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Untapped Potential

Broadening domains for micro-enterprises in rural India

The promotion of micro-enterprises in villages to meet the large demand for livelihoods would benefit from out-of-the-box ideas that move beyond hackneyed activities like making papads and pickles
Goat herds in Rajasthan. (Photo by AusAID)

Goat herds in Rajasthan. (Photo by AusAID)

Encouraging and financing micro-enterprises among the rural poor is seen today as a major livelihoods promotion method. However, conventional wisdom of promoters has thrown up a rather limited range of activities for these micro-enterprises. As one scans across the country, some limited forms of enterprises seem to dominate livelihoods promotion efforts under National Rural Livelihoods Mission (NRLM) or similar schemes. These typically cover dairy, goat rearing, backyard poultry, irrigation support for small vegetable gardens, land taken on crop-share basis, the famous PPMA (papad-pickle-masala-agarbatti) enterprises, small shops, small eateries and so on.

The typical outcomes are not very gratifying. Unless the villages are close to a busy market town or have at least periodic fairs near them, most of these domains become supersaturated, leading to low incremental incomes and low viability. The animal husbandry enterprises are well poised for survival at least in the short run, but only if functioning insurance services on top of accessible veterinary services are available. The rest are in general problematic.

So we need to think of out-of-the-box enterprises. It is of course better to stick one’s neck out and make suggestions than to merely carp. The rest of this column is devoted to offering some ideas, which may not be entirely new, but certainly have a huge untapped potential. I am attempting to marry two concerns. The first is that the output or outcome of the enterprise should be of sufficiently high social value justifying public investment. The second is that even though the micro-enterprise produces social good, it must also offer sufficient individual benefit to a user of its product or service so that the people will be willing to pay a fee. Only then the enterprise will produce a livelihood without needing recurring public expenditure.

Bathroom enterprise

Absence of private and secure bathrooms forces rural women to take hurried and incomplete bath, perennially afraid of embarrassing male gaze. The dignity issue is as strong as the health issue. Incomplete and infrequent bath leads to a diseases and troubles for women, particularly those in the reproductive age group. A safe and private space to take bath with a minimum assured quantity of water offers them a definite private benefit for which they may be willing to pay a fee.

Can there be bathroom enterprises? The public agencies can create a bathroom structure, the entrepreneur arranges to bring the water for bath and ensures that the bathroom is clean, etc. She could have a two-stage fee structure — so much for ordinary water, so much for warm water, etc. The viability of these enterprises would be the highest in densely populated but water-rich regions such as eastern Uttar Pradesh, north Bihar and northern West Bengal. Multi-caste societies with much fragmentation live here and leading to greater fear of infringement of dignity of women.

Weeding enterprises

Weeds and crop plants both take nutrients from soil and grow. Crop productivity stands to increase if farmers remove weeds from their farms. However, high opportunity cost of labor in weeding discourages removal of weeds. The result often is that either the farmers do not remove weeds at all and settle for lower productivity or many farmers take to use of herbicides. The latter happens in more developed areas with higher land-man ratios.

This is so unnecessary and harmful to the soil health. In fact the recent spate of accidental deaths in Yeotmal district in Maharashtra has been attributed to herbicides. Spread of herbicides is also rampant in Madhya Pradesh. Can there be an enterprise that undertakes to weed the farms? It will need to acquire a repertoire of different types of mechanical weeders, which would be used as appropriate on farms of those who buy the service.

Sharing of equipment makes the technology divisible and reduces the allocated capital overhead on the price. The enterprise will provide a solution to the weed problem of farmers. Weeding charges can be pegged in relation to herbicide prices.

Tree-protection enterprise

Godman Jaggi Vasudev in his Rally for Rivers and before that Madhya Pradesh Chief Minister Shivraj Singh Chouhan in his Namami Devi Narmade have been popularizing tree plantations on a massive scale. But in a hot and dry country like ours, unless fledgling trees are watered during dry months and protected from predators, survival rates will plunge to single digits.

Can each village have a tree protector enterprise? Their task would be to water the planted trees and to ensure that they are guarded. The eventual ecological gains should justify a piece-rated payment from private landholders when the trees are on private lands and from village councils where they are on public land.

SRI planter enterprise

This is not an idle idea. The grassroots organization Professional Assistance for Development Action (PRADAN) has actually developed and grounded some groups for doing SRI (System of Rice Intensification) plantations for a fee in Gaya district of Bihar. The equipment needed for this would be simple — involving ropes for line sowing; plastic trays or mats for nursery and mechanical weeders for weeding the SRI plots at specified frequency. The SRI gang gets paid either on a per acre basis or as a share of the crop as per local custom.

Organic farm materials enterprise

Many civil society organizations and some public poverty alleviation programs are promoting farming using the least possible chemical inputs. The adopters of these practices need to use inputs and plant protection measures based on locally available resources from local flora and fauna. Both the materials needed and the processes to convert them into effective plant nutrients and protection materials are known and documented.

The trouble is that they involve so much drudgery that average farm household tends to avoid them. The organic farming materials enterprises will take the task of producing these materials as a business, offering ecologically sustainable inputs and practices at affordable prices. Again some set up costs can be met form public funds, but the enterprise can be viable on user funds.

Escort enterprise

Adolescent rural girls drop out from middle and high schools if they have to go out of their villages to attend them. The need to walk long distances and the fear from men tends to discourage their parents from sending them. Can enterprises be created which offer the service of transport cum escort to these children? The parents themselves or a public agency on their behalf can pay monthly fees while public funds can invest in vehicle if needed.

A larger discussion on this subject is warranted. Can we have more ideas? These will need to be locale-specific. Hopefully a large pool of ideas coming from many people who work hard on the ground will help the public agencies broaden the domains in which they support micro-enterprises.

The number people seeking work are increasing at a fast pace while the opportunities for wage or salaried employment are much fewer. This trend is only going to strengthen as automation and technology rather than low wages drive economic growth in the country. The problem of mismatch between supply and demand of jobs is even more acute in rural India.

Livelihoods and poverty alleviation programs have therefore taken to promoting micro-enterprises of rural and urban individuals. These programs are being scaled up massively, through at times the clueless administrative machinery is comfortable only while dispensing doles. Promoters and beneficiaries could use more viable ideas and more incisive and practical promotional protocols to ensure that large-scale promotion of micro-enterprises will yield desirable results.

Sanjiv Phansalkar is associated closely with Transform Rural India Foundation. He was earlier a faculty member at the Institute of Rural Management Anand (IRMA). Phansalkar is a fellow of the Indian Institute of Management (IIM) Ahmedabad. Views are personal.

Sanjiv Phansalkar
Sanjiv Phansalkar
Sanjiv Phansalkar is associated closely with Transform Rural India Foundation. He was earlier a faculty member at the Institute of Rural Management Anand (IRMA). Phansalkar is a fellow of the Indian Institute of Management (IIM) Ahmedabad. Views are personal.


  1. Jayesh says:

    This is great out of box suggestions Sir. Thanks for sharing these insights with us.


  2. Malcolm Harper says:

    As usual, Sanjiv, you are spot on. One of the many at least partly justified criticisms of microfinance in that it finances more and more un-original repetitive enterprises, thus spreading the jam even thinner. The bathroom idea is great, all the more for actually being unoriginal; British and other European countries all had ‘public’ but paid-for baths, even in my lifetime, and I recall going to a public bath in Sweden in 1948 or so. And the Sulabh toilets are a good precedent.

  3. Kalpesh Gada says:

    Good article; with some good ideas. I particularly liked the weeding and bathroom enterprise – user would see immediate value. One of my favorites is a mobile theatre – I think women and elders should be quite happy to see a movie in a well maintained A/C van. Latest movies without having to travel several miles.