Think India Foundation

Pace of urbanization in Bihar slow: Prof Kundu

In the absence of industrial and agricultural growth Bihar can not sustain its growth rate for too long.

This was the view expressed by Prof Amitabh Kundu of the Jawaharlal Nehru University while delivering a lecture on Problems of Regional Inequalities in the era of Globalization in India organized by the A N Sinha Institute of Social Studies on Wednesday.

Prof Kundu said that the pace of urbanization in Bihar is much slower than elsewhere in the country. While the national average of urbanization is 27.8 per cent annually that of Bihar is just 10.5 per cent.

He said the population of rural area of Bihar is decreasing at the rate of two per cent every year.

Prof Kundu said that the gap between urban and rural India is on rise. The disparity in urban India itself is also increasing. He said that the condition of the urban poor is even worse than the rural poor.
Prof Kundu, who teaches Economics, said that India was facing exclusionary growth where entry of poor migrants was being protested and prevented at many places.

He agreed with the Suresh Tendulkar Committee report on poverty and said the new estimates would help states like Bihar to have a larger resources allocation for the population living below poverty line.

Prof D M Diwakar presided over the function while Prof Nil Ratan proposed vote of thanks. Read More

Migration From Rural to Urban linked to Obesity, Diabetes risk

A novel study conducted in India has revealed that people who migrate from rural to urban areas face a high vulnerability to become obese and suffer from diabetes, compared to individuals who do not migrate.

The migration is a biggest factor behind the diabetes epidemic in India, according to the study published this week in PLoS Medicine.

The figures reveal that diabetes has registered a significant rise in urban areas of India from 5 per cent to 15 per cent between 1984 and 2004.

However, in contrast to other developing countries this is believed to be as a result of unchecked consumption of  saturated fats and sugar, which is more aggravated by very less physical activity.

The process of urbanization - migration from villages to towns and cities along with the development of urban areas into the periphery - is associated to the variations in diet and behavior. Read More

Emerging markets are changing the way the world works by developing into global powerhouses. The latest edition of our "What's Driving?" series identifies the six key drivers and the effect they have on the economic vitality of emerging markets.

Rapid Economic Growth: In the coming years, growth in emerging economies is expected to outpace that of the developed world. This growth is fueling an increase in household income in places like China and India where nearly 60 million people—roughly the combined populations of Texas and California—are joining the ranks of the middle class each year.

High Savings Rates in Asia: Despite rising consumption, households in emerging Asia save 17 percent of disposable income—that's roughly four times what is saved in the U.S. and much higher than the developed world. These high savings rates allow them to meet the higher requirements for home ownership—many require at least 20 percent down—and have larger amounts of funds to invest in capital markets.

Urbanization: The world's urban population is growing by more than 70 million people each year. China already has over 100 cities with 1 million people and is expected to have over 200 of them by 2025. This urban migration has overwhelmed existing infrastructure like roads, sewers and electrical grids. The buildout of this critical infrastructure will require vast amounts of copper, steel and increase demand for all commodities.

Desire for Social Stability: One main goal of emerging market governments to remain in power is to keep the public happy. They are doing this by increasing personal freedoms for citizens and providing them with opportunities to increase their quality of life. Many governments have found the key to social stability is focusing on job creation which establishes a path of upward mobility for citizens.

Natural Resources Wealth: Many of today's most promising emerging nations sit atop some of the largest oil, metal and other valuable resource deposits in the world. Many of these nations have teamed up with private and/or foreign enterprises to bring these resources to market. Revenue generated through taxation and direct ownership allows for these governments to build infrastructure, create jobs and pursue other economic opportunities.

Corporate Transparency: A history of corruption and political turmoil has given way to higher standards of corporate governance in today's globalized world. Though still far from perfect, the improved transparency and oversight has made important information available to investors and reduced uncertainty. Read More

Health Hazards of Urban India

World Health Day this year brings back the focus on the impact of urbanization on health. WHO has come out with the campaign “1000 cities – 1000 lives”, events will be organized worldwide calling on cities to open up streets for health activities. Like everywhere else this theme assumes a disconcerting urgency in the Indian context too where the Health Minister Ghulam Nabi Azad is on record “though we are improving our economic indices, yet, we continue to be one of the largest contributors of disease burden in the world.”

Estimates are scary.  Today the  Non Communicable Diseases (NCDs), especially Cardiovascular Diseases (CVD’s), Diabetes Mellitus, Cancer, Stroke and Chronic Lung Diseases have emerged as major public health problems, due to an ageing population and more importantly hectic pace of urbanization. Surveys in India reveal that about 10 % of adults suffer from hypertension. The increase in cardiovascular disease prevalence and mortality rates is expected to continue in the coming years in the majority of countries of the Region. The number of deaths due to Ischemic Heart Diseases in India is projected to increase from 1.2 million in 1990 to 1.6 million by the year 2000, and to 2 million by 2010. The premature morbidity and mortality in the most productive phase of life is posing a serious challenge to Indian society and its economy.  It is estimated that in 2005 NCDs accounted for 5,466,000 (53%) of all deaths (10,362,000) in India. Cities face a very big brunt of this horrific statistic. Future has no solace if remedial measures are not taken- World Bank estimates that by 2035, cities will become the predominant sites of poverty globally. Health problems of the urban poor include an increased risk for violence, chronic disease, and for some communicable diseases such as tuberculosis and HIV/AIDS.

Dealing with the Menace

India has taken a note of this situation and firm beginning has been made to tackle the situation.    Pilot Project of the National Program for Prevention and Control of Diabetes, Cardio-vascular Diseases and Stroke (NPCDS) has been launched in ten states with one district each. Total plan allocation envisaged for 11th plan is Rs 1620.5 crores. NPCDS among other things, seeks to facilitate early detection of this disease.  Plan which will cover the entire country eventually. Health promotion is a key component for the prevention and control of NCDs. It must combine educational activities with policy interventions to provide a supportive environment. It is pertinent to mention that Health promotion for NCD control can be carried out with simple messages e.g. use of less salt and sugar, exercise, avoiding stress, tobacco and alcohol and increased use of vegetable and fruits. These simple interventions can prevent or delay many of the NCDs.

Several new initiatives have been taken in the field on non communicable diseases e.g. National Deafness Control Program, National Program for Health Care of Elderly, National Oral health Program.    An estimated 275 persons are killed and 4,100 injured in our roads everyday. In view of this fact, The Ministry of Health  initiated the National Highway Trauma Care Project which is an ambitious project in its scale and reach intending to cover the entire Golden Quadrilateral and North-south-east-west corridors with over 200 hospitals being upgraded with pre hospital care and integrated communication system. Rashtriya SwasthyaBima Yojna is another initiative for bringing health services within reach for a large chunk of excluded population.

Planning is the Key

According to World Health Organization, Urbanization is not inherently positive or negative. Underlying drivers – also referred to as social determinants – converge in urban settings which strongly influence health status and other outcomes. These determinants include physical infrastructure, access to social and health services, local governance, and the distribution of income and educational opportunities. Communicable diseases such as HIV/AIDS and tuberculosis, chronic diseases such as heart disease and diabetes, mental disorders, and deaths due to violence and road traffic injuries are all driven by these underlying social determinants. WHO has expressed concern on growing inequities with regard to access to health services in urban centres. Read More

Rakesh Mohan: Helping India Re-organise

Rakesh Mohan, former RBI deputy governor, tells Forbes India that India needs urban design specialists urgently because over half of the country will be urbanised in the next five decades.

Rakesh Mohan
Age: 62 years
Designation: Director, Indian Institute for Human Settlements
Education: Ph.D. and M.A. in Economics, Pinceton  University; BA in Economics, Yale
Career: Deputy Governor, Reserve Bank of India; Secretary, Department of economic affairs; Advisor to the Finance Minister
Interests: play golf, avid cricket watcher, art lover

How did you become involved with the Indian Institute for Human Settlements (IIHS)?

Two and a half years ago, people like Shirish Patel [HDFC], Deepak Parekh [HDFC Bank] and Nandan Nilekani [Infosys] got together to discuss setting up something like the IIHS. They asked me to be involved, but at that time I was with the RBI, so I couldn’t be a formal member of the board.

You started your career as an urban economist…
Yes. For a long period, from 1974 to 1988, I was interested in nothing but cities — urban economics essentially. My Ph.D. thesis was to do with urbanisation and development; and then I participated in a large project for the World Bank from 1976-1980 — the City Study. This was the most  comprehensive study done on  a city in a developing country, using Bogota, Colombia, as an example. I then came to the Indian Planning Commission in 1980 as a senior consultant and for three years I worked on  housing and urban development issues. At that time the current PM was member secretary of the Planning Commission and he helped me set up four task forces on urban development.

What is the need for an institution like the IIHS?
For the next 30 years there is going to be a great re-organisation in this country. A cursory look at our cities suggests there is a huge need for experts in planning cities. We [at IIHS] also felt that we need an institution which does a new kind of degree, so we are developing the Bachelors of Urban Practice and Masters of Urban Practice. For a bachelor’s it’s four years and for a master’s it’s two years.

Is the expectation that IIHS will solve the issues of urban planning in India?
We are not solving the current specific problems related to urban planning. What we want are better educated people. It’s just like the government a long time ago started National Institute of Design and it had a huge effect on design in India, similarly the IITs had a great effect on the supply of technology in the country. Now you have a huge stock of highly educated managers and technologists. These schools have really made a difference to the country in their respective fields.

Right now, 20 percent of the country is urbanised. In the next 50 years that’s going to jump to 50-60 percent. This is actually a very good time to start. In five years, you’re going to start getting highly trained individuals in urban design.

How is IIHS distinctive from other private universities?
One feature is that we’re clear we must be an inclusive university — right from the beginning. We will have fees that are appropriate but also a huge fund for scholarships. We will be very different from ISB [Indian School of Business], we want to be independent and autonomous. We want to have a research program, want to do advisory services, and the faculty will also be involved in practice with governments, development authorities. There are a great degree of PPPs [public private partnerships] coming up in development — so that’s another distinctive feature. We’re in consultation with MIT, we want to have open courses like they do, and we want to put all our courses online.  Read More

India's urban awakening: Building inclusive cities, sustaining economic growth

India has a young and rapidly growing population—a potential demographic dividend. But India needs thriving cities if that dividend is to pay out. New MGI research estimates that cities could generate 70 percent of net new jobs created to 2030, produce around 70 percent of Indian GDP, and drive a near fourfold increase in per capita incomes across the nation.

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, health care, 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 means 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.

Although urban India has attracted investment on the back of strong growth, its cities are still failing to deliver even a basic standard of living for their residents after years of chronic underinvestment. Unless it steps up investment in its cities, India could well lose the productivity dividend of urban living. Today, in per capita terms, India's annual capital spending of $17 is only 14 percent of China’s $116 and less than 6 percent of New York's $292.

MGI estimates that India needs to invest $1.2 trillion just in capital expenditure in its cities over the next 20 years, equivalent to $134 per capita per year, almost eight times the level of spending today. Read More

Sanitation Woes Continues To Haunt India

How do you define urbanisation? Having adequate public toilets or more number of people using mobile phones?

According to a report issued by United Nations, India, which is the world's second most populous country, have more number of mobile phones than to toilet facility.

"It is a tragic irony to think that in India, a country now wealthy enough that roughly half of the people own phones, about half cannot afford the basic necessity and dignity of a toilet," said Zafar Adeel, Director of United Nations University's International Network On Water, Environment and Health (INWEH).

The report was penned down by expert who are working on ways to meet the Millennium Development Goal (MDG) on sanitation by 2015.

They also urge the world community to set a new target beyond the MDG (which calls for a 50 per cent improvement in access to adequate sanitation by 2015) to the achievement of 100 per cent coverage by 2025.

Recent UN research in India shows roughly 366 million people (31 per cent of the population) had access to improved sanitation in 2008. Read More

US Can Take Part In India’s $1Trllion Infra Investment Plan: Montek

India’s Planning Commission April 7 said the US can participate in the development of India’s infrastructure sector, the requirement for which is being pegged at $1 trillion in the 12th Five-Year Plan (2012-17).

“The field of investment in infrastructure sector is wide open. The US can participate anywhere,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sideline of a conference on prospects of economic and financial sector reforms on April 7.

Ahluwalia, who participated in the conference along with the visiting US Treasury Secretary, Tim Geithner, also exuded confidence that Indian economy can grow at a faster pace and “9 to 10 per cent is achievable”.

Of the proposed investment of $1 trillion in the infrastructure sector during the 12th Plan, he said, private sector would be expected to contribute up to 40-50 per cent.

“Private investments of one trillion dollar (during 2012-17) will be somewhere between 40 and 50 per cent,” he said.

“In the 11th Plan (2007-12) we had said $500 billion for five years period. The Prime Minister has directed us to aim at one trillion dollars during the 12th Five-Year Plan,” he added. On prospects of growth, Ahluwalia said that with adequate resources, investment and financial sector reforms it was possible to achieve high growth rate. Read More

Former president: India making great environmental strides

Country working towards energy independence, emissions reduction

Critics of proposals for the United States to reduce its emissions of green-house gases such as carbon dioxide often cite India as an economic rival that ignores calls for such reductions.

A former president of India, Dr. A.P.J. Abdul Kalam, painted a different picture of his country Tuesday at Eastern Kentucky University.

The southern Asian country that may soon overtake China as the world’s most populous, is making great strides toward both energy independence and reduction of green-house gases, he told a nearly packed house in Brock Auditorium.

His country has a five-point plan to called Energy Vision 2030 to:

• Improve energy efficiency and reduce demand by 50 percent

• Reduce fossil fuels consumption by 50 percent

• Replace petroleum as primary fuel for transportation with less carbon-emitting or carbon neutral renewable fuels

• Reduce carbon emissions by 25 percent

• Create a seamless sharing of ideas, methods and technologies across national borders.

He complemented EKU on its initiative with General Atomics of San Diego to develop biofuels from switch grass using an algae catalyst.

Such algae-related biofuels can be produced in marshes and shallow bodies of water without taking land out of food production, Kalam said.

India’s goals will be difficult for it or any other nation that attempts to reach them, he said, because global energy consumption has been growing by about 200 gigawatts a year. Simply to level growth of energy demand will be a challenge, but the goals of 2030 are attainable, he said.

About 15 percent of electricity transmitted via power lines is lost.

“We need to urgently work on improving transmission efficiencies to minimize wastage,” Kalam said.

Buildings consume about 50 percent of global energy, but new designs and other efficiencies can reduce that by 50 percent in existing buildings, he said. Reductions of up to 80 percent can be achieved in new buildings.

EKU President told Kalam that the university has partnered with Siemans Inc. to replace lighting and motors as well as heating and cooling equipment for its buildings that will save $9,000 a day and cut carbon emissions by nearly 26.4 tons a year.

Hydrogen must ultimately replace gasoline and diesel fuel for transportation, Kalam said.

He cited the search of an Indian scientist who with European colleagues has created a two-stroke engine based on “hydrodrive” technology that could become the basis for switching automobiles that emit practically no carbon dioxide.

Photos of Kalam and the President of Iceland inspecting a hydrogen-powered bus in the North Atlantic nation were projected for the audience to see.

Even if hydrogen-powered autos are a longer-term solution, India has a near-term plan to power its vehicle using bio-fuels.

Seeds of the jatropha tree, which can be grown 82 million acres of Indian wasteland covering about 1 percent of its territory,  yields 10 times the ethanol of corn.

The subtropical country also can harvest vast amounts of solar energy and is working improving the efficiency of solar panels. Read More

Go to villages, President tells India Inc

Asking the corporate India to help improve the agriculture sector, which would ensure rural development, President Pratibha Patil today said location of food processing and agro-based industries close to rural areas would optimise the benefits for both the entrepreneurs and the farming community.

Inaugurating the three-day international conference on ‘Dynamics of Rural Transformation in Emerging Economies’ here, Patil emphasised on developing farming models that include participation of industry to achieve economies of scale and promote socio-economic development. “During the global downturn the negative impact on India was less than elsewhere. One reason was that we were able to sustain domestic demand, much of it coming from rural areas,” the President said. She pointed out that growing migration from rural areas to cities was a challenge, which could be dealt by building rural infrastructure. Read More

India's Infrastructure Drive Must Steer Around Potholes

Upgrading infrastructure has fueled rapid economic growth in the world's most populous country, China. Hope is springing once again that the second-most-populous one, India, might follow the same path. To avoid disenchantment, India will need to work extra hard to get support from investors at home and abroad, and to deliver on past promises.

China, with its sprawling networks of new highways, airports and budding high-speed rail connections, makes for a daunting comparison. India has weaker government finances and an unruly democratic government that lacks China's authoritarian discipline. Clearing land for roads or power plants in China is a cinch; not so in India, where land rights are often hugely contentious. Government-backed companies have led China's infrastructure build-out. India's push will depend heavily on the private sector. And India, with its history of murky and investor-unfriendly rules on infrastructure investment, has a record of disappointment.

But the government of Prime Minister Manmohan Singh, empowered by a decisive victory for his Congress party in elections last year, is making infrastructure a priority, with roads a particular focus of attention.

Kamal Nath, a high-profile politician, has taken on responsibility for roads and highways in what's widely seen as a sign of the post's new importance. His goal is to build 20 kilometers of new highway a day, and he's seeking $41 billion in private-sector investment over the next three to four years to help fund the construction.

He knows the depth of the problem. At a conference cohosted by The Wall Street Journal Asia in New Delhi last month, Mr. Nath declared that of India's 70,000 kilometers of highways, 16,000 "aren't worth driving on," and noted that 40% of India's fruits and vegetables rot before reaching market because of delays from poor roads and rail lines.

One thing in India's favor is an active stock market for raising funds. Infrastructure companies have raised about $6.3 billion since the beginning of 2008 on the Bombay Stock Exchange, according to Dealogic. Much of that has been for power projects, though road companies have gone to market as well. The most recent, IL&FS Transportation Networks Ltd., raised a modest $138 million in an offering that began trading March 30.

Attracting support from institutional investors, including foreign pension funds and insurance companies, won't be so easy. Many are wary of directly funding so-called greenfield projects that have yet to break ground, for fear of getting caught up in the kinds of disputes that torpedoed past investments such as Enron Corp.'s ill-fated Dabhol power project. The $2.9 billion plant closed in June 2001 after the loss-plagued Maharashtra State Electricity Board stopped payments, saying the rates were too high. Subsequent attempts to rescue the project have failed. And investors keen on emerging-market infrastructure plays have other options, not least China among them. Read More

India's New Coal Tax to Raise $660 Million For Clean Energy in 2010

India may use a heck of a lot of coal today (and no doubt would use tons more of it if its per capita energy use was anything like that of Europe or the United States) but as Revolt points out a new tax to be levied on coal will be put directly to use to help build the nation's use of clean energy tomorrow.

The tax will be Rs 50 (a bit over one dollar) per ton of coal, whether it's imported or domestic, and based on the nation's 600 million ton yearly usage, it will raise about $660 million in fiscal year 2010 to be put into a National Clean Energy Fund. That fund will finance "research and innovative projects in clean technologies." Read More

New Fuel Emissions Norms Drive India’s Most Popular Car Off the Road

The compact, unassuming little Maruti 800 has been the “king of the Indian road” since it was born in 1983 — a doubly red letter year for India since that’s also when the country won its only cricket World Cup. But from April 1, when new fuel emissions norms were brought in, you can no longer (legally) buy it in India’s top cities.

Its maker, Maruti Suzuki India Ltd., has decided it won’t upgrade the model to meet the new norms. The car will still sell in smaller cities where tougher emission rules are yet to come in later this year. After that happens, Maruti Suzuki will no longer sell the model at all. So once the current crop of Maruti 800s on the road reaches the end of their life span, you won’t see them zipping around anymore.

That brings to an end the era of India’s own “people’s car,” the desi answer to the Ford Model T or the Volkswagen Beetle. Its manufacturer, originally known as Maruti Udyog, was a joint venture between the Indian government and Japan’s Suzuki Motor Corporation, and a dream project of Sanjay Gandhi’s, the younger son of then Prime Minister Indira Gandhi. Those were the days when India drove only the bulky Ambassador and the Fiat Premier Padmini. But the 800 (actually 796 cc) quickly became the first car for large numbers of India’s new driving classes, including cricket hero Sachin Tendulkar (he now drives a Ferrari), eventually selling about two and half million units. Read More

India Expects $5 Billion Canadian Investment in Road Sector

India expects a big investment of $5 billion from Canada in the country’s road development program over the next three to four years, Road Transport and Highways Kamal Nath has said.

“I am looking at Canada looking beyond NAFTA,” Nath said after meeting with top Canadian ministers and executives of financial institutions here March 25.

“Canadian pension funds and financial institutions are actively considering participating in the National Highway Development Project (NHDP),” he added.

Nath said that of the $40 billion needed from the private sector for the road program; about $10 billion is likely to come from foreign funds. “We expect $5 billion from Canada. The Indian government will put as many as nine mega projects up for bidding in the next two months.”

“Both countries are working on a memorandum of understanding expected to be sign within three months that aims to facilitate transfer of Canadian know-how, technology with respect to highway management, road safety, vehicle safety, and private investment by high profile Canadian financial institutions,” Nath said. Read More

IANS Nanotechnology can help India ensure food security: Scientist

Nanoscience and nanotechnology can help India ensure food security by incresing crop yields and reducing consumption, an expert in the field said Thursday.

'Nanoscience and nanotechnology can be used to ensure precise supply of water and nutrients to crops, thereby increasing the yield and reducing wastage,' P. Somasundaran, a well known name in the field of nanotechnology, said at a meeting at the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) office here.

'Similarly, suitable use of nanotechnology can also help reduce the amount of food each person needs by ensuring efficient consumption patterns. A third application can be in preventing damage to stored foodgrains,' added Somasundaran, who was conferred the Padma Shri, India's fourth highest civilian award, this year.

Somasundaran, who teaches at Columbia University in the US, has agreed to chair a task force being set up by the NAFED on use of science and nanotechnology to boost agricultural production and prevent damage to foodgrain, said a NAFED statement. Read More