The Hindu Business Line : Beware the low development trap

Those responsible for Millennium Development Goals should check that they do not get into a low development trap; that they do not miss out on nourishing the brain at the top in their concern for the bruised feet below. Top-down socialism for the poor and free markets to serve the rich may not be the best strategy of development, says P. V. Indiresan.

CONTINUING THE discussion from the previous article on Millennium Development Goals, such bottom-up plans run the risk of low development trap — stunting ultimate progress and not attaining full growth potential. They require long-term strategy to grow tall.

As an illustration, IIT Delhi provides for its senior professors elegant 2500 square feet bungalows set in spacious 1000 square yard plots. The rooms are naturally large and the design is elegant and gracious. They were conceived by Prof R. N. Dogra, the Founder Director of the IIT. Though he made the bungalows large and gracious, Prof Dogra skimped on their construction.

He used not cement but cheap surki mortar; the fittings were flimsy: anyone could push open the large picture windows and walk into the house. (Forty years ago, Delhi was so safe that no one was worried about burglars the way we are now.)

I asked Prof Dogra why he could not have spent more on sturdier fittings by saving money with smaller rooms. His answer demonstrated his vision. He said, someday, when I have the money, I can change the fittings and make them better, but once I build smaller, cramped rooms, I can never, never make them larger.

His vision was based on the cardinal principle: Construct according to your means; plan according to your dreams. Nehru phrased the same principle in a different way. He said, do not plan as if you will be poor forever.

If we manage 8 per cent growth, the per capita income will double in 10-12 years and quadruple within 25 years. By that time, our bottom 25 per cent of the population — the section that is below the poverty line — will have an average income as high as the top 25 per cent commands today. Twenty-five years hence, poorest workers will be earning Rs 5,000-6000 a month at today's value of the rupee. They would afford motor vehicles, refrigerators, microwave ovens, DVDs and all such aspirations of present-day middle-class consumerism.

With present day planning, will the poor ever hop to enjoy such amenities? Will the roads be wide enough for their vehicles?

Will the houses large enough to accommodate consumer durables, or even a study table for the children? Will there be enough space to harvest (and recycle) rainwater, space to dispose off domestic, let alone industrial, waste? Will there be enough playgrounds? The poor may have the incomes of present-day rich but, without a Prof Dogra to plan ahead, will they be able to enjoy those riches?

Often, life calls for difficult choices. We live in an imperfect world; accidents happen frequently, at times very seriously with large numbers of casualties.

At such times, hard-pressed doctors have difficult choices to make. Should they attend first the most serious cases where survival is doubtful even with prompt attention, or should they leave them to die and attend to more promising cases where the chances of survival are better?

In normal times, should doctors invest their time and resources to extend the life of very old, terminally-ill rich patients or should those resources be allocated to younger poor who too may require life-long attention? In these situations, there is no universal rule that can guide us; we commit errors whatever decision we take.

Then, at its present stage of development, should India allocate its limited resources for universal uplift, or should it expend vast resources on IITs for the benefit of a minute minority at the top?

In other words, should the country give priority to the realisation of the Millennium Development Goals that help the very poor, and accept that IITs are "non-merit" goods that do not deserve state subsidy, or should the state set apart some of its meagre resources for the minute minority that directly benefits from IIT education?

Whichever choice is made, it will hurt someway or other. The final decision cannot but be political. If politicians are wise, they accept the inevitability of error whatever choice is made and will not obstruct the administration even when they are not happy with the choice.

If they are not wise, they will burn buses — to protest against non-availability of buses! In recent times, we are having many more of the latter type who obstruct all progress merely because that progress is not exactly of the type they want.

The dilemma is should we spend Rs 100 crore a year in one (just one) new IIT, or should we spend that amount to add 20,000 teachers to village schools? On the one hand, adding an IIT increases our technology capability to such an extent that, ultimately, the country can support many more than 20,000 village teachers.

On the other, adding 20,000 village teachers now will bring forth so much new talent that the IITs will, once again ultimately, get a better crop of students than what they have now.

The expression "ultimately" is critical. How long do we wait — five years, ten years, thirty years or a century? If we add 20,000 village teachers now, the results will not show up in an IIT for another 12 years, probably not for 20.

The benefits of investing in the IITs (starting mainly in the 1960s) manifested themselves only 30 years later, in the 1990s, and that too after the government started liberalising. Incidentally, the Millennium Development Goals too are planned to be realised 20 years hence, by 2025. Keynes said that in the long run, we will all be dead. That is the unavoidable problem with all long-term vision.

India spends a larger percentage of its national income on education and health than Sri Lanka does. Yet, when it comes to Millennium Development Goals, Sri Lanka is far ahead of India. Evidently, the success of the Millennium Goals depends both on resource allocation and efficiency of utilisation. These days, the market is considered to be a better allocator of resources than the state apparatus.

Then, should we not leave the realisation of Millennium Goals to market forces?

On the other hand, Indian newspapers are full of advertisements for luxury flats costing anywhere from Rs 1 to 10 crore. We see none for the poor.

Then, how can we leave the realisation of the Millennium Goals to market forces? If we do not, will we not once again get into the low-level equilibrium trap of socialist planning?

Ostensibly, the scheme of Millennium Goals is for bottom-up development, but it is also top-down planning. We, the superior, the better-informed people, decide what the poor should have — the schools, the hospitals and the other appurtenances of development that we think are best for them.

We also want Panchayati Raj and desire to delegate decision-making to villagers elected according to the system of reservation we like (and not according to the democratic choice of the villagers themselves).

I am not saying that the government is wrong; I am merely pointing out that policy-makers are not conscious that the scheme of Millennium Goals aims to achieve bottom-up development through a top-down policy, and that such dichotomy has its own hidden costs.

Reverting to the issue of efficient management of resources, it is no secret that Indian administration is inefficient and corrupt too. Then, what should be our priority — Millennium Goals or the reform of the management system entrusted with the task of taking the country past those goals?

India is like the young girl in the poem who, when she was good, was very, very good; but when she was bad, she was horrid. We jump from one extreme to another and not stay on the Middle Path, or when we do, we do so for illogical reasons.

Some years ago, I visited a fairly well-developed village, and saw a hand-pump fitted right in the middle of the street.

As is common in villages, the street was made of compacted mud, and with water flowing, deep ruts had formed, so deep that our jeep could not move further. I enquired from the villagers why the pump was plump in the middle. They said: "What can we do? Householders on both sides of the street wanted the pump on their side; for the sake of peace, we had to put it in the middle."

I then asked why the villagers could not have cut a proper drain and avoided damaging the street. The villagers had an excuse for that too. They said: "What can we do, the government does not care." An extraordinary pretext from people who dig drains day in and day out. Evidently, too much socialism had destroyed the self-reliance that villagers are famous for.

Those responsible for Millennium Goals should remember that episode. They should check that they are not getting into a low development trap; that they are not missing out on nourishing the brain at the top in their concern for the bruised feet below; and that top-down socialism for the poor and free markets to serve the rich may not be the best strategy of development.

(To be continued)

This is 149th in the Vision 2020 series. The previous article was published on May 2.

(The author is a former Director of IIT Madras. Response may be sent to indresan@vsnl.com)

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