Policy | Modi’s call to empower every district is an economic and cultural opportunity

Abhinav Prakash Singh

Prime Minister Narendra Modi in his Independence Day speech mentioned his ambitious vision of converting every district of India into a specialised manufacturing and exporting hub under the scheme of ‘One District, One Product’ (ODOP). The scheme builds upon the larger framework of ‘Make in India’ that aims at promoting the manufacturing sector in India.

The idea of the ‘One District, One Product’ is derived from the ‘One Village, One Product’ movement (Isson Ippin Undō) in Japan. The movement was launched in the Otia prefecture of Japan in 1979 and was aimed at revitalising the village economy and social communities. Similarly, ODOP aims to spur the local economy at the district level. Under it, districts shall specialise in the manufacturing and trade of a selected commodity in which it has a competitive advantage due to availability of local resources and traditionally skilled labour force.

The scheme is based on three pillars. First, the creation of the globally acceptable product or service at the district level. It is not simply a scheme of promoting the local handicraft and manufacturing but of improving them so as to meet global standards and taste. Second, the scheme depends on the use of local resources and creativity. The use of local labour and innovations to improve upon exiting products or develop a new product to take advantage of national and international demand lies at the heart of the scheme. Third, it has heavy emphasis on the human resource development by skilling and technical assistance by competent authorities.

The ODOP is a promising initiative to preserve and develop the fast disappearing local art and skills. It can trigger the mass movement of improving and re-imagining local products. The expansion in the scope of the market will induce the quality improvement and adoption of more modern techniques of the production, thus improving the labour productivity and income.

The Prime Minster has already called for the ‘Zero defect, Zero effect’ approach to the manufacturing, i.e. not only should the products be free of defects but also have zero adverse environmental and ecological effects. The ODOP is actually a call for district-level planning and industrialisation by leveraging the already existing specialisation and economics of scale of catering to a larger market. By converting each district into a manufacturing hub, it can also mitigate the problem of youth unemployment, economic migration and regional imbalances.

Not only manufactured products but by promoting tourism local culture too can become a valuable commodity. Such a focus will ensure the survival and even revival of fast-disappearing local cultures, which at the moment is under great pressure from modernisation. It will also generate viable employment opportunities at the local level. We already have the successful examples such as the Surajkund Mela in Haryana or the Santiniketan Mela in West Bengal that not only promote local culture and tourism but also provides a vibrant platform to the locally-produced goods. Other districts can learn and adopt from such already existing models.

Also, the ODOP can be linked with the wider social policy of promoting women participation and empowering the socially-backward sections by synchronising the already existing schemes such as Stand Up India, Mudra, etc.

The Japanese model has been adopted by different developing countries in Asia and Africa with varying degrees of success. While the original movement had a major focus on revitalisation of the local social communities and depended on the local initiatives, other countries such as Thailand focused mainly on the economic aspect of the scheme and central government played a pivotal role. This is because they tried to adapt the Japanese model to meet the local challenge of generating employment and increasing incomes at the local level. However, it also means that the state capacity becomes a crucial factor in determining the success in developing countries.

The successful implementation requires a large investment in the spatial connectivity to link the local production chains to the global market chain. Ensuring access to market both at the national and international level will be a tough task in the face of the low-cost production from China inundating the global markets. In addition to this, imparting modern financial and management knowhow to the local producers and labour will be a major challenge due to the prevailing low education levels.

The State will need to invest in the training and skilling programmes to ensure production is rapidly scaled up to the desired levels. Also, there will be the crucial task of branding the product and quality control of the global standards. This will require careful background work in selecting the product itself given that many districts in India are huge and often produce more than one product that can be chosen under the scheme. Furthermore, connecting local labour and producers to the digital economy and e-commerce by tie-up with major e-commerce platforms is needed as well.

The ODOP requires change in the orientation of the local bureaucracy towards being business-friendly and pro-market. Not just the local producers and labour but bureaucracy too will have to learn the modern techniques and attitude of management, finance and marketing.

Given the international experience that such schemes work best when the local government is the decision-making authority, this is also an excellent opportunity to empower local political and administrative bodies and augment their capacities to plan, implement and administer economic policies.