Unlike in past decades, when governments had a larger role as economic players, national development plans now are set against the backdrop of the state's gradual withdrawal from economic activities. Flowing from this shift is the need for the state to redefine its role as a strong regulator and policy-setter, directing the economy towards the set goals. India's officially proclaimed economic goal of ensuring that high growth rates are also inclusive is mostly empty rhetoric. The Eleventh Plan's strategy was to ensure that key sectors of the economy grew at acceptable rates and, secondly, to make critical interventions in the social sector. That this approach has failed to yield the desired results is evident from two official sources. The Mid-Term Appraisal (MTA) of the 11th Plan, released last year, for instance, put the likely growth rate at 8.1 per cent during the Plan period, against the targeted rate of 9 per cent. Further, sectoral contributions to the GDP fell short of expectations across the primary, secondary, and tertiary sectors in all but one category, ‘personal and community services.' A more significant admission came earlier this month when the Planning Commission noted, with more than a touch of euphemism, that the “progress on inclusiveness” was “less than expected.”
The Twelfth Plan process is set to commence at a time when there is serious concern over government finances. The changing role of the state, the near-jobless growth in the primary sector, and the increasing informalisation of workforce in the secondary and tertiary sectors call for strong state action to redress poverty. Growth is important; but higher economic growth rates do not, by themselves, bring inclusiveness or a reduction of inequalities. The extent to which policymakers are able to carry forward the apparently conflicting objectives of stepping up government's role as the ‘agent of change' and maintaining fiscal prudence will determine how successful they are in lifting millions out of poverty. Equally important is policy-setting that mainstreams inclusive growth through strong regulatory and oversight mechanisms that prevent leakages. The current plan to increase spending in critical sectors such as health, education, skill development, and infrastructure is welcome. International experience demonstrates that it is easier to meet targets that are related to provision of access to social opportunities — education, for example — than those linked to outcomes, such as improving school-completion rates. But focussing on progressive outcomes will be crucial in meeting the challenge of poverty reduction and inclusiveness.
Keywords: GDP growth, Twelfth Plan, Indian economy, poverty alleviation
..Ite quite enlightening observation....inclusive growth is real test to India's journey to liberalisation. If we fails on this front this growth story would end in myth or vague dream.
The opening sentence of your editorial can be recast to unveil the hidden import of what you say: the government encourages privatisation. Making over the reins of economic activities to the corporate tycoons can never serve the cause of the commoners. The ugly face of privatistion has come up when the pricing mechanism of petroleum products has been handed over to private companies. That poverty alleviation and inclusive growth orchestrated ad naseum by the government is a mere rhetoric strategem. It is not difficult to understand this by anyone of ordinary prudence. Even the good intentions of the geovernment cannot be translated into reality by dint of the bureucracy, including the ministerial staff, remain fully immersed in a stinking system of bribery. The delay and neglect the potential beneficieries of any government scheme encounter in the government offices, unless they are prepared to part with a substantial sum as bribe, is anybody's knowledge.
Most rightly that the governments in the present times has little to do with the public sector investments. But astonishingly those are only concerned with their single point agenda of Public sector disinvestments with the logic set to accumulate funds in their much claimed 'dried-up' reserves for spending in public care as education,health,drinking water,communication infrastructure etc. But the experiences of 2 long decades since the onset of the Liberalised economic policies since the 1991 shows that logic to be a mere hoax and deceit as even after large scale disinvestments of the Public sector since the year 1991 poverty, inequality, impoverishment, sufferings have increased massively for the common masses and the majority of the population keeps languishing amidst the darkness of hopelessness. Some base-level ground-realities are startling enough for everyone to see which are undeniable and irrefutable. The number of suiciding farmers are increasing every progressive year, and the number has grown so alarmingly since 1991 that it's nearing the total number of civilian deaths in the whole of Africa due to civil wars in several African nations. According to the survey of the Govt. of India, about 78% of the total population doesn't have the strength to even spend Rupees 20 everyday on their basic necessities as food.
Another startling revelation comes out into the open of the public domain when according to the 2011-12 budgetary statistics the GOI has reduced more than 20,000 crores of rupees on the subsidies given to the common marginalised population, and on the other hand it has given concessions of approximately 90,000 crores of rupees to the corporate sectors. The result is there for all to see. This is the government of the corrupt corporates, this government is never for the common population - and hence the gap of inequality is widening rapidly and the Indian nation gradually plunges into the depth of haplessness conspicuously demarcated between the shining,privileged India and the suffering,vulnerable India.
Even though it has been predicted that our growth rate will be 9% in the coming years it remains that our infrastructure development like roads railway electicity education andaccessibility for pubic health remains very poor In these areas we are far behind other countries who gained independence after 1950.With limited resources Dubai and Singapore for example are far ahead of our country.In the field of health we have many environment related diseases like dengue ,chikenguniya, leptosprosis and malaria which are unheard of in these countries. The fact is that our funds for development are hacked by middlemen cotractors and politicians and only a small fraction reaches the beneficiary.After 60 years of independence social equality remains a dream and this is the main issue for the resurgence of our endemic terrorism.When we discuss 12th plan some of these issues will need urgent solutions.
You have rightly emphasized the need to lay greater emphasis on poverty reduction measures and steps for reducing the widening inequality We may be happy that we have produced a larger number of billionaires adorning the Forbes list but at the same time the condition of those at the lowest rung of the economic ladder need to be improved, and quickly at that. At the same time, we should realize that money does not grow on trees. There is need for financial prudence so that non-development expenditure is controlled and wastages and leakages are reduced substantially. The higher success we achieve in rooting out corruption will enable greater resources being available for development. Health and education are critical areas which need constant improvement not only in quantity but in quality too. Maternal care and child mortality and child nutrition are critical areas needing not only greater outlay but proper spending and checks and supervision. A study in the past revealed that humble measure like skills development of poor people in the shape of diplomas ensure greater income potential so essential for the elimination of poverty. The emphasis on infrastructure is needed but a caveat has to be entered. Decision makers need to choose infrastructure projects carefully avoiding the creation of monumental projects giving little benefit to the people. Priority should be accorded to those infrastructure projects that will benefit a larger mass of people; the new method of private public partnership needs to be carefully evolved, monitored and implemented so that it is not misused to spirit away public property and diverting of legitimate public revenues. All this involves not only good ministerial vision but also the ability, expertise and integrity of officials right from the level of tehsil officials to the chief secretary level. Those in the top should set example by following excellent standards of performance and conduct.
Successive governments since independence have shown a parental attitude towards businesses and people in general. Though this might have been a correct approach in the initially, it is now time for government to let businesses especially small businesses and social entrepreneurs take the lead in national development. The government is absolutely on target with objectives of the Twelfth Plan. However the path to achieve them it should have a business like approach, in other words the path should be decided based on extensive opinion based research and giving people what they need and when they need it based on their responses. This is similar to customer focused market research and marketing. Giving this power to businesses and social entreprenuer by removing buearaucratic hurdles will pave the way for rapid development.
The government can learn this from the Singapore example. Such steps will not only result in effective implementations of strategies to achieving desired goals but also create good publicity for the ruling party and its coalition.
What are 'included' in India's economic growth engineered by the Manmohan Singhs and Montek Singh Ahluwalias of this country, ably assisted by the Chidambarams and Mukherjees of this world are: 1)accelerating growth in prices of items of mass consumption, 2)ever increasing pollution of the atmosphere, 3)deterioration in availability and quality as well as steady cost escalation of health services and 4)the consequent steady increase in the miseries of the common people in the country who constitute the majority of our population.
The government should not rub salt on the wounds of the people by talking about 'inclusive growth'!
Even after 65 years of Independence, majority Indians are still kept deprived and desperate . Most Indians still struggle to obtain basic public services that wealthier, more secure countries take for granted. Same time Illegal outflows from the country to tax havens has grown exponentially and in just five years from 2004-08 alone, the country lost roughly Rs.4.3 lakh crores to such outflows (GFI report). Meanwhile the total slum population of the country, which was 7.52 crore in 2001, is 9.3 crore today (latest NSSO report ). And still the Govt claims 'India is rising' and 'India is shining'. Its only deception thats at the heart of this publicity campaign . Cairo's Tahrir Square has shown us much. A revolution in India is becoming inevitable.
Author is prudent enough to point out the major loop holes in the bureaucracy of India . The points mentioned here are keenly thought and precisely expressed, deserves applause for in-depth research which summarizes the core problems with the policies makers.
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