The Cracks in Economy are Finally Showing
There is nothing stopping the daily dosage of various news and views about the Indian Economy looking down the barrel. But is it really the new developments in international markets that’s showing its decisive effects on the GDP as well as the currency (most talked about right now) or is it the fate we were destined to meet since the opening up reforms of the 1991?
A policy by itself cannot solve problems: it has to be implemented and an implementation strategy requires to be pedantically planned which demands efficiency to implement a reform and what is more, institutionalize it. Policy planning and implementing institutions are the prime pillars of sustainable growth. India adopted the strategy of opening up its economy after the 1991 reforms but the continuous disregard shown over attending the institutions of administration, judiciary and policy framework are now serving as a proper outlay of an economy crackdown whose preview is what we are watching now. Proper implementations of barring introduced in an open economy for safeguarding the securities of the common is one of the basic necessities. The impressive growth of China is one such example of a country following its own “industrial policy” and building its institutional strengths in the midst of the sweep of globalization since the 1990s. Thus even though the Chinese economy is slowing down, the recovery is steadfast.
The problem really hasn’t been with the identifications of the shortcomings. Whether it be the Planning Commission or the Administrative Reforms Commission, they have recommended various problems. Contention and overlapping of responsibilities between various ministries, citizen’s groups and stakeholders eventually leads to stacking up of jobs left to be done and eventually new deadlines which is not a very rare outlook over here. These facts are widely accepted by the Union Cabinet, but then again we touch back to the inception of the vicious circle meeting the same fate of having no appropriate implementation for the suggested encroachments.
The improvements and changes must be brought in the system bringing better collaborations and coordination between the state and the union controls, and shall be done before time. On broader basis, the Union government has to restrain itself from undertaking more and more sectors under itself out of the concurrent list, even resisting some of the union list operational spheres. Accountability and transparency must be vigorously enforced, and reference here must be made of the need for citizens’ charters and the freedom of information law. Corruption, which is presently India’s greatest shame, must be brought under firm control.
The Planning Commission has conceived the India Backbone Implementation Network as a solution for India. Now we must also focus on implementing this. The kind of underemployment situation we face in the Small and Medium Enterprise sector where more than 40 % of the national workforce contribute less than 17% to the GDP of the country . Also on the other hand, the contribution by the manufacturing sector needs to be enhanced by many folds (less than 20% in our case is just not acceptable) as better manufacturing indices would only lay the pavement to the tackle the current economic gloom which is reducing current account deficit and the fiscal deficit, as well as bracing up with what might turn out to be a huge unemployment catastrophe in the future.