Minimising corruption- discontinuance of subsidies and grants

30/05/2009

It appears that if the government stops giving subsidies and grants to the people, corruption can be reduced. To ensure that the people do not suffer in the absence of the existing grants and subsidies, full time jobs could be created for them. In countries like India, it is very easy to create jobs. In countries like Japan, no more roads and railway lines need to be constructed but in India, the present length of these facilities need to be increased by five fold.

In Tamilnadu, people get rice in the ration shops (government distribution shops) at Rs.1 per kilo. In the shops, the minimum price of the rice sold (the quality of course is a little better) is Rs. 20. Every month, a family gets 20 kilograms of rice for Rs. 20 from ration shops. They save Rs.380. If issuing ration cards is delayed by even two months, the family would lose Rs.760. The officials in charge of issuing ration cards may think that when the family saves Rs.380 per month on rice alone (sugar, pulses, kerosene etc are also supplied at ration shops at lower rates), why should the family not pay him Rs.250 for his signature. This is how corruption starts. The family may feel that even after paying Rs.250, they would save substantial amount in getting ration card without much delay and so, may not mind bribing.

The Government provides scholarships to children and the amount is substantial. The Government also provides Television sets, cooking gas and stoves, agricultural land, certain seedlings, electricity for agriculture, house sites, clothes for festivals, marriage grants for girls, meals for pregnant women, expenses for childcare at the time birth, school books, uniforms, mid-day meals and much more all  free of cost. The Government also provides grants and subsidies for certain industries. Depending on the benefit that the grant/subsidy receiver gets, the official concerned may demand and the individual may not mind paying a bribe. Mainly, a few, who do not get any benefit for the service for which bribe is demanded complain.

Few people say that they got government jobs by paying bribes. None of them has any complaint. All of them seem to think that they can earn this money through corruption in a few months.

The other reason for the breeding of corruption is that there is no transparency in handling the issues. None of the employees including the senior most officers of a department or even the senior most officers of the government replies to the correspondence he receive, either by mail or by email. If people think that they can petition to the senior officers and get their due, they would not bribe lower rank officials. If every office is made to render their services to the extent possible, corruption would come down. For example, a person could apply for a ration card by post to the Village Administrative Officer who should be required to forward the same to the revenue officials after verification. The revenue officials should be asked to prepare the ration card and send the same directly to the concerned family, with a copy of the covering letter to the village official for his record.

In India, common people are the ones who breed corruption. They demand money for their votes. They demand several things, free of cost. There was an instance of people in a few places going to the private jewellery shop and demanding them to sell gold at Rs.500 per 8 grams against the prevailing price of Rs.10,000, saying that they heard that government had issued orders for the same.

After independence people have become lazy with the introduction of modern farming methods and modern gadgets in households. The time saved by the use of machineries is not used to do other work. They just rest and this has made them lazy. The governments have taken upon themselves the duties which the parents and other family members are to perform. In return, the government does not get any thing free from the people.

Corruption could be reduced considerably, if the government discontinues the subsidies and grants.

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Credit Rating Agencies-Is there a need?

30/05/2009

India has allowed western credit rating agencies to operate in the country. It has also allowed the establishment of local credit rating agencies. Government of India and regulatory authorities including Reserve Bank of India and Securities and Exchange Board of India recognize the ratings of these agencies. People also give consideration to these ratings in taking decsions on investments. How do the agencies come to conclusions about the financial strength or weakness of a company  and how can one rely on their findings?

First of all, it is not possible for any agency to rate any manufacturing or financil services company correctly. Secondly, how can one be sure that its ratings are not subjective? Can the rating agency prepare any report on a company without the company’s full cooperation? Will the company provide any information which will show it in a bad light?

Reserve Bank of India and a few research organisations estimate the national GDP to the accuracy of 0.1% i.e say 5.7% or 5.8% and keep revising the same. When it requires the entire government machinery to estimate GDP to the accuracy of 0.1%, how can any smaller organisation or institution do it? At the most one can say that because of good rains, the agricultural production may go up by 10 or 15%; the production of fertilizers, pesticides, agricultural implements etc. may also go up by 5% or 10% etc. If there is increse in wages of the entire working class, one can predict that the demand and hence production of consumer durables may also go up. But no agency can estimate that the economy of a large country like India can grow, say  by 7.1% or 7.2%.

The ratings of the agencies is creating havoc in stock markets. Many companies abandon proposed projects which affects the growth of the economy. There appears to be a need to seriously consider whether there is need for the credit rating agencies.


Why should a lazy person be rewarded

28/05/2009

The new Railway Minister of India, Ms. Mamata Banerjee, announced a special pass for those earning less than Rs.500 per month. The special costs Rs.20 to travel 100 km. Now the question is, why should anyone be earning less than Rs.500 per month? For unskilled males, the wages are about Rs.200 per day and for unskilled females, it is Rs.80- Rs.100 per day with one meal. A male worker can earn Rs.2,000 a month by working for 10 days. Similarly a female worker can earn up to Rs.1,000 for 10 days work.

The factories in towns and farms in rural areas are facing acute shortage of labour. Then why should a person not work for at least 10 days if not for 25 days? If a person is lazy enough not to go for work, should the Railways encourage him not to work, by offering him concessional tickets? One can understand special passes for the aged, sick and handicapped but not for people who are fit but are lazy, not to earn Rs.500 a month.


Reduction of shrinking of agricultural land

26/05/2009

A few decades ago, forest land was converted into agricultural land. In India, unused government land was distributed to the poor people for cultivation. Simultaneously, agricultural land was also being converted for non-agricultural purposes like construction of school, office and commercial buildings, factories etc. There was however, net increase in cultivated land. Of late, forests are not destroyed (in fact afforestation is going on) and the unused government land is limited. On the other hand more agricultural land is being used for buildings, factories, roads, railway lines etc. Agricultural production has been more or less stagnating at around 210 million tones a year for the last few years. Population growth rate has come down but the population is still increasing. Therefore, there is need to limit use of agricultural land for non-agricultural purposes. Some of the ways could be:

  • All Government office buildings should be multi-storied – 8 floors and above.
  • All buildings constructed by the government for distribution/sales to poor People like the Samathuvapurams in Tamilnadu, units of Housing Boards etc should also be multi-storey buildings
  • Government should procure land in public interest only for present use and not for future use also. National Highways Authority of India has acquired much larger area than required on the plea that in future it would be required.
  • For factories etc. also, future expansion requirements should not be taken into account for present acquisition.
  • Burial should be discouraged and cremation should be encouraged
  • Private schools, colleges, hospitals should also be housed in multi-story buildings with safe lifts.
  • Government should extend liberal loans/grants to private persons for converting their single storey buildings into multi-storey buildings

Centre for Chaning vaues in Indian society

22/05/2009

The intellectuals in India are generally very critical about the bureaucracy and the politicians. They have a soft corner for the common people, particularly the poor people. The common/poor people are described as innocent, honest, hardworking, simple and good people. The bureaucracy and politicians are part of the society and if the society is good, the bureaucracy and politicians cannot be bad.

An agricultural worker or a construction worker or any worker in the rural areas is never punctual. He or she finds several excuses to stop work during the day. He usually takes one full day for the work which he could do in 2 or 3 hours. A worker does not work alone. He wants at least one more worker with whom he can talk while working.

If the people in general are like this, how do we expect a government employee to be different from them? Intellectuals talk of corruption in government. How can we eradicate corruption in government when the common people are corrupt? They want money for their votes for any election. They volunteer to bribe to get undue favors.

If the government is to be honest and committed for the betterment of the people, high values should be inculcated the society. Some of the important values to be inculcated could be:

  • Punctuality
  • Commitment to work
  • Taking pleasure in work; shuning laziness
  • Neither giving nor taking bribes
  • Independence – avoiding where possible seeking help or favors from friends or strangers or government
  • Valuing society’s needs more than individual’s
  • Sacrificing more for society than for self
  • Developing a sense of cleanliness – not littering on the streets, keeping public places clean
  • Accountability at all levels, from worker to manager in factories, from Peon to Secretary and Minister in the Government
  • Dignity of labor – not to look down on manual work
  • Respect to the weak, children and women
  • Repayment of debt

There is a pressing need for non-governmental organizations in India which can propagate values in the society.


India and Elections

22/05/2009

During the last 18 years since 1991, one does not see any change in the policies and programmes of the Government of India. In these 18 years, there were 5 Prime Ministers. First there was Congress Government headed by Mr.Narasimha Rao, then United Front Governments headed by Mr. Deve Gowda and Mr. I.K.Gujral, then BJP lead coalition Government with Mr. Vajpayee as PM and finally Congress headed coalition government of Mr. Man Mohan Singh. Each Government said that it was different from the other, but one does not see basic changes in the policies.

The same is the case with the state governments.

The reason is that in India, the bureaucracy is well established and strong. Most of the policies are initiated and decided by the officials with Ministers only approving in most cases while rejecting in a few cases. Initiative is taken by Ministers only in a very few cases. There is thus continuity in the policies and programmes of the Government, irrespective of the party in power.

Mr. Chidambaram presented budget as Finance Minister in United Front Government and also in the Congress led coalition government. He has not changed his policies and views in between. This shows that the policies of the United Front government and Congress are more or less same. The Budgets of BJP led government were not much different from United Front and Congress Governments. So it is clear that which ever government comes to power, the policies and programmes will remain without much change. Even if BJP had been in power during 2004-2009, the course of the government would not have been much different.

However, most of the people have great interest in the elections. They see in the elections, their power to choose the party to lead the government. The active members of the winning parties celebrated the victory with fireworks while those of losing parties were gloomy. But the general public were neither excited nor gloomy, The elections come and go but the government goes on as usual without much difference, irrespective of which party forms the government. There is of course room for every individual Minister to conceive original ideas and implement the same through the bureaucracy.

Perhaps this is the same in most of the democracies.


High wages and national loss

14/05/2009

In certain parts of Tamilnadu, the wages for agricultural and other unskilled workers have increased by about 100% in the last three years. Workers, who used to get Rs.70 per day for 5 hours of work, demand and get Rs.150 per day. Wages for harvesting sugar cane (the process of cutting grown cane) have gone up to over Rs. 350 a tonne. This is more than 25% of the price which farmers will receive for 1 tonne of sugar cane. One would expect that the monthly earning and standard of life of the workers have gone up. But unfortunately it has not. What has happened is that workers who used to go for work for 10 to 12 days a month are now working for only 5 to 6 days a month. Thus the total earnings per month remains more or less the same.

On the other hand farmers have started keeping larger area fallow, for want of affordable agricultural labor which, makes agriculture unremunerative. The overall agricultural production has not gone up. In some cases, production is coming down at such a scale that in the foreseeable future, India may have to import very large quantities of agricultural produce. Keeping agricultural land fallow is a great national loss.

Very often farmers do not harvest the crops and leave the produce in the land. This happens when the prices of vegetables drop to around Rs. 1 per kg but the wages remain at Rs. 150 per day. Classic examples are tomatoes and radish. This is a tragic loss, not only to the farmers but also to the nation.

The prices of agricultural produce and wages for workers should be fixed that one has to work for about 15 days a month for meeting his essential requirements of food, clothing and housing and another 10-15 days for non-essential expenditure like entertainment, electrical household gadgets, mechanized transport, education of children in private schools, medical treatment from private doctors, holiday tours, purchase of jewellery etc. The quality of life of the people will go up and the national income will rise.