Thursday, August 30, 2007

Serial stupidity -- a la the politician

Two articles from today's newspapers demonstrate that stupidity does not respect party lines.

Exhibit one: The ever entertaining "Dr. Ramadoss"
In his ongoing battle to suborn the AIIMS (into, what else, his personal fief?), his latest salvo.
"...saying that the premier institute was slowly becoming a "doctors' factory" for foreign countries and not for the needy Indians.

"Over 60 per cent of the AIIMS passouts are going outside India. It's becoming a doctors' factory that is producing talent for foreign countries and not for the poor Indians," Ramadoss said.

This is a tried and tested strategy to choke anything and everything: first call something anti poor, then, under the guise of "saving the poor" make it a government fief and reduce to a semi-coma and finally kill it altogether.
Just like Medical Education in Maharashtra.

If the government is so worried about doctors decamping with its money, it should stop spending on them!

My mind screams "Regime change" when confronted with such idiocy.

But, alas, the main opposition -- the BJP -- is also not immune to this phenomenon -- as exhibit 2 shows.
So here is the story: Mumbai Municipality plans to introduce 'telescopic' tariff rates for water consumers by which people who consume more pay more per unit of water they consume.

This will make water charges progressive -- just like income tax (earn more, pay higher %).
When done judiciously, this is fair and desirable -- it shifts the burden of payment to luxury users (guys with pools, jacuzzis, washing machines, 600 litre fridges).
This is highly desirable: it will allow BMC to generate surplus to re-invest in maintenance and capacity expansion. Further, this surplus will be generated by charging those who can afford to pay.
It also creates strong incentives to reduce wastage -- and this is no secret -- the biggest consumers are also the biggest wasters.

However, some BJP-wallahs think this is "anti poor".
Look at this fellow's line of reasoning:
However, committee members said that citizens do not get adequate water and therefore no reforms should be made. “The BMC provides only 90 litres per capita per day. The civic body should first follow the national norms and then introduce telescopic rates,’’ said BJP member Yogesh Sagar.
[emphasis mine]
This is like saying no reforms are necessary in telecom because there are insufficient phones in India!. The reason Mumbai's pipes leak, Sir, is because there is'nt enough money to fix the leaks. The only way you're going to get that money is by making people pay, or by handing over BMC's water to a private agency (that could raise productivity by firing non-performers etc.).
Given the second option is out -- can the existing chaps at least get some money to repair our pipes -- even if it is at slightly higher prices?

That's not gets better
BJP leader Bhalchandra Shirsat said that BMC had shown dreams of 24X7 water supply to the people but citizens were not even getting enough water for daily use. “There is no reverse accountability from the civic administration,’’ he said.
Fully agree that BMC must be accountable, but have these fellows heard the term "you get what you pay for?"
Water in Mumbai is charged at Rs 2 per one thousand litres when it costs six times that to catch, store, purify and deliver. Bisleri costs Rs 10,000 per thousand litres!!!
What exactly is the BMC accountable for? Providing water for free? Into perpetuity?
How can BMC provide water even at current volumes if it loses money on every drop it provides?
You, Sir, are accountable to the city for ensuring that water remains available 20 years from now -- not for subsidising jacuzzi owners!

And even better:
The committee members suggested that instead of increasing the price for those consuming more water, the civic body should undertake a campaign for educating people to use less water.
This would have been funny if it were not so tragic.

The icing on the cake: The BJP is not playing a sour-grapes opposition role here -- they are the party in power!

What are these guys thinking? Are they even thinking? Can they think?
I despair.

Friday, August 24, 2007

Prime Minister's Independence Day Address -- Part 2


Reforms in Education constitute the third focus for my Government.

Analysis of Government spending in education reveals a startling fact: expenditure on higher education (medical, technical, engineering and managerial development) is orders of magnitude higher than on primary education.

This is an unsustainable and unacceptable distortion. Insufficient investment in primary education implies that a significant fraction of Indians are not provided the opportunity to earn even a high-school certificate.
Overspending on higher education -- while neglecting primary education -- is perhaps the single-largest mistake we have made in perpetuating discrimination within India.

Insufficient investment in Primary Education (and, I may add, Primary Health) also means non-competitive and anti-merit steps such as quotas and reservations need to be taken to provide symptomatic relief for this underlying flaw.

Finally, international evidence has demonstrated that government subsidisation and control over higher education is largely unnecessary. This is because higher education is usually self funding since degrees typically translate directly into employment opportunities. This has also been proven in India, where private colleges, despite working in a highly restrictive environment, have created tremendous value. They have conferred degrees on lakhs of engineers, doctors and professionals who are now in a position to compete for -- and win -- global opportunities.

Against this background, my Government's Education reform agenda has two simple objectives: universal Primary Education, and a liberalised, competitive higher education sector.

We plan to treble investment in Primary Education -- buttressed by "Education vouchers" similar to healthcare vouchers -- to ensure universal primary education becomes a reality.
Even as investments in Primary Education are increased, the mode of delivery will also be revamped. Special Purpose Vehicles (SPVs) managed by educational professionals will be formed, under strict performance-payment contracts to ensure that Education is actually being delivered.

In conjunction, the Government will begin the slow divestment of higher educational facilities. Key institutions like the IITs, IIMs, Medical Schools and other higher educational institutes will be transferred to autonomous Trusts, with complete authority -- and responsibility -- for maintaining standards and remaining fiscally viable.
Liberalising the rules to allow private institutions, along with fiscal reforms to facilitate funding of higher education will ensure fee levels remain competitive -- and educational supplies flex to match changes in market demands for talent and skills.

To ensure that quality is maintained in a multi-provider environment, robust regulation is also required. A Primary Education regulator shall be formed to monitor the performance of the SPVs referred to earlier. Existing higher educational regulators (e.g. the UGC) will be vested with higher executive authorities to effectively regulate (as distinct from control) a more diverse higher education provider base.

We believe that, for a nation with a unique dempgraphic like india, a "students' market" that provides skills ased upon job seekers' needs -- rather than an "educators' market" which provides skills based upon suppliers' ability to provide -- is preferred.

Economic Performance
The robust economic growth shown by Indian enterprises since Prime Minister Narasimha Rao initiated liberalisation in 1991 is one of the major success stories of post-independence India.
This growth has weathered several storms -- recessions, boom-bust cycles and global crises. Even as Indian companies have made record profits, acquired global companies and expanded, domestic consumption of virtually all goods (commodities, services, retail) has increased strongly across all sectors -- demonstrating that Indian enterprise is second to none in value creation.

Given this stellar track record in value creation, my government believes that this responsibility should be left to the Indian private sector. The role of the government here should be restricted to regulating the system and preventing distortions.

This will free up government resources and expertise to focus on creating value in areas where the private sector is unable or not suited to value creation -- such as law and order, healthcare and education.

[to be continued]

Tuesday, August 14, 2007

Prime Minister's Independence Day Address -- an agenda for reform Part 1

15 August 20xx

In a significant break from tradition, the Prime Minister delivered the Independence day Address to the Nation while standing outside Parliament, in contrast to the usual heavily barricaded Ref Fort ramparts.

Excerpts from his speech:

"My dear countrymen. This day marks the xxth anniversary of India's political independence from over 300 years of Imperial occupation.
Every Independence day is a time for reflection -- of past successes and failures and of future opportunities.
Too many independence days have been spent thinking of the past, and of missed opportunities.
I believe, starting this Independence Day, India and Indians should spend more time thinking about their future.
Keeping that in mind, I spent a significant period of my first 30 days in office meeting over a thousand Indians, from all walks of life, from all parts of India.

Despite their incredible diversity, what struck me was how similar their aspirations for India were: Virtually all aspired to see, in their lifetimes, an India that is safe, powerful, prosperous and dynamic; an India that guarantees the safety and security of all her peoples.

As your Prime Minister, that message is especially pertinent : my people are demanding actions from me and my Government that take concrete steps in setting India in this direction.
And we are required to deliver -- in five years.

On the occasion of this 15th August -- my government's first 15th August -- i will unveil our "first 100 day plan". Reflecting the urgency of expectations, this plan is time-bound -- a response to a clearly articulated expectation of tomorrow's India.

This 100-Day Plan is clearly focused on fundamental reforms and improvements in five core sectors that underlie people's aspirations for a safe, dynamic and wealthy and caring India.
These sectors are: Law and Order (internal and external), Healthcare, Education, Economic performance and Social reforms.

Even as we have focused on these five core sectors, my Cabinet colleagues have debated extensively what the role of Government in each of these areas should be. We believe that in any sector, the Government can play three separate roles: the role of a regulator (that sets and enforces laws), of a provider (an entity that renders a service) or of financer (pays for the service in question, but does not necessarily provide the service itself).

My government has established a clear point of view on the Government's role in each of these sectors.
The objective of the "100 day plan" is to set in motion fundamental reforms in each of these sectors. I shall outline my vision for reform in each of these sectors one by one, beginning with probably the most important: Law and Order.

Law and Order

Ensuring the security of peoples is the first and fundamental role of any Government. Unfortunately, over the past decades, this area has been systematically ignored.
This is an oversight that must be corrected; for, unlike in the other sectors, the role of the Government here is that of regulator financier and provider -- all in one. Failure in this sector is thus entirely ascribable to a Government failure.

Our first priority then in Law and Order will be to raise the funding of elements of our internal and external law and order mechanisms. Resources are needed to raise the service levels of our Courts (that have over 22 million cases pending), our understaffed Police services and our Armed Forces -- to minimise this risk of failure.

In addition to augmenting resources, structural reforms are also necessary to ensure that Lew and Order are always upheld. My government is working to create a reform blueprint to completely insulate Law Enforcement from political influence. This is necessary to ensure that the fundamental right of all citizens to a safe living environment is never held hostage to political and vested interests. It is my belief that with the implementation of these reforms, every perpetrator -- irrespective of class, religion, creed or nationality, will be brought to justice effectively and quickly. A crime punished is ten crimes averted.

Ensuring the mental and physical health of all 1.2 Billion Indians is the bedrock of a strong society.
Healthcare is a top priority for this government since in the next 5 years, this country will have over 300 million children below 15 and over 200 million people over 65 -- both of whom have significant healthcare needs.

The first reform my Government plans to make is to shift the burden of payment for healthcare from the user to the provider.
In our present healthcare system, the government funds hospitals and providers -- irrespective of the quality of care they provide or whether they provide care at all. In this system, citizens end up paying healthcare expenses from their own pockets -- a system that, in nation after nation, has proved to be inequitable and inefficient.
In contrast, the healthcare payment system being devised by my government will provide citizens with cash equivalents that they can redeem in exchange of healthcare services. Hospitals and doctors will be paid on the basis of healthcare cash equivalents they accumulate.
This will significantly increase the efficiency of the system by ensuring that costs are incurred only for services rendered, while also providing users -- especially the poor -- with a real choice in healthcare. A special ring-fenced fund will be established for administering this service to the poor.

The second major reform in health care is around quality management: its important for the Government to ensure that only those health facilities that meet stringent quality, service, hygiene and competence criteria are allowed to operate.
To that end, strong professionally run regulator institutions will be established in the next 5 years to monitor healthcare education, hospitals and patient safety.

[to be continued]

Wednesday, August 01, 2007

How Sarkari "enterprises" destroy value

Air India has bought 2 Boeing 777s that can fly direct to New York.
But the inaugural flight has gone empty.
Even as Union Civil Aviation Minister Praful Patel flagged off Air India’s inaugural non-stop flight to New York amid much fanfare early on Wednesday, the flag carrier’s top brass mulled over the near-empty Boeing 777-200LR that pushed back from Mumbai’s Chhatrapati Shivaji International Airport at 12:45 am.
For onboard the “historic” flight were a meagre 80-odd passengers—including a dozen freeloaders [emphasis added] —as against the 238 seats available. Or a paltry 33 per cent load. What’s worse: things don’t appear much better for the first fortnight either.
In an era of free(er) skies, will anyone really fly Air India? I had the misfortune of flying them once and was appalled, really appalled at the planes and the (total lack of) service.

Despite this,
Air India had opened bookings with fares over 30 per cent higher than the industry average on the sector, which were later brought at par, because of slow bookings.
So, not only does the airline offer pathetic services, it also charges more than its competitors! That's rich!!

Inquiring taxpayers (like myself) want to know where the money goes, and why the all-knowing Government of India continues to squander my taxes on funding this -- and other -- white elephants.