Financial Daily from THE HINDU group of publications
Monday, Jul 15, 2002
Financial Daily from THE HINDU group of publications Monday, Jul 15, 2002 |
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Opinion
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Economy Columns - Vision 2020 Vision 2020 — Dr Kalam's six-point plan P. V. Indiresan
WE shall soon have a President who presided over the exercise on Vision 2020 conducted by the Technology Information, Forecasting and Assessment Council (TIFAC), the first organisation to do so in the Government of India. Out of a score of reports that emanated from that exercise, Dr Abdul Kalam has chosen six: Value-addition in agriculture, education, health, connectivity, strategic industries and composite rural development according to plan PURA, as the thrust areas for making India a developed nation. One may question the choices he has made but there can be no doubt that his vision comes as a fresh breeze of a win-win game in our murky political scene where everything is planned on a win-lose basis. Dr Kalam's vision is to make India a developed country in another 15-20 years. That raises the question, "What makes a nation a developed one?" There is a fable of a pious person who prayed to God for long years until finally God agreed to grant him a boon, but one boon only. The old man thought about it shrewdly, and then asked of God: I want to feed milk to my grandson's grandson in a golden cup while standing on top of the seven story family mansion enjoying the beauty of its garden. The boon he asked was one only, but it had many dimensions including long life, good health, progeny for several generations, wealth, good environment and the like. We could drum up a similar situation for our own vision of development. For instance, consider: In fifteen years, all our mothers will enjoy browsing the Internet in modern, well-appointed, bungalows searching for new places to go on holiday. This definition centred on the mother ensures gender justice. The short time frame of 15 years implies rapid development. The ability to browse on the Internet pre-supposes high-quality literacy. The bungalow guarantees high quality environment. All these and the proposition about holidays are proof enough for large surplus income and substantial wealth. Such a Vision need not be a dream; it is feasible. The TIFAC Vision 2020 report on `Driving Forces and Impedances' describes its Vision in a different way. It says: "In the past 35 years, South Korea has made greater economic progress than any other country in the world. So, we can take the progress of South Korea as one possible model. Then, we may aim to attain by 2020 the levels South Korea has already reached at the present time in year 1995. Then, we would not only have emulated the South Korean miracle but would have closed the gap by ten years. Instead of being 35 years behind as we are now, we would then be only 25 years behind." These days, the state of development is measured by the Human Development Index, a measure fine-tuned by the UNDP. That has three components: Per capita income, educational attainment, and life expectancy. Dr Chidambaram, Dr Kalam's successor at TIFAC, has worked out that these three could be collapsed into two: Female literacy and per capita electricity consumption. That implies that once female literacy and electricity consumption are increased, virtually everything else will fall in place, and development will follow automatically. Presented in this fashion, development appears as a natural, fairly straightforward process. If so, why are we lagging behind? The reason can be simply explained by relating the potential for development with actual achievement by the equation: Actual Development = Potential for development x capability/Leakages + Bottlenecks. We do have the potential to become a developed nation according to any one of the four definitions mentioned above. However, as this equation implies, that would become a reality only when we control leakages and bottlenecks, and provided also, we raise our capability to that of developed nations. All three factors — capability, leakages, and bottlenecks — have many dimensions: Physical, economic, social, political, environmental, and cultural. A deficiency in any one of these dimensions, and in any of these three factors, stunts development. Fortunately, advances in technology are known to impact on the physical dimension, and in a critical way on the environment too. It is not so well known that advances in technology can benefit other factors too. For instance, the introduction of a bus service to a backward village breaks the sway of untouchability in a way no political or legal measure will. Thus, even though technical approaches are limited in scope, they can still be powerful in ways that are not apparent. In the long run, technology does have substantial impact in every other dimension of development. Thus, technical and managerial improvements to education and health will improve the general capability of the society. So, will improvements to agricultural and industrial technology. Connectivity and the PURA (or other models of rural habitat development) will reduce bottlenecks. However, critics might complain that Dr Kalam's model offers little when it comes to reduction of leakages. In a way that is true. Most leakages in the economy occur in political and bureaucratic spheres. Yet, leakages in the physical sense are not insignificant. A substantial part of our agricultural products are lost due to wastage. Technological improvements to food storage and preservation will, therefore, improve the rural economy significantly by curtailing such leakages. Advances in telecommunications and Internet services have already impacted on rural governance. In several states, these services have reduced corruption in rural areas the same way computer reservation did in railways. Thus, even if we concentrate on just technology, we can still check leakages all round. Against this background, consider a development scheme as follows:
This exercise will be used to discover the relative returns of such massive dose of capital between rural areas and cities. That could be estimated in three ways: Employment generated per Rs Crore of investment; leverage of private investment to government investment; and environmental impact as measured by pollution and health parameters. If a dozen blocks are chosen for the experiment, they will cost the government Rs 400-500 crore per year (the rest should come from private investment). That is a fraction of what it costs to maintain our metropolitan cities with their flyovers, mass transport systems and the like. Hence, the proposed investment is not large and will address an equally large population. It is important that the investment is as massive as suggested here. Anything less will be too little for the rural development block to cross the threshold for development take-off. Marginal investments that were in vogue all these years lie below threshold level. That is why most of the money spent on rural development leaks away. Below-threshold investment is never sustainable; it will never clear bottlenecks effectively. It will never develop the capability to sustain modern development. Instead, low-level investments amplify all three impediments to progress — incapability, leakages, and bottlenecks. Once the capital investment exceeds the threshold level, and only then, can these restrictive factors be brought under control.Let us hope that with the elevation of Dr Kalam as the President, the Government (in particular, the Planning Commission and the Ministry of Rural Development) will gather enough courage to experiment on these lines. Dr Kalam should have little difficulty driving home these ideas at the level of the ordinary people who are also the voters, but he may not be equally successful with top policy-makers. It is strange but true that what appeals to voters will not always appeal to political leaders. There is a reason for this anomaly. A composite plan of the type suggested belongs to no single ministry. In the Government, the rules of Allocation of Business (better described as Isolation of Business) are rigid and sacred. Each government department is a narrow bottleneck that chokes innovation. No ministry, and no minister, dares to widen the scope for fear of treading on others' domain. Dr Kalam has to clear that structural obstacle before he can realise his ambition! (The author is a former director, IIT Madras.)
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