28 October,2024 08:24 PM IST | Mumbai | Ritwik Mehta
Image for representational purposes only (Photo Courtesy: iStock)
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If there's a new recipe to win elections in India, it seems to be the promise of cash transfers for women in the state. Observing the political landscape in states like Madhya Pradesh, Chhattisgarh, Odisha, Maharashtra, and Haryana, it's clear that such cash transfers significantly influence voting preferences. But should the entire focus be on freebies?
With Maharashtra Elections 2024 approaching on November 20, parties will soon release their manifestos. I've analysed many manifestos but am particularly eager to see those from the MahaYuti and MahaVikas Aghadi in Maharashtra. The reason is that the MahaYuti alliance has already made decisions in the cabinet that typically appear only in manifestos. At the same time, the opposition, particularly the Congress, struggles to fulfil similar promises in other states. For example, in Congress-led states like Himachal Pradesh and Telangana, cash transfers to women and other promised freebies have been temporarily halted.
As manifestos increasingly focus on giveaways, I wonder when political parties will prioritise Maharashtra's economic revival. In this article, I'll discuss key issues that need urgent attention from parties and their think tanks and argue why these issues should be central to election discourse.
Maharashtra's economic landscape is a study in contrasts, full of both remarkable achievements and stark challenges. Leading the nation in GDP and claiming the largest share of GST collections in 2022-23, Maharashtra also contributes over a fifth of India's total exports. Known for its pioneering role in industrial development, the state is home to 10 of the 100 Smart Cities planned under the national Smart Cities Mission, and it stands proudly as both India's "cotton hub" and "fruit bowl." Yet beneath this impressive façade lie pressing issues: Maharashtra recorded the highest rate of farmer suicides in 2021, and its regions of Marathwada and Vidarbha are notoriously water-scarce. In rural areas, inconsistent power supply stifles economic growth, limiting the potential for equitable industrial expansion, while women's participation in the workforce trails behind that of several other states.
To address these deep-seated regional and sectoral disparities, Maharashtra's economic policy must focus on inclusive growth, especially by supporting small-scale agriculture, fishing, and manufacturing producers. With its extensive markets, tradition of cooperatives, and strong institutional credit system, Maharashtra has the foundation to build interlinked, sustainable growth across its sectors, paving the way for increased employment opportunities.
The need for inclusivity in Maharashtra's growth narrative is closely tied to the importance of sustainability. Adopting eco-friendly production methods will not only conserve the state's resources. Still, it will also make them accessible to smaller producers, such as farmers who cannot afford diesel generators in the long run. A commitment to continuous innovation and re-evaluation is essential for Maharashtra to navigate these dual challenges successfully. With this in mind, here are targeted recommendations for five critical areas of the state's economy: agriculture, industry and business, tourism, women's development, and vocational education.
Expanding sericulture: Unlocking new avenues for Maharashtra
Maharashtra stands out as a leading non-traditional producer of raw mulberry silk, with mulberry cultivation now thriving across at least 24 districts. For farmers, sericulture presents an attractive opportunity - it demands low investment, has a shorter gestation period, and requires considerably less water than other major crops like sugarcane and cotton. While the MahaYuti Government has taken promising steps through the silk initiatives of its State Textile Policy 2018-2023, a few areas still call for targeted attention to maximize the industry's potential. Research indicates that a significant challenge for sericulture in the state lies in the inadequate training of farmers in effective mulberry cultivation and silk cocoon production, compounded by a lack of ongoing technical support. To address this, it's recommended that every taluka within sericulture clusters establish a dedicated Sericulture Training Cell. This cell would provide vital hands-on training and technical guidance to sericulturists and be staffed by experts across key areas such as mulberry plantation management, chawki rearing, silk reeling, and cocoon marketing. The growth of sericulture has been hindered by insufficient marketing channels, forcing farmers to often sell their cocoons in Karnataka instead. Establishing dedicated silk cocoon markets in every silk-producing district could significantly boost local sales and farmer incomes. Today, districts like Jalna, Nashik, Chhatrapati Sambhaji Nagar, Dharashiv, Ahmednagar, Solapur, Satara, Amravati, and Wardha lead in mulberry silk production. Some, such as Jalna and Chhatrapati Sambhaji Nagar, have already integrated cocoon markets into their APMC networks. Self-help groups and cooperatives can play a vital role here, empowering sericulturists by offering fairer prices and valuable training opportunities.
Tackling Marathwada's water-crisis using micro irrigation
Surveys and opinion polls during election cycles have shown that Marathwada voters rank water issues and drought management among their top priorities. Surveys conducted before the 2019 elections indicated a rise in discontent, particularly among farmers struggling with crop losses. However, while drought management was a focus, other factors, like caste alignments and regional development, also influenced the final vote.
To support small farmers, it's recommended that the current micro-irrigation subsidy increase from 55% to 75% for smallholders and from 45% to 65% for others. While the government took steps in this direction in 2021, progress has since stalled, likely due to funding challenges.
The Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) also includes a âMicro Irrigation Fund' (MIF), which provides loans to states for innovative irrigation projects like solar-powered drip systems and public-private partnerships (DoA 2018, 5). Maharashtra could leverage this fund to subsidize solar-powered drip irrigation in targeted districts of Marathwada, with options for gravity-fed drip systems that operate without power - an especially valuable feature for regions facing frequent outages. Encouraging examples from states like Gujarat (Kapadia 2019) and Odisha (Ghosal et al. 2018) demonstrate the potential of this approach to lower operating costs.
Engaging agribusinesses in micro-irrigation initiatives can also accelerate adoption. Jain Irrigation Systems Limited (JISL) provides a compelling example: in Jalgaon, JISL established contract farming with small onion farmers, offering seeds, fertilizers, and guidance, plus an assured price for the produce (Varma et al., 2013). To address the remaining 45% of irrigation costs, JISL arranged loans through local banks with repayment terms of 4-5 years (Zhou, 2015). By 2015, around 80% of these farmers successfully installed micro-irrigation systems, showcasing the impact of such collaborations.
Bolstering value chains through cold storage
Leaders often campaign on promises to improve cold storage and other infrastructure. In Maharashtra, where agriculture remains critical, major political parties have been vocal about developing cold storage to protect crops like onions, tomatoes, and fruits that frequently face price fluctuations due to inadequate storage.
Approximately 40% of India's perishable farm produce is lost or wasted along the value chain, largely due to a shortage of accessible cold storage for small farmers. In Maharashtra, a key agricultural state producing substantial exportable goods, the gap is stark. As of 2020, the state's cold storage capacity was a mere 1,009,693 MT compared to a horticultural output of 27,875,000 MT - enough storage for only about 3.5% of the produce.
This shortage is compounded by the high energy demands of cold storage facilities, which strains power grids that are already unstable in rural areas. Additionally, small-scale farmers often face high transaction costs to transport produce to distant storage sites, making cold storage inaccessible.
To tackle these challenges, Maharashtra could benefit from a pivot to solar-powered cold storage systems. Rural areas, with abundant rooftop space, are ideal for these installations, which are often portable and require minimal setup. In Uttar Pradesh, solar-powered units have shown potential, reducing energy bills by up to 50%. Similar solutions have worked globally; for instance, Kenya's solar-powered âColdHubs' have successfully preserved fish until reaching urban markets. Solar-powered systems can save 40-50% on energy costs. To encourage this shift, credit incentives could be offered to companies investing in solar cold storage solutions. Table 2 offers a comparison of the energy and cost requirements for solar-powered units versus conventional cold storage units (CCSUs).
Augmenting the startup policy
In the 2024 general elections, for instance, BJP's emphasis on a "Startup India" policy helped reinforce its image as a pro-business entity, although it also faced challenges over issues like unemployment, which remains a high-priority concern for voters (approximately 8% as reported by Statista). Regional parties, too, have started using localized startup incentives as a way to distinguish themselves and compete with the national government's larger economic narratives.
Women development
1. There are certain MSME segments where there is a significant involvement of women. Such women-centric industries in Maharashtra include khadi textiles, coir-products (in the Konkan region) and bamboo handicrafts:
2. To support women farmers (who have a significant presence in the horticulture segment), it is suggested that the transport of farm produce be subsidised for them through the issue of seasonal passes. Further, a fixed quota of the procurement of farm produce for government schemes such as mid-day meals, and maternal healthcare programmes (such as ICDS) should be from women farmers. Leasing and sale of uncultivated land should also prioritise women's farm cooperatives.
Vocational education and skill development
Maharashtra has among the largest number of Industrial Training Institutes (ITIs) with 1028 institutes in 2021-22 (NITI Aayog 2023, 36). It is also among the top three states in terms of employability as per the India Skills Report 2023 (Wheebox 2023, 31). Yet, certain issues pose challenges for skill development in the state. The dashboard of the Maharashtra State Department of Skills and Employability reveals that of the total beneficiaries of vocational training programmes in the state, only 49.6% were able to get placed in various jobs. This indicates a need for improving the quality of the skill training, especially in soft skills and emerging technologies. As of 2021-22, nearly 45% of the seats in ITIs in the state were going vacant (NITI Aayog 2023, 36), hinting that vocational courses need to be vigorously marketed to get more takers. A study on the skill gap in Maharashtra estimated an incremental shortfall of 33.6 lakh persons in the skilled labour force for 2012-2022. While a more recent estimation is lacking, this figure should drive home the immense possibilities of skill development in the state. Some recommendations in this regard are as follows:
1. ITI courses largely continue to cater to the manufacturing segment. Courses offered per ITI in Maharashtra range from. It is recommended that the range of courses offered be expanded keeping in view the new patterns of demand. Services-sector-related courses that train the youth in using emerging technologies as well as in high-potential sectors such as retail need to be explored and institutionalised. The Central Government's ITI dashboard shows that skill courses in banking and finance are not offered in any ITI in the state while only seven ITIs offer healthcare-related courses. IT-related courses are heavily concentrated in the computer programmer segment whereas emerging areas like IoT, data presentation, animation special effects etc. are taught in barely 3-4 ITIs. It is suggested more and more ITIs in the state offer courses in these areas as well.
2. A disaggregated and localised approach in course design must be adopted. District-wise skill gap studies such as the one undertaken by KPMG for Maharashtra in 2018 can be used to identify high-growth sectors (and specific job roles that are in high demand) in each district and skill training programmes should be accordingly put in place through ITIs and skill-centres in each district. Besides teaching basic and widely demanded skills such as in computer science and IT, these district-wise wise skill-centres can also teach skills based on the One District One Product (ODOP) programme. For example, industrial chemicals have been identified as the chief product in Solapur district (DoI 2022, 10). Accordingly, relevant skills such as for laboratory assistants, chemical processing operators etc. need to be given greater priority in Solapur's skill centres.
3. To augment the quality of skill training, it is suggested that Public Private Partnerships be considered by engaging with prominent players in each sector. For instance, Volkswagen India, as part of its CSR initiative, provided ITI Chinchwad (Pune district) with teaching aids, funded high-speed internet, helped develop updated e-learning modules and also installed a simulator to recreate real-life automobile factory scenarios (NITI Aayog 2023, 45). These interventions help in providing exposure to working environments boost employability and also provide the private partner with industry-ready talent.
4. An oft-cited shortfall in the vocational training centres is that of instructors, especially in less developed districts of the state (KPMG 2018, 35) such as Gadhchiroli, Beed, Sindhudurg, Nandurbar etc. Data from the Ministry of Skill Development and Entrepreneurship reveals that of the 18, 348 trainer posts sanctioned in Maharashtra, only 10,243 have been filled. Moreover, only 1393 instructors are reported to have Craft Instructor Training Scheme (CITS) certification. It is suggested that these vacancies be expeditiously filled. It is further recommended that Institutes for the Training of Trainers (ITOTs) be expanded in the state, with a starting target of one institute per district. Special courses should be offered to allow trainers to upskill themselves periodically. Trainers should also be deputed for exposure visits to MSMEs and other industrial units.
5. It is recommended that the political manifestos suggest engaging with the All India Council for Technical Education (AICTE) to ramp up Massive Open Online Courses (MOOCs) in the Marathi language (on platforms such as SWAYAM). This will entail creating good quality translations of existing courses as well as courses that are tailored to meet the skill requirements of Maharasthra's labour markets.
6. There is a general perception that tends to associate vocational education with blue-collar or low-paying and less-prestigious jobs which prevents high school and senior secondary school pass-outs from aspiring for vocational degrees. It is recommended that the Government of Maharashtra carry out a rebranding campaign to make the youth aware of the plethora of opportunities that are available to vocational education graduates. Such a campaign should emphasise that vocational courses are not limited to manufacturing roles such as mechanics and electricians. Instead, it should highlight service-sector-related courses offered in the ITIs that are viewed as more attractive among the youth, such as courses in IoT, AVGC, marketing, event management etc.
7. Recently, the Government of Maharashtra signed an MoU with the Tata Institute for Social Sciences to enrol 15,000 XII standard pass-outs in BVoc (Bachelor of Vocational Studies) courses at TISS School of Vocational Education, Mumbai. It is suggested that this model be replicated in other parts of Maharashtra by engaging with technical institutes and medical and agricultural colleges to offer BVoc courses with financial assistance from the MahaYuti Government and in partnership with leading companies in the relevant sector.
For all the above-mentioned developments to take place, the state needs to have political stability first. While Maharashtra is compared with Gujarat or sometimes with Uttar Pradesh, it should be kept in that both the states have a stable full majority government. Maharashtra in past 5 years has struggled from agitations and leaders jumping from one party to another. If you think that after 20th November, the political parties will shift their focus towards development, I think you need to know that Municipal Corporation elections are also yet to be announced. Therefore, Maharashtra will remain a poll state even next year as well but the focus should be on economic growth and tapping the untouched sectors of the state.
'Ritwik Mehta is the founder of Niti Tantra (a Youth Led Policy Think Tank) and a political strategist.
The views expressed here are the individual's and don't represent those of the paper.
