Manmohan Singh calls for inclusive growth, lauds Chidambaram

Prime Minister Dr. Manmohan Singh on Wednesday said our strategy must not only aim at faster growth but must also ensure that the growth processes are more inclusive.

"There are many policies that can help achieve this objective. This also calls for special programmes to meet the needs of excluded sections, especially the Scheduled Castes and Scheduled Tribes, the OBCs and the Minorities. We have many such programmes. These need to be expanded and made more effective,” said Singh in his address at the release of Book: An Agenda for India’s Growth: Essays in Honour of P Chidambaram

Singh said an important achievement of the past five years is that growth has been much more inclusive.

"Agricultural growth has accelerated from 2.4 percent in the Tenth Plan to 3.6 percent in the Eleventh Plan. Poverty is falling faster. Per capita consumption in real terms in rural areas has increased four times faster from 2004-05 than it did earlier. The erstwhile BIMARU states are doing much better,” said Singh.

"All this suggests that India has all ingredients required to achieve rapid and inclusive growth,” he added.

Singh said there is no reason to be disheartened over the decline in growth rate.

"Over the past decade, when the economy had absorbed the full benefit of the reforms that began in 1991, our economy has grown at close to 7.5 per cent. Our growth rate has slowed down to 5 percent in 2012-13. But this should not make us feel disheartened and imagine that we have slipped back to our old growth rate,” said Singh.

“The last couple of years have been challenging not only for us but for the whole world. We must view this as a short term deceleration. Our Government is determined to once again accelerate the pace of change. Once again, we will prove the naysayers and Cassandras of doom wrong,” he added.

Singh said the policy agenda for bringing back India’s growth momentum has been outlined in detail in the Twelfth Plan.

“Most of the important points are also fairly comprehensively described in the different articles in the volume. We have to deal with macro economic imbalances that have developed. We also have major challenges in key sectors such as energy, water, and land,” he added.

The Prime Minister said infrastructure is today a key constraint with many large projects held up.

“The Cabinet Committee on Investment which we have set up gives us a mechanism to overcome bureaucratic delays. Urbanisation is a new challenge which deserves greater attention,” he added.

The Prime Minister said he is enthused by the good work that his cabinet colleagues are doing to step up the rate of investment, to generate new employment, to re-energise the forces of competition and, above all, to make the growth process socially inclusive.

“I find many of my young colleagues handling key infrastructure ministries are working hard and with dedication. They seek inspiration from their senior colleagues like Mr Chidambaram. He has shown that hard work can deliver results. I have no doubt that we will deliver results and once again place India on the path of high and socially inclusive growth,” said Singh.

“The people of India expect this. The world expects and awaits this. Let me assure you, we will not disappoint,” he added.

Singh said that as a Prime Minister he feels greatly strengthened by the fact that he has a Finance Minister who fully understands and is capable of taking risks and asserting political leadership.

“He is not only intellectually brilliant and dedicated to end results: he is also politically savvy. It is these attributes that have made him a leader with an enviable reputation both nationally and internationally,” he added.

Singh further said the book, edited by Sameer Kochhar of the Skoch Foundation, contains a number of excellent essays by distinguished experts.

“I noticed that all the authors date their association with Chidambaram from 1991, when he was our Minister of Commerce, and a key ‘reformer’, initiating trade policy reform. I have known him as a ‘reformer’ from even earlier,” Singh said

“In 1986, Prime Minister Rajiv Gandhi appointed him as the minister of state for personnel, and later for internal security. In both these capacities, he pioneered key reforms in our governance processes. Under Rajivji’s guidance he launched a mid-career programme for civil servants, sending officers to IIMs and other teaching and research institutions. Many civil servants told me they appreciated the opportunity to return briefly to academic pursuits, and benefitted greatly from the experience,” he added.

Singh recalled that he and Chidambaram were Cabinet colleagues in the Narasimha Rao Government.

“We were Cabinet colleagues in Shri Narasimha Raoji’s government when I was Finance Minister and the reforms of the 1990s were initiated. I recall that Chidambaramji was one of the strongest advocates of economic reforms whenever the programme came under attack, both in the Union Cabinet, and also in the wider political arena,” he said.

The Prime Minister said academic economists who have written about economic reforms in India tend to see the process as an acceptance of technical recommendations which have long been advocated by economists.

“However, reforms don’t happen just because there is a professional consensus. They happen when the political leadership of the time decides to back these initiatives,” he added.

Singh said ‘in a democracy, reform – be it of economic policy or of institutions – is essentially a political process’.

“We have to build a sufficiently wide political consensus in favour of the policies we wish to adopt. Having a parliamentary majority alone is not enough, because there are differences within parties. For reforms to be credible it is necessary that a wide cross section of society should understand the need for and accept, the policy changes that a government wishes to make,” he added.

Asserting that the 1991 reforms did not happen suddenly, Singh said: “They were preceded by a push in that direction in the second half of the 1980s, by the Congress government under Shri Rajiv Gandhi. The Congress Manifesto in the 1990 election also gave a strong reform message. When the Congress government was formed in 1991, under Prime Minister Shri Narasimha Raoji, his leadership and support for reforms was crucial.

“After 1996, we had a non-Congress government with Left Front support, under the leadership of Shri Deve Gowda and later Shri I K Gujral. The policies we had implemented in 1991-96 were not only not reversed, they were in many respects even taken forward. This must have been helped by the fact that Chidambaramji as Union Finance Minister in the United Front Government, contributed to a continuity of policy. But I also like to think that it reflects the fact that beneath the loud disagreement and debate that is characteristic of democracies, there is also a growing consensus,” he added.