Friday, June 8, 2012

What the Next Five Year Plan should Focus upon – Five Priority Items

 “No power on earth can stop an idea whose time has come. I suggest to this august House that the emergence of India as major economic power in the world happens to be one such idea.”[1] 

These were the words of Finance Minister Manmohan Singh in 1991 as he took center stage to announce the arrival of India in the global economy. It was a watershed moment in Indian history since its independence. The world watched as the then Finance Minister of India Manmohan took to stage to explain the dream of a liberalized India to the globe. It was a time filled with dreams hopes and ideas for a better future. Coming in the wake of the Gulf War, India had enough resources to keep it going for only 100 more days.[2] It was then the government decided to open up its economy and embark on the LPG-Liberalization Privatization and Globalisation route. 20 years have passed since that historic moment took place. These past years have been an era which could be called nothing short of poetic justice. India rose as one of the top economic superpowers of the world and is expected to overtake China as the world’s number 1 economic superpower by 2045.[3] While the economic clout of Europe and USA has declined, the last 20 years have seen a rise of the Asian giants India and China.

2008 saw the worst financial crisis in the global economy yet India was able to largely nullify the shocks. However, 2010-11 again was disastrous for the global economy. The European economy is saddled with debt ridden crises. Standard and Poor’s downgrading of USA as a triple A plus economy has further shocked and shaken the world economy.[4] Yet even in the midst of such tremendous crisis India has been largely able to absolve itself from such shocks. These events leave little doubt in the mind of the global watchers that India is indeed a leader for tomorrow.

Nevertheless these past 20 years have witnessed new challenges in terms of challenges to the state. Rise of terrorism, left-wing extremism menace, other security concerns and the rising gap between the rich and the poor have taken a toll on India. Problems have been further compounded by lack of development in the agricultural sector, the problems of mitigating climate changes and hazards associated with it .Thus in the context of the present scenario the Five Year Plans calls for a new prioritisation of issues. Five key issues which must be the main focus of the next Five Year Plan should be:
1.      Reducing and subsequent removal of rural-urban disparities  
2.      Security structure revamp
3.      Addressing environmental concerns
4.      Infrastructure development
5.      Governance revamp

1.Reducing and subsequent removal of rural-urban disparities  
The first and the foremost area of focus should be the removal of the rural urban disparities. Of late India has witnessed a meteoric rise in the number of cities and also rise in the quality of living of the urban people. The urban India today has the best of access in terms of education healthcare and other basic amenities. The economic boom has been a boon for sectors like the service industry which is largely an urban based phenomenon. India cities are now acting not only as employments opportunities for the urban populace of the country but have also been able to attract outsourced jobs chiefly in the service sector. The IT sector is one area which has been nothing short of an urban miracle. at the other end of this miracle story- that is India- is however the rural population. The rural population in India stills suffers from apathy and negligence. Basic amenities still are a far cry so much so that it was only in 2010 that India was able to achieve its first fully electrified district in Palakkad district of Kerala.[5] This shows how big the gap is between rural and urban India.
This gap between the rural and urban India has to be solved by implementing a multilateral approach. Steps that can be taken in this regard are:
i.            Improving the scene of agricultural production: While urban India has seen a spirited discovery of itself in terms of finding its place in global economy, rural India is still in the shackles of poverty. The major culprit is the non development of the agriculture sector which is the mainstay of the rural community. Agriculture is the largest employer in the country. large sections of people depend on agriculture for livelihood yet it contributes a mere 10% to the GDP.[6] This can be attributed to various factors including
·         Smaller farm holdings
·         Degrading quality of soil in the Green Revolution areas
·         Overdependence on monsoons
·         Lack of proper technologies etc.
To combat this, multipronged strategy is needed in this regard. Smaller landholdings are a reality from which there is no escape. As the population increases and there is further strain on the food production sector the only possible panacea for this problem is increasing the per area yield of this land. This can be done through improving the farming technologies, using latest techniques like soil quality checking etc. For these purposes the five year plans must stress on upgrading the existing structures of the Kisan Seva Centres, the soil quality testing labs and upgrading the service for the Kisan programmes in DD() and Air(). There must be provision of regular grants to agricultural universities so that they can undertake research to improve the agricultural sector.
The budget in 2010 envisaged a Second Green Revolution in the country’s eastern sector. Reputed economist Swaminathan Aiyar has called eastern India as the sleeping giant in terms of agriculture and food production.[7] The eastern part of India including Bihar,West Bengal and Assam enjoys a very fertile soil which is feasible for food production. Proper steps must be taken to ensure that this dream of a second Green Revolution in the eastern sector is actually realised. Use of proper technologies including judicious use of fertilizers etc will go a long way in preventing the rapid degradation of soil quality.
Overdependence on monsoons has been one of the foremost problems of Indian agricultural sector. The only potential way to combat this is irrigation facilities to each and every farm combined with use of technologies like rainwater harvesting etc. The Five Year Plan can envisage setting up an exclusive National Irrigation Board in a revamped format. This board would look into the irrigation facilities in every farm of the country. The board must be headed by agricultural scientists, irrigation engineers etc. The workings of the board must be open to the public and it must have exclusive authority in deciding irrigation works in the country and ensuring that every farm has proper irrigation facilities. Rainwater is a resource which has never been judiciously used in our country. This rainwater can be used to provide adequate water supply to fields. The authorities must envisage setting up a National Rainwater Harvesting Board too which would oversee the rainwater harvesting and storage facilities in the country. The Tamil Nadu government’s effort of passing a legislation in which every house must have a rainwater harvesting facility is a landmark effort in this regard. Every state and the Centre must envision passing such legislations so that this valuable resource is not wasted.
Farming must be marketed as a lucrative employment sector for the rural youth with better returns, proper training and exposure etc. The courses in the agricultural universities must be developed and the ancillary sectors related to agriculture like cold storage etc must be developed. The government must establish National Faming Institutes in lines of the ITI’s() in the country to train the young farmers of the country. These institutes must be set up to provide certified courses in farming for the young farmers. The curriculum of such institutes must be a judicious mix of theoretical and practical knowledge including imparting them information about the farming technologies used in Europe and USA.
If these steps are taken then indeed the agricultural scenario will improve in the country.
ii.   Providing the basic amenities in villages: The recent times have witnessed a large scale migration of people from the rural to the urban areas. The rural populace arrives in the urban cities in search of a better livelihood and instead it has to face the stigma of urban poverty in most cases. Thus there is an urgent need to plug the factors which pushes a rural person away from his home. Lack of amenities like healthcare, education etc is a major cause of this. Thus the rural sector infrastructure needs to be developed in a proper manner if these push factors have to be plugged. The PURA() scheme envisioned by Dr. APJ Abdul Kalam and approved by the Government of India envisions bringing urban-like amenities to the village household.[8] The private sector plays a major role in this PURA() scheme. Although the scheme was launched with much fanfare it has failed to take off largely due to the disinterest of the private sector. The five year plan must think of innovative ways to revitalize this scheme. The private sector largely works on the profitability of a particular venture. The government must envision turning social infrastructure to a lucrative sector. This can be done by introducing education coupons, healthcare coupons etc in the consumers end. Once the private sector is ensured of the returns in form of coupons it will no doubt take up these schemes with increased vigor thus overall improving the infrastructure of the rural sector.
Scheme likes these however must not absolve the government of its own responsibilities towards the rural population. Healthcare, educational facilities, electricity, sanitation facilities etc must all be made available to the rural sector. Every major scheme should be converged under the Ministry of Rural Development so that there is a single nodal agency for the implementation of the schemes rather than multiple responsibilities which create confusion thereby affecting the progress of work. Stress must also been laid on alternate avenues for rural employment apart from agriculture and on setting up rural-based small and micro industries which are based in villages. These industries can produce handicrafts and natural products which not only have a domestic market but an international market as well. Apart from this the National Skill Development Programme must put special emphasis on the development of skills from the youth of the rural areas so that they are able to carve out their livelihood in the village setup. If these steps are taken then the urban-pull phenomenon will be limited to a large extent.
Thus with these improvements the next five year plan can hope to reduce and remove the rural urban disparity.
2. Security structure revamp
Post 1999 Kargil War India is yet to witness any large threat stemming from the external sector. Yet the past 11 years have been the most trying in terms of threats to the internal security. While India traditionally spends heavily on its external security infrastructure the internal security scene leaves much to be desired. After the Mumbai attacks the Maharashtra government as well as the Government of India launched various measures to combat such a security threat in the future. Mumbai’s own police elite unit Force One was displayed to the public with much fanfare and grandeur. yet in 2011 July-August a ship came and overturned in the Mumbai beach.[9] What was worrying was that the ship managed to escape attention of the three rings of security, the navy, the coast guard and the local police. Thus it leaves little to one’s imagination about the condition of internal security in India.
The problems of internal security are varied. These include:
·         Lack of Proper Training
·         Lack of arms and ammunitions to match the terrorists
·         Logistics failure
·         Intelligence failure
The first and the foremost problem that the internal security faces today is the lack of proper training to the police and the paramilitary forces. Terrorists nowadays realise that the cities can act as high value targets, hence they invariably target urban areas. Security forces are not well trained in urban warfare and hence falter at every step. To combat this problem the government must envisage setting up an exclusive urban warfare training school in which police and paramilitary forces will be required to train in high-tech combat. Such schools must be set up in 6 or 7 major centers of the country. The National Police Academy must also upgrade its urban warfare combat programme that is currently taught to the IPS officers. For this purpose the Government must envisage setting up SWAT teams on the lines of the SWAT teams of the Los Angles Police Department. These SWAT teams not only control the violence but also have a clear cut target of restricting the area of disturbance and minimizing the damages as a clear cut mandate. Each Indian city must have specialized SWAT teams on these lines who must be able to respond to any terrorist strikes within minutes.
Psychological conditioning is one aspect of global security measure that the Indian policymakers have regularly ignored. The government must take proper steps that the security forces have the mental conditions necessary to combat the terrorism menace. Research has shown that a fit mental condition of the combatants results in better performance in fields. Thus for this aspect the government must establish conditioning centers in every police district of the country. These kind of innovative structures must be the target of the planning commission when it envisions the internal security revamp in the next 10 years.
Left Wing extremism has emerged as another major threat to the internal security of the country. In this regard the following steps can be taken:-
1.      Establish another guerilla welfare school which deals in jungle welfare on the lines of the Vairengte Jungle Welfare School. This school must be located somewhere in Central India since the local conditions would actually suit the conditions of the Maoists infested areas.
2.      In hostile areas; especially the jungles, soldiers often yield to psychological pressures. To combat this psychological warfare the Guerilla School must have a team of psychologists each of whom would individually condition each and every soldier who is a part of the academy. This mental conditioning can be done on the lines of the Navy SEAL training of the US Navy. The soldiers who graduate from this school must be put into the exclusive combat unit COBRAS, one which specializes in dealing with the Maoists menace.
The planning commission must ensure that the external and internal security sectors receive equal monetary grants to develop their infrastructure. Upgradation of police stations, phasing out old rusted .303 rifles with more modern arms and equipments etc must be considered. Grants must be made for these purposes.
The national internal security network still suffers from large-scale logistical failure. Repeated intelligence failures have left gaping holes in our security system. The government must look at setting up an organisation in the lines of the Homeland Security, FBI of USA. The setting up of NATGRID() is a welcome step in this regard. However the NATGRID() system must be further strengthened. There must be efforts to link every local police division to the NATGRID() structure so that every police station and local crime controlling authority is linked to one superstructure which overlooks the internal security of the nation. Special mention must be made of the UID() numbers in this regard. The UID() network must be collinear to the NATGRID() system. Opponents claim that this is an infringement of right to privacy. However such measures are indeed necessary in the wake of the recent attacks on the lives of the people where many of the times the terrorists are supported by the local populace.
These are the priority sectors in the internal security scenario that the next five year plans must look at .A clear balance is needed between the spending in the external security scene and the internal security scene if India needs to have a safe working environment.
3. Addressing environmental concerns
Environmental degradation has become one of the biggest global issues today after terrorism. The rapid degradation of the environmental resources in congruence with repeated failure of the environment talks on a global level presents a dismal future of the world. In such a threatened environment the government must take proper steps to address the environmental concerns on a broader scale.
Addressing the environmental concerns once again warrants a multilateral approach one that balances development and environment quite judiciously. In this step many steps can be taken which will ensure that this balance is maintained:
                      I.            A proper moratorium authority on mining must be established which would ensure that the nation is not looted with illegal mining. This not only affects the national exchequer but also stops national development.
                   II.            The structure of the National Green Fund must be further developed. Money collected from such centers should be utilized to fund the research in various universities regarding combating the effects of climate change.
                III.            The rapid environmental degradation would directly affect the agriculture sector of the country which is the mainstay of employment in the country. For example a research conducted by the IPCC() concludes conclusively that for every 3 degree rise in temperature the production of wheat would fall by about 15-20%.Such an event might prove catastrophic to the wheat bowl of India, the Punjab-Haryana region. To combat such events proper research studies must be carried out and ways to mitigate to such problems.
                IV.            Another major problem that climate change and rapid environmental degradation brings forward is the issue of urban planning. The cities must develop the infrastructure with respect to combating the effects of climate changes. Our cities must develop themselves on the model of “future cities” or those cities which look towards a futuristic vision. A prime example in this regard is the planning and development of Amsterdam in recent times with a view of combating the harmful effects of climate changes. These include installation of UV rays absorbent glasses in window panes, opening up of large scale high speed bicycle routes which would reduce emission rates, water sewage treatment facility and linking it back to the city water system which saves valuable water resources etc. Such steps must be replicated in India. The government must provide grants to the Urban Housing Ministry in this regard.
                   V.            A national level program in lines of the JNNURM() must be developed and granted which would combat the problems of climate changes in the urban household. The recent announcement of the bicycle program across many cities in the country is a welcome step in this regard. The government must ensure that such schemes do indeed take off and must provide grants in this regard.
                VI.            Another major challenge is garbage disposal especially in the urban sector. Rural India has a by and large eco friendly garbage disposal system which does not threaten the environment. Urban India on the other hand has large scale issues with garbage disposal. This is one sector in the Urban Development which must be dealt almost exclusively. Network of biomass plants, water sewage treatment plants, and Solid waste management programme must all be implemented in order to effectively ensure proper garbage disposal. Efforts must be made to ensure that this garbage disposal is eco friendly.
             VII.            Rapid environmental degradation has resulted in the increasing chances of natural disasters and hazards. India must be prepared for such eventualities as well. Larger grants must be made available to the skeleton National Disaster Management Authority especially at the state levels. Disaster management has to follow a bottoms-up approach rather than a top down approach.
Apart from these other innovative schemes have to be though about including building earthquake resistant housing in all housing projects of the government including the Rajiv Awas Yozna (RAY), the Indira Awas Yozna (IAY) etc. These might cause a slight upward spike in the budgetary allocations but these costs are balanced by the controlled harm that will occur in case an earthquake strikes. Environmental hazards not only create havoc on human lives but also affect the economy by and large, an example in this regard is the 2011 earthquake of Auckland which has pushed back the economy of New Zealand by many years.[10] Thus an effective scheme needs to be in place to mitigate the damage of environmental hazards.
          VIII.            Allocations must be made to schools and colleges to further develop their environmental studies course and correlate it with mitigating environmental disasters.Such courses must go beyond the scope of theoretical books and must encompass field experience and practical knowledge. The youth of this country must be prepared for the challenges of the environmental concerns. The government organs of media too must play a proactive role in this regard.
Such measures if undertaken will ensure that the environmental concerns are properly addressed by the government.
4. Infrastructure development
The success story of the Indian economy has been crafted around the service sector which is an urban phenomenon. This has lead to large scale development of cities and corresponding civic amenities. Such a boom story however has not been the case with the manufacturing sector which has an intrinsic link with infrastructure development.
The infrastructure scenario stills lags behind then what is required. This has not escaped the attention of policymakers who want to make it as smooth as possible. The fundamental difference between the economic development of India and China is that while China is able to pull its investments towards the infrastructure sector in form of FDI(), India has been able to pull the foreign investment chiefly in the equity markets in form of FII() or hot money.[11] This has resulted in the loop -sided development of the country.
Thus a clear cut policy is needed in this regard to develop the infrastructural scenario of the country. The biggest problem that the country today encounters in terms of developing the infrastructural projects are land acquisition issues. Often major infrastructure development programmes like steel plants, roads, dams etc are hindered due to non existence of a comprehensive land acquisition policy which would satisfy the needs of all parties.
The draft National Land Policy developed by the Ministry of Rural Development is a major step in this regard. The government must ensure that the livelihood of the people affected must be looked after by the government itself. Alternatively the government must take steps to ensure that the effected people get a proper compensation for the land. The idea of setting up a National Land Bank must also be discussed and followed up conclusively.
Another issue that must be discussed is the red tape bureaucracy that is generally associated with the infrastructure development projects. Developers often complain of the long bureaucratic setup in the approval of projects in this sector which results in delaying and loss of valuable time in development of the projects. The Government must envision the creation of a national body or committee which will be the single most authority in the clearing or environmental projects. This committee must also consist of members from the Environment Ministry so that the balance between the environment and development is well maintained.
A look at the IIP() report reveals that India lacks in the manufacturing sector. It is the sleeping giant of the Indian economy having not only the capability to contribute a major amount to the economy but also as a large employment provider. As the population increases and land for agriculture remains stagnant the service and the agriculture sector has a limit on its capacity to absorb the youth workforce. The manufacturing sector can play a pivotal role in this regard. To achieve this dream further Special Manufacturing Zones on the lines of the SEZ must be established. These SMZ’s must be set up in PPP() partnerships. Foreign collaborations on industrial development and infrastructure development in the lines of the DMIC (Delhi Mumbai Industrial Sector) must be further developed. The other viable candidates for such projects can be the Chennai –Bengaluru region, the Mumbai-Bengaluru region and so on. The Manufacturing Zones must take up exclusive interest in developing infrastructural based industries for example steel and coal industry etc.
The infrastructure development cannot be restricted to industry and must also envision creation of better road networks, developing sea storage capabilities, developing airport facilities etc across the nation. India has for long ignored the internal waterways network specially in the eastern region which can be used as a logistical network .A national waterways body must be constituted with grants and powers on the lines of the National Highway Authority of India(NHAI).This waterway body can look after the development of inland waterways as a means of transport. There is an increased need for attracting foreign investments in developing the transport sector etc. This can be done by opening up projects in form of the BOT(Build Operate Transfer) form where the private sector will have a chance to reap profits from the development of the project in the form of toll gates etc before handing over to the government.
Big dams are bedrock of the infrastructural development of the country. These big dams not only supply electricity but also help in the irrigation of an area. Therefore there is need to develop a network of big dams. However such dams might also hinder environment. before the development of any dam a proper Environment Impact Assessment must be carried out by environmental authorities. In case a big dam is infeasible in a particular area steps must be made to atleast develop a network of smaller dams which would ensure the achievement of the infrastructural goals.
Another major issue which has barred the development of infrastructure projects has been the security concerns in the country. The security issues must be addressed to make the private investors feel free to involve in roads, dams and other big projects in the infrastructure sector.
Model cities and towns must be developed in PPP() model in partnership with the private sector. Such model cities will ensure a healthy return for the private sector. The government must also envisage the development of the existing infrastructure in cities and villages like hospitals, schools, housing amenities etc. A large amount of resource allocation must be made to these sectors so that the cities and the towns are able to develop the infrastructural capacity. Stress must also be put on developing other sectors like water supply, electricity facility etc to ensure overall development. Steps like the Rural Energy Grid program, the Jawaharlal Nehru National Solar Mission must be aggressively pursued and executed.
This multilateral policy if followed would ensure the development of the infrastructure of the country.
5. Governance revamp
India today encounters the biggest challenge in terms of governance. This question on the credibility of governance has not only been asked domestically but also internationally resulting in the escalation of protests against the state apparatus particularly on the question of corruption. Corruption has become not only a moral question but also a question of economy. The corrupt machinery has been able to stash away valuable money abroad and there is an urgent need to clamp this issue. However this is not restricted to the government sector alone, private sector too falls in this ambit .A clear cut policy is needed in this regard to curb this corruption. A particular bill or an agency is not enough to control such a question. Neither can the government absolve of its responsibilities by calling corruption a moral issue.
A proper apparatus is needed in place. Since corruption is chiefly an economic crime which deals with money the economic watchdogs must be given the proper apparatus and training to take this menace head on. Often the enforcement officials are found lacking in ways to combat financial embezzlement. Such a situation must be overcome by developing the financial training institutes further. The officers must be equipped with hands on knowledge of the ICT() sector so that they are able to combat this menace. The officers must also be further exposed to global tours so that they develop the insight to tackle the problems on a global level with varied perspectives. Apart from these, infrastructural constraints must be overcome like building a proper monitoring agency in place to track the movement of money in and out of the country. Any large scale movement of money can always be tracked and verified whether it’s legal or illegal. Since such illegal movement of money also plays a major hand in terrorism it is utmost necessary to tackle this menace.
Another major issue in the governance today is the grievance redressal mechanism. The government must envision setting up strong grievance redressal mechanisms in lines of RTI at the local, state and the national level. Initiatives like the National Portal for Grievance Redressal Mechanism must also be followed up by a fast and clear cut address of the complaint stated. Budgetary funds must be earmarked for the setting up of such institutions and their proper workings. At the block level such centers can be attached to the Common Service Centres such that the person can address his grievance manually as well as in electronic form towards a national authority. CSC’s() must be further developed as a nodal centre of governance.
The most important step is taking democracy to the roots. The Constitution in the 73RD and 74th amendment has clearly laid down these objectives.[12] Even after almost 2 decades of setting up of Panchayati Raj Institutions and the Urban Local Bodies the goals envisaged have not been fulfilled. These local institutions must be given greater financial owners and must be made the nodal authority of implementation of projects in both the rural and the urban level. The local bodies are always able to understand the local demands and constraints in development of a particular project and hence it is important to involve them and impart them financial powers in the forms of grants. Such steps would undoubtedly go a long way in ensuring the travel of democracy to the grassroot level.
Thus these are the five major policy areas which the government must put thrust on while formulating the next Five Year Plan. Five year Plans have always been the backbone of the India in general and Indian economy in particular. The thrust given to these 5 sectors would undoubtedly result in the development of the country. This development would not be the development that is quantified by the western nations but one whose roots lie in the ideologue that Pandit Jawarhalal Nehru believed in –Fabian Socialism whose purpose is to advance the principles of democratic socialism via gradualist and reformist, rather than revolutionary, means thus ensuring development for all in the long run.

[1] Finance Minister Manmohan Singh speech in Parliament Session 1991
[2] New Economic Policy-Pratiyogita Darpan Economy Special 2010
[3] Economic Times Newsreport
[4]  The Hindu : “S&P downgrades US rating- 6 Aug 2011
[5] The Hindu Palakkad to become first fully electrified district in India Feb 15 2010
[6] Economic Survey 2011-12
[7] Swaminathan Aiyar –The Economic Times
[8] India Year Book-2011
[9] Mumbai ship collision- Indian Express 12 August 2011
[10] Auckland Earthquake:Economy takes a hit too: The Christian Monitor 25 February 2011

[11] Experts required to monitor IIP, GDP survey reports – Economic

[12]  Constitution of India –DD Basu

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