Introduction
Economic growth represents opportunity.
India’s Per capita GDP growth was 1.5% during the notorious License Permit
Quota (LPQ) Raj from 1950 to 1980 (Nehru, Indira Gandhi 1). The reversal of these failed policies
instituted in the 1980s (Indira Gandhi 2 & Rajiv Gandhi) almost doubled the
per capita growth to 3%. This was further raised to about 5% (1992 to 2012) by
the reforms of the 1990s (Narsimha Rao, Atal Bihari Vajpayee). The decline of
per capita growth to 2% in 2012-13 has come as a shock to youth who have grown
up in the decade of 6% average growth.
The media exposure of high level corruption
at the Center and pervasive governance failure across the country (States) has
heightened the outrage against the government for depriving them of this new
hope of a bright future. However, it should not be forgotten that corruption at
the State level is a much earlier phenomenon and by now is so pervasive and
entrenched that even the National media seem to take it for granted. There is also a perception that the decline
in growth is due partly to the indifference of the ruling party and its
ministers, to the role of economic growth in creating opportunity for all,
including generation of revenues so essential for enhancing opportunities for
the poor through supply of Public Goods (public health, basic education &
employable skills). For instance despite
decades of talk about supply bottlenecks in infrastructure, lack of
productivity in agriculture, leakages in PDS-FCI, abysmal sewage systems there
is little public evidence that ministers responsible for areas critical to
growth and opportunity, are applying their mind and efforts to solving them.
We need, “A Right to (8%) Growth
Act” to ensure that government at
every level from the Asha worker or primary worker in the village, to the
humblest Babu in the Block office to the DC/DM at the district level to Chief Secretary
of the State and all politicians holding office in State governments or
autonomous bodies can be held accountable for economic growth.
China’s Party Led Growth
The Chinese experience suggests
that this could be an effective way of achieving sustained development and
faster poverty reductions.[i] Since 1980, when the Chinese Communist Party
(CCP) instituted market reforms, China has had an average per capital growth of
8.8 %, double the 4.3% average achieved by India. One of the major factors has been its primary
focus on economic growth for enhancing national welfare. The objective of
maximizing economic growth has helped in achieving a very effective governance
system that is highly decentralized in operation while maintaining the
unchallenged authority of the General Secretary and the top organs of the
party. The basic objective of growth
maximization filters down not only to every level of government and party but
also to every State & provincial enterprise and party related enterprise.
Within this overall objective, party cadres, government officials and
enterprise managers are relatively free to experiment on the means to achieve faster
growth. More importantly they are
effectively rewarded for achieving growth targets. The intensity with which
local officials compete to attract investment and the red carpet they lay out
for FDI is apparent to anyone who has visited an enterprise zone in China.
The higher levels of the party
continue to provide overall guidance on the broad directions of growth. For
instance the growth objective was achieved by incentivizing overseas Chinese
entrepreneurs in Hong Kong and China to shift their entire labor intensive
export manufacturing facilities to special zones in China. When this opportunity was exhausted they
turned their attention to more sophisticated FDI from developed countries. When
export opportunities in developed countries appeared to flag and the Asian
crisis struck, the higher level direction changed to using Infrastructure
investment and import substitution of the export supply chain to sustain high
growth. Thus the use of growth achievement to measure the performance of party members
and bureaucrats and to reward them appropriately through promotion and economic
opportunities for their family members has allowed them to develop a unique
blend of centralization and decentralization that has sustained growth for a
historically unprecedented 30 years.
Growth Objective
Though it is impossible to replicate the
CCP controlled Chinese system in a democratic country, we can and should give
much greater importance to the Growth objective and also use it to reward
bureaucratic functionaries. All public
authorities responsible for licensing, permits, quotas and inspection would be
judged by the growth of economic activity in their area. Electricity department
could be linked to the growth of metered electricity sale and consequent
increase in production. Similarly public health workers could be held
accountable for the no of workers in their area falling sick due to waterborne
or communicable disease and thus reducing production and growth. Education departments would be judged by
their supply of job creating skills.
Conclusion
In country whose politicians have
always acted as if growth is something to be ashamed of it will not be easy to
orient the system towards growth of the economy, jobs and income and all the inputs that go into their creation.
If the Right To Food Act can eliminate leakages, corruption & inefficiency
in the PDS/FCI, as evidenced by the government’s calculation of fiscal costs, a
“Right to (8%) Growth Act” can achieve wonders in eliminating corruption,
improving governance and raising the rate of growth of the economy to its full
potential of 8%.
PS: Twitter your support to #RightToGrowth @dravirmani .
[i] China’s
Socialist Market Economy: Lessons for Developing Democratic Countries,” Working
Paper No. 5/2006-PC, Planning Commission, June, 2006. http://planningcommission.nic.in/reports/wrkpapers/rpwpf.htm
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