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Issues in Promoting Rural Infrastructure in India

Five decades of development planning in India has been unable to ensure a decent living for a large number of people residing in rural areas. Despite many large scale rural development schemes, the absolute number of people in poverty has not declined substantially; abject poverty still remains ubiquitous in rural regions. Lack of or inadequate basic infrastructure, both social and physical, continues to remain a major constraint to progress in numerous villages and their habitations. Even during the last decade of economic reform process, started in 1991, the dismal state of rural infrastructure has hardly improved. The natural reluctance of private investors in rural infrastructure projects has been based on not only no or low returns to their capital but also uncertainties and delays involved in realising anticipated revenue from the poverty-stricken users. This shying away syndrome of private capital from rural ‘unprofitable' projects has been observed, in this paper, for such critical sectors as sanitation, drinking water, roads and housing. Whereas the role of the state remains crucial in promoting these sectors, an aspect which has been seriously neglected concerns land reforms. The significance of land as a key endowment in rural areas needs to be reconsidered as an important option, which will go a long way in creating effective demand for rural infrastructure and its efficient utilisation can be ensured at the grass root level.

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Paper provided by Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV in its series Documents de travail with number 67.

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Length: 11 pages
Date of creation: Dec 2001
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Handle: RePEc:mon:ceddtr:67
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