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Vision 2020 -- Challenge and opportunity for Mr Sinha

P. V. Indiresan

The Finance Minister is in a predicament. If he falters on the path to liberalisation, privatisation and globalisation, the new economic gurus will scalp him. But if he comes out with a Budget dressed in the latest mode, the devotees of swadeshi will disown him.

THERE IS a tale about a middle-aged man with two wives, one old and the other young. The young wife got upset because strangers mistook her husband to be her father. So, when he was sleeping, she started plucking out all his grey hairs. As a c onsequence, the older wife discovered that she was being mistaken as her husband's mother. Naturally, that did not please her. So, she started plucking out all his black hairs with the result the poor man ended up bald with neither grey nor bla ck hairs.

The Finance Minister, Mr Yashwant Sinha, is in a like predicament. If he falters in any way on the path to liberalisation, privatisation and globalisation, the new economic gurus will scalp him. On the other hand, if he comes out with a B udget dressed in the latest mode, the devotees of swadeshi will disown him. Either way, the poor man is in the same predicament as the husband with two wives.

Actually, he is in a worse situation -- he has not two but four kinds of critics each with a coloured view of their own. Though dwindling in numbers and influence, the socialists with their pink view are still a force to reckon with. They are not g oing to forgive the Finance Minister for any relaxation of state control and state ownership.

We have already seen the way they have stalled the sale of Bharat Aluminium Corporation. Every day the sale is delayed will cost the government around Rs 20 lakh. These critics had earlier stalled the sale of Maruti Udyog at a time it would have fetched a good price. Because of their hindrance, the government has lost several hundred crores rupees. In return, they have got the dubious privilege of hanging on to some seats on the company's board. They may think they are thereby controlling the company, w hereas it is the market that is controlling it.

Then, we have the swadeshi cult, patronised these days by the Saffron Brigade. There appears to be fundamental difference between the swadeshis and Mahatma Gandhi, the original progenitor of the concept of swadeshi. Gandhiji looked at swadeshi more as a tool than as an end. Of his few possessions, the most expensive were his watch and spectacles. Neither was swadeshi! One suspects that Gandhiji was more pragmatic about swadeshi than his new converts are.

Then we have the green brigade who would like the earth to be like it was in the hoary past. They are worried about the way we grow. Unfortunately, the good old days that they revere were by no means a heaven either. If we, Peter Pan like, remain childre n forever, we will miss out on our responsibility of nurturing a new generation and leaving for them a new and a better heritage.

That new heritage may be better in some respects but will inevitably be worse in others. The Greens count those costs and but not the balance between costs and benefits. Whatever the Finance Minister may do, they will find plenty to bemoan his insensitiv ity.

Just as in the rainbow, green and orange are close together, the Saffron Brigade are quite close to the Greens. However, there is a difference. As a rule, the Greens are single-issue activists. More often than not, they are negative -- they are passion ately anti something or other but not in favour of any improvement. For example, they will denounce the Narmada dam vehemently but will not be able to explain how to alleviate the poverty, the backwardness of the people whose cause, they assert, t hey espouse. Compared to them, the swadeshi stalwarts take a wide view of the economy and the polity. Yet, both are worried about `progress'.

Finally, we have the marketers whose concern is the bottomline. That must ever be blue, and quite rightly so. However, they live for pleasure alone. They live for the day, making rosy projections into the far future -- forgetting that, though their ro ad is mostly smooth and fast, it has unexpected pitfalls. They are the ones who believe that if one of ten birds sitting on a tree is shot down, nine more will be left. They can calculate what happens next but not where it will end.

Who can the Finance Minister please? There is a saying in Kannada -- jannanna mechalikke janardanan kainalli yoo aagadu (pleasing all people, even Janardana cannot manage). That being the case, the Finance Minister will please none even if h e wears all four colours -- pink, green, saffron and blue. So, he would better please himself and pursue his own goals.

One such goal is 9 per cent growth. The trouble with growth (even fast growth at nine per cent) is that it has no sense of direction. One may grow tall or fat; grow wise or greedy; grow rich or even poor. Strictly speaking, the important thing is not how fast you grow but where you will end. What Vision does the Finance Minister have about where we should end? About that we do not have adequate information.

The Upanishads advocate a very interesting Vision. Of course, that is a Vision beyond economics. Sahanaavavatu. Sahanau bhunaktu. Saha veeryam karvaavahai. Tejasvinah avadheetamastu, maa vidvishavahai. Om! shantihi, shantihi, shantihi (Let one and all ge t together. Let one and all enjoy together. Let them all perform great deeds together. May great minds flourish -- without misunderstandings. The Ultimate is: Peace, peace and peace).Though it is thousand years since it was formulated, this Shanti Mantr a suggests a laudable objective. It is unlikely that this or any other Finance Minister would object to its hoary wisdom. Unfortunately, like many scientific truths, this tells us where to go but not how to get there. Then, what can the Finance Minister do? He can only target material prosperity -- and hope (and pray) that it will lead to peace.

First, he could (and should) stimulate the primary sector, particularly agriculture. In his own backyard, near Patna, Prof Sinha, a former Director of the Indian Agricultural Research Institute, has demonstrated that the yield of rice can be increased fr om about two tonnes a hectare to as much as eight tonnes, at least five-six tonnes with confidence. In this endeavour, Professor Sinha has struck out an unusual path. He has used less seed, not more; less water not more; less fertiliser not more and even with pesticides, he has managed with less. So, the farmers are getting a double benefit -- less cost and more output. What more can one ask!

However, there is a fly in the ointment -- Mr Sinha's farmers have so much grain that there is no market where they can sell all of it. It is not that everyone in the country is well fed. The latest National Sample Survey estimates that 26 per cent o f the population, over 260 million people, are below the poverty line. Some experts assert that the poor number poor much more. In Indian usage, that means that they all have less to eat than they need. Though both absence of demand and widespread hunger , taken individually, are Threats, taken together they constitute a wonderful opportunity!

Actually the threats in this case are three. The third threat arises from the fact that if agricultural productivity increases, the demand for agricultural employment will decrease and lead to job loss. That is the dilemma. We do need more food; we also need a greater purchasing power even as the job market shrinks. Then, we need to link increased productivity of the farmer to job generation elsewhere.

In this era of jobless growth that is no mean challenge. Jobs cannot be multiplied within agriculture; that is technologically impossible. Even industry cannot help much -- in this globally competitive world, Indian industry too cries out for higher productivity, a faster growth in productivity than in the output. So, the service sector is the lone hope for employment multiplication.

Then, Bihari farmers should be induced to exchange their larger production of rice for better schools, hospitals, roads, transport services, entertainment and so on. The poor should be found jobs in these services, trained for the same and also induced t o consume the services they produce. As a prerequisite, a variety of industrial products in the fields of communications, transport, energy, water, housing will have to be produced. Unfortunately, that may not add much to the employment figures.

Professor Sinha has the technology to raise agricultural productivity in Bihar (and in the rest of impoverished Eastern India too). Left on its own, the market may turn back on these experiments of Professor Sinha (as it has done in the case of Mr Sam Pi troda, Prof Ashok Jhunjhunwala) and let them collapse by the weight of their own success. We have many such technologies that can promote progress but the market will not, on its own, take advantage of them. So, the government needs to prepare the ground first before the market will step in to reap the harvest. That is the challenge before the Finance Minister; that is also his opportunity!

(The author is former Director, IIT, Madras.)