Page last updated at 17:40 GMT, Sunday, 8 November 2009

Bringing growth to India's villages

By Shilpa Kannan
India Business Report, BBC World News

In rural India life revolves around crops and monsoons

The World Economic Forum's India Economic Summit is under way in Delhi, with the theme of India's Next Generation of Growth.

As the world emerges from the economic slump, what does India need to do to raise that next generation?

It is a cold and foggy morning as the Singh family gather around for their breakfast, close to an open fire to keep warm.

Sitting amid acres of lush green farms, it is easy to forget that this village is less than two hours from the national capital, Delhi.

In this farming community, life revolves around crops and monsoons - and the irregularity of the two.

So it is not easy for Lokender Singh, 29, to step away from farming and find a job.

But finding a job is what he and many of his young cousins dream of every day.

He says it's not easy to run a family with the income from the farms.

"When the rains are good, we have a good harvest and when it's dry, like this year, we don't even get our cost back," he says.

"We all want a steady source of income, which is why it's important to find jobs.

"But we don't want to migrate to cities, like many others, because our families and our land are here. How can we leave all this behind?"

Youth boom

The government's efforts to push technology-led economic growth are not helping Lokender and others like him.

Children in the village
Young people in rural India are seen as a bright, young workforce

And he is not alone. Soon, more than half the population of India will be under the age of 25, and the bulk of this working population will be from rural areas.

If the country wants to tap into this demographic dividend for its future economic growth, the challenge will be to create jobs in such far-off areas and stop the inhabitants migrating to urban areas.

In the last 10 years, economic growth has been led by white-collar jobs in sectors such as IT and outsourcing, banking and services. There is very little scope for workers from rural areas.

Fortunately, with the financial slowdown, more and more employers now understand the potential that rural India holds.

In spite of the downturn in the last year, rural parts of the country have registered a significant growth in almost every sector, from cars and mobile phones to banking and retail.

So companies are rushing into rural areas, desperate for a bright, young workforce.

Local knowledge

These firms include Global AgriSystem, an agribusiness consulting group that is building a cold storage chain across the country.

Women wash carrots before they are sent to cities across India

Employees need to understand agriculture, crop cycles and local dialects. So management degrees and English-language skills are not the hiring criteria here.

Chief executive Ajay Kulshrestha says more than 70% of his employees have been hired from the countryside.

"We need people who can understand the socio-economic conditions and can communicate to farmers, labourers and vendors," he says.

"Young graduates from non-urban areas are hard-working, keen to work and easily fit into our kind of work environment.

"The cost factor is also huge - we can hire graduates here at half the cost and train them to higher posts in the organisation. The attrition levels are lower too."

Opening the cyber-door

As urban employers struggle to reach rural employees, human resources websites such as and are invaluable.

There are nearly 13 million new entrants to India's workforce every year and the internet now gives access to the growing workforce. chief executive Ajay Gupta says providing employment is the easiest route to creating middle classes who have the power to influence the economy.

"The government cannot pay poor families money and build infrastructure, hospitals and services all at once," he says.

"But if we sort out the problem of employment, all the others will fall into place automatically," he adds, recalling the adage that it is better to teach people fishing than to give them fish.

"If a person has a job, then he brings money to the family and they can buy anything they want - food, shelter, transport.

"So employment will be the key for economic transformation."

Making the transition

Back in the farms, groups of women sit around washing and cleaning bags of carrots before packing them off to cities across India.

Overseeing their work is Lokender Singh, who has found employment as a supervisor in charge of operations at Global AgriSystem.

More than two-thirds of Indians still depend on agriculture for their livelihood, so it is rare to find farmer's sons making the transition into nine-to-five jobs outside farms.

As a result, the other local farmers now look to Mr Singh for career advice for their children.

There are more than 600,000 villages in the country and this is where the potential workforce lies.

And the next phase of growth will come from companies that are capable of tapping into this talent.

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