The one message that has come loud and clear from the outcome of the Parliament elections is that people, particularly those at the bottom half of the economic ladder, want a radical change in the parameters that directly impact their quality of life. Bijli, sadak, pani and, of course, rozgar now determine the political longevity and sustainability of those who want to govern India.
True, there are regions where caste and social factors tend to override economic issues. But these are not just exceptions; the fact is that with each passing election these identity factors are becoming secondary to the people?s desire to articulate their economic concerns.
There is no doubt that the new ruling coalition?s Common Minimum Programme (CMP) would seek fully to address these issues. However the CMP, much along the lines of a manifesto, would set out the approach, or the ?ideology? if one likes that word, of the ruling coalition. It would be the job of the cabinet led by the PM to ensure how the objectives outlined in the CMP are translated into action.
This is where the rub lies. During the first phase of reforms launched by the Dr Manmohan Singh, achieving macroeconomic balance and adjustment to reduce the vulnerability of the economy to shocks was a major part of the agenda. Over the last decade, that task has been addressed substantially. The food and foreign exchange bottlenecks that have historically constrained the Indian economy have been eliminated. Some of the second-generation reforms to remove hurdles in the growth of sectors have also been addressed, and the ones that remain ? like civil aviation, textiles etc ? can be addressed quickly. Overall, from being crisis-prone, our economy is now on a trajectory of becoming globally competitive.
Yet, the fact remains that issues of bijli, sadak, pani have not been effectively addressed. True, channelling more public investment in these areas would help. An increase in public investment by the Centre could address the objectives of the CMP, but only partly. This in fact is true of most of the third-generation reforms which would have to address sectoral and intra-sectoral issues that directly impact the quality of life of the less privileged sections of our population. The Centre can announce reforms and new schemes in these areas, but has little role to play in their implementation. This is the domain of the state governments. And if as they tend to remain spectators to the various programmes and schemes announced in the Central budget and the plan, very little can move forward.
The new government can do what it likes to implement the CMP. But all that it may end up doing is to add to the number of schemes announced by the Centre ? schemes that look good only on paper but do little to change the ground reality. Take the case of agriculture. This sector is yet to benefit from reforms. No wonder that anti-incumbency is such a strong feature of recent electoral outcomes. Actions to be taken like abolishing the Agricultural Produce Marketing Committees Act and removal of restrictions on inter-state movement of farm produce to free the farmer to sell to whom and where he wants are well known. A change in the present support price system that promotes only the wheat-rice rotation is another measure. But the Centre cannot do all this alone. The states have to be strong partners if change is to be implemented.
We need a new water policy to spread irrigation, create sustainable and financially viable delivery systems for drinking water, promote water use-efficiency etc. But without a buy-in from states little can happen. Same can said for the President?s desire to provide urban facilities in rural areas (PURA). Another example is creation of urban infrastructure and slum development to revive our dying cities. No urban reform can take off without ownership by the states. Effective implementation of all poverty alleviation or rural development schemes depends on the states.
For delivering economic change at the grassroots level, a new partnership with the states needs to be crafted. Incentive mechanisms for inducing states to deliver better can no longer be postponed. The decades-old formulae for transferring plan funds to states have to be modified to ensure implementation of schemes for bijli, sadak, pani. New benchmarks for monitoring and delivery mechanisms have to be created. For instance, Mr Vajpayee launched the rural roads programme and committed substantial funds to it. Has the outcome been satisfactory? Sometimes, even the facts are difficult to come by. Obviously the system has to change. But the change must be such that it invites result-oriented participation from the states.
The success of Dr Singh?s new reform agenda would depend on not just the cohesion of the coalition at the Centre but also of the second coalition he needs to put together with state governments.
The author is an advisor to Ficci. Views expressed herein are personal.
