Atanu Dey on India’s Development

Khosla's massive bet on renewable energy as the answer to climate change and peak oil (and big profits) may not even be his most ambitious scheme to remake the world. In 2002, Khosla co-wrote a paper with development economist Atanu Dey sketching out a plan to boost economic growth in rural India. It's hard to think bigger than a bid to upgrade the living standards of some 700 million people -- as the paper notes, one out of 10 people on this planet is a rural Indian. (Thanks to the India Economy blog for the link.)

The paper is titled "RISC: Rural Infrastructure Services Commons."

Wide range of topics on India's development at high intellect level.
He authored RISC model for Rural india with Vinod khosla ..

India’s economic growth depends critically on the development of its 700-million strong rural population living in 600,000 villages. The challenge is to manage their transition from a village-centric agricultural-based economy to a city-centric non-agricultural economy urgently.

Economic growth is both a cause and consequence of urbanization. Cities are engines of economic growth because they give rise to economies of scale, scope, and aggregation. The aggregation of supply and demand for economic goods and services (and thus for infrastructure) which accounts for cities. Availability of low cost infrastructure in turn makes the availability of a wide range of services possible in cities as opposed to very small villages.

People need access to a range of services which allow them to engage in economically productive activities. These services include, at a minimum, market access, educational, health, financial, entertainment, transportation, and communications—these enhance life and livelihood. Affordable infrastructure makes service provision commercially viable. However, infrastructure investment is ‘lumpy’ – the average cost of provision of infrastructure is inversely related to the scale of the operation.

Resource limitations preclude the provision of infrastructure at every village. Moreover, instead of 600,000 small villages, the future population distribution has to be in a much smaller number of much larger habitations – if the majority of the labor has to be engaged in non-agricultural activities. The basic geographical structure of population distribution will eventually undergo a change because people migrate out of villages into cities.

RISC (Rural Infrastructure and Services Commons) is an economic model which can catalyze rural economic development by providing rural populations a comprehensive set of relevant services. It works within the constraints of limited resources by focusing attention to and concentrating investments at specific locations to obtain economies of scale, scope, and agglomeration.

A RISC provides a reliable, standardized, competitively-priced infrastructure platform consisting of power, broadband telecommunications, and the physical plant (building, water, air-conditioning, sanitation, security). This is achieved by the coordinated and cooperative investment of firms that specialize in the component activities.

The user services such as market making, financial intermediation, education, health, social services, governmental services, entertainment, logistics, etc, make use of the infrastructure services. Market forces determine the set of services offered at any location. The availability of the infrastructure reduces the cost of the services and therefore the prices that the users face.

The total rural population of India can be covered by about 6,000 RISCs each servicing the needs of approximately 100,000 people. By providing a full complement of services, RISC creates a ‘micro-city’ which seeds the formation of a city by drawing to it the population from the surrounding areas. RISC focuses on the development of the rural population, and not on the development of villages which are destined to be extinct anyway.

[The RISC concept paper was jointly written by Vinod Khosla and Atanu Dey. It is available at www.khoslaventures.com]