Connectivity and skills should be the twin aims of the 12th Five-year plan

The Economic Times

The Planning Commission wants to rework its draft of the 12th Five-Year Plan (2012-17). The 11th Plan, which set 27 goals aiming at inclusive growth, failed to achieve most of them. The 12th Plan is expected to aim for "faster, sustainable and more inclusive growth".

But all Plans have had similar names. So, this looks like a rehash of all the old goals rather than something new. Indeed, cynics could call the 12th Plan the 12th Approach to the Same Plan. Arun Maira, member of the Planning Commission, wants the organisation to drive policy rather than just tinker with allocations.

Yet, the political economy of India will not allow the Planning Commission to do much more than reshuffle allocations. Economic and social policy is certainly not driven by research or even common sense, but by short-term electoral compulsions and constant surrenders to the realities of coalition politics and the lack of majority in the Rajya Sabha.

Thus, inclusive growth has come to mean ever more subsidies plus reservations based on caste and religion. This provides palliatives and charity, and keeps disadvantaged people as objects of pity.

True inclusive growth should empower the disadvantaged to break old boundaries and become objects of envy rather than objects of pity. An estimated 200 million Indians have flourished beyond all expectation by riding the globalisation bandwagon, which has been made possible by two inputs: global connectivity and skills.

Much of rural India lacks connectivity, even in the basic form of pukka roads. Inclusive growth requires every village to have a pukka road, telecom, electricity, a functioning school and health centre and access to vocational training. These are the elements that will create both connectivity and skills. Ideally, labour laws must also be changed to encourage labour-intensive manufacturing.

Once the state provides these, the rest of India can take off like the leading 200 million. There is, of course, an important place for welfare schemes: they can provide vital support to those in deep distress. Welfare is a palliative, not a cure for poverty. The cure can only come from connectivity and skills.