'Social indicators need to improve'

NEW DELHI: Legislative and policy changes for agricultural growth, substantial hike in investments in education, health and infrastructure and increasing accountability of local authorities are imperative to achieve the targetted seven to eight per cent growth rate, Planning Commission deputy chairman Montek Singh Ahluwalia said on Monday.

"I will not believe that India can achieve a sustained eight per cent growth over a period without also achieving a very significant improvement in social indicators...," he said at the World Economic Forum here.

Pointing out that the country''s social indicators, basic health and primary education are much behind most of the southeast Asian countries, he said the total volume of resources for the sector is much less than what it should be and government should increase the flow while simultaneously improving the service delivery system.

He, however, pointed out that states and local authorities being the implementing agencies, Centre should consider increasing accountability of the local authorities "rather than give the money to states'' capital and have the money trickle down�.

"The idea is to see that expenditure on health and education schemes should be essentially done on a design which greatly involves elected representatives at the village level," he said.

Advocating diversification of agriculture to horticulture, vegetables, fruits and flowers and asking the states to encourage contract farming, Ahluwalia said the Commission would suggest legislative and policy changes at the state level.

"It will be the Planning Commission''s objective to highlight the need for legislative and policy changes mainly at the state level to allow these," Ahluwalia said adding such changes in the agriculture pattern, particularly encouraging contract farming, may require addressing sensitive issues.

At the Centre, a few modifications in the Essential Commodities Act may be required.
The government would also need to evolve a completely different strategy in marketing, research and expansion and stress on greater involvement of private sector. The states would have to be persuaded to involve the corporate sector in developing agri marketing and agro processing.

He said agriculture growth decelerated to two per cent from 3.3 per cent since mid 1990s. "This is a serious problem and is a clear indication that business as usual in agriculture/rural policy will not deliver results that the government wants.�

On the unused irrigation potential, which was critical for agriculture growth, Ahluwalia said huge public investment was needed in this area and it was time to "move from an irrigation system controlled by irrigation bureaucracy to a system where public investment takes place and the actual user, the farmer, is benefited�.

This would require resources and changes in the organisational structure, he said.

Stressing the need for major public-private investments in infrastructure projects like roads, power and ports, he said, "There is no chance... to be able to deliver infrastructure by solely relying on public investment. A large part has to come from the private sector, both domestic and foreign".

Regarding India''s poor infrastructure, he said this was the counrties biggest deficit which hindered the country''s global competetiveness.