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India Shining: What about Rural India?

Posted by Ramoo on February 16, 2007

http://justbasics.blogspot.com/2007/02/india-shini…

If you are one of those people, who are sick and tired of listening to “India Shining Stories” despite the growth not bringing about basic changes you had expected to be associated with an economic powerhouse – you will probably like where I am going with this. Over the last few days I have been reading a lot about the Great Indian Corporate Shopping spree.
What Lakshmi Mittal started last year with Arcelor, has seen several follow-up acts such as the Tata-Corus deal, Birla’s Hinduja takeover of Novelis and the Hutch deal with Vodafone. I wondered how much of Atanu Dey’s introduction to RISC (Rural Infrastructure & Services Commons) was relevant. I tried to understand this better. There is no doubt, that India is growing – and growing fast – the universally accepted eight percent GDP growth rate holds pretty good.

Graph: Poverty in Indian states (1999-2000)

But, how good is this economic growth, when more than half of children aged below five are undernourished or when one fifth of the entire population is chronically hungry. Dey also points out the recently released rankings in the Human Development Report, where our 126th rank (out of 177 counties) is nothing to be proud of. A quick look at the demographics explains this imbalance:
The National sample survey organisation (NSSO) estimated that 22.15% of the population was living below the poverty line in 2004–2005, down from 51.3% in 1977–1978, and 26% in 2000. I for one question, whether this is any indication of India’s overall upliftment (especially rural areas) or just migration of ‘cheap human resource’ from villages and towns to the IT/ITes based megapolis.
My doubt is further strengthened when you see that while services and industry have grown at double digit figures, agriculture growth rate has dropped from 4.8% to 2%.
More than three quarters of India depends on agriculture for livelihood, but the contribution of agriculture to India’s GDP is less than one quarter.
Precious little is being done to address plaguing problems in rural India such as availability of civic amenities, education and health & sanitation. This is further compounded by a high population growth rate.
So what does this translate to – more pressure on crumbling urban infrastructure, which has led to greater congregation of population in ‘hot pockets’ of corporate India. This in turn, had led the politicians to shift their already trivial focus on rural matters, by addressing matters concerning corporations, city development and infrastructure. There is absolutely no incentive for either the poitician to be concerned about the rural population, or for the people to participate in upliftment of villages.
The Discovery channel documentary on Thomas Friedman (Pulitzer winning author of The world in flat), showed that within an hour’s drive from India’s star performer – Bangalore, there were villages with no educational system or health-sanitation facilities. I wonder, how the villages deeper inside the world’s seventh largest country score on this scale.
The politicians with schemes such as Rural Employment Guarantee Bill (2005) and the Reservation Bill have resorted to controversial methods, that give scope to extreme corruption. I only read about initiatives done by NGOs and corporations that lay emphasis on their CSR. Moreover, a new controversy bogged my mind – shifting the BPO industry to villages on the fringe of urban centers. Satyam computers recently set up a BPO village in Andhra Pradesh. While, this practice may reap in profits for firms such as Satyam, who are struggling with infrastructure issues and high operating costs in traditional ‘hubs’, what is the payoff for rural India. The sustainability of such quasi-pro-rural initiatives depends largely on availability and willingness of ‘cheaper skilled labor’ in such rural belts. This also, if successful, will add to the wooing of potential agro-based laborers to cheaper service based jobs, which may disturb the long standing balance of our economic structure.
So, this brings me back to the initial debate – how can India shining not be a misnomer, but a whole, meaningful phrase, that applies to every sphere of India. Is RISC the only method of moving ahead, for rural upliftment ? I think, given a corruption-free, closely monitored and explicitly public undertaking by the GOI, NGOs and other partners, this could be one of the more effective solutions. The main idea behind RISC, is to bring to the rural population services that are normally available only in large urban locations. It is virtual grouping of villages and small towns to provide a common platform for Infrastucture (I-level) and user Services (S-level). The economies of scale works well with this model, as spreading the costs of such services over the large population of clubbed villages and towns, makes per unit cost as low as possible, while extending quality resources such as public health programmes, education and training and manufacturing capabilities (such as factories, logistics, access to markets, trading information).
We may be competing well in 2007. But to sustain a long term balanced growth, we cannot ignore the rural population with it’s promising resources, reduced inefficiences and potential to decongest not just the metros, but also the economy on the whole. Lastly, with projects such as RISC, governance of India shifts from small units such as villages, to larger congregations in these RISC centers. Let India Shine. Now.
References: Dey, Atanu and Vinod Khosla (2002), ‘RISC – Rural Infrastructure and Services Commons’.Full document available at Deeshaa.com and at Khoslaventures.com; A Brief Introduction To RISC — Rural Infrastructure & Services Commons — Atanu Dey (http://indianeconomy.org/2007/01/23/a-brief-introduction-to-risc-rural-infrastructure-services-commons/#more-389)

posted by aK @ 10:46

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