In his Independence Day address to the nation, the last as the UPA Prime Minister, Dr Manmohan Singh tried to stress more on the social sector than other aspects of the economy where his government'sfailures are more glaring.
Well into the fag end of his innings he was not a picture of confidence though his leader expressed abundant faith in his capacity to lead the party in the next election. Sonia Gandhi's?certainly, why not? bravado, was certainly soothing to the ears of the Prime Minister, but it did not cheer up the nation. The Prime Minister in an election year was expected to make his vision statement, if not the road map ahead considering the widespread skepticism on the state of the economy. He was evasive, which some considered political. The 12.63 per cent inflation, still rising, the highest in 16 years and the equally high lending rate that has made investments costlier and created an unprecedented EMI crisis for the common man have the potential to derail the great India growth story. But the Prime Minister had no fresh idea to offer and he rather conveniently spoke on the rosy picture he inherited from the NDA. That really is the four-year nine per cent growth odyssey. And what else? His single-minded obsession with the Indo-US deal in which he finds the panacea for the rest of the problems.
Thus he made a dull, boring speech listing the priorities that remained on the headlines for the last six decades.
He said his government, because of the nuke deal will help India tide over its energy problem and bring electricity to all villages. In this context he admitted that there are still ?places across the country without electricity?. Which means the country will have to wait for another thirty years for the nuclear energy to reach the villages to get electric connection. The PM seems to have forgotten that for 50 years the Congress ruled the country by making such fake promises.
The most worrying aspect of the industrial slowdown in the recent months is the deceleration of electricity generation to just two per cent in the current financial year. It is an established fact that the GDP cannot grow beyond a point except with more generation of electricity. Coupled with truant monsoon which created a slowdown in hydroelectric generation, the power shortage was proliferated because there was no fresh capacity addition in the last five years. The UPA has not done anything to redeem the situation. The energy scenario has worsened under UPA.
Power shortages threaten a slow down in growth and increase in price rise. For instance, the slowdown in industrial production in April- June to 5.2 per cent from 10.3 per cent during the same period last year?was mainly due to power shortage than a fall in demand due to tight monetary policy initiated by the government to fight inflation.
Let us examine other features of Prime Minister'sspeech. He emphasised on seven sutras?education, agriculture, drinking water, healthcare, employment, urban renewal and infrastructure. In all these areas if Economic Survey is any guide the government has a poor record.
?It has often been pointed out that our planning and development process, both at the central and state levels, suffers from lack of adequate closure. The feedback loop of evaluation and assessment of our numerous plan schemes is often missing. As a result the corrective measures on most plan initiatives, if any, are few and far between. Thus, while the intentions have been noble, the delivery systems are weak and characterized by significant leakages and mistargeting of the intended beneficiaries.? This candid admission is taken from the Economic Survey, 2007-08. In each one of the seven aspects of targeted growth the Prime Minister has emphasised, the UPA record is tardy.
?The challenges and opportunities arise at two levels. It is incumbent on the Central Government to provide a conducive investment climate and manage the macroeconomy to facilitate non-inflationary growth. The Central Government and the Planning Commission can in certain areas and sectors also play a leadership role in setting an agenda of policy and institutional reforms that will sustain high growth for several decades?Only then can they satisfy the majority of their citizens and meet their legitimate aspirations?, the Survey says.
There can be no modernisation without change and no growth without modernisation. Every society that went through the process of modernisation had to make painful adjustments. The problem of growth is a social process and the social dimensions are more important in a developing economy.
Dr Singh talks of accessible, affordable education. His government in the last five years has messed up this most crucial area of human development.
Under the NDA this was brimming with confidence. Huge investments came into education sector. The capacity addition in the higher education sector was phenomenal and education was listed as one of the growth engines of NDA Shining India. The NDA launched Sarva Siksha Abhiyan with a promise to spend six per cent of the GDP on education. The whole system was botched up under UPA and it has been inexplicably slow in acting on even sensible proposals and deliberately confused and subjective in allocation of funds.
In his 2006 speech Singh promised a ?vocational education mission?. In the 2007 Independence Day speech he said ?it was ready to be launched?. This year he announced that ?a skills development mission? was being launched. He was talking about the same thing for three years and it is yet to see the light of day. The failure comes through vividly in Dr Singh'sown words. Four and a half years his government wasted proposing, deliberating and launching such a vital initiative in the education sector.
Infrastructure is a particularly neglected area under the UPA. There are reports of power deficit ranging from 15 to 20 per cent against the projected shortage of peak and total availability at 14.8 and 8.4 respectively (Economic Survey, 2007-08).
The situation is worsening by the day. Similarly roads and ports are crying for more investments and expansion. Even funds allocated on highway projects and rural road programme have not been utilised. The rate is as low as 60 per cent. The bungling on the economic front is clear. On the seven core areas underlined by the Prime Minister, the Economic Survey has painted a picture of job half done or just attempted. Why is it that the problems remain the same, and the Economic Survey repeats the same sentences verbatim year after year?
True. Under the constitutional division of responsibility between the Centre and State Governments, the bulk of social services and most infrastructure services lie in the domain of State Governments.
The outcomes in the health sector, says the Economic Survey, ?show significant disparities across States. A successful policy framework to bridge outcome gaps in this sector would require a strategic focus on public goods like vector borne and epidemic diseases, public health education (including awareness about quacks and shaman) and drainage (as flooding affects everybody, whether in city or village). It would require addressing the shortfalls in the availability of quasi-public goods like clean drinking water, sanitation and sewerage, and garbage collection and disposal. Finally, making health insurance (a private good) affordable to a large segment of the vulnerable sections of the population. In respect of the Government health services, numerous studies have highlighted the critical role of governance in improving the delivery of services to the public?. Is there any need for more evidence of mismatch between what the PM claimed and the ground reality?
The Survey says. ?In fact, some observers have gone as far as to say that Government at the cutting edge level, where it interfaces with individuals and economic agents, is the most important constraint on raising the growth rate of the economy to 10 per cent.?
This is the big gap between the word and the deed. Governance is about creating a conducive atmosphere for profitable economic activity and social security. That is what the Survey also underlined in a new chapter on challenges and priorities. It should encourage private initiative in a non-discriminatory and inclusive manner. It should concern with laws governing markets, protection of property rights and systems guaranteeing territorial integrity. At an individual level, it should work to provide basic services universally to all citizens to build individual capabilities to harness opportunities. The fact that these services must be provided universally often translates into a much greater government involvement. It is mainly in providing this leadership that Manmohan Singh has failed miserably.
(The views expressed in this column are personal. The writer can be contacted at [email protected])
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