Rural Development in Uttarakhand-

Rural Development in Uttarakhand-

About 69% of state’s population is residing in rural areas (50% male; 50% female). This share was 74% in 2001. The slow development process in the backward hilly areas is the main reason of migration of rural population. Thus the challenge for inclusive growth policies is to generate faster development in the hilly areas. A lot of Central and State Government schemes are being implementing in this direction. Roles of these schemes range from strategic development and policy, regulation and monitoring and to handling complaints about the activities. But still the hilly regions have not been able to utilize their vast resources. Therefore there is a need to speed up the rural development programmes for better results.

Out of these schemes MGNREGA had performed exceptionally well. As far as Uttarakhand is concerned, though the performance of the state has been better than the year before, much needs to be done to energize the programme for better achievements in intensity of work provided. Besides this, steps should be taken to solve various problems of MGNREGA; inadequate awareness in the public, indiscrimination, corruption, unavailability of labour especially for farm activities, delay in payments, inflation etc. Being included in ‘Special Category Status’ by the Indian Government, the state is also under Backward Regions Grant Fund (` 135 crore released to the state under Rashtriya Sam Vikas Yojana during 2003-04 to 2009-10).

PMEGP was launched in 2008 by merging; Prime Minister’s Rojgar Yojana (PMRY) & Rural Employment Guarantee Programmes (REGP). The data for the period up to 2008-09 is relevant to REGP. Subsequent to 2008-09, data is relevant to PMEGP.

Regional imbalances have to be taken into consideration while drafting major programs in the core areas like poverty alleviation and social development. To make the above schemes more effective, the public authorities should firstly equip the projected area with basic amenities. Due to unavailability of these basic facilities about 84% of the villages in the state are having population less than 500 as compared to only 0.52% of the villages with population more than 2000. To mitigate the migration basic facilities should be provided with special thrust on the backward hilly districts. Besides this, migration must be cured by providing employment opportunities.

Basically the state has a farm subsistence economy in hills and dynamic industrial development in plains. Farm and allied sector contributes around 15% in GSDP of state and employ a major chunk of the total rural labour force (about 58%). The share of net sown area in the state is only 13.06% which shows huge potentials for farming. The share of cultivatable wasteland is only 5.47% which provides fodder trees and other plantation crops.

Because of its location and diverse climate, the State has certain unique advantages for development of sunrise areas in agriculture viz., horticulture, floriculture, organic farming, cultivation of medicinal and aromatic plants, food processing, agricultural marketing infrastructure, micro irrigation etc. It is the first state to be called as an organic state.

Even having huge potentials for farming, the farm subsisting economy of the state is pressurizing by geographical and local problems, small size of holdings, increasing trend of population, low level of per hectare income, increasing fragmentation of land holdings leading to decreasing availability of per household cultivated land area; inadequate development potentials of irrigation facilities, etc. Therefore the land usage for farming activities is decreasing year by year as compared to its usage for non-farm activities.

The most persisting problem in state is the average size of land holding which is only 0.96 ha as against the national average of 1.57 ha. The small and marginal holdings are increasing on while the large holdings remaining same.

Moreover, the farm productivity in the state has also not shown any significant improvement during last 3 years, as the yields have marginally gone up, whereas area under cultivation has reduced for almost all the crops. This increasing yield may be due to use of fertilizers. However the use of fertilizer in hilly regions is very low (4 to 6 Kg/ ha.) as compared to more than 200 Kg./ ha. in plain regions. The existing average yield level of important crops is low in the state except U.S. Nagar, Haridwar and some other parts of plain areas of Dehradun district. The Indian Government had declared four AEZ in the state for leechi, horticulture, herbs and medicinal plants and basmati rice.

The main reason of the low farm growth is improper and inadequate irrigation facilities. The farm sector in the state still remains heavily dependent on rainfall. The net Irrigated area in the state is only 3.38 lakh hectare (85.83% in plains and only 14.17% in the hilly region). The irrigation intensity in the state is 159% which varies between 155% in plains to 184 % in hilly region. Even having canals of 11346 km; lift canals of 230 km; gool of 24978 km; 1051 tube wells; 54515 pump sets; 31511 hauj; and 1532 hydrum as source of irrigation in the state, the districts of Almora, Chamoli, Rudraprayag, Tehri Garhwal, Pauri Garhwal, Uttarkashi, Pithoragarh, Champavat and Bageshwar are facing severe problem of the irrigation facilities.

However the farm sector is ailing from above severe problems yet the participation of women in labour force especially in farm and allied sectors is relatively higher as compared to other states which is creditworthy. But still farm sector alone cannot be expected to create additional employment opportunities and to sustain the livelihood in rural areas. Due to scaling up of production and diversification of activities in rural areas there is a demand for setting up of industries and related services in these areas. These efforts will not only increase the labour productivity and reduce the population pressure on farming but also will help in checking the rural-urban migration. Therefore to overcome the persisting problems, the economy of state has been diversified from subsistence centered farming to commercialized production of farm and non-farm products. This is the need of the hour for the public authorities to promote these activities to prevent high incidence of out-migration of active human resources from the state.

In this direction, the state announced its Industrial policy in 2003 to create high quality infrastructure facilities; to provide single window project clearance; to simplify and rationalize labour laws; to promote and encourage private sector participation; to promote SSIs, Cottage, Khadi and Village Industries, Handicrafts, industries based on local resources, sunrise industries in the State in the areas of IT and Bio-Tech, and planned and scientific exploitation of the mineral resources; and to provide special attention for setting up industries in remote areas etc. Subsequent to this, Integrated Industrial Hill Development Policy was launched in 2008 to accelerate industrial development through providing infrastructure and financial support to entrepreneurs in the industrially backward and remote hill districts. State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd (SIDCUL) was also incorporated to provide financial assistance in the form of debt, equity and venture capital and to facilitate the development of infrastructure in the state. Now SIDCUL is going to develop 11 new industrial hubs in the hill regions.

But at the same time, the scope for large scale diversification and industrialization is severely limited in purely hilly areas, because of a number of factors; limited and environmentally sensitive resource base, spread of useable resources across different and inaccessible terrain, inaccessibility to markets and modern inputs and technology, deficient infrastructure, insufficient energy and high transport costs leading to non-competitiveness of products etc.

The policy support of Central and State Government (inclusion of SSIs under priority sector lending of the banks; excise exemption, direct tax benefits; sales tax/loan deferment by the State Government; protection through product reservation; price preference and purchase preference; support for technology upgradation; entrepreneurship development programmes conducted by various National Level Institutes, encouraging ancillaries, development of infrastructure, etc) and availability of natural resources in the districts has led to a good growth in the number of SSI units in the state. At the time of formation, the state was having only 15285 registered SSIs but this number has been increased to 148% in 2010-11 and for the same period this increase was 196% in India.

The state also possesses a good number of mills and factories i.e., stone rolling mills flour and rice mills, sugar mills, cloth mills, paper mills, pharmaceuticals, etc. Since 2000-01 number of factories has been increased by 235.8% with an increase in workers of about 592%. This shows a very positive impact on the employment status as a result of industrialization. But the districts of Bageshwar, Champawat, Rudraprayag and Uttrakhshi are still having negligent number of industries. It is expected that the new industrial policies will focus on industrial development of these districts.

Besides this, artisan units are also being supported in the state. In 2002-03 there were 58904 such units investing `3953 lakh and employing 64492 persons. Within a year, number of these units increased to 61450; and investment and employment increased to ` 4175 lakh and 67051 people respectively.¹

Not only SSIs and factories but Khadi and Village Industries are also promoting industrial development in the state. Village industry is any industry located in a rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of artisan or worker does not exceed ` 1 lakh (` 1 lakh and ` 50000 in case of village industry located in a hilly area) or such other sum as may, by notification in the Official Gazette, be specified from time to time by the Central Government.² Since 2002-03 number of K & VIs has shown a remarkable increase of 79.13% while since 2006-07 the employment in these units increased 4.07%.

Table 5.15: Progress of Khadi & Village Industries in Uttarakhand

Year	Units (No.)	Employment (No.)	Production ( in ` lakh)
2002-03	575	NA	NA
2004-05	468	NA	NA
2006-07	809	4987	1064
2007-08	597	4634	8172
2008-09	727	2850	4905
2009-10	1210	3750	10731
2010-11	1030	5190	NA

Source: Directorate of Economics & Statistics, Uttarakhand.

Basically the state possesses 2 categories of industries; first traditional industries running for a long period in the state; and second non-traditional industries which are not traditional yet having vast potentials in the state and seeking new avenues in the state’s economy.