Reform ideas are suicidal

Updated: Feb 29 2008, 05:55am hrs
A wish list of the neo-liberal reformers in the policy establishment is contained in the Economic Survey 2007-08 under Policy Reform Options. This includes an outrageous proposal of extending the working day to 12 hours and the 48-hour week to a 60-hour week. The proposal implies that workers should be firmly pushed back to slave labour of the 19th century. The list also includes proposals like selling off of shares of profit-making PSUs, introduction of FDI in retail, privatisation of the railways and so on, which are all far removed from the NCMP. It would be suicidal for the government to follow these policy prescriptions.

The chapters on agriculture, food and social sectors show the skewed nature of Indias growth story. In a country where the majority of people are dependent on agriculture (52% in 2004-05 as per the Survey), growth in the sector in 2007-08 has again slipped to 2.6% from 3.8% in 2006-07. Thus, during the first year of the 11th Plan, agricultural growth has not reflected any revival from the pathetic performance under the 10th Plan. To address this, the focus has to shift from Sensex to the villages. The CPI(M) has been advocating a holistic approach for such problems like a comprehensive debt relief package for small and marginal farmers, adequate and fair MSP for a wider range of commodities, agricultural credit at 4% interest rate and stepped up investment in rural infrastructure.

A glaring example of the gap between policy and reality is the fate of the price stabilisation fund scheme (PSF) for tea and coffee growers. While the corpus of the PSF stood at Rs 435.1 crore in November 2007, the actual amount spent so far was just Rs 1.16 crore. Exclusion is also evident in figures of food consumption revealed in the Survey. There was 13% decline in consumption of cereals between the beginning of the reform period in 1990-91 and 2005-2006, from 468 grams per capita per day to 412 grams, while the consumption of pulses declined from 42 per capita per day to 33 grams during the same period. While foodgrain production remained largely stagnant, procurement has sharply declined from 42.2 million tonne in 2005-06 to 35.8 million tonne in 2006-2007.

This has resulted in acute shortages in the PDS. Under what is callously termed rationalisation by the Survey, there have been drastic cuts in foodgrain allocations in the PDS there has been 82% cut in the allocations for Kerala. The Survey admits that there are no regular allocations to those who do not have BPL cards and allocation is dependent on stocks in the central pool.

The chapter on social sectors brings out some grim realities. Under the UPA, expenditure on education and health has increased in nominal terms compared to the NDA rule, in real terms this is meager. Expenditure on education and health as a share of the GDP stood at 2.84% and 1.39%, respectively, in 2007-08, a far cry from the commitments made in the NCMPto spend 6% of the GDP on education and 2-3% on health.

The author is a CPI(M) Politburo member