This presentation looks at four kinds of formal institutional structures in India that have evolved for improving the rural livelihood, namely- private company model which is involved in a primary produce, a cooperative model established by act of legislature, a non-governmental organization (NGO) led project-based intervention model, and a producer company (PC) model which has been a recent development in the Indian economic scenario

1. Institutions and Rural
Development
How institutions create value for the rural marginalized
person: A comparative analysis

2. What are institutions
• The definition of institutions varies depending on the context. An
institution could be the government, a firm, a religious/social
group, a family, rules, norms, strategies, etc (Ostrom, Elinor,
2010)
• The analysis of institutions is based on a relatively weak
foundation of invisibility of these structures. It is difficult to
identify and measure them.
• This study, relies on the conception that it is a stakeholder
analysis of agencies/organizations that are implementing an
action or reform (World Bank draft for PSIA workshop)

3. Gandhi’s talisman: the genesis of this study
• “Whenever you are in doubt, or when the self becomes too much
with you, apply the following test. Recall the face of the poorest
and the weakest woman [man] whom you may have seen, and ask
yourself, if the step you contemplate is going to be of any use to
her [him].’’
• This research attempts to look into the role played by institutions
involved in achieving the objective of redistribution of resources
(income)

4. The four kinds of institutions
• Producer Company- Rangsutra
• Private limited company- Dungarpur Renewable Energy (DURGA)
Pvt. Ltd
• NGO-intervention model- Million Souls Program in Dungarpur,
Rajasthan (India)
• Cooperative model- Gujarat Cooperative Milk Marketing
Federation (GCMMF)

5. Methodology of analysis
• The study uses case studies of the four kinds of institutions-
qualitative approach to bring out the parameters/criteria that will
decide which model is better
• The analysis also incorporates the methodology of value chain,
albeit in brief form to understand the share of labour in monetary
units
• The analysis is preliminary and fairly simple and has room for a lot
more

6. Result and Observation
• The study suggests that NGO-led intervention has the most visible
impact on rural development- in creation of rural livelihood
• With regards to long term outcome on rural development, the role
of NGO is limited in scope because of limited access to resources
and market
• Nonetheless, NGO-led model scores higher on intangible
parameters- community ownership, transfer of power to the
beneficiaries
• This study can be considered as a starting point of institutional
analysis by adopting a value chain methodology