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

Vision 2020 What India Can Be (NOT what India should ideally be) How India Can Be What India can be Dr V. K. Vijay Centre for Rural Development & Technology Indian Institute of Technology Delhi vkvijay@rdat.iitd.ac.in. India’s Journey of Development. 1950 to 2008. What India is –.

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

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  1. Vision 2020 What India Can Be (NOT what India should ideally be) How India Can Be What India can be Dr V. K. Vijay Centre for Rural Development & Technology Indian Institute of Technology Delhi vkvijay@rdat.iitd.ac.in

  2. India’s Journey of Development 1950 to 2008

  3. What India is – poor, filthy, crowded, needy copious What it can be – prosperous, neat, spacious,

  4. PURA – A Plan for Promoting Prosperity, NOT Perpetuating Poverty Providing Urban services in Rural Areas Partnership for Urban amenities with Rural Ambience Promoters, Unifiers, Rurbanisers,Administrators

  5. PURA A Complement to, not a replacement of existing schemes of Rural Development A TRANSFORMATION Large-scale employment generation At urban wage levels, not mere poverty alleviation Profit-seeking schemes, not grants/ subsidies From work-for-food To work-for-prosperity

  6. Biodigester Vision 2020: The Proposed Goal Permanent shelter, Protected water supply, Stable electric power, Vocational training, Life-long healthcare, Clean environment Access to a large market Would all be fundamental rights of the poor 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. Proposed Existing Vicious Cycle, Virtuous Cycle Low Investment Vicious Cycle Poor Quality Subsidies Commercial Investment Poor returns Virtuous Cycle Reinvestment High Quality High returns

  9. Rural schemes depend on SUBSIDY. Villages have poorconnectivity 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 highconnectivity Being profitable, and having good connectivity investment is high. Investment being high many jobs are created, and at high wages. Rural vs Urban Development

  10. Why doesn’t a population of 100,000. Distributed over a number of villages generate Jobs the way a city of same population does? Villages do not have The CONNECTIVITY and LEVEL of Investment Essential 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

  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. The Hypothesis Rs Given connectivity And investment Be empowered To support markets Villages will And create jobs Better than Cities do to become RURBANISED

  13. Power Industry Bus Hospital Food processing Office ViIlages With rail link to city Hotel Telecom Bus School Shops Rurbanisation: Getting Villages Connected Link a loop of villages by a RingRoad With Frequent and Fast bus services. Ring road + Bus services make a variety of services viable Note: Bus services are crucial to connect all villages.

  14. PURA as Rurban Habitat 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

  15. Why PURA is profitable The cost of connectivity is minimised When 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 km from main roads

  16. Inner Unbuilt Area Or, consider a town of built round a ring road With same 30 sq.km. built-up area, and also as before All points within half a km distance from main road As the figure shows. Length of Ring Road is 30 km only Half that of the Rectangular grid Not only is road length halved, So will the length of all infrastructure. Further ecology is superior because Every point lies within Half a km of open spaces too.

  17. Power Industry Bus Hospital Food processing Office ViIlages With rail link to city Hotel Telecom Bus School Shops Advantages of the Ring – 1 Businesses naturally distribute round the ring; No overcrowded bazaars No congestion No artificial inflation Of real estate prices

  18. Advantages of the Ring – 2 Businesses need not be concentrated, They can be brought close to residences. So, no commuting!

  19. The Ring Road and PURA PURA 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 villages Yet, PURA can create a market of 1-500,000 customers

  20. PURA Strategy • Draw investment away from • Fast growing but dirty and expensive cities • To make PURA more attractive than existing cities: • Insist on cleanliness: avoid overcrowding • Keep prices low: avoid shortages • Promote participation: avoid authoritarianism PURA will be built like old military cantonments But managed by consensus

  21. Not this But this Biodigester Villages suffer from poor demand: Maximise it! • Attract high-wage organised industry • 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 d. Keep real estate prices low: make large houses affordable

  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 housing Half of national capital formation is wasted in artificial inflation

  23. Implementing PURA A partnership of administrators, farmers, venture capitalists and bankers choose a few ring road alignments close to a city select the one The farmers charge least. Get state administrators to build the road. Then . . .

  24. Then organise Road 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 house all employees who get loans to build their own houses With full amenities And create demands that currently, only cities do and villages do not

  25. PURA: Targets • Two-lane 30-40 km ring road with link to a highway • Ten minute bus service • Ultra modern Habitat • High quality water supply and sanitation • Full range of connectivities Are these cost factors or demand-generators? • Supplementary Targets • Minimum 1000 non-farm skilled employment • Break-even in 3-5 years • Provision for tenfold expansion

  26. Conventional Targets poorindividuals Marginalgrowth with traditional crafts Employment in ruralcrafts Grant-in-aid projects Maximising prices Small amounts in subsidies Agriculture is the growth engine PURA Targets villageclusters Total transformationthrough modern technology Employment in services Profitableenterprises Minimisingcosts Rs. 100 crore + investment. Servicesarethe growth engine PURA vs Traditional Rural Development

  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, Rs. 200 crores per Rural Block? 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. you will get only monkeys!

  29. School Water Electricity Hospital Biodigester Transportation Telephone Recreation Sanitation Reality: Aid Targeted to the Poor leaks Away Solution: Provide basic needs as Public Goods

  30. Asatoma sadgamaya Tamosoma jyotirgamaya Mrityorma amritamgamaya Om! 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!

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