IASbaba’s Daily Current Affairs – 11th December, 2015

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IASbaba’s Daily Current Affairs – 11th December, 2015

ECONOMICS

TOPIC: 

• General Studies 3: Infrastructure: Energy, Ports, Roads, Airports, Railways, etc. 
• General Studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation;

Why high-speed rail is viable?

• It has been reported that Japan has offered to finance the Mumbai-Ahmedabad high-speed rail (HSR) corridor, estimated to cost about Rs 90,000 crore, at an interest rate of less than one per cent.
• Whenever any news item on HSR appears, questions revolving around whether India really needs HSR are raised.

A look into various questions that arise out when talking about HSR:

Why should we develop HSR when air travel exists for faster travel between cities?

• India’s transport demand will triple or quadruple in the next three decades, and given that the negative externalities in terms of energy consumption and emissions are high for air travel, it is a great opportunity for India to go for low-energy and low-emission modes such as HSR.
• HSR is comparable with air travel in terms of end-to-end travel time for most inter-city trips of distances up to 600 km in case of HSR and 1,300 km in case of super-HSR such as maglev.
• In addition, India can also claim carbon credits for resorting to low-carbon transport – without losing on travel time.
• Thus, HSR is a better option in terms of energy efficiency, carbon footprint and inter-city travel time than air travel.

Is India at the state of economic development where it could build HSR?

• The rule of thumb for the timing of investment is that in the first year of construction of HSR, the country’s real per capita gross domestic product (GDP) at purchasing power parity (PPP) has to be at least $5,000.
• As reported by the World Bank, India’s real per capita GDP at PPP was $5,244 in 2014.
• So India has reached the economic level where it is appropriate to time investment into HSR.
• Moreover, there has been continuous upward mobility in terms of demanding more comfortable and faster travel across all sections of society in India.

Why should the government spend money on HSR when there are other pressing needs, including developing conventional rail infrastructure and social infrastructure such as schools and hospitals? 

• HSR has been planned on Golden Quadrilateral (GQ) and its diagonal routes of North-South and East-West corridors (NSEW), which are high-density corridors for both passenger and freight traffic.
• Indian Railways has planned HSR only on these high-demand routes.
• The government has no intention of developing HSR using its own funds – it would remain the facilitator in the execution of the project.
• As and when the corridors become financially viable, they would be taken up for HSR execution either with 100 per cent foreign direct investment or through public-private partnerships, or some other format where the government funding would be nil.
• Thus the question of spending taxpayer’s money on HSR projects does not arise at all.

How do we handle land requirement and fencing of HSR lines? 

• According to the International Union of Railways, to construct one kilometre of HSR (two lines), 2 hectares per km is required, whereas to construct a six-lane highway, 9.3 hectares per km is required.
• Given the difficulties associated with land acquisition in India for infrastructure projects and the compensation being introduced with the Right to Fair Compensation and Transparency in Land Acquisition and Rehabilitation and Resettlement Act, 2013, the lower land requirement of HSR for a transport corridor with higher passenger carrying capacity is a boon.
• The cost of about Rs 165 crore per km for HSR includes underground and elevated tracks in congested urban areas as well as provisions for fencing, centralised safety monitoring and other safety-related costs, among other things.

Way ahead:

• HSR would also reduce our crude oil import and dependency, energy consumption, carbon emissions and pollution and increase the overall supply of rail transport.
• By diverting people from travelling by road, HSR would also reduce road accidents.
• It would be a great loss to the country as a whole, if the construction of HSR is delayed indefinitely.

Connecting the dots:

• Economic survey 2014-15 pointed out to structural gaps for the low economic growth of the country. What do you understand by structural gap. Substantiate.
• Critically examine the various measures taken by government to curb structural gaps that persist in the country.
• Recently the government proposed to upgrade Delhi- Agra railway link into a high speed railway link. At this backdrop critically examine the importance of high speed railway links for India.

NATIONAL

TOPIC: 

• General Studies 1: Population and associated issues, poverty and developmental issues, urbanization, their problems and their remedies; Social empowerment
• General Studies 2: Development processes and the development industry  institutional and other stakeholders; Important aspects of governance, transparency and accountability
• General Studies 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Inclusive growth and issues arising from it. 

Villages — the bigger, the better

• A clear comprehension of rural development processes is missing in India.
• Available data clearly show residents of large villages are socio-economically better developed than those of smaller villages, and have higher utilisation of maternal and child health services.

Average village size in India

• Census 2011 reported that there are as many 6,40,867 villages in India out of which 597,483 are inhabited villages.
• Among them 82,149 villages have a population of less than 200.
• Nearly half the rural population is residing in 115,029 villages with population more than 2,000 but less than 10,000.

Growing size of villages

• Over the years, the larger villages have rapidly grown in number, and there has been a decline in the number of small villages in all the States.
• The intra-rural movement of population by village size also indicates an increase in the population of the large villages.
• Very few people (0.98 per cent) are living in villages with ‘Less than 200’ people.

Linkage between village size and development

• The provision of basic facilities like how well a village is connected with other areas, availability of safe drinking water, presence of schools and health centres, among others, are important for the development of rural areas.
• Naturally, the larger the size of a village, the more cost-effective it will be to provide it with services.
• Hence, the changes in the distribution of population by village size may be thought of as beneficial to rural development.

Why larger sized villages do better compared to smaller ones?

1. Population density is an important factor considered by policy makers to design developmental schemes and in this larger size villages override smaller ones.
2. Larger sized villages are better, in terms of economies of scale, to provide the facilities like education, drinking water and sanitation etc.

Smaller villages in a state are less likely to be connected by all-weather roads and to have other facilities like schools and health centres.

• In the process of rural infrastructure development, the connectivity of a village, through all-weather roads, seems crucial.
• If a village is connected by road, it increases mobility among its populace which in turn can facilitate a variety of other activities to promote employment.
• In addition, better accessibility will have a beneficial impact on the education and health of its residents.

Poverty rates and distance from city

• As distance from the nearest town increases, poverty for those villages also increases as compared to villages which lie in closer proximity to a town.
• Distance can affect poverty through influencing both rural labour demand and supply.
• More remote rural communities have more inelastic labour supply, which causes them to have higher poverty when labour demand is weaker, but allows them to capture more poverty-reducing benefits if they were to have stronger local job growth.
• Further, distance and travel time to roads are not highly correlated with welfare, while distance and travel time to urban centres are highly correlated with wealth indices: welfare decreases rapidly as access to urban centres gets worse.

Way ahead:

• Rural development of a State can be more contingent on how well it formulates the policies and implements the programmes.
• However, the process of development need not overlook the small villages.
• It may be better, in terms of economies of scale, to provide the facilities to large villages, but the government, as a custodian of society, also needs to have an impartial view towards the well-being of all its citizens irrespective of size.
• Proper attention to the development of small villages will go a long way in narrowing the existing inequalities in rural areas.

Connecting the dots:

• Critically examine the various rural development strategies adopted by the government since independence.

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