India’s $90bn multiplier mission takes off

by Arnab Mitra

It’s a mission for a cleaner, healthier India that is, at once, a disguised economic stimulus package, employment generator and harbinger of cultural change that also promises to promote women’s safety and education.

Two projects – Swachh Bharat Mission and Namami Gange – with a combined Budget outlay of more than Rs 80,000 crore ($13.5 billion) over five years, could change the way Indians live. Additionally, the private sector could invest an additional $15-17 billion, taking the total expenditure on these two projects, which are part of the same mission for a cleaner India, to about $30 billion.

The goal, as Prime Minister Narendra Modi said, is to completely eradicate open defecation and manual scavenging by October 2, 2019, Mahatma Gandhi’s 150th birth anniversary.

Assuming that every dollar spent generates $3 of economic activity (called multiplier effect in economic jargon), this will mean an economic stimulus of about $90 billion for the economy. This money will go to suppliers of materials like steel, cement, bricks, machinery, etc, pay for workers in these sectors and its knock on effect could help kick start the much delayed economic revival that everyone has been waiting for.

First, the Swachh Bharat Mission: it aims to build 60 million toilets in five years across the country, in both urban and rural India, in a bid to end the practice of open defecation. Till February this year, about 3.2 million toilets have been built.

The mission envisages:

• The building of toilets for families below the poverty line. The government will provide a subsidy of 80%) for such toilets.
• Construction of community toilets exclusively for women, with facilities for bathing, defecation and washing
• Construction of toilets in schools, especially at girls schools
• Construction of drains and other waste disposal facilities in villages
• Launching an awareness campaign to get around cultural issues that hold many people back from building and using toilets within their housesThe Budgetary cost of the project will be borne by the Centre and the states in the proportion of 75:25 (90:10 for north eastern states) and
• Total eradication of the degrading practice of manual scavenging

A senior government official said the first year’s target of building 12 million toilets is likely to be missed, but he expressed confidence that with increased momentum, and the participation of leading companies like Larsen & Toubro, the Tata Group, Bharti Airtel, Jubilant Foundation and others such as USAID and the Bill & Melinda Gates Foundation, this shortfall would be made up easily in the coming years.

19626661_xl“Has it ever pained us that our mothers and sisters have to defecate in open? Poor womenfolk of the village wait for the night; until darkness descends, they can`t go out to defecate. What bodily torture they must be feeling, how many diseases that act might engender. Can’t we just make arrangements for toilets for the dignity of our mothers and sisters?,” Prime Minister Narendra Modi had said when he announced the mission in his Independence Day address last year.

“When the girl student reaches the age where she realises this (the absence of toilets in schools) she leaves her education. As they leave their education midway they remain uneducated. Our daughters must also get equal chance to receive quality education,” Modi had said.
It has been estimated that every Indian spends an average of more Rs 6,000 ($100) every year for diseases related to the lack of hygiene and cleanliness in our surroundings. At an aggregate level that comes to a whopping $120 billion of avoidable medical expenditure every year for the entire country.

But the Swachh Bharat Mission is not only about money and health. There is a cultural aspect as well. Several studies by respected Indian and foreign scholars and sociologists show that in rural areas, even many affluent families with toilets in their houses go out in the open to defecate. The toilets are used as storage spaces.

Millenia-old beliefs on purity and pollution stop many people from using toilets inside houses. Only a sustained and intensive campaign against these deeply ingrained prejudices will bring about a change in mindsets.

To encourage corporate participation, Finance Minister Arun Jaitley, in his Budget for 2015-16, announced a 100 per cent income tax deduction for contributions to the Swachh Bharat Fund. Further, he announced a 2 per cent surcharge on all taxes to generate funds for the Mission.

The second leg of the campaign to clean India involves the Rs 20,000-crore ($3.3 billion) Namami Gange programme, which the Modi Cabinet cleared a fortnight ago. The Ganga, considered holy and revered by millions of Indians, is actually one of the most polluted rivers in the world.

The discharge of industrial pollutants, human waste and household garbage is threatening to kill the river that still provides sustenance to a third of the Indian population that lives on the Gangetic plains.

Previous efforts to clean the Ganga, from 1985 onwards, have failed miserably. So, the government has drawn up an ambitious plan to fund the entire programme out of its own resources, and plans to involve local populations and civic bodies in implementing the plan to rejuvenate the river in a sustainable manner.

Will these two programmes lead to a cleaner, healthier, more ecologically sustainable India in five years? The funds are tied up, a timebound implementation calendar is being drawn up, responsibilities are being fixed and financial incentives are being dangled to encourage private participation.

So, there is every reason to be optimistic.

Arnab Mitra1mbArnab Mitra is a senior journalist based in Delhi. He writes on business and politics.




Policy India RoundtableThe above article was published in India Inc‘s print edition of the India Investment Journal launched in June 2015 in conjunction with the Policy India Roundtable 2015.




2018-05-18T13:07:03+00:00June 11th, 2015|2015, Clean India, India Investment Journal - V 3/I 2, Year|

About the Author: Arnab Mitra