The most important achievement of the United Progressive Alliance (UPA) government has been its focus on developing an enabling system. Markets can work towards generating income for all only if everyone can enter the market and carry out transactions. If people are poor, they cannot afford their basic needs even when they are available in the market. If people lack training, they cannot enter the skilled labour market even when companies are looking for skilled labour. While many have been talking about it for a long time, this government is the first that actively thought about addressing these issues.
Take, for example, the activities planned under the government’s flagship programme Bharat Nirman.
If villages are connected to each other and with cities, then small village producers have immediate access to markets for inputs they require and output markets they can sell in. The National Rural Health Mission and the National Health Insurance Plan are two other such programmes. The basic idea of development is to empower people to use their resourcefulness to solve their own problems.
If they are trained, educated and in good health, they can do so; hence, the importance of these sectors in the development process.
Development is not simply tax sops to the corporate sector or, investing in public sector enterprises; it is largely concerned with basic training, basic health and basic infrastructure to all. Governments can play a large role in these sectors since many of them require collective action. But, whenever we depend on the government, we have to ensure that they really deliver what is expected of them. The Right to Information (RTI) Act passed by UPA is a huge step in making the government accountable. Democracy works not only through elections; it also requires institutions that force governments to respond to people’s demands in a continual fashion.
The National Rural Employment Guarantee Scheme (NREGS) is another excellent idea and is quite unique. It takes a "rights" approach in the sense that all rural citizens can access this scheme if they want. Most people who migrate from the villages in the "lean" seasons, are landless labourers or members from small and marginal farming households. While they may be highly skilled in agriculture, they are quite unskilled in most things outside the rural economy. Also, they look for temporary jobs because they will go back to the villages in "peak" seasons. So they get the lowest paying jobs in the urban areas. Often they bring their spouses to supplement the meagre urban incomes. This has a disruptive impact on their family lives. NREGS addresses these problems directly.
NREGS is also a good example of what went wrong with UPA. Indeed, the way all the bright policy ideas have been implemented leaves a lot to be desired. This is one area where you can criticize the government. It is not that the government is unaware of the implementation problem, and I am not sure it has done enough to address it. The problem is a systemic one; our government delivery mechanisms were never designed for implementing such programmes.
The government started off in a positive way, talking of administrative reforms; unfortunately, it did nothing substantial to change the system. We need an overhaul of the system.
One important way to start this more important reform process is to change the mind-set of politicians, policymakers, you and I.
We should start by acknowledging that the most important ministries are those of education, health and all those covering infrastructure. Second, the best administrators should be put in charge in these ministries. Third, they should be evaluated not by how much money has been spent, but, say, by how many kilometres of roads have been constructed.
In the final analysis, should the government have done more in the past five years? The answer is yes. However, whereas in infrastructure there was a collective failure within the government in spite of its best intentions, in sectors such as financial markets, the responsibility of delayed reforms will have to be attributed to the Left parties. In any efficient economy, you do not want intermediation costs to be too high and in India, such costs are still too high. Part of the solution lies in changing technologies and part of it lies in developing proper regulatory environments. One cannot depend on retiring bureaucrats, or experts flying in from global financial institutions, to effect these changes.
This is where the outgoing government has failed to see the light of day.
The author is research director at IDF, an independent research organization.