Infra stories differ across Asia

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Published: May 18, 2018 2:47:14 AM

India has joined the Asian Infrastructure Investment Bank (AIIB)—which is financed by China, but also has a substantial contribution from India.

china, chinese economy, china investment growthHow infrastructure development and financing in, say, China is vastly different from the same in India.

India has joined the Asian Infrastructure Investment Bank (AIIB)—which is financed by China, but also has a substantial contribution from India. The third annual meeting of the Board of Governors of AIIB is to be held in Mumbai next month. There was a preparatory meeting recently organised in Ahmedabad, which I was asked to chair, and many interesting conceptual and practical issues were raised in the meeting.

The concentration of their efforts in India is on urban infrastructure. I raised a number of issues and some of which were strongly supported by Prof Amitabh Kundu, who was chaperoning the meeting on behalf of the Research and Information System for Developing Countries and ASSOCHAM. These institutions had been mandated by the finance ministry to organise the discussions.

The first issue was the definition of what is ‘urban’ for such financing. I pointed out that, during the last intercensal period (2001-11), over 4 crore kisans had moved to what is called census towns. These are urban towns according to the Census definition—so they are, in fact, not rural areas, but the state governments prefer to keep them as rural habitations because of the politics of them remaining panchayats. Ignoring them as urban settlements means that the most dynamic aspects of the Indian rural-urban linkage are being ignored, and that too for infrastructure provision.

In a fast-growing economy, its agricultural-based, non-grain commodity base—such as milk products including cheese, animal husbandry including poultry, eggs, fish and meat, and vegetables and fruits—is a dynamic section whose demand goes up. The infrastructure needs of these fast-growing sub-sectors for transport, markets, first-stage processing and so on are tremendous. The roads, transportation infrastructure, market organisations outside APMCs (Agricultural Produce Market Committees) are high-infrastructure investment sectors and funds are solely needed.

Smart City systems in India also ignore these needs. Infrastructure financing bodies must fill up the gaps. While private and community investments were needed, the state had to provide the gap funds for their mobilisation. I reminded the meeting—which had a Chinese focus—that during a visit to a Walmart store outside Shanghai, I found a section in which farmer cooperatives and producer organisations, as we would define them, had been given space as a strategic partnership.

There is also a need to support the newer kinds of farmers’ organisations which are coming up. Farmer producer companies have expanded in a big way. In spite of the initial hesitation and, in fact, hostility by a FICCI group chaired by Homy Irani, a great number of private sector conglomerates later took interest in collaborating with such farmer companies.

More recently, R Gopalakrishnan of Tata Sons and Yashwant Thorat, former chairman of NABARD and now a director in a Tata company, had listed these institutions as essential for rural infrastructure. The need for initial financing for such arrangements for drawing in private rural savings and other financial sector savings to finance rural infrastructure was tremendous.

In fact, a number of these newer kinds of arrangements were noted as important in the upsurge of agricultural exports. Again, working capital needs could also be financed. The meeting recognised that it is these newer areas of rural-urban linkage that are being focused on and this requires training and research backup to sustain the momentum.

There was an interesting debate on the fact that, as regards land questions, there were a number of farmer producer movements in India, which protected the interest of the farmer. Term lending experts thought of this as a hindrance, but some of the town planners and NGO participants argued that, in many cases, there was a lot of strength behind the movements of small farmers, dalits and adivasis to their land and this was important to configure processes which included them in the investment and development system rather than seeing them as bottlenecks to be eliminated. The meeting noted that a number of professional town and country planners had their first field experience in such movements.

In Ahmedabad, architect BV Doshi, town planner Christopher Benninger (now an Indian, but of US parentage) and I had started a School of Planning in the 1970s. Its earlier batches, whom we taught, are by now legendary names, but they cut their teeth sitting with the demonstrators in the slums of Gul Bai Tekra in Ahmedabad in the mid-1970s, to stop the tractors from moving in. Our Chinese friends would not fully understand.

I remembered that, during a visit to China, the mayor of Shanghai told me during a dinner that he had relocated 60,000 persons in four months. I had to confess that, as the chairman of the Narmada Planning Group, it took me two-and-a-half decades to rehabilitate 22,000 families—now all well-settled in their new communities, according to independent evaluations. Infrastructure development stories differ across Asia.

The author is former Union minister.

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