2020 is limping to an end. For me it will be archived as the year of questioning. The pandemic has made us question beliefs that had begun to sound like platitudes, equality being on the top of the list.
Equality has many faces; in my book economic equality is paramount because it sets the ground for empowerment. Equality is not about everyone getting the same house, it is about everyone having the same opportunity to build one. Two years short of our 75th Independence Day, we are still battling poverty. Its stubborn existence only proves neither welfare nor philanthropy is an effective weapon. We need an inclusive economic environment that gives everyone equitable access to finance, skills, technology and resources so that they have a free hand to chart the economic activity of their choice.
I believe we should do three things to contribute to this environment
The first is focus on MSMEs. This sector employs about 11 crore workers, contributes around 29% of India’s GDP and is responsible for almost 48% of India’s exports. Prefixes micro, small and medium don’t do justice to the potential of these businesses. I firmly believe they can become a global force. to become a global force. As the West looks for alternatives to China, a globally competitive MSME sector can make India the next manufacturing hub for the world and address its livelihood and growth conundrum.
We must also view MSMEs, especially micro enterprises, through the lens of rural development. Historically, our rural societies have been defined by potters, agriculturists, weavers, shopkeepers, craftsmen and other artisans and tradesmen. However, studies show that only a very small percentage of such entrepreneurs are job-creators. Their enterprises are usually a one-person show; sometimes family members pitch in with labour or skill. Such enterprises should be helped with technology, innovation, financing mechanisms, skill upgradation and marketing support so that they can move out of self-sustenance mode. Technology can play a pivotal role in expanding the market beyond the immediate geography of the producer. We need to fan the vocal for local narrative to push up demand for local produce.
The second key to an inclusive economic environment, is ease of credit access for micro-entrepreneurs. The government’s SHG Bank Linkage Programme (through NRLM) has helped rural micro-entrepreneurs. Recent figures show that one crore Self Help Groups (SHGs) now have bank accounts. More than 50 lakh groups have built up loan outstanding of over Rs 87,098 crore and 88% of the disbursement has been to the rural women groups.
While this is encouraging, it is clearly not enough. We need to bring more people into the net and Non-Banking Financial Company (NBFCs) can play a big role in this area. NBFCs have a good understanding of the micro-markets and can collaborate with different stakeholders to customize products for the lower end of the spectrum. Since customer insight is key to creating innovative products, firms should look at recruiting employees who understand the cultural and economic nuances of their target communities and can help in the design of better products.
Th third thing we need to increase financial and digital literacy in this country. The ability of people to recognize and capitalize on economic and financial opportunities is the key to a vibrant economic ecosystem. This requires financial canny but unfortunately, a large part of Indians do not have the ability to make smart choices in matter related to wealth. It’s time we made financial literacy, a part of school and college curriculum. This will also fan the entrepreneurial spirit in the youngsters of this country.
Digital literacy must be elevated to the level of a national movement so that more and more people, especially from the informal sector, are able to leverage technology for better economic opportunities. Technology can only be a game changer if a population has the ability to absorb it. The sooner we bring everyone aboard digital India, the stronger will be our fintech industry. The world over, thanks to fintech, innovative tools and products are helping more people change their lives by accessing financial services and products at reasonable costs.
I would like to end this article with a quote attributed to the late Prime Minister Jawaharlal Nehru – Life is like a game of cards. The hand you are dealt is determinism; the way you play it is free will. Seven decades later, that belief is up for question. Life is indeed a game of cards, but it is time to deal every Indian, a fair hand.
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