Roads and poverty reduction: Excerpts from Swaminomics
Grama sadak, PMGSY, Roads, highways and Bus stands Comments Off on Roads and poverty reduction: Excerpts from SwaminomicsFollowing is an excerpt from a column by S. Aiyar in Times of India.
Roads are not, of course, the only things that matter – other rural projects and policies matter a great deal too. But connectivity enhances the value of every other rural investment, since it empowers people through improved mobility and access. People can more easily buy agricultural inputs and sell their produce. Children can go more easily to schools, cattle can more easily get veterinary help, and the sick can get to health centres. Remote areas have, by definition, the worst connectivity. They are among the poorest and slowest-growing, but accelerate when given connectivity.
Roads can incubate a thousand small businesses, and can convert villages into towns. Government staff are much more willing to be posted to places with good connectivity, so roads improve administration. Rural productivity cannot be high without roads, but can be very high with them.
… Gulati says that studies by IFPRI (International Food Policy Research Institute) in China, Vietnam and some African countries point to the same conclusion – rural roads do more for growth and poverty mitigation than virtually anything else.
A recent IFPRI paper by Fan, Gulati and Thorat estimated the impact of different government programmes on rural growth and poverty reduction in recent decades. The poverty-reduction data for the 1990s are given in the accompanying table. Road investment gave the biggest bang for buck, followed by agricultural R&D, with education lagging some way behind. Subsidies on fertiliser, credit and power achieved rather little.
For every million rupees spent, roads raised 335 people above the poverty line, and R&D 323. Every million rupees spent on education reduced poverty by 109 people, and on irrigation by 67 people. The lowest returns came from subsidies that are the most popular with politicians – subsidies on credit (42 people), power (27 people) and fertilisers (24 people).
Exactly the same picture emerged when the researchers estimated the agricultural growth impact of these factors. Roads and agricultural R&D contributed by far the most to growth. Lower down came investment in education and irrigation. At the bottom came subsidies for credit, power and fertilisers.
… For decades, rural roads in India were neglected by most states. Besides, rural employment schemes, starting with Maharashtra’s Employment Gurantee Scheme in the 1970s, created the illusion that durable rural roads could be built with labour-intensive techniques. In practice labour-intensive roads proved not durable at all, and those built in the dry season vanished in the monsoons.
This finally changed with the Pradhan Mantri Gram Sadak Yojana (PMGSY) launched in 2000. This, for the first time, ordained mechanised techniques to provide high-quality, all-weather roads to 1.6 lakh rural habitations without pucca roads. It also upgraded roads that had collapsed. Panchayats were made responsible for maintenance. Conversations with experts suggest that this is one of the best-functioning programmes in rural development.
… Let me conclude by recalling what economist Robert Chambers said back in the 1970s. "If I had money, I would use it to build roads. If I had more money, I would build more roads. If I had still more money, I would build still more roads."
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