Connectivity and Savings Propensity among Odisha Tribals

Abstract

Rural areas in India are underdeveloped relative to urban areas. One result of this has been a migration to urban areas; such migration, in turn, sharpens the problem of sustainability of rural communities. Even though there are some social benefits to urbanization, there are also disadvantages; and if urban migration is rapid and unplanned, social services in urban areas are likely to be strained. Given this, it is important to pursue strategies to develop rural areas. Such solutions can either involve external intervention with outside resources or alternatively, development using internal resources. The second solution is clearly more sustainable, as well as politically more feasible. An important part of such a self-reliant strategy involves rural saving. This paper uses the results of a survey to examine the factors affecting saving in a rural part of Odisha populated primarily by tribals. Our tentative findings are that savings propensity is determined partly by the extent to which individuals feel connected to the broader economy, and partly by cultural factors. One implication of these findings is that connecting rural areas to other, possibly urban, locations could elicit greater saving and this could lead to greater development, employment possibilities, economic betterment and all the consequent social welfare implications.