How to save the Indian Economy?

India’s growth story ever since de-regulation in 1991 has been both awe-inspiring and meteoric. The pace with which the Indian Economy went on to expand its GDP made the whole world take notice of India’s economic juggernaut. Within a period of decade’s post-globalization, India along with China was labeled as ‘superpowers’ in the making. However, two decades have now passed since the end of the infamous license raj system in India and things seem widely improved but the year 2011 saw a slight dip in the growth rate of India Inc. Analysts say that this down stride is not to be taken lightly and if India Inc intends to keep the cash registers rolling they have to take certain drastic measures or else the alphabet ‘I’ will most commonly refer to Indonesia instead of India on the map of global economic affairs.
 
There are umpteen reasons behind the stalling or slowing down of the growth process in India. The first and the most evident one is policy paralysis or governance deficit. Leading industry players were the first ones who brought up this issue after an ample number of reformatory measures were put in the cold storage or on the backburner by the Government of India. It’s a world renowned fact that political instability leads to economic instability and India’s fractured polity doesn’t help the cause. Amidst a politically volatile environment, the over embattled Union Government of India has lost the appetite for reforms and a disrupting Opposition only adds to their woes. This problem of policy paralysis can be overcome only when all the stakeholders involved in the political spectrum of India rise above partisan politics and get back to the job of legislating. All parties need to be fully committed to getting the Indian Economy back on track and for this purpose; a broad consensus needs to be evolved among all the stakeholders on key reform issues.

Another major headache for the Indian Economy has been inflation or price rise. This has developed because of the imbalance in demand-supply proportions. Many a times, more of demand and less of supply escalates the price of commodities and items. Several corporations indulge in hoarding to artificially force the prices up in order to register higher profits. The Government needs to crackdown upon all those who indulge in hoarding to keep the prices in check. Secondly, the Government needs to build an investor friendly environment by doing away with complicated rules and regulations which promote red tape to pave the way for the entry of new firms in the industry to increase supply and to bring the spiraling prices down. The complex issue of the ever-growing fiscal deficit has also given sleepless nights to India’s economic policy makers. One of the solutions to the complex problem of fiscal deficit is by cutting down on various subsidies, be it food or petroleum. However, to enact this proposal the Government will need to muster a lot of courage as subsidies happen to be integral electoral issues in India and a reduction in them would mean a substantial vote swing away from the incumbent government.
 
A string of more problems faced by the Indian economy are primarily interrelated. They are the issuing of pink slips to employees, sharp fall in per capita income, foreign firms exiting the Indian market, etc. India needs to come up with landmark legislations to deal with these concerns. We need to open up the closed doors of promising Indian sectors like retail. This will bring in the necessary capital which will serve as a boost for the beleaguered Indian economy. The entry of foreign players into the market will also ensure hiring and some talented individuals are sure to meet the cut. The capital brought in by these firms will inject a fresh breath of life in the industry. This investment will be of high criticality and will save the economy from getting derailed. The entry of foreign players will also ensure the entry of better and more feasible technology. India is bound to benefit technologically by such measures. Overall the solution looks to be very simple on paper; open key enclosed sectors for foreign investment, they’ll bring in capital and technology, hire employees and will help in pushing up profits and per capita income. We also need to put a brake on the trend of foreign firms exiting India successively. This has been happening because of the lack of skilled labour in the industry. This concern needs to be tackled with a more holistic and far sighted approach. India needs to improve its education sector vastly and needs to inculcate technical know-how among all students attending the various temples of learning across the nation. This will improve the quality of students graduating from colleges and universities who in turn will turn out to be better skilled professionals in the field. But this is a long term measure and will require tons of patience.

Even though the year 2011 raised many critical questions for the Indian economy but the fact that the Indian growth story has ended eludes all aspects of truth. India is very much on the path towards inclusive growth and if we are able to resurrect certain faulty sectors within a feasible period of time, the Indian economy will very soon become an even more powerful force to reckon with.

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India’s Stellar Comeback – Polio on the Cusp of Becoming History

On 13th January 2012, India engineered a historical feat which many would have termed as ‘impossible’ a couple of years back. The country of 1.2 billion successfully managed to astonish the whole world by not even reporting one case of polio over the past twelve months. The last unfortunate incident of polio in India was reported in Howrah district of West Bengal on 13th January 2011. The World Health Organization hailed India’s awe-inspiring and trend-shattering performance as ‘India’s greatest public health achievement.’

Polio is a viral disease which is catastrophic enough to cause partial or full paralysis. In the year 2006, India along with three other countries, namely, Nigeria, Afghanistan and Pakistan, was included in the list of those countries who miserable failed to curb the transmission of intrinsic polio virus. It was a matter of great shame for a country like India (aspiring to become a superpower) to fail in its pursuit of puncturing the menace of polio virus but India refused to budge and started afresh. The Government of India devised a host of initiatives and came up with spirited strategies to curb this menace. Like a responsible leader, the Government took up the mantle of funding the majority of the polio eradication program in India. The Government mobilized the support of many vaccinators in its fight against polio. Health workers spread all across the country and undertook a massive polio eradication program. Children under the age of five years were vaccinated at homes, railway stations, bus stands and in some cases even on footpaths to ensure their immunization from polio virus. The crusade spearheaded by the Government of India was provided with exemplary and constant support from organizations like WHO’s National Polio Surveillance Project, Rotary International, Bill and Melinda Gates Foundation and many other religious organizations and its leaders who helped the above mentioned organizations in reaching out to the members of their communities by encouraging their community members to actively participate in the polio eradication programs.

The Government’s “107 block” strategy which identified key areas in Uttar Pradesh and Bihar as major roadblocks in putting a brake on polio virus transmission turned out to be a game changer. The strategy which envisaged vaccination being carried out with immaculateness, continuous availability of clean drinking water and propagation of hygienic practices ensured desirable results. The professional training imparted to health workers too played a very critical role in achieving this phenomenal result. The Government’s rigorous scientific sampling of sewage helped in identifying and tracking the spread of polio virus. India’s decentralized polio program which gave enormous independence to health workers operating in different areas across the country was carried out with such zealousness that hardly any case of laxity was brought to the notice of the administration during the vaccination drives. In the year 2011, two National Immunization Days (NID’s) followed by multiple Sub-National Immunization Days (SID’s) set the tone for India’s remarkable performance in the recently concluded year as they led to safeguarding of millions from the sinister polio virus.

However, the crusade is far from over. India will have to continue its stellar performance for two more years before it is declared as polio free. The challenges ahead are complex and astronomical in number. India needs to be highly vigilant and should stop importation of polio viruses from neighbouring countries like Pakistan where it continues to persist. The existing eradication programs need to be carried out with the same indomitable spirit to arrive at the goal of a polio free India and to eliminate the possibility of resurfacing or reintroduction of the virus. The network which has been established with the help of this initiative needs to be diversified so that it can undertake many other immunization programs concerning diseases which continue to be a headache in India so that our country can provide a wholesome healthy life to all its citizens.

NCTC’s Tryst with the Principle of Decentralization of Power

Last week the Union Cabinet sanctioned a very bold program which was precisely a picture perfect example of the Union Government superbly practicing all that it had been preaching since quite a while. Post 26/11, the then Home Minister was made to resign and P Chidambaram vacated the Finance Ministry to take over the reins of the Home Ministry. P Chidambaram envisaged an effective National Counter Terrorism Centre to tackle terrorism in India. He emphasized that the creation of such an institution, wholly devoted to the cause of countering terrorism, was necessary to sabotage terror plots against the nation.

Chidambaram launched a blitz of institutions to strengthen the anti-terrorism armoury of the country but Chidambaram’s idea of tackling terrorism in India was in contradiction to the principle of decentralization of power which has been a fundamental policy being actively carried forward by the incumbent government. Chidambaram wanted the National Counter Terrorism Centre (NCTC) to act like a parent body and advocated in the favour of bringing agencies like the NSG, NIA, NATGRID etc under the umbrella of the NCTC to give buoyance to the proposed institution. The Union Cabinet gave a go-ahead to the setting up of the NCTC but it refused to entertain Chidambaram’s plea to subsume institutions like the NIA and NSG under the ambit of the NCTC. What does this signify? It shows the zeal with which the government is committed to ensuring the propagation of decentralization of power.

The Government refused to accept the draft Jan-Lokpal Bill because it was a similar sort of a proposal where the demand was to circumscribe institutions like the CVC and the CBI under the Lokpal, the placement of the citizen’s charter under the ambit of the Lokpal, bestowing the Lokpal with suo-moto power and giving it powers of preliminary inquiry, investigation, prosecution and other departmental powers. The Government courageously struck down the proposal since the proposal aimed at loading a single institution with all possible powers. Chidambaram’s vision for NCTC sounded a bit similar but the government passed a different version of it.

What we need to realize is that no matter which issue is to be dealt with, be it corruption or terrorism, it has to be dealt by a medley of institutions working in active coordination and consonance with one another, not by a single omnipresent body. The Government is deeply committed to address all such burning issues but at the same time it is the Government’s responsibility to hold up the spirit of decentralization of power. Just because the Government doesn’t clear proposals wanting to create centralized institutions and instead gives its nod to creation of institutions undertaking the task prescribed by means of sharing powers and responsibilities, it doesn’t mean that it is wilfully trying to weaken institutions and is not enough committed to address the concerns facing the nation. What we must correctly comprehend is that decentralization of duties and power is the primary step towards addressing any concern. A lot of troublesome concerns have persisted just because a single institution based in Delhi has tried to slug around with it. With the power of legislating let us create institutions and not dismantle institutions, let us strengthen the Executive and let us not weaken it.

Fighting Poverty & Identifying The Poor

There are an ample number of reasons for the failure of the welfare schemes initiated and implemented by the Planning Commission of India for the poor. The first and foremost problem lies with the identification of the poor. The statistics revealed from time to time by the Planning Commission are erroneously flawed and contradict the figures of many other independent outfits conducting surveys to measure poverty. This error comes into play because since a long period of time we’ve been dependent on a uniform definition of poverty. A uniform definition of poverty cannot rightfully point out towards all those who are poor. For correct and clear identification of the poor we need to have multiple definitions of poverty measuring poverty on multiple parameters. The figures obtained should be further classified and they should plainly put all those afflicted by poverty under different categories.

The first one should consist of all those who are living in a totally deprived state referred to as absolute poverty by economists. The second and third, should shell out the names of those who are poor but somehow are able to meet day to day expenses and who are vulnerable to poverty in the near future, respectively. The second problem lies with our bureaucracy. We’ve created a giant sized bureaucracy which incurs astronomical amounts of administrative overheads. 60-70% of the funds allocated get exhausted by the time all the administrative and management expenses are met, the next 10-20% get swallowed courtesy corruption. In such a scenario only 20% of the funds targeted at the people actually reach them. We’ve got to fix our bureaucracy. This handicap can be outdone by simplifying the procedure of implementation of schemes which will not only ensure cost effectiveness but will also lead to timely execution of the work to be done.

Bureaucracy needs to go through overhauling to get itself back on track in order to ensure that we are able to allocate 70% of the total number of funds allocated for the poor. If these small steps are performed as desired then we can surely achieve planned growth and eliminate poverty. We’ve got to stop concentrating on GDP. It just represents trade. The real growth is in desirously rooting out poverty and in improving the quality of life which is categorized by health, happiness and human resource development. Quality of life should always come prior to the standard of life because standard of life is economic in nature and the numbers game associated with it is can be easily manipulated with the help of the amount of money earned by the super rich. In an economy as unequal as ours it takes a far greater amount of pain to enhance the quality of life rather than the standard of life but this doesn’t mean that there isn’t a need to enhance the standard of life. 

 

RTI & Institutional Efficiency

Union Law Minister Salman Khurshid recently stated that the Right to Information Act (RTI) is causing serious roadblocks in government functioning. The RTI Act has been a major milestone in the history of the constitutionally governed democratic Republic of India.

This Act has helped in exposing graft and incompetence, it has also led to the inception of transparency in government functioning, decision making and policy implementation but at the same time it has been greatly misused to create unnecessary obstructions to various policies to satisfy vested interests, political purposes and to garner access to politically sensitive information capable of evolving into a sensational news item.

This Act like all other acts has been rightly as well as wrongly used. What we need to do is to draw a clear line of demarcation between transparency and restricted institutional autonomy necessary for flawless functioning. Sometimes the tab of the RTI which hovers over the offices of the PM, CJI etc becomes burdening in nature. An effective mechanism capable of ousting and specifically stopping the misuse of an Act of this much importance is essential for good governance capable of giving inclusive growth. There is no denying of the fact that governments do need to be accountable to the general public but they deserve some secrecy to conduct diplomacy and statesmanship and this fact needs to be respected.