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Dividing the meagre resources
AS THE TASK of assigning resources for the Tenth Plan gets under way, a few important issues are bound to engage the attention of policy bodies such as the two special groups constituted by the Union Finance Ministry to finalise sectoral allocations. An important undercurrent that would have to direct such decisions is finding a path that not only arrests the present decelerating phase of the economy, but also seeks to place the process of social development on a rising path. One starting point is to assess the feasibility of the targets set by the Approach Paper. Central to meeting the objectives would be making suitable resource re-allocations as well as, equally importantly, improvements in the quality of governance, the latter a somewhat exogenous but crucial factor in determining the outcome of planning. Reducing poverty levels by five percentage points by 2007 and by 15 percentage points by 2012, universal schooling by 2003 and providing all villages with sustained access to potable water, among the targets set by the Paper, are cases in point. To meet these, in addition to the 8 per cent targeted growth rate, are required serious efforts to translate intentions into reality.
One major constraint is finding resources, with clear indications of a lowering in the gross budgetary support. That pinning hopes on proceeds from disinvestment is bound to be futile is becoming increasingly obvious, given the backdrop that this process itself is entangled in conceptual, procedural and political hurdles. Given the centrality of this source of revenue, with the Approach Paper recommending acceleration in the process to yield around Rs. 17,000 crores a year on an average over the first three years of the Tenth Plan, it is important that policy-makers recognise that the path so far has been far from encouraging. Simultaneous pressure on the Finance Minister of his annual budget exercise, that calls for making the more short-term allocations along politically sensitive lines, is bound to only make the policy-makers take the easy option of following the pattern of setting growth targets for the economy and physical targets for the social sector, without the supportive finances for the latter. This temptation is best avoided, given the slippage the country has seen on the social front. To begin with, clear thinking will be required on the thrust areas identified for the Tenth Plan - agriculture, roads, housing, infrastructure and power - with a conceptual redefinition on the extent to which the state would be able and willing to bring in the finances, and a simultaneous alternative plan to rope in private capital on a sustainable basis.
Charting out measures that offset the shortfalls expected calls for bold departures from past paradigms, wherever possible, weighing the sensitivities of the target participants. Of the selected thrust areas, two - agriculture and power - are bound to have a wide range of consequences for the country's economic and social development in the years ahead. One common factor in these two sectors is the experience with subsidies, which have acted as a drag on the larger national and State finances. Needless to say, these are areas that are not just extremely sensitive politically, but also those where the federal nature of the Constitution calls for balancing of efforts by the Union and the States. In the larger context, as the efforts towards making sectoral allocations for the Tenth Plan take place on a canvas that is fast changing from the time when planning was introduced, it is imperative that the new economic realities are factored into the planning process to mark a redefinition aimed at bringing in economic change.
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