Financial Daily from THE HINDU group of publications Monday, May 03, 2004 |
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Opinion
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Rural Development Columns - Vision 2020 PURA: Emulating the Silicon Valley P. V. Indiresan
PURA (Providing Urban-services in Rural Areas), which has been given pride of place by the President, Mr A. P. J. Abdul Kalam, in his Vision 2020, has got a new accolade: It has entered the seminar circuit. Serious professionals have also started writing about it in journals. We may now expect a cross-fertilisation of minds, and hopefully a more rounded and a better formulation of the scheme. PURA is based on concepts that differ radically from the conventional wisdom on rural development, concepts so very different that they require a radical change in the mindset. Hence, we should be prepared for hostility too not necessarily out of pique but because of sincere differences of opinion. Some likely points of contention are:
A dwindling element of the economy cannot create enough employment to absorb the expanding workforce; it cannot be the Driving Force for future prosperity. Hence, in the place of agriculture, PURA opts for five different types of connectivity, physical (roads and transport), commercial (markets, banks, storage), societal (municipal, recreation, healthcare), knowledge (education, vocation training) and electronic (Internet, computers, telecommunications). There is some acceptance that connectivity is important but many would be unhappy to see connectivity replace agriculture as the prime Driving Force of rural development.
Because the business of agriculture is so vulnerable, it cannot sustain existing employment even. As a rule, employment in agriculture decreases in inverse proportion to per capita income. Hence, as is the case in developed countries, as much as 80-90 per cent of rural employment will have to be in non-agricultural activities. Accepting the fact that ownership of land is no guarantor of economic security (let alone prosperity), that the concept "land-to-the-tiller is outdated, and that rural employment should concentrate on non-farm activity, requires a radical change in mindset that is not easy to come by.
Flutes are simple to make but difficult to play; CDs are difficult to make but simple to use. Hence, the simple flute should be reserved for the highly skilled and the expensive CD for ordinary people. That is, should we not give rural folk a technology that compensates their absence of skill rather than one that parallels their poverty? PURA asks that villagers be given the best possible technology and not be palmed off with substandard ones. The criterion is not how cheap the technology is but how profitable it will be. The acceptance that rural areas should not be palmed off by sub-standard technology just because it is cheap requires a change in mindset, which too is difficult to find.
PURA suggests that, at least as an experiment, select rural areas be funded at the same per capita rate as the rest of the country. Then only we can check whether or not PURA will offer as good returns on investment as cities do. Experts justify paltry allocations for rural development on the ground the fiscal deficit is already excessive and hence, the government cannot subsidise any more. PURA does not ask for extra grants; it seeks for-profit investment. It postulates that rural development can be made a profitable commercial proposition. Here is the fourth change in the mindset: Neither government officials, nor NGOs, let alone private investors, buy the idea that rural development can be made commercially profitable.
That is, the choice is between siphoning off the development fund immediately, or to invest the same to make substantial profits later on. PURA will succeed when MLAs agree to change the way they exploit the funds at their disposal.
In that case, local investors accept substantial financial risk. In return, they may be entrusted with the responsibility of managing the project, or PURA may be operated as an autonomous mission under a full-time official. Unfortunately, local government officials will not easily give up the hegemony they have been enjoying all these years. Until, administrators agree to changes in management style, PURA may not take-off.
This is the choice: Pay high rents (in money, in pollution, in social and psychological costs) in congested cities; waste time every day getting stuck in traffic. Alternatively, pay low rents and invest resultant savings in a better habitat for themselves and for employees. Silicon Valley entrepreneurs did not locate their businesses in such cities as Bangalore and Hyderabad but in villages. They used the higher purchasing power of money in the rural areas as a form of capital. Our businessmen do not locate their businesses in the rural areas the way their American counterparts did. So far, they may have had valid reasons to be different. Yet, only a change in their mindset will make them realise that PURA gives then an option to emulate the Americans. PURA can succeed only with the help of NGOs. Most NGOs believe that it is the duty of the rich to buy rural handicrafts. On the other hand, it should be the duty of villagers to produce what customers want: NGOs too should change in their mindset work for the market, not demand goodwill. The essence of PURA is change, a change from the prevailing cynicism that rural development can be sustained only by charity. In parallel, urban attitudes too, that urban slums are inevitable, rural-urban migration is unstoppable, should also be given up. PURA needs a vision to realise that urban amenities do not need congested, dirty cities. (The author is former Director, IIT Madras. Response may be sent to indresan@vsnl.com) (This is 122nd in the Vision 2020 series. The previous article was published on April 19.)
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