Runa Sarkar and Anup SinhaIIM Calcutta

CENTRE FOR ECONOMIC AND SOCIAL STUDIES Begumpet, Hyderabad-500016

Discussion Paper No. 1Division for Sustainable Development Studies (DSDS)

April, 2015

Transforming Rural India:A Narrative of a Development Intervention in East

Godavari and its Implication on Sustainability

About the Authors

Runa Sarkar is Associate Professor of Economics, Indian Institute of Management Calcutta,

Kolkata. Prior to this, she taught at Indian Institute of Technology Kanpur. A chemical

Engineer from Birla Institute of Technology and Science Pilani, she pursued her Masters

in Environmental Engineering at the University of North Carolina, Chapel Hill, USA.

She has been closely involved in European Union and World Bank Projects on the

application of social informatics in agriculture and is currently on the board of two

companies of the BASIX group.

Anup Sinha is Professor of Economics, Indian Institute of Management Calcutta, Kolkata.

He was educated at Presidency College and University of Rochester and completed his

doctoral research at the University of Southern California. He has taught at the Centre

for Economic Studies, Presidency College and held visiting appointments in a number of

institutions in India and abroad. He was Dean, Indian Institute of Management Calcutta

and has also served as a non-executive director on the board of National Bank for Agriculture

and Rural development (NABARD).

About the Division for Sustainable Development Studies (DSDS)

In view of the growing importance on the issue of Sustainable Development,CESS (Centre for Economic and Social Studies) has contemplated theneed for starting a Division for DSDS in May 2014. Prior to startingDSDS, a Research Unit for Livelihoods and Natural Resources (RULNR,supported by Jamsetji Tata Trust, Mumbai) at CESS had worked for sixlong years between 2008-2014 in the core areas of forest ecosystem, drylandecosystem and river basin ecosystem and their linkages with the livelihoodsof the communities in a Pan-Indian setting. As RULNR phase came to anend CESS realized the need to take forward the pool of knowledge basethat was created and expand it to other related frontiers of knowledgesuch as Climate Change, Green Economy, Energy & Water Security,Industrial Pollution and Urban Waste Management, Forest and TribalDevelopment, Sustainable Agriculture, Aqua Culture and Fisheries, GenderIssues, Governance and Institutions relating to Natural ResourceManagement etc., DSDS intends to conduct evidence based policy researchand expects to bring in cutting edge level solutions on the problems studiedin different areas of research. Further, DSDS intends to forge networkingwith other Social Science research institutes and develop collaborativeresearch projects in the area of mutual interest in the field of sustainabledevelopment. DSDS also proposes to act as a forum to launch debates anddiscourses on the major research themes relating to sustainable developmentby inviting eminent scholars working in these areas and bring outDiscussion Papers, Working Papers, Policy Briefs and Research Monographsetc, to reach out to larger audience.

Runa Sarkar and Anup SinhaIIM Calcutta

CENTRE FOR ECONOMIC AND SOCIAL STUDIES Begumpet, Hyderabad-500016

Discussion Paper No. 1Division for Sustainable Development Studies (DSDS)

April, 2015

Transforming Rural India:A Narrative of a Development Intervention in East Godavari

and its Implication on Sustainability

2

Acknowledgements

The authors acknowledge research support from Indian Institute of Management Calcuttathrough a financial grant no. RP: DPTOLIE/3419/2009-10 and logistics support fromNational Bank for Agriculture and Rural Development (NABARD).

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Development as TransformationThe term development is loosely used to connote progress. It conveys a variety of different things todifferent social scientists, leading to a wide range of theories and approaches to development. Whileeconomists usually use the term to focus on changes in material living conditions and opportunitiesto increase consumer choice and consumption, sociologists have a wider perspective. Development,for them, encompasses changes in social institutions such as family or class, qualitative aspects ofliving such as liberties and rights, and belief systems. Anthropologists interpret development throughthe lens of processes of change in society, and how people relate to one another in terms of socialrelations and culture.

Across disciplines, while change is a common theme when we talk of development, it is not clearwhether there are a set of universal ends or accepted goals to be attained through development. Inaddition to improvements in material living conditions, other concerns for development include theavailability and distribution of goods and services in the future as the population grows. Further, asmaterial goals are accomplished, non-material notions of fairness and justice (Rawls 1971) becomegoals of a development process. Ethical concerns about equity and growth transcend distributionalchanges among the current generation to changes between the current and future generations. Appadurai(2004) focuses on how the aspirations and ambitions of people evolve as an outcome of the changesbrought about by development. Thus, a wider notion of development embraces the concepts ofsustainable development, which explores whether the process and desired outcomes are sustainableover a reasonable period of time, extending into the foreseeable future (Dasgupta 2001).

Sustainable development is then not only about change, manifested in improved economic andsocial conditions, but also about the ability to maintain a positive momentum in the direction ofchange. The change could be measured using standard metrics such as quantitative changes inincome, consumption and quality of social and economic institutions. However, the change wouldbe called sustainable only if there is a substantial qualitative change or transformation in the socialand economic conditions of the agents, which empowers them to take control of their lives andimprove their own standards of well-being. Thus, transformative change or change that is suggestiveof a transformative process is termed sustainable development, when the outcomes of the changecan continue to be harvested for an indefinite amount of time in an equitable manner.

The literature on economic development in the context of transformation can be categorised intothree distinct classes, Lewisian or complete transformation (Lewis 1954, 1979), hybrid or delayedtransformation (Amin 1976; Brewer 1980; Frank 1978; Furtado 1973; Wallerstein 1979) and theimpossibility of transformation (Chatterjee 2008; Sanyal 2007; Taylor 1979). The Lewisian approachdraws from the transformation during the industrial revolution in Europe. It states that a feudal pre-capitalist traditional rural country side is transformed into a capitalist industrial economy with wagelabour and machine based technology as a result of continuing investments in the modern sectordrawing out productive resources from the traditional sector. The alternate view of hybrid or delayedtransformation debates whether there is one concept of modern capitalism vis-a-vis traditional capitalismor whether there are several types of transformation contextualised by factors beyond our control,

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including the inherent ability of the traditional sector to transform itself. Based on observations ofeconomies which were colonies of the west, the third view of economic development proposes theimpossibility of transformation, asserting that the structure of capitalism contains non-capitalisticstructures (as opposed to pre-capitalist structures) within itself. The only change therefore would bequantitative and incremental, and transformation is impossible.

BackgroundGiven this canvas of theoretical positions around economic development, the objective of our researchwas to situate the Indian development experience in one of them. Given that we were trying to lookat transformation rather than change, we realised that a macro-analysis of available quantitative datamay not provide appropriate insights. Instead, we chose to focus on specific development interventionsand changes at the basic level of the village to examine whether the seeds of transformation hadbeen sowed through these interventions. We looked at several micro-interventions across India,ranging from watersheds in Rajasthan, Maharashtra and West Bengal, entrepreneurship experimentsin Sikkim, Himachal Pradesh, Gujarat and Arunachal Pradesh, development of tribal areas in AndhraPradesh and Chhattisgarh and fishing in Kerala. While our project was funded by the Indian Instituteof Management Calcutta, we received support from the National Bank for Agriculture and RuralDevelopment (NABARD) for identifying interventions and logistics. This paper describes ourobservations and learning from one such intervention in the East Godavari district of Andhra Pradesh.

The paper is organised as follows. The next section briefly describes the mental model with whichwe undertook our study. This is followed by a discussion from what we saw in East Godavari. Wepresent our observations from three villages, Vetamamidi, Mitlapalem and Pinjarikonda, where MHPprojects had been initiated. We then devote a section to comparing the different outcomes of theintervention in the three villages, while venturing some explanations for the same. Some specificlearnings from our visit are documented in the next section. Finally, the last section attempts todraw some conclusions on the outcome of the development intervention in the context of transformation,which is validated through our observations in the other states as well.

Our Mental ModelGiven the nature of our quest, we decided at the outset itself that this would not just anotherquantitative study of development related indicators. Instead, we decided to focus more on thequalitative changes in individuals, and how it all fitted together in a big picture, which in turn,affected the people involved. Specifically, we looked at the impact of the consequent diversificationof livelihoods on both beneficiaries and non-beneficiaries and whether (and in which way) it affectedtheir aspirations and ambitions. Since many of the development interventions relate to creatingeconomic opportunities from a village's natural resources, we also assessed whether ecological assetswere being conserved or created and the change in control over the village commons. Since we didnot start with any preconceived notions or expectations on what we would conclude from our fieldinvestigations, we adopted a grounded theory approach (Glaser and Strauss 1967), observing, listeningand learning as we went along. We held one on one as well as focused group interviews usingunstructured discussions with all stakeholders including beneficiaries, non-beneficiaries and the peopleresponsible for bringing change. Secondary data from NABARD and the implementing NGOs was

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also examined in depth, to develop a framework for investigation and arrive at a preliminaryunderstanding of the village and villagers we were going to meet.

TemporaryOrganisation

Income & wealth creation

People'sParticipation

EnvironmentalImpact

ChangedAspirations

SustainableDevelopment?

InterventionProcess:

LivelihoodsApproach

Source: Runa Sarkar and Anup Sinha (2015): Another Development: Participation, Empowerment and Well-beingin Rural India Routledge, Taylor and Francis, New Delhi, pp. 20

Figure 1: An Exploratory Framework for Analysis

Figure 1 represents the broad framework used to organize and analyse our observations to explore thedynamics of development interventions. As is evident, our purpose was to look at both outcomes ofdevelopment interventions as well as the processes that bring about those outcomes. The field studiestried to understand the processes through which the environmental, economic and human factorsinteract to create development outcomes, and the nature of the outcomes themselves.

The 'temporary organization' refers to all the people involved in a development intervention, includingthe funding agents, the change agents (NGOs or individuals) as well as the people themselves whoselivelihoods are being addressed. While 'people's participations refers to the different ways differentstakeholders involved themselves in the intervention, we focused more specifically on the 'vikas victims',the villagers whose lives the intervention seeks to change, and to what extent they influenced theprocess by which the specific intervention would be implemented. The intervention process includesconceptualizing a project, designing it, identifying and accessing the resources required, includingpeople and organization, and then managing the dynamics of the interaction of a complex set of ideas,activities and people. In general we observed that all the interventions we studied followed a 'livelihoodsapproach', that is, one which addresses the issue of poverty reduction through providing a means ofgenerating sustainable income, often leveraging the instrumental value of natural resources in theprocess (Carney et. al., 1999).The outcomes of implementation were assessed on the basis of incomeand wealth creation, environmental impact and changed aspirations of the participants. We tried toascertain the element of scalability and durability of the intervention to determine its role in contributingto more comprehensive socio economic transformation, which in turn would lead to the desired goalof sustainable development.

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Case Study of an RIDF Project in East GodavariThe topography of East Godavari district in Andhra Pradesh makes it ideal for locating sites forhydroelectric power generation (see Figure 2). The rolling hills of the Eastern Ghats, with little rivuletsrunning through them are ideal for developing mini hydroelectric power plants (MHPP)1. Further,this is sparsely populated (primarily) tribal area, which reduces concerns about displacement ofpopulation and their rehabilitation.

In the early 2000s, when there was a nation-wide thrust on developing sources of renewable energy, aprivate company surveyed the East Godavari region around the town of Adateegala, and identified theYelleru river as a potential water body to tap for hydroelectric power, and submitted a project plan tothe Nonconventional Energy Development Corporation of Andhra Pradesh Limited (NEDCAP) forapproval. NEDCAP, however, could not approve the project as it involved acquisition of tribal land bythe private party to set up the power plant, which is restricted. A separate agency, the Andhra PradeshTribal Power Company Limited (APTRIPCO), had the mandate to establish mini hydel power plantsin tribal areas by involving local tribal women's organizations, and ensure that the entire profits fromsuch projects would accrue to the tribals for developing the local areas. The local Integrated TribalDevelopment Agency (ITDA), took up the private company's proposal through APTRIPCO, which,by 2005, had chosen three sites on the Yelleru River, where a slight diversion of the river water couldbe used to generate power. The tehsil itself had a population of around 40,000. The three sites chosenwere located in Vetamamidi, Mitlapalem and Pinjarikonda villages. The projects were funded throughthe Rural Infrastructure Development Fund (RIDF)2 and from a subsidy scheme of the Ministry ofNew and Renewable Energy (MNRE).

The authors visited East Godavari in November, 2012, to understand, first hand, this novel projectand the impact it has had on the locals in the area. We first visited the village of Vetamamidi, where thepower plant was already in operation for a couple of months and then went to Mitlapalem andPinjarikonda. A narrative of our observation follows.

VetamamidiA drive of a kilometre or so on a turn-off from the main road led us to the power plant site at Vetamamidi.Since we were visiting just after the monsoons, the area was green and lush, with the rocky undulating

1 An MHPP produces electricity (usually above 1,000 MW at peak capacity) by using the energy from theflowing water of a river. The plant is supposed to function as a run-of-river system where water passing throughthe generator is directed back to the stream without the need of a reservoir. The electricity generated is typicallyfed to the power grid for distribution, although it could be locally consumed if there is adequate neighbourhooddemand.2 The purpose of RIDF is to promote innovation in the rural and agricultural sector and to ensure that goodinfrastructure projects are not stalled because of a lack of funds. The specific projects to be funded are decidedkeeping in mind the sectoral priorities of the government, and the new projects recommended by the differentdepartments of the state governments. RIDF is a demand-driven non-concessional scheme where finances areprovided in the form of loans from NABARD to the state government which implements the project throughlocal government institutions and line departments. NABARD has no role in implementing or monitoring theRIDF projects; this is the responsibility of the state government.

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terrain reminding us of thickly wooded hills not far away. The plant gate had a large yellow board thatmarked the project site, where the plant capacity was listed as 1,200 KW. The funding details werealso painted: the project cost was Rs 60 million, of which Rs 29 million was from RIDF, and theresidual Rs 31million was a subsidy from MNRE. The officer of NABARD, who accompanied us,told us that over the years there had been a 25 per cent cost escalation of the project to around Rs 80million. Further, this plant, situated on 2 acres of land, had been constructed on an erstwhile nurseryplantation of ITDA. The power plant needed 11 acres in totality, the remaining 8 acres coming fromthe state government and 1 acre coming from two private owners. The private landowners werecompensated at the rate of around Rs 35,000 per acre for the land and for the crops/ plants grown onthe land. The project commenced in 2005 and the plant had begun to produce electricity from April2011.

A group of five or six people received us at the gate. We were shown around the plant by an engineerfrom APTRIPCO, who were still responsible for plant operations, and Parvati, a lady electrical engineer,fresh from college, recruited as Assistant Manager (with a salary of Rs 9000 per month) to oversee theentire plant. The President and Secretary of the 'Management Committee' that were supposed to takeover the plant in less than a year's time, once APTRICO stabilized all operations, were also there. Alocal village youth, recruited as a non-technical employee of the plant, made up the team that showedus around.

As we walked around looking at the equipment, the engineer from APTRIPCO did most of thetalking, explaining the process as well as hurdles faced while setting up the plant. He added that theplant was operating at 600 KVA; the low utilization was due to a combination of natural and manmade factors. Firstly, the flow of water in the Yelleru was lower than normal, attributed to low rainfallin the just concluded monsoon season. Second, the quality of the civil construction was poor; some ofthe channels were incomplete, leading to water leaks, reducing the water pressure further. The poorconstruction quality was evident even to us. Thirdly, the operators of the power plant (mainly somecontract workers employed by APTRIPCO) and Parvati were inexperienced and slow to respond toproblems. Overload alarms kept going off in the control room.

Although it had been a couple of months since the power generated was linked to APTRANSCO'sgrid at Addateegala, generation had not stabilised and the billing of units was still in progress. Hencethere were no revenue inflows into the project, and the operating costs of the plant were still being metby APTRIPCO. The Divisional Engineer deputed by APTRIPCO to the project was actively involvedin supervising the day-to-day progress of the plant as this was the only one in the series of threeMHPPs that had seen the light of day. Successful handover of this plant to the VMC would be afeather in his cap. He had been involved with this plant since May 2009. According to him, APTRIPCOitself was in disarray with many of its senior officers resigning due to unmanageable delays in projectexecution. He believed that his hard work and patience could lead to a more rapid career progressionfor him given the number of vacant top-level positions. Towards this objective, he even claimed tohave spent up to Rs 0.3 million from his personal funds to assist the contractors so as to ensure that theprojects were completed. He empathised with the contractor's reluctance to complete the projects asthey were allotted the projects on the basis of estimates made in 2005, and given cost escalations over

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the last few years it was not economically viable for the contractors to honour their commitments.This was part of the reason why in Vetamamidi, although the contractor's work was incomplete, hehad not been fired and the project team was being patient.

We walked around half a kilometer upstream from the power plant to the site where the river wasdiverted. Here some of the civil construction work was incomplete. Within less than a year of theproject operating, one could already see the formation of sand banks on the riverbed where its flowhad been diverted. We were surprised to hear that this was not a source of ecological concern to theengineer at APTRIPCO, who confidently reiterated that such a minor diversion of water would notchange the pattern of the river's flow.

As our discussions slowly veered to non- technical matters, the two ladies who were accompanying us(both Managing Committee members), became more vocal, sharing with us that the successfulimplementation of the plant was largely because of the enthusiasm of Prerana Devi, the then ITDAcommissioner. She used to visit the village often, and was instrumental in convincing the villagers thatthey should support this project and that they were capable of managing a complicated thing like apower plant by themselves. Further, they could get some revenues from successful operation, whichthey could use to create valuable village infrastructure, without any investment by the villagers. Moreover,the availability of water in the village would not be affected, and very little land would be required.

The villagers gave their formal consent to the project in a meeting of the gram sabha. Since the ITDAadministration and APTRIPCO were known entities, there were no serious reservations about outcomesand consequences. In addition to the villagers' consensus, a more formal tripartite memorandum ofunderstanding (MoU)3 was signed between the APTRIPCO, ITDA and a committee chosen by thevillagers through the meeting of the gram sabha regarding responsibility and revenue sharing. Theunderstanding was that APTRIPCO would supervise the construction and initial operations of theplant and ultimately (after one full year of running the completed project) hand over the plant to theVillage Management Committee (VMC) for sustained operation and maintenance. The handover ofthe project from APTRIPCO to VMC would take place under the supervision of the ITDA.

Though nothing was explicitly mentioned in the MoU, we were given to understand that the ITDAwanted the composition of the VMC to be 80 per cent women, with key positions held by them. Thegender of the previous commissioner of ITDA might have been the source of the emphasis on womenbeing brought to the fore and encouraged to take long-term responsibility of maintaining the commonassets to be created. The persons who would be displaced from their land would be accommodated inthe VMC. In addition to project supervision, APTRIPCO would be responsible for training localtribal youth and members of the VMC on maintenance and management aspects of the project. Thecontractor appointed by APTRIPCO would be responsible for commissioning commercial operationsand for maintenance of the project for one year from the date of commissioning. The contractorwould also be responsible for imparting hands-on training to the project employees. The MoU wassupposed to document carefully the cost and revenue sharing model for the project.3 Despite several efforts, we were not able to see a copy of this MoU. Nevertheless, the different stakeholders'(APRTIPCO, the village committee)version of the content of the MoU was consistent.

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The revenue sharing formula was as follows. First, regardless of the revenues generated, 4 per cent ofthe project cost, had to be set aside as operation, maintenance, insurance and working capital costs.Second, actual costs incurred in handholding, subject to a maximum of 0.5 per cent of the project costwas earmarked as annual fees to APTRIPCO for services rendered until the entire RIDF loan componentwas repaid. (After the repayment the VMC could continue with APTRIPCO under the same conditionsif it so desired). Once revenues started flowing, an amount upto Rs 3 million annually could beutilised for repaying the RIDF loan through APTRIPCO. About 1 per cent of the project cost was tobe apportioned as an emergency fund to meet operational exigencies. From the remaining revenue, 50per cent was to be directly utilized by the gram sabha for development activities, mainly the creation ofcommon assets. Around 25 per cent of the remaining revenue was to be utilized by the local ITDA fordevelopment activities in the Addateegala area, and the residual 25 per cent would be devoted todeveloping renewable sources of energy which could benefit the tribal people within the local ITDAregion of Rampachodavaram.

Despite this being so complex, VMC members were able to recite these relative shares accurately witha little prompting from each other. However, the committee members were not as clear when we askedthem about the revenue and net revenue prospects. Instead, they emphasized that they would haveaccess to 50 per cent of the remaining gross revenue to build assets in the village. We pointed out thateven if the tariff offered by the grid for green energy was fixed, the amount of power they could supplywould be variable, depending on the plant efficiency and the amount of water available. Thus theycould plan only on the basis of some expected amount. They stared at us blankly, not comprehendingany part of our argument. We calculated the net surplus that the VMC could earn for using for villagedevelopment activities (see Table 1) for three hypothetical scenarios. The net surplus would depend onthe power generation capacity utilized. We assumed that revenue per unit of power sold to the gridwas Rs 4 and simulated three alternative states of affairs, a 'best' situation (plant generating 1,000 KWfor 10 months for 16 hours a day4), an average situation (800 KW of generation for nine months at therate of 12 hours per day), and the worst case (600 KW generated on average for eight months in a yearat the rate of eight hours per day) which was the current operating conditions.

In the best case, the net surplus that the VMC could earn would be Rs 5.9 million in a year, which isa healthy amount to build a portfolio of assets in the village that would promote the capabilities of thevillagers in terms of health, education and accessibility. At an average level of utilization, the netsurplus available to the village would fall to Rs 1.48 million as a result of the fixed maintenance costsand loan repayment built into the project finances. Under the worst-case outcome, the net surplusavailable to the VMC would turn negative, that is, no revenues would be available for development,and annual repayment amount for the RIDF loan would be a mere Rs 0.21 million instead of Rs 3million. What this means is that unless the project was run at a high degree of capacity utilization andtechnical efficiency (over which the villagers had some control) the benefits flowing from this projectwould be effectively zero. It was not too clear to us that the VMC understood the gravity of thesituation.

4 This was despite the rated capacity of the plant being 1,200 KW, as we realized 1200 KW could be only peakpower generation when all was well with the powerplant and the river was in full flow (the monsoon months).

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Table 1: Revenue Generated from MHPP at Vetamamidi and its Distribution

Shares Best Case Average WorstCase Case

(in Rs million)

Units - 4,800,000 259,200 1,152,000

Revenue 100% 19.2 10.37 4.61

O&M costs Rs 3.2 mill 3.2 3.2 3.2

APTRIPCO annual fee (max) Rs 4 mill 0.4 0.4 0.4

Loan repayment Rs 3 mill 3.0 3.0 0.21

Emergency fund Rs 0.8 mill 0.8 0.8 0.8

Remaining revenue 26% 11.8 2.97 0

Distribution of Remaining Revenue

Village common asset fund 13% 5.9 1.48 0

local ITDA (common asset) 6.5% 2.95 0.74 0

local ITDA (green energy) 6.5% 2.95 0.74 0Note: Assumptions:Green power feed in tariff assumed as Rs 4 per unit.Best Case: 1,000 KW generated on average for 10 months in a year, with the plant operating 16 hours per day.Average case: 800 KW generated on average for nine months in a year, with the plant operating 12 hours per day.Worst Case: 600 KW generated on average for eight months in a year, with the plant operating eight hours perday

The VMC comprised 19 members of which 10 were women (not the expected 80:20 in favour ofwomen). The office holders, namely the president, Manasa, secretary, Vijaya, and treasurer, Preksha,were all women. Five of the male members (of which two were from families from whom land hadbeen acquired)in the VMC formed the operation and maintenance team of the project and earnedsalaries. A provision through which10 per cent of the committee (two members) could be changedthrough consensus or elections by the gram sabha every two years had not been exercised so far.

The VMC played a pivotal role in the supervision of the construction work of the MHPP. Committeemembers took turns supervising so as to not jeopardize their domestic commitments. The enthusiasmand sincerity of the VMC made up for their lack of knowledge. During construction, they often madephone calls to APTRIPCO officials to ask what brand of cement was to be used or the exact proportionof sand, stone chips and cement for concrete. To get the contractor's attention they often resorted to

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measures such as temporarily stopping work or threats to disengage the contractor. There were situationswhere the VMC confirmed the contractor's deviation from the work plan in writing with the localAPTRIPCO official and sent it over to APTRIPCO's office at Hyderabad for validation. APTRIPCOofficials personally supervised critical construction and erection works at the water intake point and atthe plant site. The villagers working at the civil construction site got daily wages between Rs 60 and Rs80 (compared to the rural employment guarantee scheme rate of Rs 140 at that time),. Supervisionwas, however, entirely voluntary, with the VMC volunteering because they felt they were contributingtowards the improvement in the living conditions of the village in the long term, and because it wouldearn them more respect from the villagers. So far, there were few other benefits from the project. Forthe few who were directly employed, earnings were not very high, with salaries ranging around Rs3,500 a month for unskilled labour. The incentive for individual sacrifice (effort) for reaping collectivebenefits (common assets created) was evident.

Perhaps the greatest benefit of this project was the increase in self-confidence and awareness of theparticipating women of the village. They claimed that they were leading from the front now, as comparedto in 2005 (when ITDA and APTRIPCO approached the villagers with the proposal) when they hadlittle to contribute. They were proud of the assertive role they had played in the supervision of the civilconstruction works, more so since this was the only successful MHPP site. In addition, the trainingthey had obtained from APTRIPCO on power generation gave them confidence. Despite this, thewomen were still shaky on operating and managing the power plant once APTRIPCO handed it over.For example, Preksha, their treasurer, who had had formal education only till middle school (classeight), had no idea of how to maintain or keep books of accounts since she had not been exposed tothese aspects. She, however, was confident of operating the bank account of the VMC, which had thepresident and secretary as the other signatories. Moreover, the VMC was aware that based on the MoUthey would have APTRIPCO support and involvement till the time that the RIDF loan was repaid.

MitlapalemAt Mitlapalem, the construction site (the power generation station was not completed yet) was farfrom the metalled road, over uneven terrain. The undulations on the path, sudden curves and a roadfullof stone, gravel and rocky outgrowths were such deterrents that the driver of our four-wheel drivehad to be coaxed to take us as close as possible to the site. We found a few pieces of rusted equipment,including the turbine blades, scattered at the site where the plant was to come up. Upstream, only asmall part of the civil construction was visible: a half-made diverting weir and the beginnings of theconcrete channel. There were saplings and trees growing out of the cracks in the concrete.

Hailing from the Koidara tribe, the villagers at Mitlapalem wore a forlorn look when asked about theprogress of their MHPP. They were despondent; they had been hoping that the ITDA would interveneto help resolve their standoff with the truant contractor but no help was forthcoming. Here, almost12.4 acres of the 14.2 acres required for the MHPP had been acquired from private landholders.Persuaded by APTRIPCO officials, they had sold their land willingly; quite happy with the lump sumpayment they received. As land donors, they harboured an expectation of an increase in esteem amongfellow villagers once the MHPP was up and running. Some of the landowners were (mistakenly)optimistic that in the future APTRIPCO would compensate them with some land. These erstwhile

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landowners had now become daily labourers, and they regretted that they did not save more from thecompensation they had received. In retrospect they felt that the compensation amount of Rs 35,000per acre was low since losing the land implied that they lost an income of around Rs 15,000 to Rs20,000 per acre per year.

Only seven of 19 members of the managing committee were women. Fewer women from this villagehad showed interest and as per the MoU, one representative (usually male) from each of the familiesthat had lost land had to be accommodated in the committee. The five major posts of president, vicepresident, secretary, joint secretary and treasurer were however held by women. Work on the MHPP inthis village had been stalled for a long time. There had been no government intervention in the villagesince 2005-6.The committee members had lost hope as the project was at a standstill. The president ofthe VMC had given up, and she appeared a trifle disturbed that she was letting the village down. Shewas clear that she would not go to the court of law so as not to repeat the Pinjarikonda story, where,because of termination of contract, the contractor had filed a case and the project was on hold becauseof litigation issues. She was also certain that the negotiations were best handled by APTRIPCO. Sincethe contractor had stopped work citing problems of inaccessibility and cost escalations, the villagershad offered that the contractor and workers could stay in the village itself. ITDA, who, as per theMoU, should have stepped in to handle situations such as work stoppages, hadlet them down. Thepresident was lost, and was unsure whether APTRIPCO'sadvice to write a complaint to ITDA wouldhelp in any way. APTRIPCO's inability to influence the contractor was because the tenders of theMitlapalem MHPP had to be issued for the third time before any contractor participated in the bid.We rued the irony of the situation: the RIDF was set up to provide funds to complete stalled governmentprojects, and instead here was an instance of another stalled project!

PinjarikondaThe situation at Pinjarikonda was even more distressing. Young villagers had little idea of the locationof the project site. Others unexcitedly gave us directions to the place where the power generating sitewas to be set up, where we came across an old rusted turbine lying in the middle of an overgrown pieceof land. An iron signboard with remnants of yellow paint marked the site. The large turbine lying therewas a monument to how development interventions can be wasted. The project had come to a standstillin 2008,when the village committee had terminated the contractor's services because of poor progress,and the contractor had challenged the decision, obtaining a stay order from the court. Meanwhile, theturbine lay there, gathering dust and slowly disintegrating into scrap under the vagaries of the weather.

The Fine Line between Success and FailureThe work on the MHPP at Vetamamidi, Mitlapalem and Pinjarikonda started at almost the sametime. However, while the right mix of coercion, threats and understanding, the MHPP at Vetamamidisaw the light of day, the other two sites were not as lucky. The creation of a network for collectiveaction was at the heart of the functioning of the VMC at Vetamamidi. The network, between thevillage community and the representatives chosen, the APTRIPCO employees in the project, theprivate contractor, and the powerful ITDA officials, was imposed on them by the MoU. People whovoluntarily joined the network (not the officials of agencies like APTRIPCO and ITDA) did so becausethey had shared beliefs about the importance of the subsequent accumulation of common assets. It

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was a form of civic engagement through interpersonal networks. However, there could be repercussionson the governance of the project, which would be determined by the relative competencies of thesevolunteers. Perhaps, this is what explained the relative success of Vetamamidi over Mitlapalem andPinjarikonda.

The project design was identical, and the sizes and socio-economic profiles of the three villages werevery similar. In Vetamamidi, the plant was complete and power generation (albeit at a low level ofcapacity utilisation) had begun. In Mitlapalem, the civil works were about three-fourths completed,after which the contractor had stopped work and had refused to come to the site. In Pinjarikonda,work was at a standstill. It was the same contractor appointed in all the three villages, all in the samevicinity. Was the leadership of the VMC a determining factor for the observed differences? InVetamamidi, the office-bearers had relentlessly pursued the contractor and the engineers of APTRIPCOto complete the works. The optimism of the president, an eighth class dropout, was almost contagious.The project cost had ballooned from Rs 60 million to Rs 80 million. The management committeementioned that while they were not fully aware as to all the reasons behind the escalation, they werevery conscious that one reason could have been their insistence on high quality materials for the civilworks. As part of his defence for abandoning the projects, the contract or had officially cited the lackof proper access to the project site in Mitlapalem and Pinjarikonda as compared to Vetamamidi.However, the contractor must have known about the terrain of the sites when he accepted the job.

An institutional implication of this failure relates to the way the job contract was drawn up. TheAPTRIPCO engineer at the sites had not seen the contract and was unclear about the penalties for thefailure to deliver by the contractor. He was not even sure about the responsibilities arising out ofcomplementary commitments of the ITDA (like the building of roads to the project sites if necessary).The contract was at the APTRIPCO head office. We followed up on the issue with the ITDAcommissioner in-charge of the project area. She was unaware of the impasse, and claimed that land-related disputes took up all her time. Another concern was the effect legal institutions could have onpeople involved in participatory development. The court was a distant nebulous but powerful forcethat could intervene and upset their lives in unanticipated ways with often irreversible negativeconsequences.

Learnings from East GodavariThis case study is about the creation of a common property resource (CPR) that was not entirelynatural, and yet was derived from natural resources. This was a project where participation was soughtfrom above; rather than participation generated by people demanding intervention. Except for a few,the fruits of successful collective action would not result in any direct improvement of personal incomes.Gains from the project would be for the community as a whole. The overall supervision of the projectwas left to local women. The project was the construction of a set of mini hydel power plants (MHPPs)along the Yelleru River with public funds. The project, on completion, would generate and sell electricityto the grid. The net surplus (after meeting all costs and charges) would be available to the villagers,from which they could create common resources like schools, hospitals and roads in the village and itsneighbourhood. This was a different experiment in 'build and transfer-to-operate'. The power plants,once completed, would be operated and maintained by a committee formed by the local villagers,

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consisting almost entirely of people drawn from the community. The leadership of the managementcommittee would have to be drawn only from women members chosen by the villagers themselves.

What kept the VMC motivated? Self-interest may not be the only force that drives people (Dasgupta2001; Sen 1977). Dasgupta (2010) discusses motives like mutual affection, pro-social inclinations andcreation of trust and credibility as possible motives why people undertake collective action. Therecould be ethical reasons too as to why people cooperate. In the case of these villages, personal interestcould not have been the driving force, because there were no individual incomes that resulted from asuccessful completion of the project, except for three or four salaried beneficiaries. While the benefitswere collective, and could not be apportioned to individuals, the costs were personal. There wereopportunity costs in terms of time foregone in working on one's own fields or working as day labourers.It was like a 'voluntary tax' paid for the well-being of the community, even beyond the boundaries oftheir own village.

While the 'output' of a working MHPP was visible only in Vetamamidi, the outcome of this developmentintervention was evident in all three project sites. The observed outcomes were diverse in terms of theway that local participants emerged from their participatory role with different experiences. TheMHPP project was adopted by local villagers and a form of participation was imposed by its designwhere the incentives transcended individual benefits. These experiences ranged from the need to learnnew things like accounting or the insight that a sacrifice for the community's benefit was a rewardingmoment of self-realisation, to the agony of failure and a sense of impotence against the bigger powersof the contractor and courts of law. A mix of leadership styles and institutional failures combined tocreate the outcomes we witnessed. We came away with the feeling that not only was collective actionand the creation of a temporary organization problematic; but also that the intent to act collectivelytowards a common cause may not be a guarantee of success.

The critical resource for the project was the Yelleru River, a natural capital asset. The exclusive focus onthe instrumental value of nature (or return on ecological capital) could lead to a variety of intense andinevitable conflicts. In Vetamamidi, sandbanks were already evident where the local river had beendiverted to generate green power for the grid, but this was not a source of concern to any of thestakeholders. The ecological impact of this in the long run could be quite serious.

Situating the East Godavari Development ExperienceWe began with the premise that micro-interventions, such as the series of MHPs in east Godavari,were designed to act as a catalyst for transformation since, left to its own devices, the process ofcapitalist economic growth was not enough to pull the rural sector out of its traditional mould. Fromthis point of view, was the East Godavari intervention an instance of a Lewisian style completetransformation, or of a delayed transformation, or could we conclude that transformation wasincomplete?

To assess this, some markers to look out for are the creation of market access, especially access to creditmarkets, creation of infrastructure, especially natural assets and developing human capabilities, especiallythrough capacity building and empowerment of women.

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In the case of Vetamamidi, Mitlapalem and Pinjarikonda, as with many of the other interventions westudied (not described in this paper) we were unable to discern any emergent unambiguoustransformative trends. In East Godavari, there was no big change in network of markets or the numberof participants in the development process had not changed significantly. Neither was there a qualitativetransformation in market linkages or human capabilities beyond very minimal quantitative incrementsin transactions and incomes during the MHPP building stages. The physical infrastructure createdwould not cater to local needs or open up the rural areas to connect to modern economic spaces. Wedid not observe any inter-sectoral mobility of resources. Perhaps this was not representative of a Lewisiantransformation.

In that case, wasthis a scenario where transformation was merely delayed? While there was a functioningMHPP in Vetamamidi, in terms of its operation, it was not really an exemplar of a modern institution.It still operated based on personal understanding and social network rather than in a more professionalmanner (in which case the contractor should have been disengaged). There were no visible attempts totry and create linkages with the more urban parts of Andhra Pradesh through the MHPP, except forthe occasional exposure visits that the VMC were taken on to see other MHPPs. We did not see anypossibility of a transition from traditional to modern coming out of this intervention, in terms of thecommonly accepted metrics of development. Was it that there was change, but transformation wasactually impossible, as posited by Sanyal (2007)?

We came away with a more optimistic outlook. While there were no evident signs of a transformationhaving taken place, or even the presence of the right elements so that there is hope that transformationwill eventually take place, the one element which caught our imaginations was the look of hope andoptimism in the eyes of most of the villagers we spoke to. The local people directly involved with themini hydel project were engaging with ideas of looking for opportunities beyond the project at handsuch as large irrigation projects. Some of them also realised that to make these possibilities come trueparticipation in politics was a prerequisite and they nurtured their own political ambitions. This beliefmixed with desire could be interpreted as a very nascent form of agency. Its transformative power wasabsent because there was neither a destination nor a road map of change although the movement awayfrom the here and now was deemed necessary. They dreamt of alternatives, of another life, usually notfor themselves, but for the next generations. They were not able to completely articulate their visionfor their village or present an appropriate action plan to change their present conditions. This, however,did not deter their desire to see (if not create) a different future for themselves, not necessarily in theirvillages. These aspirations are not a sufficient condition for transformation to an urban-modern world,yet one cannot undermine the power of human agency. We left East Godavari with a strong belief thatthis indomitable power of human agency would ensure that the possibility of transformative change inthe villages we visited was not entirely negated.

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