Ending Unemployment In Rural India: Integrating Rural Finance With Skill Development

This paper reviews developments in India in the area of training poor rural households, focusing on technical, financial, managerial and marketing skills that translate into high degrees of productivity, quality and marketability of farm and non-farm products.

The paper examines:

• The scenario of rural households in terms of poverty, growth in farm population, decrease in farm size, unemployment, and lack of access to technology, raw materials and marketing services.
• The rural financial system, including:
  • The role of credit and rural financial institutions (RFIs),
  • The need to integrate existing training plans and programs meant for rural households with skill development efforts.

The paper argues that the ‘right to skills development’ is a basic right and concludes that:

• The Government of India has established a rural banking infrastructure as well as an extension-education system that should facilitate rural households’ access to credit and skill development in the area of agriculture, rural and cottage industries and business and service sectors.
• This should lead to improved productivity, production and quality of products, resulting in the generation of additional employment, income and profitability.
• There is immediate need for:
  • Revamping ‘Human Resource Development and Training policy’ of RFIs,
  • Creating the institutional infrastructure to provide managerial and marketing skills to rural house holds,
  • Training modules for skill development along with adult education programs to serve as desk reference manuals for rural house holds and staff.