Traditionally, both government and the private sector have struggled to reach remote and poverty stricken parts of India, especially eastern states such as Bihar. Even social entrepreneurs and civil society organizations struggle to apply their innovations because of poor reach and lack of absorption,. However, Jeevika, a program jointly supported by Government of Bihar and the World Bank, has built a community-based institutional platform that can reach millions of poor households in Bihar. It is now offering a unique opportunity to social innovators to capitalize on the platform as well as access to financial capital providing enterprises with a chance for a leap.
It is a paradox that India which is among the most densely populated countries in the world, is also among the least urbanized. The figure below compares urbanization rates with income for more than 100 countries. It shows that an increase in urbanization rate is positively associated with real per capita income. This is the iron law of development—i.e., growth is associated with the reallocation of labor and capital away from traditional (rural) sectors to modern (urban) sectors. Spatial transformations that give rise to urbanization accelerate growth because households and firms benefit from scale economies, mobility, and specialization. Increased urbanization contributes to growth, job creation and poverty reduction. This can indeed become a virtuous circle.