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Need transparency in talks between govt and businesses: Arun Maira

May 07, 2012 14:22 IST

A slowdown in growth has raised several questions on the pace of economic reforms and government policies. As India entered the 12th Five-Year Plan (2012-17) last month, Planning Commission member Arun Maira tells Sanjeeb Mukherjee and Indivjal Dhasmana that a focus on governance implementation issues could help the country meet its target of average annual growth of nine per cent for the Pplan period. Excerpts:

India Inc believes the government is not able to expedite economic reforms. On the other hand, civil rights activists are protesting. In this context, how will economic activities gather momentum?

The Indian government has been - and is - doing a lot to support the corporate sector in India. Unfortunately, there is a large trust deficit at the moment. The citizens' trust in government institutions is low. Their faith in the corporate sector is also declining.

Many sections of society have a feeling that business has influenced government too much, and that corporations have benefited a lot from the relationship between government and business.

To rebuild trust, we require more transparency in the consultations between the government and businesses, with participation of civil society too in the process. Also, corporations and business associations must strengthen their direct communications and consultations with citizens - and earn the trust of society.

Is crony capitalism in India just a perception? Or is it actually holding up the growth process?

Well, if you read the stories about mining, where politicians collude with businesses to benefit a few, you have to believe that there is crony capitalism in some parts of the economy.

The perception of crony capitalism is holding up the growth process, because citizens will not support policies proposed by the government that they believe are designed to favour some corporations, or even the corporate sector generally, at the cost of the common people.

The government has been accused of slowing the pace of economic reforms and suffering from policy paralysis. How do you see it?

I think we have a two-reform agenda. In the first category, we can list the economic reforms. The other has reforms of institutions and administration, which will improve our ability to get things done in all sectors - infrastructure, health, education, urban development, etc.

At this time, the benefit of reforms, which will improve our ability to get things done in the country, will produce much more benefits. Also, it will have a greater effect on improving the economic efficiency and growth than, say, big-ticket economic reforms like FDI (foreign direct investment) in retail.

Further, reforms in institutions and implementation will have much wider political support, because they will clearly benefit everybody, whereas many big-ticket economic reforms are politically contentious.

We have budgetary constraints just now. If we were to improve the way we implement things, we will get more efficiency, more results. We will need less money for our social programmes, because we will use our money more efficiently.

By this, do you mean that we should first address issues related to implementation and governance - and then focus on economic reforms?

We require economic reforms. My point is that many of them are politically difficult to carry out just now. Whereas, when you come to governance matters, there are hardly any ideologies involved. For, everybody wants improvement.

To achieve the targeted average growth of 9 per cent a year in the 12th Plan, the economy has to grow by over 9.5 per cent in the last three years of the Plan since the Budget has assumed 7.6 per cent growth for this financial year and the Economic Survey has projected 8.6 per cent growth for 2013-14. Do you think it is feasible to achieve the target?

Financial resources are required for growth; but how much? It depends on the efficiency with which we use resources. We must improve that, so as to get higher growth with less resources.

Also, growth will depend on the application of resources to sectors. The strategy for applying the resources and the efficiency of their use will change the growth rates, even with less resources. This is what we have to do in India.

Can this (changing the model of growth) happen in the current plan, because it seems to be a long-term proposition?

Look, if I focus on implementation, the chances of getting 9.5 per cent growth rate (average per annum in last three years of the plan) are much higher than if I don't. It (high growth) is more likely to happen in this approach than by other methods. If you want higher growth, then do this.

Don't keep debating the problems and making predictions. Get on with the solutions, and get on with them - now! The sooner we do this, the more we focus on the implementation. And faster we will grow.

Sanjeeb Mukherjee and Indivjal Dhasmana
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