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Friday, January 13, 2012

Mission India

"Inclusive Growth" is the new Mantra which calls for the Economic Uplift of the masses Below the Poverty Line (BPL). At the "nano-economic" level it translates to a sustainable income for families and individuals of employable age. This means that these folks are either self employed or have jobs that provide them with the requisite sustainable income. (See Note 1). 


India can be broadly partitioned into Urban and Rural Areas, each significantly different, requiring different solutions. Taken in its entirety the situation appears complex. However, the solution to complex problems is to break it down successively to arrive at a set of priorities that can be individually tackled to bring about a comprehensive solution.


At the heart of the problem is the inability of the agricultural sector to absorb the excess labour force resulting in abject rural poverty. This also leads to migration to Urban areas which are already bursting at the seams, resulting in the rural poor moving laterally to become urban poor living in squalid conditions.


The most pragmatic solution is a primary focus on Jobs, Food Security, Education, and Quality of Life. Every development and decision should be targeted towards one or more of these priorities.


Focus on Jobs, Jobs and More Jobs:
Besides providing all the necessary attributes that allow the Private Sector to proceed at an accelerated pace (Energy, Infrastructure, Investment Friendliness, Land Reform - with attention to fairness towards owners of land whose land is acquired and to environmental norms etc.) Two things ought to be kept in mind:
  1. Easier to facilitate the relocation of people to Job Opportunities, than to move Job Opportunities to the people. This would help in siphoning off the excess labour that is lacking opportunities in Rural India.
  2. Better to locate these Job Opportunities in proximity to an existing railway line or extend the railway line to where the new Job Opportunities will be. (Indian Railways is the fourth largest railway network in the world.)
To facilitate the migration of people to these Job Opportunities, the criteria applied should be simply:
  • A person/family, regardless of their income potential should be able to rent a flat,a room or a bed when relocating. 
  • All the amenities (shopping, recreation, schools, places of worship) desired by the highly skilled personnel that comprise the Middle Income Group (MIG) and the low/medium skilled personnel that comprise of the Lower Income Group (LIG) should be provided.
The above ought to be the recipe for all SEZs (Special Economic Zones - See Note 2), that includes an "Economic Engine" that provides the primary opportunities around which a number of secondary opportunities are generated. It does not matter if the "Economic Engine" is a nearby Metro, provided efficient public transportation links are incorporated into the plan.

Focus on Food Security:
Farming today is an entrepreneurial endeavor. Marginal farmers are at great risk and does not provide a sustainable income. The focus should be on making the productive farmers more productive and provide the farmers at risk an exit opportunity by way of a job. This means removing the barriers that exist in the acquisition of agricultural land and allowing farm consolidation. The focus should be on ensuring agricultural land land remains agricultural land rather than who owns the land and how much they own. What India needs is a Food Security Strategy that includes improving farm output, food processing and agro-industry. See Note 3.


Education:
The Quality of Education can be improved significantly by the use of modern technology. Students can obtain access to Good Teachers and Quality education through "Distant Learning" programs. 


Focus on Quality of Life:
This encompasses many areas from housing, health, education to security, defense and environment. However,the "in our face" issue is the plight of the people at the "Bottom of the Pyramid", who represent a largest segment of India’s population. This segment continues to be treated as “Invisibles”, in that their existence is ignored, and they are neglected.   They exist, but have been intellectualized into non-existence.  The solution is not a hand out to this segment.  What this segment needs is affordable solutions that they can pay for. It is no longer conscionable or moral to marginalize and neglect the needs of this segment. 


Instead on the emphasis on ownership, the focus ought to be on affordable rentals, with ownership being the desired end goal. The emphasis ought to be in making it economically viable to provide housing solutions to the "Bottom of the Pyramid". This includes "owner friendly" rental laws and providing the requisite "Living Wages" that enable these wage earners to rent reasonable accommodation. See Note 4.

Note 1: The term "Living Wage" and "Minimum Wage" can be used to debate what translates to a sustainable income. Minimum wage is usually an amount defined legally for a country, whereas Living Wage defines what is required for an individual or family for a specific geographic area.


Note 2: Special Economic Zones (SEZs)


Note 3: What is India's Agricultural Policy?


Note 4: Alleviating Visual Poverty

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