As the incoming government is seriously deliberating on the measures for revival of economy, the Institute of Public Policy (IPP) Beaconhouse National University has presented a comprehensive development strategy for reviving growth. IPP experts and economists in their report said that to stabilise the economy the politicians will have to make tough choices entailing sacrifices, especially by the well-to-do sections of the population.
But in order to win public support for tough economic choices, the new government must present an economic vision and a strategy of inclusive development in which future rewards become available to all segments of the population and to all parts of the country. To address the deep-rooted structural problems and a doubling of the GDP growth rate, the new political order will have to bring a major structural shift in both governance and economic policies.
NEED FOR A COMPREHENSIVE DEVELOPMENT STRATEGY IPP experts said we believe that the key elements of the long-term strategy should be as follows: Revival of growth: This should aim initially at restoring the growth rate of the economy to 6 percent of GDP by 2015-16. Given the low rate of investment, much of the acceleration of growth must come largely from higher productivity in factor and use.
The main but inter-related elements that are the focus of economic revival are: improved governance; greater attention to trade strategy and export- orientation including induction of private foreign investment in support of exports; a clearer policy frame work for the private sector and closer private - public partnership; special focus on increasing productivity, and quick resolution of serious power and gas shortages.
GOVERNANCE: Without necessarily increasing the role of the state, governance can be improved significantly through the erection of a firewall between executive authority and the accountability mechanisms and strengthening the deterrents to prevent the abuse of power and breaking of the law. This report presents a number of proposals in this regard including effective devolution and strengthening of civil society institutions.
Pillars of the Industrial Strategy - Revival on the Back of Survival Energy for industry, the cluster approach, proactive role of the provinces, promotion of Foreign Direct Investment (FDI) and export-led growth, better management of state run or public sector corporations, bringing down costs of doing business and enhancing the role of women entrepreneurs are important prongs of the revival strategy.
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