‘Involve public sector in social sector growth initiatives'

Dr G. Thimmaiah, Former member of the National Planning Commission, dubbed the Indian policy makers of being obsessed with growth.

Speaking at a budget seminar organised by Amrita School of Business, Dr Thimmaiah, who was among a panel of three - the others being Dr N.R. Bhanumurthy, Professor, National Institute of Public Finance and Policy, New Delhi and industrialist and Vice-Chairman of Sakthi Sugars, Dr M. Manickam – said “while growth is important, it is equally important to involve the public sector in social sector development initiatives. Sustainable growth requires peace and harmony.”

Emphasising the need to give more incentive to the private sector to achieve the budgeted growth levels, the former member of the Planning Commission said high fiscal deficit is a worrisome issue and the private sector appears to be worried about this. “Look at the credit allocation between the private and public sector. It is not reformed,” he said and suggested that the policy makers could find out the private sector's requirement of credit and leave the money aside. “There is a need to reverse the role,” he said.

He further noted that there was not enough mention about the manufacturing sector policy. “Instead, measures to expand the manufacturing sector was made; the Finance Minister has meddled with MAT and this was quite unexpected,” he said and stressed the need for a clear cut policy for the IT sector as such inconsistencies tend to create uncertainty in the minds of the investor.

Risks ahead

Dr Bhanumurthy highlighted the risks the economy would face in the next year due to spiralling current account deficit on the one hand, high inflation rate and the agriculture sector itself on the other.

According to him, achieving the long term growth strategy would not be impossible provided there is fiscal consolidation.

On achieving the growth target, he said “the 8.6 per cent growth in 2010-11 is still a forecast, and for the next year, the expectation is 9 per cent growth. The current inflationary trend is putting pressure in the international market; commodity prices are moving up, oil prices have shot up and all this is putting pressure on our economy.”

Agri-reforms

Reverting to the agriculture sector, Dr Bhanumurthy said: “until this sector is seen as an industry, the supply side bottlenecks will continue to remain unresolved. It is high time we got back to land bank consolidation,” he said and expressed disappointment over the lack of reference made to labour law reforms, clear rules regarding land acquisition and passing of the pending Land Acquisition Bill.

During the question hour that followed, Dr Manickam said: “we have enough land in India to produce for the whole of Asia. Unfortunately, it is not irrigated. Linking of rivers would help improve agricultural productivity,” he said and pointed out how linking of Mississippi and the Missouri in the US helped improve the agricultural scenario there.

Business Line was the media partner to this event.

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