To enable takeoff, act on the ground
The economic outlook for 2013-14 projected by the Prime Minister’s Economic Advisory Council rests on the hope that Indian industry, agriculture and the services sector perform a whole lot better than they did in 2012-13. Dr C. Rangarajan, who heads the PMEAC, is looking to a growth rate of 6.4 per cent based on increasing investment. Dr Rangarajan recognises, of course, that this investment will take place only if projects, specially those in infrastructure, are cleared with alacrity. There are said to be projects worth `7 lakh crore stalled for various reasons, though finance minister P. Chidambaram has said projects worth $14 billion have been cleared in the past two months. The irony is that even if power projects are cleared, there are problems of fuel supply with both coal and gas being in short supply. The government has failed to tackle the huge fall in gas production in the KG Basin D-6 block from 21,017 mscm in 2010-11 to 8.893 mscm, on which the parliamentary standing committee on petroleum and natural gas has expressed concern. It is estimated that every one mmscmd drop in production of gas means a loss of 210 MW of power capacity; while 20,000 MW with bank guarantees worth `30,000 crore are reportedly locked up due to this shortage. Fertiliser production is similarly affected. The government recently made Coal India compensate power companies who have to import costly coal, as CIL has not delivered the promised coal. Who is going to compensate the power companies for the gas not supplied as promised?
There are several such issues on the ground that have to be tackled for the economy to take off, which bodies like the PMEAC have failed to tackle. There is no doubt that the government has shown it is capable of taking decisions, but when will these decisions be translated into reality?
Dr Rangarajan has said there is a need to tackle the current account deficit by controlling imports of coal, oil and gold. While gold imports are being tackled, very little is being done to curb oil imports. What efforts, for instance, is the government making to seek cheaper crude sources? There are reports that India is charged much more than some other countries for imported crude from Qatar, and the government has never denied these reports. While India can achieve well over six per cent growth even in the current global scenario, the government needs to get more serious and show fresh thinking in tackling new challenges facing the country.
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