The approach paper to the Twelfth Plan says all the right things. Well, almost all, but it’s cool now and not as passionate as in the mid-term appraisal of the Tenth Plan and the approach to the Eleventh Plan which followed. The UPA policymakers have matured now, but unlike good wine, there is no tickling of the cerebral senses any more. We did not grow at 9%, but at 8.2%, and that?s not bad, they correctly say. But the assumptions for this year are somewhat rosy. The fact that lower growth will lead to a tax revenue crunch was anticipated by many, including this columnist, but is not quite there in the approach paper. The plan schemes did well, they correctly say, but infrastructure is not that good and the shortfalls may, in fact, be more.
For the future, there is a 9% and a 9.5% alternative. That table is with god, love, mother and country. The planners sagely tell us what they, and some of us, have been saying now for almost a decade. Unless you grow at 9%?from number four, China went on to number three, beating Japan?you will become a have-been of history. They are much too polite to say it that way, but the message is clear: save more, invest more and be more productive. It?s all there. Is anybody listening to them out there? The Anna Hazare of growth probably migrated to China, like the famous Buddhist monk from Kerala who brought both Buddhism and Kung Fu there. In fact, since I published my 2020 piece in The Indian Journal of Quantitative Economics in 2005, Brazil and Russia are catching up.
They make the point, with the Tendulkar poverty line, that poverty is falling but not as much as they targeted?a 1% fall instead of 2%. The inclusiveness targets did not do as well as they wanted, although very legitimately they take credit for the progress. I love the sentence where they say that Tendulkar (a friend of mine and theirs, Suresh Tendulkar) led to calibration of the poverty line with the urban poverty line, which he found more appropriate. Suresh was a member of the task force that I chaired in the mid-1970s, which defined the calorie requirements for an urban and rural Indian then and constructed the poverty line on that. After he left Delhi, I asked him why he picked that urban poverty line, now totally irrelevant, as the poverty line for both rural and urban areas, and he let it pass. But Jairam, Mihir Shah and Arun Maira are now taking on the gauntlet and so more will come.
On the mega stories, there is not much that is new on land, water and energy and what is said is unexceptional. On water, they are not new, but quite sensible. The section on agriculture is good, but that is meat for another column. The section on urbanisation is terrible, with a bare understanding even of the 2011 Census, but that again is another column. I found the discussion of the demographic dividend particularly disappointing. They note the fall in the female work participation rate in the latest NSS round. They don?t tell anybody that in the logical and quantitative structure of demographic dividend models?as I showed in a piece on global imbalances for the IMF conference at Bali in the middle of the last decade?the rise in the female work participation rate is a big part of the demographic dividend. The first child comes later and the last child earlier, and women stay in the labour force longer, as the demographic dividend models show, and that was a net gain in per capita income growth.
I argued then, in the early part of the last decade, that it was not happening in India and the sweetest dividend was not there. This was happily reversed in the middle of the last decade, but we are getting back again and the approach paper?s discussion is showing that the Commission no longer can be trusted to even describe known quantitative models of a long-term kind, leave alone use them. But, again, they show concern for the long term and what?s a slip between friends. Their real trouble will come from those in the government who want to abolish long-term strategic planning altogether and, since that story is on the Planning Commission Website, the NDC could be a lot of fun and games, depending on who is reading what of the policymakers? output in print.
The author is a former Union minister