Thought for the day
"Don't limit a child to your own learning, for he was born in
another time. "
-
Rabindranath Tagore (Indian, 1861-1941)
Word for the day
Boisterous (adj)
Rough and noisy; clamorous; unrestrained
(Source:
Dictionary.com)
Teaser for the day
Are "Science &
Technology" and "Law & Justice" much lesser problems in
India as compared to "Health" and "Railways"?
If no, how an underachiever in one
is suitable for the other?
My five cents - Reforms
As stated yesterday, when faced with the task of catapulting the
economic activity to a higher orbit it is imperative for the policy makers to
distinguish between "administrative corrections", "systemic
efficiencies" and "reforms".
The businesses, investors and consumers also need to assimilate
that economic reforms do not necessarily result in more profit and convenience
in the immediate term. To the contrary, economic reforms are more likely to
cause pain and inconvenience in the immediate term as these involve fundamental
changes in the processes and practices of doing business and consuming goods
and services.
For example, consider the following:
(a) 100% FDI in
insurance does not qualify as a reform, in my view. It merely enhances the
capacity of insurers to take more business on a larger capital base. It may
change little for a large section of consumers. Making health and accident
coverage compulsory for all employees and petty service providers, including
domestic helps, drivers,
porters etc., compulsory would be a reform.
(b) Transfer of de
jure power to fix prices for transportation fuel to IAS officers at the
helm of public sector oil marketing companies from IAS officers assisting the
Prime Minister and Cabinet Committee on Economic Affairs is merely a
administrative change. A 30% rise in global crude prices will most likely cause
this change to reverse, as was the case in 2003-04.
A reform in this
area would be implementation of an integrated energy policy that motivates and
(where necessary) forces changes in the consumption patterns. Reducing energy
intensity of water, improving quality of public transport, and improving fuel
efficiency of roads would provide a sustainable solution.
(c) Cutting on some
travel cost, curtailing number and place of meetings, stationary expenses etc.
is a cost management exercise. Empirically, all these expenses tend to rebuild
as the fiscal situation eases with the economic cycle. Labeling this as
expenditure or fiscal reform might be a mistake. A small reform in this area
could be to identify routine government jobs that do not involve public dealing
or matters of national security; and allowing the employees to perform these
jobs from their homes with use of technology.
(d) Food security
programs have been integral part of the government agenda since independence.
Despite leakages and inefficiencies, the public distribution system (PDS) has
helped millions. Similarly mid-day meal schemes have also worked well. Now
bringing the prices of food down to Rs1 or Rs2 per kg for BPL families may not
qualify as major reform to the current system, in my view.
Defining the
upper bound in terms of accumulated money and wealth (Upper Richness Line or
URL) may though bring dramatic changes in the business models and CSR
functions....to continue tomorrow
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