UPA-2 is working on implementing an interesting idea that?s ambitious in scope and may actually increase the efficiency of government spending. All rural development schemes are to be rolled into one comprehensive plan and this will apply from the central to the sub-district level. Given that centrally-sponsored schemes are worth Rs 1 lakh crore, the material impact of any efficiency improvement is obvious. The idea assumes that there are synergies to be gained by making a single plan. Duplication of administrative effort and wastage of money will be avoided: that?s the theory. Working out the details is the job of the task force that is looking to marry a variety of schemes to the rural employment guarantee scheme. The key, as always for plans like these, is to find an institutional structure that?s both sturdy and supple. Pilot projects in 115 districts will give plenty of important and interesting data, but the quality of the task force?s intellectual input will still be critical. Here, it is important to recognise that not just the schemes themselves, but the sources of their funding also need to be factored in. District-level authorities get funds from central schemes, multilateral authorities, state budget allocations and revenues generated by local governments. And allocations are made scheme-wise, not district-wise. If a single plan for all rural schemes is to work, it has to work at the district level, and that cannot happen unless district authorities have a clear map on funding. State governments will obviously need to cooperate on this. And given that states? policy capacity and chief ministers? political wisdom vary, a smart workable blueprint for this good and necessary plan may widen the already wide economic/social differences between states.
But as good and necessary as its plans for converging rural programmes are, UPA-2 still must be asked whether its political economy doesn?t need some fresh thinking. The plan for rural India seems heavily biased towards welfare/make work/minor works programmes. There seems to be a deliberate lack of emphasis on creating broad economic opportunities that call for some broad policy changes. That?s quite worrisome because, at its best, a government scheme provides short-term livelihood answers, not stable, long-term economic opportunities. The only way to do that is to obviously deploy more private capital. Agriculture must stop being a small plot activity and mass manufacturing factories must appear as an employment alternative?these apparently politically incorrect solutions are the only way to really help rural India.