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A template approach to Eleventh Plan?

The Planning Commission has approached the Eleventh Plan with `mundane templating', ignoring the issues on the ground. India deserves something bigger, better and fresh.

The Planning Commission recently put out the Eleventh Plan Approach Paper for nation-wide discussion. The draft envisages three growth scenarios (Table 1) with a base rate of seven per cent, a remarkable baseline figure for a country that was grappling not so long ago with a "Hindu rate of growth."

Nevertheless, even at the highest growth scenario of 9 per cent, the Planning Commission envisions a tepid farm growth rate of 4 per cent. This means that two-thirds of the population that depends on agriculture will continue to grow at this proposed rate a rate that the Commission itself fears "is not an easy task since actual growth of agricultural GDP, including forestry and fishing, was only one per cent per annum in the first three years of the Tenth Plan and even the most rosy projections for 2005-06 and 2006-07 would limit this below two per cent for the full five-year period."

Crocodile jaw syndrome
This implies that in the absence of ambitious planning to enhance the farm growth to, say, 8-10 per cent per annum, the nation could witness the "crocodile jaw syndrome" that is, increased inequality.

While the income levels of one-third of the population that is dependent on manufacturing and services would rise in excess of 10 per cent, the aggregate income of the other two-thirds would rise at best by four per cent. Taking the population increase into account, the proposed farm growth would bring about no perceptible change at the ground level.

In the Indian context, a growth paradigm that does not provide for a robust expansion of the rural/farm sector is hollow.

While the share of the farm sector in national income has come down drastically over the past decade, the number of people depending on it is yet to record a significant fall. It may not be out of place to mention that while ignoring the farm sector does not change the big picture, at a sectoral level, farm growth is crucial to tackling the twin challenges of poverty and inequality. All this explains the paradox of high growth and abject poverty.

Strangely, while the Approach Paper talks of "inclusive growth," it refuses to think beyond the mundane. The scourge of poverty and deprivation can be conquered only with a farm growth of 10-12 per cent. In fact, the farm sector should become the growth driver, not the laggard, of the economy.

Aiming low
Contrary to the belief within the polity, this is neither an outlandish idea nor an impossible target.

Experiences in Gujarat demonstrate that the farm sector can indeed grow in excess of 12 per cent per annum consistently for well over a decade. No wonder, then, that while farmers in the rest of the country are committing suicide, Gujarat has not reached such a dismal state of affairs. What makes this story truly impressive is that Gujarat is, relatively speaking, one of the resource-poor States, insofar as agriculture is concerned.

In resource-rich States such as Uttar Pradesh, Bihar, West Bengal, Punjab, Haryana and Andhra Pradesh, a 10-12 per cent farm growth rate is eminently possible. By planning for 4 per cent, the Planning Commission has demonstrated a defensive mindset. And for these reasons the Commission needs to revisit the growth targets.

Another issue that needs to be tackled upfront by the Planning Commission is the social sector, comprising primarily education and health.

The Approach Paper is quite silent on this apart from suggesting the usual increase in outlays on how to tackle these fundamental issues. It bemoans the quality of delivery of these crucial services and identifies poor governance as the root of the malaise.

In this connection, the Paper says: "A recent study found that 38 per cent of the children who have completed four years of schooling cannot read a small paragraph with short sentences meant to be read by a student of Class 2. About 55 per cent of such children cannot divide a three digit number by a one digit number."

On health, especially primary heath, the country compares very poorly with its neighbours (Table 2). To address these issues, a number of larger and efficient public institutions are needed. This calls for a fresh approach, an increase in outlays and monitoring outcomes.

Instead, by dwelling on the National Rural Health Mission or the `Sarva Sikhsha Abhiyan', the Approach Paper seems to have jettisoned innovation for the beaten track.

As a delivery mechanism the intention to involve Panchayati Raj institutions, especially in the absence of adequate financial devolution to these, remains a mere fashion statement.

Governance: The root
In short, given the quality of governance, it is inappropriate in the Indian context to raise outlays significantly and hope for the best. Since there is a complete disconnect between service providers and consumers, poor governance has become the norm.

The Approach Paper assumes that this issue can be tackled through "better design of projects and implementation mechanisms and the Right to Information Act." But these are passive attempts; the rot is deep and massive. The malaise of poor governance needs radical and innovative solutions.

One thought is to ensure that the children of public servants and ministers are compulsorily made to attend public schools.

The Approach Paper has not only failed to think big but has also fought shy of out-of-the-box solutions to solve the vexatious and long-standing problems. It assumes that the growth will be a function of savings, investment and incremental capital output ratio, in effect, extrapolating the past into the future.

And if the past is any indication, we can rest assured that we will achieve precious little in our war against poverty, unemployment and mis-governance, though we could still grow at eight per cent.

The Planning Commission has approached the Eleventh Plan with "mundane templating" while ignoring the issues on ground. India deserves something bigger, better and fresh.

Published at: http://www.thehindubusinessline.com/2006/09/07/stories/2006090702141000.htm

Last modified on Sunday, 07 July 2013 07:36

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