An article of mine got published in the TCS Daily on organized retail in India (The article was first drafted in late ’06- early ’07, so parts of it might appear slightly dated) Here is the link.
Some of the comments are interesting. Here are a couple that I thought I should highlight –
With around 65% of India’s population in about half a million villages – which translates to an average of just 1400 people per village – it is very uneconomical to provide infrastructure services, barring telecommunication services (thanks to the cell phone).
India needs to move its villagers into (newly constructed) towns and villages.
5,000 new towns and cities with an average of 140,000 people per town would surely afford economies of scale. The very creation of these new towns and cities leads to lot of beneficial economic activity.
Mr. Atanu Dey writes extensively about this topic (the urgent need for new towns and cities in India) at his blog (http://www.deeshaa.org/) and there is a good video just on this topic there today.
Just for the record, I do NOT subscribe to MANY of Mr Dey’s views. But I whole heartedly endorse his thoughts on urbanization of India.
One way to achieve this is by encouraging corporate farming where the current adjacent marginal land holders become share holders of a corporation and get shares denominated in land area and are legally PROMISED a certain amount of produce (not MONEY, but produce). This amount can be based on the average yield of the past few years. This would immediately free a huge army of people from agriculture WITHOUT reducing the quantity of food grains produced.
And, as has been proven in many societies, the path to a wealthy society is through the reduction of the percentage of people dependent on agriculture.
Are India’s political leaders upto the task
It has been demonstrated throughout history that service-oriented societies become wealthier than just product-oriented (agricultural commodities/non-ag commodities and manufacturing) societies do. Their economies are also much more resilient and sustainable, too.
Both India and China will become more dependent upon domestic trade — especially for material goods — as you say. And, as you say, that is a good thing. It shows their coming economic maturity and, as the author states, it shows that they are utilizing all of their citizen’s productivity more and more and getting higher value for it. Such positive feedback mechanisms is what happens when a society gets wealthier.
As for the US, did you know that US manufacturing output has been INCREASING all of this time that the media bemoans the ‘hallowing/offshoring out of the nation’s manufacturing’? People fall into the trap (especially Roy) of believing that just because US manufacturing JOBS are being eliminated, then manufacturing itself must be.
That’s like saying that just because 50% of the US population is no longer involved in agriculture (as it was circa 1900), we’re all going to starve.
Yes I know, unlike with the offshoring of manufacturing, we didn’t stop making corn or wheat and imported them instead. But, if we could find an alternate source of wheat a whole lot cheaper than what could be grown here, it would make the same economic sense to stop growing it as it does to simply import plastic forks instead of manufacturing them here.
And, if we had to, we could build newer, highly automated factories to start making plastic forks again. In a very short time frame, too.
We have the means of making robots that can do metal finishing, after all. And that capability keeps getting better and better. In fact, it is automation — not cheap labor abroad — that causes more losses in manufacturing here. You just don’t see the news media covering union protesters outside a plant that is installing robots. At least, not yet.