The Telegraph
Since 1st March, 1999
Email This Page
- An approach paper isn't supposed to be a political document

Is there an approach paper to the 11th five year plan (2007-12)' I am not very sure. I have a document titled 'Towards Faster and More Inclusive Growth', dated 14th June, 2006. This could have been an approach paper, except that it states, 'Draft for circulation and comments. This has yet to be approved by the Planning Commission.' Notice that in the title of the document, the adjective 'faster' occurs before the phrase 'more inclusive'. In the 10th plan (2002-07), average growth is likely to be 7 per cent and this document tells us, 'Simulations from several models show that the base-line growth rate of the economy, i.e., the growth that is likely to be achieved without significant new policy initiatives, or the business as usual scenario, is around 7 per cent per annum.'

Since the target for the 11th plan is an annual average of 8.5 per cent, presumably something needs to change. That means reforms. We have been told, now that disinvestment is off, that disinvestment is not equal to reforms. (By the way, the word 'disinvestment' doesn't occur in this quasi-approach paper at all.) Presumably, something is equal to reforms and without that, we won't have 8.5 per cent. Nor will we deviate from the 7 per cent business-as-usual trend.

The approach paper isn't supposed to be a political document, constrained by coalition politics. It is supposed to be a technical or economic document, rooting for reforms and suggesting ways of accelerating growth. An approach paper isn't supposed to be a National Common Minimum Programme. Whether those reforms are politically doable is not for the planning commission to judge. For instance, that was the spirit of the approach paper to the 10th plan. If one takes a vote from citizens, certain key issues will emerge as critical in the reform agenda, and generally, these will be controversial. With the exception of small-scale industry de-reservation, I can't find a single instance where this quasi-approach paper takes a position on any of these.

Consider agriculture, a sector that features prominently in the document. 'Thus, we have farmer suicides when new seeds fail to deliver expected output, or when expenditure on bore wells proves infructuous, or when market prices collapse. Farmers should be protected against such risk by appropriate measures. Insurance is one way of doing this, but the financial cost of existing and proposed crop insurance schemes is very considerable, and recurring, so that these are not appropriate as plan schemes. These and related issues of risk management need to be addressed in the 11th Plan.'

How do we address the risk management issue' Wait for the plan document. The quasi-approach paper ducks the problem. Or take the Urban Land Ceiling Act as an example. Does the planning commission, with all the expertise vested in its members, take a position on this' Again, no. 'There are several constraints on land development in many states which need to be reconsidered. The most important of these arise from the Urban Land Ceiling Act which is still in operation in some states. Non-transparent land use policies, which are almost ubiquitous, also add to the problem. Urban Rent Control, high stamp duty and other transfer costs also restrict construction. State governments and Municipal Bodies should undertake a comprehensive review of such policies and amend necessary laws/regulations in line with the requirement of modern city development to formulate their Master Plans and Zonal Plans in a given timeframe.' Dump the problem on states and urban municipal bodies. On foreign direct investment in retailing, we have, 'This is an area of policy on which there are different views. We need to evolve a consensus keeping in mind the balance of advantages and disadvantages that exist with modern retailing with FDI in most other developing countries, including even China.' No position again.

Are education vouchers a good idea' We don't know. 'There is a feeling that voucher schemes can help promote both equity and quality in schooling in areas where adequate private supply exists, provided that this is combined with strict requirements on private schools to give freeships to students in economic need. However, government must ensure that public schools are available to provide competition to private schools and of course in areas unserved and underserved by private schools.'

Clearly, the planning commission itself has been at loggerheads because of coalition dharma and because of the divergent views of its members. Consequently, on reforms and on faster growth, the quasi-approach paper says nothing at all, which is the reason it offers little value-addition and shouldn't receive the 'approval' of citizens, regardless of whether it obtains 'approval' of the planning commission itself. Even on a simple matter like the poverty ratio, the percentage of population below the poverty line, we have the 'one hand, on the other hand' bit. We have had National Sample Survey thick samples in 1993-94, 1999-2000 and now, 2004-05.

Subject to non-comparability of data, there was a drop in the all-India poverty ratio from 36 per cent in 1993-94 to 26 per cent in 1999-2000. We now have, 'Preliminary estimates are now available from the latest NSS thick sample conducted in 2004-05 which provides data that are fully comparable to 1993-94. This shows that the per cent of population below the poverty line in 2004-05 was almost 28 per cent, which is higher than the official figure for 1999-2000 because of the non-comparability of 1999-2000 data. The reduction in poverty between 1993-94 and 2004-05 is 0.74 per cent points per year rather than 1.66 per cent points per year implied by the earlier 1999-2000 data. However, it is also clear that poverty continues to reduce. The percentage of poverty in 2004-05 that is roughly (but not strictly) comparable to 1999-2000 is about 22 per cent, implying that poverty decreased over 1999-2000 to 2004-05 at the rate of 0.79 percentage points per year.'

Notice what is happening. The United Progressive Alliance and its NCMP generally don't believe in the National Democratic Alliance's 'India Shining' message, and would like poverty ratios not to show a decline during the NDA regime. So compare the 26 per cent of 1999-2000 with the 28 per cent of 2004-05. But there are also planning commission members who believe growth (which is not disputed) must have led to trickle-down benefits. In that case, compare the 26 per cent of 1999-2000 with the 22 per cent of 2004-05. This is a good example of how this document has become a political one and reads like an elaboration of the NCMP, rather than a document drafted by experts.

Ditto for labour laws. 'There are many aspects of our labour laws where greater flexibility is needed and would be in the interest of labour as a whole in the sense that it would actually generate larger volumes of employment in the organized sector by encouraging employers to expand employment. This flexibility is especially needed if we want to exploit the enormous opportunities offered by export markets. Other countries, especially China, have been remarkably successful in this area. It is time for India to compete. These are sensitive issues on which opinions differ. We should evolve a consensus on the scope for reforming key labour laws including especially the Industrial Disputes Act and the Contract Labour (Regulation and Abolition) Act.'

Strive for the consensus. Not in the country, but within the commission. That's precisely the reason why the quasi-approach paper is strong on the inclusive element and applauds the Sarva Shiksha Abhiyan, Bharat Nirman, the national rural employment guarantee programme, the Jawaharlal Nehru urban renewal mission, decentralization, the Right to Information Act, the backward regions grant fund, the national tribal policy and so on. Rather a boring and predictable document actually.

Email This Page