[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

REIMAGINING INDIA
country grows it would be more important
to build up institutions within India which
are functional and proactive. The government
has a very critical role to play in building
up action oriented efficient institution
structures and in implementing them. These
institutions have to facilitate the functioning
of the market in an efficient way in certain
segments of the economy to promote the
growth of the Indian economy. This has to
be facilitated by sound governance framework
in Indian economy to address the developmental
dimensions of India along its
growth path. The next section briefly highlights
the governance aspect.
The Governance Aspect
With regard to governance structure the
important issue to ponder about is the role
of the government market driven economy.
In context of India, the role of government
has to be efficient provisioning of public
ment. This needs efficient functioning of
the departments and the bodies associated
with the basic infrastructure services. However
the expenses for such provision of infrastructure
and health care services should
also be met through collection of taxes. The
tax collection policy has to be well targeted
and progressive. This would mean that people
with higher income would pay higher
Market oriented growth is not a solution to the mitigation
of this problem of conflicts. The role of a debating, progressive
society holds the key towards this conflict resolution
and for which government has to take a proactive role
goods, services like safe, wider road networks,
hospital services, water and sanitation
services. In certain cases of such provisioning
public private partnerships could be
tried out in the form of concession, management
contracts. The efficient functioning of
these partnerships would again depend to a
large extent on the nature and extent of implementation
of such contracts, reduction of
corruption in the process of awarding contracts.
Efficient delivery of basic infrastructure
services like safer roads, water and
quality health care could tackle many of the
developmental dimensions of the economy,
which is lying at a dismal state at the mo-
taxes for the provisioning of the infrastructure
services for development. The key towards
the success of this is the implementation
mechanism which has to be monitored
and reviewed from time to time. An accountability
framework has to be brought in
the governance structure for trickling down
of growth of Indian economy towards development.
This trickling down in simpler
terms would mean provision of basic services
like road, health care, water, information
network to the rural areas of India.
Along with that this would also mean provision
of finance to the rural people for generation
of economic activities and income
for them.
The growth of self-help groups and microfinance
with favorable interest rate structure
along with a reduction of intermediaries
and informal lending could be one possible
step in this direction. Larger penetration of
banks, ATMs by allowing large number of
players in banking segment could also be
another step in this direction. However, this
would need the support system of a governance
framework, which would facilitate the
efficient players to operate in the system.
Market led growth thereby doesn’t necessarily
mean a lesser government intervention as
market led growth could often create a larger
need for regulating the costs of growth so
that growth could percolate and transit towards
development of the society. Thus the
importance of the government increases in
that case with a change in its governance
framework and operational structure. If this
doesn’t happen then it could be termed as a
failure of the governance framework, which
could create disparities in the society
through larger conflicts across sections of
the society. The type and extent of these
conflicts would vary from place to place and
from region to region. These could range
from conflicts having their origin in caste
discrimination (like the ones prevalent in
Bihar) to conflicts, hatred originating from
one section of the society, which has been
deprived of the fruits of growth and development
(like the ones in the North-Western
parts of Andhra Pradesh, North-Eastern
states of India). There could be many other
forms, but the two has been cited to bring
out the role of the failure of governance
framework in the development of a country
even with the presence of a market driven
growth. The caste driven conflict (ones in
Bihar) could be because of corruption and
the political system as well as an ineffective
education system. The resource scarcity and
developmental needs driven conflict (ones
in Andhra Pradesh, North-Eastern states of
India) could be because of a lack of governance
framework to enable efficient distribution
of resources between regions across
India. Conflict resolution is an integral part
of development of a country. It arises because
of domestic failures and exists because
of ineffective implementation of stated policies,
contracts. Market oriented growth is
not a solution to the mitigation of this problem
of conflicts. The role of a debating, pro-
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