HowIndia sorts through these fiscal difficulties in the years to come，will be an important indicator of its commitment to making life more meaningful for well over a third of its citizens. Will India go by the mantra that growth rate is all that matters and that the poor will be adequately looked after in any high-growth regime？Or will it go back to the older wisdom that the poor hold the key to growth-that rather than depend on the fickle favours of “trickle-down”，the greater assurance of economic development with justice and equality，lies in recognising the poor as the primary agents of the growth process.

From all that is available in the public realm，it seems clear that the government is backing growth as the antidote to poverty，rather than a direct attack on poverty as the pathway to growth. The official Economic Survey of the government of India，released every year just prior to the presentation of the Union Budget，sums up these philosophical dilemmas in its most recent edition，when it speaks of the improvement in human development index being “powered by per capita income growth” and then admits—rather implausibly and within the same paragraph-that India’s “human development effort still needs to catch up with the capital”.

There is an opinion that persistently surfaces in the daily referendum on the government that the media conducts：what is good for the economy is often bad for party politics. The economy in turn is assessed by the sole parameter of the aggregate level of growth. Parties often feel tempted to adopt fiscally irresponsible strategies when in power，especially when the electoral cycle is at a decisive moment. The media though has concluded that these efforts to abridge the natural course of economic growth and turn it to political advantage，serves little purpose. It only wrecks the opportunities for growth inherent inIndia’s liberalisation drive.

The financial press and the news channels convinced themselves in 2004 thatIndia was “shining” when few others seemed inclined to that belief. And the party that had made “shining India” its claim for a renewed mandate to govern，went down to a momentous defeat in nation-wide general elections. It then became the accepted wisdom that despite the lustre that certain parts of India were displaying，a large part of the country remained in a slough of despond.

What could be done to restore the semblance of social and economic equity that a democratic polity depends upon？The government that took office in 2004，led by a party that had suffered a mortifying decade-long shutout from the corridors of power-when its self-belief in being the natural party of governance for all India was rudely shattered-saw the answer in revisiting the populist commitments of the 1970s and early-1980s. This meant providing a stimulus to the rural economy in an effort to directly address poverty，though within the overarching compulsions of fiscal prudence.

The National Rural Employment Guarantee Act （NREGA） was passed in 2005，assuring every willing individual a minimum of a hundred days of manual unskilled work，in the 200 poorest districts of the country. The fiscal year 2006-07 was the first full year of implementation of the National Rural Employment Guarantee Plan （soon named after Mahatma Gandhi and now known as the MNREGP）.