Urban agglomerations are engines of economic growth. As such, sustainable economic growth demands sustainable urbanisation. There is evidence which indicates that higher the non-agricultural labour share, higher is the log of output per worker in the non-agricultural sector. However, this relationship is true for the agricultural sector as well. This implies how the growth of cities has a positive influence on national productivity. But this also implies that the benefits of economic growth driven by urbanisation get transmitted into the rural areas. This underscores the importance of cities in improving the agricultural productivity of a nation assuming that the channels, by which the above-mentioned transmission takes place, are intact.
Given the chronic agrarian crisis in India and the fact that about 43 percent of the population earns 15 percent of the national GDP, the prospects of sustainable urbanisation are far too important to ignore. This also raises the question as to why India, as one of the fastest growing economies, has not been able to translate these gains into rural development, in general, and agricultural development in particular. One of the reasons for this may be that, despite urbanisation, the mechanisms by which growth percolates into rural areas have got fractured.
Given India’s commitment to the UN Sustainable Development Goals (SDGs), it is imperative to get sustainable urbanisation right. Here, a pertinent question to ask is whether the infrastructural profile of rural areas is ready to assume the role of a medium of transmission of economic growth – particularly of the core social infrastructure areas such as education, health, housing and transport –into these mofussil hinterlands.
Affordable education is a crucial medium by which one gains access to productivity. Quality education and skills demanded by the industry open the doors to new and better jobs and economic opportunities. Access to affordable and quality health care services adds to the overall quotient of human capital. Adequate housing is not just about enough space. It involves concerns about regular supply of electricity and water, sanitation, sewage management, disease-free and hygienic environment and open spaces. An adequate house is one that makes you economically and educationally productive and enhances your mental and physical health.
The interaction between the spatial patterns of housing and transport has implications for rural productivity. Access to social networks, and economic and other opportunities relies on a well-planned transportation system. These networks and neighbourhood effects have significant ramifications to determine whether economic growth is followed by inequality or the economic gains are equally distributed. Furthermore, a well-planned transportation system facilitates firms to gain easy access to labour and other factor markets as well as product markets.
Several government efforts have been launched since Independence to improve the stock of rural infrastructure in India. Of course, these efforts have generated improvements and positive results. However, they have not been able to plug the loopholes in infrastructure provision. The discussion below will outline theses deficits to direct future policy action.
Rural education system is plagued by the scarcity of schools within reasonable vicinity and lack of well-trained teachers. According to the Annual Status of Education Report (ASER) 2018, despite some improvements, more than 50 percent of the students in grade five fail in reading a grade two textbook and cannot even solve basic mathematical problems. This raises doubts on the quality of education imparted in rural schools. Affordable and quality education is crucial to ensure employability, which, in turn, opens the door to economic opportunities. Lack of employability is a serious problem in India. There is a mismatch between the skill sets possessed by prospective employees and those demanded by industries. As mentioned above, lack of access to human capital will deter investment in manufacturing and other industries as well as services in the rural areas affecting the process of urbanisation.
Only 13 percent Primary Health Centres (PHCs), 11 percent sub-centres and 16 percent Community Health Centres (CHCs) in the villages adhere to the Indian Public Health Standards (IPHS). Health care units in rural areas are financially stressed, lack skilled personnel and experience a shortage of medical supply and equipment. Poverty compels rural inhabitants to depend on these low-quality health services, or turn towards quacks and rely on unscientific practices.
While a lot of progress has been made, a large number of villages continue to be the victims of underdeveloped roads, railways etc. Poor transportation systems are also responsible for wastage of agricultural produce, thus threatening food security of the nation. In fact, to ensure seamless access to product and factor markets is a crucial requirement for investment.
A majority of housing in rural areas do not have a solid roof, wall or floor. The government housing schemes such as Indira Awaas Yojana and Prime Minister Grameen– Awaas Yojana have not helped much in bridging the deficit of housing in rural areas. For instance, phase one of the programme was to be completed in March 2019 with the construction of one crore dwelling units. However, the target was missed and only 86 lakh homes have been constructed as of now. Despite this deficit in construction, the second phase has been announced under which 51 lakh homes are to be constructed in the fiscal 2019-20. As of now, while funds have been sanctioned for 39.23 lakh dwelling units, only 3.61 lakh households have been constructed.
Since Independence, the contribution of agriculture to India’s GDP has gradually dipped. However, the number of people depending on agriculture for employment has not reduced at a rate that ensures commensurate rise in the productivity of the workforce. This explains why a decline in the contribution of agriculture to GDP has translated into low agricultural productivity and incomes. Gradual, but inevitable, urbanisation of rural areas is bound to transfer this surplus labour into non-agricultural sector. But fractured infrastructural mechanisms are the biggest impediment to this transfer.
The Shyama Prasad Mukherjee Rurban Mission (SPMRM) attempts to remove this impediment. Launched by PM Modi on 21 February 2016, this mission seeks to develop clusters in rural areas by providing social, economic and physical infrastructure. Such development is expected to harness the potential of growth in these rural clusters by capitalising on the economic drivers, and leveraging locational and competitive advantages. So far, 295 clusters of the mandated 300 clusters have been identified. 249 Integrated Cluster Action Plans, the blueprint of investment in clusters, have been approved across 29 states and six UTs. Of the INR 32.05 crore released in FY 2015-16, Utilisation Certificate was submitted for INR 1.97 crore. Much of the funds released were not utilised. In 2016-17, around INR 600 crore were released, of which, Utilisation Certificate was submitted for INR 119 crores. While an infinitesimal six percent of the funds released was utilised in FY 2015-16, a better, yet meagre, 20 percent was utilised in 2016-17. It is important that the scope of enabling balanced and inclusive growth and development through the SPMRM should be harnessed optimally by avoiding as much as possible such pitfalls in implementation.
Hence, sustainable urbanisation cannot end at conversations around existing cities. It has to consider the concerns about future cities as well and the latent potential of urbanisation that a fast urbanising India provides. Hence, discourse around rural development completes the discussion on sustainable urbanisation. Policymakers who are focused on the SDGs must take this into account.
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Renita DSouza is a PhD in Economics and was a Fellow at Observer Research Foundation Mumbai under the Inclusive Growth and SDGs programme. Her research ...
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