apfr.co.in - Naxal districts as growth index::: A paradise is in the making for Indians. Easy for them to get there too. All they have to do is to wait for five more years. The 11th five-year plan will take them there

Naxal districts as growth index

A paradise is in the making for Indians. Easy for them to get there too. All they have to do is to wait for five more years. The 11th five-year plan will take them there.

Take planning commission 'CEO' Montek Singh Ahluwalia at face value. He is kind. No trouble for us getting lost in the reams of paper called the Approach Plan. A compact newspaper article by him gives us a distilled version of the plan magic.

Skip the references to the rising growth rates and other worn out stuff. They add up only to make a launching pad. Notable is the anticipatory bail he seeks. For he drives home the point that the "Indian economy has demonstrated that rapid growth rate is possible in an environment of highly pluralistic and vigorously participative democracy". The stage is thus set for a possible blame game and, if necessary, a strategic retreat.

The democratic framework is fine. But India is no Robinson Crusoe Island. The global economic forces will be in full play when the 11th plan gets going. He notes that the manufacturing sector, long stuck in the 7-8% groove is fast forward in double digit. Extrapolating the trend, he says it will be better. Reasons: two decades of economic reforms and the effective handling of competition at home and abroad.

He is silent on the role of low exchange rates and other protective devices behind the grand opera. Remember the rupee started falling even as the reform measures got into stride in the 90s. The implications of the drop in the October index of industrial production (IIP) is yet to be x-rayed. In sum Mr.Ahluwalia simply forgot or did not care to add the textbook proviso 'other things remaining the same' to his estimates.

For the record, the planning commission vice chairman admits that the "transitions to 10% growth rate" is not going to be smooth. He is aware of the "critical constrains". Here his anticipatory bail becomes more relevant. He hands us a list of pious wishes. He speaks of "inclusiveness" which is defined as poverty reduction plus. Such high sounding phrases are okay for the readers of financial dailies. For most of the country's 100 plus crore-population one-meal-a-day is the only item of the agenda. What the Ahluwalia-crafted 11th plan will do for them? A downpour of jargons greets us in answer. We get no wiser.

Why Mr.Ahluwalia over flogs the word critical? Is he unsure of himself? For him agriculture is also critical. It has to be so with a growth rate of less than 2%. It must therefore rise several fold to make Mr.Ahluwalia's dream rate of 10% for the 11th plan. An uphill task unlikely to be realised with all the magic he reels out.

To be fare to Mr.Ahluwalia, he is alone among the bureaucrats to fret over rural sector's adverse terms of trade, the root cause of all its ills. So expected from him is sharper analysis and a more purposeful action plan. Nothing of that sort is there. Even with the "critical issue" of education fewer farmers will be around to do his bidding. They are all going the kulaks' way.

At the end of it all how to judge the El Dorado, the plan promises us. Blind pursuit of GDP is passé. Some economists suggest its composition screened for actual growth, taking on board Mr.Ahluwalia's thesis of inclusiveness. In theory it is possible. But statistically it will be a nightmare.
The late Prof.Raj Krishna, whom Mr.Ahluwalia refreshingly quotes at the beginning, said something more than quipping on the word approach. He aptly called the Approach Paper to the 7th plan as the 7th approach to the plan. His focus was on the crucial employment growth of 4%. For that he pleaded for the GDP by rising by 9%. He wanted the growth scaled up if only to protect the 4% employment effect. What we see around is growth sans jobs. Such growth for whose sake?

Given the global setting, it is not easy to lift employment levels in India. Everywhere the battle for growth has morphed into battle for employment. Frantic efforts being made to save jobs will have its negative echo in India and other developing countries. Hopes of a second green revolution and revived rural industries are better dropped. The conditions are not ideal for such slow motion experiments. The submissive population that made the green revolution possible four decades ago is just not there. The construction of roads here and there and a promise of a few days of work every year will only fuel the urge for urban wages and comforts. The cell phones are already there as a great leveller. New trade agreements with countries far and near will further reduce job opportunities in India.

In the circumstances, the political set up in which the "highly pluralistic and vigorously participative democracy", as Mr.Ahluwalia put it, is coming under strain. Dissatisfaction with the development strategy spawns extremist movement. So it is okay for us to look for "inclusive" growth indices outside the conventional economic categories.

So we see the Naxalites well established in as many as 170 districts in the country. A recent Delhi despatch in the Deccan Chronicle has confirmed that the "expanse of Naxalism has increased from 11 states to 12 states this year despite the centre's pursuance of a multi point approach to combat the problem which includes focused attention on integrated socio economic development through centrally sponsored schemes to the states with an outlay of over Rs.2475 crores".

That being the case, what hope then that the planned injection of more funds coupled with the type of social engineering outlined by Mr.Ahluwalia and keyed into the 11th plan will reverse the trend? If it succeeds, there will be fewer Naxalites menacing us in 2011-12. That reading will make a better index than the ones in the economists' tool kit. Unfortunately, the judgment must await the post-mortem results of the 11th plan. Then only will we be able to decide whether the "p" in the Ahluwalia-crafted plan should be written with a capital "P" or in lower cap.