Rural India: Can it shine too?

Most visitors to India don't have the chance to venture out into rural areas. They zoom through India's cities in air conditioned cars, gawp at the IT palaces, cough on the blue rickshaw fumes, and come away with the impression that India is indeed booming. But the cities tell you only part of the story.

The countryside is home to more than 700m people (~70% of India's population) scattered across roughly 600,000 villages. And whilst agriculture now only accounts for about 20% of GDP in the new India, it still generates the majority of employment. So to really understand what's happening in India, you need to see the rural picture. (Or to quote an Indian proverb: "What does a monkey know of the taste of ginger?")

I was up in western Maharastra on a trip into "the field". Together with Sauhrab, I was visiting customers and the jhotis (female village entrepreneurs) to assess the impact of our latest marketing promotion. The landscape flat, bare, and dusty. A few trees grow forlornly in the rugged hills. Fields have been recently plowed and sown, ready for the coming monsoon rains. A man, wrapped in a bursting orange lungis, urges his bullock on, leaving churned, charcoal earth behind him.

Much of Indian agriculture is rain fed, and thus harvest come just once a year after the monsoon passes. Farmers live lives of plenty for a few months, and then spend the following 9 months living off their savings. Wealthier farmers with connections can drill bore holes and pump out water to irrigate their field and grow cash crops like sugar cane and fruits.

But the real promise is large scale irrigation. In one village we visited, the government had diverted a nearby river to feed their crops. The concrete canal was swollen with rich brown, silt-laden waters which farmers were sluicing into their fields. Here they harvest cash crops year round and you can see the impact in the village. Houses are bigger, 2-wheelers abound, and kids march off hand-in-hand to school.

Much has been made of how rural India felt marginalised and left out of "shining India". It was said that the poor punished BJP at the polls in 2005 by handing power to Sonia Ghandi's Congress. Progress does indeed feel less palpable in rural areas, but things are on the move. And where there is the right mix of government investment in infrastructure, good access to markets, and savvy farmers, you can see definite hope.

Lifting people out of poverty, will require shifting some of the 700m rural residents into more productive activities - i.e. service and manufacturing jobs. India is fertile and well suited to industrial farming. Agriculture should be booming and with low labour costs Indian exports should be very competitive on world markets. But this requires sufficient economies of scale, which India will only through organisation. (There are many models: social cooperatives ala Amul for dairy products, as well as private sector efforts). To provide the incentives for consolidation the government needs to invest billions in better irrigation, better roads, more consistent power. But as ever, prescribing solutions and making promises is easy. Delivering them is much harder.