The Hindu Business Line : Initiatives to spur development

Schools and hospitals will work better if they serve the needs of more than one village. The government should subsidise rural bus services from the villages to these centres. This can spur entrepreneurial initiative so that schools, transport systems and hospitals develop in tandem, says P. V. INDIRESAN.

Good schools and hospitals will be viable in rural areas only when public transport improves.

The UNDP has identified education and healthcare as the two prime indicators of social development. India’s rank in terms of the Human Development Index is poor because of its backwardness in the fields of health and education. No one has stopped politicians and administrators from providing good governance in education and healthcare. Social activists have been urging them to be more committed and efficient, but without success. As they have all failed, we need to improve our governance.

The World Bank defines governance as the traditions and institutions by which authority in a country is exercised: How governments are selected, monitored and replaced; how it secures the respect of citizens.

Politicians have found that they can win votes by offering alcohol or even TV sets. They have not found it worthwhile to offer better schools or hospitals. Possibly, that is because our people are poor and their immediate priority is money; they possibly do not understand that they will earn more when they are better educated and are in better health.

Hence, our political class prefers showering gifts of TV sets and win more votes instead of offering better schools and healthcare. That remains the view in spite of the growing Naxal violence which most people agree is the result of poor education/health services.

MAKE LARGER SCHOOLS, HOSPITALS

In the matter of social development, ever since Independence, our governments have decided that primary schools and primary healthcare should be a feature of every village. That has not worked. No doctor or teacher is willing to live in a poorly endowed village.

The time has come to give up the unworkable proposition of compelling unwilling teachers and doctors to move to villages, but instead make it easy for students and patients to travel to good, large schools and hospitals situated in nearby villages. Even if we let children to travel to an adjacent village, we can have a large school with at least nine teachers rather than nine single-teacher schools. Likewise, we can have hospitals with several doctors who can at least converse with and consult one another.

The issue in governance is: Should we have 500,000 single-teacher schools or 50,000 ten-teacher schools? Should we attempt a primary health centre in every village or should we have some 10,000 or 50,000 hospitals?

If we choose the latter option, we will need in addition to good schools and hospitals a rural transport system to carry students and patients. All these years, most villages did not have motorable roads. That is no longer the case; most villages have roads but no public transport service. Without such a service, we cannot make larger schools and hospitals (or markets) successful.

The fact that rural connectivity is poor indicates that rural bus services are not profitable. It appears to be a chicken and egg problem: Buses will be successful if we have good schools, hospitals and markets in rural areas but in their absence they are not viable.

Likewise good schools, hospitals and markets will be viable in rural areas only with good bus services. Each category — bus service or social services (and markets) — is waiting for the other to come up first and hence neither is emerging!

The Delhi Metro would not have become the success it is but for the virtually zero cost, long-term Japanese loans it gets. It has the support of a benevolent government which absorbs the risk of escalation of the value of the Japanese yen. Why cannot a similar transport arrangement be extended to developing rural buses? They could get a low interest loan with the government making up the interest cost.

Once rural buses get zero or low-interest loans, private initiative will develop rural connectivity in a much better measure than at present – provided there is no need to get bus permits and other licenses. In turn, that will lead other entrepreneurs to develop good schools and hospitals.

TARGETING SUBSIDIES UNVIABLE

That leads to the second issue in governance: Which one should we start first — social services or bus services, or both? A government with its enormous resources can resolve the problem.

Unfortunately, our government is so obsessed with subsidies to the “poor” that it has given no thought to meaningful social development.

Governance in India has become contentious because the government (that is, both politicians and administrators) is more concerned about subsidising the poor alone. For that purpose it has established a large and unwieldy bureaucracy merely to identify the poor. It would be interesting to consider what will happen, how much the government would lose if subsidised buses are available to all, with no condition that they be restricted to the poor only.

Incidentally, suppose a benefit worth, say, Rs 1,000, is given to those identified as poor by the state. There will be a large number whose income will be within Rs 1,000 of those who have been declared as poor.

Therefore, the government’s largesse will alter the economic hierarchy — the poor who get the subsidy will become richer than those who are neglected. Hence, it appears that we should give up the illusion that we can give the poor, and only the poor, certain benefits. This opens a Pandora’s Box; it is not worth the trouble.

PRIVATE INITIATIVES

India’s Human Development Index will improve only when its education and health services in rural areas improve.

Rural education/health services will improve only when schools and hospitals (as well as markets) become bigger and are not distributed in tiny sizes over every village.

Large education/health services will be effective only when rural public transport improves.

Rural public transport will improve only when their cost is subsidised, and restrictive rules are removed.

Hence, I appeal to private entrepreneurs to try an experiment. Why not support some 15-20 villages by offering a similar number of buses free of interest and induce local entrepreneurs to establish good quality English medium schools as well as secondary care hospitals and markets? That subsidy will cost a couple of crores of rupees.

Such a scheme will provide a feedback, whether my proposition is right or not. As a commitment to my argument, I am prepared to contribute 10 per cent of that amount out of my personal savings towards such a scheme. Anybody (including the government) interested?

(Concluded)

(The author is a former Director, IIT Madras. blfeedback@thehindu.co.in and indiresan@gmail.com)

(This is 263rd in the Vision 2020 series. The last article was published on October 19.)

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