The Hindu Business Line : Focus on people’s needs

Our country is so poor that it does need growth. Hence, de-growth is not the solution, however much that may be for the more prosperous countries. What we need is a new kind of growth that concentrates on people’s needs, says P. V. INDIRESAN.

Shortage of resources is not the reason for our scarcity. We need better design of our habitations.

Mrs Rohini Nilekani, in a recent article, expressed her anguish about our declining ecology. She wrote: “Some groups in Europe, whom I recently read about, are challenging the idea of growth itself. They advocate de-growth, which allows people to ‘escape from the economy as a system of representation’. They believe this is the only way to empower the poor. Add de-growth to the new term “de-globalisation” and you have enough ammunition for prot racted debate for argumentative Indians.”

Mrs Nilekani points out her son’s obsession with simplicity. For instance, moved by his grandmother, her son will not have more than a few pieces of clothing. He does not need more. Then why should he waste money on more? His simplicity does cut down pollution — which is good, but it does have its own side effects.

It is no secret that, due to prevailing economic breakdown in the West, demand for undergarments has come down. Many, relatively poor people, who used to make a living making undergarments in the Tirupur factories have lost their jobs.

If Master Nilekani had purchased more of these garments and so had his friends with similar views, those relatively poor people would have had a better living; now they are suffering for want of a market for their skills. Thus, if the rich do not spend money extravagantly, many more people lose their jobs.

Then, are the luxuries and extravagances of the rich good or bad? Or, is their some other way, by which the poor will have their basic needs fulfilled? The issue is not simplicity but what the person does with the money so saved.

New norm for growth needed

Mrs Nilekani suggests we need a new norm for growth. She is rightly against the GDP as the indicator. As I have written several times, GDP includes three components — the goods like education, the bads like cigarettes and anti-bads like cancer treatment. We know of no way of separating the bads and the anti-bads from the GDP. Therein lies the rub.

We may say that good growth is the one that increases what people need but is in short supply. In our country, that would include food, water, energy, shelter, employability training, telecom, recreation space as well as transport to schools, healthcare and markets. How can we concentrate on these (true) goods with the money that young people like the junior Nilekani save by buying fewer shirts?

Charity, second-best option

Rich people spend their spare money on charity. However, charity is only the second-best option; it is not the best. The best you can do with spare money is to use it as capital to multiply itself; you spend it on charity only where capital will not help. Regrettably, capital has been used to maximise immediate profits, not general welfare.

For instance, why are we short of water or shelter or recreation space? Is there an absolute shortage of those essential needs? Apparently not; if we limit habitation density to 10,000 persons per sq km, except in desert areas, people can harvest enough rainwater. They will also have plenty of room for shelter and recreation. At that rate, our habitations will need barely 3 per cent of the nation’s space. So, there is plenty of resource to provide all those needs.

Our food production is far less efficient than the world average. It has been shown that we will get more rice by cutting down on water, seeds, fertiliser and pesticides. Transport needs too can be reduced drastically by keeping workplaces (and schools) close to dwellings of workers. Hence, shortage of resources is not the reason for our scarcity. We need better design of our habitations.

Better designs of our habitations will not arise out of charity but by using money as capital. Unfortunately, capitalists are focussed mainly on the rich; they do not know how to produce goods for the poor profitably or how to put them all together in a package.

Our country is so poor that it does need growth. Hence, de-growth is not the solution to our country however much that may be for the more prosperous others. Or, what we need is a new kind of growth that concentrates on people’s needs.

I state as my first proposition that we have erred in making our cities larger and larger, much larger than what developed countries have. Because our cities are larger than necessary they have become unmanageable; they have become badly polluted, expensive and cause acute shortages. They also reduce profits — which, unfortunately, few capitalists realise.

Manageable cities

We have two options: One, try to improve the governance of our large cities or, two, build better, more manageable cities.

Unfortunately, our urban governance is so poor that our smaller cities are actually worse than the large ones. That is the reason why our large cities continue to grow in spite of the losses and the pollution they generate.

As a second proposition, I suggest the following rules of urbanisation:

Every employer should guarantee every new employee (permanent or temporary) living space with assured water, electricity, telecom and sanitation.

Every employer will pay the full cost of travel to commute to work for every new employee who lives more than a km away.

Those employers who do not satisfy either condition will deposit the market cost of the service plus pay a penalty.

Let us see the consequences of these rules. One, the first rule ensures employers expand only where living space is ready and available. Rule Two ensures that employers will minimise daily commuting. Rule Three is a check that the first two rules are obeyed and there is money for future expansion.

There is another consequence: Employers will expand their businesses only where they can observe these rules economically; they will avoid crowded cities. Then, the number of our towns will spread, not cities by themselves as they are doing at present.

Give rurbanisation a try

Guaranteed water, energy, employability training, education, healthcare, mass transport/ telecom and recreation facilities may all be provided efficiently with a population no larger than several tens of thousands. Where mass transport is available, the population need not be concentrated at one point; it may even be distributed in a cluster of villages. I have called that scheme rurbanisation.

Will rurbanisation be acceptable? Will people be happy to live in villages and towns — provided they are well served with all urban amenities? Will that be better than our blind rush to build bigger and bigger cities? Will that produce more jobs than what we are able to generate at the present time? These are issues that are worth investigating.

Unfortunately, our politicians and their advisers are uninterested. That is why the country needs people like Mrs Nilekani not merely to write but to do. For instance, Infosys may be induced to install its next expansion not in cities such as Mysore or Pune (in the hope the civic authorities will take care of their employees) but in smaller places. There it should plan and install better habitations that will provide all the goods that not merely the employees, but those others who will serve them, need.

Such habitations can, with a little effort, be made superior to current ones. More important, they will also be more profitable than the current systems that Infosys has.

Think positively!

(The author is a former Director, IIT Madras. blfeedback@thehindu.co.in)

(This is the 249th in the Vision 2020 series. The last article appeared on March 30.)

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