Mohan Guruswamy
September 20, 2004

The economic results of the past two years make a recast of Tenth Plan goals inevitable. The Plan, which envisaged an annual GDP growth rate of 8.1%, now appears to be a bad case of day dreaming by the previous regime. Against an annual envisaged growth of 7% in the first two years what has been achieved has been 6.4%. The growth in the current year, after the delayed and patchy monsoon, oil price rise and tax rollbacks will be hard pressed to do even that. To achieve the Tenth Plan's growth goals the GDP growth has to better 11% in each of last two years. This would be almost twice the new Hindu growth rate and the probability of that would be extremely bleak.

The performance of the national economy still depends on the Agricultural sector. Real investments to expand and modernize the agricultural infrastructure stopped four plans ago. Today we fritter away almost Rs.70, 000 crores each year on unproductive and undeserved sops like procurement and fertilizer subsidies, and free if not heavily subsidized power and water instead of investing in productive and lasting assets. Given this and the fact that we are even more dependent upon the mercies of the weather gods - there must be more than one for sure - it seems the 4% annual growth of Agricultural GDP required to hit the Tenth Plan target can only be a dream best reserved for a much later plan.

There are other more disquieting trends emerging on the farm front. The number of cultivators with less than one hectare of land has risen to exceed 50%. This will further impede higher farm productivity possible either by additional private investment or modern technology. Clearly there is a need for the state to assume a greater responsibility. This will call for a mid-term recast of the Plan.

nother matter of grave concern, and it is shocking that none of our politicians or policy wonks have shown any concern about it, is that the decadal growth rate of Agricultural Laborers - the poorest of our poor - has almost doubled from 23.51% to 43.16% in the last decade of the previous millennium. This is the first decade of the so-called Reforms that are largely credited to the present Prime Minister. This one indicator is enough to suggest that something has gone very wrong with the economy and that it needs to be set right pronto. A mid-term recast of the Plan becomes central to this.

But the Planning Commission will be quick to tell us that the percentage of poor is on the decline. Mark the use of the term percentage, because the absolute numbers have never declined in the history of independent India. This is despite having the most absurd and self-serving definition for poverty in the world. It is only in India that poverty is defined by caloric value of food intake each day. There is no reference in our definition to Basic Human Needs or even a modicum of Physical Quality of Life. It does not seem to matter to our planners, thinkers, and political and bureaucratic leaders if the majority of our people live in sub-human conditions. The adoption of an enlightened standard to define poverty will no doubt burden the policy makers by creating new national challenges. The time to do this is now.

The present plan was the handiwork of the previous regime. Their hollow economic optimism was rightly jeered by the then Leader of the Opposition as "Mungeri Lal ke haseen sapne." The present Leader of the Opposition seems unconcerned with this and is pre-occupied with the decadal growth rate of Muslims, which for the fifth time running outstrips that of the Hindus. Besides the Tenth Plan is his party's plan and so it is extremely unlikely that he or his party would want the Tenth Plan programme to be changed in any way. But with Mungeri Lal gone to enjoy his dreams in private isn't it time the Government got real?