Vision 2020What India Can Be (NOT what India should ideally be)

How India Can Be What India can be

Dr V. K. VijayCentre for Rural Development & TechnologyIndian Institute of Technology Delhivkvijay@rdat.iitd.ac.in

India’s Journey of Development1950 to 2008

3

What India is –

What it can be – prosperous,

filthy, crowded,

neat, spacious,

needy

copious

poor,

4

Providing Urban services in Rural AreasPartnership for Urban amenities with Rural Ambience

Promoters, Unifiers, Rurbanisers, Administrators

PURA – A Plan for NOT Perpetuating PovertyPromoting Prosperity,

5

PURAA Complement to, not a replacement ofexisting schemes of Rural Development

A TRANSFORMATIONLarge-scale employment generation

At urban wage levels, not mere poverty alleviationProfit-seeking schemes, not grants/ subsidies

From work-for-food

To work-for-prosperity

6

Vision 2020: The Proposed GoalPermanent shelter, Protected water supply,Stable electric power, Vocational training,Life-long healthcare, Clean environment

Access to a large marketWould all be fundamental rights of the poor

Biodigester

This transformation is possible But ONLY with a paradigm shift

From state subsidies to commercial investment

7

What is the average investment for every new job created in India ?

What is the average per job in villages? What is the average investment per job in cities?

THINK!

8

Subsidies

LowInvestment

Poor Quality

Poor returns CommercialInvestment

High Quality

High returns

Reinvestment

Vicious C

ycle

Virtuous C

ycle

Vicious Cycle, Virtuous Cycle

Existing

Proposed

9

Rural vs Urban Development

Rural schemes depend on SUBSIDY.

Villages have poor connectivity

As returns are few, and connectivity is poor, investment is minimised.

Investment being low, few jobs are created, that too with low wages.

Urban expansion is driven by PROFIT.

Cities enjoy high connectivity

Being profitable, and having good connectivity investment is high.

Investment being high many jobs are created, and at high wages.

10

Villages do not haveThe CONNECTIVITY and LEVEL of

InvestmentEssential for the emergence of large

markets.

Connecting and Investing in Villages same way as in cities

To support a full range of urban amenities But WITHOUT Urban Congestion is

RURBANISATION

Why doesn’t a population of 100,000.

Distributed over a number of villages generateJobs the way a city of same population does?

11

Is either this slum or crowded street necessary?Does either promote demand for goods and services?Does either promote growth or choke growth?Can growth be sustained when demand is choked?Are slums truly economical?

12

RsGiven connectivity And investment

Villages willBe empowered

To support markets

Better thanCities do to become

RURBANISED

And create jobs

The Hypothesis

13Ring road + Bus services make a variety of services viable

Bus

Bus

ViIlagesWith rail link to city

Rurbanisation: Getting Villages Rurbanisation: Getting Villages ConnectedConnectedLink a loop of villages by a Ring Road

With Frequent and Fast bus services.

Telecom

School

Office

Industry

Hospital

Power

Food processing

Hotel Shops

Note: Bus services are crucial to connect all villages.

14

The ring road with its bus service integrates The markets of all villages on the loop

Makes the market size as large As that of a large town

Connected villages become a virtual city, a RURBAN habitat

PURA as Rurban Habitat

15

The cost of connectivity is minimisedWhen the Habitat is in the shape of a ring

To appreciate why, consider a town 6 km x 5 km in size,That is, 30 sq.km. in area and with a rectangular grid of main roads spaced 1 km apart

As the figure shows, Total Main Road Length will then be 60 km

And all points lie within half a kmfrom main roads

Why PURA is profitable

16

Not only is road length halved,So will the length of all infrastructure.

Further ecology is superior becauseEvery point lies within

Half a km of open spaces too.

Inner Unbuilt Area

As the figure shows. Length of Ring Road is 30 km onlyHalf that of the Rectangular grid

Or, consider a town of built round a ring roadOr, consider a town of built round a ring roadWith same 30 sq.km. built-up area, and also as before

All points within half a km distance from main road

17

Advantages of the Ring – 1Businesses naturally distribute round the ring;

No overcrowded bazaarsNo congestion

No artificial inflationOf real estate prices

ViIlagesWith rail link to city

TelecomSchool

Office

Industry

Hospital

Power

Food processing

Hotel Shops

Bus

Bus

18

Businesses need not be concentrated, They can be brought close to residences.

So, no commuting!

Advantages of the Ring – 2

19

The Ring Road and PURAThe Ring Road and PURAPURA develops no more than 100 to 500 m space

on either side of the ring road. Then, open fields too are within same walking distance.

PURA is zoned to be spacious, not crowded.

No congestion! No pollution!Bhopal type disaster cannot occur in

villagesYet, PURA can create a market of 1-

500,000 customers

20

PURA StrategyDraw investment away fromFast growing but dirty and

expensive citiesTo make PURA more attractive than existing cities:

1. Insist on cleanliness: avoid overcrowding

2. Keep prices low: avoid shortages

3. Promote participation: avoid authoritarianismPURA will be built like old military cantonmentsBut managed by consensus

21

d. Keep real estate prices low: make large houses affordable

Villages suffer from poor demand: Maximise it!

Not thisBut this

Biodigester

a. Attract high-wage organised industry

b. Induce high-wage employees to reside in,

not commute from city (as they do in Hosur)

c. Encourage employers to offer civic amenities like:

as perquisites

22

How many fans are there in your house?

How many fans can a slum have?

Do slums add to growth or to inflation?

Since Independence, the wages of peons have gone up 100 times

How much has their standard of living increased?

What happened to the rest? (Gobbled up by inflation)

THINK!How different it would have been if houses had been bigger!

Half of national capital formation goes for housingHalf of national capital formation is wasted in artificial inflation

23

Implementing PURAImplementing PURA

A partnership of administrators, farmers,

venture capitalists and bankers choose a few

ring roadalignments

close to a city

selectthe one

The farmerscharge least. Get state

administrators

to buildthe road. Then . . .

24

And create demands thatcurrently, only cities do and villages do not

Then organiseRoad Show for

entrepreneurs

To bring in high-wage business

And install all that cities have but villages do not get

And insist that employers lease enough land to houseall employees who get loans to build their own houses

With full amenities

25

PURA: Targets1.Two-lane 30-40 km ring road with link to a highway

2.Ten minute bus service

3.Ultra modern Habitat

4.High quality water supply and sanitation

5.Full range of connectivities

Are these cost factors or demand-generators?Supplementary Targets

1.Minimum 1000 non-farm skilled employment

2.Break-even in 3-5 years

3.Provision for tenfold expansion

26

PURA vs Traditional Rural PURA vs Traditional Rural DevelopmentDevelopment

Conventional

Targets poor individuals

Marginal growth with traditional crafts

Employment in rural crafts

Grant-in-aid projects

Maximising prices

Small amounts in subsidies

Agriculture is the growth engine

PURA

Targets village clusters

Total transformation through modern technology

Employment in services

Profitable enterprises

Minimising costs

Rs. 100 crore + investment.

Services are the growth engine

27

What Decides Success (1)

A Rs. one lakh subsidy that yields no profits is a perennial burden

A Rs. one crore of investment that offers profitable returns is a

permanent blessing.

It is not COST but Return-On-Investment that

determines success

28

If you pay peanuts,

In the Tenth Five Year Plan, Average/ capita public + private investment is ~ Rs. 20,000.

A typical Rural Development Block with population 100,000 should then get a total investment of Rs. 200 crores.

Rs. 200 crores per Rural Block?

you will get only monkeys!

29

Water

Transportation

School Hospital

Telephone

Electricity

Biodigester

SanitationRecreation

Reality: Aid Targeted to the Poor leaks AwaySolution: Provide basic needs as Public Goods

30

Asatoma sadgamayaAsatoma sadgamayaTamosoma jyotirgamayaTamosoma jyotirgamaya

Mrityorma amritamgamayaMrityorma amritamgamayaOm! Shantih, shantih, shantihiOm! Shantih, shantih, shantihi

From the untruth (minimise investment!)

to the truth (maximise returns on investment!);

From the ignorance (that villages would ever be poor)

To the realisation (that they can prosper as well as cities do)

From decay (of villages) to (their) rejuvenation

The Ultimate is Prosperity, Prosperity, Prosperity!