Indian Economy - News & Discussion 27 May 2012

[Suraj]

Atri: that article just states that the villages are themselves urbanizing. They're not becoming self-sustaining pockets of their own. On the contrary they're gaining from the benefits of being connected by road and the attendant benefits of cheap supply of goods in and out, electrified by a central grid, and more. That is how urbanization begins.

Go back there 10 years from now and a cluster of villages in that area will have probably grown into a small city. In effect what's happening is expanded urbanization, which is a good thing, because we need more cities, even if not built the Chinese style from scratch by fiat order. Gujarat isn't an example of de-urbanization, but the opposite - expanding urbanization and generating more urban clusters out of what used to be clusters of villages.

[Atri]

Atri: that article just states that the villages are themselves urbanizing. They're not becoming self-sustaining pockets of their own. On the contrary they're gaining from the benefits of being connected by road and the attendant benefits of cheap supply of goods in and out, electrified by a central grid, and more. That is how urbanization begins.

Go back there 10 years from now and a cluster of villages in that area will have probably grown into a small city. In effect what's happening is expanded urbanization, which is a good thing, because we need more cities, even if not built the Chinese style from scratch by fiat order. Gujarat isn't an example of de-urbanization, but the opposite - expanding urbanization and generating more urban clusters out of what used to be clusters of villages.

I think we are talking same things, Suraj ji... My thrust is not on keeping people in mud huts.. my thrust was decentralization as much as possible..

[svinayak]

Go back there 10 years from now and a cluster of villages in that area will have probably grown into a small city.

This may be true but once the basic power grid, water a,d infra is built in that area the industry will flourish and will create output which can be shipped anywhere (in the world)

In effect what's happening is expanded urbanization, which is a good thing, because we need more cities, even if not built the Chinese style from scratch by fiat order. Gujarat isn't an example of de-urbanization, but the opposite - expanding urbanization and generating more urban clusters out of what used to be clusters of villages.

Infrstructure is being built in the local area and the regin is getting competitive in the wider market,

[Vamsee]

Atri garu,

I greatly respect your thoughts but on this topic I would disagree. I would like to see at least 80% of India to be urbanized. I am not sure if below links were posted on BRF in the past.

Think Big about India’s Urbanization
A Brief Introduction to RISC

Regards.

[member_20317]

Atri garu, of all the people here I am probably going to be the most in sync with you. The smaller is not yet out and the larger is not exactly the winner as yet.

However, you need to avoid one mistake that this Nehruvian idea of big is beautiful committed. That is ignore your competition.

1) Large actually does has some benefits. In matters of taste, large investments, big risks it is the large that makes sense. Since I believe you already have bought this idea so I will not sell it to you.

2) The large has forced our people to leave their families en mass and destroyed our resources. Our young men spend ~10% of their productive life (about 25 days every year) travelling to their native place and yet not earning enough to be able to afford good education for our kids. Just imagine the loss to the children in educational terms. This is a fact too. However this situation has grown into a double edged sword for us. The people who suffer such a state of affairs have themselves become addicted to it now. A lot of people just do not have any skill other then a naukri. The sense of self employment achon achon ke tote uda deta hai. Invoking the small just immediately can easily be used to harm us seriously by both the Leftists and Foreigners. That too without us having any substantive support from our own people for whom you want these more involved, more committed lives. Learning comes with time. And there has been a tremendous deconstruction of the man.

I hope you get the nub of my argument. You are a yogi. Establishing yog is what the infatuated people did not work on and we should not commit the same mistake. Esp. when we have the benefit of training and culture on this most crucial of ideas.

[member_20317]

posted twice.

[svinayak]

Does anybody know Atanu Dey.

[RamaY]

sorry

[Vamsee]

Does anybody know Atanu Dey.

I do not know him personally, but follow his blog & twitter. Watched couple of his presentations on youtube.

https://twitter.com/atanudey
http://www.deeshaa.org/

====================================================

Atanu Dey's proposal on Rail transport in India

An Integrated Rail Transportation System
The IRTS — Revisited

[RamaY]

Atri garu,

I greatly respect your thoughts but on this topic I would disagree. I would like to see at least 80% of India to be urbanized. I am not sure if below links were posted on BRF in the past.

Think Big about India’s Urbanization
A Brief Introduction to RISC

Regards.

Urbanization need not mean replacing hundreds of millions of people. It can also mean taking technology to where people already are. This is more cost effective.

Imagine it costs say $100B to develop a city that can sustain say 2 million people. Currently these 2 million population is in say 500-1000 villages (2000-4000 people per village).

The alternative model is to check if it costs less to take urbanized life-style and opportunities to all these villages. Let us assume urbanization of a village costs say Rs 100 crore = $20M (includes sufficient industrial base to offer suitable employment for these. This includes 1MW power station, infra for SMBs etc ). Thus it would cost $20B (1000 villages x $20M) to urbanize this population.

Which is cost effective and more sustainable?

[Vamsee]

Rama garu,

It is impossible to use existing cities to urbanize the next 600 million Indians. Instead we need to build new cities (either by scaling up existing towns/Villages or building from scratch)
Atanu Dey proposes building compact cities where walking or bicycle is the primary mode of transport. Each city 10X10 Kms housing 1 million.

I disagree with him on solar energy ( I would prefer around 100 Nuclear energy parks generating 1000GW of nuclear energy )
=========================================================================
Cities and Urbanization

[Suraj]

I think we are talking same things, Suraj ji... My thrust is not on keeping people in mud huts.. my thrust was decentralization as much as possible..

You're not going to get much decentralization, just more cities whose existence is due to their specialization. You certainly aren't going to get the inefficient distributed production system you suggested either. That's what exists now, to a significant extent. It will evolve into a more centralized system of production with a large distribution and supply chain management system backing it up.

These small towns in the article owe their new labour to the investment in their infrastructure and the connectivity from outside. They are NOT generating their own capital or human resources. Instead, they're leveraging external capital inputs and growing into sizes large enough for a concentrated pool of labour to generate economic output.

Cities came into existence because they concentrate labour, capital and technology. You cannot get economic growth and a high standard of living by spreading that out - it's inefficient and those components will not be utilized well.

[Theo_Fidel]

Suraj,

I don’t agree. By that calculation China with the largest trade surplus should be the most productive per capita.
But we have both said our piece and I will let it go at that.
--------------------------------------

Urbanization is about a lot more than roads and infrastructure. Urban areas are always about the people. Putting that many folks together creates an aggressive climate of innovation and experimentation and specialization. Cities give people the anonymity to try and fail and try again. They also give ordinary folks with little collateral access to capital. These things are not scalable to a village level. There was a book by Liebskind sometime back, who estimated that the average city environment required people to perform 50,000+ niche special job to make the urban environment functional. For instance I was reading about folks who repair stethoscopes/orthoscopes. It is a very high skill job and only about 2000 folks in the USA are skilled enough. Almost all of them live in cities. If your city has 1 million+ it will have a stethoscope specialist. If not you are out of luck and will have to travel to the nearest city. In smaller villages you will have far more generalists. The doctor who delivers your baby will also be delivering cows, etc. Generalists can usually never match a specialist in performance.

[Suraj]

Suraj, I don’t agree. By that calculation China with the largest trade surplus should be the most productive per capita.

That's a strange argument. You're using an aggregate trade surplus and then using that as an argument against a per-capita metric. Normalize your data to per-capita surplus, and better yet, focus on manufactured output rather than just dig-and-sell raw material, and the numbers do put western Europe on top.

While I don't have exact data for population of Europe and India back then, I used data to show that India (and China) was indeed more productive than the west then.

[svinayak]

http://www.mckinsey.com/insights/urbani ... g_in_india

Handled well, India can reap significant benefits from urbanization. MGI offers a range of recommendations, the vast majority of which India could implement within five to ten years. If India were to follow the recommendations, it could add 1 to 1.5 percent to annual GDP growth, bringing the economy near to the double-digit growth to which the government aspires.

Surging growth and employment in cities will be a powerful magnet. MGI projections show India’s urban population soaring from 340 million in 2008 to 590 million in 2030. And this urban expansion will happen at a speed quite unlike anything India has seen before. It took India nearly 40 years (between 1971 and 2008) for the urban population to rise by nearly 230 million. It will take only half the time to add the next 250 million.

India has the potential to unlock many new growth markets in its cities, many of them not traditionally associated with India, including infrastructure, transportation, healthcare, education, and recreation. MGI projects that, to meet urban demand, the economy will have to build between 700 million and 900 million square meters of residential and commercial space a year. In transportation, India needs to build 350 to 400 kilometers of metros and subways every year, more than 20 times the capacity-building of this type that India has achieved in the past decade. In addition, between 19,000 and 25,000 kilometers of road lanes would need to be built every year (including lanes for bus-based rapid transit systems), nearly equal to the road lanes constructed over the past decade.

Cities can also deliver a higher quality of life. Urban scale benefits mean the cost of delivering basic services is 30 to 40 percent cheaper in concentrated population centers than in sparsely populated areas. But to reap such benefits, India needs to meet an unprecedented policy challenge. If it fails to do so, this could seriously jeopardize its growth and risk high unemployment.

[RamaY]

I think we are talking same things, Suraj ji... My thrust is not on keeping people in mud huts.. my thrust was decentralization as much as possible..

You're not going to get much decentralization, just more cities whose existence is due to their specialization. You certainly aren't going to get the inefficient distributed production system you suggested either. That's what exists now, to a significant extent. It will evolve into a more centralized system of production with a large distribution and supply chain management system backing it up.

Decentralized economic model may be an inefficient production/distribution system today, but will it continue be so in the future where 3-D and 4-D printing technologies and custom designed CNC products?

Should we build our economy for 20th century technology/design/society or 21/22nd century societies?

[Suraj]

This is somewhat absurd. We have an society that's yet to see the benefits of large-scale industrialization and the involvement of most of the population into formal industrialized economic activity, and we're talking of 3D and '4D' printers ? What's a 4D printer anyway - it prints into the past and future in the time dimension ? 3D printing is a niche at the high end. A substantial fraction of our population has socioeconomic quality of life equivalent to barely the 20th century in the west.

There's a hell of a lot of basics we ought to be covering first. For starters, there's no effective public policy discourse that pursues the implementation of basic health, education and sanitation measures, city planning and urbanization. It's saddening that a third rate US city has a better sewage system, water and electricity supply, and even just the footpaths, crosswalks and roads and properly laid out and the city effectively zoned, than anything in India. There's not even uniformity in signage (never might what languages are used).

People seemingly forget how all this comes together. Even if you build an utopian township - it will be constructed using labour, capital and technology[ produced elsewhere. There's no net gain in output, but rather, you have a subsidized utopian lifestyle paid for with capital infusion from outside. Take the example of the suggested 'divide $100 billion for a big city into 1000 smaller towns' - where do you think that $100 billion for the development in Shanghai came from ? Those were generated from the incoming foreign capital into Shanghai's factories, and reinvesting the profits back into Shanghai! Rather than spread it all over Zhejiang and Jiangsu, they focused on investing building up Shanghai as a magnet for foreign capital and technology, so they could multiple their GDP growth.

The talk of decentralized 1000-person hamlets fed by its own power and producing its own electricity and toothpaste is absurd. You want true decentralization ? Generate and duplicate all the capital and technology as well. That means design and build your own transformers, powerplants, factories, mine and smelt the ore for it all, etc. You want 3D printers ? Learn about it, and design them too. And you don't get $100million from anywhere, in a decentralized system - produce enough of value yourself to have that much to invest. That's the fundamental problem with this argument - the technology, capital and labour to feed this utopia is generated by the current system. The reason why it didn't naturally decentralize is that doing so is inefficient.

Even the Indus Valley folks knew better, that urbanization was the key to development. Please don't go about comparing the population of Harappa then to Bombay today to make a point - compared to the aggregate population at that time, those towns were megacities of their era.

Please stop applying post industrial concerns on a still somewhat pre-industrial society. There'll be a time to develop Indian solutions to harmonize industrialized life with an Indian touch, but we're decades away from it; this kind of Luddite/NIH attitude towards basic industrialization and urbanization is unnecessary.

[panduranghari]

Atri garu, of all the people here I am probably going to be the most in sync with you. The smaller is not yet out and the larger is not exactly the winner as yet.

However, you need to avoid one mistake that this Nehruvian idea of big is beautiful committed. That is ignore your competition.

1) Large actually does has some benefits. In matters of taste, large investments, big risks it is the large that makes sense. Since I believe you already have bought this idea so I will not sell it to you.

2) The large has forced our people to leave their families en mass and destroyed our resources. Our young men spend ~10% of their productive life (about 25 days every year) travelling to their native place and yet not earning enough to be able to afford good education for our kids. Just imagine the loss to the children in educational terms. This is a fact too. However this situation has grown into a double edged sword for us. The people who suffer such a state of affairs have themselves become addicted to it now. A lot of people just do not have any skill other then a naukri. The sense of self employment achon achon ke tote uda deta hai. Invoking the small just immediately can easily be used to harm us seriously by both the Leftists and Foreigners. That too without us having any substantive support from our own people for whom you want these more involved, more committed lives. Learning comes with time. And there has been a tremendous deconstruction of the man.

I hope you get the nub of my argument. You are a yogi. Establishing yog is what the infatuated people did not work on and we should not commit the same mistake. Esp. when we have the benefit of training and culture on this most crucial of ideas.

Ravi g ji

The concept of urbanisation depends on relative cheap fuel. Everything has to be moved from out into an urban sprawl. Only sustainable until the cost of fuel remains low. Claims that Indians migrating into Mumbai or Delhi have voted with their feet for urbanisation is a red herring. The canary in the coal mine is the example of buenos Aires depopulating with the inset if painful economic turmoil. Living in a paradigm when the virtual matrix of loose money is switched off, will inevitably lead to depopulation of mega cities. Perhaps then Atri ji will also get his wish of end of Mumbai based Indian film industry. I too vote for decentralisation and city living is a pinnacle of centralisation.

[RamaY]

This is somewhat absurd. We have an society that's yet to see the benefits of large-scale industrialization and the involvement of most of the population into formal industrialized economic activity, and we're talking of 3D and '4D' printers ? What's a 4D printer anyway - it prints into the past and future in the time dimension ? 3D printing is a niche at the high end. A substantial fraction of our population has socioeconomic quality of life equivalent to barely the 20th century in the west.
.

This shows your ignorance and disinterest in understanding future trends. I understand you are a good moderator, but I think you are very poor at having a national vision and facilitating a debate towards that.

There's a hell of a lot of basics we ought to be covering first. For starters, there's no effective public policy discourse that pursues the implementation of basic health, education and sanitation measures, city planning and urbanization. It's saddening that a third rate US city has a better sewage system, water and electricity supply, and even just the footpaths, crosswalks and roads and properly laid out and the city effectively zoned, than anything in India. There's not even uniformity in signage (never might what languages are used).

How can you debate and deliberate public policy, when public policy is defined by political interests and you do not have the capability to differentiate between a criticism towards a political dispensations policy with a blind reverence to a political dispensation?

People seemingly forget how all this comes together. Even if you build an utopian township - it will be constructed using labour, capital and technology[ produced elsewhere. There's no net gain in output, but rather, you have a subsidized utopian lifestyle paid for with capital infusion from outside. Take the example of the suggested 'divide $100 billion for a big city into 1000 smaller towns' - where do you think that $100 billion for the development in Shanghai came from ? Those were generated from the incoming foreign capital into Shanghai's factories, and reinvesting the profits back into Shanghai! Rather than spread it all over Zhejiang and Jiangsu, they focused on investing building up Shanghai as a magnet for foreign capital and technology, so they could multiple their GDP growth.

I pity you. We were not talking about source of resources (yes, we can talk about that too) but we were talking about how to spend a given resource pool. When Hyderabad generates, say Rs 40000 crore tax revenues, it doesn't mean hYderabad is generating all that income. Secondly why do you think you need FDI for everything, beginning from toilets to water purification plant to Tunnel boring machine?

It is all about a vision for India. India need not be a copy of Beijing (if that is what you want, you should support communist or whatever china has style of leadership) or USA (if that is what you want, then you should be able to blame the existing political dispensation for doing such a miserable job. Nope, you want the benefits of Beijing and New York while you keep your political sycophancy safe.

Please stop applying post industrial concerns on a still somewhat pre-industrial society. There'll be a time to develop Indian solutions to harmonize industrialized life with an Indian touch, but we're decades away from it; this kind of Luddite/NIH attitude towards basic industrialization and urbanization is unnecessary.

Then why did India leap frogged from no telephones to mobile phones, by passing a revolution in land-lines? How silly is your thought. Who says a given society has to go thru one step to another, that too following some self destroying societies?

[Suraj]

How can you debate and deliberate public policy, when public policy is defined by political interests and you do not have the capability to differentiate between a criticism towards a political dispensations policy with a blind reverence to a political dispensation?

In your case, I agree it's a very good idea not to discuss the matter here since it's all about the underlying politics to you. Please stop asking to post on politics anywhere outside the thread dedicated to it. It is against forum rules.

[RamaY]

^ I followed your moderation policies Suraj.

[RamaY]

Emergence of 4-D printing

This will be very much useful, especially in infra-sector.

[Suraj]

We were not talking about source of resources (yes, we can talk about that too) but we were talking about how to spend a given resource pool. When Hyderabad generates, say Rs 40000 crore tax revenues, it doesn't mean hYderabad is generating all that income.

Spend ? And where does the money come from to spend, with a diffused set of small 1000-person townships ? Cities are where companies base their headquarters, because that's where the money and talent comes together. Cities exist because it concentrates capital and labour to generate economic output. In a distributed set of small towns, the ability to generate output is constrained by the limited capital base and labour.

There are plenty of ways to Indianize our urban life. You can take it as far down as to how to design skyscrapers - Charles Correa designed the brilliant Kangchenjunga building in Bombay decades ago just on those lines, instead of the standard glass and steel facade that is extremely resource intensive.

But the utopian 1000-person township model for a whole country ? That'll never generate enough capital to give its residents anything beyond a destitute life. It's not accidental that the economic development everywhere in the world - even in the Indus Valley 4000 years ago - was characterized by urbanization into large cities.

Then why did India leap frogged from no telephones to mobile phones, by passing a revolution in land-lines? How silly is your thought. Who says a given society has to go thru one step to another, that too following some self destroying societies?

That's not really a good example. How much of that technology was manufactured locally ? Every part of that infrastructure has substantial import content. While ARPUs are in Rupees, the costs are in dollars and generates a net drain on the balance of payments ledger. Remember Gurumurthy's capital goods article ? The result is an industry that's primarily services driven, with very narrow margins, low value addition and a minor addition to the industrial base, via facilities like Nokia's assembly plant.

[RamaY]

Suraj,

Firstly the source of funds. There are three possible sources; 1) GoI 2) Local funds using bonds 3) FDI.

GoI opened the infra sector (let us limit the discussion to civic infra like the list you mentioned) quite a few years ago (was it 1991?). How much FDI came into civic infra (not the gated communities) since then?

The current political dispensation started (IIRC) an urban development plan few years ago with Rs 1Lakh crore (~$25b in those days). That means the primary source of our civic infra development has been GoI and not FDI.

So how do we go from here? Do we wait for FDI or make the regime even better to attract FDI? What if we fail to attract FDI? Do we delay or drop developing our civic infra?

The alternative approach is to develop the necessary resources internally. If Indians, like many people say here, are that wealthy to import $50b of gold every year, can definitely invest that amount in their own civic infra development bonds, provided they can trust the GoI with their investments and most importantly their ability to execute such a vision/project.

Coming to the technology wave that we should be, kindly tell us which technology India is developing TODAY, after 60 years of current economic policy? Past few pages of this very thread was about capital goods imports that are mostly related to previous-gen industrial capacity. The current gen industrial technology is still unavailable to even chaina for export (Like Japanese HSR, Western/Korean nuclear power reactors, first world TBMs etc).

So which generation of technology would you copy/borrow/buy/steal at any given moment? I think the common sense suggests that a nation is better off with importing most advanced technologies available at any given moment.

Coming to the level of urban development, GOI itself is working to develop 1000 towns all over India with its Urban Development programs. Please take a look at this list - http://en.wikipedia.org/wiki/List_of_mo ... s_in_India. By the time the list comes to 50, the city population falls down to below 1 million. This in a country with 1.2 billion population.

Then comes the total Economic cost of urbanization. If technological development is as great and desirable as people say, then how is it difficult to make technology reach the existing population centers? Why do we want to displace millions of Indians, leaving their free/own homes and cheap cost-of-living for cities where they have to live in slums with barely enough to live?

The biggest factory in the world is of Foxconn, where its biggest factory employees a 250k employees, where the city population is about 1.5m. Then how is it impossible, even by the past generation industrial model (IMHO), to have cities with population of maximum 4-20k? I know you are talking about the logistics costs that comes with decentralization.

But the fact is that the average distance between average towns is 20km (which is nothing, compared to west where it is common to commute 30-40miles to work every day). The benefit of this approach is saving the cost associated with population migration and rehabilitation.

Finally this all takes some Bharatiya vision, and capability and willingness to execute that vision, of course with existing Indian employees and investments. The problems associated with delve into Politics so I will stop here.

[Suraj]

Firstly the source of funds. There are three possible sources; 1) GoI 2) Local funds using bonds 3) FDI.

You'll not have access to any of those three. Maybe local bonds, but that's it. We are discussing the viability of the distributed small township model. The fundamental measure of sustainability is that there is no net capital infusion from outside. The townships have to generate their own capital. Ergo, no money from GoI. Probably no FDI, because no one is going to invest $1-2million in a hundred different little towns; this is an Indian model and outsiders are not compelled to follow it. You can issue a bond, but definitely not for billions - at most a few million dollars' worth. As you can see, that model does not work.

I'm aware that we need more cities - that's exactly what I said the article posted by Atri was about. It's not an example of de-urbanization but more and more cities replacing villages. Even Los Angeles was a small town of 5000 people back in 1880 or so. It's definitely not an example of some independent sustainable township. In fact, none of this is any sort of 'Bharatiya dharmic model' - it's just standard urbanization and the growth of suburban sprawl - and you're too late to patent it and call it Indian. Here in silicon valley you already have all of what you're describing - a whole bunch of towns of a few tens of thousands of people. Raja Bose lives in one, Anujan in another, ramana in yet another and me elsewhere

[RamaY]

^ It is even better if it is not a dharmic model. You should have no problem copying it.

That model you talk in US is achieved by making the capital and technology accessible to any part of the nation.

For example check this list of GE aerospace facilities - http://www.geaviation.com/aboutgeae/fac ... uring.html

How many of these facilities, in your opinion, generated the capital from local towns? How could GE have these facilities all over the place and yet achieve the efficiency it did?

If centralization is the key for industrialization, why is Detroit failing?

[Suraj]

So now you're basically arguing what I've been arguing for all along and asking why something else won't work ?

[RamaY]

Then what are you 'arguing' with me? Go read your posts.

[KrishnaK]

Then why did India leap frogged from no telephones to mobile phones, by passing a revolution in land-lines? How silly is your thought. Who says a given society has to go thru one step to another, that too following some self destroying societies?

India leap frogged from no telephones to mobile phones, by twiddling it's thumbs. Any advantages that might have accrued to the Indian economy by having telephones were simply lost. Only those services that didn't require costly infrastructure development thrived. If we wait long enough, we won't have anybody left to develop infrastructure for. Then we won't have to be like China, only like the Bahamas or Maldives.

[Suraj]

RamaY, do you have a point here ? The silicon valley model of adjacent cities/towns - if that's what you've been advocating all along - is the epitome of urban sprawl. It has *nothing* to do with some independent and sustainable series of small towns with a low footprint. We even have slums here, as well as overcrowded schools and everything else that characterizes urban life.

You're going to have urbanization with all its attendant costs and horrors (slums etc) no matter how you go about it. The only solution is to control the inflow of migrants and effectively reinvest the revenues generated in the cities back into making their infrastructure and facilities better suited to taking on a larger population. There's no magic 'Bharatiya' solution here.

[RamaY]

What is "your" problem Suraj?

That the suggestion that it is 'more effective' to invest in existing population centers (so-called villages) and decentralizing economy than going to your recommended route of today to steam engine to spinning mills to steel mills to automobile revolution to ....?

Or that the suggestion that India should follow its own Bharatiya vision where technology, innovation and civic infra is made available to people where they are instead of migrating people to cities?

Or your mis-understanding that California is a model where local population was empowered by technology instead of human migration that is attracted by access to economic activity?

Or my calling my thoughts as Bharatiya and somehow it is not secular enough for you?

Like I said, please read your posts past two pages.

[Suraj]

My problem is that formulating unique solutions for the sake of calling them unique homemade solutions, is a pointless exercise. It detracts from focussing on the problems at hand and what needs to be done to fix them, because planning instead focuses on whether the solution is sufficiently unique.

This thought process is functionally exactly the same as 'Islamic banking', where they go to great lengths to not call the time value of money 'interest', but something else, and jump through hoops to call it 'Islamic'. That's a pointless, inefficient approach, serving no other purpose than doctrinaire purity. It's ironic when posters rightfully mock these, and then come here and speak of 'Bharatiya' or 'dharmic' solutions.

California is absolutely a model of migration of people into a concentrated area leading to the creation of cities. This state is all about people running to the fledgling dynamic cities to build a better life. A hundred years ago, SF was the preeminent city of Calif, while LA was a small town. A few decades of the movie industry, followed by aerospace and ancillary industries. Exactly what's happening in the big Indian cities now.

[RamaY]

I am aware of "Islamic banking" type traps.

The alternative model I (and Atri if I understood him correctly) suggested in the previous page was that the new developments in technology make the 'economies of scale' useless or non-differentiating factor. In the earlier generation, economies of scale were required for the capital requirements in technology was very high. But the situation is changed now. The new generation technologies allow us to move from current situation to next-gen industrialization bypassing the 'economies of scale' phase that China is invested in.

I will give the example of toys. The other day someone posted that toy industry needs $mmm investment because it is not profitable without the economies of scale. But now a 3-D printer costing $500 (less than the cost of a smart phone, millions of which are sold in India) can print a custom toy for a child in every mall in Bharat.

This approach will avoid the unnecessary cost of human migration.

Now it is up to us if we want to call it unique or Indic or Bharatiya or Arapian model.

You and I had a discussion about "sustainable economic model", as a next phase to "fin/services economy" a couple of years ago and at the time too you wondered what it was.

It is not wise to go thru steps 1 thru 10 like a Jambie society just because our 'ideological' masters did so. If we are capable of skipping few steps, that too with no -ve impact, it is prudent to do so. Such a vision can be an innovation in itself (like a process patent).

PS: First of all you have to get rid of the thought that Hindusim == Abrahamic faiths, so any Sanskrit word must be same as some Arabian concept. That in itself is an ideological prejudice, that you ask others to avoid, in the threads you moderate.

[johneeG]

I think 'urbanization' should be defined first, so that it would be clear as to who is trying to say what.

Does 'urbanization' mean:
a) roti(food), kapda(clothes) aur makan(made of brick and cement)
b) bijli(electricity & fuel), sadak(roads), pani(water supply)
c) education, technology, and employment

If so, then villages can be 'urbanized'. And they can be done in a self-sustaining way mostly without having to depend on the others.

On the other hand, if 'urbanization' means creating a towns, cities, metropolis,...etc then I think it is unrealistic(due to logistics, prohibitive cost and implementation) to create so many urban centres in India. And if one wants to migrate many people from villages into these urban centres, then I think it is simply unsustainable. Already, the cities, towns and metros are strained by more population than they can support. There is simply no way that cities or towns or metros can be created to support majority of India unless one wants to go the China way and create a giant slums along with massive environment pollution. Environment pollution is not just some moral or ethical issue. It is an economic, social and health issue. Environment pollution means bad affects on the health of people which means expenditure on hospital bills and medicines. It also means lower quality of life for people. And if the water bodies or lands are polluted, that means natural resources are corrupted. If the natural resources are polluted, then it becomes difficult to run a proper economy(which benefits people).

Many areas in cities, towns and metros around the world have no bijli, no pani, no roti, no kapda, and no employment, no education and no technology. The crime rate increases massively due to such situations. People cannot even invent their own solutions and are completely dependent on the sarkaar to provide them security and basic amenities in cities or metros.

So, its a bad plan and seems unfeasible to me.

A better plan is to take the positive aspects of 'urbanization' to the villages while avoiding the negative aspects. The need is to reverse the migration and not to increase it.

Most people who migrate to cities or metros have to live in ghettos without any associated benefits of 'urbanization'. These people find it hard to gain employment also. Given a chance of gainful employment and benefits of 'urbanization' in their own village, they will reverse migrate.

Industries(particularly for manufacturing products like TVs, Phones, Fridge, Mixer, Cars/Vehicles, etc...) have their own importance. But other products like toothpaste, soap, shampoo, clothes, ...etc can be produced in villages itself especially if the technology(along with electricity and fuel) is made available.

Most villages can have self-sustainable sources of electricity or fuel or water supply by community solutions, like Atri saar said. Kudos to Atri saar for explaining it so lucidly.

One needs to identify what are the products/solutions which can be manufactured locally(at village level, at district level, ...etc) by community solutions and what are the products/solutions which need large-scale industries. And then the sarkaar needs to plan accordingly.

Modi was just talking about a bio-fuel & bio-fertilizer from the waste of the cities and towns to be supplied to villages around the cities. Such measures, he says, will bring down the dependence of the farmers on chemical fertilizers and hence bring down the cost of the chemical fertilizers. It will also be waste-management.

Thumbs up to Modi for coming up with such an idea(or accepting this idea from whoever who gave it to Modi because it takes an intelligent man to accept a good idea and implement it). It seems he plans to go ahead with pilot projects in some select cities and towns. And then expand it from there in stages.

Such ideas are needed.

Instead if the focus is to create more and more cities, towns or metros to accommodate most of the deshi population, then I think it would never be enough nor is it going to be a solution.

[Suraj]

I will give the example of toys. The other day someone posted that toy industry needs $mmm investment because it is not profitable without the economies of scale. But now a 3-D printer costing $500 (less than the cost of a smart phone, millions of which are sold in India) can print a custom toy for a child in every mall in Bharat.

Fascinating. Who produces the 3D printer in the 100s of thousands to equip all those malls ? How about the precision engineering required to produce the components ? And the material that is fed to the printer ? The electricity ?

My point is, your example is a case of innovation at the front-end. It's similar to film roll technology being replaced by digital cameras. It took away an entire supply chain built on economies of scale, and replaced it with another - that of photosensors and assorted components needed for digital photography, taking years to mature on its own right into a commodity item as opposed to a speciality toy, because it took time for the economies of scale to kick in!

In the next century there could be 3D printers in toy shops, portable fuel cells powering basic electricity needs instead of an electricity grid, etc, but somewhere else there will be factories producing that stuff, using economies of scale to keep them cheap enough to commoditize them. Economies of scale is not a trend. It's the basic foundation that makes something cheap enough for mass consumption, regardless of whether you're talking of shampoo satchels or 3D printers. Cities themselves are concentrated sources of capital and labour harnessing economies of scale.

[Vayutuvan]

3D printers are just a fad and will fade away pretty soon. Raw material is very expensive, takes too long a time to print anything complicated and the gee-gaw that comes out is of underwhelming quality. It is a just a toy and it is not yet clear whether it will be anything more than that.

I know people have printed whole bicycles (in labs) and all but the process can in no way scale to the level of fully automated (and a few of them lights-out mostly in Japan) assembly lines.

As for Silicon valley, there is no process in sight that can replace current extremely large scale integration despite all the talk and excitement of DNA computing and other kinds of computing models bandied about. Certain processes that work in the small would not scale and it will be several decades (some optimists think it is 20 years but my estimate is more like 40 years) before current mass manufacturing techniques of electronics are superseded. Sorry for raining on the party - the exponential exploitation of resources is a self limiting process.

[disha]

3D printers are just a fad and will fade away pretty soon. Raw material is very expensive, takes too long a time to print anything complicated and the gee-gaw that comes out is of underwhelming quality. It is a just a toy and it is not yet clear whether it will be anything more than that.

The same was said, as stated above, about the following:

1. Fuzzy logic., the japaneese took it seriously and implemented in washing machines.
2. LCD
3. LED Light bulbs
4. Electric cars - a stop gap., hybrids are a big hit already and is already considered "yesterday's" technology.
...

I know people have printed whole bicycles (in labs) and all but the process can in no way scale to the level of fully automated (and a few of them lights-out mostly in Japan) assembly lines.

How about printing a car to your specification, and that to delivered at your home after an hour of you ordering it? And the car self-drives to your home - basically there is no driver. Yeah even in India. Going to happen, with us - without us - inspite of us. And in a time frame in which you and I will enjoy those innovations.

As for Silicon valley, there is no process in sight that can replace current extremely large scale integration despite all the talk and excitement of DNA computing and other kinds of computing models bandied about. Certain processes that work in the small would not scale and it will be several decades (some optimists think it is 20 years but my estimate is more like 40 years) before current mass manufacturing techniques of electronics are superseded. Sorry for raining on the party - the exponential exploitation of resources is a self limiting process.

Here are the tech marvels in 1992/93 replaced in 2012 (20 years on a mass market basis)

1. A laptop, a video camcorder, a phone recorder, an electronic address book, a mobile phone, a pager and a watch - all replaced by a single device - the "smart" phone.

2. WWW was born and the first bag less vacuum cleaner invented.

3. CFL was the cutting edge technology. LED bulbs are not even considered cutting edge technology now.

So if you are arguing on the basis of technological gaps, you are on an extremely thin wicket. Technology will evolve, evolve faster and will make the change of pace faster. There is enough technology now to close the gap on roti, kapda or makan.

If your argument is on "service delivery" then you have a point, since the current debate is how to finance, how to deliver the "goods and services" efficiently - whether to call the consumers at one place or push the delivery to the consumer.

[Suraj]

There's such a thing as being ahead of its time. Leonardo da Vinci's design for aircraft and helicopters were ahead of its time because there wasn't sufficiently advanced materials science to support it. Charles Babbage's Difference Engine could not be built for lack of machining precision at that time. Electric cars will similarly face challenges with battery design over the next several years. Even Teslas are quite limited cars today - drive them spiritedly, and I'd be lucky to make it from north to south bay without having to spend a while charging it. Battery technology, whether it is charge storage density, or charging rate, isn't advanced enough yet.

There are two sets of problems- a) that the technology cannot be translated into production at the desired level of tolerances and b) that it cannot be produced at sufficient scale to make it cheap enough to be a commodity.

It's all well to be a visionary, but productizing something takes a lot more than vision. Without either the technology to translate the vision into reality, or the brute economies of scale to make it cheap enough by amortizing the cost over a large volume, translating vision to reality is not possible.

[Arjun]

There's such a thing as being ahead of its time. Leonardo da Vinci's design for aircraft and helicopters were ahead of its time because there wasn't sufficiently advanced materials science to support it. Charles Babbage's Difference Engine could not be built for lack of machining precision at that time. Electric cars will similarly face challenges with battery design over the next several years. Even Teslas are quite limited cars today - drive them spiritedly, and I'd be lucky to make it from north to south bay without having to spend a while charging it. Battery technology, whether it is charge storage density, or charging rate, isn't advanced enough yet.

There are two sets of problems- a) that the technology cannot be translated into production at the desired level of tolerances and b) that it cannot be produced at sufficient scale to make it cheap enough to be a commodity.

It's all well to be a visionary, but productizing something takes a lot more than vision. Without either the technology to translate the vision into reality, or the brute economies of scale to make it cheap enough by amortizing the cost over a large volume, translating vision to reality is not possible.

Possible. Predicting the extent of acceptability of new technologies is never easy...that's the domain of the industry analyst or some would say the 'futurist'.

You are taking a pessimistic stance on 3D printing, there are others who have a more optimistic view. Boeing for example uses 3D printing for a number of its parts already.

For those who are interested, 3D printing is one of the 12 disruptive technologies included in Mckinsey's latest report on the technology innovations that are likely to shape the world in the next 10 - 15 years. There is some detailed market sizing available in that particular chapter which folks I am sure would find interesting. The report is freely downloadable from the Mckinsey website.

[Atri]

I think 'urbanization' should be defined first, so that it would be clear as to who is trying to say what.

Does 'urbanization' mean:
a) roti(food), kapda(clothes) aur makan(made of brick and cement)
b) bijli(electricity & fuel), sadak(roads), pani(water supply)
c) education, technology, and employment

If so, then villages can be 'urbanized'. And they can be done in a self-sustaining way mostly without having to depend on the others.

Industries(particularly for manufacturing products like TVs, Phones, Fridge, Mixer, Cars/Vehicles, etc...) have their own importance. But other products like toothpaste, soap, shampoo, clothes, ...etc can be produced in villages itself especially if the technology(along with electricity and fuel) is made available.

One needs to identify what are the products/solutions which can be manufactured locally(at village level, at district level, ...etc) by community solutions and what are the products/solutions which need large-scale industries. And then the sarkaar needs to plan accordingly.

Modi was just talking about a bio-fuel & bio-fertilizer from the waste of the cities and towns to be supplied to villages around the cities. Such measures, he says, will bring down the dependence of the farmers on chemical fertilizers and hence bring down the cost of the chemical fertilizers. It will also be waste-management.

+1 only.

Although I am yet not sure on cement houses. If we do more research on our traditional way of making houses (mud, clay, wood) and design it properly to have leveled floor, enough internal light scattering making home well-lit, the homes built in traditional manner are much more cooler in warmer days than cement houses. My well ventilated ancestral home where loo flows in May and trmperatures in range of 42-45 are daily average, thr home interiors are quiete cool and a ceiling fan suffices. In the "new" cement concrete flat even AC (set at 25 degrees) does not suffice.

Research is needed. Whatever I said is not utopian. As Insaid and as RamaY garu and JohneeG garu clarified is precisely this. There are many things like FMCG, Food products, biotechnological products, many pharmaceutical products, biopharma, alternative fuel, even small scale manufacturing of many spare parts for autorepair, textiles, many organic dyes, beverages(India has rich traditiin of making high quality alcohols. We have one entire jaati dedicated for this. If only we could standardize manufacturing of tharra, mahua, tadi, santraa etc), furniture, leather, many organic chemicals (produced by chemical or 1st or 2nd gen biiprocesses), many polymers, diagnostic kits (like pregnancy, blood sugar and many other small kits) many small laboratory and surgical equipments for local hospitals, laboratories, schools and universities and ITIs. Possibilities are endless only. Heck, if every village is provided by high bandwidth internet connection, much of the tech-supprt industry as well much of what passess off as IT industry in India can be decentralized and there can be a much needed forest instead of SEEPZ.

I think anything which can be manufactured profitably (speaking relatively of course, profit per se has no limits only) in a factory spanning in the area not more than 9-10 acres can be and should decentralized and localized. There is of course heirarchy of localization. Check out my "Pancha-Kroshi" model in deracination dhaga. Industrial scale hierarchy can be modeled or imagined on similar lines.