Plan for no growth?

The Planning Commissions approach paper to the next Five-Year Plan has always been an opportunity to lay out the broad,sweeping,policy environment in which India is likely to operate. The Eleventh Plan is ending; the time for the approach paper to the Twelfth Plan is thus here. And,in its latest draft,it is clear what the commission fears the nature of the policy environment will be: drift. The paper lays out two alternative growth paths: one that sustained a GDP growth rate of 9.5 per cent,and the other one of 9 per cent. But it appears to abandon hope of the higher target altogether and even sounded dicey about the lower possibility,indicating that a business as usual approach characteristic of this government must end. Nine per cent,it warns,is ambitious,and impossible without the necessary political will.

In other words,even the Planning Commission has become infected with despair that UPA 2 seems unable to get a move on with crucial reform. Continually derailed by political distractions,with little impetus coming from the major ministries,and even less political pressure from the Congress party to overcome the drift in reform,this government has failed for months to provide significant signals that would revive the India growth story. This point has been made several times in the past,including by the prime ministers own economic advisory council. The monsoon session of Parliament has been overshadowed by various political developments,and it is essential that the government not lose sight of its crucial legislative agenda. If nothing else,the land acquisition bill,the lack of which holds back industrial growth and urban planning,must be introduced before the end of this session. Other serious,impactful reform bills include those that emanate from the human resources development ministry to fix higher education,and from the mines ministry to clean up natural resource extraction. These are all problems that are both political and directly influence the industrial growth rate as well as the employment and aspirations of Indias young people. They cannot be delayed further.

The government must thus work with the opposition to end this long,reform-free period. The Planning Commission says the major difference between 9 and 9.5 per cent growth would come from industrial growth; it seems to have little confidence that industrialisation can be speeded up. Well it can if the government speeds up its lawmaking.