NEW DELHI: A report sponsored by the house of Tatas, released by Prime Minister Manmohan Singh here on Sunday, has proposed the payment of subsidy for luring private players into investing in the development of rural infrastructure at an estimated cost of Rs.1,58,313 crore.

The `India Rural Infrastructure Report' has pointed out that rural India — home to 70 per cent of the country's population — would require Rs.92,690 crore(at 2002-03 prices) for providing telecom connectivity alone. This apart, an amount of Rs.55,243 crorewould be necessary for power supply, Rs.5,892 crorefor roads and transport and Rs.4,488 crorefor water and sanitation.

Sponsored by Sir Ratan Tata Trust and prepared by the National Council for Applied Economic Research (NCAER), the report noted that resolution of infrastructure bottlenecks suffered from the fact that infrastructure in villages is largely owned and run by the Government which faced a funds constraint. On the other hand, private funds sought to move into areas where rates of return were "at least" reasonable.

Contradiction

This contradiction, the report suggested, could only be resolved through a Public-Private Partnership (PPP) model, where the Government provides subsidies to private players commensurate with the level of development required in a particular rural area.

Highlighting the plight of rural India, the report noted that while nine-tenths of village households did not own telephones, 50 per cent of the households did not have power connections. Even the connected households were without power owing to outages for almost 17 hours a day in the monsoon months and 13 hours a day during other months.

Even worse is that 50 per cent of the people living in habitations away from a main village did not have access to all-weather roads. As for drinking water, while almost all rural households were covered by a source, its quality and quantity actually available was often low on account of poor maintenance and operation, the report said.

Moreover, 80 per cent of the rural households did not have access to sanitation facilities.

Decentralisation

In such a scenario, the report has advocated greater decentralisation of regulation and ownership, greater reliance on user fees to recover costs so as to provide for sustainable operation and maintenance and greater use of micro-finance to build demand for services.

Highlighting the differences between rural and urban India, the report pointed out that the low per capita income and density of settlement in villages posed infrastructure problems. "Thus, for example, complicated and expensive piped water supply and sewerage systems, which may be cost effective in cities, are inappropriate for rural areas," it said.

Another severe problem in developing infrastructure, the report said, was the fact that rural population largely remained scattered. As a result, conventional networks were often found too expensive and inefficient to be practical.

Besides, incomes being low, households were often reluctant to invest their limited resources in vehicles, telephones, electric appliances or other equipment that could take advantage of new infrastructure developments, the report said.

Printer friendly page  
Send this article to Friends by E-Mail