Rural economy: The Amul story and management education

Published: September 2, 2019 1:46:22 AM

The answer to growing India’s rural economy lies in the application of professional management

Rural economy, amul story, management education, five trillion economy, agriculture, GDP, White Revolution, rural india, Dr Kurien, dairy movement, Unnat Bharat AbhiyanAs per the ministry of statistics and programme implementation report, 70% of India’s population resides in rural areas, which is defined by its remote geography, agrarian economies and high incidence of poverty.

By Hitesh Bhatt

India aims to become a $5-trillion economy in the next five years, and to power the growth of the overall economy we need to power rural India, which, today, depends predominantly on agriculture and allied activities that contribute a mere 17% to GDP. As per the ministry of statistics and programme implementation report, 70% of India’s population resides in rural areas, which is defined by its remote geography, agrarian economies and high incidence of poverty. The MoSPI report indicates that 4% of India that resides in urban areas is below the poverty line. To sum up, nearly 74% of India is still underserved. From lack of opportunities, low incomes, joblessness and low purchasing power, the underserved population continues to be excluded from the development story.

There are lessons to be learned. Today, Amul is the epitome of a successful homegrown brand that originated from rural India. On the way to become the world’s largest food brand, Amul had its origins in the White Revolution initiated by the late Verghese Kurien over 60 years ago. That the White Revolution transformed India into the world’s largest milk producer and enhanced the livelihoods of over 15 million dairy farmers is well known. However, what is less known is the critical differentiator that made this transformation possible. Dr Kurien believed the defining factor was the application of professional management to an underserved sector that needed it the most.
The dairy movement initiated by farmers of Kaira district in Anand, Gujarat, was a true rural grass-roots movement, and Dr Kurien, with his engineering and dairy technologist background, brought the necessary professional management to the movement by facilitating a robust supply chain, creating modern technology and production systems, and establishing a marketing and organisational ecosystem. Amul would not be in existence today were it not for these changes.

The success of Amul has provided proof of concept for professionally managed rural institutions as a way of addressing India’s rural woes. Many industry stalwarts continue to propagate this model to revolutionise other sectors like pulses, perishables, etc. But the heart of the issue remains the dearth of specialised institutes that can nurture this kind of talent. With the Unnat Bharat Abhiyan, the government has made a start by linking all higher education institutes with rural development processes by adopting five villages each, but a holistic approach is required if we want to recreate White Revolution in all industries. Business schools in India aim to cater to the corporate sector, which mainly serves wealthy urban markets—a mere 16% of population. To make an impact for the 74% underserved, India needs a higher education model that combines a thorough understanding of the rural and urban underserved segments, with professional management.

Dr Kurien dreamed of creating ‘many more Kuriens’ to transform every underserved sector in India and it led him to set up the Institute of Rural Management Anand 40 years ago. This approach may well be the panacea India needs to boost the upwards trajectory of the economy.

The author is director, Institute of Rural Management Anand. Views are personal

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