Montek Singh Ahluwalia

India's Planning Commission is one of the traces of the socialist economy that led to India for decades since independence. With the 1991 reforms, however, lost no strength: still setting budgetary allocation lines of India in its "Five Year Plans", controls the execution of programs and ensures intersectoral linkages in the economy. Gives an idea of their importance that is chaired by Prime Minister Manmohan Singh . Although it is on a par: the strong man of the Commission has always been the vice president, as happened with Nehru and the legendary Mahabalanobis. Today, that position is occupied by Montek Singh Ahluwalia, who is projected as the next Indian Minister of Finance if the Congress Party wins the elections. Singh Ahluwalia spoke in his spacious office of Yojana Bhawan administrative block in the heart of New Delhi.

After decades of mistrust, has changed its relationship with the private sector?

We interact all the time, for example in the infrastructure sector, which is one of the major initiatives of the Government: try public-private partnership. With a necessary investment of 500,000 million dollars. India is facing many challenges, but one thing is clear: if we want to grow fast, have to improve massively infrastructure . And there is another big challenge, which is to provide education to train skilled workers.

According to experts, India is facing a serious training.

This problem has emerged now, in the sense that when we were growing at 4 percent, we had a surplus of skilled workers, with 6 per cent, would be fine, but with an increase of 8 who aspires to be 9, we have a serious problem of shortage of skilled workers.
And unless we can take internal measures to reform the education system and training, we can not achieve our goals. There is much expansion of this system as planned, but we need to do more. Many of our universities produce people that somehow, they resort to academic training, and it is right to join the civil service, but is not oriented to the development of specific skills to the world of work.
These problems can be solved, giving these people programs and courses of three or six months, which would allow them to develop skills "market". But otherwise, this is true: it is a program that will require three or four years ...

But what would the number of workers needed?

Is dependent on each sector, and I have a number. But certainly we see that in the past two years are required machine operators, people able to operate machines with computers, computer experts ... Our need is rising sharply and is more difficult to retain your workforce. That, employers tell us. But on the other hand, has lowered the number of people who went abroad. And many who are out again. None of our work will pay as well as in the United States, but people are willing to accept much lower wages if working at home.

The threat of recession also plans on development box ...

We are less dependent on the global economy than some other countries. But not independent: and many of the benefits we have had in the last few years are a result of greater integration. So if the world down, we. This is evident even now. In the past two years grew more than indicating the potential. This year we think we can grow at a rate of eight, and some believe that we will go even lower. Whatever will be a high growth rate, and much will depend on how the global economy reacts. We are less dependent to USA, but more dependent on an overall pattern. While the outlook for the U.S. are looking very grim.

Will they have any effect on the reforms the Indian elections?

Until the elections, no new reform can be expected, but has been little implementation. Things have already started, but had to complete before the election. All areas of infrastructure, for example, where we have initiatives under way and we must prove that the public-private partnerships can work. There are many projects in the system and make sure that these projects are carried out.
And there are other areas such as the promotion of education: announcing a new number of universities and institutions last week. Among them there will be some world-class universities, IIT, IIM, but now we must determine the place and convince regional authorities to put the necessary land. The more specific these decisions are, the more they can show their interest in supporting them. The Government of India has already said he wants to have 30 universities, but now we have also indicated where they should be. The assignment could be delayed two years or it could be done in two months. So our goal is to put on a tight schedule to be done.

It seems that the buzzword of this term has been "inclusion."

It's a long story and we have a whole five-year plan dedicated to it. But at length, we need a boost of agriculture, which has not fared well in recent years. So if we can make the evolution of agriculture in a better story, part of the road would be done.
We need a stronger base of qualified development and spread education, because this opens up opportunities and can make a difference. We also need better growth of manufacturing sector to reverse in employment. In recent years, the services sector grew much more than manufacturing. And higher education services tend to require a more specialized education.

But it will be difficult to shift from agriculture to services, so suddenly.

If you want to transform people from rural areas to farm employment, with limited capacities in two, three or six months, then it simply can manufacture what they teach. So we need that manufacturing growth is faster.
I believe that manufacturing did not grow much as they should because our infrastructure was not good and there was a lack of competitiveness. Some also say that this was due to our labor laws, which are a bit too rigid and limited flexibility. To have employees, you need the consent of the regional government, and what has happened over time is that the law has been implemented with more flexibility.

That is, there are irregularities in the implementation of labor laws.

People find ways to do this [fire employees], but what would that make the law a rule easier and transparent. Left, in particular, is resistant to it. To be honest, if we continue on a path of high growth, and competition for skilled jobs continues to grow, it is easy to increase flexibility.
If you just asked the unions, "I want to change the labor law," there will be many protests. We need to focus on building infrastructure and will improve to some degree, the growth of manufacturing, the next step will then labor flexibility. But by then, the work will have seen the effect of changing India, so strongly that different regions follow different policies: the more progressive states introduced flexible working and people will see that employment expands, will be an expansion of good practices .

Former Finance Minister Palaniappan Chidambaram said India could grow to 11 percent if all people share in growth. Do you share this perspective?

We do much work with numbers, and frankly, when we project the limits of what is possible, is beyond the numerical analysis and rigorous. Chidambaram is what it says: "We are a poor country, China is a poor country. We have much to do and they. They are growing at 11 percent, why not us? ". I think one of the most positive things in India is that people have seen the benefits of China as a base to compete. For a long time, India did not grow fast. Now, India is the second fastest growing country, China still behind with some difference ... Why are they capable of? One reason is the political environment, totally different, but do not think anyone in India want to change the political environment. At the same time, democracy can not become the excuse for a poor performance. Authoritarians are licensed, move people, but democracy has its advantages.

The perspective is settling in America seems to be a strategy of using India as a counterweight to China.

T here is little interest in presenting India as a counterweight, but the prospect of India is: look, we are both poor countries and should be transformed. I think the world will be much better if India and China are prosperous countries simply do as well as they. The emergence of China has had a positive effect on India. People wonder why it can not be like Shanghai Bombay. We have businessmen in China, they invest in India, we buy more from one another, many more Indians have visited China and seen what is happening there ... When an Indian visiting Europe, learning is a bit like, yeah, in 200 years we will be well. But in China, the visitor thinks 20 years ago, these guys were as poor as us. There are more moral, and this is an important factor. Asia is part of the rapidly growing world that sees itself as part of a success story in the sense that development is taking place, that things are changing. Each country has had to solve their own problems and some can learn from others.

But India should apply the story about the regional trade. The SAARC still in its infancy, from the economic standpoint.

What we are very clear with the opening of trade, trade barriers have been falling, and we have always maintained that we must maintain a freer climate in the region. There are differences between the SAARC region and other regions, because India is a bit too big and our neighbors are all comparatively small, which usually leads to some concerns. And the lesson to be learned from this is that India should grant more benefits to integration unilaterally, and that will have a positive effect: and that is what we are doing. We have more benefits to Sri Lanka and Bangladesh and Nepal in what we ask. Pakistan is different, because we depend more on political relations. But the idea about Pakistan is also having a freer trade. We do not discriminate imports from Pakistan as does Pakistan, India has a most favored nation status to Pakistan, the tariffs imposed on us are higher than those imposed on other countries.

And another big economic battlefront is the Doha Round. India is negotiating fiercely ...

Overall, we strongly support the multilateral negotiations and believe that we must reduce barriers. Our disappointment with the Doha Round is that this was sold as if the key point was agriculture and with the expectation that U.S. and European Union were to reduce subsidies. But in reality subsidies on exports are distorting agriculture, but the massive domestic subsidies. Seeing how world prices have gone up, both Europe and the United States should consider the reduction of domestic subsidies substantially. But for now the steps have been disappointing. Europeans and Americans, for a long time, gave the signal for a long time that this time they were serious about agriculture, but when the time came, everyone said the policy was very difficult. And I recognize that there are difficulties ... We have been genuinely in favor of lowering barriers, we have made ​​offers to Europeans and Americans in the manufacturing section. Hoping that among both Europeans and Americans, a solution of these problems take place, to move forward.

According to the Planning Commission, which sectors most urgent need of reform?

In the area of manufacturing, you're all well liberalized ... you can always do more in some places, such as limits on foreign investment, we can try to delete. We have done a little, but if you ask a foreign observer ... I agree that we must reduce these limits ...

You look at annual growth and the thing seems to be taking off. You see as a historic moment?

Absolutely. In 1975, the Club of Rome issued a report that, with the deepest consideration, said that India was dead, that the Indians would not be able to feed themselves. And there was not even to try to help India. If you're in a crowded boat, they said, or the whole world is sinking, or strip the people least likely to survive. So they said that there was no need to try to help India, a country because he was convicted. Today we are supposedly the cream of the month, desired by investors. It's a huge qualitative change, very nice. You never know what is "historic", but I think there is a profound transformation. The young Indians have a new sense of confidence. This is inevitable ... It takes time to get out of the colonial mentality. But now, when there is a problem, young people blame their own government from him, and this is good. They ask "why can not you do better."

Does it have something to do with globalization?

For India, globalization is worth, in the sense that the Indians see that gives them tremendous opportunities. And we are big enough for us not to be swept away culturally. If you are a small and poor country, you think that culturally missed. If India grows and develops, we will not be swallowed but culturally globalized. The other day I saw a story saying Armani has designed a "sherwani" (traditional Indian formal dress) for the Indian market. This is very different from what happened in Japan: Coco Chanel did not design any kimono. Our designers will e "indianizarán" European suits, Europeans will design things for the Indian market and in general, people will appreciate it.

And for the next few years, what will be the biggest challenge?

Ugh, many. Climate change ... Name one and guess right. All countries have the same goals for the future. If we survive the objective of maintaining rapid growth over the next four or five years we'll be better able to face the future. An average of nine percent over the next five years, but with a definite sense of greater inclusion.

Again the word inclusion.

Is that in the long term, we must maintain the growth that we have, and above all, create the feeling and conviction that is inclusive. And this is a great challenge. Because if it is not inclusive, social acceptability and legitimacy of these policies will not occur. On the other hand, if we create a sense of inclusion, and this does not mean that problems will be resolved around the world, will always be people with deep problems-if people perceive that economic changes are associated with social mobility will be important . because people do not necessarily want to improve your own life if he becomes convinced that their children's lives better. A 45 year old man does not want high inflation, want high wages, but if lower-middle class, known not to be rich. But if you know your child might be, that's a motivation. I think we should judge ourselves by how much social mobility are able to provide.

Lead to a kind of Indian dream.

It is. It really is an old Indian dream, but perhaps we're seeing now. Or they always said, but never had.

Government approves new five-year plan with investments of $ 910,000 million

New Delhi, December 20, 2007. - In order to accelerate growth and extend its benefits to the entire population, India has approved the eleventh five year plan, which includes investments worth 910,000 million dollars through 2012.
"I am pleased that the National Council has given its approval to the Five-Year Plan," the vice president of the Planning Commission, Montek Singh Ahluwalia, following discussions, led by Prime Minister Manmohan Singh.
Entitled "Towards faster and inclusive growth," the mammoth five-year plan targets is 10 percentage points lower poverty rates, generate 70 million jobs and put the unemployment rate to a level below 5 percent.
The new five-year plan, an economic figure dating from the days when India was inspired by the Soviet policies, reflects the priorities of the country between this fiscal year and 2012.
The plan contains 27 national goals, including the strengthening of income, reducing poverty and infant and maternal mortality, and improving education and literacy of the population.
What really has raised passions, however, is the announcement of Prime Minister Singh of India, at the end of five years, could grow for the first time at a rate exceeding 10 percent.
During the five-year plan already completed, the Indian economy grew at an annual average of 7.5 percent, and in fact exceeded 9 percent the past two years, a significant rate but behind its larger neighbor, China.
The new set of rules establishes an initial period of four years in which India intends to maintain the growth of 9 percent, and last year that the country should take that symbolic step forward for up to two digits.
A possibility that Singh referred in his opening address the National Council, citing as additional guidelines dedication and an appropriate set of policies.
"Our economy has shown resilience to adapt to the challenges of globalization. In the past two decades, our industry-large and small, has been restructured and has become globally competitive, "he said.
"It is possible that with an appropriate set of policies and efforts of all regional and central governments, not only maintain high growth right now, but we manage to bring it to 10 percent," added the premier.
Taking advantage of the meeting, Singh also called for the formation of working groups in other areas such as education, agriculture and acceleration of permits for industrial and infrastructure projects.
With this petition, Singh outlined some of the chronic problems of the Indian economy: poor agricultural growth, resistance to the industrialization of the population, lack of adequate infrastructure or educational disadvantage.
In 2007, agriculture grew only 2.7 percent, which has prompted the government to give budgetary priority to the sector and put the increase at 4 percent.
In terms of infrastructure, both Singh and President of the Planning Commission have acknowledged that India needs investments of over 450,000 million dollars over the next five years.
Regarding education, India faces a serious problem of teacher absenteeism and illiteracy than a third of the population, which affects the lack of sufficient skilled workers.
Besides, India is experiencing resistance to industrialization and conversion to a service economy, as evidenced by the rejection of the special economic zones and the establishment of supermarkets in some regions.
Upon approval of the new plan was attended by heads of regional governments and Indian central government ministers, who discussed some of the issues before giving their approval to the plan.