Rangaswamy Elangovan and Village Economics

[Subhas]

You can look at this as an economic idea, or as Gandhian thinking. The village produces a few things, and tries to sell them, typically in Chennai (which is 40 km away). Most of the things we sell are "unfinished products", such a harvested crops, unpasteurized milk, nuts for oil, etc. We send these off someplace else, like Ambattur, to be processed, packaged, and transported back to us. Typically, there is a 100% markup in price in that process. We think of ourselves as consumers only of finished goods, but there is no reason why we cannot be the buyers of the unfinished goods as well as the processors who make the finished goods. In the same move, you can eliminate all the middleman costs, and also find employment through new economic activity. From this there is self-reliance, a sense of pride and independence. You can call that gram swaraj.

Thinking this way, we have set up a dairy processing unit. Employment in such a unit requires a steady inflow of milk. We figured that if we have a 150 animals distributed to 70 families (each woman needs at least two cows, so she can continue her economic activity even when the yield from one is low), we could help those families make Rs.1800 a month even if the milk yield is low (3 to 4 litres a day). We made a jacketed stainless steel, and a couple of chillers to eliminate some of the middleman costs. Not only that, the dairy creates a base for related economic activity. A few people can be employed in sealing packets, a few more in vending, a few more in keeping the units clean, and so on. When you remove the need to send one economic activity out of the village, very often there are other activities that can also be indigenised.

His interview, from which the above was excerpted: http://www.indiatogether.org/govt/local/interviews/elango.htm

Economics for village clusters:

He got a door-to-door survey done in the village and found the village consumes Rs.60 Lakhs worth of goods and services per month. Elango discovered to his astonishment, that nearly Rs 50 L of that can be produced at the village level. Since then, he has been evolving an economic theory of village clusters. In simple terms about seven or eight villages form a free trade zone. They identify and produce goods and services without overlap. They consume each other's produce. And the money stays back and gets invested in human development.

His personal story: http://www.goodnewsindia.com/index.php/Magazine/story/elango-kuthambakkam/

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