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TECH TALK: Rajasthan Ruminations: Government and Rural Development

February 19th, 2004 · No Comments

Little rural development can take place without the active leadership of the government. While it is possible to do pockets of small successes, for an across-the-board transformation, the state government must lead the way. It controls the machinery and the resources, it has people with authority and influence at various levels. In other words, it has power and money. In the past, few state governments have shown an inclination for a sustained focus on development other than just before and after elections. With the electorate now exposed to the media and literacy rates increasing, future elections will be fought less on caste and promises, but on hard issues like bijli, sadak and paani (electricity, roads and water) as the recent Assembly elections demonstrated.

This means the government will have to do just that govern. In doing so, it must use its capabilities well. First, it must say no to Corruption. This is perhaps the hardest thing for people in power to do. But without it, there can be little development. If the designated money does not get spent on where it should be, there is little hope. Second, it must focus on creating infrastructure the public goods, as economists call them. This means focusing on infrastructure and human development building proper roads, electrifying villages with reliable power, provisioning water supply, focusing on school education and adult literacy, ensuring proper healthcare and sanitation for everyone, and making sure there is availability of food for the poor.

One of the models that the government can consider is the Rural Infrastructure and Services Commons (RISC), proposed by Atanu Dey and Vinod Khosla (overview, full paper) to address the co-ordination failure that constrains service providers from setting up shop in rural India. Think of RISC as a hub or a rural mall, serving a population within a bicycle-commute distance. From the Deeshaa website:

The Infrastructure-level (I-level) provides a reliable, standardized, competitively-priced infrastructure platform. This is achieved by the coordinated and cooperative actions of firms that specialize in the component activities. Co-located on the Services-level (S-level) are all kinds of firms that provide user services. The presence of the I-level reduces their costs and therefore the prices that the users face. Economies of scope and agglomeration are obtained by the presence of the variety of different service providers.

Given that rural populations are very poor, it is reasonable to expect that the aggregate demand of a single village for any single service will be very low. However, the aggregate demand for, say, a 100 villages for a single service could be significant. Aggregating the demand for many different kinds of services of the same 100 villages would translate into lot of services. These services would require infrastructural inputs which can be commercially and sustainably supplied.

According to Atanu Dey, RISC has the potential for achieving the multi-faceted goals of sustainable economic development through more efficient utilization of available resources. RISC can provide the starting point for addressing the infrastructure and service lacunae that prevail across rural Rajasthan and India.

Whether we like it or not, the spark has to be lit by the state government. For long, much of the population has remained in the dark about the world outside. Now, this is no longer the case. Economic prosperity and the desire for a better tomorrow is becoming the driver for the New India. The transformation of the Bharat that we have so far forgotten and left behind needs to build on Indias democratic foundation and its entrepreneurial culture.

Tomorrow: Rural Development and Entrepreneurship


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