Good governance key to equitable, inclusive growth: Chidambaram

While conceding that distribution of wealth is worsening despite a robust economy, Union Finance Minister P. Chidambaram today made a strong pitch for good governance as the key precondition for a more inclusive and equitable growth in the country.

"Without the instruments of governance getting improved, it would be hard to mitigate the inequitable growth pattern,” Chidambaram said while addressing an engaging session on “Growth With Equity?" at the India Today Conclave 2008 in New Delhi.

P. Chidambaram, Union Cabinet Minister of Finance
Chidambaram says bulk of new jobs will come from service, mining sectors
The session was moderated by Dr Shankar Acharya, Honorary Professor, ICRIER, and Chairman of Kotak Mahindra Bank, and attended by delegates that included top political figures, business leaders and corporate honchos.

"The tragedy in our country is that the good is occasionally rewarded while bad governance is rarely punished," Chidambaram said, adding that it’s the people’s responsibility to put in place the parties with a track record of good governance.

Dwelling on the ambitious and audacious economic roadmap of the Congress-led UPA government in the run-up to the Lok Sabha elections due next year, Chidambaram said the pre-conditions to ensure a high and more equitable growth have been laid.

"Our government has worked hard to deliver the growth and the goal is to keep up the batting average of 8.8 per cent growth in the last year of our government," he said, appropriately drawing on the presence of former Australian cricketer Adam Gilchrist in the previous session.

The government, he said, has laid the foundation to convert the high growth into a more inclusive and equitable pattern. In this context, Chidambaram pointed out how an increased tax GDP ratio has created a greater fiscal space allowing the government to spend more on health, education, rural infrastructure, drinking water and sanitation. The physical infrastructure is getting better and will spur industrial growth, he added.

Chidambaram attributed the worsening distribution of wealth to the stagnant farm sector which, he said, is growing at 2.6 per cent and accounts for only 18 per cent of the GDP. Agriculture’s share will further shrink unless a big chunk of 42 per cent of rural population dependent on farm is taken away to non-farm jobs, he said.

Talking about the new job creators, Chidambaram noted that manufacturing was no longer producing big number of jobs because of technology and labour and revenue productivity. The bulk of jobs will now come from the service and mining sectors, he added.

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