National Agenda For Bhagidari Sector

oprietorship firms) which bore the brunt of the license-permit quota raj at the cutting edge of its interaction with the organs of State power. Millions of un-incorporated enterprises in the country contributing 40 per cent of our national income did not deserve even a small paragraph in our Economic Surveys and Reserve Bank reports.

This most important segment has so far commanded the least attention and virtually no legitimacy. The entire establishment ignored these unincorporated enterprises which have a share of nearly 50 per cent of national income in the manufacturing sector, a share of 60 per cent in the construction sector, a share of more than 75 per cent in the transport sector, nearly 90 per cent in the trade sector, more than 80 per cent in hotels and restaurants and nearly 100 per cent in the business and other services like that of a doctor, Lawyer, accountant, goldsmith, plumber, porter,..., mechanic, electrician, tailor, barber, carpenter, driver, priest, cook, musician and in the crafts and professions. We neglected this sector (which is clubbed as part of households in our savings statistics) which constitute the largest segment of savers contributing around 60 per cent of our national savings. During 1990-1996 out of the total gross domestic savings of Rs 11,32,029 crore, the savings by household sector was Rs 8,94,918

 

crore, i.e. nearly 80 per cent and the Bhagidari.... sector is the largest segment of the household sector other than the salary earners.

Any agenda for reform necessarily has to focus its attention on the largest segment of our economy which was also the least cared for during the inspector-raj nurtured by the socialistic regime. But the so-called reforms of the nineties did not address the serious issues of using the phenomenal and enormous savings rate of our middle-class.

The focus of the Government in the nineties, in the name of reforms, concentrated essentially on the corporate sector and foreign investment that came a cropper. A clear understanding and a broad national agenda, with the following measures, are needed for the Bhagidari sector.

l The financing cost for this sector is phenomenal and they borrow at usurious interest rates. There is no exclusive, national-level financing agency for trade activities or for construction activities. Indian private-sector banks need to be encouraged and developed in these areas and the Government policies should facilitate the same. A separate development bank for this sector will also be considered.

l There is no social security net for this sector. With changing patterns in the joint family system, there is even more necessity to introduce the same. The Indian private sector insurance companies can provide this. Unless and until the social security net is developed for this sector (of course, from the contributions of this sector), economic reforms will be a castle built on American sands and the European air, but not on Indian soil.

l In order to mobilize savings of this sectors for targeted poverty alleviation programmes, it would be desirable that full deduction is given for the traditional commitments of the sector, including family obligation and contribution of this sector for temples, mosque, gurudwaras, etc. Where free food is provided to poor people daily.

This would reduce the leakages in the anti-poverty schemes currently undertaken, since this method would directly deal with the target groups. Local citizens committee can monitor this.

The fear of God is a more powerful authority than that of the Government in a country like India.

l This sector is a target for all levels of the State machinery like politicians, policemen, tax officials and municipal authorities. A national-level awareness programme of this sectors contribution and a national-level law to guard them against State excesses should also be formulated.

This sector has the greatest potentiality to grow with a quantum jump if this agenda is implemented. Any attempt to increase employment and to eradicate unemployment must begin here.

This sector at once provides self-employment and multiplies employment. This single sector has the greatest potentiality to attack unemployment, poverty and hunger.