What is Rubanomics?
“Rubanomics” is a construct to understand the economics as applied to “Rural-Urban” (and thus the term “Rubans”) and define newer business models for their economic prosperity (Padaki, 2013). A Ruban is a youth living in a village but with the aspiration of an urban youth. While the improved connectivity in terms of television, mobile, internet has raised the aspirationof the youth, there has not been increase in their income to meet the aspiration. In this juncture, it is beneficial to understand demand “as aspiration for products backed by capacity to pay”. So, Rubanomics is the study of economics as if people mattered and exploring ways of improving the skills and employability so that the Rubans enter into the consumption mode.
There are two ways of meeting the goal: one is the present situation of the Rubans migrating to the cities in search of opportunities. The massive migration of the rural youth that we see these days is due to the growing aspiration which is not finding an expression in the rural areas due to the lack of opportunities. The massive migration of rural youth to cities causes undue pressures on the infrastructure of the cities and most cities are breaking at their seams. If the rural youth had a choice to improve their lives in the villages, many would have stayed back in the rural areas (Nanyong Technological University, 2012).
The second and more pragmatic approach would be to provide opportunities in the rural areas and developing facilities in the rural and semi-urban areas. The second approach is the approach of Rubanomics.
Traditionally, the economic activity involved movement of raw materials from the villages to the city and movement of produced goods from the cities to the villages. With the proposed model, some of the products will be produced in the rural areas itself and the other such as tractors etc. will be centralised. Thus, this model will be a win-win situation to both corporates and the Rubans. C K Prahlad in his celebrated book, “Fortune at the Bottom of the Pyramid”, talks of democratising commerce wherein every person is a consumer, a producer and an entrepreneur (Prahlad, 2012).
Rubanomics therefore, is about business models for the economic prosperity of the Rubans wherein Ruban is both an entrepreneur and a consumer. This has the advantage of retaining their roots and the flow of economic activity will be two way instead of the traditional one-way movement.