A start of a new year has often been associated with the tradition of making unrealistic pledges. While lesser mortals make promises to improve their lives, be better in their quotidian tasks, eschew alcohol or embrace exercising, for a country and it’s policy-makers, start of a new year may be time to reflect on the unfinished agenda. By most accounts, India has been the bright spot on the post-pandemic global map, brimming with economic growth better than most other geographies, younger and covid-vaccinated population and the third largest startup ecosystem. Yet, if the economy can aspire for around 6.8 per cent growth, the list of unfinished tasks on hand is long and needing urgent attention.
Can the new year unfold enablers for higher farmer incomes, jobs, investment rate, set out a roadmap to reduce the fiscal deficit as a percentage of GDP to half the current level & address some sector-specific wants like for instance, better drug monitoring & enforcement to ensure high quality medicines.
Farmer incomes
In 2016, the government had set out on a goal to double farmer incomes by 2022 but what could be achieved was just about 60 per cent of what was hoped. Dr. Sukhpal Singh, professor and former chairperson at the Centre for Management in Agriculture (CMA), Indian Institute of Management (IIM), Ahmedabad, and one who has studied Indian agriculture closely over the years says, while agriculture has been a good growth story during the pandemic and thereafter, 2022 also saw the sector maintain its growth momentum of around 4 per cent despite climate uncertainties. However, “the unfinished agenda,” he says, “is mainly in terms of inability to double the farmer incomes between 2017 and 2022. What has been achieved is at best 60 to 70 per cent of what was expected as per estimates based on National Sample Survey Office (NSSO) data from 2012-13 to 2018-19 showing an increase from around Rs 6000 income per household in a month to around Rs 10,000 income a month”.
One argument often proffered to explain the inability to achieve the aspired goals, he says, has been to suggest that this was because the agriculture reforms could not be undertaken and focus shifting to reversing the three farm laws. However, to Professor Singh, “the problem is much more fundamental if farmer prosperity is to be insured. The farmer incomes are crucially linked to need for a common policy rather than have the sector that is led only by schemes, across states. Fundamental shifts are needed to facilitate better production and marketing channels.”
Agri ecosystem
MS Sriram, the chairperson at the Centre for Public Policy, Indian Institute of Management, Bangalore and an expert on financial inclusion, says if agriculture is to be a sustainable livelihood then the focus needs to be more long-term with an eye on creating an ecosystem- from storage to market- where solutions and implementation is not left to market forces alone and emphasis is not on minimising the role of the state in agriculture. The nub, he feels, is in greater productivity and in ensuring leakages in the production cycle get minimised.
Investment rate
While agriculture remains a priority and within it, some viewing food-processing as a sunrise industry for India at this juncture, there are other challenges. Many, within the government, and also outside have been hinging hopes on upping the investment rate from around 17 per cent to 33 per cent and that still remains a goal. The unemployment rate, according to data from the CMIE (Centre for Monitoring Indian Economy) has been steadily increasing since September. As on December 30th, 2022, the unemployment rate (30 day moving average) was at 8.4 per cent for the country (with 10 per cent urban and 7.7 per cent rural). Part of this problem could get addressed by increasing the investment rate. Economists have often observed that the increased emphasis by the government on capital expenditure is a huge and healthy policy shift. However, this alone cannot help if private investments does not pick up.
Manufacturing & jobs
While airports are packed with passengers and hotels fully booked and upping tariffs, the concerns on the output composition stem from manufacturing slipping in its performance in the second quarter numbers for the GDP released in November last. It showed a negative 4.3 per cent change over previous year. The biggest jump this time had come in the services sector with increases coming in from the segments of trade, hotels, transport, communications and services relating to broadcasting at 14.7 per cent.
Apart from these, there are several sector-specific unfinished tasks seeking urgent attention. Consider drug quality and enforcement of best manufacturing practices. In what seemed swift-footed action, health minister Mansukh Mandaviya tweeted last Friday that “following inspection by @CDSCO_INDIA_INF team in view of reports of contamination in cough syrup Dok1 Max, all manufacturing activities of Marion Biotech at NOIDA unit have been stopped yesterday night, while further investigation is ongoing.” However, what many would now prefer focus on is proactive checks on other brands?
Quality medicines
Can 2023 see steps being taken towards evolving a common inspection protocol across states that meets international standards like say the World Health Organisation (WHO) pre-qualification. Also, for instance, it has been couple of years and the Indian pharmaceutical industry is still awaiting the implementation of the recommendations of the committee on regulatory reforms chaired by Rajesh Bhushan, the current health secretary. Or as many in the industry have been hoping India becomes a member of the ICH or the International Council on Harmonisation, which will ensure that the country has drug regulatory standards that are much more stringent and globally accepted with the clinical trials done by the Indian company getting a larger global acceptance and also create greater confidence among drug regulators abroad. China has already moved ahead in this and in a world that seeks a China-plus-one partnering, India can hardly let no action happen on this in 2023.