An editorial in livemint puts forth the thesis that the answer to rural India’s problems does not lie in the development of the villages, but rather in the development of the villagers. And they claim, paradoxically, that the best way to do that is to convert them into city dwellers.
There has been a general tendency to romanticize village life as a return to our roots. What is noticeable, though, is that most people who romanticize village life in India tend to live in cities—in India, or elsewhere. They also seem incapable of noticing the irony implicit in this romanticization, since their forefathers, too, were once villagers —who migrated to cities for good reason.
The main problem they see with development of villages is that a typical village is too small to allow efficient delivery of (at least some important) goods and services. Like electricity.
The economics of power generation and distribution do not allow decentralization to the level of villages that are home to a few hundred people. The average cost of per unit of power makes it prohibitive. The only way for a small 1-2MW decentralized plant to provide power for a village of 1,000 people is for the villagers to pay substantial premiums—which is highly improbable.
However, an earlier post on the Indian Economy blog suggests an alternative way to fix this without giving up on the villages:
Given that rural populations are very poor, it is reasonable to expect that the aggregate demand of a single village for any single service will be very low. However, the aggregate demand for, say, a 100 villages for a single service could be significant. Aggregating the demand for many different kinds of services of the same 100 villages would translate into lot of services. These services would require infrastructural inputs which can be commercially and sustainably supplied. Thus, a RISC would supply to the needs of about 100 surrounding villages.
Considering that Atanu Dey is a co-author of both the above posts, I am not sure why the livemint editorial does not have any reference to the RISC idea.
In any case, it is very common for people to subscribe to the “village life is great” philosophy without really putting too much thought into it. And these two articles should go some way in ensuring that you understand the issues a little bit more.