States must propel India's growth

The recently concluded power parade in Indore where a conglomeration of industry titans gathered for the Madhya Pradesh Investors Summit under the aegis of chief minister Shivraj Singh Chouhan had an element of déjà vu about it. Though it appeared as if Chouhan was cloning the former chief minister of Gujarat - Narendra Modi - in an endeavour to engage with investors and attract investment, he was showing intent. The fact that PM Modi was in attendance and endorsing the move was significant.

India needs to get a move on and it is axiomatic that states have to be at the vanguard. We have seen the dark side of central populism which has left the treasury in tatters. Modi's new doctrine which lays emphasis on skill development and manufacturing to extricate India from its fiscal mess is praiseworthy, but it requires a lot of ground work. Old dogmas have to be cast aside, being mimetic is not going to endear this govt to the people. Modi has shown mien and resolve but it is the states which need to throw down the gauntlet and surpass themselves. And India cannot ignore agriculture even as it transforms itself into a manufacturing economy. Why is it important for the states to take India forward? The sum of parts strategy is at work here, once you add all the state's contribution, then the whole looks more appealing. In 2012-13, a decelerating economy saw India's GDP growth trajectory at its lowest in a decade at 5 per cent down from 6.2 per cent in the previous financial year, but a large majority of the states not only bucked the trend and reported a higher growth rate compared to their own pace in the previous year but also a rate higher than the one for the country. A base effect obviously helping.

Turnaround

While 14 of 26 states and union territories for which data was available - including Karnataka, Orissa, Maharashtra, West Bengal, Bihar and Chhattisgarh - reported higher year-on-year GSDP (gross state domestic product) growth rates in 2012-13 (see table), an overwhelming 22 of the 26 grew faster than the national rate of 5 per cent, according to advance estimates from the state governments compiled by the Planning Commission. GSDP growth data for key states like Gujarat, Rajasthan and Kerala wasn't available when the advance estimates were put together. Madhya Pradesh is a case in point. Progressive leadership seems to be backed by empirical evidence of an economic turnaround. Last year, it posted the highest agriculture growth in the country thus making everyone sit up and take notice. According to the government's claim, the state achieved a growth rate of 13.33 in 2013. The previous year, agriculture growth, however, was pegged even higher at 18.91 per cent. This back-toback highest agriculture growth achieved by the state is a first. The state produced 2.31 crore metric tonnes food grains in 2012-13 against 2.03 crore MT in 2011-12. With this, Madhya Pradesh surpassed Haryana in food grain production and now stands third after Punjab and Uttar Pradesh. In 2012-13, Madhya Pradesh contributed 9.50 per cent to the country's total food grains production of 2553.62 lakh MT. Also, the state tops the country in gram and pulses production by posting a production of 31.99 lakh MT gram and 46.89 lakh MT pulses respectively. Well-contemplated and committed efforts of the state government were responsible for this astounding turnaround.

Madhya Pradesh is the only state in the country to extend (short term) farm loan at 0 per cent interest rate to farmers. In 2012, loans to the tune of Rs 10,800 crore were advanced to the farmers.

Augmentation of irrigation facilities played a major role in agricultural growth in the state. Over a period of only six years, the irrigation facility was ramped up from 7 lakh hectares to 26 lakh hectares which is a record in the country.

Strategy

Fertilizers and seeds were made available to the farmers on time. The farmers were provided the facility of advance stocking of fertilizers which saved the farmers Rs 300 crore last year. Area under agriculture has also been increased considerably over the years. In 2008-09, a total of 196.60 lakh hectares was under agriculture in the state. This has increased to 223 lakh hectares, representing an increase of about 27 lakh hectares. All this has paid in spades. A new strategic imperative which has been swirling in the air for some time and now needs to be actualized is the food and farm corridor agricultural corridor between Punjab and West Bengal. The cortex of the corridor is to build the entire eco-system centered around agriculture. It will cover four million hectares of the most fertile land in the world. Changing the cropping patterns which is skewed towards the production of cereals remains at the core of this idea.

Amplification

The idea being to be in sync with rapidly changing consumer's preferences. A shift of this type is vital to boost the supply response to changing dietary patterns, which, as per the government, is shifting away from staples - like rice and wheat - towards vegetables, fruits, milk, pulses, eggs and other protein rich items. We often talk about supply side interventions and this stratagem is an amplification of that germ. For a country like India which requires its farmers to continue growing crops, it is critical for them to remain engaged in agriculture. Already, the next generation of agrarian India is unwilling to toil and is part of the gargantuan conveyor belt of mass migrants to urban agglomerates. Skilling of the migrants has to go hand in hand with boosting agriculture. And states now have to do all the walking and talking.