First, Dr Singh has made it clear that he banked on faster pace of development to bring about inclusive growth. He stated upfront that the targeted rate of growth for the country would be 10%-- that was an audacious figure to mention a mere ten years back. It is remarkable that today even a conservative person like Dr Singh put a 10% growth target for the country. This is a measure of the transition that the country has made since reforms began, if we remember that India had for a long time grown only at about 3.5% which was described as the normative “Hindu rate of growth”.

Of course, we all have been talking of inclusive growth, meaning the uplift of the weakest sections and economic vulnerable people. It is clear that to bring these people from below the poverty line, the best way is to hit the fast growth track. It has been observed that the poverty ratio has fallen fastest when we grew rapidly in the decade of the 2000s. By all measures, the Planning Commission's and other experts', poverty levels fell when the economy was growing at between 7.5% and 9%. By Planning Commission reckoning, the poverty ratio now stands at 22%, although admittedly on a much stricter norm adopted by the Tendulkar committee it stands above 40%. However, by any norms, poverty has gone down in periods of high growth. Hence, as a seasoned economist, Dr Singh placed his faith in high growth rate for poverty alleviation.

Secondly and as a corollary, he set out a three-pronged strategy for achieving high growth. This consists of firstly, increased investment in social and physical infrastructure; secondly, enhancing productivity in agriculture, and lastly to give a fresh impetus to the manufacturing sector. Modernisation of India's farm sector and increasing the infrastructure facilities are the basic imperatives for the country. The farm sector had proved to be the laggard in terms of growth in the last decade. The output growth has been low and erratic. Indian farm productivity levels are also much below those of comparable countries like, say, China. There has not been any breakthrough in agriculture ever since the Green Revolution of the 'sixties. What we need is a second green revolution not just in Punjab, but in the eastern region which has large potential in this respect. This will call for massive extension effort to spread use of better farm technology, practices and addition of rural infrastructure like cold chains network. There are no easy routes to raising agricultural productivity and output.

This also holds the key to price stability. As the country is developing, the demand for food is rising because with every success of anti-poverty programme and growth, the income effect of this should first and foremost increase food demand. The poor man, when he gets a little more income, will first go for a little more food. India is currently seeing a nearly double digit inflation rate. But that is only the overall whole sale price rise. What is more worrying is that the food items inflation is raging at between 16 and 17 per cent. This hurts the poor and the vulnerable sections most. The biggest concern for the government, and the biggest weapon for mass embarrassment of the government in the armoury of the opposition, is the inflation rate. The prime minister stated in his press conference that the inflation rate should come down to 5-6% by December. He is hoping to achieve this on the back of the expectation that the monsoon should be normal this year and we should have a normal agricultural season. Once the fresh crop starts arriving in the market by October, the prices should stabilize and come down.

Secondly, physical infrastructure has been the Achilles heel for Indian economy. We have been growing at a fast pace without adding to the infrastructure facilities. As a result, the facilities were straining. We transported ever more cargo without adding to railways' capacity, pushing more exports without commensurate addition to port capacity and ever more aviation traffic without expansion of airports and air traffic control network. It is these which have to be expanded now, as the prime minister has underlined in his press conference.

Lastly, India has neglected the manufacturing sector so far. While China has emerged globally as the factory of the world, India has been dubbed the “back office” thereby meaning that we are good at services like BPO or IT consultancy. The fallacy is that a major economy cannot survive on services sector alone. This has been the experience of United Kingdom which has depended solely on financial services to thrive. As the world met with the US financial melt-down, UK economy faced near-collapse. The UK is now strategizing to re-develop its manufacturing sector. India has only recently seen development of its manufacturing sector and this needs to be hastened. As such, we have made some headway in manufacturing and some of the new industries are leaving their mark. Automobiles, consumer durables or cement and steel industries have seen creation of large capacities. Nevertheless, compared with the demand, the production levels are still low.

Currently, the manufacturing industry is investing in creating new capacity to meet increasing demand. What they are faced with, however, is shortages in intermediate products and raw materials. We have to create fresh manufacturing capacity in down-stream industries so that inputs and raw materials are available easily. This applies all the more to basic raw materials such as minerals and metals products. Unfortunately, that is proving to be the difficult part. We are at present witnessing the struggles between industry and land owners for setting up new units. It is surely no easy job to resolve these conflicting demands. However, if India has to grow, industry will expand, fresh capacities will have to be created and some additional land will have to be used for this. These issues have to be sorted out tactfully to ensure continuity in growth.

The prime minister has therefore given a blueprint for broad-based development. It is for the individual ministries and others, including the private sector to follow up with concrete action. (IPA Service)