Commentary/Dilip Thakore

I like the CMP, but the United Front's human resource deficiency will sink it

Readers of my columns in various publications will be forgiven if they assume I may have helped draft the Common Minimum Programme of the 13-party United Front government led by former Karnataka chief minister H D Deve Gowda who was recently sworn in as the nation's tenth prime minister.

So many of the policies and programmes which I have been advocating to the point of ennui of some of my readers, and which seemed to have few takers, are incorporated in the CMP, that I am delighted. Or should be.

For example, one of my hobby horses has been larger resource allocations for primary education and health which have been so criminally neglected by the nation's self-styled planning experts that by the turn of the century -- now only four years away -- 50 per cent of the world's illiterates will be citizens of the sovereign socialist secular and sanctimonious Republic of India.

For quite some time now I have been strongly urging lock-stock-and-barrel auctioning of the nation's white elephant public sector enterprises and canalisation of part of the sales proceeds into the construction of one modern, fully equipped primary school in each one of the country's 5010 administrative districts every year.

Another part of the sales proceeds should be utilised to retire public debt to reduce the Union government's monstrous interest burden which swallows up 52 per cent of its revenue.

Unfortunately, this practical, business-like solution not only failed to find any takers, but also failed to generate a debate within the firmament of the growing tribe of business-illiterate economic pundits who dominate the media and public discourse.

But to my pleasant surprise, after cautiously broaching the 'question of withdrawing the public sector from non-core and non-strategic areas' on the advice of a proposed Disinvestment Commission, the new government's CMP states that 'revenues generated from such disinvestment will be utilised in two vital areas -- health and education, particularly in the poorer and backward districts of the country.'

Admittedly, it's not much of a commitment, but it does represent a new line of thinking in government.

Another objective of the CMP which if pursued with determination offers the prospect of metamorphosing the Indian economy is the extension of the Narasimha Rao government's economic liberalisation and deregulation agenda to the agriculture sector which employs over 60 per cent of the nation's workforce and provides a livelihood to almost 70 per cent of the poulation.

The agriculture sector cries out for reforms. No strategy of economic reforms and regeneration in India can succeed without sustained and broad-based agricultural development, says the CMP with refreshing forthrightness.

The truth about the Indian development effort which has been concealed from the public for over four decades is that there has been a heavy and sustained bias against agriculture. Innumerable formal and informal restrictions have been imposed against the free movement of agricultural produce and raw materials within the country and beyond.

The consequence is the nation's farmers, ill-served by nationalised insurance, transport and produce procurement companies and organisations, have seldom if ever received remunerative prices for their produce. Moreover, the calcutated neglect of the downstream food processing industry (reserved for small scale units and taxed to the gills), has placed the Indian farmer perennially at the mercy of under-capitalised market-town middlemen who rip off both the producer and the consumer even as over one-third of the nation's annual horticultural output rots in transit to the market.

In effect, under the influence of left-leaning Soviet-style central planners, a softer version of ruthless Stalinism which siphoned off resources from agriculture to finance the growth of no-hope public sector enterprises has been practised in India for almost five decades.

'Controls on the movement of agricultural products and on the processing of agricultural products will be abolished,' promises the CMP. Well, here's hoping.

There are several other proposals of which I thought I was a lone-voice advocate in the wilderness which find mention in the CMP. Foreign investment for example. I have been arguing for the free flow of foreign direct investment into the Indian economy to create jobs, incomes and most important to enable Indian industry to upgrade its largely obsolescent technology and to learn organisational management and marketing by doing.

The United Front government's CMP isn't prepared to go all the way in attracting FDI into the economy. It proposes to canalise foreign investment into core and high-tech industries while ensuring that the small-scale sector is protected.

However, it has set a target of FDI of $ 10 billion per year which will make it difficult to be very picky and choosy.

However, despite these and several other eminently sensible policies -- restricting access to the public distribution system to the poor; reducing the fiscal deficit; giving priority to growth over redistribution; urgently speeding up the judicial system; and maximum autonomy to Kashmir -- being incorporated in the CMP, I find it difficult to be optimistic about the future of the CMP.

That's because I entertain grave doubts whether the United Front government's leadership has the capability to manage the processes required to realise the reforms promised by the CMP.

One of the characteristics of post-Independence India's upwardly mobile lower middle class is that it is deeply infected by the fatal diseases of nepotism and casteism. These compel people from this class who are pitchforked into positions of power to appoint grossly unqualified kith and kin to implement ambitious policies and programmes.

Conseequently, policies and enterprises of great pith and moment founder because of the poor quality of the human resources deployed to attain socially beneficial objectives. For one reason or another, proven professionals will need be called upon to manage and implement high-potential policies and programmes. And the United Front government -- a motley collection of small-town politicians driven by caste arithmetic and the desire to get government jobs and contracts for unqualified kith and kin -- is quintessentially a lower middle class administration.

That's why I fear that while the CMP prescription is based upon an accurate diagnosis of the ailing Indian economy, the doctors and nurses it has at its disposal for performing a delicate operation are like those in government hospitals -- callous, corrupt and incompentent. They are likely to end up compounding rather than curing the ills of the Indian economy.

Dilip Thakore is the founder-editor of Business India and Business World and former eidtor of Debonair.