NATIONAL PRIORITIES - Inclusive Growth (Urban-Rural Divide), Essential Services (Health & Education for Poor) & Growth (Infrastructure)

NATIONAL PRIORITIES - Inclusive Growth (Urban-Rural Divide), Essential Services (Health & Education for Poor) & Infrastructure

1. Inclusive Growth – Rural-Urban Divide

India’s GDP is growing at close to 9% and is expected to reach 10%. India overtook Japan this year in number of billionaires, with 36 billionaires worth a total $191 billion while Japans 24 billionaires were worth $64 billion. This is good news!! But please also note that 77% of our population (836 million people) lives at less than Rs. 20 per day, mostly in rural India. Benefits of growth and prosperity are not reaching the rural India.

Majority of our rural population is dependent on agriculture for its livelihood, however share of agriculture in India’s GDP has declined from 59% in 1950-51 to 20% in 2005-2006. Agriculture can no longer provide sustainable livelihood for our rural population.

SOLUTIONS –
We need to provide non-agricultural jobs in rural areas. Local skills based self employment in cottage industries should be encouraged through PPP. With high economic growth and proliferation of service industries (Telecom, Retail, Finance, Security and other support services), our cities are starved of trained man-power in skilled and semi-skilled categories, while our rural youth is unemployed and frustrated. We need to fill this demad-supply gap.

Vocational training to educated and semi-educated rural youth in collaboration with industry with reasonable assurance of job opportunity will bridge this gap. We have embarked upon one such initiative in Rajasthan under Rajasthan Mission on Livelihood using PPP involving local industries. This has shown a good promise.

Institutional Micro credit to marginal farmers in rural areas needs urgent attention. Farmer suicides have been linked to repeated failure of crops coupled with burden of high interest loan from local lenders. Micro finance schemes have shown great promise and need to be encouraged.

Agricultural productivity should be improved and more land should be brought under cultivation by implementing irrigation projects urgently. Farmer must get fair price for his produce through Input Cost based Procurement Price (ICPP) in place of current MSP.

Easy credit facilities and crop insurance schemes should be effectively administered. Honest & efficient implementation of various rural welfare & employment generation schemes. 74th amendment should be implemented in its true spirit.

2. Essential Public Services for the Poor - Education & Health

Educated & Healthy population is a prerequisite to sustain high growth rate of any economy. Given our high economic growth rate, with share of services and industry in our GDP reaching 80%, we have a historic opportunity to provide gainful employment and respectable livelihood to each of our employable adult.

Unfortunately, majority of our population is UNEMPLOYABLE, because they are not suitably educated and lack required skills.

70% of our population is rural, dependent on agriculture. Education will provide them with an alternate means of employment. Sadly education is accorded a low priority in rural India due to the need for helping hands with daily chores of agriculture. Lack of infrastructure and poor quality of teachers has compounded the problem.

Efficient implementation of Sarva Siksha Abhiyan & Mid Day Meal Scheme with effective monitoring using DISE (District Information System for Education) should improve the situation.
Quality and affordable health care for poor should be made a national priority. We spend just 1.2% of our GDP on health care. Our Public Health System is inefficient and has lost its credibility. This is in urgent need of revival and resurrection. Our poor can not afford private healthcare.

Subsidized Universal Health Insurance for poor should be accorded high priority.

3. Infrastructure is Essential for Virtuous Growth Cycle – PPP is the way to go

Rapid economic growth must be an essential part of our national strategy since it is only in a rapidly growing economy that we can expect to raise the incomes of the masses sufficiently to bring about a general improvement in living conditions. With sustained economic growth rate of 8-9% and population growing at 1.5% per year, the real income of the average Indian would double in ten years.

Infrastructure has become a major constrain and is threatening to impede our economic growth. The matter has acquired extreme urgency and calls for a substantial increase in the allocation of public resources for infrastructure sector. However, public resources alone may not be sufficient.
The private sector has a critical role to play in achieving the objective of faster and more inclusive growth. This sector accounts for 70% of the total investment in the economy. Given the huge investment requirement in infrastructure sector, private participation is critical and must be encouraged.

Government should device appropriate policy framework, dispute resolution mechanisms and MCAs (Model Concession Agreements) which would encourage private investment in infrastructure. Success of private participation in Telecom and National Highways should strengthen the case for a mutually beneficial Public Private Partnership Model in infrastructure.