Small is bountiful

The so-called Bhopal Principles were worked out by civil society at a meeting outside Ahmedabad; these were lobbied for, and are now a part of the developmental structure. These are considered the ways out of the land and water crises we are in and the PR people have worked out an activity-mapping exercise beginning from the village level and going upwards. Pradip Khandwala, one of the best men we have on this, has designed this in a focused manner within the framework of what he calls “agencification”. In a larger context, there are two fundamentals here. First, people’s programming has to be in the context of science and management applied to the soil, water and climate of the area. Rajiv Gandhi called it agro-climatic planning, later given only lip service. The second is the point the FAO and World Bank have made on India recently. We have reached an income level where food demands are explosive and our policies have to be in the context of linking town and village, in terms of both opportunities for creating incomes by meeting needs and problems, say, of land scarcity.

Of course this kind of argument is far more compelling in the areas of education and heath which have a large focus in the Eleventh Plan and this was discussed in some detail at the Delhi meet.

Unfortunately, in India, we think that village empowerment is wasteful and inefficient. IRMA’s State of Panchayati Raj brings out the fact that, all over the world, local governments are growing and accessing more resources. In India, the last finance commission abolished formula-based assistance to regional governments, a model built up assiduously by giants like the late Prof D.R. Gadgil. So the RBI tells us now that market borrowings by the states have declined and, of course, tax revenues are growing at a lower pace than the inflation rate. States are flush with funds, but these are all from the Central big-ticket schemes and they have no local manoeuvrability.

The good news is that as the local economy grows, in about a quarter of the best cases, econometric studies show that resources raised by the panchayats grow at twice the growth rate of the economies. These aspects have to be institutionalised, so that these institutions can play in the demand and financial markets. More than 30 cities now have CRISIL ratings for non-sovereign borrowings.

The finance ministry must introduce reform so that it is as easy to buy an Indian municipal bond as it is to buy a tax-free bond of a global metropolis. It is only in the world of prejudices that all local and community organisations are either inefficient or avoidable. It is only in India that, while the World Bank says that producers associations of farmers should be a strategic part of the rural-urban connectivity, it is demanded in the name of reform that the second amendment to the Companies Act, to permit co-ops to become companies, be abolished. Reform must empower and not limit possibilities.

The writer is a former Union minister for power, planning and science, and was vice-chancellor of JNU alagh@icenet.net