Sunday, August 27, 2006

11th plan....

The Planning commission is a relic of our Soviet era bureaucracy and it is one of those departments which is neither extinct and not even on the endangered species list. Infact they are alive and kicking (everybody else, I presume). And while at it, theres actually a lot of links on the site. I did not click too many of them since I was looking for something else.

Heres a draft (all 92 pages of it) of the 11th plan - An approach to the 11th five year plan, 2007 to 2012. In a moment of foolhardly bravery, I decided to plough though as much of it I could and here are my observations. It is titled "Towards faster and more inclusive growth" and is available, from June 14th 2006. I chanced upon only a few days back though, and that too because I read about it somewhere. It starts off on a promising and well known note...

The Indian economy on the eve of the 11th Plan is in a much stronger position than it was a few years ago. After slowing down to an average growth rate of about 5.5% in the Ninth Plan period (1997-98 to 2001-02), it has accelerated in recent years and the average growth rate in the Tenth Plan period (2002-03 to 2006-07) is likely to be about 7%. This is below the Tenth Plan target of 8%, but it is the highest growth rate achieved in any plan period.

While this performance reflects the strength of the economy in many areas, it is also true that large parts of our population are still to experience a decisive improvement in their standard of living. The percentage of the population below the poverty line is declining, but only at a modest pace. Far too many people still lack access to basic services such as health, education, clean drinking water and sanitation facilities without which they cannot be empowered to claim their share in the benefits of growth.

It notes that we are doing well in IT, ITES, textiles et al and we are pretty well covered from a demographic (Age) perspective. The focus is, on, well, services to poor, agricultural growth, manufacturing competitiveness, human resources, governance and environment - so nothing is left out. Then, of course, are disparities, divides among certain sections of the populations.

The solution or atleast one of the solutions, almost a Eureka is "The Backward Regions Grant Fund provides a new instrument to deal with this problem."

Under policy interventions is another point, The emphasis on expanding access and improving quality of public sector schools and health facilities may also help by reducing the need for private expenditure on these items by lower income groups and some of this expenditure will be redirected to generate demand for agriculture. How, I dont know.

Under infrastructure, it says, Preliminary exercises suggest that investment in infrastructure defined as road, rail, air and water transport, power generation, transmission and distribution telecommunication, water supply, irrigation and storage will need to increase from 4.6% of GDP to between 7 and 8% in the 11th Plan period. In other words, of the increase of 6 percentage points in total investment needed to accelerate from 7% growth to 9%, about half should be in infrastructure. This will place a heavy burden on the public sector which will have to invest more in this area. Since public sector resources are scarce, an aggressive effort at promoting public private partnership in infrastructure development will be needed.

Well, if we (had) invested money in infrastructure instead of doling it out to schemes with long names (and I include schools, electricity, roads here) for the last 60 years and done it well, this planning document would have been a list of achievements. But 60 years later, we are no better (probably worse) than where we where especially from a governance front.

The whole document is about grandiose schemes with big names that (have) fail(ed) to deliver (ever) and prescribes more or those. These schemes fail at the grassroots level thanks to our usual culprits - babucracy, corruption and politics. The point is that the problems are well identified (and have been for 60 years of independence, perhaps earlier) but the solutions are still Nehruvian.

As I wondered if I should write more, I chanced upon this piece by Kiran Karnik, a good analysis of the same document, which in its title itself, encapsulates the problem. A great read there...

3 comments:

phantom363 said...

the planning commission and the 5 year plans (concept borrowed from the erstwhile u.s.s.r by nehru) is a joke. this body has no executive power. moreover it has no long term vision. its span of thinking is 5 years, of which the first two are spend winding down the previous 5 year's leftovers. the planners are either ivory towered academics or fellow travellers of the fabian society mode (which appear to exist only in india). too bad, we do not have any other alternative. :(

every five years they produce a plan, which always falls short and whose achievements are dubious at the most :(

Anonymous said...

we've been talking about changes bubbling up in India from the grassroots level, unlike things in more govt regulated countries. maybe we need to stop waiting around for hte state to do something about planning and just go ahead and do it? one example that comes to mind is what the IT industry did at Davos, if I'm not mistaken that entire advertising campaign was by private sector only.

Neelakantan said...

Phantom! You are absolutely right.

Anon, private thingies are happening in India and perhaps the only that is happening is that. Which is why it is all the more important for the government to shut the planning commission shop once and for all. 60 years have proved its inefficiency. It really should RIP...