India-District Administrative set up

27/03/2010

Watching the local Television channels, one gets the confirmation that of all the government officers, the District Collector/Deputy Commissioner appears to be the most overburdened officer. With the ever increasing welfare measures and developmental works which the state and central governments are undertaking, the workload of the Collector keeps increasing. The districts have already been bifurcated and trifurcated through out India and at present the districts, in any state, in general, are not large enough to be further divided immediately to lessen the work load of the Collector. Of course, as the population increases, the already small districts would need to be made smaller (in areas). It is also not practical to post two Collectors for each district.

The District Superintendent of Police (SP), who is of the same rank as that of Collector, also has more than sufficient work. With the criminals using sophisticated and new methods, the task of preventing and investigating the crimes is becoming more difficult and time consuming. With every individual and groups of people asserting their rights in relation to the rights of other people and groups, maintaining law and order is also more difficult than before.

The Collector needs to be relieved of some work, to enable him/her to concentrate on the remaining work. SP could perhaps be entrusted with the work relating to the management of natural calamities like floods, fires, riots etc. Also some work relating to regional transport department, labour department, forests, and fire services, census, conducting elections, arms licenses, hotel licences,  cinema theatre licences,  could  perhaps be placed under the charge of SP

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Employment generation is easier in developing countries

21/03/2010

There is a lot of scope in developing countries for creation of employment avenues. In developed countries, the scope for laying new roads is limited as they already have sufficient roads. Similarly, there is very limited scope for laying railway lines, drawing electricity and telecommunication lines, in building houses, in building lakes and digging canals, laying sewerage, expanding supply of piped gas etc., as saturation point has already reached. But in developing countries, the scope is unlimited. In other words, while it is difficult to generate employment in advanced countries, it is very easy to do so in developing countries.

All the works mentioned above, will not only eliminate unemployment, but would lead to labour shortage. However, priority should be established for undertaking the different works. Irrigation and agriculture should get the top priority. After digging lakes and irrigation wells around the lakes, it takes only about 4-5 months to get additional production of food grains. The second priority should be to set up cotton ginning, spinning and weaving mills and ready made garment units.

Funds should not be a problem as currency notes can be printed. This will not lead to long term inflation as with the digging of lakes, wells and canals, the production of food grains and other agricultural produce will increase which will lead to decrease in prices. Inflation would be there only for a short time, between the start of the work for digging lakes etc and the harvesting of the agricultural produce.


Gap between the rich and the poor

15/03/2010

It was and continues to be fashion with leftist intellectuals and political parties to speak of the rich becoming richer and the poor becoming poorer in India, thus widening the gap between the rich and the poor. They find fault with the present and past governments for this.

 The rich are becoming richer because of the hard and long hours of work they put in. Similarly, the poor are becoming poorer because of their refusal to work hard and longer.

In the past, agricultural workers used to work for 8 hours a day but now they work only for 4-5 hours in most of the places. During this period, they take breaks for drinking water, smoking, tea and for lunch. The owner of a provision store who is rich, works from about 7 am to 9 pm i.e. for 14hours a day, taking break only for lunch and that too only for short time. The same is the case with other rich people.

 To meet the increased cost of living, the workers in United States and other developed countries look for second and third jobs. In India they look to the governments and the governments readily come up with more grants and subsidies as well as free supplies, while there is acute labour shortage in every sector of the economy- agriculture, construction, small scale industry, plantation, transport, domestic etc. The people who work for 4-5 hours can easily find second and even third jobs in their localities themseves in agriculture, construction etc. which would enable them not only to meet both ends meet but also have savings for them and their children.

It is time the governments reduce the grants and subsidies and advise the people to look for second and third shift jobs. The governments may however, simultaneously assist the people to acquire new skills for working in construction, small scale,  plantation, transport and other sectors


Corporatization of Indian Railways

14/03/2010

The Government of India has denied consideration of any proposal to privatize Railways. Government would have valid and good reasons for this. There however, does not seem to be any convincing reason for running the railways departmentally. The telecommunications were earlier handled departmentally by Department of Posts and Telecommunications. Now the telecommunications operations are run by BSNL, a Government undertaking. The service is now much better than what it was, when it was handled departmentally. Similarly, railways should be run by a government undertaking. Railways have around 1.4 million officers and staff. The population of as many as about 50 countries in the world is less than 1.4 million. In such large operations, it is difficult to get the best out of the employees. Therefore, the operations should be handled, to start with by at least 10 corporates each with employee strength of about 140000, which itself is very high. These undertakings could raise resources by making profits and by borrowing from banks and the public. Hence forth, they should only be giving dividends to the government and should not seek any budgetary support for new lines or for any other purpose.

Additionally, like highways, railways should also get projects of new lines, doubling of lines etc by Build, Operate, Own and Transfer (BOOT) basi

As mentioned in the post “Indian railways and employment generation” (1.5.2009), India needs at least about 137000 km of new lines and this can be constructed fast by Corporatization of Railways and by allowing construction of rail lines by BOOT method.


Petrol and other fuel prices should be higher

14/03/2010

There are a lot of protests against increase in the prices of petrol and diesel in India. The prices need to be higher than even the increased prices for the following reasons.

  1. India imports the raw material for fuels, viz crude oil. Crude oil reserves in the world are so low that they may last only for a few decades. Hence this needs to be used as little as possible. To discourage people from avoidable use, the prices have to be kept higher than what they are now.
  2. Lower consumption would mean low pollution
  3. While the prices of petrol and diesel in many countries are around the enhanced prices in India, in some countries these are much higher. The prices are higher there to discourage use
  4. Higher prices will encourage vigorous efforts for invention of viable, alternate and cheap fuels.
  5. Automobiles production- two wheelers and four wheelers are increasing so fast in India, that, if the prices are not high, India may have to import larger quantities leading to depletion of world reserves of crude oil. Automobile companies should be forced to undertake research and produce fuel efficient vehicles. The increase in prices can be absorbed if the fuel efficiency of vehicles increases even by just 5%.
  6. Unutilized or underutilized cattle power, for drawing water from wells, for transporting goods over short distances etc could be utilized
  7. People would start using bicycles and solar powered two and four wheelers
  8. Some people will also be forced to walk short distances, instead of using vehicles. This would be good for the health of the people.
  9. To encourage production and use of biogas and to increase the use of firewood for which demand has come down, it is necessary to increase the price of LPG

India- Government’s control of the economy

10/03/2010

In the initial years of independence, public sector had a large presence in the Indian industry and banking. This presence was further enlarged during the Prime Ministership of late Mrs. Indira Gandhi. Several private banks were nationalized. The managements of several companies were taken over by the Government. Several other companies were nationalized. This is how National Textile Corporation came into being. State and Central governments also set up many new factories. Now the situation is changing. Several government companies are being sold to private sector. Governments’ stake in many commercial and industrial establishments is being diluted. Thus the control of the governments over the economy has diminished.

Governments’ intentions should not only be to promote industries but also to have visible presence  for obvious reasons. In stead of inviting foreign equity participation in Indian companies, the governments (state and central) should set up investment companies which should take up equity in new companies as also in existing companies to induce Indian entrepreneurs to set up factories and commercial establishments and to expand existing ones. Indian companies should normally be allowed to seek technical collaborations only with foreign companies.

Governments  should borrow from Reserve Bank of India for setting up investment companies. Later on the loan amount could be monetized. This will lead to only as much inflation as bringing in equity from foreign countries.

Investment by Foreign Institutional Investors should also be restricted as ultimately, they would take away more foreign exchange than they bring in. As of now, the foreign exchange reserves of the country are more than adequate and there is no need to worry about this.