The problem of the economic development of large underdeveloped economies present unique challenges that require innovative solutions. In an age of increasing specialisation, there is a critical need for integration to supplement the specialisation. Economies are complex, nonlinear systems and just as they cannot be adequately described by partitioning them into subsystems and analysing them piecemeal, so also their problems cannot be addressed by partial interventions. This is because the subsystems of complex non-linear systems interact strongly with one another, and even the most carefully thought through partial solution often fails to achieve its goal.

The aim of RISC is to address the problems of one such complex nonlinear system — the rural Indian economy — and to outline a solution that addresses the problem of economic growth comprehensively by accomplishing a set of interlinked transitions to a more efficient equilibrium.

RISC is a market-driven intervention in rural India that has the potential for achieving the multi-faceted goals of sustainable economic development. This intervention has the potential to

• increase India GDP growth rate by around 1 percentage point
• add about Rs 20,000 crores annually to India’s GDP
• directly raise the incomes of around 70 million Indians

Services share a standardised reliable infrastructure platform
RISC distinguishes between the infrastructural services from the user services. Standardisation of the underlying physical plant and the infrastructural services makes the services cheaper to develop and deliver.

Conceptually and operationally, a RISC has two levels:

• Infrastructure level
• User services level

RISC follows the logical trend of moving away from vertically integrated institutions to one of horizontal segmentation and specialisation. Thus, conceptually and operationally, a RISC has two levels: the lower one is the infrastructure level (henceforth, the I-level) which consists of power, broadband telecommunications, and the physical plant (building, water, air-conditioning, sanitation, security); and above that the user services level (henceforth, the S-level) which consists of all services that are relevant to rural economic activity such as market making, financial intermediation, education and library, health, social services, governmental services, and so on.

The I-level provides a reliable, standardised, competitively-priced infrastructure platform. This is achieved by the coordinated and cooperative actions of firms that specialise in the component activities. Co-located on the S-level are a variety of firms that provide user services. The presence of the I-level reduces their costs and therefore the prices that the users face. Economies of scope and agglomeration are obtained by the presence of the variety of different service providers.