The agri part of the economy is rightly a very small part of the economy, but unfourtunatly it is the largest employer and over 50% of the population depends on farming. Even small increases in disposable income in this section of the society, has a huge positive impact on the demand. This demand gives boost to the small town economy.
Again Rishi, this is a political argument, even social one, but NOT a make the economy productive argument.
I would argue the improving the income only seeks to delay and hence destroy their earning potential. This not real productivity.
A small/tiny improvement here requires a massive investment schedule. A $100 Billion here or there is not going to cut it.
Take the figure of 30 billion dollar loss to the economy every year (I believe it is higher. In a 20 years perspective the total acumalated losses are 600 billion dollars. Hece spending 250 billion within the same timeframe gives an handsome return on capital.
Doubtful. Even if you cut the loses in half (not a given) with new roads it is not going to give you a return of even 10%. How is this handsome. Esp. when you consider that within that same time the rural population is continually declining. So you are throwing money at a place people are leaving in droves. How asinine is that.
The rural areas are backward, mainly becasue of lack of infrastructure.
This is what everyone would like to think, but here is what I see from my small holdng.
- Earning power is extremely limited. You only get paid so much for agricultural products and you can only produce so much. Yet the number of mouths increase every year. You can make more cars if you feel like but the agricultural productivity increase is very limited. There is little or no diversification in jobs.
- Good education is very hard to acquire. By its nature labor intensive agirculture is time intensive. You work from Dawn to 9:00 pm plus on most days. There is no time to educate your children or yourself. Despite this laborers these days sacrifice to put their children thru school. The local school near my field is 4 miles away. Little kids 3-4 yrs old walk this every day on the nice new metalled road. Instead a cheap autorickshaw to ferry them would be nice.
Despite what people might think I happen to believe that 90% of education actually comes from your parents. If your parents don't have the time to learn and educate you all you studying is still going to leave you seriously handicapped.
- Here is the truth. Atleast in my area 90 percent of rural folk own no land, no property, no vehicles, are in serious debt, and die by the time they hit 40, leaving no resources for the next generation. In fact all they pass on are debt.
- No fancy schmancy infrastructure is gonna help them. Villages are not idyllic wonderzones. They are hell holes of death. Even Dharavi is a hundred times better. Villages are OK for the small numbers who own houses/land/jobs and ruthlessly exploit the other communities.
- No factories are gonna open there because it costs too much to ship all materials from the suppliers to their out of the way places even on on smooth nice roads. Power is non existent. Skilled labor will not stay. No manager will move out there. There are no competitive advantages.
- Finally, you can build all the fancy infrastructure you want but the earning power does not exist in these places to even maintain what you build. There is no alternative to moving people to cities where they can specialize and become highly skilled.