Topic:-- Strategic Implications of Social & Political

Institutions for Entrepreneurship Development

Instructor : -- Dr Basavaprabhu Jirli( Banaras Hindu University, Varanasi )

Friends, in our last class we were discussing about the overview of Indian economy, and the relationship
between the growth in agriculture and the growth in GDP. Different sectors of Indian economy contributing
for the gross domestic product or the GDP and the relationship between the agricultural output and the
influence on the various other two sectors that is production and service sector. So these are all the things
that we have already discussed in our previous class. In this class we will be discussing about the strategic
implications of social and political institutions for entrpreneurship development. Before we exactly enter
into the strategic relationships, so let us try to understand the strengths, weaknesses and opportunities and
threats of Indian agriculture. So the strengths of Indian agriculture include the rich bio-diversity as I was
mentioning about in my previous discussion also. We can cultivate the crops of temperate region as well as
the tropical crops in the same country in different parts, so that is what is the rich bio-diversity means. The
arable land which is ready for cultivation, different types of crops and different seasons. The climatic
conditions which support the cultivation of different crops, and strong and well dispersed research and
extension system, that is prevalent throughout the country in the form of Indian Council of Agricultural
Research institutions as well as a network of state agricultural universities and the Krishi Vigyan Kendras
spread throughout the country.

So with all these strengths of Indian economy, so there are equal weaknesses also, What are they. Number 1
is the fragmentation of the land. Land fragmentation is due to the social pressure that as a basic profession
of Indian community that is agriculture. So farmers with a division in the family, land is also being divided
and over a period of time so one family which was cultivating one piece of land, over a period of time 2 or
3 or 4 families coming on the same land, and that is how there is decrease in availability of the land, and
that is how the pressure on the same piece of land is also increasing over a period of time. Low
technological inputs, so even though the national agricultural research system has developed and released
good number of technologies for the farmers and the farming community, as per the studies conducted by
the Indian Council of Agriculture, which reveals that only about 30% of the technologies are being accepted
by the farmers, rejecting about 70% of the technologies released by the national agricultural and research
system. So which is one of the important weakness of Indian agricultural scenario, wherein there are low
technological inputs. Unsustainable water management is another important weakness, wherein in the many
times we have not considered water as an important resource over a period of time.

Now there are good number of differences between the states, just due to the sharing of the water, it is
because now we have started realising water as an important resource, and we are coming out with good
number of water management strategies. The things that we wasted over a period of time, is has become our
weakness right now. The poor infrastructure, this point we have already discussed in our previous
discussion also. The infrastructural inadequacy which is influencing the Indian agricultural scenario and
low value addition in the subsequent slides, am giving you the exact figure of the levels of processing and
the value addition to the agricultural produce. With all these weaknesses, we have good number of
opportunities also. What is that? Number one is the bridgeable yield gaps. When we compare the average
Indian productivity and the world productivity, in many crops there is huge gap, but with the potential that
what we have, we can easily bridge that gap and that is what is an opportunity. There are huge demands for
Indian products in the international market, which is an opportunity for Indian agriculture and there are
good number of agro-based industries existing in India, and there is demand for Indian agricultural products
elsewhere and that is how the agro-based industry has lots of opportunities. Similarly the horticulture and
untapped potential in the north-eastern region which makes lots of opportunities for Indian agriculture,
because in north-eastern India, horticulture is one of the promising cropping system that we can think of
and in the rest of the country also horticulture is emerging as one of the economic alternative for the
farmers who are growing the cereals and pulses. So these are some of the opportunities.

But along with these opportunities, threats also persist. Number 1 is the unsustainable resource use. Many
times as I have said in my previous discussion also. In Indian context we have considered agriculture as
Indian culture, part of Indian culture, and we have not considered many of the resources, may it be land or
may it be water or may it be any of the resources as an important resource, but we thought that it is
available there and we are going to exploit that. Unsustainable regional development, which is reflected in
the inadequate infrastructural inadequacy and with the adoption of the international agreements like WTO,
imports are also important threats for Indian agriculture. With this brief background now let us move on to
the social institutions. Before going into the details let us understand what exactly the social institutions
means. A complex of positions, roles, norms, values lodged in particular types of social structures, and
organizing relatively stable patterns of human resources, with respect to fundamental problems in
sustaining viable societal structures within a given environment. Society is a very complex institution in
Indian context, because we give highest emphasis on the culture and the values associated with the culture
in which society becomes an inseparable component. And along with these social institutions agriculture
was intervowen and now it is very difficult to separate agriculture from these cultural aspects and the
societal aspects. So with this intrinsic relationship, so now what are the outcomes, what outcomes of this
intimate relationships between the social institutions, the norms, the value systems, folklores, mores that are
existing in the society.

The outcomes when we look at, the situation is very very alarming. The number of farming holdings in
1970-71 was around 71 million. But in 2010-11 it has raised to 137.8 million, almost double. So why there
is increase in the number of farm holdings? The only reason behind that is the fragmentation or the
divisions in the family and those divided families are not having any other alternatives other than going for
agricultural production. And that is how the number of farm families or the farm holdings are increasing
every year. If the same trend continues, by 2021 we are going to have around 154 million small and
marginal holdings in the country, which is going to constitute about 85% of the total holdings. Now you
see, only 15% of the farmers are going to be covered under the large or the medium farmers. 85% of the
farming community is going to be small and marginal. The figures as on date are almost nearer to this so
that is how the situation is becoming very very alarmed, and hence we need to have the perfect
understanding of the social system for development of entrepreneurship. As a consequences of this, 37
million farmers in India have turned into the farm labourers in the last 10 years. What are the reasons
behind? It is the increasing cost of cultivation, it is inadequate support price by the government and it is the
lack of credit and comprehensive risk coverage, declining government investment and negligence of rainfed
areas so on and so forth. The basic reason is the increase in the number of farm families, and automatically
the attention given to all these families by the government is going to be reduced accordingly. So at the
roots we have the social institution, which is influencing the outcome of the government efforts. So that is
why we need to have the understanding of the social institutions.

Another repurcussion of this is 2035 farmers are quitting farming everyday, this is according to an estimate.
The reasons quoted are the same, because they are not having any other alternatives, and the practices what
they are practicing are not even giving them the income to sustain their own family. So that is how they are
quitting agriculture and they are in search of various other operations, and that is how we can see large
amount of migration from the rural areas to the urban areas. Just to counter such issues, the former
President of India has given the concept like PURA(providing urban amenities in rural areas) so that we can
provide them different employment opportunities in the rural areas itself, so that we can stop the migration
and we can improve upon the villages. With this background of the understanding of the social implications
for the development of entrepreneurship, there are various issues associated with the politics also. So what
is that political risk that is hidden in the concept of entrepreneurship development is, the political stability.
The political stability, if there is political stability, so then we can anticipate the political will, they go hand
in hand. So in Indian context we have seen many times, the government was not stable and because of that,
there was no political will and because of that the entire process of growth was hampered. It is not only in
Indian context, wherever in any, most of the developing and the underdeveloped nations, it is because of the
political instability. So those countries are not able to develop themselves, obviously in predominantly
agro-based country, agricultural based countries like India, agriculture is going to be hampered. So that is
why we need to understand the political institution and the political system to develop the concept of
entrepreneurship development.

The level of social inequality, obviously the issue is associated with the social implications itself. So
whatever the things that what we observe in case of social implications is going to end with the social
inequality. So there is a chance of the poor becoming more poorer, and rich becoming more richer. This
type of system is going to generate because and it is ending with the social inequality. And the same
reasons are behind the unemployment also. Unemployment is one of the problem at the same time, the more
serious problem is the underemployment, that what we are observing at the national level. It is also because
of the lack of political will, and the understanding of these factors in the concept of entrepreneurship or the
development of the entrepreneurship, we can address these issues. The level of corruption. I am sure none
of the countries are free from this particular aspect, yes some countries are affected to the maximum extent,
and some countries are affected to the minimum extent. Those who are affected to the minimum extent. We
try to observe them as the most developed nations. And those countries which are affected with this
particular syndrome, to the larger extent we call them as the underdeveloped nations, or the developing
nations. But it is there, but now the major issues; how to reduce the corruption, and how to come out of this
and develop good number of opportunities for the benefit of people and that is where the role of an
entrepreneur comes into the picture.

The threat of terrorism and other threats to security at the national level many times we have good number
of internal security threats only, may be in the form of naxalism, may be in the form of insurgency, may be
in the form of communism, whatever it is. And there are threats from the external sources also, in the form
of the sponsored terrorism, in the proxy war, so on and so forth. All these factors are also having their direct
influence on the development of entrepreneurship. The person if he is interested in investing on a particular
enterprise, in a particular region, if the area is affected with any other security threats or if the area is more
affected with the corruption issues, or such social inequalities; it becomes very difficult to establish an
enterprise in those regions. But it is not impossible, but understanding that these factors make that particular
individual more aware of and he can counter these things and that is why understanding these factors
becomes more important. So friends, in today's discussion we have discoursed elaboratedly about the social
institutions and the political institutions, and how they are influencing the development of the concept of
entrepreneurship among the potential entrepreneurs. In the next class we will be discussing about the
implications of economic and the legal institutions for entrepreneurship development.

Thank You.