In his landmark book, Making Globalisation Work, Joseph E Stiglitz observed that “Development is about transforming the lives of people, not just transforming economies.” To the contrary, globally declining commodity prices, food inflation, natural calamities and much more have created a hitherto unparalleled agrarian crisis in India. This has led to deaths and impoverishment of three-quarters of the people who live in rural areas.

This crisis, in turn, has engendered massive agricultural indebtedness, alienation of land to money-lenders, resultant suicides and all-round impoverishment of small and medium farmers. In many states land reforms have shrunk individual land-holdings that are not acceptable to banks as collateral security for loans. Farmers’ savings are utilised by bigger farmers, mainly in southern and western India while the credit-to-deposit ratio for states like Assam declines. Although giant loan waivers resorted to by preceding governments have been granted, almost bankrupting the banking system and budget, these have hardly benefited small and medium farmers.

Arrogant politics of keeping body and soul together, enshrined in programmes such as MNREGA have rendered farmers, mainly small and medium, unskilled, untrained and economically dependent on declining state and central budgets for subsistence. Six and a half decades of deprivation, notably in NE, Northern and Central India, has also contributed, in part, to the rise of left-wing extremism. Basic amenities of life such as health and education have not permeated to the desired extent in rural India. Nor has much new skill development taken place that would have afforded a billion people to earn an honourable supplemental living. While catchy slogans like Digital India and Smart Cities are the order of the day, little is being spared for 72 per cent of India&’s population. With health and education budgets on the decline in real terms and the absence of a social security system, life in rural India is worsening by the day.

Census 2011 shows that 72 per cent of Indians, or about 950 million, live in nearly 6.50 lakh villages. Assuming no more than a 3-5 per cent decline in such numbers till 2026, nearly 1.10 billion Indians will populate close to 7 lakh villages. The country&’s population is projected to grow to 1.40 billion in 2026. The rural population is presently spread over villages with 59 per cent concentrated in habitations of a thousand heads or less. In other words, about 300 million people live in small rural clusters of 1000 heads and below. Thus a cost-effective mix of permanently resident and mobile solutions would have to be contemplated for these two broad categories of rural agglomerations.

Since three-quarters of India&’s people live in villages, that too mostly in economically-sized villages (in terms of services and coverage) there is the strongest case for reincarnating them as smart villages at a fraction of the cost of smart cities. For instance, in the health sector, mobile clinics, operation theatres, telemedicine, VSAT connectivity with major state and private hospitals to rural family wellness centres should be planned. Likewise, in the education sector, mobile e-libraries, Internet Access Vans, Adult Literacy Classroom Vans, technical trade classrooms and work benches are entirely feasible. Mobile agri-labs, demo vans, fertilizer sale vans, post offices and banks, mobile entertainment, Community TV/Radio Broadcast Centres, telephone exchanges would greatly help the village economy in its integration with the urban economy.

Being mobile, all these amenities could plug into off-grid solar/biomass-based energy systems and not require more than 2-3 months to erect. Once large-scale employment is generated in villages, their painful migration to cities may well become history while prosperity spreads to villages. Modular add-ons relating to waste and water management could be considered, subject to availability of investible funds. That too would vastly improve the Quality of Life Index (QLI) by providing amenities comparable to an urban area while stoking low-overheads and medium-technology but huge manufacturing rural economy with concomitant employment opportunities in addition to agriculture. I created an example of how rural waste management could help improve QLIs in rural India. Waste management may have three major components – mobile waste collection and incineration for energy and human/animal remains incineration. Waste collection would cover community and individual water closets and generate biogas while waste water could be recycled for irrigation. From mobile incineration, energy could be generated with saleable by-products like fly ash. Commercial animal remains disposal could create a village industry in animal hide. Likewise, portable all-weather prefabricated structures could provide multi-use solutions, in tandem with mobile ones. These could be used to house primary schools, multipurpose halls, homes, local manufacturing centres, stadia/amphitheatre and family wellness centres. Information technology enabled services (ITES) connected to the State OFC backbone (with Reliance Jio in the pipeline) could offer multiple services. For energy and water management, web-based meter reading, pre-paid tariff coupons could be contemplated. I-T enabled services would coordinate movement of mobile waste collection; manage local energy generation and much more. A single pre-fabricated hut could accommodate the panchayat office, post office, rail and bus booking counters, real time e-kiosk information access to weather, water and energy supply, market prices of produce, etc.

The use of alternative fuels would open Greenfield areas of employment and foods/vaccine preservation. Solar/biomass powered cold storage containers would fetch much better prices for produce when one considers that 22 per cent of India&’s vegetable and fruit production worth an estimated Rs 330 billion in 2014-15, rots or never reaches remunerative markets. Such containers could store medicines, vaccines, meat, and marine products as well. Technologies like biomass gasifiers would not only help in managing rural waste (presently being burnt in Punjab, UP and Haryana and causing lung-searing smog in New Delhi) but has substantial energy potential too to supplement state energy utilities.

Rural India may well be the single biggest GDP-booster in the next decade or so if its energy requirement is met. Then should Public-Private Partnership (PPP) be the preferred option? A UNODC survey in 2011 showed that 6.45 per cent of private PPP partners embezzled property, 6.45 per cent of private senior managers colluded; there was corruption in 9.68 per cent of PPP procurement, 19.35 per cent fabricated false financial statements, another 19.35 per cent colluded with governments to select a pre-determined bidder while 22.58 per cent resorted to bribery to government PPP-related partners. On the government&’s side. 10.11 per cent of officials surveyed felt that government tender evaluators colluded with the private partner, 13.48 per cent accused politicians of colluding with politicians, 20.22 per cent believed that independent consultants hired by the government colluded with the concessionaire, 25.84 per cent believed that there was misrepresentation of facts by bidders and 30.34 per cent thought that concessionaires misrepresented facts.

Private PPP partners also blamed their government partners for poor services to be rendered by these ventures. In fact, both government and PPP partners agreed that confidentiality of bids was shared by both partners and that corruption also had its genesis in the definition of the pre-qualification criteria. Likewise, government and their PPP partners agreed that there was pressure from senior members of the government. In fact, PPP ventures have become the biggest contemporary racket in India with the difference between politicians, civil servants and contractors having been obliterated. The logical corollary therefore is private sector takeover with the establishment of an effective regulation regime by states.

India&’s Prime Minister realised, early in his tenure, the futility of finding state funding for smart rural India when there was precious little available with his government. Yet, the Government of India&’s high pitch for FDI is yet to show appreciable results.

FDI alone is not the panacea for the severe shortage of development funds and must necessarily be teamed with systemic out-of-the-box thinking for meaningful accretion to GDP and prosperity as at least Mr Narendra Modi has realized. The virtual exclusion of rural India and the traditional preservation of poverty for votes is an issue that bodes ill for our national integrity. It is also not as if India is not endowed with large investible resources but the owners of such resources, public and private, await coherent long-term policy to be enunciated. CNBC&’s Money Control database shows 16 major private banks had over Rs.1.70 lakh crore cash and deposits that was an average of only 7.41 per cent of their liabilities. PSBs likewise, have over Rs.7.36 lakh crore that was an average of 7.58 per cent of their liabilities. Four major CPSUs in the power generation sector, viz. NTPC, NHPC, NLC, SJVN and PGCIL had a combined total cash and deposit availability of Rs.26500 crore with an average of 12.50 per cent of their liabilities. In fact, the fifty largest Indian firms had combined cash and deposit base in excess of Rs.10 lakh crore as on March 31, 2015. PSBs would also have extra funds to loan Rs.40000-50000 crore if they are able to recover even 10 per cent of their current NPAs.

(To be concluded)