The Hindu Business Line : From high GDP to high GNC

In A Call to Honour — In Service of Emergent India, Mr Jaswant Singh says that the most powerful anti-poverty programme is a consistently high GDP, which transforms into Gross National Contentment (GNC).

The Economic Advisory Council (EAC) to the Prime Minister, which met under the chairmanship of economist Dr C. Rangarajan on August 14, forecast a near-8 per cent growth in 2006-07 — the final year of the Tenth Five Year Plan. A noteworthy feature is that this upbeat assessment for the current fiscal follows three years (2003-06) of 8.1 per cent growth. This also means that for the first time the economy grew at 8 per cent for four years in a row.

That the economy's growth began to take off in the last year of the NDA government, says the former BJP Finance Minister, Mr Jaswant Singh, is testimony to the firm foundation laid by that multi-party coalition at the Centre, which governed the country for six years, since 1998.

High GDP is key

It is no coincidence that in his latest tome, A Call to Honour — In Service of Emergent India, Mr Jaswant Singh, contends that "the most powerful anti-poverty programme of all is a consistently high Gross Domestic Product (GDP) growth. This has proven to be a vastly more effective method of reducing poverty than any other."

While the book is now best known for its allegation of a mole in the Prime Minister's Office (PMO) leaking information about the country's nuclear policy to the US during the P. V. Narashima Rao government (1991-96), Mr Jaswant Singh does devote some space for observations on India's economic policies even while conceding that the book is not a narrative on the subject.

Mr Jaswant Singh writes that in terms of national well-being, the GDP growth figures attained by the NDA regime were no mean achievement. And this despite many factors: The devastating earthquake (2001); two catastrophic cyclones (1999 and 2000); the worst drought in 30 years (2002-03); the Iraq war and an oil crisis (2003); a conflict (Kargil, 1999) and a stand-off (2001-02), continual terrorists attacks (on Parliament and the Delhi blasts, 2001, the Kaluchak Camp, May 2002); and, above all, US-led sanctions (1998).

Mr Jaswant Singh explains his faith in high economic growth thus: "High GDP growth will inevitably convert itself into high GNC." GNC is Gross National Contentment, a phrase that he often used and continues to do so as a true index of growth, "arguably to the horror of economists."

But Mr Jaswant Singh states that to "abandon growth under the illusion that attaining equity ought to have precedence is to jettison both growth and equity and to then end up actually distributing poverty." The goal of anti-poverty programmes, he says, is to "promote self-adjusting, self-targeting and self-liquidating programmes," not endless debates or high budgetary allocations. It is not what is allotted that counts, but what is acted upon and delivered. Programmes do not alleviate poverty, only delivery can and does. There absolutely has to be emphasis on GNC or on the factor of inclusivity.

India's challenges

Mr Jaswant Singh believes that India's No 1 challenge remains economic: "A distributive spread of progress; consistent economic growth; enhanced spending power; a markedly-improved quality of life for all our citizens." He says that by leveraging the demographic dividend the nation is blessed with, India must firmly and decisively move away from and beyond state capitalism. He suggests that it can do so only by accelerating institutional reform, including efficient privatisation at the level of both the Centre and the States. He concedes that there are areas, such as urban infrastructure, which have not even been begun to be addressed.

Here Mr Jaswant Singh refers to the emphasis laid on the accelerated development of the country's physical and social infrastructure exemplified by the Golden Quadrilateral national highway project and the project for providing urban facilities in rural areas (PURA) which, he points out, in Hindi means `complete.'

Failures

Mr Jaswant Singh speaks about the failure in attending adequately to literacy, primary education, elimination of poverty, health-care, sustainable population growth, in the six decades since Independence.

He regrets the lack of adequate commitment to the rule of law. "When adherence to law is lax and legal systems immobilised through congestion, a sense of order in the land erodes.

Consequently, governance gets reduced to excessive and empty legalism, `government servants' then acquire a most `un-servant like' aggression, resulting in an `expropriatory' mindset towards the citizen and the state. This breeds corruption. Citizens then begin to, because they have to, `pay' for their rights; nothing works without taking recourse to a suvidha shulka, or `convenience tax'.

Little wonder then that criminals, otherwise punishable under law, often expropriate for their own use, the very functioning of democracy, observes Mr Jaswant Singh, summing up the state of play in politics and governance in the country.

Vivid vignettes of missed economic opportunities.