Atanu Dey On India's Development

The Logic Behind RISC

Understanding what motivates a specific solution to a problem is important if we are to have some reason for pushing the solution. Here is mine with respect to RISC – Rural Infrastructure and Services Commons .

It is a bit of a cliche to remark that our resources are limited while our wants are unlimited. To say that resources are limited is an incredible understatement when considered in the context of rural India — 700 million people and most of them below the poverty line even by Indian standards, leave alone global standards.

There is what can be called the first degree of poverty — the absence of resources. To make matters worse, we have a second degree of poverty: the inability to efficiently use what little there is. Though there is no escaping the first degree of poverty, there are ways of preventing the second degree of poverty.

This is what motivates me: what can be done with the limited resources so as to make the best use of them. It is depressing to note the almost unimaginable waste. I will give only one example here. But it is only one of the hundreds of such examples — all of which add up to create an almost inescapable prison that the economy is chained within.

Here is a news item:

BSNL lost Rs 9,000 crore (Rs 90 billion) for providing telephones in villages and remote areas, between its corporatisation in October, 2000 and December 31, 2002.

In a little over 2 years, it lost nearly $2 billion. It is a staggering amount. What does that really mean? Expenses exceeded revenue by $2 billion! Why did this happen? Largely because the use of the telephones did not generate sufficient benefit to the users to justify to them a level of usage that would pay for the capital and on-going costs of providing the telephones. It costs orders of magnitude more investment per rural telephone line than it costs to provide an urban line. The rural telephones are rarely used — if they are working at all in the first place.

So what are we doing wasting $1,000,000,000 each year in putting up these lines? We have village public telephones in about 300,000 villages (out of about 600,000 villages in total.) That is, we lost about $3000 per village PER YEAR. Imagine the alternative uses of that money for a village. It could easily fund a primary school. Imagine 300,000 public schools. Imagine the number of teachers you could employ. Imagine the number of children who would benefit. Imagine the multiplier effect on the economy of having a few hundred thousand additional literate people. And now compare that to the utter waste of installing dead phones in villages.

Why are we doing this? Is it because some brain-dead bureaucrat in Delhi decided that? Has he thought through the welfare implications of that policy? Is there an alternative policy? Instead of incurring a loss of $3000 per village per year, how about aggregating that for 100 villages, and using $300,000 to provide a comprehensive telecommunications center that WORKS and that actually recoups the investment though user fees?

Let me argue by analogy: imagine, just as we have the scheme of village public telephone (VPT), that we had a ‘village transportation system‘ (VTS) where we decided that each village will have one Maruti at the cost of Rs 4,00,000. Of course, lacking maintenance facilities, spares, contention about who can ride it and when, it just sits there and rots. But we have spent Rs 400K on this car, and in the 100 villages we have spent Rs 40 million to provide each with a car.

Alternatively, if we had used the Rs 40 million for this:

20 minibuses @ Rs 1 million each — Rs 20 million
40 drivers @ Rs 100K salary per driver per year — Rs 4 million
Maintenance and fuel subsidy — Rs 5 million

I could go on but you get the picture: PUBLIC TRANSPORTATION that works. A reliable bus service twice a day.

Economies of scale kick in. Fact is that Americans can afford to neglect public transportation; we cannot. So also, Americans can afford to have 2 PCs per capita — one at home and one at work; we cannot. We have to use our limited resources efficiently and intensively. That can only be done if we use scale economies and create minimum economically viable units. Thinly distributing limited resources is not the way to do this.

Given limited resources, we have to put them to that use which has the maximum return on investment. Computing for the masses is a great idea. But can we afford that right now? Probably not. What we can do, and should do, is to bring computing to those that are most capable of benefiting from it.

It is a war out there, as they say. In that context, the concept of triage is very important. The big dic defines triage as “the sorting of and allocation of treatment to patients esp. in battle and disaster victims according to a system of priorities designed to maximize the number of survivors.”

Trying to do everything for everyone at the same time leads to nothing being accomplished at all.

So my thesis is this: build a bridge across the digital divide but don’t try to get everyone across the divide all at once. It cannot be done because the bridge we can afford to build will have a limited capacity. Try to get all of them on board at once, and we all end up at the bottom of the divide.

The solution is to provide a consistent solution that will be useful for at least some part of the rural population, rather than a solution that is all pervasive but of little use to anyone.

A RISC is located away from the majority of the population. You have to get on your bicycle and pedal for an hour to get there. But when you do, you find that you have come to a mini-city where you get everything that you need — internet access, telecommunications, market services, distance education, agricultural extension, banking, health services, …