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Power of the rurban

An expanding segment of the population is voting and consuming robustly

Written by MK VENU |
April 22, 2013 12:06:14 am

An expanding segment of the population is voting and consuming robustly

The fast expanding grey area between India’s urban and rural segments — you could call it semi-rural or rurban — is increasingly determining the shape of India’s democracy as well as market economy. This aspirational segment has grown faster than you could imagine and the people here are consuming and voting robustly. The 2009 National Election Study by CSDS found that the much touted “urban voter apathy” was a misnomer in the semi-rural areas with urban characteristics. This segment not only recorded,on average,10 per cent higher voting than metros like Delhi,Mumbai,Kolkata,Chennai and Bangalore,it also saw higher voting than the rural constituencies.

So the rurban voter,who is participating in a dynamic market economy,is voting with a lot more passion than seen before. The outcome of the 2014 general elections will be shaped in some ways by this growing segment. To get an idea of how this rurban segment has grown over the past decade,one has to just see the increase in the number of census towns that do not have a municipal set-up and are administered by panchayats. India’s population census shows that in 2001,there were a little over 5,000 towns,of which about 1,200 were census towns with a rurban character. A decade later,in 2011,the total number of towns was 8,000,of which 4,000 were census towns. So,90 per cent of the increase in urbanisation over this decade happened in the form of census towns under panchayat administration. This is the most fascinating and unique aspect of India’s rurbanisation.

An extensive study of this phenomenon by the global investment firm,Credit Suisse,says “a meaningful part of urbanisation in India is just villages growing larger,merging together,moving away from agriculture,and thus being classified as towns”. These new rurban entities appear to have evolved organically and have assumed a life of their own. In some ways,they may approximate the Gandhian notion of a highly decentralised village economy. In contrast,Karl Marx had envisaged that the forces of capitalism would herd together scattered village populations into dense and optimal production and consumption centres. India doesn’t seem to be strictly following this pattern,witnessed in the West through the spread of 20th century capitalism. It may be partly because in the mid-20th century you could naturally build a brand new town with half a million population just around a big steel mill that employed over 1,50,000 workers. Today,technology advances ensure that the same steel mill can be run by less than 10,000 workers. So,massive technology change itself could be resulting in India not creating more steel townships like Bhilai or Bokaro,which Nehru had conceptualised.

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Instead,we seem to have a growing number of village clusters coming together to create viable production and consumption units,moving away from agriculture,into services and small manufacturing. Some economists may be tempted to dismiss this as a highly unviable and low equilibrium economy caused by lack of policy planning. But this is not just about pure economics and there are deeper tendencies — social and cultural — that need to be studied before rejecting India’s growing “rurban” base out of hand. And mind you,the complexity of this tendency may vary from state to state. Gujarat may have a very different framework from Uttar Pradesh or Orissa. Gujarat may be less complex in this regard and probably that is what gives so much confidence to Narendra Modi when he speaks of development with such clarity. Modi,perhaps,believes that such clarity on economic development can be easily brought to states like UP and Bihar. As a purely hypothetical exercise,it might be interesting to imagine Narendra Modi and Nitish Kumar switching jobs for a full five-year term.

On a more serious note,rurban markets in India have shown a very interesting pattern of transformation. Village clusters begin to have urban characteristics when a large number of people start moving away from agriculture. One definition of urban is places where less than 25 per cent of the population is engaged in agriculture. Another criterion is a minimum density of 400 persons per square kilometre in a population of 5,000. If one goes by these two parameters,the transition away from agriculture has accelerated over the past five years. According to the Credit Suisse study “the drop in male employment in agriculture over the last five years is equal to the shift away over the previous 27 years. Further,over 75 per cent of new factories during the last decade came up in rural India,contributing to 70 per cent of new manufacturing jobs. Manufacturing in rural India is now 55 per cent of India’s manufacturing GDP. Growth in services is equally robust in rural India”.

Also,a decade ago,agriculture was about a half of the rural GDP. Today it is just 25 per cent of the rural GDP. This also reflects the organic rurbanisation happening in the countryside. A small example at the micro level might illustrate the macro tendency better. I spoke to a taxi driver,Ashok Kumar,who has a 3.5 acre piece of farmland near Bulandshahr in western UP. He earns about Rs 10,000 a month,working for the taxi service,and sends about Rs 6,000 home for his wife and two kids. He spends about Rs 900 a month on the schooling of both children,including their daily pocket money of Rs 10. Grain and vegetables largely come from the farm. Interestingly,much of the farm activity is outsourced. How? Ashok’s younger brother hires a tractor and the required labour for the sowing and harvesting. Ashok says farmers in the nearby villages have begun to aggregate their small farms to collectively outsource the hard work of sowing and harvesting through mechanised means. This is the big change. Earlier,they would physically do the back-breaking work and have no leisure time. Now Ashok’s brother,after outsourcing the farm work,has enough time to study at a technical training institute. Soon,the family becomes a multiple income earning entity,instead of just depending on agriculture. There is a new division of labour happening in rural India. This is what is being captured as the new aspiration emerging from the highest-voting rurban segment as framed by the CSDS national election study.

It is this class — largely made up of non-upper castes — that will also decide how future governments are voted into power.

The writer is managing editor,‘The Financial Express’

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