The results of the general elections currently underway will be declared on May 23 and soon thereafter, a new government will assume office. As yet, we do not know the colour, composition and complexity of the incoming regime.

While the report card of the outgoing government is a mixed one, the new government’s tasks are cut out. Four major challenges will confront New Delhi and by implication these four ought to be the agenda for the incoming government for purpose of policy-making and resource mobilisation.

Accelerate economic growth: The economy is decisively slowing. Policies to boost all-round growth are critical.

Of the three pillars on which the economy rests, agriculture is not in a good shape. It contributes to approximately 15 per cent of the GDP, but employs over 50 per cent of the workforce, making farm and related activities vital for the nation’s overall economic well being. Rural incomes have hardly risen in the last two years and rural demand is enervated.

The manufacturing sector too is facing a slowdown. There is perceptible loss of momentum in the industrial output growth. The automobiles sector is a good example. The housing market too is showing no signs of revival, despite claims that India is at least 50 million dwelling units short. SMEs and MSMEs are crying for policy attention.

Attract investment: The outgoing government has acquitted itself reasonably well in terms of opening up the economy to foreign direct investment. FDI inflows have risen to about $45 billion. Sectors such as Railways and defence production are open to receiving FDI. However, there has been a slowdown in FDI inflows in recent quarters because of policy uncertainties. New Delhi has turned wary in case of trans-border e-commerce, for instance.

It is necessary to regain the confidence of overseas investors by ensuring a stable, transparent policy regime even while protecting domestic entities from unfair competition from abroad. Confidence among entrepreneurs to spur domestic investment is not exactly high. Good governance and confidence building measures are necessary.

Create jobs: One of the most vexatious challenges for the new government will be job creation. In the last two years, jobs have been lost and creation of new jobs has fallen far short of the population’s needs. Availability and credibility of jobs data are also in question. Pro-growth policies and closer attention to reviving the MSME sector and the farm sector can potentially help create jobs.

Contain inflation: The least challenging agenda for the new government will be reining in inflation. Expectation that crude oil prices are likely to decline from the current levels (Brent $70 a barrel) in the second half of the year is a huge relief. However, on the farm front caution is necessary because of the threat of El Nino which New Delhi may be underestimating.

Fortunately, the country carries humongous stocks of rice and wheat as also some quantities of pulses. Edible oil prices in the international market are largely consumer-friendly. Tariffs can be used effectively to encourage imports to ease supply tightness in case of any eventuality.

How well the new government advances this agenda and addresses the multiple challenges remains to be seen.

There is another aspect that the incoming government must examine seriously. While we claim to be the world’s fastest growing significant economy, there is little equity in our growth. We need ‘growth with equity’.

It is a tragedy that despite being a rapidly growing economy, our social development indicators are pathetic. India faces a twin ignominy. We are rather low on the Human Development Index (HDI) and high on the Global Hunger Index (GHI).

The incoming government will have to work with tenacity to substantially improve our HDI ranking. That calls for good governance and honest implementation of policies, programmes and schemes.

Farm focus

Agriculture deserves special attention. Agrarian crisis and rural distress can destabilise the nation’s progress. We need farm resurgence. The structural issues of the country’s agriculture have remained largely neglected over the last 20 years or so. No wonder, farm growth rates have left much to be desired.

Here are six mantras for farm resurgence:

* Strengthen the input delivery system

* Rapidly expand irrigation

* Infuse multiple technologies in agriculture

* Invest in rural infrastructure and market reforms

* Use our strength in ICT to deliver price, market and weather information to growers

* Build capacity among farmers to withstand market volatility and step up public investment

As agriculture is a State subject, it is critical that the Centre works closely with States to draft a new National Policy for Farm Resurgence. We have all the factors of production — arable land, sunshine, rainfall, varied agro-climatic conditions, biodiversity and of course labour force.

So, sustained growth in agriculture and allied areas should be within our grasp if policies are effectively implemented; that alone can lift people out of poverty.

The writer is a policy commentator and commodities market specialist. Views are personal

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