India Needs A New Bombay Plan
This month India completes fifty years of independence. While much has been achieved in the last fifty years, much remains to be achieved. In the field of industry, we have achieved much in the recent past. However, it is in the field of providing all our people a decent standard of living that our failures are stark. In the last seven years, there has been a collosal neglect of agriculture, poverty, unemployment and other social problems. The population below the poverty line has actually increased for the first time in independent India's history.
It is not possible to maintain a high rate of economic growth without substantial investment in infrastructure, education and health for working people. It is not possible to maintain a high rate of growth unless there is steady growth in the agricultural sector which sustains a majority of our people. These truths that were learnt at the end of the third plan period have been unlearnt in the subsequent 30 years. It is no surprise that we are on the brink of a substantial industrial slowdown.
A 'hire and fire' labour policy cannot be the solution to the problems we face in the labour market. Instead, we must develop a social security net to enable people to move from job to job seamlessly. A social security net will also help agricultural workers look for higher paying industrial jobs.
The infrastructure in our large cities is crumbling. While the rich and famous are driving fashionable, imported cars, the poor are having to make do with insufficient capacity in public transportation. Our cities today are too crowded. There are close to 100 million people living in slums. There is a need to take the pressure off our metropolitan cities by building new intermediate sized planned cities. In the metropolitan cities themselves, there is a need for a public housing programme to provide shelter to the millions who come to the cities in search of jobs. Within the next fifteen years, more than half of India will live in large cities. It is too important to leave this to anarchic market forces.
Millions of people lack access to water and electricity and where there is access there are frequent power cuts, water supply is intermittent and often not particularly clean. Some people would have us believe that running these for profit would eliminate our problems. But it is clear that extracting profits from our already weak utilities industry would only exacerbate our problems. We would face higher charges and there would be nothing to gurantee that the money they raise from us goes back into the industry. Those who are supposed to manage these utilities, state and municipal governments lack the resources to make long term investments. Having hived off the responsibility, the central government is happy to sit back and pass the buck. This newspaper believes there is a strong case for nationalising our utilities industry so that the central government which has the ability to raise funds can make the necessary investments. Our success in expanding telephone usage is a clear example of the successes that the public sector can achieve.
What the country needs today is a new Bombay Plan. While the first Bombay Plan emphasised heavy industry, today's Bombay Plan must focus firmly on infrastructure, agriculture, urban renewal, health and education. The questions of affordability are ill posed. The rich in India pay much less tax than the rich in the developed countries when they should be paying more. We can raise resources by raising tax on high incomes, luxury goods, dividends and capital gains. We can also make substantial savings by implementating a rationalisation plan for public sector units by merging banks and corporations that perform similar tasks.
Implementing these measures requires a renewed commitment to long term economic planning. It requires enormous political will to resist the World Bank and IMF diktats and pursue a policy that is in the best interests of working people. Sadly, with today's politicians that may be too much to hope for.
