The Hindu Business Line : For inclusive growth

The recently-released World Bank's India Development Policy Report (DPR) 2006 advocates inclusive growth as the only sure means for correcting deeply ingrained regional imbalances and for consolidating recent economic gains. Nothing new, but where the DPR breaks fresh ground is in linking a more inclusive growth process with attempts to improve markedly the quality of basic services such as healthcare, education, power and water supply for every one across the country.

Elaborating, the DPR, drawing on the current literature, says that the development process is not simply a measure of aggregate of economic activity but is an assessment of the inclusiveness of economic growth "with emphasis not only on the distribution of economic gains but also on the security, vulnerability, empowerment, and sense of full participation that people may enjoy in social life." Both the goals — improved delivery of core services and more inclusive growth — depend upon empowering and creating opportunities for each person. In fact, the challenge of distributing economic benefits all round has become particularly acute at a time when the economy is growing rapidly. As the DPR concedes, some parts of India are in fact shining, though the message when hyped at the time of the last elections boomeranged on the Vajpayee Government. The country has done well on a number of socio-economic parameters but this very success has created fresh challenges. Some of the tangible achievements are: halving of absolute poverty, dramatically reduced illiteracy, and appreciably improved healthcare facilities. Yet, a quarter of the country's citizens still live below the poverty line, and progress has been uneven across the country. Some parts of rural India have a higher poverty rate than countries such as Malawi and Ghana. At the other end, some States are fast approaching the prosperity levels of some middle-income Latin American countries.

If the DPR's concentration on the delivery of key services is novel, the means suggested are not. Almost all the service providers are in the public sector. Evaluating public spending in these areas becomes a key task and ought to be different from the methodology being adopted by the Comptroller and Auditor General. Reform of these service-providing institutions should be done systemically. Some of the measures suggested by the DPR have been, or are being, implemented: Fixing internal accountability so that decision making at the government-run service provider is free and autonomous; decentralisation; conferring the right to information and giving the private sector a role. The DPR has stayed clear of any ideological arguments in favour of or against private sector but makes the point "that implementation is everything." Nobody can challenge the DPR's assertion that the primary task for the country now is not of raising the rate of economic growth from 8 per cent to 10 per cent but of sustaining the growth while spreading it more widely.