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Walk the line, with care

india Updated: May 21, 2011 19:29 IST

Hindustan Times
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The Congress this week saw little need to veer off an economic agenda that has delivered significant political gains to the party. The economic resolution adopted by the All India Congress Committee at its plenary in Delhi admits some course correction may be needed in its "inclusive growth" agenda, but these would be in the nature of slight over- or under-steer and not a radical departure from its manifestos for the previous two elections. Inflation is seen as an unfortunate side effect in an economy firing on all cylinders through much of the deepest global recession in living memory. Alongside an helpful explanation to party workers of what is causing prices to spiral — demands-supply gaps, income supports for farm output, and the international commodity cycle — the resolution exhorts the government to tackle inflation with "candour and courage". In controlled doses, inflation is a small price India pays for its scorching growth rate, which the party is committed to accelerating over the next decade.

Key to this strategy is a renewed focus on manufacturing, which has lost out to services as the country's principal driver of growth. The Congress sees foreign investment leading the resurgence in Indian industry on the lines of what China has achieved. However, the economy's capacity to absorb investments in plant and machinery on a scale similar to China's is critically dependent on its ability to ramp up physical infrastructure in a reasonable timeframe. Given the State's delivery record on this count, private industry will have to play a far bigger role in building ports, highways and power plants than has been attempted so far. The resolution calls for a changed mindset for the government from being provider to being facilitator in this process, a call that must be heeded. The Congress is aware of the political price to be paid if it cannot be an honest broker to the dispossessed in this process.

Thus the stress on inclusiveness, be it land acquisition from farmers or the mineral rights of tribals. The growing list of entitlements in health, education and livelihood pack a powerful punch inside the ballot box, so the Congress scales up its ambitions on welfare through income redistribution. A return to large government investments in agriculture to improve productivity is long overdue and sits firmly between 'inclusive' and 'growth' in the party's tagline. At some point in the next 10 years, India will be well on its industrial revolution, and it will require a social framework that can support it. The Congress may not be imagining a brave new world. But it does see some of what is coming in the "decade of social and economic justice".