The World Bank Group is in the process of formulating its first Country Partnership Framework (CPF) for India for which consultations are in process to come out with Systematic Country Diagnostic (SCD), which will provide analysis of the principal challenges facing India today. The SCD will provide the analytical base for the WBG’s roadmap to determine the Group’s engagement with India in the next four years (2018-2021).
Prior to this, the World Bank investments were based on Country Partnership Strategy (CPS). The last CPS for India is for the period FY2013-17. The objective of the CPS was to support poverty reduction. That goal was closely aligned with the vision for development in the 12th Five-Year Plan (FY2013-17). In the past, the five-year plans have heavily borrowed and shaped by the CPS’s analysis and plans for the country.
For formulating the SCD, the WBG has scheduled a series of consultations in Delhi[, Mumbai, and Bhubaneswar with a broad range of stakeholders. In spite of claiming to bring together a wide range of stakeholders for these consultations, there was hardly any representation of all stakeholders. The already conducted Delhi consultations saw representation from policy think tanks. Mumbai consultation was exclusively for the private sector. Till now there has been no consultation with civil society organisations and grassroots organisations. The inputs, ideas, and comments received as part of these consultations will feed into the WBG’s final CPF for India.
The Systematic Country Diagnostic finding till now which is based on the limited stakeholders’ consultations raises some serious concerns. The findings do not echo the view some of the most important stakeholders like civil society organisations and grassroots movements and present a superficial, flawed understanding of the challenges facing India. This understanding almost feeds the private sectors narrative for development challenges in India.
The SCD suggests that India faces three principal challenges to its goal of attaining middle class, middle-income status. They are moving to a more resource-efficient growth path, accelerating inclusion by creating good jobs, building human capital and by strengthening the public sector. The SCD findings suggest that “India’s agriculture uses too much water and too much land, and occupies too many people for too little output which implies it as resource intensive. It also suggests that “Land being a scarce resource – will need to be used more productively, harnessing the benefits of agglomeration in urban areas, and increasing the productivity of agriculture in rural areas where poverty is often concentrated.” This analysis ignores the problems of current development model and emphasises agriculture being resource intensive. It rules out the role resource-intensive industries. A resource efficient growth path is necessary, but in a predominantly agricultural country analysing agricultural sector as resource intensive and occupying too many people is inherently flawed.
The SCD findings again fall into the trap of envisioning deregulation as a way forward for Indian firms to grow to medium and large scale. It sums that reforms will be needed across four broadly connected policy areas – addressing obstacles in the major factor markets (land and labour); easing access to domestic and global markets; increasing the availability of finance, and creating a skilled workforce that can provide the backbone for productive modern industries. Issues of protection of local markets, small and medium scale industries, self-employed and protectionism for local industry have completely been side-lined in the findings which essentially form the backbone of the Indian economy. Finally, the SCD finding emphasised strengthening the public sector. But, this is looked at primarily from the narrow perspective of efficiency and effectiveness. It also states that the public sector must be adequately resourced and ‘right-sized’. The sector being right-sized is a very ambiguous and uncertain finding.
The SCD findings process at this point of time hardly looks an inclusive process with very little presence of broad stakeholders. It is not a surprise then that, the findings till now are hardly reflective of the current challenges facing India today. If this remains the narrative for CPF, this could have grave consequences for our national planning and policies.