Issues facing India

CorruptionCorruption

Dependence on Agriculture

Business EnvironmentBusiness Environment

Corrupt Media

Unemployment

Inefficient Police

Quality of EducationQuality of Education

Terrorism

Naxalism

China

Infrastructure

Over Regulation!

Crimes against women

Environmental degradation

Ineffective system of Justice

Ineffective system of Justice Population growth

PovertyPoverty

Votebank Politics

Slow Judiciary

Political control overGovt. Policies

Poor Business Environment

CorruptionAiling

Judicial system

Poor Educational standards

Unemplyment

Poor AgriculturalProductivity

Poor Implementation of Govt. Policies

Status of Women

Poverty

As things stand...

Agenda

Political Leadership Business Environment Poverty Education Law and Order

Global ranks

Per capita GDP: 141 Human Development Index: 136 Ease of doing business Index: 134 Corruption Perception Index: 94 4th most dangerous place for women (after

Afghanistan, Congo, and Pakistan)

Political Leadership

India grows despite and India grows despite and not because of the not because of the

Government!Government!

Political Leadership

Control over executive and judiciary Populism inherent to Democracy Corruption Electoral System Coalition Dharma

Control over Executive and Judiciary

Civil Services CBI Vigilance Police Issues with Judiciary

Populism inherent to Democracy

Corruption: Can it be solved? Judicial & Police reforms and Independence of

the Anti-corruption wings Privatization RTI Use of IT Initiative by private players Income tax reforms Simplification of the laws, lesser role of

beureaucracy. Protection to whistle blowers

Political Leadership: Electoral System

Coalition Dharma Ideological differences – fractured policy

debate Blackmail Uncertain fate of the govt

Representation of People Bill, 1951that should be "torn and thrown out".

Representation of People Bill, 1951that should be "torn and thrown out".

Business Environment

• Ease of • DB 2013 rank

• Doing Business (Overall Ranking) • 132

• Starting a Business • 173

• Dealing with Construction permits • 182

• Trading across Borders • 127

• Enforcing contracts • 184

• Resolving Insolvency • 116

Growth rates of India and China

Growth rates of China, S. Korea, Taiwan, India Infrastructure growth

Poor Infrastructure

Growth rates of China, S. Korea, Taiwan, India Infrastructure growth

Slow Reform Process

Refrain from touching politically sensitive areas– Land Acquisition – New LARR Policy, 2013– Labour Laws– Tax rates - GST– FDI in Multibrand Retail

Divergent State Policies

Example: West Bengal / Gujarat / Kerala / Maharashtra / MP / UP / Bihar

Difference in the style of functioning leads to different growth trajectories.

Business-politician Nexus

Business control over policy making, media, implementation etc.

Creates

Bureaucratic Inefficiency

Scale of implementation Performance measurement metrices Political control Ill conceived policies Corruption

Business Environment: Government Initiative

New R&R Policy Thrust areas/sectors, priority sector lending Creating infrastructure through PPP, BOT, FDI

etc. Tax holidays, single window clearance Micro-finance

Land Acquisition, Rehabilitation and Resettlement Policy, 2013

Heavily loaded in favour of land owners Huge mark up to the historical market price

to determine compensation amounts Numerous entitlements to landowners

including permanent job and upfront payment Prohibiting the use of fertile agricultural land

(beyond 5% per district) may be counter productive.

“Socialism is the destiny of any society. But it must pass through

Capitalism first.”

Agenda

Poverty Business Environment Education Political Leadership Law and Order

Poverty Population below poverty line: 29.8% World Hunger Index Rank: 94 (of 119) 43% Indian children under 5 are

underweight and 58% stunted as of 2008 - the highest in the world

Sector Employment (%) Share of GDP (%)

Primary 51 17

Secondary 22 26

Tertiary 27 57

Sector wise contribution to GDP

Govt Initiative: Subsidies

Issues: ✗ Opportunity cost of

money✗ PDS losses✗ Market distortions✗ Inclusion/exclusion

errors✗ Environmental impact

Money granted by the Government to keep down the prices of commodities.

Subsidies in India: Alternative

Direct Benefits Transfer Scheme– Bolsa Familia Programme

Implementation– UID Programme – Aadhaar Integration, ERP Integration and

Integration with nodal bank and payment gateways

Subsidies in India: Alternative

Direct Benefits Transfer Scheme– Conditional Cash Transfer– Bolsa Familia Programme

Implementation– UID Programme – Aadhaar Integration, ERP Integration and

Integration with nodal bank and payment gateways

– Direct transfer of Subsidy through state govt followed by UID based benefit transfer to the targets

DBTS: Risks

Proper Identification of beneficiaries Addressing the liquidity constraint Price indexing of the subsidies Controlling the overall scale of expenditure Black marketing

Govt Initiative: Food Security Bill

✔ Provision of subsidized food grain for 67% of the population (75% rural and 50% urban population to be covered)

✔ To provide Rice, wheat and coarse cereal at Rs. 3, 2 and 1 respectively.

The most optimistic estimates put the cost of the scheme to Rs. 1.3 lakh crore per annum

(11% of the net expenditure)

Food Security Bill: Critique

✔ Do we need it?✔ How are we going to fund it?✔ Impact on other items?✔ Can we deliver?✔ Isn't it too obvious?

Govt Initiative: Food Security Bill

Political implications Public distribution system Cross Subsidy

Govt Initiative: MGREGS

"the largest and most ambitious

social security and public works

programme in the world"

IssuesNet value add

Impact on the job market

Impact on the budget

Poverty: Summary Poverty and Unemployment go hand in hand. Govt. schemes for poverty alleviation focus

on creating jobs & subsidies in agri & other produces.

Govt schemes are marred by ill-conception, scale of implementation and corruption.

Education Literacy rate: 74% (82% for men and 65% for

women) (world average: 84%) Only 15% of Indian students reach high

school, and just 7% graduate Consistent share of at least 3% in the budget

spend since freedom.

Access to Education

Right to Education Act

Education is the fundamental right of every child between the ages of 6 and 14

Private schools to reserve 25% of seats to children from poor families

It prohibits all unrecognized schools from practice

No donation and no interview for admission

No child shall be held back, expelled, or required to pass a board examination until the completion of elementary education.

Quality of EducationRole of govt bodies (UGC, AICTE, MCI etc)➔ Teacher – student ratio➔ Balance between acads and extra-curricular

activities➔ Rote based teaching ➔ Skill development

75% of technical & 85% of general graduates are unemployable by industries. (WSJ)

No Indian university appeared in top 200 (including the IITs). (QS World University Rankings (sept 2011))

The number of students writing CAT 2013 is 2 Lakh (for 3500 seats), GATE 2013 is 12 lakhs (for less than 500

seats), over 5 lakh students for IITJEE 2013, 7.5 lakh for NEET 2013 etc.

Education: Important issues

Fee and Funding Pvt participation and degree of control Attracting foreign universities Limited job opportunities post graduation Adult Education – Literacy vs Education

Education: Summary

The govt has spent a lot of money on Literacy but to not much avail.

The policy is misdirected – Education and not Literacy should be the target.

Focus on employability and alternately creating more employment opportunities is the ultimate solution to the problem.

Agenda

Poverty Business Environment Education Corruption Law and Order

Law and Order

Police Judiciary Status of women

Police

System of policing is governed by "Police Act of 1861"

Police-population ratio of 120 against global avg. of 270 per one lakh

“An average of 50 transfers every month in a state that has around 350 IAS officers...43 IPS officers have been transferred 40 times in

their career.”

“the bureaucrats should work in close coordination with party leaders or face the music.”

- State of affairs in UP

Read article “A hell hole for Civil Servants” by Tehelka

Police Reform

1.Minimum tenures for senior police offices (Station Inspector upwards).

2.Setting up of a body to decide transfers, postings, promotions and other service related matters of police officers.

3.Police Complaints Authority at state level to inquire into public complaints against police officers.

4.Increase in the funding/budgetary allocation for the Police department.

5.Separate the investigation and law and order functions of the police.

6.Greater integration of various arms of investigation.

Judiciary

More than 3.7 Crore cases pending at various levels of courts (district, high and Supreme)

High pendency levels at the quasi judicial forums (like MRTP commission, consumer forums, Company

Law Board, Administrative tribunals, taxation tribunals etc).

“Justice delayed is justice denied.”

“Justice should not only be delivered, it should also be seen as being delivered.”

Judicial Reforms Simplification of the court procedures– Service of summon, recording of evidence,

arguments, decision Suitable changes to categories of laws with high

pendency– Dishonored cheques, Motor Accident, Land

acquisition, maintenance to dependents Compounding/amnesty schemes for penalty

related offences Alternative dispute resolution mechanism– Lok Adalat, pre-litigative redressal, expert

tribunals and regulators, Fast-track courts Use of IT

Status of Women

Foetecide (sex ratio: 941; 914 for children below 6 years),

Discrimination (male vs female literacy rates) A crime against a women is committed every

three minutes, a women is raped every 29 minutes, a dowry death occurs every 77 minutes - National Crime Records Bureau

Causes– Social: Justice and policing, Mindset (Patriarchy,

Tradition, Marriage)– Economic: Lack of job opportunities, Limited family

income – Biological: Nature of work, maternity, self-defense

Government Initiative● Woman Reservation Bill (pending for over 4

years) The sexual harassment of Women at

workplace Act, 2013 Protection of Women from Domestic Violence

Act, 2005 Justice JS Verma Committee report and

Nirbhaya Act (Criminal Law Amendment Act, 2013)

Women empowerment through Self Help Groups, Microfinance, reservation in education etc.

21/04/23

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