rates of school children have improved significantly, and basic infrastructure is nearing saturation.
- As the size of the pie grows, the benefits of growth can be expected to percolate down to the district level.
- However, we need districts not just to become receptacles of growth but also the drivers of growth themselves.
A district is becoming a unit of production in India
- A typical district in India is not usually associated with a significant underlying productive activity.
- As the Harvard-led competitiveness report notes, national value creation is dominated by a small share of leading districts in India.
- Schemes such as the One District One Product (ODOP) have begun making amends for this situation.
- Since its launch in 2020, the programme has seen the development and promotion of 1,000-plus unique products, across 767 districts, encompassing sectors such as textiles, agriculture, food processing and handicrafts.
- Going by American academic Michael Porter’s theory of clusters, district-level productivity and value-creation can be catalysed by creating linked industries and institutions in proximity.
- Developing industrial clusters that leverage the district’s geography, culture and institutional structure is a possible route to improve district-level value creation exponentially.
From district to Industrial cluster: way forward
- To create districts that are clusters of growth, a one-size-fits-all policy does not work.
- For example, the healthcare and education priorities of Kerala and Tamil Nadu are vastly different from those of Uttar Pradesh and Bihar.
- The key to effective administration is realising that India is composed of many Indias, and a top-down approach alone will not work.
- While top-down policies can act as enablers, the critical thrust should be on tailored responses.
- This requires coordination across all levels of government, agency and autonomy at the local level and a pervasive presence of account-based accountability.
- Moreover, a significant gap in the effective implementation of programmes has been the limited availability of timely and high-quality data at the district level.
- This limitation severely hampers policymaking, particularly in identifying the segments of the population that need immediate government assistance.
Conclusion: Initiatives such as the District Development Index prepared for Maharashtra bring about transparency and ensure accountability of stakeholders. They will go a long way in tracking and supporting the contemporary socio-economic and infrastructure development at the district level, ensuring that districts emerge as growth drivers of Viksit Bharat.
Topic 2 : More in store
Introduction: Last week, Prime Minister Narendra Modi launched the world’s largest grain storage plan in the cooperative sector. This can reform the archaic grain storage policy of India.
More about the grain storage plan
- PM Modi, who was speaking at the inauguration of a pilot project being carried out in 11 states by primary agricultural credit societies under this plan, said that the government is looking to “set up a storage infrastructure of 700 lakh metric tons”.
- Expected to fructify over the coming five years, this is likely to cost Rs 1.25 lakh crore.
- The government’s plan is ambitious.
- To put it in perspective — the Food Corporation of India currently has a storage capacity of 361.62 lakh tonnes and state government agencies have capacities of another 400.74 lakh tonnes as reported in Indian Express.
- This would imply that the government aims to almost double the existing storage capacity in the country.
The significance of this increase in storage facility
- This sharp increase in storage facilities would help at multiple levels — it will cut down losses due to lack of adequate infrastructure, and enable farmers to sell their output at an opportune time in terms of prices.
- At the same time, the framework of this new storage plan also points towards the increasing emphasis the government is placing on cooperatives.
About PACS
- Primary Agricultural Credit Societies are the grass root level arms of the short-term co-operative credit structure.
- PACS deals directly with the rural (agricultural) borrowers, give those loans and collect repayments of loans given and also undertake distribution and marketing functions.
- They occupy a predominant position in the co-operative credit structure and form its base.
- It serves as the final link between the ultimate borrowers on the one hand and the higher financing agencies, namely the Scheduled Commercial Banks, and the RBI/NABARD on the other hand.
Organisational Structure of PACS
- General Body of PACS: Exercise the control over board as well as management.
- Management Committee: Elected by the general body to perform the work as prescribed by the society’s rules, acts, and by-laws.
- Chairman, Vice-Chairman, and Secretary: Work for the benefit of the members by performing their roles and duties as assigned to them.
- Office Staff: Responsible for performing day to day work.
Significance of Primary Agriculture Credit Society
- For the uninitiated, a PACS is the first building block of the century-old cooperative banking system of India.
- PACS can play a colossal role, in bringing farmer communities closer to credit, inputs, market and value addition.
- No commercial bank branch can ever come close to providing the kind of services a Primary Agriculture Credit Society (PACS) can.
- PACS can also play a major role by integrating its warehouse with the physical and financial supply chain of agro-commodities in the upcoming Garmin Agriculture Markets (GrAMs) or large warehouses in the private sector.
Reforms of primary agriculture cooperative societies
- Government had previously outlined a plan to establish two lakh primary agricultural credit societies (PACS), dairy and fisheries cooperatives in the country.
- The Union Budget 2023-24 flagged the initiation of the process of computerisation of 63,000 PACS with an investment of Rs 2,516 crore.
- The formation of a Ministry of Cooperation under Amit Shah is also indicative of this priority.
- The appeal of PACS rests in these societies serving as the last, but vital, link in the cooperative credit structure.
Status of PACs in India
- A report by the Reserve Bank of India had pegged the number of such societies in the country at 1.02 lakh at the end of March 2021.
- These societies, which have a sizeable presence in the western part of the country, served “13.7 crore members and 5.4 crore borrowers”, it said.
- The disaggregated data shows that small and marginal farmers and others accounted for 81 per cent of these 13.7 crore members.
- Around 60 per cent of lending of district central cooperative banks is through these societies. However, as the study pointed out, of these one lakh plus PACs, only 47,297 were in profit.
Conclusion: This increasing reliance on cooperatives stems from the prime minister’s belief in their critical role in solving farmers problems “through group/collective strength”. This emphasis may also be an indication, though, of receding expectations of large-scale investments from the private sector in agriculture infrastructure and marketing.