This should have a sobering effect on our day-to-day trumpeting of India's growth record of the first decade. Our failures in social development raises serious questions about the methodology and effectiveness of our planning mechanism, which has functioned as another huge bureaucratic apparatus not accountable for results. It also reflects on our political system as a whole which cannot deliver the designated services to the people.

It is pathetic we are having to revisit the old ills and set new goals with no greater credibility on fulfilment than what has marked our performance hitherto. The Planning Commission needs to reinvent itself for a role in human development for a country of more than one billion, develop norms of accountability for performance at all levels, and function as a watchdog for the fulfilment of goals embodied in projects and programmes for which thousands of crores are allocated out of the budget annually.

Higher growth is a must but not adequate to secure equitable distribution and transform India into a more “just society“. India still clings to the 'trickle down' theory discarded long ago even by the World Bank. Growth with social justice had long been India's development objective. Yet, the widening of disparities in our model has virtually created two Indias, one of the affluent, who can tide over the present double digit food inflation - an issue the Government has treated with disdain over the long months it has been ravaging millions - and can still fuel consumption-led growth and get richer. The other is the vast under-belly of the nation inured to a sense of deprivation.

“Inclusive development” has become the slogan of recent years. It is not something unique that India has embraced. Inclusive and sustainable models of development and growth are the universal refrain. A useful beginning has no doubt been made, over the last five years, with some of the flagship programmes like rural employment guarantee and national missions on rural health and urban development. These are still to get into stride in a way that these impact on the daily lives of the poor and under-served citizenry while stemming the massive leakage of public funds.

It is true over the last five years the GDP growth has been remarkably high, historically, but if we look around, it will be realised that it is not a peculiar Indian phenomenon. It is part of global expansionary phase in which many developing nations registered higher growth in relation to their own previous record. This is by no means to under-rate the spectacular advances in IT and related services or the global competitiveness that Indian manufacturing has been acquiring. Now, the economy is set to recover from a slowdown forced by the global crisis of 2008-09. The focus again is on shifting to higher growth, which should certainly be the medium-term objective, taking into account domestic fiscal limitations and the slow recovery that is inevitable in recession-hit developed world.

But it is surprising that the double digit food inflation hardly gets noticed at the series of high-level policy utterances whereas more liberalisation and reforms readily come to the fore while addressing apex chambers and at the economic summits. Millions upon millions are having to pay the highest ever prices for foodgrains, pulses, edible oils, sugar, vegetables, etc. and this has gone on for more than twelve months with no let-up. The drought later on came handy for Government as an excuse. All the time, Government simply kept talking of its comfortable stocks but there was no effective intervention to moderate prices. The Agriculture Minister has blamed the states.

The need to combat food inflation, with supply management and imports of foodgrains and pulses has been emphasised more than once by the Chairman of the Economic Advisory Council Dr. C. Rangarajan while offloading of grain stocks as an immediate measure has been urged by apex business organisations like CII, in the face of official apathy. This is best typified by the assumption prices would come down on their own “in the coming months”, after rabi crop, while the Deputy Chairman of Planning Commission Montek Ahluwalia has kept under-playing prices as a significant economic variable in the growth drive and has now set February as the deadline for fall in prices. The 'Right to Food” the Congress promised in its election manifesto of May 2009 will remain on paper for some time.

As the Finance Minister gets busy with his budget-making involving questions like whether and, if so how much, the stimulus (in the form of duty cuts, etc) should be withdrawn, implementation of the 13th Finance Commission's scheme of devolution of central revenues to states from April 1, 2010, and a roadmap for fiscal consolidation, inflation would remain secondary. The Centre evidently leaves it to the Reserve Bank of India which could, in the first instance, reduce liquidity with a hike in CRR and then keep options open for readjusting policy rates at a later stage. Essentially, the current inflationary pressures are due to failure in supply management of Government though the risk of generalised inflation may be near at hand.

India faces a formidable array of challenges at present, security, internal and external, as well as developmental. Extremism and violence are no longer confined to the North-East but has spread to several states where Maoist forces have entrenched themselves, apart from the cross-border terrorism in J and K. In the midst of all the economic, social, political and security problems, prudence would demand a more careful well-thought out approach on the part of Government to challenges like regionalism, chauvinism or communalism.

Many of the old and new promises by this Government like greater autonomy for Kashmir, a fair land acquisition policy, generating a second green revolution, accelerating the pace of poverty reduction, securing a broad political consensus on a host of issues including women's representation in Parliament and ensuring rights for minorities form part of unfinished business. Energy and climate change pose another set of challenges.

It is in this grim setting that the Home Minister Mr P. Chidambaram made a midnight announcement on Telangana on December 9 based on a decision within the Congress High Command, apparently with the green signal from Ms. Sonia Gandhi. From that moment, Andhra Pradesh has plunged into chaos and disorder and widespread violence which the Rosaiah Government has found it extremely difficult to control. The economy of this front-line state is in disarray and leading businesses, especially IT majors, are planning possible shifts to more conducive centres.

In a series of subsequent clarifications, Mr. Chidambaram has sought to defend himself for the original statement and for his “altered situation” statement of Dec.,23 to contend there was no ”flip-flop”. Whatever the laboured explanations, the articulate Home Minister cannot deny that no careful study had been made of the consequences of the original move, which was done without first establishing a consensus at both the state and national levels, on a vital political matter such as bifurcation of a key peninsular state which had a major role in the return to power of UPA itself. It is not known whether subsequently there was any Cabinet-level consideration of division of AP.

With Ms. Sonia Gandhi preferring to remain in the background, it has fallen to the Home Minister to embark upon the consultative processes de novo, with the first meeting of all party leaders from the state on January 5. Predictably, it reflected the division among political parties. There is a bagful of demands for statehoods in the wake of Telangana announcement even if that demand had been on the agenda for a long time. Had the Government prepared the ground carefully, going into all the implications including the future of Hyderabad and a time-frame, and involved all parties in a round of consultations without taking a decision first, the UPA Government would not have had to court more trouble for itself than it has already on its hands, not the least the Naxalite menace.

Telangana will be on the boil for months to come. (IPA Service)