Comments on: The PURA Meeting in Delhi

By: S Dev

S Dev — Tue, 12 Jun 2007 06:33:17 +0000

Arithmetic or not – there are developed rural areas all over the world. The money may nor be there presently. But it can be brought in.There is absolutely no reason why the entire financing has to be borne by the govt. Whenever there is an investment mela, it is for promoting urban India. Come up with profitable investment packages for making PURA a viable economic reality across India’s villages and the money will come in from NRIs, businessmen and capitalists across the world. That is the answer.

By: Buddhist Connect

Buddhist Connect — Thu, 03 Aug 2006 16:40:22 +0000

I agree that India should rethink the way their villages currently exist to get them what they need to grow and flourish.

On Buddhist Connect (http://www.BuddhistConnect.com ) people are discussing ways to help India and opinions and solutions to end the poverty there..

By: little Ram

little Ram — Wed, 12 Jul 2006 04:56:01 +0000

Hi,

The point Atanu is entirely valid- cities and urabnization are the most efficeint form of providing infrastrcture. To further understand how transaction costs impact development take the example of NYC or London as financial capitals- dense urban agglomerations where people can meet each otehr, exchange ideas, and transact substantial business at a lower cost than by living in suburbs or small towns. Pual Krugman had a column on NYC’s resurgence detailing all of this (11th July’s- “The Hindu”).

On getting people out of agriculture- leaving aside farmer suicides which is a most depressing fact, quite simply having human beings engaging in activities that are not economically productive or intellectually challenging is not desirable. We simply do not need 72% of our population engaged in growing food to feed all of us. 10-20% should do if only we adopt solutions based on technology and economic policies designed to create larger number of non-agri professions/ occupations.

By: DesiPundit » Archives » The PURA Meeting in Delhi

DesiPundit » Archives » The PURA Meeting in Delhi — Tue, 11 Jul 2006 21:55:21 +0000

[...] a meeting at the Ministry of Rural Development on the economic development of villages and comes back with insightful observations that take us back to square one.

[...]

By: V

Tue, 11 Jul 2006 21:14:56 +0000

Atanu,
You claim that farmers are commiting suicide because there are too many of them. Can you explain that statement. From What I have read farmer’s suicide is caused by raising input costs, dumping by countries with high farm subsidies, spurious seeds and pesticides and debt trap.
As I understand it, there are so many structural shackles on agriculture that it is impossible to make a decent living from it.

By: Laukik Desai

Laukik Desai — Tue, 11 Jul 2006 08:49:36 +0000

Dear Atanu,
I can’t understand the importance of urbanisation. Although the economy in reducing the distribution cost through concentrating population appeals to me, I dont understand how people living in cities do activitie like farming and tourism.
Cant something like Amul be done? Wont that bring ‘development’ to villages?
Thanks

Atanu’s response: Yes, one can do something like Amul. But while a half a million people make a modest living out of an Amul, when you recommend that to 600 million, it will not work.

Let’s do some arithmetic. The Indian population needs food which its agricultural sector will have to produce. Assume that a person needs a certain amount of raw food per month which at the farm gate cost Rs 500. Assume 70 percent of the Indian population is into agriculture and their only source of income is the food that they sell to the non-agricultural sector. Then the average monthly income of a rural person is Rs 150 per month.

Compare that to this other scenario. Keeping all else the same, assume that only 10 percent of the population is in the agricultural sector. Then the average monthly income of a rural person is Rs 450.

Can you raise the per capita monthly income of a rural person to Rs 450 and yet maintain 70 percent of the population in agriculture? Yes, if you increase the farm gate costs from Rs 500 to Rs 1,500. Or, if you triple the amount of agricultural production — that is, increase productivity — and do so without affecting the price. (Note that in general, when the supply increases, the prices obtained can decrease.) Both are unlikely for various reasons.

The bottom line is that the population has to move out of agriculture and into non-agricultural activities. Farmers will stop commiting suicide when farmers are able to make a decent living out of agriculture. They cannot do so now because there are simply too many people who are into farming.

For people to be productive in non-agricultural activities, they generally have to be in cities. That is called “urbanization.”