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ECONOMIC AND SOCIAL JUSTIFICATION OF RURAL ROADS IN INDIA

A. C. Sarna (Dr.), Scientist

Kham Chand, Scientist

R. K. Soraut, Junior Scientific Assistant

Central Road Research Institute, New Delhi

ABSTRACT

In rural India, roads are the major channels of transportation for carrying goods and passengers. As the benefits derived from the construction of rural roads are reflected throughout the economy of the village, therefore, an adequate rural road network is absolute necessary for the improvement of the economic and social conditions of the economic and social conditions of the rural folk. Thus roads play a significant role in the life of villagers and its multiple effects are evident.

Recently various studies covering different aspects of rural roads have been carried out but still a great dear of work is required to be carried out towards providing an adequate rural road system.

In this paper the work pertaining to the economic and social benefits derived from the rural roads in Philippines and the study on transport cost based on the data collected from different countries by Clark and Haswell has been reported. The results of a study carried out in Argentian have also been presented.

The paper deals with social & economic benefits derived from the construction of rural roads in India such as increase in prices of agricultural production, change in the crop pattern, creation of new employment opportunities, increase in land prices, increase in dairy products, better medical care, education standard, availability of public utility and social interaction.

Further studies in this respect are necessary and for the economic evaluation it is necessary to collect the data on certain economic indicators.

Introduction

Availability of roads play a pivotal role in the economy of any society. It is accepted that benefits derived from roads are transmitted throughout the economy and its fruits are noticed in every sector of development. It has rightly been expressed by A.B. LEWIS that "economic development depends mainly on education and transportation" Raul Manglapus made similar comments in his speech before the members of the Manila Lions Club¹. It is clear that many economists all over the world share the same idea.

The vast effects of roads on the economy and on the well being of any society are evident. There is no doubt that almost everything that one buys is moved once or several times by land transportation. Thus roads are the major channels of transportation in any country

Farmers, to a very large extent, depend on roads for transporting their products to market or other distribution centres. Roads have equally important social values. Roads are often called the "highways of ideas."

Rural Roads in India

In a developing country like India the rural roads may be defined as those one with low traffic volume, the type being dominantly slow-moving animal drawn carts most of the time. Government of India has accepted in principle that all human settlements are required to be provided with at least some kind of all-weather access roads as a basic infrastructural necessity.

The problem of connecting every village with all-weather road is colossal and that can be gauged from the fact that as on March 31, 1981 only 1,55,166 villages out of 5,91,924 villages were connected with all-weather roads in our country. This clearly shows that 74% of the villages are yet to be linked with all-weather roads.

Rural Roads cannot always be justified by the volume of traffic that they are expected to carry. The stress should be on overall developmental impact of roads. In 1967 a one man committee² on Rural Roads was appointed specially for going into the details of rural roads system in the country. One of its terms of reference had been to indicate the basis for determining priority between various categories of rural roads in India. The Committee accepted the mileage target of villages roads laid down in the Chief Engineers' Report. As for priority determination it rated highest "areas where special steps have already been taken for repaid increase in agricultural production". Of course backward areas and the areas with no other means of transport (The two are likely to be overlapping) were mentioned separately in the rating list and each received the half of the weightage attached to the agriculturally prosperous areas. Thus in this report and in similar reports of earlier years on rural roads, we find mainly two factors i.e. population and agricultural production being factors i.e. population and agricultural production being considered for road planning in rural areas.

The National Transport Policy Committee³ appointed by the Planning Commission has strongly recommended that no village should be more than 1.6 kms from a road by 2000 A.D. If these targets are to be achieved the total rural road length of about 8,00,000 kms is to be constructed as against the present length of about 5,00,000 kms.

Road Planning of India

The present road system in India has been built on the basis of the norms laid down in the successive plans namely, Nagpur Plan (1943) and Twenty-Years Plan (1961-81) prepared by Chief Engineers in 1958. The formulae presented in these plans were developed on the basis of fixed weightage to population size. The larger is the size the greater is the weightage. Some allowance was given to the future rate of growth of agriculture and industry. According to the report of the Chief Engineers on Road Development in India (1961-81) to bring every village.

a.In a developed and agricultural area within 4 miles of metalled road and 1.5 miles of any road.

b.In a semi-developed area within 8 miles of a metalled road and 3 miles of any road; and

c.In a underdeveloped and uncultivable area within 12 miles of metalled road and 5 miles of any road.

Thus the emphasis made in the above report was agriculturally developed areas.

The objective under the minimum needs programme was to link up villages with population of 1500 and above with an improved road system by 1978. The number of the villages under this category was found to be nearly 29,000 and about 12,000 such villages were actually covered during the above period. The Governments have launched programme under which the work in the rest of the villages numbering 17,000 was to be completed and at least half of the villages having a population between 1000 and 1500 are also to be brought under the scheme by 1990. The Sixth Five Year Plan allocated Rs. 1165 crores for this purpose. The Seventh Five Years Plan has earmarked Rs. 3100 crores for the rural road development.

Economic Benefits from Rural Roads

General

Economic benefits do accrue from roads that serve rural communities. The extent of these benefits, however, has been largely conjunctural. At the outset one particular point needs to be clarified that economic benefits such as increase in agricultural production, increase in employment and change in crop pattern and such other variables depend on a number of factors others than roads. For example, agriculture depends on supply of inputs like fertilizers, irrigation, quality of seeds and environmental factors like soil and climate as also other facilities like credit institutions, storage, etc. Moreover, investment on roads is always accompanied by a package of complementary investments for utilisation of potentialities of the area. So the resulting growth comes from all the factors taken together and isolating the effect of one single factor is a different aspect. In spite of all these limitations an attempt has been made to discuss some of the very important socio-economic benefits which can be derived by providing rural roads in the following paragraphs.

Increase in the Prices of Agricultural Production

Normally the villages do possess an established agricultural sector as well as a set of existing alignment mostly discontinuous mud/earthen roads traffic composition changes and animal driven vehicles are replaced by motor vehicles carrying commodities and passengers. head loading similarly yields place to bicycles. Thus improvement in from of market road is obviously beneficial to the village

economy. It has been observed that in most of the cases before the construction of roads, the surplus in villages could not be brought to the market. New roads provide outlets for surplus goods and former relationship that exists between supply and demand in the village's economy is shattered. Thus the villager gets the increased price for his products in the free economy and his perishable goods reach the nearby market centre before it is perished. In this regard one study was conducted during 1957-1958 in Philippines5 where in it has been pointed out that a very significant change as far as the increase in village price is concerned, is in the price of coconuts. Before roads were built a thousand pieces were sold for Pesos 30.00 and after the opening of the roads village price of coconuts rose to Pesos 40.00 a thousand. Table 1 from the above study is reproduced in the paper which clearly endorses the above statement that the prices of the agricultural products are increased after providing the links.

Table 1

Comparative average increase in

Barrio prices of specific farm products

before and after construction of roads

Product No. of Barrios Unit of Measure

Prices
Diffrence
Year Before Year After
(Pesos) (Pesos) (Pesos)
Rice 22 Cavan 20.00 23.75 31.75
Corn 18 Cavanshelled 8.00 10.00 2.00
Tobacco Kilogram 10 1.40 1.70 0.30
Root Crops 8 Kilogram 2.50 2.55 0.05
Bananas 15 Hundred 0.70 0.80 0.10
Coconuts 12 Thousand 30.00 40.00 10.00
Chickens 20 Head* 1.70 1.80 0.10
Swine 17 Kilogram 1.15 1.30 0.15

*Native chicken six months old or above.

Source: The value of Rural Roads by Vallanueva Patrocinio S- University off Phillipines-1968

Change in Crop Pattern

There may be little scope for extension of farm area if land is already scarce, but newly improved road is likely to encourage intensive cultivation. It may have effect on change in the crop pattern. It is very much evident that before the construction of road-links the villagers may not go in for the commercial crops in the wider sense. The yield function also suggests that agricultural productivity is higher in villages nearer to pucca roads. No doubt the existence of pucca roads influence

the cropping patterns and it has been observed that the perishable agricultural produce such as vegetables, fruits and dairy products are brought to the nearby urban centres by those inhabitants of the villages which are connected by all-weather roads.

It is only when the village is linked with the road the market for agriculture develops and the local produce is transported away from the village area. The majority of the rural population of India depends on subsistence agriculture. Food is produced, harvested, stored and consumed within the local community. These poor villagers cannot think in terms of changing the crop pattern because their produce does not move outside the village area where it is grown. Thus it can be concluded that if proper road-link is provided to the village and with the present system of communication the villagers will definitely change the pattern of crops and cultivate those cash crops which fetch them more return.

Transport Costs and Relative Prices

Transport cost also changes with the provision of rural roads because before the availability of roads the transportation of agricultural products is not only difficult but also costs more. Transport cost represent only a small component of the final prices on most of agricultural commodities. Though it accounts for small portion of the final prices but it is very much significant for the small farmers. Miller6 found that in Argentina total transport costs for wheat made up only 8 per cent of the total sales price. After an intensive investigation of data relating to many different countries Clark & Haskiell7 found that if grains were moved 10 kilometers then (using the median values of their data) transport costs would account for only 9 percent of the total costs if portage were used, 3 percent if carts and wagons were used and only 1 percent if motor vehicles were used. Thus transport cost also affects the agricultural development.

According to Walter8 "under certain simplified conditions price of product (in his example rubber a new commercial crop in a subsistence economy) is entirely dependent on cost of transporting it to the market and production decision therefore, rests on transport cost".

Employment Opportunities

Naturally with the linking of villages with all-weather roads new opportunities of employment open up. If the area is too much dependent on agriculture, there may shift of people from primary to tertiary sector. It is likely that by providing the road new opportunities in employment will arise. For example as new modes of transport like cycles, buses and trucks are introduced road side cycle repair shops and motor repair shops make their appearance. Tea and snack shops also do good business catering to the needs of passengers and transport operators. The road side sub-centres for collecting commercial crops also offer some employment shifting to non-agricultural sector.

Changes in Land Values

Due to the provision of roads better prices for both agricultural and residential land is obtained. In India no specific study on this particular aspect has been made but according to one estimate 50% increase in the agricultural land price has been noticed after the construction of feeder roads to the villages.

The results of the study in Phillipines in this regard are presented in Table 2. it will be noted that least increase in land values was 39 percent in the case of Coffee land and the most was 77 percent in the case of Coconut land. Of the various types of rice lands the low land non-irrigated had more increase than both the low land irrigated and upland.

Social Benefits of Rural Roads

No doubt the construction of new roads as feeder to the villages affects the social life in the villages. However, the extent of these social effects just like their economic counterparts, cannot be determined in the absence of any suitable measuring indices. Some of these are discussed as under:

The Spread of Knowledge

Knowledge travels with people along transport links. The greater frequency and ease of movement following rural transport investment may lead to a greater spread to technical and marketing knowledge. Among the factors that limit school enrolment is inaccessibility of the school to rural folk. It is conceivable that parents are discouraged from sending their children to school when these children have to cross streams and creeks and walk over rough terrain in order to reach the school. As generally primary schools are available in almost all the villages in India but surely with the provision of all weather roads the enrolment in high school and college level can be expected to increase and the light of knowledge will be transmitted to the villages which are even now considered as dark corners of this vast land. Thus providing roads to the villages we will be full-filling the dream of our Father of Nation Mahatma Gandhi who said that real India resides in the villages whatever good we do for the villages would change the face of the country. The results of the study in Philippines in this regard are presented in Table 3.

Table 2

Estimated average increase in land values after the construction of road (Pesos per Hectare)

Type of Land Year before Year After Difference Percent Increase
Rice Land Upland 1,430 2,038 608 42
Low Land Irrigated 2,904 4,184 1,280 44
Low Land Non-Irrigated 1,667 2,495 828 50
Coconut Land 1,427 2,524 1,097 77
Corn Land 1,571 2,181 681 39
Residential 10,123 17,456 7,333 72
Uncultivated 546 834 288 53

Source: The value of Rural Road by Vailanueva Patrocino S-University of Philipines-1968.

Table 3

Average increase in the number of
individuals going to school after road construction

Type of School Year Before Year After Difference Per cent Increase
Primary 89 131 42 47
Intermediate 24 44 20 83
High School 10 14 4 40
College 6 10 4 67

Source The value of Rural Roads by Vallanueva Patrocinio S-University of Philippines-1968

Medical Service

Next to food and shelter, the medical assistance is the most important necessity for human being. The medical service becomes very easy with availability of road. It has been observed that in the absence of road links to the villages many people died who could have been saved just with little medical care. Roads links are very important both for getting government or private medical service. It is pity that people in the villages having other resources are deprived of this important service because unfortunately the places where they are born and live are not connected with all-weather roads. Therefore, it is absolutely necessary to link the villages with roads for providing minimum medical care to the masses.

Political Enlightment

In democracy the political enlightment of the general masses is essential for the proper functioning of the system. If it is true, for example the rural people are more or less political inert over local issues and roads may conceivably be taken as good media to encourage local political participation. Thus it is obvious that with the roads political consciousness will arise among rural folk.

Availability of Public Services

With the availability of roads to the villages the public services in the form of schools, dispensary, community development schemes, postal service and credit institutions will be available at the doo-steps to the rural masses as the investment on roads is generally followed by other package of complementary investments in order to harness the potentiality of the area.

Besides the above social benefits the roads can be expected to provide opportunities for increased social interaction among the people.

Cost Benefit Analysis

Economic cost-benefit analysis is an appraisal technique frequently used in both developed and developing countries as an aid to decision marking. Basically, it is procedure used to assess the validity of any proposed investment by estimating the costs of the proposed project in terms of resources employed and comparing these costs with the value of benefits expected from the project. Both costs and benefits are expressed in money unit terms using resource cost value.

Though it looks that the principle of cost benefit is very simple but in actual application especially in transport sector and that too when we deal with rural road projects is extremely difficult and is based on so many assumption. The two important components of costs and benefits are dealt with here briefly in the context of the construction of rural roads.

The cost in regard to rural roads can be considered basically the cost of construction and the cost of land acquired for the purpose. The maintenance cost of the road is also taken into account. The maintenance are recurring which help in keeping the roads good condition.

the cost price of agricultural productions. Besides these economic benefits there are certain social benefits there are certain social benefits such as availability of medical facility, spreading of knowledge and social interaction are obtained through rural roads.

Actually, it is not possible to make the cost benefits analysis for every rural road because sometime it is not feasible and the benefits cannot directly converted into money. If a comprehensive study on cost benefit analysis of rural roads is to be carried out for that certain information pertaining to the village economy are to be collected from the various government agencies which are involved in the development of the rural areas.

Besides this certain other studies may be necessary to get other information of economic indicators such as travel characteristics, income from all sources, occupation, number of students, land ownership, education standard, fertilizer and manure used, availability of electricity, medical assistance, production of dairy products, etc.

The data collected has to be analysed and economic benefits may be quantified due to the provision of new links. As has already been pointed out that it is difficult to calculate the benefits only due to roads because construction of new road links are generally followed by other economic activities which also contribute towards these benefits.

Evaluation of Economic Benefits.

There are various scientific and traditional methods for evaluation of economic benefits but these can hardly be applied in the case of rural roads due to extremely low traffic volume on these roads. The investment made on the rural roads and the benefits following the construction cannot be exclusively linked with the roads. One way of overcoming this difficulty is to compare the transport costs of the travel demand with those villages which are already connected with the road links and find the difference, however, to find the counterpart villages connected with roads and the same economic backward could be extremely difficult.

Charnemark, Biderman and Bovet9 suggest that in the areas that are relatively well developed and where traffic levels are over 20 to 25 vehicles per day, transport cost savings may be used to appraise rural roads, However, in less developed areas where traffic level falls below 20 vehicles per day, then road should primarily be appraised by using a "producer surplus" approach supplemented by non-agricultural vehicle cost.

In this paper the user cost-benefit with induced traffic method is suggested for evaluation of the economic benefits from the rural roads with some modifications.

The approach is the classic text-book method of transport project appraisal which can be easily used for rural roads with certain modifications.

The total benefit in the cost per trip is shown as the shaded area C1ABC2 in figure 1. The basic assumption that is made here is that elasticity of travel demand will not change. A diagrammatic representation of the travel demand curve is given by D1D2 in Fig. 1. Now as soon as the costs per trip on earthen and metalled road are calculated (C1 & C2 respectively) while the elasticity of travel demand (which is the slope of the curve) is available and the number of trips (N1) on the earthen road are obtained from survey, the estimated number of trips (N2) can be deduced. In Fig. 1 the part of the shaded are viz C1AEC2 represents direct benefits due to lowering of transport costs while the other part ABE is the contribution to the benefits from induced trips following the improvement of the road link.

It is suggested that if the calculation of travel costs are not immediately possible, the same can be replaced by the travel times on the respective roads and the total benefits can be obtained. In this case, however, the elasticity of travel demand might change.

Concluding Remarks

The linking of the villages with feeder roads in the fast developing country like India is absolutely necessary because road transport plays a pivotal role in the rural economy. An investment on the new roads is likely to stimulate the rural development and its effects would be transmitted to the entire economic structure of the society.

The economic benefits of the new roads would lead to increase in agricultural production, change in the crop pattern, reduction in the transport costs, creation of new employment opportunities in other that agricultural sector, increase in the land prices, better climate for setting up cottage and agro-Industries, increase in production of dairy products, etc. As a result the standard of living of the rural folk will become better.

The impact of the new feeder links on the social life of the rural population, will be reflected in the form of better medical care, more attendance in school/colleges, better availability of public services, social interaction etc.

As the construction of new road links are followed by other indirect economic and social activities which also contribute towards the development of the area, therefore, it is not easy to quantify and specify the benefits due to the investment made on the new roads. But if the detailed cost-benefits analysis for rural roads are to be carried out in that case field studies are to be conducted to collect information on economic indicators.

Acknowledgements

The authors wish to acknowledge gratefully the permission given by Director, Central Road Research Institute, New Delhi to present this paper at the Seminar on Roads and Road Transport in Rural Areas, 1985. The authors are also thankful to Dr. D. Mukherjee for the helpful suggestions.

References

Raul Manglapus, "Nationhood-the experience of five continents", Manila Times, October, 23, 1958.

Report of the Committee on Rural Roads, Government of India, 1967.

National Transport Committee Report, Planning Commission, Government of India, May, 1980

Report of the Chief Engineers on Road Development for India (1961-1981)-1958.

Villanueva Patrocinio S, "The value of Rural Roads", Community Development Research Council, University of the Philippine (Pacd-up project) Publisher 1968.

Miller, F., Highway Improvements and agricultural production an Argentine Case Study traffic 1968.

Clark, C. and Haswel, M. R., The economic of subsistence agriculture London, 1964 (Macmillan)

Walters, A. A., The Economics of Road User Changes.

Carnemark, C. J., Bindermah and D. Bovet, The economic analysis of rural road projects. World Bank Staff working paper (241) 1976 (World Bank)

Guha, Sabita (Dr.), "Impact of Feeder Roads in Rural Area" (A Block Level Study)-Institute of Economic Growth, University Enclave, Delhi.

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