India’s new government should take a problem-solving approach

What will matter is delivery on ground. The guiding principles will have to be decentralization of authority to local bodies, even as efforts are stepped up for job generation and improved agricultural productivity. Our challenges require the Centre to take a problem-solving approach in multiple fields.

Devolve funds to local bodies: The fund flow needs to be continuous, so that local priorities can be chalked out with a mandate to ensure that each ward in urban and rural areas has good access roads, school buildings and well maintained public places like playgrounds, gardens and sports facilities. Access to quality schooling and healthcare is a must.

The corrective directions of the 15th finance commission (FC) are relevant. We must go back to the entire funds being untied, with a list of suggestive activities given and social audits used to check the quality of delivery. This, along with MGNREGA, will strengthen public-works projects that create quality infrastructure and offer employment in local geographies awaiting a development boost.

The United Progressive Alliance had nearly doubled the abovementioned fund flow from the 13th to 14th FC. Under the National Democratic Alliance, flows recommended by the 15th FC need to be streamlined. 

It had asked for a transfer of 41% of the divisible tax pool from the Centre to states and this must unfailingly be done, while the 16th FC that recently began work must aim to capture the country’s real needs. This will allow local level infrastructure whose quality can be monitored by social audit arrangements.

Also read: Continuity in reforms, improving ease of living top Nirmala Sitharaman’s policy agenda

Union territory funds for local bodies can be transferred from the home ministry back to the panchayati raj ministry.

Enhance social security: Some of it has already been achieved with direct benefit transfers (DBTs). Efforts need to focus on women’s needs, along with their health, hygiene care and nutrition. Below-poverty-line families must be relieved of malnutrition.

Reduce inflation: The first step should be to cut the cost of fuel considerably, a reduction that can have a cascading effect on price levels across the economy. It will offer immediate relief.

Generate employment: Employable youth should be attached for a year to MSMEs for skilling. Small businesses will get the support of a paid hand, while young individuals get a chance to pick up skills that could form livelihoods. Policy support for the MSME sector must be enhanced, given its potential to create jobs. With many posts in the government lying vacant, it must run recruitment drives as well.

Support farmers: Agriculturalists can be assured Minimum Support Prices on all crops and clarity on India’s export policy for farm produce. The symbiotic relationship of farmers, agriculture universities and Krishi Vigyan Kendras needs to be strengthened with the aim of doubling farm productivity through better targeted cropping patterns. Ways must be found to overcome the problem of smaller farm sizes in India to catch up with yields in China. Ths ball should be set rolling from the very next crop cycle.

Also read: Towards a Viksit Bharat: The farm sector must play a bigger role in our economy

Reform the statistical system: Statistics are very important for better governance, planning and welfare targeting. Data deficiencies over the last decade have been a major handicap. Hence, a census must be carried out and also another Socio Economic Caste Census. 

Till this process is complete, India must map households under the poverty line that are vulnerable. The Samagra model’s common household database and MGNREGA data can come in handy. All welfare schemes should work on the same database, be it skilling, DBTs to women, scholarships, housing, toilet construction, housing, income support, etc. Better targeting is key.

Relook other policies: India’s industrialization and IT policies need a relook. India is becoming more of a follower than a leader in important sectors because of uneven policies and hindrances, even somersaults in a few areas. The state must play the role of a facilitator. Irritants need to be removed in textile, IT, mining and trade policies. They have to be credible, consistent and coordinated.

Focus on education and health: What is important in education at the school level is to ensure local schools are handheld for teacher recruitment and other key resources. For higher education, academic staff needs to be of high calibre so as to create a healthy environment for learning, questioning and research.

Health is a sector that needs attention in the context of service affordability. The delivery of outcomes cannot be left to market forces in a country where healthcare services are costly and only a small fraction of people have high income.

Also read: Develop human resources for a Viksit Bharat by 2047

Adopting the approach suggested above will address significant problems that affect the ease of living in India as well as economic outcomes. It will also be consistent with the election mandate of 2024.

The beneficial impact of the measures outlined will help increase aggregate demand across the economy, setting into motion a virtuous cycle that will help households graduate from subsistence—over 810 million Indians are covered by India’s free-food scheme right now—to sustainable earnings of their own. This is what our elected representatives must work for.

The author is a development economist and former secretary, Government of India.