Over the last 10 years, the bazaar at Udhwantnagar has undergone major changes.

Walk down the market, from the village school in the north to the block office in the south, and you see two kinds of establishments. One kind has been around for a long time – farm equipment workshop, grocery, confectioner.

The other comprises a clutch of new businesses – three chemists and as many beauty parlours, a video-photography store, a cell phone repair shop and another selling recharge vouchers, a banking correspondent, a store each for footwear and garments.

Along the way, the caste composition of the market, eight kilometres south of Ara town in western Bihar, has changed as well.

People from all castes now set up and run shops here, said Lallan Singh and Ganesh Singh, two village elders sitting at the confectioner’s. “On this street, you now have shops of Rajputs, Yadavs, Brahmins, Baniyas and backward caste people,” they said. The change, they added, started about ten years ago.

Shifting scenes

Most village markets around Araria and Bhagalpur towns have seen a similar growth of small enterprises. Take a closer look at this rise and two contradictory trends emerge.

One, the new businesses are mostly restricted to a handful of consumer goods segments – chemist shops and mobile phone stores are especially common. Within the latter, there is striking specialisation. Some shops only sell phones, others only repair them, or only sell recharge vouchers or music and movie downloads. There are no overlaps.

At the same time, there are outliers as well, businesses one would not expect to find in a village. Take, for instance, this shop in Geetwas near Araria. What does it deal in?

Upendra at his X-ray shop at Geetwas near Araria.
Upendra at his X-ray shop at Geetwas near Araria.

The green-coloured unit in the foreground is a diesel generator. The white one in the middle of the shop is an X-ray machine and you can see X-rays drying on the clothesline. This shop is Upendra’s, the man in the light shirt and grey trousers.

The other trend is that most of these new establishments are not very profitable. Take Upendra’s puzzling choice for business. Could a village provide enough customers to make an X-ray business viable? Sure enough, his business is struggling. “There is no MBBS here,” he said, referring to a physician, while pinning X-rays to the clothesline. Most patients go to Araria to see a doctor, and get their X-rays done there.

If outliers like him suffer because of low demand, the micro-enterprises in medicine and mobile phones are struggling for a different reason. Too many of them are scrambling for a share of the limited business the village can generate. As Rajkumar, a young man who runs the videography store in Udhwantnagar, said, outsiders come to the village only for a variety of sweetmeat it is famous for. (It tasted like paneer steeped in sugar syrup.)

What complicates matters is that most new businesses sell products or services produced elsewhere. All they earn is the “retailer margin”. Most people, said Ganesh Singh, earn between Rs 5,000-Rs 8,000 a month. “The halwai business is more profitable than many of these new businesses,” he added.

Because the competition is fierce, businessmen are forced into hyper-specialisation.

Beyond Bihar

The changes in the village markets of Bihar mirror what Scroll’s Ear To The Ground project has found in other states.

In Tamil Nadu, too, markets at the village, panchayat and tehsil levels show a similar rise in micro-enterprises. Most of these, as J Jeyaranjan, a researcher who studies the informal economy, told this reporter last year, are hyper-specialised as well. They have their share of outliers as well. Asghar Ali in Denkanikottai, a tehsil in Krishnagiri district, sold fancy stickers and number plates for motorcycles. Like Upendra, he was struggling. “I get four-five bikes a day. Each of them pays me Rs 20,” he had said. “That is monthly income of Rs 3,000-Rs 4,000. This business is better in cities.”

These changes – in a bazaar’s shop mix, caste composition, businesses catering to ever-tinier economic niches, the rise of the outliers – are quite significant. Local markets, after all, are the fundamental cogs of India’s economic and social machine.

So, in Bihar, Ear To The Ground tried to understand why the bazaars are changing the way they are.

New socio-economic reality

Start with the micro-enterprises boom.

One reason for it, obviously, is Bihar’s inability to create enough jobs. As Lallan Singh, who is in his 80s, said, “The number of shops has gone up because unemployment has gone up.” With agriculture weakening and employment in non-farm sectors sluggish, people who need to earn an income opt for self-employment. That is people like Rajkumar. His family needed him to work – but did not want him to leave the village – so he studied video editing and got into the business.

Another is reverse migration. The salaries of migrant workers drop as they age. In Sriperumbudur, Tamil Nadu, for instance, wages are Rs 8,000 or so by the time a worker turns 40. Around that time, they return home to start a small business – using whatever sums of money they have managed to save. That is people like Vijay Singh Ballia. When this reporter met him last year, he was a warden in a garment factory at Sriperumbudur. His monthly income was Rs 8,000. Increasingly fatigued by a life that made him subsist on Rs 3,000 and his family on the Rs 5,000 he sent them, he was thinking of returning home to Uttar Pradesh and starting some small business there. Even if it netted him just Rs 6,000, it would still mean more cash in hand for his family.

Rajkumar sees this pattern in Udhwantnagar. “People who earned Rs 10,000 outside think they can stay in the village and manage with Rs 8,000,” he said. “Chawal bahar mehnga hain – Rs 25 ka hain. Idhar Rs 20 ka hain,” he added by way of an explanation. Rice costs Rs 25 per kg outside, but only Rs 20 here.

These people, he said, work as labourers. Or set up a shop in the market. In the last 10 years, the village has seen a bit of a construction boom, which has absorbed manual workers as well.

This is consistent with what happened in Tamil Nadu. In the early days of the post-liberalisation economic boom, the state saw landless workers and women migrate to industrial hubs such as Tirupur. However, as competition intensified, several of the older workers were replaced by younger (and cheaper) ones, or by migrants. Finding work hard to come by, many of them – giving up on their dream of earning a middle-class lifestyle – returned to their homes in the Cauvery delta.

This shift is now also facilitated by India’s turn towards cash-based welfare programmes.

Impact of welfare schemes

Sanjay Paswan, a senior leader in the Bihar unit of the Bharatiya Janata Party, teaches labour relations at Patna University. He explained how reverse migration was encouraged by the added safety net created by the state’s cash-based welfare programmes. Take the rural employment guarantee scheme MNREGA. Village headmen, he said, retain their villagers’ job cards and fraudulently claim waes on their behalf. Most of the money paid out by the government under the scheme, he said, is thus pocketed by these local leaders.

This was corroborated by a former chief secretary of Bihar who did not want to be identified. Local leaders, he said, get welfare schemes or construction work allotted to their supporters. “They get a cut for ignoring supervision and getting beneficiaries onto these programmes,” he said. “You see this in MNREGA. In the mid-day meal programme, teachers and sarpanches get together to make money. In the case of old-age pension, payment is made in the presence of the local representative. Many times from his office itself. And so, he gets a cut.”

The headmen, Paswan explained, share a part of the pocketed money with the job cardholder. “Yaani hazar rupaiya assured ho gaya,” he said. Assured of getting Rs 1,000 from here, the cardholder picks up some other work. MNREGA, he pointed out, is just one scheme. “Bihar runs about 20 welfare schemes that give out cash – pensions, Indira Awaas Yojana, scholarships,” he added.

Together, Paswan said, these schemes blunt the marginal economics of the livelihoods that await back home. “People, if they can get a part of their household cash flow from these schemes, figure they can manage between these and some local work,” he said.

These are not large sums, of course. Pensions, as Rajkumar said, pay out Rs 400 a month. MNREGA provides about 15,000 a year. But, as Paswan said, “If the average monthly income is Rs 6,000, these schemes together might bring in another 20% or so.”

Caste and local politics play a determining role here. “About 10% of the people in the village are still deprived of all schemes,” Paswan said. They belong to the most marginalised communities. “Musahars and Mehtars,” he added, “Families where the man is not around and the woman cannot do chaploosi, or go to the block office, or to the mukhiya for fear of sexual violence.”

Patterns of migration

In Bihar, a mix of government policies and local politics influence migration. In turn, migration is changing the state in varied ways – the micro-enterprise boom is among them.

Reverse migration is also reshaping local political contests. Migrants, Paswan noted, return and fight elections – and win. “The newcomers are challenging not only the upper-caste people but also people in their own caste,” he said. “The existing power structure is being impacted.”

Why do they win and not the local leaders who have been working on the ground for long?

The answer lies in what people expect of their local leader. “They want someone who can take them to the police, block office, hospital,” Paswan said, “and the local leader, given the lack of resources in Bihar, cannot quite satisfy everyone.”

Some people always get left out. So, he said, “a perception builds, correctly or not, that the local leader works only for some people. In contrast, the migrants are seen as group-less. This person will work for everyone.”

This trend, he said, can also be seen in the election of legislators in Bihar.

As the above chart shows, there are other ways in which migration is changing – and changing Bihar in turn.

Speaking with people in Bihar, it seemed that some of these questions – the rise of the manpower supply companies, for example – are not studied well enough. That may change soon, though. The Tata Institute of Social Science’s campus in Patna is starting a research programme on migration. It will be interesting to see what they find.

This article is part of the ongoing Ear To the Ground series.