NOVANEWS
Inclusive Growth and its Application on Rural and Urban Development in India by Nhan “Nathan” Tri Tran
I. Introduction
When we mention about sustainable development in South Asia, India is one of the earliest countries that applied it into their development scheme. In respect and abide to the Millennium Goals of the United Nations (UN), India set their national plan to focus on sustainable development by greening their economic structure and by applying inclusive growth to link the development between rural and urban areas.
But it has not been a successful and flawless progress due to the failure of the institution framework to integrate and allocate resources and technologies that lead to both failure in urban development and disparities of growth in India. The content of this paper will be dedicated to examine India urban and rural development in respect to the inclusive growth to point out their success and flaws in both sectors and the trend of disparity of wealth. This paper will also provide some recommendation for improvement.
II. Overview of India Inclusive Growth
a. Inclusive Growth in India
Rural and urban areas are two interdependent factors in a country economic, political and social structure. Inclusive growth aims to bind the urban and rural livelihood and resources together to create a united development body that prosper the country. The main purposes are to relocate technologies, intellectual workforces and capital from urban areas to rural areas in exchange for its resources and labors to bring equal opportunities, development and benefit for both (Inclusvie Growth).
Therefore, governments and states should not treat urban and rural areas as too distinctive bodies. Because urban areas can as a rural areas’ main market and producer, rural sector can act as a buffer zone to partly absorb the macroeconomic affects/crisis for the urban areas (Rural China – Transition and Development, 1999). However, the application is another story as many developing countries have done the exact opposite. They concentrated countries’ resources and development projects into the urban areas, which consequently create a vacuum of capital and labor that widen the development gap between urban and rural areas. As the result of this, the poverty will continue to increase and the disparities of wealth will continue to expand (Fan, Chan-Kang, & Mukherjee, 2005).
And India is somewhat following this path. This is the reason why, even though India applied for inclusive growth since 2006 and the new administration lead by President Modi since May 2014 announced some potential development policies and initiatives that brought forth some short term successes, India is still rank 71 out of 144 countries in the Global Competitiveness Index 2015 (GCI) with a third of the population lives under extreme poverty and the urbanization ratio is only 32% (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015). An overview of India urban development and rural development will be provided below to help gaining in-depth understanding of the current circumstances.
b. India Urban Development
The urban development in India leads by President Modi, High Powered of Expert Committee (HPEC), the Ministry of Urban Development (Minister Venkaiah Naidu) and the Central Bank of India. It has been included and highlight in India Fifth Year Plan since 2010 with focus on the upgrade of urban infrastructure and services. India also create a lot of legal framework, institution, guideline and mechanism to conduct it. And the budget for urban development projects keeps increasing by $20 billion annually with an estimation of $640.3 billion needed till 2030 for maintaining and renewing urban infrastructure and services to boost economic growth (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015).
India urban development focus on eight major sectors of urban development (roads, transport, traffic support, street lighting, water supply, sewerage, storm water drains and solid waste management), the elimination/the improvement of the slum area, and the efficiency of urban service. Typical example can be found in Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which state, governmental agencies and urban development team work together since 2005 to encourage fast track development in India or in Clean India Mission (SBM), which improve the urban waste management and enhance people awareness about public health and environment (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015).
Besides, India sets up 5 industrial corridors surrounding the country in order to modernize and industrialize the country (Delhi-Mumbai Industrial Corridor (DMIC), Chennai-Bangalore Industrial Corridor, Mumbai-Bangalore Economic Corridor, Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) and Vizag–Chennai Industrial Corridor). And President Modi recently signed partnership with Japan to establish/renovate current cities into “100 smart cities” across India with focus on improving mobility, energy efficiency, urban services, living standard and ICT (information and communication technologies) (What is Smart City?, 2015)
c. India Rural Development
The rural development in India leads by President Modi, High Powered of Expert Committee (HPEC), the Ministry of Rural Development (Minister Chaudhary Birender Singh) and the Central Bank of India. It has been included and highlight in India Fifth Year Plan since 2010 with focus on the upgrade of rural livelihood, rural housing, job training and job opportunities, and the allocation of budget. India also create a lot of legal framework, institution, guideline and mechanism to conduct it. And the budget for rural development projects keeps increasing by $7 billion annually with an estimation of $10.9 billion needed for the year of 2016 to invest in rural employment, rural housing, irrigation system and disaster prevention (Annual Report 2014-2015, 2014).
Typical example can be found in Mahatma Gandhi National Rural Employment Guarantee Act (GNREGA) where they provide guarantee wage employment to 576,000 people to help promote rural livelihood and security since 2005 or in Shyama Prasad Mukherjee Rurban Mission where they improve the living condition and the quality of life in rural villages (Annual Report 2014-2015, 2014). Besides, they successfully manage to shift 36% of the rural employment from farm-sector to non-farm sector (manufacturing, construction, trade, hotels and restaurants and transport).
III. India Development Challenges
Despite the claim of applying inclusive growth in the Twelfth Five Year Plan (2012 – 2017), there are very few projects or linkage between urban and rural development in India. There is a significant gap between the amount of budget for urban and rural development as showed above. And it will create a lot of social and economic problems if India does not change it strategy and planning soon.
Common challenges that can be found is the overwhelming of India mega cities and the high poverty rate of rural areas. The Indian urban population is rank second in the world in term of size, from 222 million (26% of the population) in 1990 to 410 million (32% of the population) in 2014, but the urbanization ratio still remains considerably low with only 32% compared to other countries (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015). However, with the declining from 79% in 1960 to 42% of population residing in the rural village (Annual Report 2014-2015, 2014), India is witnessing a trend of rural people migrates to urban areas that will further overwhelm the urban areas of India. Besides, it is very difficult for urban people to afford housing and serviced land, to access to urban services such as transit system, road networks, health care, etc. and to start-up or grow a business. The reason behind it are the complicated bureaucracy system, the lack of stable and standard urban services and the opaque financial policies. While urban areas is overwhelming with migrants and downgrade in urban services, one third of the rural areas population still lives under extreme poverty (Annual Report 2014-2015, 2014).
It is worth noticing that India manages to reduce poverty by 2.9% annually in rural areas and 5.2% in urban areas (Annual Report 2014-2015, 2014), the poverty rate is still remain high with increasingly reported rate on Schedule Tribe (42%) and Schedule Castes (31%). This shows the high rate of inequality in social classes still happen and this combines with the concentrated resources into urban areas are the main reason why India social disparities are increasing by 7% among states and the rural – urban inequality is widening by 2% annually (India Rural Development Report 2012 – 2013, 2013)
IV. Conclusion and India Development Recommendation
Even though India has initiated a lot of frameworks and projects for their urban and rural development in order to achieve inclusive growth, the outcome is not on par with the money and efforts that they have invested. The Indian government usually reports managerial, financial and technical constrains as main challenges of their urban and rural development projects. But, the real reasons behind these challenges can be contributed to the complicated and the inefficient bureaucracy and development institutions, to the wrong policy of focusing resource in urban areas rather than whole areas, to the fail to integrated spatial planning at all level across India and to the lack of effective monitoring and controlling system. With the new administration under Prime Minister Modi and a more inclusive development projects to achieve low carbon economy and inclusive growth, hopefully India will be able to bridge their urban and rural development to prosper their country.
References
Annual Report 2014-2015. (2014, December 3). Retrieved from Ministry of Rural Development – India: http://rural.nic.in/…/ann…/Annual_Report_2014_15_English.pdf
Fan, S., Chan-Kang, C., & Mukherjee, A. (2005, August). Rural and Urban Dynamics and Poverty: Evidence from China and India. Retrieved from Research in Agricultural and Applied Economics: http://ageconsearch.umn.edu/bitstream/59598/2/fcndp196.pdf
Inclusvie Growth. (n.d.). Retrieved from Organisation for Economic Co-operation and Development: http://www.oecd.org/inclusive-growth/
India Rural Development Report 2012 – 2013. (2013). Retrieved from IDFC Rural Development Network: http://orientblackswan.com/…/9788125053927/content/irdr%20f…
Rural China – Transition and Development. (1999, May 28). Retrieved from Rural Development and Natural Resources Unit – World Bank: http://www-wds.worldbank.org/…/…/Rendered/PDF/multi_page.pdf
The Future of Urban Development & Services: Urban Development Recommendations for the Government of India. (2015, April). Retrieved from World Economic Forum: http://www3.weforum.org/…/WEF_IU_FUDS_Urban_Development_Rec…
What is Smart City? (2015). Retrieved from India Smart Cities Challenges: http://www.smartcitieschallenge.in/what-is-a-smart-city
I. Introduction
When we mention about sustainable development in South Asia, India is one of the earliest countries that applied it into their development scheme. In respect and abide to the Millennium Goals of the United Nations (UN), India set their national plan to focus on sustainable development by greening their economic structure and by applying inclusive growth to link the development between rural and urban areas.
But it has not been a successful and flawless progress due to the failure of the institution framework to integrate and allocate resources and technologies that lead to both failure in urban development and disparities of growth in India. The content of this paper will be dedicated to examine India urban and rural development in respect to the inclusive growth to point out their success and flaws in both sectors and the trend of disparity of wealth. This paper will also provide some recommendation for improvement.
II. Overview of India Inclusive Growth
a. Inclusive Growth in India
Rural and urban areas are two interdependent factors in a country economic, political and social structure. Inclusive growth aims to bind the urban and rural livelihood and resources together to create a united development body that prosper the country. The main purposes are to relocate technologies, intellectual workforces and capital from urban areas to rural areas in exchange for its resources and labors to bring equal opportunities, development and benefit for both (Inclusvie Growth).
Therefore, governments and states should not treat urban and rural areas as too distinctive bodies. Because urban areas can as a rural areas’ main market and producer, rural sector can act as a buffer zone to partly absorb the macroeconomic affects/crisis for the urban areas (Rural China – Transition and Development, 1999). However, the application is another story as many developing countries have done the exact opposite. They concentrated countries’ resources and development projects into the urban areas, which consequently create a vacuum of capital and labor that widen the development gap between urban and rural areas. As the result of this, the poverty will continue to increase and the disparities of wealth will continue to expand (Fan, Chan-Kang, & Mukherjee, 2005).
And India is somewhat following this path. This is the reason why, even though India applied for inclusive growth since 2006 and the new administration lead by President Modi since May 2014 announced some potential development policies and initiatives that brought forth some short term successes, India is still rank 71 out of 144 countries in the Global Competitiveness Index 2015 (GCI) with a third of the population lives under extreme poverty and the urbanization ratio is only 32% (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015). An overview of India urban development and rural development will be provided below to help gaining in-depth understanding of the current circumstances.
b. India Urban Development
The urban development in India leads by President Modi, High Powered of Expert Committee (HPEC), the Ministry of Urban Development (Minister Venkaiah Naidu) and the Central Bank of India. It has been included and highlight in India Fifth Year Plan since 2010 with focus on the upgrade of urban infrastructure and services. India also create a lot of legal framework, institution, guideline and mechanism to conduct it. And the budget for urban development projects keeps increasing by $20 billion annually with an estimation of $640.3 billion needed till 2030 for maintaining and renewing urban infrastructure and services to boost economic growth (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015).
India urban development focus on eight major sectors of urban development (roads, transport, traffic support, street lighting, water supply, sewerage, storm water drains and solid waste management), the elimination/the improvement of the slum area, and the efficiency of urban service. Typical example can be found in Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which state, governmental agencies and urban development team work together since 2005 to encourage fast track development in India or in Clean India Mission (SBM), which improve the urban waste management and enhance people awareness about public health and environment (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015).
Besides, India sets up 5 industrial corridors surrounding the country in order to modernize and industrialize the country (Delhi-Mumbai Industrial Corridor (DMIC), Chennai-Bangalore Industrial Corridor, Mumbai-Bangalore Economic Corridor, Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) and Vizag–Chennai Industrial Corridor). And President Modi recently signed partnership with Japan to establish/renovate current cities into “100 smart cities” across India with focus on improving mobility, energy efficiency, urban services, living standard and ICT (information and communication technologies) (What is Smart City?, 2015)
c. India Rural Development
The rural development in India leads by President Modi, High Powered of Expert Committee (HPEC), the Ministry of Rural Development (Minister Chaudhary Birender Singh) and the Central Bank of India. It has been included and highlight in India Fifth Year Plan since 2010 with focus on the upgrade of rural livelihood, rural housing, job training and job opportunities, and the allocation of budget. India also create a lot of legal framework, institution, guideline and mechanism to conduct it. And the budget for rural development projects keeps increasing by $7 billion annually with an estimation of $10.9 billion needed for the year of 2016 to invest in rural employment, rural housing, irrigation system and disaster prevention (Annual Report 2014-2015, 2014).
Typical example can be found in Mahatma Gandhi National Rural Employment Guarantee Act (GNREGA) where they provide guarantee wage employment to 576,000 people to help promote rural livelihood and security since 2005 or in Shyama Prasad Mukherjee Rurban Mission where they improve the living condition and the quality of life in rural villages (Annual Report 2014-2015, 2014). Besides, they successfully manage to shift 36% of the rural employment from farm-sector to non-farm sector (manufacturing, construction, trade, hotels and restaurants and transport).
III. India Development Challenges
Despite the claim of applying inclusive growth in the Twelfth Five Year Plan (2012 – 2017), there are very few projects or linkage between urban and rural development in India. There is a significant gap between the amount of budget for urban and rural development as showed above. And it will create a lot of social and economic problems if India does not change it strategy and planning soon.
Common challenges that can be found is the overwhelming of India mega cities and the high poverty rate of rural areas. The Indian urban population is rank second in the world in term of size, from 222 million (26% of the population) in 1990 to 410 million (32% of the population) in 2014, but the urbanization ratio still remains considerably low with only 32% compared to other countries (The Future of Urban Development & Services: Urban Development Recommendations for the Government of India, 2015). However, with the declining from 79% in 1960 to 42% of population residing in the rural village (Annual Report 2014-2015, 2014), India is witnessing a trend of rural people migrates to urban areas that will further overwhelm the urban areas of India. Besides, it is very difficult for urban people to afford housing and serviced land, to access to urban services such as transit system, road networks, health care, etc. and to start-up or grow a business. The reason behind it are the complicated bureaucracy system, the lack of stable and standard urban services and the opaque financial policies. While urban areas is overwhelming with migrants and downgrade in urban services, one third of the rural areas population still lives under extreme poverty (Annual Report 2014-2015, 2014).
It is worth noticing that India manages to reduce poverty by 2.9% annually in rural areas and 5.2% in urban areas (Annual Report 2014-2015, 2014), the poverty rate is still remain high with increasingly reported rate on Schedule Tribe (42%) and Schedule Castes (31%). This shows the high rate of inequality in social classes still happen and this combines with the concentrated resources into urban areas are the main reason why India social disparities are increasing by 7% among states and the rural – urban inequality is widening by 2% annually (India Rural Development Report 2012 – 2013, 2013)
IV. Conclusion and India Development Recommendation
Even though India has initiated a lot of frameworks and projects for their urban and rural development in order to achieve inclusive growth, the outcome is not on par with the money and efforts that they have invested. The Indian government usually reports managerial, financial and technical constrains as main challenges of their urban and rural development projects. But, the real reasons behind these challenges can be contributed to the complicated and the inefficient bureaucracy and development institutions, to the wrong policy of focusing resource in urban areas rather than whole areas, to the fail to integrated spatial planning at all level across India and to the lack of effective monitoring and controlling system. With the new administration under Prime Minister Modi and a more inclusive development projects to achieve low carbon economy and inclusive growth, hopefully India will be able to bridge their urban and rural development to prosper their country.
References
Annual Report 2014-2015. (2014, December 3). Retrieved from Ministry of Rural Development – India: http://rural.nic.in/…/ann…/Annual_Report_2014_15_English.pdf
Fan, S., Chan-Kang, C., & Mukherjee, A. (2005, August). Rural and Urban Dynamics and Poverty: Evidence from China and India. Retrieved from Research in Agricultural and Applied Economics: http://ageconsearch.umn.edu/bitstream/59598/2/fcndp196.pdf
Inclusvie Growth. (n.d.). Retrieved from Organisation for Economic Co-operation and Development: http://www.oecd.org/inclusive-growth/
India Rural Development Report 2012 – 2013. (2013). Retrieved from IDFC Rural Development Network: http://orientblackswan.com/…/9788125053927/content/irdr%20f…
Rural China – Transition and Development. (1999, May 28). Retrieved from Rural Development and Natural Resources Unit – World Bank: http://www-wds.worldbank.org/…/…/Rendered/PDF/multi_page.pdf
The Future of Urban Development & Services: Urban Development Recommendations for the Government of India. (2015, April). Retrieved from World Economic Forum: http://www3.weforum.org/…/WEF_IU_FUDS_Urban_Development_Rec…
What is Smart City? (2015). Retrieved from India Smart Cities Challenges: http://www.smartcitieschallenge.in/what-is-a-smart-city
