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2/18/2008 9:41:20 PM
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In archives there is a photograph showing Rabindranath Tagore listening to the woes of a distressed and disturbed Gandhi. It was then that Tagore told him: “If they don’t follow you, walk alone.”
Introduction
India has very ambitious social sector programmes — in areas of employment, health, education, infrastructure development, etc and the outlays on them have been increased. But so far the results have been less than desirable. Why? Two words: failed systems.
India’s planners have developed well-conceived social programs, but its speedy implementations are inhibited by a contentious and fractured political system and incompetent bureaucracy. India needs new institutions to deliver services as India continues to depend on tried and tested, but failed systems of delivery. There is an urgent need for transforming mindset of all key agents of social change, from politicians to trade unions, for India to achieve its aspiration of becoming a major nation. Substantial progress in public-private partnerships is missing. Private sector needs to devise alternative institutions, may be credible NGOs (non-governmental organizations) to deliver goods and services to the masses rather than rely on incompetent government bureaucracy.
India has more than a million NGOs. A small number of NGOs have credibility with an established record of accomplishments as community services providers. Most Indian NGOs refuse to team up with other NGOs presumably for trust issues. There is an urgent need in India for a self-regulatory coalition of NGO organizations, similar to India Development Coalition of America to bring them together for self-evaluation and rating NGO performance using well documented criteria to identify and periodically publish a list of top 1% NGOs. If top 1% of million NGOs duplicated track record of NGOs identified in this essay then 600,000+ rural communities can be developed in about 5 years.
A book, “How to Change the World - Social Entrepreneurs and the Power of New Ideas,” by David Bornstein (Oxford University Press, 2004, offers an interesting overview of global NGO movement.)
The demographic explosion and ever growing expectation for modern amenities to improve quality and standards of life have challenged tasks of development. It is evident that more than traditional knowledge is required for development of rural communities. For India’s accelerated development the preservation of traditional rural life should be complimented with modern science and technology. Farming incomes can be improved through productivity gains using farming equipment, power, communications devices, water harvesting, transportation and storage facilities for improving shelf-life of perishable produce, etc. Surplus rural labor should be functionally literate to service, install, operate and maintain modern products applicable to rural life. The essay in two parts covers these issues of rural development.
Rich Poor India India is a young nation, both rich and poor. Ignoring spin doctors engaged in impression management India offers both good and bad. India’s richness is due to abundant natural resources, good alluvial soils for farming and a wealth of minerals ready to be mined. It has a youthful population, ready to work to support a burgeoning economy. One-half of its 1.1 billion people are under the age of 25. India is also poor. According to the World Bank, more than a third of its citizens live on less than Rs 40 a day. India has a deficit of good roads, hospitals, sanitation facilities, drinkable water, and power.
Growth is the best antidote to poverty. Poverty is a shame and a stigma; with rapid economic growth and a workforce that will stay predominately young for decades India could eliminate abject poverty in less than two decades.
India is challenged as the good and bad is a set of warring realities. Great natural resources are available but administrative policies and laws are inadequate to exploit them efficiently. For example, an abundance of native talent and young workers are handicapped by an education system too small to handle the task of turning out the managers, engineers, judges, and doctors for a country of more than a billion populations. India has a first-class medical system available in urban areas and weaknesses exist in delivering healthcare to the countryside.
A part of being challenged is a legacy of the lost three to five decades that saw the growth of the “monstrous and rapacious structure” of a socialist government. Socialist jargon pervaded all walks of life. State-run economies are unwieldy and the socialism of the early decades “stilled entrepreneurs.” India’s biggest remaining challenges are education and healthcare.
There are too few professional schools. We have to have more knowledge workers; for example, compared to India China produces 10 times more new Ph.D.’s. There are still too many school dropouts, too much illiteracy and a dearth of technical education, trapping the poor in agriculture. About two-thirds of agricultural workers are not landowners, and the average farm is only 2.2 acres anyway. The next generations of children have to be weaned from agriculture.
In healthcare, despite some progress, India still has high rates of infant mortality, 7 million blind children, and endemic rural problems with cholera, malaria, and other eradicable diseases. A National Rural Health Mission is making a difference and so is a program with state governments to provide health and life insurance for the poor, and an increase in old age pensions.
Government’s proactive measures to improve healthcare by enacting laws for sale of enriched foods based on modern scientific discoveries, not a part of traditional knowledge, are resisted by traditionalists. Traditionalists offer increased costs for government mandated QC (quality controls) and loss of low skill rural job arguments to disapprove of incorporating essential nutrients such as iodine in salt, vitamins in oils, iron in flour and production of other enriched foods. In spite of progress to produce abundant food supplies an estimated 300+ million Indians are chronically undernourished and suffer from dietary deficiencies of essential nutrients including vitamins and trace elements responsible for good health.
Although food is available, with daily per capita income of less than Rs 40 poverty continues to defy elimination of hunger from India. After independence famines in India disappeared but elimination of large famines in India must not be seen as the removal of undernutrition and hunger. India has a very high proportion of undernourished people, who are chronically hungry, to varying extents. In last six decades potential increases in the GDP were neutralized as India’s annual food production increased four folds from about 50 million tons to over 200 million tons and population grew three fold to over a billion.
The first six years of the new millennium have been economically the best since independence in 1947; from 2001 on, growth of GDP averaged 6.9 percent; after 2004, that figure went to 8.6 percent and in the last fiscal year to 9.4 percent. A growing economy means paying an environmental price; we should be as concerned about the environment and climate change as any developing country and we need power; we need to mine our coal; we need to dam our rivers. The engine of these and other reforms is economic growth. Let’s not deride growth for growth is the starting point; It is our chance to wipe out abject poverty.
Traditional Development and British Raj
A popular traditional development model is associated with Gandhian though. India’s traditional development was systematically dismantled during British Raj. The traditional knowledge is devoid of modern scientific discoveries and technologies.
Elite traditionalists promote Satvic or environmentally friendly and self-reliance methods for rural development. There is merit to reliance on India’s traditional knowledge for rural development. However, demographic changes and a universal desire to improve healthcare, quality of life and living standards require that traditional knowledge be complimented with modern sciences and technologies for overall development of India.
India suffers from colonial hangovers. Traditionalists disliked industrialization as British dismantled traditional manufacturing businesses. The food production stagnated and distribution systems collapsed as British Raj neglected rural development. The administration failed to prevent millions of death due to large famines; for example up to 3 million Indians were starved to death in the Bengal famine of 1943. British reoriented production to supply raw materials for its industries in U. K. and created in India a market for British manufactured goods and administrative services. They established railways, postal services, roadways, canal systems in Indus basin, etc primarily to improve its defenses and to ensure rapid deployment of its forces to potential trouble spots in India. Such actions were to compliment administrative set-up for tax collection to maintain British army and systematically drain India’s financial resources. Before 1947 for five decades the average GDP growth rate was about 1% in British Raj.
Demographic Changes
Population of British Raj more than doubled from 1850-1947 and that of independent India tripled by 2004. Several factors contributed to population growth not only in India but also globally. In colonies death and destructions related to frequent religious, sectarian and tribal wars by the loot and plunder brand local warlords were inhibited. Discoveries of modern medicines, such as antibiotics helped control infectious diseases. The relative peace coupled with declines in infectious diseases related mass scale deaths facilitated population growth. It took 1,800 years for global population to be 1 billion and it grew to 6.6 billion by 2004. The projections are by mid-2100 the global population may stabilize at 10 billion. India’s population in 2006 exceeded 1.1 billons growing at less than 2% per year.
Hybrid Development Model
The hybrid development model improves traditional knowledge by complimenting it with modern technology and scientific practices. Adapting modern technology requires use of sound business principals to justify high wage skilled labor for production. Unless a high value added product is to be produced, higher labor costs are unjustified. High labor costs leads to adopting methods of mass scale production to reduce costs and efficient use of supply-chain managed distribution system makes retail prices affordable to masses.
Being a land of 30 states, 600+ districts and 600,000+ villages for rapid development India requires an accelerated rate. A study of examples like the Barefoot College designed for training functional literates with learning by doing methods for rural development shows that by using tiny solar photovoltaic (SPV) plants operated by semi-skilled labor it has built a commendable record of achievements in more than thirty years of operations. The College has successfully developed a few hundred rural communities in its life and produced more than 15,000 functional literates. India needs 2,000+ equivalent colleges and NGOs like those identified below to develop all 600,000+ villages as fast as possible.
Rural Development Programs
Traditionalists want minimum machine driven mass scale production and decentralization for promoting rural employment. NGO institutions, to name a few - the Barefoot College, Bunker Roy, Vigyan Ashram, Yogesh Kulkarni, Sehgal Foundation, Jay Sehgal, BAIF (Bharatiya Agro Industries Foundation, Dr. N.G. Hegde), (SVYM Swami Vivekananda Youth Movement, Dr. R. Balasubrahamaniam and VILD (Vivekananda Institute for Leadership Development, Mysore, Dr. M.A. Balasubramanya) - are collectively producing thousands of rural functional literates to use traditional knowledge updated with modern technology and sciences to make them employable in modern industries.
The NGOs address problems of living in a heterogeneous poor society using a strategy that considers each family as the unit of development. They adopted a multi-disciplinary village cluster development approach for socio economic development by blending development with applied research, training and promotion of people"s organizations for program implementation and sustainability. They ensure empowerment of women, education and community health for better quality of life and integrate environmental protection with livelihood programmers. Various programs implemented for example by BAIF and its associate organizations are spread to more than 45,000 villages in Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh, Uttarakhand, Bihar, Gujarat, Rajasthan, Madhya Pradesh, West Bengal, Orissa and Jharkhand.
Other examples for employment of rural functional literates include: PCB manufacturer in Rajkot manufactures sophisticated PCB of cell phone for Rs. 20. By setting up screen printing equipment thin film technology for solar cells is turned into cottage industry for running by rural women who are skilled in making highest quality roti, puri, dosa, paratha, etc. A producer of electronic inverters for CFL tubes (cost Rs. 60) in Rajkot employs rural women workers. Each producer has to adopt user friendly instructions sheets and techniques to train workers from rural communities to be skilled functional literates.
Rural Electrification Strategies
An estimated 100 million homes of poor in rural and slum communities lack electricity. The homes (90+ %) are within 200 meters from neighbors with electricity. An 11W CFL light (brightness of ~35 lumens/watt; lumens is a measure of brightness) with a rechargeable battery delivers light equivalent to 50 watts incandescent light (brightness of ~10 lumens/watt). All poor people can have bright light at home for less than Rs. 1.65 per day by adapting one of three practical cost-effective affordable scheme for providing three hours of light with one 11W CFL tube to each of 100 million poor homes and it requires no application to electricity board, no deposit, no meter rent, no harassment of or by electricity board, and no house wiring.
Semi-conductor based LED lamps (with 110 lumens/watt ratings) are likely to replace CFL lamps in near future. As it stands now for a given wattage, at present improved semi-conductor based LED lamps emits 2 - 3 times more brightness than CFL and ~10 times more brightness than that of an incandescent lamp. To reduce electricity bills a trend is to switch from incandescent lamps to CFL lamps to latest LED lamps.
The R & D to make LED lamps with 200+ lumens/watt brightness is progressing at a rapid pace. Theoretically at 100% efficiency one watt equals 680 lumens. Continuous rapid advances in LED lamps technology potentially can reduce power cost to consumers. For example, in near future it would be possible for a four bedroom home of 2000 to 3000 sq. feet area to use twenty one watt LEDs of 200 lumens/watt rating to deliver same level of brightness as the 20 11W CFL or 20 50W incandescent lamps currently do.
Consumer’s electric bill represents wattage of energy used. The cost of energy usage for home will continue to go down by an order of magnitude or more as they switch from incandescent to CFL to LED based lamp technology, not to mention desirable impact it will and should have on environment; improvements that come with decreasing use of power (watts) needed to infrequently (once a month instead of once a day) recharge batteries or to supply power to households through power grid.
Once the LED light technology is perfected to deliver highest possible efficiency, it would be possible for homes to cut the monthly power usage equivalent to power needed to recharge a standard 12V battery.
Electrification of homes within 200 meters of electrified homes: If grid power is available without long periods of power shedding then a viable method for poor rural families is to buy a set (costs less than Rs. 500) of a CFL tube and a rechargeable 12V X 4.5Ah battery. Battery can be recharged every day by a battery charging service provider. CFL tubes in an elegant plastic cabinet with reflector and small inverter cost Rs 200 and a two wheeler small battery costs Rs 250 to 300. Powered by a sealed maintenance free battery weighing 1.5 kg an 11W CFL tube can provide very bright light for 3 hours.
Battery chargers available for Rs. 3,000 to 3,500 can charge 30 batteries at a time and with 2 shifts in 12 hours 60 batteries can be charged to serve 60 home accounts. Community battery chargers installed by Gram Panchayat, a cooperative society or private operators can electrify all rural homes. In every village with grid connection at least few family homes have electricity. An Indian village typically has 200 to 400 homes. Three to six homes can install community battery chargers to provide charging service for 60 batteries per installation per day to electrify practically all homes in the village. Individual tiny battery chargers are also available at Rs 100 to 125.
Cost-performance estimation: Power consumption of 11W CFL tube for 3 hours equals to less than 40W and for recharging batteries power needed is 50W to 80W at 50 - 80% efficiency. One KW or 1000W costs an estimated Rs. 5 from power grid or to produce power using a tiny (3 to 10 KW) BSTP (biogas and solar thermal power) or SPV (solar photovoltaic) plant. Estimated cost for 50W to 80W power will be less than 40 paise or less than 12.5% of Rs. 5 and hence for 30 days power supply total cost for recharging a battery is less than Rs.12.
These costs will further reduce as efficient LED lamps become available.
The kerosene lamps used by poor families are fire hazard. Each poor household spends up to Rs. 50 per month to buy kerosene at government subsidized prices. Gram Panchayat or any NGO can charge Rs. 30 to 50 per month per battery charging service to replace kerosene lamps.
A woman owned private battery charger service can be established with a capital of less than Rs. 4,000. A very profitable business can recharge batteries at Rs. 1 to 1.65 per day. Subtracting operating expense of 25 to 40 paise for each of 60 homes, daily earning will be between Rs. 45 to 75 (monthly Rs. 1,350 to Rs. 2,250). The annual revenue will be Rs. 16,000 to Rs. 27,000 against the investment of less than Rs. 4,000. With 15% down payment, micro-financing Rs 3,500 for 3 years – average battery charger life - at prevailing interest rate of 12% to 25% will carry a monthly payment of Rs. 133 to 159.
Micro Finance Credit: This is a good example of potential credit market for micro financing in development of rural communities. It can be lifeblood of a modern rural economy that isn’t functioning well. Once revenues for battery charging service start coming in at full strength (60 accounts) and the field operations verify costs, the service provider may invest some annual revenues to build a modest business shed on land next to her home.
Wind and Solar Power Plants: If grid connection for battery charging is not but wind is available, small wind turbine of 1.5 KW can be installed for charging 60 batteries per day. Such wind turbine costs about Rs. 1.5 lakhs which is cheaper than extending transmission and distribution lines to sixty homes. Alternately, solar plants (HSTP or SPV) can be installed for battery charging.
The scheme can make every rural home electrified within 3 years. To implement the scheme in 2 years, the following actions may help.
Establish microfinance credit institutions to provide finance of Rs. 4,000 for purchasing battery charger to every village or community or urban slums.
For establishing a wind, HSTP or SPV power plant bank credit of up to 100% finance (Rs. 1.5 lakh) or up to 75% government subsidy should be available to the person with a condition that s/he will not charge poor people more than Rs. 1.65 per day per battery charging.
Abolishing of all taxes such as central excise, VAT, sales tax, octroi, income-tax etc. for CFL Tubes, inverters, plastic cabinets, batteries and battery chargers used in this scheme should provide poor families incentives to participate in this scheme.
India’s Socialist Model
Nehru"s socialism - the English Fabian model - emphasized centrally controlled socialistic concepts, which created imbalances as business acumen-wise incompetent bureaucrats were asked to do jobs they were not trained for. Centralized bureaucracy dominated socialism, communist or not, appeals only to naive and ignorant and Nehru as a business entrepreneur, in my opinion, belonged to this category.
Globally communism has failed and locally socialism is limping as any top dominated centralized development model sooner than later leads to a kind of corruption seen all around India. The politicians dominated bureaucrats – otherwise smart men and women with world class education except inadequate understanding of sound business practices – are responsible for sub par operations of national public businesses.
Centralization was a poor strategy and root of many problems in India. It induced a dependency on big government bureaucracy and stymied personal initiative. Both communism and capitalism in centralized form are dangerous. Governments in India, America and EEC value human rights and freedoms and they are committed to help reduce and inhibit spread of poverty. Contrary to rhetoric otherwise, the elements of socialism and capitalism are merged in decentralized free market economies of developed nations and they are now beginning to merge in increasingly license raj free developing India.
(I thank Mr. Veljibhai K Desai of Rajkot (India) and Dr. Ranganayakulu Hyderabad (India) for some ideas included in the essay.)
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