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The question of optional growth rate One of the novel requirements of the Tenth Five Year Plan (2002-2007) is the specification of state specific growth targets which take into account the constraints operating in individual states. In the case of Manipur, specification of growth targets will be a completely new exercise. Our main concern has been whether we can spend the money allocated. It will be pertinent to recall the objectives of the Ninth Five Year plan as given in the document brought out by planning department, which ran as follows: There is no mention of any targeted rate of growth of the economy. Besides the slogan "Growth with Equity" seems to be devoid of any meaning in the context of the ongoing failure in stemming the systemic rot. The fresh whiff of air ushered in by the tumultuous events in June appears to have become stale. In short, can our Tenth plan deviate from the ritualistic restatement of objectives without any hope for realization? One of the objectives of development planning is to catch up with the all India average level of economic advancement as indicated by per capita income. This little exercise shows the enormity of the challenge. The per capita net national product of India in 1997-98 was Rs 12729 at current prices. The per capita net state domestic product for Manipur in 1997-98 was Rs 8194 at current prices. The targeted growth of gross domestic product of 8 per cent per annum in the Tenth Plan and the expected 2 % annual growth rate of population imply an annual growth rate of 6 % in per capita GDP of India. With this growth rate per capita income of India would be Rs 22796 in 2006-7. To reach this level by 2007, per capita NSDP of Manipur would have to grow at an annual growth rate of nearly 11% per annum. The enormity of the challenge will become obvious from the fact that during 1972-96, the post statehood phase, the annual growth rate of real per capita income has been 2.24 % only. The gap is likely to persist even when current prices are used. Though national income statistics are available with the new base 1993-94, state domestic product estimates at constant 1993-94 prices is yet to be prepared as the methodology is under review. During 1980-96, real per capita income of Manipur grew at the rate of 2.37 % per annum. Transport, storage and communication and fishery were the only sub-sectors with double-digit growth rates. However they contribute only 10 % of state income. Not only was the share of agriculture declining, its growth rate of 1.8 % was also on the low side. Construction and trade were the sub sector with accelerating growth rate though their share in income was only 15 %. In the case of trade, in spite of the accelerating growth rate, its share in state income declined marginally from 0.053 % in 1980-1 to 0.052 % in 1996-7. The lack of dynamism in sectors with large shares in state income was the main reason behind the unsatisfactory performance of the economy. If we want to raise our per capita income significantly, there is no alternative to making the dominant sectors dynamic. The next pertinent question is - by how much? A 1 % (one percent) rise in income originating in real estate would raise it by nearly 0.9! However in the context of Manipur, a growth based on agriculture would be more beneficial to real estate based identical growth rate due to the large proportion of workers engaged in agriculture. A 13 % (thirteen percent) rise in NSDP needs an 18.5 % rise in income originating in agriculture. Income originating in agricultural sector had a much stronger impact on NSDP than that in manufacturing sector. A 1 % rise in income originating in manufacturing would have raised NSDP by only 0.14 %. Manufacturing happens to be a low growth sector and its growth rate was de-accelerating. This decline is attributed to inadequate infrastructure and acute law and order problem threatening the growth of entrepreneurship in Manipur. Not only the rich non-local traders but also the local trades are interested in investing outside the state. The acquisition of real estate by our own people in metropolitan cities is a stark indicator of the general perception of law and order environment. Local entrepreneurs face challenge both from mainland companies in South-East Asian countries. It remains to be seen whether our response is optional enough to not only face the challenges but also evolve a self-sustaining mechanism. Setting out the growth targets will necessitate an examination of the consistency of the allocation of different sectors. It is a fact that not all government expenditures are equally important in the sense of giving a big push to the economy. There is no reason why we should hesitate in curbing growth in such heads. Simple superimposition of national norms will be both unrealistic and unsustainable. For us an 8 % growth rate may not be sufficient but such high growth rates need lots of self-introspection in every section of society. Political will and determination of the public are as important as adequate infrastructure invoking both for the state is the challenge before the policy makers. One can definitely make a bold beginning in this direction by setting out some meaningful targets. FrontPage Manipur Profiles Features Potpourri Opinions Editorials Books Photos Links Archives Contact Policy/Disclaimer |
