BASIX Equity for Equity A Microfinance India Publication State of India's Livelihoods: The 4 P Report Edited by: Dr. Sankar Datta and Vipin Sharma ACCESS Development Services 28, Hauz Khas Village, New Delhi - 110 016 Tel. 91-011-26510915 Fax. 91-011-26850821 www.accessdev.org Our Special Thanks To ACCESS Development Services is a national technical services company with focus on livelihoods and micro finance. Set up with the support of CARE and DFID India following implementation of CARE UK's 1999-2006 DFID India funded Credit and Savings for Household Enterprises (CASHE), the entire direct livelihoods and micro finance knowledge, experience and BASIX Equity for Equity human resources of CASHE has moved to ACCESS. This sustainable legacy institution established as a Section 25 Co. in March 2006 is structured to provide technical assistance to a rapidly growing livelihoods and microfinance sector working with Civil BASIX is a livelihood promotion institution established in 1996, working with over a million and a half customers, over 90% Society organisations, Government Departments, Corporate sector, and Multilateral/ Bilateral agencies. being rural poor households and about 10% urban slum dwellers. BASIX works in 15 and over 10,000 villages. It has a staff of over 3500, of which 80 percent are based in small towns and villages. Although ACCESS has a national remit, given the low penetration of development services in certain regions, ACCESS focuses its efforts in the more underserved regions, helping to build local capacities and enhancing their abilities to work at scale. Recognizing the value of organising communities as a sustainable strategy, ACCESS helps develop robust community based models and demonstrate their efficacy as viable and sustainable institutional forms with a focus on building capacities of local partners in a region. ACCESS is positioned to work at all levels within the value chain. On the ground, it seeks to incubate innovations, develop community models and design 'lift and shift' models that can be replicated across contexts and regions. At a regional level, ACCESS works as a technical resource agency, supporting diverse stakeholders for more effective flow of benefits to the poor. At the national level, ACCESS seeks to bring together all key stakeholders to vision for the organized growth of the microfinance and livelihoods sector and help in building regional and national networks for effective access to resources, services and markets and facilitate the poor to negotiate more effectively within the value chain. The Citi Foundation is the philanthropic arm on Citi Inc., the world's preeminent financial services firm. By partnering with Based on its knowledge and practice, ACCESS has developed a strategy on Livelihoods and Business Development Services Citi businesses around the world, the Foundation is able to put the full resources of a global institution to work for the local focusing on inclusive value chain approach and works within a few sub-sectors, those in which are poor are engaged and those organization it supports. The Foundation is committed to enhancing economic opportunities for individuals and families, have future potential. particularly those in need, in the communities where we work so that they can improve their standard of living. The Livelihood School is an academic institution promoted by BASIX group, a modern livelihood promotion institution. The DFID, the Department for International Development, is the part of the UK Government that manages Britain's aid to mandate of the School is to build up a scientific Knowledge Base on livelihoods and disseminate the same to livelihood poor countries. The work is focused on achieving the Millennium Development Goals. DFID works with charities, practitioners for enhancing their understanding and implementation capabilities, who in turn will promote large number of international organisations and the governments of poor countries to find lasting solutions to the global problem of poverty. livelihoods. After being incubated through a pilot phase of three years, from 2006-07, the School has now started operating as an independent body. The School was ordained to focus on practice that is work on questions that arose from the predicaments of a practitioner and not from a theoretical construct. During the pilot phase, it attempted to generate adequate revenue to meet all its costs. This new phase of the School focuses on building it as an academically sound knowledge institution as compared to its earlier thrust marketing its services during the initial phase. The two focus areas of the School are: (i) Building capacity of the faculty and (ii) Building collaboration with other agencies engaged in livelihood promotion, building knowledge from their experiences helping them build the capacity of their teams. The School has also sharpened the target group focus. While working with some of the IFMR Trust is a private trust whose mission is to ensure that every individual and every enterprise has complete access to large Government livelihood programs, attention of the School is now drawn to a group of people who could play a critical role in financial services. IFMR Trust has thus far invested INR 300 million (USD 7.5 million) in various commercial enterprises in supporting the livelihoods of the people like the Sarpanch and the leaders of the local governance system. multiple sectors. They have also made strategic investments to provide technology and infrastructure support to our ventures. In the initial year of its work, The Livelihood School is greatly supported by all the members of the Board. The Livelihood School is also supported significantly by senior management of various collaborating institutions like SIRD Chattisgarh, WDC Bihar, UPASac Uttarakhand and the managers of BASIX, as parent organization. ACCESS Development Services UNDP is the UN's global development network, advocating for change and connecting countries to knowledge, experience Livelihoods India Secretariat: 28, Hauz Khas Village, New Delhi - 110 016 and resources to help people build a better life. They are on the ground in 166 countries, working with them on their own solutions to global and national development challenges. Navin Vivek Horo, Manager, Livelihoods, Tel. 91-011-26510915, Fax. 91-011-26850821 Access Development Services www.accessdev.org State of India’s Livelihoods : The 4 P Report Edited by : Dr. Sankar Datta Vipin Sharma ACCESS Development Services 28 Hauz Khas Villages, New Delhi 110 016 2008 Disclamer : This report represents the personal views of the chapter authors. It does not represent the views of ACCESS Development Services, The Livelihood School, or of its sponsors, or of the Livelihoods India Advisory Group. 1 Livelihoods India Advisory Group Brij Mohan, Former Executive Director, Small Industries Development Bank of India Deep Joshi Consultant, Watershed Management, Former Executive Director, PRADAN Sanjeev Phansalkar Programme Leader, Sir Dorabji Tata Trust (SDTT) Prema Gera Head, Poverty Unit, UNDP Rachel Lambert Rural Livelihoods Advisor, DFID Tinni Sawhney Senior Programme Officer-Rural. Development, Aga Khan Foundation Dr. Alakh N Sharma Director, IHD The Livelihood India Secretariat Navin Vivek Horo Manager, Livelihoods, ACCESS Development Services 2 2 Contents Chapter Page No Foreword 6 Preface 8 Abbreviations 10 PARt - I 13 1. Overview 15 Vijay Mahajan, Mona Dikshit and Kaushiki Rao 2. The People: Their Livelihoods and Critical Challenges 41 Braja S. Mishra and Sourindra Bhattacharjee 3. Policy: Pathways to Sustainable Livelihoods 59 Smita Premchander, M. Chidambaranathan and V. Prameela 4. Possibilities: Livelihood Opportunities and Potential 81 Sankar Datta and Preeti Sahai PARt - II 101 5. Public Systems: Major central government and donor-supported programmes for Livelihood Promotion 103 Ajay Tankha, Girija Srinivasan and Ramesh S. Arunachalam 6. Civil Society Initiatives 131 Girija Srinivasan 7. The Contribution of Corporate Supply Chains to the Livelihoods of the Poor 151 Orlanda Ruthven PARt - III 169 8. Agrarian Distress and Rural Credit: Peeling the Onion 171 M S Sriram ANNEXURES 189 List of Tables Table 1.1 Labour Force and Workforce Participation Rates (CDS basis) (percent) 20 Table 1.2 Employment and Unemployment in million person years (by CDS basis) 21 Table 1.3 Sectoral Employment Shares (by CDS basis) 21 Table 1.4 Poverty Rations by URP and MRP (percent) 22 table 1.5: Diversified Portfolio of Subsistence Activities of a Rural Landless Household in Jharkhand 24 table 2.1: Distribution of total and Unorganised Sector 2004-’05 42 Table 2.2 Estimate Share of Unorganised Sector in GDP in 2004-’05 (per cent) 43 Table 2.3: Distribution of Workers by Type of Employment and Sector (per cent) 43 Table 2.4: Reasons for Migration: A Comparison of Census and National Sample Survey (NSS) data 49 table 2.5: Independent Estimate of total Persons Displaced by Dams during 1950-’90 52 Table 2.6: The Tsunami’s Toll on Life in India 54 Table 2.7: Extent of Damage Caused by the Tsunami in India 54 Table 3.1: Employment Potential in Irrigation area 62 table 3.2: Year-Wise Employment Potential in SMEs during 11th Plan 63 Table 4.1: Employment in the Tertiary Sector 82 Table 4.2: Weightage of Capital and Labour in Key Sectors 83 Table 4.3: Employment in the Transport and Communications Sector 85 table 4.4: Labour to Capital Ratios in Key transport Sub-sectors 85 table 4.5: Profile of workers in the main sub-sectors of Land transport 87 Table 4.6 Employment within the Trade, Hotels and Restaurants Sector 88 Table 4.7: Labour to Capital Ratios within the Trade, Hotels and Restaurants Sector 88 Table 4.8: Employment in ‘Repair’ 89 3 Table 4.9: Trends In Growth of Employment in SSI & Industrial Sector (%) 92 Table 4.10: Jobs Created in the Organised vs SSI Sectors 92 Table 4.11: Livelihoods in Bethamcherla Cluster 95 Table 4.12 Major Clusters in India 96 Table 5.1 114 Table 5.2: Key Design and Implementation Features of DPIPs 121 table 7.