With formal approval by the National Development Council, the process of designing the Eleventh Five-Year Plan, which runs from 2007 to 2012, is now complete. By government standards, the finalisation of the Plan before the end of its first year is not a bad achievement. Two issues that have been extensively debated in the build-up to the final document are particularly important. The first is the importance given to the role of the private sector in what historically has been the domain predominantly of the public sector. The strongest manifestation of this is in the infrastructure sector, but there are clear indications to this effect in education as well. The second relates to the merit of increasing government expenditure on services for which the public delivery system is largely inefficient, even dysfunctional. Even if the resources were available, their impact on social indicators would be significantly diluted by the weaknesses in the delivery mechanism. | |
| The expanded role of the private sector is visualised mainly through public-private partnerships (PPPs), which, at least in theory, combine public resources and broader social objectives with private sector efficiency. PPPs have been the buzzword in recent discussions on solutions to the country's infrastructure problems and, defined broadly enough, there are an increasing number of them emerging in various sectors. But, to move from scattered experience, most of which is in the category of "too early to tell" as far as success goes, to basing an entire strategy on the concept may prove to be a bit of a stretch. To be effective, a plan needs to combine ambitious targets with a realistic assessment of the capabilities and resources that will actually be involved in executing it. To see PPPs as a panacea may be understandable, given the prospects of existing public sector institutions and mechanisms breaking through the constraints. However, the more the Plan is based on evolving and largely untested instruments, the greater the likelihood of it proving a disappointment when the time comes to look at the results. |
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| On the second issue, it is reasonable to argue that the government simply cannot wait until the delivery systems are fixed before committing more resources to them. As challenging as it may be, the wheels have to be changed while the vehicle is moving. For a given capability, more money will obviously provide better results. But, that having been said, the current state of the system is hardly something that a long-term plan can accept as given. The critical changes that the system needs in order to make expenditure more productive should be articulated up front and the allocation of funds should be contingent on progress being made on these. Unfortunately, the whole issue of reforming the delivery system has been pushed to the sidelines, giving the Plan an additional element of unreality. |
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| One of the issues raised by chief ministers during the Council meeting was that there should be greater devolution of resources and autonomy for states to manage programmes. While this may render programmes vulnerable to weaker capabilities in many states, it has the long-term potential of introducing greater sensitivity to local conditions and accountability. It was heartening that both Dr Singh and Mr Ahluwalia endorsed this view. But, as on all the other issues, there is many a slip betwixt planning and doing. |
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