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Freedom to do business PDF Print E-mail
Tuesday, 16 August 2011 00:00
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Thanks to 20 years of economic reforms, at 64, India is dramatically different from what it has been at any point in its history. The headline numbers of this remarkable story indicate both the movement and the task ahead. With 85 crore mobile phone connections, India has more people connected to a phone network than to a sewerage one; private sector mobile phone companies have far more rural customers but it is the public sector BSNL and MTNL that continue to get taxpayer-funded subsidies; private airlines fly a lot more passengers but the government wants to plough in another R42,000 crore into the sick public sector Air India; the government spends R29,000 crore each year on elementary education but Indians spend more than this on private tuition/schooling and are deserting government schools for private ones in even rural India; realising the emphasis being put on education by even the poor, the government makes the right to education a fundamental right, but puts the onus of providing quality education on the private sector by forcing schools to reserve a fourth of their seats for those the government decrees have to be given admission; ‘unrecognised’ private schools are providing education to the bulk of the population, but legislating the imposition of physical standards (size of classrooms, for instance) and salary levels for each school, the government is threatening their existence; GDP growth has gone up compared to the ‘Hindu rate of growth’ days, but it goes up when private investment growth rises and falls when this reduces …

 

Judged against this reality, there is little in Prime Minister Manmohan Singh’s speech that suggests a radical change from the business-as-usual approach. Sure, there were references to a new public procurement law to check one sort of corruption, a strong Lokpal, the judicial accountability Bill, a Bill to make regulators more accountable, a new land acquisition Bill to take care of the interests of land-losers. The Prime Minister was right when he spoke about the need to be cautious and to not do anything to endanger stability (in the same vein, the President spoke of the need to respect the separation of powers), about how Parliament was the forum to debate laws and that fasts-unto-death were undemocratic … The real issue, however, is about whether the government, as in 1991, is prepared to get out of the way, to unleash a million mutinies by letting people do their business; it’s about whether, critical in areas such as judiciary or healthcare, the government is prepared to add on the necessary muscle. What we have instead is the promise of more government intervention where it isn’t required—a Right to Food Bill and possibly even more restrictions on private sector service providers with the universalisation of secondary education. An Independence Day speech, it is true, is not the place to spell out details of planned reforms, but it is a useful signalling device—the signal yesterday was government-as-usual.

 

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