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Opinion - Editorial


Orphans of the reforms process

ONE CAN HARDLY fault the Prime Minister, Dr Manmohan Singh, for flagging off 2006 with a very upbeat scenario of the economy and, by implication, the achievements of his 20-month old government. The venue where he waxed eloquent on the economy was meant to showcase the UPA's success in steering the nation with efficient governance. The All-India Congress Committee's Plenary session at Hyderabad, like its predecessors, demanded grandstanding, and that is what the Congress leaders indulged in. In an age of coalition politics and arrangements the Hyderabad sessions may be passed off as another affirmation of party loyalties but for the statements that the Prime Minister and the Finance Minister, Mr P. Chidambaram, made on the unfinished reforms process.

Stripped of its rhetoric, and there was plenty of that, the economic content of the Congress leadership's address could, at one level, be seen as relevant to the unfinished tasks of the reform agenda. Infrastructure and agriculture received their fair share of attention, as did social security, expressed in terms of the concern that the next round of reforms must keep the most deprived in mind. That policymakers have to still remind the nation, and themselves, of the existence of a large number of the poor after two decades of reforms and two successive years of creditable economic growth is nothing if not an artless and blasť admission of the limits of even the most successful policy change. To their credit, both Dr Singh and Mr Chidambaram are aware of the dangers of neglecting these critical sectors. Missing, however, are concrete plans to initiate change on the ground.

Some progress admittedly has been made to pump life into the moribund infrastructure sector. A Special Purpose Vehicle has been set up to mobilise or encourage the massive funds required to build roads, provide electricity and other elementary services. The Prime Minister underscored the need for urban renewal with the Jawaharlal Nehru National Urban Renewal Mission that will cover 60 dying cities. Impressive as all this sounds, not much issues forth about agriculture, barring the usual platitudes. With a dismal two per cent annual growth rate, the sector that supports 700 million people is not only not doing well enough; its contribution to the nation's wealth is declining rapidly. Suicides by debt-ridden farmers in Vidarbha are the most poignant and perverse expressions of this decline.

Policy makers must view both infrastructure and agriculture as twin orphans of the reform process. Tackling their sickness conjointly to solve the problems of incomes and quality of life would address the UPA alliance's social concerns far better than simply viewing these sectors as capital-starved and, by that token, ripe for foreign investment. It is not just the question of raising farm output but of providing sustained employment and incomes. The SPV may start off with an initial corpus but stop with treasury operations to stay afloat unless some concrete issues, including a market structure for user charges in electricity, irrigation and power generation, are addressed in order to attract the magnitude of investments required. And that will require more than populist rhetoric.

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