When a society makes a transition from paradigm of patronage to entrepreneurship, it recognizes that not all can take equal amount of risk, not all can wait for long time to get returns from present investments, and not all can be opportunistic to diversify options and try a portfolio of opportunities. Internal colonialism must stop.
Thus a creative strategy has to be developed by recombining different instruments of public finance and development to encourage risk-averse disadvantaged communities to move towards high mean-low risk segment from the low-mean, high-risk quadrant. Ideal for all will be high mean-low variance but some with higher risk absorption capacity will sustain high mean-high variance segment as well. By improving access to institutions, information, innovations, and Investments, one can reduce the risk, and try to make the transition more meaningful.
The choice is not between either dole or a dignified loan, or just a risk-investment. A combination of subsidies, grants, and risk capital, loan etc., will be needed to make the societal transition smooth. And our institutions are not yet geared to do this at the micro level.
There are several ways in which the entrepreneurial energy of our society can be unmasked. Agro-climatic segmentation: We should recognize that region which has had successive drought or floods, hailstorm or other natural hazards will need a different combination of long-short term investment with provisions for rescheduling, rehabilitation and re-financing the ventures as against those which have more or less stable climatic condition and can deal with normal market instruments.
Some of the economically depressed regions (some of the aspirational districts), are likely to have the weak market infrastructure, maybe tribal and forest regions, lower educational status, and weak production activities. They will need much more hand-holding but given a little support, they might sustain the enterprises. Given high biodiversity and associated knowledge system, strategy for these regions should be based on resources in which these regions are rich. Cooperative processing units will require significant institution-building support. Merely providing funds conventionally will not help, as most of these will remain unutilized. We need to link funds (a combination of grants for missing infrastructure and skill building), technology, skill building and market access if these regions have to be transformed.
Today various program are still sectorally planned and seldom spatially integrated. One will need to go a step forward and link these program elements at household level. This requires considerably different implementation culture. New developmental paradigm requires thus redesigning the process of planning and implementation: i) we need to identify the strength of each region, no more should the focus be only on what different regions/communities lack. This will imply that poor are unlikely to be excluded if the focus is on abundant resources, ii) the in situ value addition in forest resources, local agro-biodiversity, medicinal plants will require a focus on a new kind of skill building, infrastructure development, and new kind of research-society linkage; private sector will have to be brought on board through a fair and just contracts, and poor people will be engaged in high-value adding enterprises. Poor people need not be engaged in poor and low-income enterprises.
Inter-colonialism must stop.
We have used tribal and other such economically depressed regions as a way of extracting resources (ores, coal, timber etc.), cheap so-called ‘unskilled’ labour, and dumping ground for waste in some cases. This can not go on. Mere better implementation of existing schemes will not take these regions very far, though it will certainly help overcome exclusion to some extent. What we need is a new paradigm of development which will blend grants and dignified entrepreneurial opportunities. The work ethic should not be compromised, and yet not all can work. The Old, physically challenged and sick cannot work and yet must be enabled to live. Just as all able-bodied people must earn their living through honest means and fair opportunities for growth, through just and fair access to resources. The artisanal skills must be repurposed and rejuvenated rather than converting them into urban labour. Dignity and development can not be divorced. Whether those flay dead animals, or those who work with leather to make shoes or other products, or those who process waste and reduce load on the environment need a fair entrepreneurial opportunity. All of them. Each one of them.