Despite rapid progress, rural India suffers from an infrastructure deficit.? Discuss major Constraints in Supply chain and rural infrastructure and give suggestions?10M

 Despite rapid progress, rural India suffers from an infrastructure deficit.? Discuss major Constraints in Supply chain and rural infrastructure and give suggestions?10M

Physical infrastructure investments are important determinants of economic growth (World Bank, 1994), and are one of the main United Nations Sustainable Development Goals (SDGs). However, estimating the causal effects of infrastructure on the local economy is often very challenging. This is because these investments are either directed to fast-growing regions or to economically lagging regions, making comparisons between places that received infrastructure and those that did not infeasible. Among rural, remote, and low-income households, where the demand (and willingness-to-pay) for these services is low, studying the effects of infrastructure is especially complicated. 

Constraints

1. Public and private investments in agriculture have remained low since the early 90s.Bottlenecks in implementation and a high degree of uncertainty have further reduced investor appetite for agricultural investments.

2. Inability to acquire land for setting up of market yards, resulting from the restrictions on land blessing and land acquisition, is another major constraint.

3. Even the existing marketing infrastructure suffers because of a lack of finances, manpower and proper facilities. Sub-market yards largely function as a location for government procurement and do not provide opportunities for open auction. Further, the yare irregular in their operations and handle less than five per cent of the volume handled in principal yards.

4. Poor maintenance of rural roads is a major constraint as well. Linkages with local and feeder roads remain sub-optimal.

5. In the electricity sector, separate feeders for supply of power to agriculture and domestic electrification have not been carried out in many states.

6.Lack of agriculture best practices hinders India’s food exports. Interventions at the farm

or producer level are needed to ensure that products meet export standards. However, factors such as the lack of a traceability mechanism from the farm to the consumer, fragmented holdings and restrictions on direct procurement of products from farmers in some states makes it virtually impossible to ensure that products meet export quality standards.

Way Forward

Markets and value chain

1.Infrastructure status for agriculture value chains: Warehousing, pack-houses, ripening chambers, and cold storages, including those set up at the village level, should be accorded full-fledged infrastructures status to enable them to avail of the fiscal benefits that come with infrastructure status.

2.Village level procurement centres: To benefit small and marginal farmers, government collections centres and warehousing facilities should beset up at the village/block level. The budget announcement of developing Gramin Agricultural Markets (GrAMs) will help develop the agricultural marketing infrastructure and bring markets closer to the farm-gate.

3.Link production to processing: Village level collection centres for fruits and vegetables should be linked to larger processing units. Actively engage the private sector in developing processing centres near rural periodic markets (RPMs).

4.Food processing: A greater focus should be placed on the food processing industry for enhancing value addition in vegetable and fruit crops. The government has now shifted its attention to promoting “agripreneurs”. This will result in rapid modernization of the agriculture sector.

5.Rural markets: Develop private market yards. Agro-processors and food processors that wish to establish backward integration to secure their raw material should partner with the government in organizing sourcing through the RPMs.

6 Upgrade wolesale markets: Upgrade wholesale markets with facilities for temporary storage, pack house operations and cold storage facilities.

Rural roads, electricity and mechanization

1.Maintenance of rural roads through women SHGs: The maintenance of roads by women SHGs has been experimented with by some states(Uttarakhand for example) and has been found to be very promising. This model could be replicated by other states.

2.Revisit criteria for identification of rural habitats for road connectivity: To ensure better inclusion, the criteria for identification of habitats for rural roads connectivity in hill and left-wing extremism (LWE)affected districts must be revisited.

3.Incentivize feeder separation: All distribution companies (DISCOMs) need to be incentivized for rural feeder separation. Agriculture connections and electricity supply feeders should be separated from domestic rural electricity supply.

Export enablers

1.Develop export oriented clusters: The Agricultural and Processed Food Export Development Authority(APEDA) has been championing the development of export-oriented clusters with common infrastructure facilities. These clusters should contain a functional ,end-to-end cold chain system along with processing facilities.

2.Regulatory frameworks to combat rejections in export markets: Regulatory frameworks regarding use of pesticides, growth hormones, and antibiotics for marine produce need to be developed and implemented effectively to curb the rejection rate in the export market.

3.Ensure traceability mechanism: Promotion of farmer producer organizations (FPOs), export-based clusters and contract farming will go a long way toward sensuring traceability of farm produce, a key export requirement