BUSINESS

What would I like the new govt to do?

By R Ravimohan
February 20, 2004 12:01 IST

Elections are a couple of months away. The political preparations are on. Alliances, choice of candidates, manifestos, campaign issues and promises are being drawn up.

Assuming that there will be serious intent to align promises and actual deeds, this might be a good time to take stock of what needs to be done for our country to progress.

To simplify the agenda, let's think of economic, social, development and security issues. Somehow, we treat these as discrete issues with almost no overlap between them. Politics is perhaps the only sphere that straddles these circles of our lives.

In a sense, politics arbitrates the priorities of the diverse needs of these areas. It is not clear that the allocative process that's led by political considerations takes into account the objective and quantitative criteria that should be applied, or follows the doctrine of popular compromise. If it is the latter, are the choices optimal?

Broad indicators suggest that there has been incremental improvement all around in the past years and even decades. There is increased food and civil security.

There is improvement in almost all human development indices such as poverty, literacy, health and population. Economic indicators have also shown significant improvement, especially in the past few years. Human security and social justice are possibly areas where the records are mixed.

There are no reliable aggregate numbers to indicate the status of these issues. However, if one were to measure criminal, civil and communal strife and incidents as well as measure time to get judicial remedy, the progress appears to be limited. Apart from this, there is also the issue of whether the progress recorded in the other areas is adequate.

There are two ways to look at progress. One, to measure the distance travelled and the other, the distance yet to be covered. The third method of comparative benchmarks with other countries is complicated by the fact that the circumstances of each country are so diverse as to make objective analysis always subject to interpretative arguments.

Is there a way to ascertain objectives that are useful guides in the context of current developments in the country and therefore have the chance to be accepted as widely as possible?

There is the issue of growing employable population that will need gainful employment. The indications are something like 20 million additional jobs will be demanded from the youth that join the workforce.

While this trend alone has the potential to grow our country's prospects, it is also frightening to imagine the chaos if they are not employed.

Growth in the service sector of the economy indicates perhaps that the economy has so far accommodated the increased workforce gainfully. However, a progressive and comprehensive employment agenda is seriously needed from the new government.

There is also the problem of regional imbalances. There are regions that show markedly different human and economic indicators from others. This trend is not sustainable and can only be resolved, if ever, by disruptive events.

The development process has distinctly changed from a centrally planned economy to one of a decentralised, market based economy. The idea is to foster competition and let the best initiatives attract best capital and labour, contributing to social and economic development.

Having discarded the alternative of central planning as impractical and too onerous for a country as vast and diverse as India, the chances of that system ever coming back are indeed remote. Even in terms of federalism, the trend is clearly to seek greater autonomy at the state level.

The states clamour for greater autonomy, which is willingly ceded by the Centre, given its increasingly limited appetite for shouldering responsibility.

However, the states' dwindling resources to accept responsibility for social, economic and human development may lead to deterioration in delivered results to segments of population. Given the poor state of economic and social development in some of the weaker states, this dichotomy would lead to a worsening development agenda.

In such cases, the Centre would have to step in to maintain support. That might lead to greater tension between progressive states and regressive states on grounds of justice and incentive to perform. The central government's agenda in tackling this issue effectively will be watched keenly.

As the country adjusts to market and decentralised economy, several developmental and social issues emerge apart from economic issues themselves.

Issues relating to social safety net for displaced employment, care for senior citizens and labour migration are some of the issues that need to be addressed. It is to be expected that as commercial considerations replace social considerations as drivers of transactions, there will be greater chance of disputes regarding justice, fairness, rights and limitations.

Suddenly all 'providers' will be replaced by 'sellers' and all 'receivers' will find that they are now 'buyers'. For instance, employment was tacitly guaranteed in the past era, now it is a matter of contract. Electricity and water and other amenities were 'given' by the government, and will now be 'sold' by the market.

In such circumstances, there is bound to be a greater chance of litigation to protect economic and human rights of market participants. Although the system of regulators is being put in place, given the widespread changes that are taking place in the country, the pace of strengthening and reforming the judicial redressal system in the country needs to be considerably accelerated.

The view of social concerns from the world of economics and vice-versa yield a dismal picture of discontinuity. Those in the economic world feel that social needs are a drag on the limited resources, and bet on the power of economic development to ultimately improve human development in what is known popularly as the 'trickle down' effect.

Those opposed to that notion feel that the pace of 'trickling' down if any, is far too slow and distorted to be of meaning to the population here and now.

Certainly given the divergence one sees between indicators up and down the social ladder and between progressive and stagnant regions in the country gives this round to the sociologists.

Given the resistance one has witnessed to various economic reforms, it is clear that a more frontal address of the social issues will be needed to make meaningful gains on the field of economic reforms.

For instance the process of divestment is a fertile ground for research in this dilemma. If there was a clearer policy on protecting employees' interest post divestment, including formalised allocation (even from the proceeds of divestment) for taking care of any employment displacements, one of the serious sources of opposition to these initiatives would be removed.

If a suitable policy and system for addressing the concerns of the needy were to be put in place, then reforms aimed at subsidy reduction would proceed more smoothly. Governments that are serious about these measures are sure to find greater acceptance all around given the new realities of our society.

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