South Asia radius

Assocham: Bring cities to the countryside to boost rural growth

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags Food safety Food safety and standards authority of india

Though they account for almost three quarters of India’s population, farmers and rural dwellers account for just 17% of national income, according to Assocham as it urged key service sectors to make massive investment in non-urban infrastructure.

In a concept note, India’s apex industry body revealed research showing that agriculture, forestry and fishing is worth a mere INR23.7tr (US$368bn) out of the country’s gross national income of INR136.7tr (US$2.1tr).

This shortfall could be mitigated only when segments like trade, hotels, transport and housing receive more focus in the hinterland, it said.

In other words, close to 70% of our people get just a slice which is less than one-fifth of the cake. This defies social equity and is economically unsustainable​,” the note’s author, economist and commentator Prakash Chawla, wrote.

He said that, with migration continuing to from from rural areas to India’s choking cities, the answer to the disparity of rural wealth lies in revisiting former president APJ Abdul Kalam’s “laudable idea​” of providing urban amenities in the countryside. 

The creation of rural infrastructure like roads, broadband telecom, and financial services through technology-based inclusion would lead to substantially enhanced economic activities in the rural landscape and result in a big jump in incomes​.” 

Though India’s consumption demand is driven significantly by the larger share of the population in rural areas, the multiplier impact remains restricted because the purchasing power of non-urban residents is just one-fifth of the total national resource. 

But by integrating the city-based service economy to rural India, the gross domestic product could be “enhanced to well above US$3.5-4.0tr​” over the next 5-7 years,” Chawla wrote.

The great Indian consumption story so often parroted by stock market analysts could be realised effectively​.” 

According to DS Rawat, Assocham’s secretary-general, countryside regions are more prosperous than cities in most of the developed world, and this could become the case in India.

It all depends how soon the governments both at the centre and in the states can create the required infrastructure in terms of all-weather navigable roads, electricity, telecommunication, hospitals and schools to villages, tehsils and other semi-urban clusters​,” he said.

Kerala is a good example of integrating cities with small towns and villages. As they say, there are no villages in Kerala​.” 

More from South Asia…

India to introduce employee food-safety officials in all foodservice premises

India’s food regulator has made it mandatory for hotels and restaurants to employ at least one member of staff trained in food safety, who will check for food adulteration.


To this end, the Food Safety and Standards Authority of India has devised a two-month training course on hygiene standards and regulatory compliance, its chief executive, Pawan Kumar Agarwal, announced at a food safety seminar in Kolkata.

Stressing the need to strengthen the food testing infrastructure in the country, Agarwal said India needed to catch up with other countries in maintaining institutional food safety. 

Canada, with less than 3% of India’s population, has 6,000 food inspectors but the figure is much lower here​,” he said.

Having achieved official certification, staff members will then be expected to pass on their knowledge to other staff.

Agarwal said the regulator had now launched a food safety and certification programme with 19 modules, from basic courses for street vendors to advanced ones for food business operators, as well as for the general public.

He also revealed that draft regulations on food labelling, advertisements and packaging will be unveiled “in a few weeks​”.

"There will be separate sets of regulations for labelling, claims, advertisements and packaging materials. The draft regulations will soon be released across all food groups​," Agarwal said, adding that ingredients will be marked on a per-serve basis.

The FSSAI also plans to enlist third-party auditors to inspect the premises of food manufacturers.

SL mulls soda tax, raises duty on sugar imports

Sri Lanka has become the latest country to consider the introduction of a specific tax on sugar.

Sugar tax

The country’s health minister said the move is being considered in a bid to help reduce consumption to promote health.

I stressed the need for increasing tax on sugar in 2015 with an objective of controlling non-communicable diseases​,” Rajitha Senaratne said during a speech in Aluthgama.

He added that he still believes a higher tax on products high in fat and salt should also be levied to control NCDs.

Dr Senaratne said he had advised the government to increase tax on sugar at a time when 70% of all Sri Lankan patients at government hospitals die of NCDs.

At the same time, the country has increased the import duty on sugar to protect local cane growers as global sugar prices continue to fall.

The finance ministry said the “special commodity levy​” on imported sugar has now been increased by SLR10 (US$0.065) a kilo last week, but stressed that the move would not have an impact on local selling prices. 

Imported sugar currently costs SLR69 a kilo, compared to SLR89 last October, with duty now increasing to SLR23.

The government intends to pass the benefit of this increased levy to the farmers engaged in sugarcane cultivation​,” finance minister RHS Samaratunga said.

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Posted by Prof. Ross Barnard,

This means that the average income for the country person is about 1/9 of the city. It's very nice to talk about provision of infrastructure in the rural areas. They have been talking about it for 68 years.

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