Address at the 76th Annual General Meeting of Ficci

Evolution of PURA Enterprise

I am indeed delighted to participate in the 76th Annual General Meeting of FICCI, New Delhi. My greetings to the Chairman and all the members of this FICCI, distinguished guests, all the presidents of chambers of commerce, diplomats and ambassadors and civil society leaders. The theme for the discussion in your AGM is: "Growth with employment: Challenge Ahead". FICCI has a great tradition of national movements. The time has come to take up the single mission of enriching 700 million people who are in the rural areas in the six hundred thousand villages of our country. I would like to share some thoughts on the importance of partnership the FICCI has to have in this mission. The topic I have selected for discussion is "Evolution of PURA enterprise". PURA means Providing Urban amenities in Rural Areas.

Economic Growth in different societies

During the last century, the world has undergone a change from agriculture society, where manual labour was the critical factor to an industrial society where the management of technology, capital and labour provided the competitive advantage. Then the information era was born in the last decade, where connectivity and software products are driving the economy. In the 21st century, a new society is emerging where knowledge is the primary production resource instead of capital and labour. Efficient utilization of this existing knowledge can create comprehensive wealth of the nation and also improve the quality of life - in the form of better health, education, infrastructure and other social indicators. Ability to create and maintain the knowledge infrastructure, develop knowledge workers and enhance their productivity through creation, growth and exploitation of new knowledge will be the key factors in deciding the prosperity of this Knowledge Society. Whether a nation has arrived at a stage of knowledge society is judged by the way the country effectively deals with knowledge creation and knowledge deployment in all sectors like IT, Industries, Agriculture, and Health Care etc.

Changes in employment, agriculture, Industry and Service-Knowledge Industries

In 1980, an agriculture area employed, in parts or in full, 76% of people of India and it reduced to 65% in 1994 and is expected to further fall to less than 60% by 2012. Whereas the demand of agricultural products will double in quantity, productivity using technology and post harvest management will have to compensate the manpower reduction in farming and agricultural products sector. In the case of industry, in 1980, 13% of the population was employed in small scale and large scale industries. The trend continued during 1994. However, it has to increase in 2010, as the GDP grows with high technology in the situation of opening up of the economy under WTO regime. The pattern of employment will take a new shape. Service with knowledge industry component from 11% employability in 1980 has increased to 20% in 1994. And further it will increase to 54% in 2012 in view of infrastructure, maintenance areas, financial sector, IT sector and entertainment demands. This big change will demand in all areas more trained skilled human power and technology personnel. Indian industrialists, commercial chiefs and technologists may have to get ready for such transformation in agriculture, industries and service - knowledge industries for which human manpower with knowledge and skills has to be evolved in a mission mode. In such a situation, the integrated mission is just discussed.

Integrated Mission

As you all know, recently India Vision 2020 has been given a momentum by certain initiatives. Our Prime Minister announced on 15-Aug-2002 that India would become a developed country by 2020. He has also said "All the national efforts have to be directed towards this mission". As you are aware a task team has been formed for one of the largest projects of the country for the feasibility study of interlinking of rivers to combat flood and drought. This will be the largest project of the nation. Prime Minister has announced a road map for implementing 5000 PURAs (Providing Urban Amenities in Rural Areas) out of 25,000 PURA Complexes. Orissa will have the unique honour of having the first fully government initiated PURA. This has kindled many private agencies and NGOs to direct their efforts towards creating more PURAs which are economically viable and technologically sustainable. The official 10th plan document released recently aims at 8% GDP growth in the plan period. In such an environment, let us study what FICCI can contribute in progressing such missions.

Economic Connectivity for PURA

Providing Urban facilities in Rural Areas (PURA) consists of four connectivities: physical, electronic, knowledge and there by leading to economic connectivity, to enhance the prosperity of clusters of villages in the rural areas. The economic connectivity will generate a market and the production establishments for servicing the market. The PURA has all the dimensions to become a business enterprise. The PURA entrepreneur has to have the skill for evolving a business plan with banks and also for creating infrastructural support such as educational institutions, health centres, small scale industries, transportation services, tele-education, tele-medicine and e-governance services in the region integrated with the governmental rural development schemes such as road, communication and transport. Can FICCI play a role to create a PURA enterprise and entrepreneurs with the required business and managerial skill?

Employment Generation through entrepreneurship

There has been substantial growth in our higher educational system and we are generating over 3 million graduates every year. However our employment generation system is not in a position to absorb the graduates passing out from the universities leading to increase in educated unemployed, year after year. This situation will lead to instability in the social structure. We need higher education backed by employment opportunities. A multi pronged strategy is needed to make education more attractive and to simultaneously create employment potential - how do we do that?

Firstly, the educational system should highlight the importance of entrepreneurship and prepare the students right from the college education to get oriented towards setting up of the small scale industrial enterprises and any ventures in our rural areas which will provide them creativity, freedom and ability to generate wealth. Apart from entrepreneurship, the youth should have the spirit that "we can do it". Secondly, the banking system should provide venture capital right from every village level to the prospective entrepreneurs for undertaking new enterprises. Banks have to be proactive to support the innovative products for enabling wealth generation by young entrepreneurs by setting aside the "conventional tangible asset syndrome". Definitely this involves certain amount of calculated risks which can be eliminated by making an analysis of successful venture capital enterprises. Thirdly, there is a need to identify marketable products and enhancement of purchasing power among the people. FICCI with its large network of institutions both within the country and abroad can provide know-how in identifying the marketable products based on their business intelligence.

PURA Enterprise

A large number of SSI units are members of FICCI. The SSI sector has experience in managing the small scale industries of different types in various regions. This sector is widespread in the country and is a promising candidate for becoming the chief and managing the PURA complexes in an integrated way. PURA enterprises can undertake management of schools, health care units, vocational training centres, chilling plants, silos and building a market, banking system and the regional business or industrial units. A new management style has to emerge for managing such type of PURA enterprises. This new PURA enterprise needs partnership from the bank, from the Government and also from the private entrepreneurs. Since, the FICCI is an umbrella institution for the small scale industries; they can start a movement in the country for evolution of new PURA enterprises in the country.

Structural Support for PURA

FICCI can be a facilitator for creating this entrepreneurship scheme through the support of the banking system and the marketing system. The regional representatives of FICCI should identify the PURA complexes in their areas and adopt them right now, so that they can be developed in an integrated way. They should create a holistic plan of product, skill and entrepreneurship. Determination of products should be done on the basis of the core strength of the region and the availability of raw materials and infrastructure. Once the product is determined it will also involve infusion of new technologies for making it attractive for both national and international market and also productivity enhancement. After establishing the process and methods a vocational training package needs to be established for improving the skill sets of the local population. This is also the time for developing entrepreneurs with leadership qualities who will then create and nurture the enterprise. The selection of entrepreneurs should be preferably done from the higher educational institutions in the region. This will enable creation of the village level industries simultaneously with the establishment of connectivities in the region.

Each PURA depending upon the region will cost between Rs.100-200 crores. It has also to provide employment opportunity for 3000 employees. If we create a small scale sector, this will mean creation of approximately 10-20 enterprises per PURA complexes. This will also generate employment opportunities in service and support sector for about 10000 people. This is one way of reducing the employment gap leading to upliftment of the 260 million people living below the poverty line. Another area where FICCI can play a major role is in rejuvenating the small scale industries.

In brief, FICCI should generate the business plan for PURA and evolve methodologies for creating a model that would:

(a) create a data base of core competencies in the chosen region.

(b) estimate the cost of implementing PURA

(c) measures of quantitatively establishing the economic prosperity of people before and after PURA is implemented

(d) economic returns and self sustainability

I am sure with your experience in small scale industry and national development; you can make a project implementation document that will attract business enterprises towards investing in PURA and make PURA a socially relevant and economically feasible project.

Conclusion

I would call upon all the members of this organization to continue to maintain the high traditions set by your founding fathers by keeping your sight on the national development. Towards this end I would request FICCI to consider undertaking following tasks on mission mode:

1. FICCI as an organization can create a movement to propagate the concept that PURA is a viable business proposition.

2. FICCI can conduct a survey in different regions and suggest the villages to be clustered for effective PURA complexes and also determine the total number of viable PURA complexes in the country and evolve a database for various components of PURA model.

3. FICCI can help the small scale industrialists to prepare a business model for a PURA Enterprise in their region taking into account of the core strength of the region.

4. FICCI has to become a facilitator for integrating the role of the Small Scale Industrialists, State and Central Governments agencies, and NGO's and Educational institutions for integrated establishment of the PURA enterprise.

5. FICCI should enable generation of a new breed of entrepreneurs to provide leadership for PURA mission.

6. FICCI should assist the government in generating policies and procedures needed for establishment of a smooth PURA enterprise.

7. Assist the entrepreneurs in making the PURA enterprise as a self supporting business unit.

My best wishes for success in your missions.