NEW DELHI: Avowing that the government intends to continue the process of liberalising the economy and dismantling controls, the Planning Commission in a futuristic sense speaks of greater collaboration between industry and business on the lines that exist in Japan, China and other Asian countries that have recorded rapid industrialisation and high growth.

“The key to the acceleration of broad and deep industrial growth in India within a competitive world is to innovatively improve domestic processes for consultation and consensus building. They must work well and work fast,” the Commission says in its Mid Term Appraisal (MTA) of the Eleventh Plan.
“Should India succeed as it must, the description of that process (which will be different to China and the others) and the policies that it will produce (which cannot be known ex-ante) it will be added by future economic historians to their list of successes in economic development,” the MTA says.   
It says the Planning Commission will focus on the improvement of these processes in the remainder of the Eleventh Plan and into the Twelfth Plan.
The MTA was recently approved by the meeting of the Full Planning Commission, headed by the Prime Minister, Dr Manmohan Singh and in which key cabinet ministers were present.
From here, the MTA will go for approval of the cabinet and then by the National Development Council, the highest policy-making body where all chief ministers are its members.  The key person in the meeting was Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia and was attended by all the full-time members of the Commission. 
The MTA has a unique Montek flavour, a well-known economist and a strong votary of the liberalisation process. It is also in line with what has come to be known as ‘Manmohanomics’, which was a forerunner and provided the ideological underpinnings of India’s integration with the global economic order and the big bang reforms of the 1991. 
The MTA says the task of shaping industrial policy is to elicit information on significant externalities and their remedies. As it advances and grows, the industrial sector bumps into the constraints in the economy: it feels the stones underfoot, or the ‘pinch in the shoe.’
Some of the obstacles in the path of the industry in India — poor infrastructure, inadequate power supply and the plethora of inspectors and permissions required — have been mentioned before, the MTA says.
“The lesson from all-Asian countries that have rapidly grown strong industries in the last century is that policy makers must work closely with industrial managers to solve problems in the production sphere,” the MTA says.
It says in Japan, Miti and the Keinderan worked together; in Korea government and the chaebol (South Korean business community); and in China the party and the state controlled enterprises. 
In its own way, each produced an institutionalised process of collaboration that resulted in competitive industries.  
“Not only did these countries choose strategic sectors in which they believed they could build competitive advantage, government worked with industry to make it happen.”
“In a world in which not only companies, but states and countries too, are rated on their competitiveness by international agencies, and a world in which all must strive to climb that scale, the only sustainable source of competitive advantage can be a company’s or country’s ability to learn, change and improve faster than any potential competitor. Therefore, a country’s competitive ability lies in the capability of the collaborative process between producers and policy makers to produce effective policies and not on any particular policy,”
the MTA says.