Ideas for India – Part 2

Continuing the note Atanu Dey and I had written from yesterday:

  1. Urbanization. Urbanization is both a cause and a consequence of economic development. No country has developed without being also largely urban. India’s economic future depends on India’s success at urbanizing its immense rural population. Therefore in the matter of rural development, there is a distinction between the development of rural areas as opposed to the development of rural people. The former is neither necessary nor sufficient for development; the latter is indispensible and can be achieved most effectively by urbanizing them. This requires the development of liveable cities that would absorb hundreds of millions of people who would be engaged in non-agricultural sectors.
  1. Transportation. India is a large country with a large population. For the economy to prosper, people and goods have to be efficiently moved fast over large distances. India is approximately ten times as densely populated as the US. It therefore cannot afford the solution that works for the US for transporting people, namely, air travel. What India needs is a land-based system and more specifically a rail-based transportation system for both goods and people. The technology exists for super-efficient, super-fast rail systems. India has to seriously invest in that and replace the century-old current railway system. Further, within cities, India needs to have efficient public transit system and not rely on automobiles.

Note that each of the four elements has dependencies with the others. For instance, the creation of the human capital (education) requires urbanization, which in turn depends on the availability of energy and a good transportation system.