How about focussing on deliverables?

?The time has come, the walrus said, to talk of many things

Of shoes and ships and sealing wax, of cabbages and kings?

Financial analysts, those that track Indian markets and advise investors, are churning out opinions and concerns ever faster, as the indicators of economic management become more confused. There are obvious stresses and strains in the economy that are finding expression in the media and in politics. Inflation is up and the wholesale price index of primary articles, mainly food, have surged 1.2% week to week, and over 8% year to year.

The impact at the consumer level is far more. The Reserve Bank is likely to raise its inflation forecast to around 6%, half to 1% higher than the forecast earlier. It is likely to raise interest rates this month, to curb demand. It has already been adopting measures to reduce liquidity, through larger than expected repo auctions.

There is, however a strong school of thought that believes these inflationary pressures are cost-push rather than demand-pull. They point out that though imports are increasing, there is strong competition that is keeping prices of imported products of mass consumption in check. Real estate and construction sectors are already overheated, with prices of cement having gone up over 18% in the past year. Manufacturers of steel have put up prices, as have transporters. It is argued that increases in interest rates will further push up costs, reduce investment plans, and would not have an adequate impact on inflationary pressures. It is also argued that there is pressure on agricultural prices, a factor of uncertain crops and inefficient distribution, and monetary tightening will not relieve this problem. Finally, fiscal measures, such as reduction of duties, would only depreciate the currency more, making exports more difficult and revenues from taxes lower, causing fiscal stress.

At the macro level, the balance of payments is experiencing major cross-currents. The trade deficit has widened to a record high, though surplus from invisibles, at $40.9 billion for 2005-2006, was 31% higher than the previous year. The current account deficit is likely to continue to widen for the rest of the year, and the RBI?S concerns on inward investment flows are likely to remain. Uncertainties in the global economic environment are also likely to have their impact on the scene. This is coupled with the fact that fiscal deficit has surged to Rs 721 billion in the first two months of the fiscal.

The cumulative fiscal deficit is nearly 48.5% of the full year?s official target for the budget deficit, and substantially higher than the figure of 31.5% for the corresponding period last year. Revenue collections have been doing better than last year, but expenditure has surged.

There is need for the government to be disciplined about its finances, especially after the credible performance on the fiscal front last year. There is now need to worry about inflation, consumer prices, energy, trade deficits, fiscal pressures and on reforms. Decisions on support prices and imports, on tax-free special economic zones that have become real estate development bonanzas for a selected few, on the management of the financial markets, all point to uncertainties in the decision-making process that are causing concerns to international investors, that I increasingly en-counter while traveling.

It is at this juncture that the call for ?inclusive growth? requires some consideration. It is important that all sections of the country participate in the growth process and benefit from it. But, it is also true that this effort would require considerable public investment that the government appears ill-prepared for and has not yet envisioned. At the top of the agenda is matching jobs and skills. Corporate leaders, whether in IT or in manufacturing, are complaining about lack of skills in the citizenry in the employment market: there are shortages in the tourism, hospitality, transportation and healthcare sectors. There is a mismatch between the skills being provided by the tertiary institutions and those that are required in the market, but there appears to be little attention to correcting this.

The economic adviser to the Prime Minister has predicted full employment levels within a decade, but achieving this requires public policy initiatives in the form of curriculum reform, training of trainers and better work environment for the teachers, technological upgradation of institutions and the like, that no one appears to be talking about.

In agriculture, there has been considerable discussion on creating value addition for farmers, but no national agenda is visible, nor any path to making this feasible. Two years since announcing that agriculture is the next vehicle for growth, there are serious problems in marketing and distribution, with attendant shortages and price increases.

Interestingly, it is in the Common Minimum Programme initiatives that there appears to be the greatest room for improvement. That the Prime Minister has stressed this is important, but had it been envisioned when the economy was stronger, two years before, perhaps the results would have been visible by now.

Perhaps it is time to focus on deliverables, and to make these happen. To forget about the stock markets, the corporate mergers, the telecom spectrum debates, and to really focus on a few important things. Water, education and health as a first set. Technology, extension and marketing in agriculture, across regions, across crops, as a second. Matching employability to job opportunities, for a third. These are all doable within the next three years. And would, indeed, make the fiscal deficits and the fiscal stresses worthwhile.

?The writer is a former finance secretary and economic advisor to the PM