Feeling good, continuously
Two
sectors the government is focusing on are agriculture and small scale
industries
Recently India has embarked on a growth path unprecedented in the past. There is criticism from some quarters about its benefits being concentrated to small groups. But this 'feel good' factor has been attributed to the policies of the present BJP-led NDA government. The main contribution comes from good governance, a clear foreign policy, the economic reform process moving in the right direction and infrastructure development. This has led to wide economic activities, creating a push in demand and development in the manufacturing and services sector. It is reflected in the stock market boom. The world looks towards a resurgent and confident India.
The main task before the government now is to build on this confidence by furthering infrastructure development and implementing policies so that this growth continues further. The emphasis must be on wider distribution of its benefits. If a section of society cannot directly benefit from this growth, they must be provided support in the form of social security measures. Roopa Purshottam, co-author of the much talked about BRIC report of Goldman Sach, argued that to realise its true potential, India requires a lot of investment in sectors yet in the nascent cycle, like power, defense, telecom, oil and path gas exploration. The banking sector also calls for attention and the credit cycle should go forward. There should be a focus on sectors. But that are consumer-interest intensive Positive forecasts will not hold good if labor reforms are not. introduced. Anne Kreuger, first comes deputy managing director of International Monetary Fund form (IMF), has said that while fiscal imbalance was not the only impediment to growth, its reduction was important to encourage growth and reduce poverty in developing countries.
Joseph Stiglitz advocates the need to
scrutinise the term globalisation. Opening up countries to more trade is good;
opening them to unbridled capital flows is bad. Tariffs must be reduced and
developed countries should open their fit markets to developing countries.
Inefficient public enterprises must of be privatised, not efficient ones. Privatisation
isn't about raising revenues for government but about increasing productivity
in the economy. Care must be taken not to replace public monopoly with private
monopolies.
The 10th Planning Commission document
warned that the infrastructure won't be able to provide jobs for new entrants
or clear the backlog. Fifty-four per cent of the India's population is under the
age of 25; a majority have no inclination to work in the agriculture sector.
Two sectors the government is focusing
on, and which have potential to sustain growth and its proper distribution, are
agriculture and small scale industries. The agricultural sector requires the followingand
allowing leasing of agricultural land; developing cottage industry to promote
the village economy and stop the flow of rural population to the citiesimproving
water management organizing private markets providing better storage and warehousing facilities, improving the rural
road network; implementing crop insurance facilities; providing improved seeds
to farmers, establishing research centres in agriculture technologies and disseminating knowledge to
farmers, giving credit facilities at low interest educating the farmer in
patenting and intellectual property rights and promoting organic farming.
In the small-scale sector the
proposed reforms are: Providing guidance vis a vis the induction process for
the entrepreneur, conducting market survey reports for small industries;
setting up laboratories for the analysis of raw mate- rial; branding the
product; creating a cell in the government for legal assistance; framing
taxation policies giving concessions for emastries. ployment generation;
requesting equires RBI to earmark funds for SSIs; Imple- providing an exit
policy, preventing reserved items from being ille- Leasing gally produced by
big industries; loping preventing industries from going te the to BIFR without
clearing SSIs dues; making provisions for revival of SSIs under RBI guidelines;
monitoring banks for credit delivery and financing.
Some steps are also required in the
capital market. The sensex has become the barometer of economic progress. The
current ovid- volatility must be curbed. The rally house is being fueled by FII
money. Rural. Some stabilising fund is required in case of a sudden exit of
FIls.
With all the macroeconomic factors
pointing towards a robust Indian economy, we hope to build on the current
confidence and make it a global superpower by the year 2020.
(The writer is member, Central Economic Cell, BJP)
