A new paradigm for implementing rural development

Updated: Feb 26 2005, 05:30am hrs
In the past, the implementation of rural development projects has been beset with a number of problems. The projects are not always selected in consultation with the actual beneficiaries. There is leakage in the utilisation of funds. There is conspicuous lack of transparency in the award of contracts and their implementation. Only a small fraction of the funds allotted goes towards actual creation of benefits for the target categories.

Two of the main problems confronting rural areas are unemployment and lack of infrastructure. Roads are an important part of infrastructure. It is reported that the World Bank is likely to provide resources for rural roads, which will provide employment and also add to the infrastructure in rural areas and integrate them better with markets.

In this paper a new paradigm for implementing rural road projects is presented. This addresses many of the issues that beset their planning and implementation.

The same method can be adapted for the other rural development projects, with appropriate changes. The main issues are allocation of funds and their prioritisation, the design and standards for road construction, selection of contractors, their supervision to ensure quality construction and structuring of contracts in a fair and equitable manner.

The entities involved in this paradigm will be:

the village panchayat, or a larger formation such as a panchayat union;

the district administration;

NGOs;

contractors;

the private sector;

and, finally, the Construction Industry Development Council (CIDC). This is the apex body for the construction industry. Public and private sectors have equal representation on the board of governors. The deputy chairman, Planning Commission, is the patron.

This organisation has, over the past six years, developed tendering and contract documents on international standards. It has undertaken a training programme for construction workers at a number of places and has also networked with other Saarc countries for training programmes.

Each of these entities is given a role here. Starting with the panchayat, which should have a say in the priority to be given to roads within the funds available to it.

For this purpose, the total funds available for each panchayat or panchayat union should be indicated by the district administration, by pooling all the different packets available out of different centrally sponsored, assisted and foreign-funded schemes under different heads, some of which may be earmarked for particular sectors or projects. To enable the panchayat to make informed decisions, it should be assisted by NGOs and decisions should be taken after open discussion. Such decisions should not only cover rural roads, but also other felt needs at the village.

The district administration should work out the total funds available to the panchayat during a year, for which the state administration should give a breakdown of fund allocations and say which are fungible and which are not. Keeping the fungible part as large as possible. Some funds may be available at the district level, some at lower formations, depending on the nature and size of the projects and the source of funding.

IT solutions will be used for storing information, listing projects according to panchayat preferences, implementing projects, etc.

NGOs can perform a useful purpose if they suggest, from their own experience, the order of priorities to be adopted by the panchayat. They will be graded by institutions like Icra, in association with CIDC, as these bodies are already engaged in this activity. NGOs with their own funding would be preferred, other things being equal.

Selected NGOs may also participate in the supervision of the road works actually contracted out along with CIDC, who can access qualified civil engineers. And report to the panchayat at periodic intervals on the quality of work, the speed of completion and the costs incurred. They should have the confidence of the panchayat, as an impartial friend.

The contract award procedures are crucial to avoid favoritism and contract padding. The state or district administration can help. CIDC, which has done considerable work in this area, should advice on pre-qualification criteria for contractors, the tendering procedures and contract terms, including the payment terms, quality certification and dispute settlement procedures. Their reports should be placed before the district administration and the funding agency.

The private sector can play a useful role. If larger industrial houses can depute one of their new business recruits to work in rural areas, they can also make a contribution with their analyses and advice on the various procedures.

These persons will be funded by their respective employers as their contribution towards rural development. They can assist the panchayat and the district administration in adopting IT solutions for listing the felt needs, the priorities for choosing projects and the record of all projects.

At the apex of the entire process will be the project committee, under the chairmanship of the panchayat president.

The same structure, with suitable modifications, can be adopted for other schemes. The advantage of this arrangement will be greater transparency, less leakage, more value for the money spent, better quality and speedier completion.

Above all, there will be a sense of participation by the panchayats in the entire process of selection of projects and their implementation. And encourage them to come forward to mobilise some of their own resources for their development.

The writer is former chairman of Sebi and also of the erstwhile Disinvestment Commission