Atanu Dey On India's Development

Journey to Kanpur — Part 2

Gates of IITK

It takes nearly two hours by road to get from the Lucknow airport (Kanpur does not have an airport) to the IIT campus in Kalyanpur outside Kanpur city limits. The road is fairly good by Indian standards and just before entering Kanpur city, it crosses the wide expanse of the river Ganga.

It was just a little before midnight when the car turned towards the IIT main gate. I felt a sense of nostalgia and sadness.

The IITK campus main gate is a not imposing. Off the highway, it is nestled among a bunch of ramshackle shops. It is hard to imagine a less dignified entrance to one of the most premier engineering and technology schools of India. The campus is not as shabby as the entrance would make one expect, however. Built in the late 1960’s with American collaboration, it does bear a passing resemblance to some American campuses. The halls of residence, and the academic and administrative buildings are of various vintages, and the dominant theme is exposed-brick and concrete architecture. Situated in the dusty semi-arid plains of the state of Uttar Pradesh (UP), the campus is huge compared to the student population it serves.

It is surprising to note that IITK serves only 2,000 undergraduates and about 1,600 graduate students currently. A couple of decades ago, during my time, it had half that many students. The well-known American campuses, in comparison, serve around 25,000 students. UC Berkeley, the most recent of my various alma maters, has 35,000 students. The UC system with ten campuses has a student enrollment of over 200,000. All the IITs combined do not add up to even one campus of the University of California. Of course, IITs are mainly engineering schools and a fairer comparison would be between the sizes of the engineering schools.

All told, the IITs combined take in less than five thousand students a year. The competition is something fierce. More than 300,000 students take the “Joint Entrance Exam” (JEE) and depending on one’s rank in that test, one gets to choose the campus and the branch of engineering one enters. The test rejects more than 98 out of every 100 who appear for it.

Vistor’s Hostel

I checked into the Visitor’s Hostel (VH, as it is called). It is a sprawling complex of buildings connected with covered walkways enclosing well-kept lawns and housing about 200 visitors. The rooms are big and wasteful of space. Though late into the night, the heat of the day was still trapped inside the room and the window air-conditioner struggled mightily to make the temperature bearable. Like most living quarters in India, the VH was not designed with usability in mind. I find that most Indian construction is ill-suited for India’s climate.

Rural Infrastructure

I was at IITK to participate in a roundtable discussion of sorts on India’s rural infrastructure. There were about 30 participants, mostly from academia and from the government. How do we provide for roads, power, telecommunications, water, sanitation, and other infrastructural elements was the question.

My take on the whole issue boils down to these points:

* First, we must understand why rural infrastructure is the way it is—practically non-existent despite numerous plans and pretty large amounts of spending over the decades
* Second, what are we doing about rural infrastructure? Should we be building for the rural landscape as it exists today or should we be focusing our energies on what rural India should be (and would be) in the future?
* Finally, the model for rural infrastructure growth must include as one of its components the RISC concept outlined by yours truly

One of the participants, Prof PV Indiresan, presented his model of rural development called PURA–“Providing Urban Amenities in Rural Areas” (which you may know is promoted by President APJ Kalam.) The problem I have with PURA is simple: the numbers don’t add up. Per rural resident, the capital investment required is around Rs 100,000. If we had that kind of money to spend on rural development, we would not be a poor country in the first place. And even if we had that kind of resources, it would still be ill-advised since the model is economically wasteful. I argued why in my brief presentation which followed Prof Indiresan’s.

Scattered Economy

India is a dual sector economy: a large rural population (around 70 percent) and a much smaller urban population. The rural population is scattered over 600,000 villages, and the urban population in towns and cities that are severely overcrowded. Development and urbanization of the population are causally linked: each is a cause and consequence of the other. Therefore India’s development depends on the urbanization of India’s rural population.

We need to keep the distinction between the “development of rural people” as opposed to the “development of rural areas” in mind because they have divergent implications.

The existing towns of cities in India are bursting at the seams and cannot handle any more rural-urban migration. The only recourse is to urbanize the rural population in situ. Now urbanization has many facets, one of the most important being that of the density of aggregation of the population. Agglomeration economies arise when lots of people live very close to each other, as in Mumbai, NY City, or Tokyo. That is the reason that cities exist and why living in a city is economically more efficient and more attractive to the average person. You cannot obtain the same benefits if you are living in a village of 1000 people.

The average population of an Indian village is 1,000 or so, and there are 600,000 villages. Can all these 600,000 places be “urbanized”? Yes, if you had a nearly infinite supply of resources, which in our case we have not got. Now ask another question: Do we really want our population to be living in 600,000 little villages, say, 40 years from now? The answer is clearly no because the fragmentation of such a large population is inefficient and a recipe for poverty. What India needs is the transformation of these 600,000 villages (with about 1,000 people on average) to 600 cities (with about one million population each.) It will be a distributed economy but not a scattered one.

RISC

If we should be moving away from 600,000 villages, then we should not be spending scarce resources in trying to keep the status quo as PURA appears to aim to do. The vision should be seed a sufficiently small number of places with adequate infrastructural investments so that the surrounding rural population would be able to benefit from it and which in time will become the core of the new cities we must have in rural areas. That is what my RISC model does and does it without invoking neither the heavy hand of state planning and government spending (and its attendant corruption.)

As I am wont to do, at some point in the discussion I was provocative and basically said that the reason government intervention has failed for so long was simply because the government is ridden with people who are immoral, corrupt, short-sighted, and stupid. Besides that, I noted the practical and theoretical impossibility of the success of any command and control economy. This did not go down too well with one high-ranking government bureaucrat. In his defense of the government, he made the incredible claim that the public sector incumbent firms (BSNL, MTNL) were responsible for the amazing telecommunications revolution and that too against all the attempts by the private sector entrants to not play by the rules. As they say, ulta chor kotwal ko daatey.

Later that day, many participants told me that they agreed with my position. One lady, who was full of praise for PURA, after my presentation said that she is going to re-examine her conviction.

My official visit to IITK ended with the end of the workshop. The next day I was there as an ex-student wandering the campus recalling those days when I was much younger, much stupider, and much less cynical.

[Continue?]

  • http://lifeandsomething.blogspot.com gaurav

    Atanu,
    Warning:My uninformed opinion follows

    Your plans seems to make sense.
    Have you dealt with agriculture?
    I am not an expert, but is land distribution the way to go.
    Land distribution (and most probably non senscial restriction on usage and sale of agricultural land)inevitably results in small land holdings.
    It is a double whammy, the farming is almost always subsistence based.
    This means that marginal farmers remains condemned to poverty and the output is low compared to international standards.
    The way out of it should mechanized farming, which may be possible if corporate sector is allowe by realxing land acquisition.
    The only thing I am not sure is whether from perspective of energy scarcity this is feasible.

    Apologies for being offtopic, but I had to get this off.

    Regards

  • http://ruralindia.blogspot.com/ Malapati Raja Sekhar

    Short and crispy explanation of your paper while comparing PURA. Why didn’t you link to “Risk paper”?

    Raja
    http://malapati.blogspot.com/

  • Abhijat

    Dear Atanu,

    I am ignorant of the economic history of our country. All I wonder is: are there any lessons for the present from the past ? I feel that there may be some lessons there as I cannot imagine affluence without some sensible political and economic structures. Perhaps not all of the lessons would be applicable to the present context. To what extent do RISC, PURA etc. adapt and use these lessons, if at all ?

  • http://chrestomathic.blogspot.com Jyoti Iyer

    “Continue?”

    Yes please!!

  • http://www.cse.iitb.ac.in/~soumen/ Soumen Chakrabarti

    For the foreseeable future, moving the villager away from subsistence farming can be achieved only by removing subsistence from the villager! There is good reason the average American farmer produces food for 50 mouths and the Indian counterpart barely manages 2–3. Per-capita energy is the final arbiter of how we live. I cannot see India’s per-capita energy consumption increasing by even a factor of 3x ever, which will still be far lower than EU and US numbers. Even China is significantly ahead, although I don’t know how much of that energy leaves China via exports. I don’t believe there is any plausible route other than very quick reduction in population.

  • Patel

    Soumen,

    I think urbanization and development which Atanu pointed out are the best ways to reduce population.

    Policies designed to control growth rates will create welfare problems in the future. This is something China may one day have to deal with.

  • little Ram

    Going back in time, one can see that the history of Indian civilisation has cetered around city-states that ensured prosperity of its dwellers who were formerly left unprotected, with poor access to various facilites in their ‘rural’ setting. This is probably true of any other nation as well. Hence this would point to development of rural hubs or nodes that would actually develop into mini-townships or cities as Atanu says.

    My only point of concern is whether 600 cities is the right number. I have been more inclined to a figure clsoer to 6000 of these hubs with a population of 100,000 each on an average. Feedback?

  • http://wateronlotus.blogspot.com Raghuveer

    Atanu,

    Say, there are 1000 villages with 1000 people in each. How does it become a city/town? It would be insightful if you can give more details/practical steps to be taken to realize your vision and discuss the implications.

    This is not a rhetorical question, am really curious to know.

  • shiva

    With 70% of our fellow citizens subsisting on agriculture at little better than starvation wages allowing good money into the sector makes sense. There is a lot of dead investment by way of benami land holdings in large parts of India representing bad money; that earns the government no taxes, provides meagre wages and perpetuates a host of social and economic evils. The good money could come in many ways, corporate money (which is well regulated through financial market and labour legislation and oversight); cooperative money (as with the dairy sector) and the sugar sector (if you ignore the disastrous pricing of water and electricity). The temptation to run things from New Delhi must be avoided and curbed and experiments at every level must be encouraged.

  • surojit

    I’m always amazed at so many people trying to reduce population. Population density and GDP to population ratio should be more important metric. Our population density is still lower than Japan. Even non-industrialized Japan has higher population density than India. (So it’s not true that they first industrialized and then started to procreate.)
    Instead of reducing population we should focus on increasing income. Let’s work on the numerator, shall we?