China model inspires Niti Aayog’s 3-yr plan
NEW DELHI: The government is looking up to the Chinese model of development to give a fillip to India’s economy.
Or so it seems. There are 67 references to “China” and “Chinese” in the Three-Year Action Agenda: 2017-18 to 2019-20, prepared by Niti Aayog, the government’s think tank.
The agenda, released by finance minister Arun Jaitley on August 24, underscores the need to “replicate” China’s very large special economic zones (SEZs) along its coasts by developing two employment zones along India’s east and west coasts.
For Make in India, China and some other countries, are the inspiration. Shenzhen model of urbanization and neighbour’s effort to reduce the use of lowquality coal are something to learn from. Deliberating on the critical role exports play in enhancing productivity, employment and wages, the document says there are only four developing countries — China, Taiwan, Singapore and South Korea — that “successfully transformed themselves” within three decades.“In every one of these cases, exports have played a key role. China, with its population comparable to that of India, offers the most relevant example. In 2015, the world merchandise exports amounted to USD 16.6 trillion. China accounted for 13.72% of these exports and India only 1.67%,” says the report, making suggestions to increase Indian exports while drawing comprehensively from Chinese examples. The governing council of the Niti Aayog -- comprising Prime Minister Narendra Modi as its chairperson and many Union ministers and chief ministers as members-- deliberated on the draft document in April.
Their comments were incorporated in the agenda, commissioned by the prime minister’s office in May 2016.
A second document containing the 15-year vision and seven-year strategy is being worked on.
The action agenda call for cultural centres to promote soft power “similar to” Confucius Institutes of China, Alliance Francaise of France and Goethe institutes of Germany.
It speaks of “learning from” China’s and Singapore’s attempts to create world-class research universities.
China chose a tiered system under which two Tier 1 universities – Beijing and Qinghua received significantly higher funding.
“We too should be careful that we do not spread available funds too thin. Instead, we should adopt the tiered funding model for public universities,” says the action agenda.
It dwells at length on what it terms as “a critical element in China’s development strategy”— that is the creation of very large SEZs, as distinguished from India’s SEZs, which are “tiny by comparison”. The SEZ provided flexible land and labour markets, attractive incentives to foreign investors and a foreign trade regime that was liberalized over time.
The agenda points out that many large multinational firms on the Chinese coast, especially in labour-intensive sectors, are turning uncompetitive due to high and rising wages.
They are looking for alternative low-wage locations for production. India could be a “natural home” for such firms.
The document takes note of the differences between the two countries in their levels of achievements in various sectors and borrows copiously from Beijing’s development model to recommend the three years’ action agenda for Modi government.