A To-Do List for India's New Ministers

The focus must be on deploying political capital on key result areas. Revive agriculture by repurposing farm laws using FPOs & cooperatives. Boost food processing, storage for price stabilisation. Design a model for public private partnership like in roads for water recycling & desalination plants. Align skilling and curriculum to market needs. To enable manufacturing clusters, unclog regulatory cholesterol design plug-and-produce sites using surplus PSE land.

Shankkar Aiyar | The Third Eye | The New Indian Express | 16 Jun 2024

The dust is settling and decibels are fading. As the Modi-led NDA III regime gets down to work, it is worth exploring key areas that must be attended to — agriculture, water, industry, labour, skills and employment.

A 100-day programme is apparently in the making. The context affords an opportunity to present a to-do list for ministries key to growth and prosperity.

Shivraj Singh Chouhan, agriculture, farmers’ welfare and rural development: Distress in the farming sector is visible in political dialogue and economic data. Nearly half or 45 percent of the workforce is engaged in agriculture and is dependent on a sixth of the national income. This data point is central to the spectre of poverty and is illustrated in the political geography of the economy. 

Unlike industry, agriculture lacks forward and backward linkages. This calls for re-purposing the farm laws (which were withdrawn) to induct innovation and access to credit, storage and markets through farmer-producer organisations and cooperatives. The pairing of rural development and agriculture enables alignment of goals. The necessary reforms, though, are squarely in the domain of states. This is what makes the choice of Chouhan critical. As a senior politician, the four-time chief minister is perfectly placed to collaborate with states and champion the cause of farming.

Chirag Paswan, food processing: Chouhan will also have to mentor food processing under young Paswan. The pain of high inflation is audible in data on the political economy. The impact of 8-plus percent food price inflation is visible in the GDP data on private consumption and corporate revenues. The causation is located in uneven output and availability worsened by the lack of capacity in storage and processing. 

Despite being among the largest producers, India lags in food processing. This is manifest in data on post-harvest losses and wastage. India needs to create a framework for lease/rent storage where producers of grains and perishables can store their produce to sell at will or hypothecate for credit. India also needs to leverage the ‘one district, one product’ idea and clear up the legislative pathway across states to expand processing capacity to enhance value addition and job creation.

C R Patil, jal shakti: Water has long been an unattended crisis in India’s political economy and is riveted by a complex set of compulsions. The ambitious Har Ghar Jal programme is vulnerable to issues of storage, availability, quality and access. This is vividly visible in data on depleting ground water levels and in tanker-infested urban India accounting for over 100 Lok Sabha constituencies. Every major metro in India sources its drinking water from distances 50 km to over 100 km away. 

There is an urgent need for a holistic approach and setting up of recycling and desalination plants. This will need deep-pocket funding and calls for tax incentives and a public-private model adopted successfully in the expansion of roads. The headline attention on India is an opportunity to attract moolah from sovereign and pension funds looking for long-term investments in sustainability. Patil comes with a reputation of being a politician-technocrat and has an opportunity to engineer a legacy.

Mansukh Mandaviya, labour, employment & youth affairs, and Jayant Chaudhary, skill development: The issue of unemployment and job creation echoed through the elections and is visible in its outcome. There is the gap in job creation and then there is the gap in skills. India needs an active labour policy which aligns policies with the needs of the market. Yes, there is a skills development programme, but as underlined by the parliamentary standing committee, the programme has struggled with placements. 

The imperative calls first for the mapping of educational attainments, a template to certify the skill sets of the young workforce, restructure curriculum to match industry demands and nudge companies to induct upskilling and reskilling. The government needs to align skill-sets and leverage opportunities highlighted by the Global Skill Gap Study. Mandaviya and Chaudhary will also have to accelerate the account aggregator and ONDC initiatives to enable job-creating start-ups with access to credit and markets.

Piyush Goyal, commerce and industry: Evolving geopolitics, especially the tensions between the US and China, has nudged global companies to shift from just-in-time to just-in-case business models. India is at the intersection of a global opportunity to ramp up its footprint in global manufacturing. A poll published by PwC in May shows India emerging as the third most important link in global supply chains — particularly in electronics, pharmaceuticals and medical equipment — behind the US and China. Yes, the production-linked incentive scheme is paying dividends in some sectors, but more needs to be done. 

The burden of the unfinished agenda of reforms is on the states and here Niti Aayog may enable change by creating a blue book of best practices — for instance, from Tamil Nadu. The window of headline interest is narrow. India must accelerate adoption of new labour codes, enable plug-and-produce sites for investee companies by leveraging surplus land with PSUs, and clear up regulatory cholesterol. India’s industrial belts are essentially triangulated clusters — for instance, the Mumbai-Pune-Nashik and Bengaluru-Hosur-Chennai corridors. India needs to enable such industrial clusters — particularly in resource-rich states on the eastern coast and in the north — to attract investments and spur employment generation.

The choice of ministers in the cabinet reveals an interesting pairing of focus areas with personalities, the intermeshing of political compulsions and economic imperatives. It remains to be seen if the rejig of personality and portfolio delivers the promised results.

Shankkar Aiyar, political economy analyst, is author of ‘Accidental India’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’ and ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’.

You can email him at shankkar.aiyar@gmail.com and follow him on Twitter @ShankkarAiyar. This column was first published here. His previous columns can be found here.