Key Trends and Findings in the Non-farm Sector in Assam

Key Trends and Findings in the Non-farm Sector Relevant to Assam

The non-farm sector plays a crucial role in diversifying the economy of Assam, reducing dependency on agriculture, and providing livelihood opportunities to a vast number of people. This sector includes industries such as handloom, handicrafts, tourism, agro-processing, and small-scale manufacturing, among others. In this literature review, we explore the key trends and findings related to the non-farm sector in Assam, supported by data, statistics, and examples from recent studies.

1. Growth of Rural Non-farm Employment

The rural non-farm sector in Assam has witnessed significant growth over the years. According to the Ministry of Statistics and Programme Implementation, non-farm employment in rural Assam increased from 21.6% in 1993-94 to 31.2% in 2019-20. This growth is attributed to various factors, including government initiatives like the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) that have promoted skill development and employment in rural areas.

Example: Handloom and Handicraft Industry

Assam’s handloom and handicraft industries have been a significant contributor to the non-farm sector, providing employment to thousands of artisans. As per the National Handloom Census 2019-20, Assam accounts for about 50% of the total handloom production in India. Notably, the Muga silk industry, which is unique to Assam, supports around 1.5 lakh families in the state.

2. Role of Small and Medium Enterprises (SMEs)

Small and Medium Enterprises (SMEs) play a pivotal role in Assam's non-farm sector, particularly in agro-processing and manufacturing. The Ministry of Micro, Small, and Medium Enterprises reports that Assam has around 67,000 registered SMEs, contributing significantly to both employment and income generation in the state.

Agro-processing industries, especially tea, spices, and fruit-based processing units, have been expanding, driven by Assam's agricultural outputs. For example, the state produces nearly 51% of India’s total tea production, with numerous small tea growers setting up their own processing units, generating employment in non-farm activities.

Case Study: Barpeta District's Agro-Processing Cluster

Barpeta district has emerged as a hub for agro-processing, with numerous small enterprises involved in mustard oil production, rice milling, and food packaging. This cluster has been supported by the Assam Industrial Development Corporation (AIDC) and schemes such as Prime Minister's Employment Generation Programme (PMEGP).

3. Tourism as a Growth Driver

Tourism has emerged as a critical driver of the non-farm sector in Assam, leveraging the state's natural beauty and rich cultural heritage. The Assam Tourism Policy 2017 aims to promote eco-tourism, rural tourism, and adventure tourism, leading to the creation of jobs in hospitality, transport, and allied services. In 2019, Assam attracted over 6.8 million domestic tourists and 31,739 foreign tourists, which generated substantial revenue and non-farm employment opportunities.

Example: Kaziranga National Park

Kaziranga National Park is one of the prime examples of tourism's impact on the local non-farm sector. The park employs hundreds of locals in jobs related to wildlife tourism, including tour guides, drivers, and hospitality staff. The Assam government’s push for homestays around the park has also opened up new avenues for local entrepreneurship.

4. Digital Transformation and E-Commerce

Digital technology has made inroads into Assam's non-farm sector, particularly through e-commerce and digital marketplaces. Platforms like Tribes India have enabled artisans from Assam to sell their products online, widening their reach and boosting income levels. Additionally, initiatives such as the Digital India program have helped rural entrepreneurs adopt digital tools to manage their businesses more efficiently.

Example: Online Handloom Marketplaces

Several online platforms have emerged that support handloom weavers from Assam by offering their products to a national and international audience. For example, the platform Ahom.in showcases traditional Assamese textiles, bringing economic benefits to local communities involved in handloom weaving.

5. Challenges and Policy Recommendations

Despite the positive trends, the non-farm sector in Assam faces several challenges, including inadequate infrastructure, lack of access to finance, and skill gaps. Policy measures such as improving rural infrastructure, enhancing credit availability for SMEs, and promoting skill development initiatives are essential for further growth in this sector.

Policy Recommendations

• Strengthening rural infrastructure, particularly roads and connectivity, to facilitate market access.
• Promoting micro-finance institutions and credit cooperatives to provide financial support to rural entrepreneurs.
• Scaling up skill development programs tailored to the needs of the non-farm sector, including handloom, handicrafts, and agro-processing industries.

References and Further Reading

• Rural Non-Farm Employment in India: The Role of Development Policies and Institutional Reform by K.P. Kannan and G. Raveendran
• The Non-Farm Economy in India: Macro and Micro Perspectives by Basudeb Guha-Khasnobis and Gopal Naik
• Handloom Industry in India by Rakesh Kumar (2018)
• Ministry of Micro, Small and Medium Enterprises (MSME) Report, 2022
• Ministry of Statistics and Programme Implementation (MoSPI), Government of India
• Reserve Bank of India (RBI) Handbook of Statistics on Indian Economy, 2023

For a more detailed study, you can refer to the following books:

• Rural Transformation in India: The Role of Non-Farm Sector by T.S. Papola
• Non-Farm Sector in the Rural Economy: Perspectives from the Global South by P. Nayak and D. Roy

Literature Review: Existing Research on Assam's Rural Economy 

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