Pura development

Dr. A P J Abdul Kalam, has dreamt of making India a better place by providing education and urban amenities in rural India. That great Indian dream, after much delay, seems to have found a way to speed up. PURA (Provision of Urban Amenities in Rural Areas) 2.0, the improved version has started working with private firms to develop infrastructure in Indian villages and private players are assured by the ministry of guaranteed returns on investment.
Pura development

India’s leading scientist and former President Dr. Kalam has always stressed on bridging the urban-rural gap to see India as a developed nation. In one of his speeches, he has said, “rural development is an essential need for transforming India into knowledge superpower and high bandwidth rural connectivity is the minimum requirement to take education and health care to the rural areas. Roadmaps for development of certain areas have been generated and we have to work on their realisation.”

His concern for rural India is well known and he has repeatedly said that without the development of rural, Indian cannot become a superpower. PURA, his brainchild, was launched in 2004 to ‘provide basic amenities like good roads, drinking water, quality healthcare services to people even in some of the remotest villages.’ However, Rural Development Minister, Jairam Ramesh discarded the original scheme by calling it a ‘complete failure’. While launching the restructured version of PURA, which the ministry has termed as PURA 2.0, the Minister said, “Abdul Kalam’s project has completely failed. This project may succeed.”

He also added, “This PURA project has nothing to do with Abdul Kalam’s PURA project.” The restructured version of the scheme is open to partner private players to develop ‘physical infrastructure in RURBAN (areas with rural and urban traits). In the first phase of the reengineered scheme, the rural ministry has selected five states and one union territory and there are nine pilot projects which are under development in these states. However it is noteworthy that the original idea of PURA, which was conceived by Dr. Kalam has been sidelined by the ministry, but most of its elements remain unchanged. Going by the recent statement made by the minister, it appears that the ambitious scheme has got political colour now.  Under the ‘improved’ scheme, the ministry now plans to extend the pilot projects in other regions of the country by adding at least 10-15 more projects. According to official sources, the ministry has invited tenders from the infrastructure development firms in the country and so far has received over 99 applications.

In the public-private partnership (PPP) model, private companies now have an opportunity to work with the government in developing urban infrastructure in r-urban areas. The government plans to develop at least 500 new clusters in the second phase of the scheme. According to Dhruv Kumar Singh, Deputy Secretary in MoRD, “ministry plans to develop 10-15 pilot projects in the second phase of the scheme, However, these clusters will neither be in urban nor in rural. They will be somewhere in between.”

The private partner is selected after properly analysing his financial and other abilities to undertake PURA projects. The scheme allows the private partner to identify a gram panchayat, a cluster of geographically contiguous gram panchayats for a population of about 25,000– 40,000. Whereas, the cluster would be the project area, there may be sub-projects to cover each of the panchayats within the cluster. On the selection of the site, Singh said, “the site of the project will be finalised by the private partner and we don’t interfere in the process. Once the site is selected, the firm can start working on developing the project. However, the company has to work as per the instructions of the gram panchayat.”

The flexibility of selecting gram panchayat will be based on the firm’s familiarity with the area and its experience of working at the grassroots level. The private partner, after undertaking baseline studies, will plan for the development of selected infrastructure services along with economic activities in the area selected for its work.

The private firms, which will partner in the development, are assured by the ministry of guaranteed returns on investment.  On the assured returns on the investment, Singh said, “Government of India guarantees handsome rate of return on add on amenities, maintenance and other kind of activities. It is roughly around 15 per cent per annum, which is one of the highest.” However, government expects that the private firms should also bring on board their share of investment besides operational expertise. The robust scheme would be implemented and managed by the private partners on considerations of economic viability but designed in a manner whereby it is fully aligned with the overall objective of rural development.

The reengineered PURA scheme will work closely with the private players to develop amenities like sewerage system, water supply, solid waste management system and street lighting. The focus will also be on developing centers for skill development and generate economic activities in these clusters. The private firm can charge money for the ‘service’ they are providing to the villages but this will be decided by the gram panchayats. The services charges will help the private partner to cover some of its project cost, rest of the expenditure will be borne by the ministry. According to the officials in the rural development ministry, the scheme is likely to be launched ‘very soon’ in entire country with an estimated investment of more than Rs 64, 500 Crore . In June this year, Planning Commission has announced to allocate Rs 1500 Crore to the scheme under the 12th five year plan.

In the cluster development, gram panchayats are empowered to decide which kind of development activities they like in it. The ministry has assured that there are minimum chances of corruption in the present scheme and companies which are developing infrastructure will be working under a given timeframe and will be bound to follow it as per the guidelines of the ministry. “Delivery of service will be monitored for next 13 years through independent engineers, and their report will be read in the gramsabha when all the members of the community are present”, D K Singh said.
In this robust business mechanism, intensive monitoring will be required and to ensure timely delivery and quality service, the ministry is also planning to bring in some of the advanced technologies from across the world. “We are also considering developing something on the lines of regulatory authority, which will address the grievances of both sides in future”, said Singh.

Major powers in the scheme are given to gram panchayats, which will decide what they want for the villages. As per the provision, an independent engineering committee will evaluate the work of the private firm and their reports will be read the group of engineers in the presence of the whole village. Later, gram panchayats will decide that the firm can take up projects like sanitation, water supply, street lighting, roads and solid and liquid waste management on user-charges basis in the area.  As per the data available on ministry’s website, each project is likely to cost about Rs 150 Crore with rural development ministry providing a grant of Rs 40 to 50 Crore; Rs 70 to 80 Crore will be mobilised by ongoing central schemes, while the private sector is expected to bring in about Rs 20 Crore.

The private company in consulation with the gram panchayat will get the lease of 10 years for the physical infrastructure to be developed in such towns to recover the investment.  The ministry had already launched two such schemes in Kerala in February this year under PURA 2.0. According to the rural development ministry, the average size of the projects under PURA is Rs.100 Crore. The rural development ministry officials told that it has started talking to the Planning Commission and finance ministry to arrange for additional funds. Under the scheme, private companies will be entrusted with providing and maintaining services or amenities for 10 years. User charges to be levied on these will be fixed by the government and will not exceed current rates. “This will certainly give power to the panchayats because in the provisions, they have the responsibility of supervising and monitoring the private firms, who will report to them,” said Singh.

These upcoming clusters will be self sufficient in terms of providing livelihood opportunities to its inhabitants. For that, the government had kept the provision of developing skill development centres in these clusters, which will train the natives in variety of skills. The objective of the scheme is also on combining infrastructure development for a village cluster with mandatory development of skills development, economic activity generation and additional revenue generating activities through a PPP modality. This, as government, hopes will help in containing migration and will also help in providing self sufficiency to the people in these areas.

Dr. P C Sabharwal, former director of Amity School of rural management says, “Certainly the PPP model will work very well. Involving private firms will certainly speed up the process at the same time, lots of employment generation will happen during and after these projects.” According to the officials, economic generation will increase in these clusters as all factors of urbanisation will help in it. However, there are few challenges too. The scheme has multi-layer sanctioning and screening for the projects. Involvement of various agencies in at different levels will hamper the project as it is more likely that projects are stuck due to ‘official procedures’. In such a scenario, private players can opt out from the projects. Now this will be interesting to see how long this government-corporate marriage lasts.

The Changing Face of Rural India