India is poised for a quantum leap in its growth rates thanks to four ongoing changes. One, huge advances in power generation capacity (54,000 MW added over 2007-12) and rural electrification (power lines have been laid to 5,60,000 villages); two, broadband connectivity reaching 2,50,000 rural localities; three, the political economy changing with voters putting a premium on growth and governance; and four, the wherewithals of electronic banking accessible by all are being put in place, thanks to a combination of telecom, banking and the unique identity project.
The power story is compelling. If power flows through those lines that now connect 5.6 lakh villages, the effect on rural prosperity would be, well, electrifying. For the first time, climate-controlled storage and agroprocessing industry would be possible in rural areas. This would raise farm yields and farm incomes, diversify the rural production structure, reduce food inflation across the land and generate new demand for consumer goods. Read More