The Hindu : Business : Benefits of growth should reach the needy

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Wednesday, Dec 26, 2007
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Benefits of growth should reach the needy

V. Jayanth

Task Force to take a fresh look at irrigation schemes

Targeting and monitoring can help
Focus on fund allocation for minority sections

CHENNAI: At the 54th National Development Council meeting on Wednesday, the focus of most leaders — national and State — was on making growth and development “inclusive.” Prime Minister Manmohan Singh, Finance Minister P. Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia, and many of the Chief Ministers wanted a more inclusive approach to the entire process. While most of them were happy at the higher trajectory of growth in recent years, they clearly wanted the benefits of such growth and development to reach the poor and the needy.

The Chief Ministers for their part welcomed the approach to the XI Plan and the stepped up allocations. But they had their own reservations on the ‘tied’ and ‘untied’ resources released to the States. They were more concerned about the Centrally-sponsored schemes not giving them enough leeway to fit in their priorities or requirements.

Their idea of ‘inclusive’ was to ensure that the fruits of development trickled down to the common man, and the allocation of funds be stepped up for sectors such as agriculture, irrigation, health, and education, which are clearly the focus of the next Five-year Plan, 2007-12.

For these critical sectors and, of course, for the vital infrastructure sector, the Planning Commission has allocated 75 per cent of the XI Plan resources to them, compared to 55 per cent in the earlier Plan. It is not just the Centre, but the States too that are trying their best to focus on agriculture and irrigation. The Prime Minister and the Finance Minister have made it clear that sustaining a more than nine per cent growth in gross domestic product (GDP) cannot be achieved without ensuring a 4-5 per cent growth in the agriculture sector.

Aside from the special schemes worked out by the Agriculture and Finance Ministries, Mr. Manmohan Singh has announced the setting up of a Task Force in the Planning Commission to take a fresh look at irrigation schemes.

Further, the Agriculture and Finance Ministers will go into the whole issue of the debt burden of farmers to come up with a solution.

The point that many of the Chief Ministers were trying to make was that in its anxiety to achieve and sustain a high growth rate, the Centre should not lose focus of the problems of the poor. The XI Plan and the allocations to various sectors, especially the social, health, and agriculture-related programmes, must cater to the needs of the poor and the marginalised sections of society. Industry, SEZs (special economic zones), and exports may not directly concern the poor.

Inadequacies in PDS

Mr. Chidambaram chose to look at the inadequacies and pilferages in the Public Distribution System (PDS), which was entirely under the management of the State governments.

With the Prime Minister also calling for a clear targeting of subsidies to reach the poor, the message to the States was that they should also review the food subsidy burden and ensure that the PDS catered to those below the poverty line.

The siphoning of foodgrains, their diversion to the open market, and the cost of subsidising rice, sugar or kerosene were the real issues calling for attention and a national political consensus. For instance, many States want to offer rice at Rs. 2 a kg to all family cardholders, instead of the earlier scheme of providing it to families below the poverty line and charging a higher rate to those above the poverty line, or even denying them subsidised rice. They could draw just sugar from their ration cards. As some States were running a food subsidy bill of about Rs. 1,500 crore because of this, at least 60 per cent of that could be diverted to other poverty reduction programmes or to strengthen the social security measures.

The Finance Minister, during a recent visit to Chennai, had dwelt at length on the “inclusive growth strategy,” blaming the age-old caste system and bureaucracy for the hurdles on this path.

Hence the Centre, especially the Congress party, focusses on fund allocation for the minorities, the Scheduled Castes, the Scheduled Tribes, and the marginalised sections of society.

Planning Commission sources argue that while States want greater decentralisation of planning and allocation of funds, they were not prepared to decentralise it further to empower the local bodies.

“Unless the planning process begins at the bottom, its implementation of success will remain basic problems. Ultimately, we have to adopt the bottoms-up approach and provide funds directly to the Panchayats, making them accountable for the implementation of projects and schemes,” reasons a senior official of the Commission who has been touring the States extensively for the Plan review process.

He thinks the local bodies can better identify the real poor, which will also be answerable to the local community.

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