Public Private Panchayat Partnerships Promoted for Convergence of Schemes at Grassroots Level

Rajya Sabha

The Ministry of Panchayati Raj (MoPR) is attempting to develop and promote Public-Private-Panchayat Partnership in which the Panchayats will facilitate convergence of extant schemes of State and Central Government, together with initiatives of Panchayats, financial institutions and promotional bodies. This will help develop a holistic and integrated partnership between decentralized rural production units and larger corporate entities.

The Ministry is playing the lead role in taking the benefits of rapid economic development to the rural areas of the country through the Rural Business Hubs (RBH) Scheme. While addressing the first Conference of Chief Ministers on the subject “Poverty Alleviation and Rural Prosperity through Panchayati Raj”, the Prime Minister had stated that “Panchayat Raj” is the medium to transform rural India into 700 million opportunities. The key instrument for integrating economic reforms with institutional reforms in the countryside is Gandhiji’s goal of “Poorna Swaraj” through “Gram Swaraj”. As a follow up, the Ministry of Panchayati Raj organized a National Presentation on RBH in November 2004 which was attended by 1000 representatives of Panchayats and 200 representatives of Confederation of Indian Industry (CII). A Joint RBH Council under the Co-Chairmanship of the Minister of Panchayati Raj and the then President of CII was set up at the national level. State RBH Councils have been set up in 15 States. The objective of RBH initiative is to promote RBHs across the country by bringing to the attention of business houses, both in the public and private sectors, the unique products of skills in each development block deriving from local resource endowment. In consultation with State Government and Panchayats, the Ministry of Panchayati Raj has identified local resources and skills in more than 1000 development blocks of the country.

This initiative by the Ministry of Panchayati Raj and Confederation of Indian Industries (CII), Rural Business Hub Scheme works on win-win relationship between rural producers and members of industry, facilitated by the Panchayats. It aims to foster and permeate economic growth into and for rural India. The concept is based on “participatory development model “ and draws inspiration from many successful models such as Thai experience of One-Tambon-One Product (OTOP) model, OITA prefecture model of Japan and TVEs model of China, etc.

Pilot projects based on this model can be partly funded by the Ministry of Panchayat Raj under the Central Sector Scheme on Rural Business Hubs that was approved in August, 2007. The allocation for this scheme for the 11th Plan period is Rs.24.90 crores and allocation for 2008-09 is Rs.2.00 crores. Under the Scheme, MoPR can provide limited financial support to the pilot projects for availing services of professional facilitators and to bridge the critical gaps in infrastructure.

The salient features of RBH Scheme are:

• It seeks to link rural producers with the wider market through a marketing partner and developing this as an integrated business relationship benefiting both sides and therefore, sustainable.

• Panchayats, the grass-roots democratic institutions, may prepare plans based on local resource endowments, felt needs of people and relative absorptive capacity and implement them. The PRIs can also partner with commercial entities and NGOs for developing the rural business hubs.

• The RBHS are based on economic activity that is appropriate for the area;

• It is suited for agriculture/horticulture/handloom/handicrafts related activities, where production is decentralized;

• It helps generate rural employment and developing livelihood opportunities.

Under the RBH scheme, any economic activity can be promoted that can improve incomes in the area. This can even include embroidery, stitching of garments, etc.

The scheme is applicable for all areas of the country including Uttar Pradesh. However, under the Central Sector Scheme on RBH, funding support is available only in districts covered under BRGF. Except in the seven North East States where all districts are covered. So far, 169 MoUs have been signed between the Panchayats and business partners for setting up RBH5. Of these, nine are located in U.P.

This information was given by Minister of Panchayati Raj, Shri Mani Shankar Aiyar, in written reply to a question in Rajya Sabha today.

SP/AS