Reforms & Growth
By Dhurjati Mukherjee
Reform is a much talked about word, borrowed from the West, which means that such initiatives would boost up growth. But here growth means high GDP, more billionaires, more profits for the private sector and not balanced development, reaching the lowest tiers of society, i.e. the villages. Also, reforms are somewhat synonymous with industrial growth and not growth in agriculture and agro-based industries.
Recently, while speaking at the ET World Leaders Forum, Professor Emeritus Nourie Roubini at the Stern School of Business observed that more reforms could usher the country’s potential growth rate to 8 percent, thereby helping India to become a major economic power in few years. In this connection, he outlined several reforms that need to be implemented, including those related to land and labour markets, bankruptcy, further financial inclusion, more investment in skills and human capital, reform of the bureaucracy and provision of public services.
The learned economist, however, did not mention the need for India to formulate a policy of grass-root development that ensured welfare and well-being of the poorer sections of society. In the Western world, the word ‘reforms’ is quite common to signify changes needed in the socio-political and socio-economic systems. For India, the planners and political leaders should realise that the priority is not just growth but spreading the growth down to the grass-root level and not concentrated amongst the rich and middle-income sections.
Prime Minister Narendra Modi, at the same conference, spoke about his usual theme that India was destined to be a developed country by 2047 through reforms.”Our promise is to reform, you promise to perform. Our promise is to give stable policies…” But he did not elaborate the areas of reform and how the needs to the common man would be addressed through these. He, however, identified four pillars for building the foundations of a developed country: the push for skilling and education, focus on making India a global food basket, thrust on green energy and the thrust to make the country a major tourism destination.
Though these may sound realistic presumptions, the poor allocation for education and the state of both school and higher education in the backward districts of the country may surprise any foreign analyst who hears tall talks and claims of political leaders. Besides, very little is being done for modernisation of agriculture and agro products and helping small farmers to increase their incomes by providing appropriate technology. The role of the Indian Council for Agricultural Research in this regard is not quite encouraging.
Further, while Modi emphasised on popularising ‘Made in India’ products he did not outline what steps the government proposed to undertake. The figures reeled out by him of lifting people out of poverty may be difficult to believe though a small section may have seen an increase in incomes. As usual, the schemes launched or initiated by the government were mentioned but the meagre resources for most of these were not elaborated. While Modi and other leaders see the capability of young Indians, most ask what opportunities are being offered to them and the plans of the government in this regard.
Meanwhile, it is worth mentioning the government’s decision to create infrastructure for industry to set up factories in 12 cities with an investment of Rs 28,600 crore with the largest one coming up near Dighi port in poll-bound Maharashtra. These projects have the potential to generate investment of over Rs 1.5 lakh crore, according to Commerce and Industry Minister Piyush Goyal, who piloted the proposal, adding that 10 lakh direct jobs are expected to be created. The big question being, with such huge investment the employment generated would be too meagre, keeping in view that job creation is a challenge before the government.
It needs to be pointed out high-tech and capital-intensive industries have not had its desired effect in stimulating regional development and creation of job opportunities. As such, prosperity has come to the corporate sector without any effect on the micro and small enterprises, thereby maintaining stagnation of the rural economy.
Delving into Modi’s observation, analysts expect listing of steps the government proposes to take to make the country a global food basket. In fact, transforming the agricultural sector is much needed by diversification into cash crops and crops that need less water. At this point of time, the government needs to take the views of experts to formulate a white paper of what it intends to do in this regard in the coming five years or so. This would indeed be a positive step and a much-needed reform which would benefit a large segment of the population.
Another aspect of reforms, not in the Western sense, would be to transform the rural sector through better opportunities for the impoverished and backward sections. Just carrying out a caste census would not help, instead a well laid out plan of the government’s strategy on extremely backward sections must be formulated for their rehabilitation. Obviously, a scheme to promote agro and various types of rural industries need to be promoted that would generate employment and help in upgrading living conditions of the masses.
The whole strategy of reforms must keep in mind the prosperity of all sections of the population and what measures would gear up their incomes. Conducive atmosphere for boosting up self-employment must be created in all sectors and rural infrastructure improved in all possible ways. For example, while emphasis on development of road infrastructure, may boost tourism and generate employment opportunities, remote terrains too need to be popularised, and more trains and air services made available to these destinations.
The government must be cautious about the rise in educated unemployment. There is every possibility that unrest may increase among the youth if they are not provided proper opportunities whereas billionaires continue to rise as well as disparity in incomes. Futile talks of nationalism and right-wing Hindutva, the leaders should remember, will not divert the minds of youth and they may become more assertive if ignored. — INFA