'Finding new markets key to high growth'

The government has to focus creating new markets to enhance development and growth in the rural areas, according to Arjun Sengupta, co-chairman of the Congress party's economic cell.

Speaking at the Knowledge Forum -- Rural services Innovation Summit, organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) and the World Bank, Sengupta stressed the importance of monitoring projects and reform measures to hasten the process of growth.

He said it was important to have a proper monitoring system to hold parties accountable. "The problem currently is that money is spent but does not reach the people. We need a system for monitoring and fixing responsibility in a way that democratic institutions are not ruptured," he said.

He said that while various areas, which required services, were identifiable, the bigger challenge was to provide the services. The government should finance public goods with support from the private sector.

However, the government need not necessarily build and operate such public goods, and that can be done with the support of private operators.

On services that increase productivity like rural credit and marketing, Sengupta said these should finance themselves.

The government should get involved in the creation of markets, enabling institutions and promoting risk sharing. "However, it should stay away when the markets have matured," he added.

World Bank India Director Michael Carter said if rural poverty was to be reduced then agricultural growth and improved marketing, expansion of farm, non-farm employment and development of social infrastructure was important.

He emphasised that it was necessary to empower the poor to access the various services provided.

He added that to make the government programmes effective, the poor need to have a voice in the design and implementation of the programmes that affect them.

Carter said this year the World Bank would scale up the funding to India to about $1.7 billion from $1.5 billion in 2003-04.

The focus areas for the World Bank would be infrastructure, human development, support to livelihood and rural areas, he added.