FM has made use of economic buoyancy well

Updated: Mar 1 2006, 05:30am hrs
Indian economy is clearly on the upswing--savings rate and investment rate have both moved into the 30% bracket. This, combined with a reasonable inflation rate, gives the government space to invest in a decisive way in improving the quantity and quality of physical infrastructure. And the FM has made the most of this opportunity.

On the physical infrastructure front, government is steadily progressing on building roads both highways and rural roads, on irrigation, as well as on ports and airports. The biggest concern, in my view, is that on power front. The gap between demand and supply is widening, what with power generation growing significantly lower than the GDP growth rate.

While government has ambitious plans for adding more generating capacity, it is not moving fast enough on making the power sector financially healthy. For instance, annual commercial losses of State Electricity Boards continue to be around Rs 25,000 crores. I believe that until the management of these utilities improves, power sector will continue to struggle. I am happy to learn that FM has proposed to create an empowered committee of chief ministers to address this issue. On the social infrastructure front, both education and health have been allocated significantly higher sums. Government can be rightly proud of reducing out of school children from around 50 million to just about 10 million, for providing mid-day meals to 120 million children, and for moving with determination on eradicating leprosy and polio.

At the same time there are huge concerns. Only one out of three children complete 10 years of schooling and infant mortality rate is as high as 56 deaths per 1,000 live births. I believe the key issue now has gone beyond making merely enough financial resources available, to the quality of management of these resources.

We need to make the management in the government system outcome oriented, and not just accountable for incurring certain level of expenditure.

For instance, from our experience of working with the elementary education system, I can say that high drop out rate is clearly linked to the quality of teaching, which in turn is a function of how we prepare our teachers and how we support them in their work.

I am encouraged that FM is attempting to bring this outcome orientation in the delivery systems managed by governments. His promise to present the outcome budget on March 17, 2006 is one such attempt.

Moreover his proposal to deliver routine services like issue of ration cards, birth certificates, payment of bills etc. to the citizen online would make a huge difference in the quality of outcomes. Overall, I think the Budget is taking the country in the right direction.

The writer is chairman, Wipro Ltd