GROWTH OR DEVELOPMENT
Disinegrationist Development & Wasting Welfare
T.H.Chowdary, Director, Centre for Telecom Management & Studies 5/18/2011 1:24:42 AM
India’s economy has been, soon after liberalistion in 1991, growing at an envious eight percent and above. The growth of population has slowed down; it has come down from 2.8% to about 1.7% per annum. These rates help doubling of the per capita income (PCI) in about 12 years. This is in contrast to the miserable 3.5% annual growth in GDP and 2.8% population growth per annum before 1991. At those rates it would take 70 years for PCI to double! The pre-1991 miserable performance was due to the Nehruvian permit-licence-quota socialism which stifled the initiative of the growing number of enterprising engineers, MBAs and other highly qualified young people. Is economic growth a sufficient condition to build a prosperous, powerful, intellectual and ethical India? The prosperity should not be only for the few enterprising people. If that is so, the great wealth that is being created will be concentrated in a small section of our population. Inequality as between the enterprising and wealth creating sections of the people and the hardly educated, unemployable masses would grow. Growing inequality creates envy and instability in the society. These are the fuel for the Maoist above-ground intellectuals and underground guerilla armies and casteist groups (some of which are fostered and financed by multinational conversion (MNC) enterprises) to indulge in militant socially disruptive and destructive activities. The public policy of all political parties and governments should be to contain this inequality and help the economically lower strata of people to lift themselves up into prosperity.
Opium Feed to the Poor
Soon after independence, the budget of the Government of India was a total of about Rs. 110cr.; by the year 2011-12 the tax revenues are over Rs. 8 lakh cr; Government will borrow Rs. 4 lakh cr. The budget is a total of 12 lakh cr. In the early 1950s there was very little social sector spending. It has now risen to over Rs. 4 lakh cr. There are subsidies for agriculture. These could be justified as food and its availability to all people is essential. On the amount of debt government has so far incurred, it is paying interest of over Rs. 2 lakh cr. Obviously, this amount goes to the rich who alone could lend to the government. There are certain social merit goods for which subsidies are justified. Education upto matriculation is such a social merit goods. But what is known as fee reimbursement in Andhra Pradesh to over 25 lakhs of university level students is a total mis-spend. It is primarily aimed at getting votes. For eg: the annul intake of students into engineering colleges in Andhra Pradesh is 2,75,000 (all over India it is about 13 lakhs). About 75% of these are unfit to be employed as asserted by various professional and business associations and companies. Why should such students be subsidized? The entitlement — wallahs (those who assert right to life, right to house, right to wife, right for a degree, right for free rice) and the subsidy justifiers say that this is for social justice, for inclusive growth, for giving access to education. When education upto matriculation for all itself is a constitutional requirement but is not yet attained, giving total fee reimbursement to millions of university level students excepting about 15%, is a criminal misapplication of the resources of taxed people’s money by government. What good are these unemployable engineering and other graduates going to do the society in return for the tax money spent upon them? Would not a loan be a better option to deliver access to degrees level education? Would not merit scholarships be better so that the meritorious who are employable can return something to the society which is spending upon them?
Another give-away is the National Rural Employment Guarantee (NREG) scheme named very exceptionally (most schemes are named after Rajiv Gandhi or Indira Gandhi) after Mahatma Gandhi. It is a great waste. Every year about Rs. 40,000 cr are being spent. The example of my own village will illustrate the waste and harm of the NREG. There are 400 people (of about 1200 house holds) enrolled under the NREG. Instead of Rs. 100 per day they are now paying Rs. 125 for 125 days (instead of 100 days earlier). 50,000 man days of labour every year in a village with a population of 5000 to produce any social good is unthinkable. They don’t have any work. The non-governing government of Andhra Pradesh, under threat of political instability has increased the daily wage from Rs. 100 to Rs. 125. The result is the men just come to some office at about 10.00 Hrs mark their attendance, go away and get money. The wages for agricultural labour have shot up from Rs. 100 per day to Rs. 400 to 500 during the season of harvesting and such works which have got to be done only during a particular period. The result is farmers who are not even rich — the average holding in my village is 4.5 acres per family — are distressed and are wanting to abandon farming. They would rather lease their holdings to corporates. Sooner the corporate farming becomes a practice, the better. Then there will be relief for the distressed farmers .
This phenomenon of 70% rural population depending upon agriculture must be very disturbing. The contribution of agriculture to the GDP has come down from 68% in 1951 to 18% and yet 65% of the population of working age in the rural areas (whose population is 70% of India) are depending upon agriculture for their livelihood. Therefore, their PCI is about one eighth that of urban people. The impoverishment of farmers by the steep rise in agricultural wages is occasioned by money being freely disbursed in the NREG. So many people in the rural areas are unproductive because they are not employable in any sector other than those which need physical labour. This is due to lack of education, especially vocational education. The TV and news papers are showing the prosperity of the enterprising Indians (Mukhesh Ambani building a house costing more than Rs. 200 cr and more than 57 dollar billionaires; Indians are growing as billionaires at the highest rate anywhere in the world). Obviously, the multitudes will get restive and in order to contain their restiveness, political parties are competing to distribute money directly as in the NREG and in addition, by way of appliances like TVs, laptops, mixis, grinders, light bulbs and so on as in Tamilnadu. As time passes, political parties will have to promise more and more welfare competing with one another thus detracting from the spend on education and very grievously, on the defenses of India. our Chiefs of staff of Navy, Air and Army have already drawn the attention of the nation to the fact that China’s military power is three times India’s; Pakistan has near parity with India in regard to the defences. Gen. Shankara Ray Choudhury, former Chief of Staff wrote that we would have to fight two and a half wars simultaneously against China, Pakistan and Maoists within the country. When we are overwhelmed by a three to one superiority by China alone, imagine what could happen to India if we are to wage war with all the three which is not inconceivable.
Loan Melas
Another give-away is the waiver of debts, Rs. 70,000 cr for farmers. A moratorium would have been better. Taking a cue from the central government, Andhra Pradesh government waived another Rs. 5000 cr to farmers who have paid the debts to bring them to parity with those who have defaulted and got the loan waiver. In Andhra Pradesh there was a debt waiver mela — over Rs. 1900 cr for the SCs, Rs. 450 cr for Muslims, Rs. 350 cr for weavers and so on. Government of Andhra Pradesh (I am sure many other governments also) are urging people to take loans like for example when the former Chief Minister Y.S.Rajasekhara Reddy gave a lakh of Rupees as loan to one crore women to make them lakhpathis. Now when they are due to repay, political parties including Congress are agitating that these loans should not be collected. So governments and political parties are urging people to take loan and at the same time, they are organizing them for waiver of the loans. These actions are subverting the work ethic, the saving ethic and instead promoting dependency ethic; that is, government should give free housing, non-repayable loans, free provisions — from rice at Rs. 2/ Kg; then Rs.1/Kg; and now 35 Kgs free per month, marriage, pregnancy and child-birth grants; old age pensions. Government does not expect anything from them. It is promoting laziness. No nation which has spent more than what it produces has lasted for long as a great nation. For example, we see the decline of America because an average American addicted to credit card use is indebted to the extend of 18 months of his PCI. That is the reason why American power is declining.
A Few Right Actions
What is right is work must be got from people availing NREG but not in the village where they are. Work must be guaranteed for those who are willing to work at project sites where dams and canals are being built, where houses are being constructed, roads are being laid. They can be transported at government cost and housed in tents with their children also being looked after by government. That means instead of simply paying money for doing no work in the place where they are, they should be prepared to move. Only those people willing to work at sites shown by government should be guaranteed a job.
In addition to this, government must have program of totally stopping all welfare for families who have more than two children; that is the moment a third child is born all welfare must cease because that is an unsupportable burden on the rest of the people. If somebody says that God is giving them children, then they should apply to God for welfare and not to the poor government and poor citizens. It is this Manthra that China has been following one-child norm since 1978. It is because of this that there is hardly any growth in its population and that it has been able to build prosperity and power and become the second largest economy in the world in the shortest span of time and is poised to over-take the USA in the next few years. Government, leaders and responsible citizens must constantly emphasize the virtues of education and its quality work and saving ethic. They should say that people should try to live within their ability to earn and during the period of development, they should have only one or two children. That is one by choice and the second only by mistake.
Slogans like garibhi hatao, inclusive growth, Muslim First and social justice are all sweet words. They are unethical and totally populist. The purpose of populism is to get votes; the purpose of vote gathering is to get elected to legislative and ministerial positions cover up the real intention of feeding welfare opium to the people to keep them away from movements against corruption, inflation, loot of public money and its stashing in Swiss banks and for building vote banks. Pre-election promises of give-aways are no different from I.O.Us and should amount to distribution of cash for votes; hence punishable.
If the huge wealth our entrepreneurs are creating of which governments are getting about a third is used properly to build up human resources, through education and health and housing and drinking water, limited families then our nation can really become prosperous and powerful. Education rid of unnecessary and unjustifiable reservations will be productive of intellectual property (IP) that the country needs to sustain its prosperity and power. And above all, ethical and moral values like that one should live within one’s own means, one should not covet wealth without work, one should not produce children who will be a burden upon the society are what should be taught in the home and school and at large by all responsible people. This nation cannot afford wealth creation with increasing inequality. This nation should not create opportunities and incentives for the wealthy to take away the money and keep them in Swiss bank.
If we make a mockery of reservations, launch festivals like loan melas and their waivers; if we bribe people by give-aways like in NREG, indiscriminate and unreasonable fee-reimbursements; cash grants for marriages, pregnancies, child-birth and pilgrimages while those in government loot money in collusion with contractors, licencees, land-gainers (in the name of SEZs which are later utilized for real estate activity), we will surely be incubating popular, deadly up-rising as in Algeria, Egypt, Libya…. The political class and the collusive greedy get-rich-quick business operators will be bringing disaster upon our country even as our “friendly” neighbours undermine our sovereignty and plan to slice off our territory in the north-east and north-west.
(Dr. T.H. Chowdary held executive, managerial and directorial positions (General Manager, Deputy Director General) in the Departments of Information and Broad-casting and Telecommunications, of the Government of India. He was the founding Chairman and Managing Director of India’s Overseas Communications Corporation (VSNL). He was Governor, INTELSAT, (Washington) and Executive Director, INMARSAT, (London). He was Senior Expert of the International Telecommunications Union in Guyana and Yemen and was engaged by the CIDA (Canada) for writing the Green Paper for restructuring of Telecoms in South Africa and for drafting Information and Communications Policy in Nepal. He was Member of the Prime Minister of India’s National Task Force on Information Technology and Software. Dr. Chowdary was Information Technology Advisor in the rank of Minister of State to the Government of Andhra Pradesh, mentoring the State’s extensive programmes for e-Governance, Government to Citizen services (e-Seva), establishment of Internet Kiosks, computer education in schools and colleges and broadband applications. Dr Chowdary was Fellow of Satyam Computer Services and the founding Director of the Center for Telecom Management and Studies and also serves as a Chairman of Pragna Bharathi. He is the author of several books on telecommunications, information technology, Indian culture and politics.
The views expressed in the write-up are personal and do not re?ect the official policy or position of the organization.)
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