Governance reforms are key to inclusive growth

The government, industry and civil society need to collaborate to improve the education system, invest in infrastructure and ensure an equitable distribution of opportunities.

It is just a coincidence that the India Economic Summit’s theme — “Linking Leadership with Livelihood” — echoes the objective of the 12th five-year plan. The Summit, jointly organised by the World Economic Forum (WEF) and the Confederation of Indian Industry (CII), is being held at a time when the Planning Commission has released the draft 12th five-year plan and sought suggestions and objections.

The draft plan reiterates the government’s commitment to inclusive growth. It makes it amply clear that inclusive growth should be reflected in better opportunities for both wage employment and livelihood and in improved provision of basic amenities such as water, electricity, roads, sanitation and housing. All sections of society — the government, farmers, businesses, labour and concerned citizens — will have to adopt newer, more effective ways of pursuing their activities, so that Indians can collectively achieve national goals, the draft plan document says.

On the other hand, the Forum notes that leaders from government, industry and civil society can collaborate to improve the education system, invest in much-needed infrastructure, increase agricultural productivity and ensure an equitable distribution of opportunities through better governance, improved delivery systems, greater transparency and stronger implementation. CII’s former president, Hari Bhartia, believes that “India can leverage its large workforce in the global agenda only if the private sector emerges in the interlinked issues of education and skills development.”

He adds, “One per cent expansion in GDP leads to an additional 0.8-1 million new jobs. Further, livelihood opportunities can be fostered by nurturing entrepreneurship and innovation.”

The Summit’s theme in the present global financial crisis is quite apt, especially when, after several years of sustained near-9 per cent growth, India’s GDP growth for the coming fiscal year is forecast to fall below 8 per cent on account of rising inflation and ongoing depressed markets worldwide. Therefore, critical governance reforms and innovative public-private partnerships would have to be pushed forward to deliver rapid and inclusive growth and an enabling environment for upgrading infrastructure in India.

Sushant Palakurthi Rao, senior director and head of Asia at WEF, says, “In this context of global and national challenges, there could not be a more appropriate time to host this year’s summit in the city of Mumbai, the commercial capital of India and capital of the state of Maharashtra. Under the theme Linking Leadership with Livelihood, the programme will generate high-level discussions between stakeholders aimed at achieving new insights under four thematic pillars: From Momentum to Models; Removing Barriers, Managing Risks; Ensuring Sustainable and Equitable Growth; and Building Central and State Competitiveness.”

Maharashtra Chief Minister Prithviraj Chavan admits that inclusive and equitable growth is a challenge but that governments are trying their best to achieve it. “Governments are making all efforts for deeper financial inclusion. There is inflation pressure and all attempts are being made to see that food inflation does not go through the roof.” Further, he believes that collaboration between governments, industry and civil society is required to give a boost to India’s evolving development story.

Chanda Kochhar, managing director and chief executive officer of ICICI Bank, India, concludes: “We tend to think of rural development as something for the government. But the private sector has an equal role to play.”