Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

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 all...it 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


Education


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]