Thought for the day
"In modern business it is not the
crook who is to be feared most, it is the honest man who doesn't know what he
is doing. "
-
William Wordsworth (English, 1770-1850)
Word for the day
Nosophobia (n)
An abnormal fear of
disease.
(Source:
Dictionary.com)
Teaser for the day
Heard on street: the top leadership of
Congress is in drought mode post Lok Sabha election. Preservation and thrift is
the order of the day at Akbar Road and Janpath!
Subsidy reforms: Need a micro approach
One of the major problem with the centralized planning process
has been the misguided and misdirected social welfare planning and
subsidization programs.
It is critical to evaluate this aspect, along with more popular
foreign investment and PSU disinvestment policies, to make a realistic
assessment of need for reforms in social spending of the government as in past
decade or so it has accounted for over 50% of the total budget spending.
Efforts to achieve socio-economic and regional equality and
justice through various subsidies and welfare programs have not yielded desired
results in past six decades.
Whereas it is common to cite poor execution and leakages as the
primary cause for sub-optimal results of the social welfare programs, in my
view, the primary reason is disregard to regional diversities.
For example consider the following:
(a) Lakshadweep (95%)
and J&K (65%) have large Muslim population; whereas Meghalaya, Mizoram and
Nagaland (65-85%) have large Christian population. Implementing uniform
religion based welfare program for these states is bound to fail.
Similarly, the Schedule Tribe population in Hathras district in
UP (0.1%) Goa (0.04%) are materially different from the ST population Mizoram
(95%) and Lakshdweep (95%). How implementing same reservation policies in these
states, Union Territories or even districts could yield desired results.
(b) The southern
states in India mostly witness hot weather and receive abundant sunlight.
Western states get abundant sunlight, have arid environment. Northern, Central
and Eastern states have a variety of seasons, while hill states mostly have
cold climate.
Having uniform energy policy and subsidization for all these
states is bound to produce disastrous results, as the case have been.
For example, a solar energy based subsidy policy in south and
west, a wind and tidal energy based subsidy regime in coastal areas, and a mix
of solar/LPG/KSO subsidy regime in northern and central plains, and hydel
energy based subsidies to hill areas from beginning could have created an
amazing energy security infrastructure in the country in past six decades.
(c) For example,
Punjab & Haryana, UP & Bihar, MP, Rajasthan and Tamil Nadu have very
different water resource profile and irrigation infrastructure. Within UP
eastern and western parts differ materially. Having uniform food and farm
subsidy regime has only increased regional disparities.
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