President,
India Development Coalition of America
www.idc-america.org
m.jain@idc-america.org
“Working Together to Accelerate Sustainable Development in India”
630-303-9592 (O) 630-325-7571 (direct)
SOMETIMES FACTS SPEAK louder than comments. The following are some extracts from the Approach Paper to the 11th five-year plan, prepared and published by the Planning Commission. Thence these are not mere statistics or unverified facts. Rather, coming from the Planning Commission they remain as an authentic and a grim reminder of what has gone wrong in the past six decades of our independence. It is not that one can dismiss our progress post independence. Rather our achievements post-independence are indeed laudable. But our failures seem to overwhelm our successes. Surely, something has gone terribly wrong. Consider these facts from this document of the Planning Commission:
Growth and poverty
Preliminary estimates are now available from the latest NSS thick sample conducted in 2004-05 which provides data that are fully comparable to 1993-94. This shows that the per cent of population below the poverty line in 2004-05 was almost 28, which is higher than the official figure for 1999-2000 because of the non-comparability of 1999-2000 data. The reduction in poverty between 1993-94 and 2004-05 is 0.74 per cent points per year rather than 1.66 per cent points per year implied by the earlier 1999-2000 data.
A more equitable allocation of states resources must be an important part of the solution.
Thus complete elimination of the abhorrent practice of manual scavenging needs to be accomplished by the middle of the 11th Five Year Plan. This needs to be done through effective measures of liberation and rehabilitation of scavengers such as sustainable employment and income generating activities. Similarly, total eradication of the practice of bonded labor, which especially targets the SCs and STs would be an urgent imperative in the 11th Plan.
Governance
Some of these services, e.g. education and curative health, are available in the market to those who can afford to pay. However, quality sour- ces of supply are costly and beyond the reach of the common man, and other privately provided services are of highly variable quality. In our situation, access for the mass of our people can only be assured through a substantial effort at public financing of these services.
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A major institutional challenge is that even where service providers exist, the quality of delivery is poor and those responsible for delivering the services cannot be held accountable. Unless such accountability is established, it will be difficult to ensure significant improvement in delivery even if additional resources are made available. This is a major challenge of governance that must be faced.
At present there are a large number of vacancies of staff in the health and education systems which have not been filled up due to resource constraints.
The costs of displacement borne by our tribal population have been unduly high, and compensation has been tardy and inadequate, leading to serious unrest in many tribal regions. This discontent is likely to grow exponentially if the benefits from enforced land acquisition are seen accruing to private interests, or even to the state, at the cost of those displaced.
Corruption is now seen to be endemic in all spheres and this problem needs to be addressed urgently.
The legal system in India is respected for its independence and fairness but it suffers from notorious delays in dispensing justice. Delays result in denial of justice.
Agriculture
Agricultural growth from 3.2 per cent observed between 1980 and 1996-97 to a trend average of only 1.5 per cent sub-sequently. This deceleration is undoubtedly at the root of the problem of rural distress that has surfaced in many parts of the country. What is more, the problem is also not a purely isolated one, arising out of the special problems of small and marginal farmers and landless labor. In fact, the deceleration is general affecting all farm size classes.
A second green revolution is urgently needed to raise the growth rate of agricultural GDP to around 4 per cent. This is not an easy task since actual growth of agricultural GDP, including forestry and fishing, was only 1 per cent per annum in the first three years of 10th Plan and even the most rosy projections for 2005-06 and 2006-07 would limit this below 2 per cent for the full five year period.
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The National Farmers Commission has identified the knowledge deficit in agriculture as an important reason why productivity is much lower than what is achievable even with existing technology. To overcome this, farmers will need effective links to universities and best practices. A good extension system is the means for achieving this linkage but unfortunately the extension system has virtually collapsed in most states, partly as a result of constraints on non-plan expenditure.
No dramatic technological breakthrough comparable to the green revolution is presently in sight. We are also not exploiting the potential of existing technology. In fact, most of the growth required in cereals, pulses and oilseeds is possible merely through plausible yield increase in currently low yield regions.
The result is that farming practices in large parts of the country are sub-optimal. Soil testing to determine optimal nutrient requirements is hardly practiced and fertilizer application is often highly unbalanced with excessive use of nitrogenous fertilizers, often leading to a negative effect on productivity of the soil over time, a consequence that farmers are not fully aware of. These imbalances are themselves to some extent the result of a system of fertilizer subsidy which is irrational and focuses excessively on nitrogenous fertilizer.
Diversification requires effective marketing linkages, supported by modern marketing practices including introduction of grading, post-harvest management, cold chains, etc.
The failure of the organized credit system in extending credit has led to excessive dependence on informal sources usually at exorbitant interest rates. This is at the root of farmer distress reflected in excessive indebtedness.
With an estimated 80 million hectares needing treatment, and average expenditure of Rs. 10,000 per hectare, the total requirement of funds is about Rs. 80,000 crores.
Education
Literacy is still less than 70 per cent.
The most difficult task is to ensure good quality of instruction and the position in this respect is disturbing. A recent study found that 38 per cent of the children who have completed four years of schooling cannot read a small paragraph with short sentences meant to be read by a student of class 2. About 55 per cent of such children cannot divide a three-digit number by a one-digit number. These are indicators of how bad things might be in the learning of other school subjects.
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The children must also complete eight years of useful and relevant school education and this remains a problem since the drop-out rate in primary schools for the country as a whole was around 31 per cent in 2003- 04. For some states it was much higher.
Data collected in 60th round of NSS shows that only 3 per cent of the rural youth (15-29 years) and 6 per cent of the urban youth have gone through a formal course of vocational training of any kind. Most of them have acquired the skills they have from taking up or changing employment. Therefore, the principal planning issue will be how to expand vocational training from the present capacity of a mere 2 to 3 million to 15 million new entrants to the labor force.
There is also a serious problem of quality. While some of our institutions of higher education compare well with the best in the world, the average standard is much lower. Disturbingly, the high quality institutions are finding it difficult to get faculty of suitable quality given the enormous increase in opportunities in the private sector for many of the skills most in demand.
Industry also requires persons skilled in many specific trades and the situation in this area is not comforting. India has historically lagged behind in the area of technical/vocational training and even today enrolment rates in ITIs and other vocational institutes, including nursing and computer training schools, is only about a third of that in higher education. This is quite the opposite of other Asian countries which have outperformed us in labor-intensive manufactures.
Environment
The impact on water quality of the Water Quality Assessment Authority (WQAA) constituted in June 2001, in different states is yet to be ascertained. A workable mechanism will be developed for monitoring and early war- ning systems for improving water quality.
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However, it is a matter of concern that the quality of green cover has deteriorated. There has been a 6.3 per cent reduction in dense forests indicating degradation.Out of the 14.22 lakh habitations in the country, although more than 95 per cent coverage was achieved prior to Bharat Nirman, about 2.8 lakh habitations have slipped back from either fully covered to partially covered category. Another 2.17 lakh habitations have problems with the quality of water, with about 60,000 habitations facing the serious problems of salinity or arsenic and fluoride contamination.
Health and Sanitation
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Infrastructure & Industry
The most critical short-term barriers to growth of the manufacturing sector are absence of world-class infrastructure and shortage of skilled manpower.
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The most important constraint in achieving a faster growth of manufacturing is the fact that infrastructure, consisting of roads, railways, ports, airports, communication and electric power, is not up to the standards prevalent in our competitor countries.
Shortage of electric power and the unreliability of power supply are universally recognized as a drag on the pace of Indias development. Our competitors benefit from round the clock supply of power at stable voltage and frequency, but this remains elusive in most parts of India. The management of power systems, especially distribution, is the responsibility of state governments and a decisive improvement in this area is a critical challenge.
Indian roads are considered very accident prone and claim a large number of casualties representing an enormous human and economic loss.
There is a need to ensure that delays in land registration, water and utility connections, environmental and other clearances are minimized through a single window clearance of applications for establishment of industrial units.
The Mines and Minerals Act and the Mineral Concession Rules as well as the FDI policy have also been revised on several occasions with a view to attracting private investment for exploration of mineral deposits and operation of mines but actual investment in this area has been very meager because of procedural hassles and numerous discretionary provisions in the laws, which discourage prospective investors.
A key issue in this context is the need for greater flexibility in some of the labor laws. In particular, there is the need to consider appropriate amendments in Section V-B of the Industrial Disputes Act, 1947 to facilitate exit and Contract Labor (Abolition and Regulation Act) to give to the industry the flexibility necessary to compete in international markets.
Cross subsidizing passenger traffic through freight traffic, and within passenger traffic cross subsidizing second class fares by overcharging higher class of travel cannot be carried beyond a point because overcharged freight migrates to road and overcharged passengers to air. To put Railway fares on a rational basis it is essential to establish a Rail Tariff Regulatory Authority.
Manufacturing and maintenance of rolling stock (of railways) should be privatised as has been done in China.
The Accelerated Power Development and Reform Program (APDRP) initiated in 2001 was expected to bring down AT&C losses to 15 per cent by the end of the Tenth Plan. In fact, the average for all states is closer to 40 per cent (including uncollected bills). State governments should adopt the goal of bringing down AT&C losses from the current level of around 40 per cent to at least 15 per cent by the end of the 11th Plan. This can be done if management of SEBs are professionalised and given autonomy of operation without political interference.
Coal production is nationalized at present. If petroleum, which is much scarcer than coal, is open to the private sector there is no reason why coal should not also be opened up, especially if we take a longer term view of energy constraints and also the need to absorb new clean coal technologies.
Tailpiece
As I am completing this piece I notice in the television how our elected representatives goof up on simple questions concerning our independence era.
National song was composed by Bunkum Chatterjee says one and the other says the full name of the father of the nation was Karamdass Gandhi. With a suspect bureaucracy and an ignorant polity, no wonder the state of affairs in this country is so abysmal. Surely Winston Churchill would be chuckling in his grave.