Diary of a Rural Manager!

There are two factors that affect the lives of farmers - Lack of financial planning and Information Asymmetry. Let us roughly cash flow of the marginal farmer (as owner or tenant or share cropper who cultivates agricultural land up to 2.5 acres) that will fall into low-income households. The cash out flow of the household is throughout the year and peak-out during festive season, marriage or birth) and bad patches (accident/death) in the family. The farmer gets cash inflow with sales of produce only. Hence, the borrowings of the farmer limits the growth option for the household. Let us take an excerpt from the paper -  Why Don‘t We See Poverty Convergence? by Martin Ravallion  - "Banerjee and Duflo (2003) provide a simple but insightful growth model with borrowing constraints. Someone who starts her productive life with sufficient wealth is able to invest her unconstrained optimal amount, equating the (declining) marginal product of her capital with the interest rate. But ...

Household final consumption expenditure constitute India's 59.5 percent of GDP in 2008-2012 as per world bank data. Household final consumption expenditure (formerly private consumption) is the market value of all goods and services, including durable products (such as cars, washing machines, and home computers), purchased by households. Consumption shows utilization of wealth but the question runs deeper than figures. Is wealth creation enough ? Is wealth reaching the poor household even with the above 5% GDP growth rate? Lop sided nature of Indian capitalism promotes few entrepreneurs, mostly as an employees and almost all as a consumers. This is well reflected in our quest to create jobs rather than suitable ecosystem for a new venture. I am seeking attention towards our socio-economic environment where masses are looked as consumers rather than producers. By focusing only on profit making, even BOP reduces the concept of wealth to just money, and the rest – i.e., the commun...