HVK Archives: And they call it reform
And they call it reform - The Indian Express
Jagmohan
()
21 April 1997
Title : And they call it reform
Author : Jagmohan
Publication : The Indian Express
Date : April 21, 1997
A sound economy requires four strong foundational pillars. These
are: efficient infrastructure which attracts investment and
encourages initiative; an efficient and productive administrative
and managerial set-up; a healthy environment which enhances the
quality of life and minimises social strains; a political
leadership, committed to the country's long-term interests, which
inspires confidence in its stability.
In the modern Indian economy, the strength of these pillars has
always been suspect. But of late they have started tottering
dangerously, and the political engineers of the economy are content
to paint and plaster the edifice rather than look into its
structural deficiencies. And they are keeping the nation in the
dark.
Virtual famine conditions exist in infrastructure. Power, energy,
roads, ports, etc, are experiencing acute and increasing shortages.
Take power. At the beginning of the Eighth Five-Year Plan
(1992-97) India faced a peak power shortage of 19 per cent and
energy shortage of 8 per cent. The figures at the end of the Plan
are estimated at 29 and 15 per cent. The combined losses of the
state electricity boards have risen from Rs 41 billion in 1991-92
to Rs 63 billion in 1994-95. In the ten years from 1996-97 to
2006-2007, an additional capacity of about 1.1 lakh MW is needed at
an investment of about Rs 6,244 billion.
How it will be generated, how the funds will be raised and how, in
the absence of such capacity and funds, 7 per cent growth will be
attained have been glossed over both in the Budget and the Approach
Paper to the Ninth Plan. All they do is express "concern over the
sluggish performance by the power sector". They do not tell the
nation that this "sluggish performance" means achievement of only
about 16,000 MW against the requirement of 85,000 MW and the modest
Eighth Plan target of 31,000 MW.
The road sector is no different. Between 1951 and 1995, national
highways have increased only by 55 per cent and state highways by
118 per cent. Of the total 1.7 lakh km of national and state
highways, only 2 per cent is four-lane, 34 per cent two-lane and 64
per cent single-lane. The network is so poor that a commercial
vehicle does an average of 225 km per day. In the developed
countries, the figure is more than double this.
By 2001, freight traffic will increase to 800 BTK and passenger
traffic to 3000 BPK. The resources needed to meet this demand: Rs
320 billion. Already, there are about 31 million vehicles on the
roads. By 2001, their number is likely to increase to 54 million.
What is the Government doing? It merely says "The National Highway
Authority is now geared to implement the new policy on roads". It
provides Rs 5 billion for the Authority, taking care not to mention
that even for maintaining the existing road network about Rs 90
billion is required over the next five years.
The Government seems to believe that the best way of facing the
'sea of troubles' is to leave these sectors at the mercy of the
turbulent waves, hoping that the economy would not collapse in the
near future, and that later on 'something would rum up' to save the
situation.
The Infrastructure Development Finance Company, whose setting up
was announced by the Finance Minister in last year's Budget speech,
was registered only in January this year, and it has done nothing
tangible so far. For ports, the tariff regulatory body has yet to
see the light of day. So much for Government performance in the
"period of reform".
The picture is equally depressing on overall efficiency and
productivity. The latest Economic Survey shows that the time and
cost overruns of 189 central infrastructure projects have added a
burden of Rs 31,000 crore. If non-infrastructural projects are
included, the Ministry of Programme Implementation annual report
reveals, the burden for 1995-96 rises to about Rs 45,000 crore.
It is tragic and inexcusable that government, which never tires of
beating its drum about the so-called economic reforms, should not
be able to set even its administrative machinery in order. The
truckers' and the Air Traffic Controllers' strikes are pointers to
gross inefficiency and a total lack of imagination and preparedness
in handling key issues.
Both Manmohan Singh and P. Chidambaram have been ignoring the
quality of growth, which has far-reaching implications. If growth
gives rise to heavy social and environmental costs and constricts
future options, it is worse than no growth. It is
counter-productive to have "growth" which produces polluted
drinking water, poisonous air and noisy cities; and which brings in
lakhs of cars but makes little provision for maintenance or
expansion of roads. Due to environmental degradation, "about 40,000
premature deaths, 1.7 crore respiratory hospital admissions and 120
crore restricted activity days are occurring annually".
While seeking a vote of confidence on April 11, the Prime Minister
took special credit for providing "unprecedented" funds (Rs 330
crore) for slum-dwellers. He might not have done so had he known
that this would provide Rs 3-4 per slum-dweller. If he had found
time to see the data produced by his own agencies, he would see
that at least Rs 90,000 crore is needed in the next five years to
ward off slum conditions. If he took the trouble to travel to Delhi
by the morning train, the spectacle of the vast open defecation
ground along the railway line and the hundreds of slums would tell
him which direction urban India is moving in.
Is it wrong to assume that present-day architects and engineers of
the Indian economic edifice are exposing the entire structure to
collapse?
(The writer is an MP and a former Government of Jammu and Kashmir)
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