India cannot afford villages...

There has been a general tendency to romanticize village life as a return to our roots. What is noticeable, though, is that most people who romanticize village life in India tend to live in cities—in India, or elsewhere. They also seem incapable of noticing the irony implicit in this romanticization, since their forefathers, too, were once villagers —who migrated to cities for good reason.

There was no greater proponent of villages than Mohandas Gandhi, who had been educated in London, and had a law career in urban South Africa. Gandhi’s most vehement critic at the time was Ambedkar, who knew about village life as an untouchable. Attacking Gandhi’s view on the republic of villages as overly sentimental, Ambedkar urged his followers to leave their rural persecution behind, get educated and move to urban centres.

Clearly, anyone who lives in the average Indian village and has access to information and money would like to leave for towns and cities.

The conflating of the development of rural people with the development of villages perhaps explains the misplaced emphasis on the latter. The fact that despite decades of attempts at developing rural areas, nothing much has been achieved in the development of rural people suggests that the answers may lie elsewhere.

Every developed economy has followed a path which begins with agriculture being the main source of income for the majority of the population, and ends with agricultural employment being a very small fraction of the total labour force. The shift has always been from a village-centric, agriculture-based economy to a city-centric, non-agricultural economy—as agriculture becomes more productive, labour is released into manufacturing and services, which have higher productivity and incomes.

At the low levels of economic prosperity seen in rural India, economic growth is a precondition for development. Economic growth, in turn, is a cause and consequence of urbanization. The reason is not hard to see. In urban areas, people aggregate in numbers sufficient for markets to deliver goods and services efficiently and cheaply. Consider the supply of an essential infrastructural service such as electricity. The economics of power generation and distribution do not allow decentralization to the level of villages that are home to a few hundred people. The average cost of per unit of power makes it prohibitive. The only way for a small 1-2MW decentralized plant to provide power for a village of 1,000 people is for the villagers to pay substantial premiums—which is highly improbable. No wonder then that essential services such as uninterrupted electricity are not available at the village level. By comparison, supplying decentralized power for the needs of a few tens of thousands of people is economically feasible.

Villages are not the proper object of analysis when it comes to economic growth, and hence economic development. By insisting on the development of villages, scarce resources, which could have been more efficiently used elsewhere, are wasted. The same resources can be used in the development of cities. It seems to us that the answer to the development of rural people paradoxically lies in urban development.

About 700 million Indians live in villages. Clearly, there is little scope for urbanization in their case by having them migrate to existing cities—those are already bursting at the seams. Practically all Indian towns and cities are unplanned and inefficiently use land and other resources. They are inadequate even for current residents, leave alone the idea of adding hundreds of millions of more people to them. The country requires new urban centres to accommodate the hundreds of millions of people who need to be in such centres.

In fact, the answer to Mumbai’s or Delhi’s problems is, interestingly enough, that these cities lose their centrality to the Indian economy as other regional centres come up and mass migration to large cities ceases. People tend to forget that New York (or London) was once considered an unlivable, hopelessly polluted city. At least part of the solution to the city’s problem lay in the creation of other centres such as Chicago, St. Louis and the cities of the west which relieved the pressure on New York itself.

India has a choice of futures, say, in 2030. Will the majority of Indians continue to live in 600,000 small villages engaged in near-subsistence agriculture or will they be in living in 600 well-planned vibrant cities (or 6,000 towns of 100,000 population, for that matter) working in non-agricultural sectors and enjoying a rich social and cultural life? Looking at current revenue ratio- income from agricultural is slowly declining and service sector is increasing even with 60% India's workforce is in rural agricultural sector.

Depending on how we use our resources, the latter future can be a reality. Achieving that reality would be the greatest challenge for India and arguably, the most rewarding as well. Rather than trying to trap people in villages and agriculture, the focus should be on the creation of new urban centres which will lead to economic growth and development of people.

Source: WSJ's Livemint