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LATEST NEWS UPDATES | That Growth Tangle

That Growth Tangle

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published Published on Aug 17, 2010   modified Modified on Aug 17, 2010


India's growth story in a crisis-hit world has been globally applauded. Still, the prime minister did well not to use his Independence Day address as a mere occasion for back-patting. This isn't yet "new India" where growth's gains percolate to every citizen. Not only must structural nuts and bolts be fixed before we get there, the economic blueprint itself needs a sharper reformist orientation. To its credit, the UPA has made inclusive growth its political USP. But it's time to ask why, despite its social sector commitments, delivering growth's benefits to all may remain easier said than done.

More than eye-grabbing allocations, social sector programmes need transparent linking to outcomes. Leak-proofing and accountability far from mark NREG or the PDS. What's to stop UPA-II's food security plan from benefiting the corrupt instead of the poor, without the PDS's prior revamp or alternative delivery channels? Shoddy vigilance can't but mar affirmative action. Second, helping-hand schemes are palliatives, not surrogates for real empowerment. Give the needy education, health and organised sector employment and they'll stand on their own feet. Improving health and school systems on a war footing, then, is imperative. Nor can labour reform be sidestepped if secure, better-paying jobs are to be generated on a massive scale, easing pressure on land by moving labour from agriculture to manufacturing and services.

Agriculture itself needs boosting, the PM said. True. The vast numbers depending on it for livelihoods and its relatively thin contribution to growth makes for a skewed and unsustainable ratio. With just 40 per cent of India's arable land being irrigated, greater irrigation cover must accompany technological innovation in view of the importance of conserving water. If a second Green Revolution is to ramp up food production, quicker green signals are needed on genetically modified crops. Also, retail liberalisation must take off to attract investment in storage infrastructure and expand farmers' market access. Rules on inter-state movement and marketing of farm products are outmoded. Why not get cracking on all these issues?

Infrastructure, the PM rightly suggested, supports growth. That's why India needs to polish its record on project implementation. The sector's association with official meddling, shoddy planning, project delays, missed targets and cost escalations can't but spook would-be stakeholders. An image makeover is in order, along with investment-friendly policymaking. Finally, the PM justified petrol price decontrol in terms of the need to trim subsidies so that social sector spending isn't hampered. The implied critique of big government debt is reassuring. Only, reform needn't be linked to social sector goals in order to be championed. Rather, without reform, such goals become difficult to push without painful fiscal strain. The longer we keep apologising for doing the right thing, the harder it'll be to do it.


The Times of India, 17 August, 2010, http://timesofindia.indiatimes.com/home/opinion/edit-page/That-Growth-Tangle/articleshow/6320767.cms


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