Saturday, January 10, 2015

New Year Bites 2015

For the New Year:



Year 2014 can be termed as year in waiting. People waited with bated breath for the policy paralysis to end and for the economy to start growing to its potential. Post elections, the wait did not however end. There have been announcements more than achievements and promises more than performance. 2015 would therefore be a demanding year for the rulers.

The crude shocks elsewhere brought some cheer to India in containing its current account deficit and inflation that touched unsustaining levels in March 2014. Stock markets reacted favourably with the indices taking the highest ever jump of 6000 since the last General Elections. They shocked the investors with a peak in the crash on the 7th January 2015 led by yet another decline in global oil prices and other commodity prices.


India has been attracting the global investors’ attention lately. International rating agencies have all been viewing political stability as a major factor prompting them to move from suspicion to stability. A diagnostic assessment of the Indian economy requires deep understanding of various factors affecting its growth. Optimistic, India has always been, never failed to acknowledge its weaknesses and has also been open to receiving good advice on strengthening its economic frontiers. NITI Aayog has replaced the Planning Commission. Renaming hopefully would lead to better strategies in reducing the rising inequalities in the country.

India’s high economic growth even in the best of times has not been able to take forward the human development indicators in the areas of poverty, literacy, public health, and sanitation, significantly, save some exceptions like Kerala. That every third person in the world living below poverty is an Indian reflects the gigantic challenge the country faces at this point of history. Safe drinking water for all, good sanitation and zero-open defecation require enormous effort from all the state governments.

Education has been the most spoilt sector during the last three decades. The laws facilitating Right to Education suffer serious implementation lags. Access to Primary education universally suffered for want of good affordable schools. In rural areas, the primary schools still have leaking roofs, buildings that do not have toilet facilities, that do not have electricity to introduce state of the art teaching methods for the teachers, and in several places they also suffer from the absence of qualified and well cultured teachers. Teachers committed sexual crimes against their students – the biggest ever shame on India’s culture that says “Acharya Devo Bhava”.  How can such teachers be Gods to the students next to parents? Gains of reservations in the appointment of teachers, and enrollment of students have also been not significant.

 Sarva Siksha Abhiyan under implementation for more than a decade and half now is yet to show its benefits to the expected level. In the urban and metro areas, play schools and primary education has become highly expensive. No one can miss the sight in the mornings of the children carrying heavily loaded school bags on their backs.

The schools do not have enough play grounds, good libraries, and a happy environment for all children to enjoy their learning age. Parents have to rush during the office hours to pick up their wards from the schools. Regulators are intransigent and regulations are permissive. It is time that this tier of education is cleared of the mess with a sense of determination. Whether it is done by laws or regulations or better surveillance is left to the governments. No school should deny admission for a child staying within 5 km radius. There can be more schools depending upon the population of school going children within the 5km radius and these should be established by the state government.

India has been relentlessly pursuing inclusive growth agenda during the last ten years. Right to Health proposed as a legal right for every citizen is a good move in this 2015. Hopefully it would address the issue of reach ere long. During the last two decades health sector has moved to exploitation from engagement. Prices of health services have touched roof making the governments in several States to introduce subsidized health programmes – Kutumba Sri, Arogya Sri and the like. Some Governments like Telangana have provided access to corporate hospitals to all their earning employees with the State picking up the expenditure. Whatever the State picks up is out of the taxes and duties that the citizen has been paying. The more the subsidies the more is the recognition of inequality and inadequacies in the system. What needs to be done is to clean up the system steeped in high costs to the normal citizen.

Senior citizens and lactating mothers need home-bound services by peripatetic and paramedical services at their doorstep. There must be transparent tariffs for such services. Diagnostic services have been touching the roof and these have almost become mandatory for any ailment as no doctor would like to risk a symptomatic treatment unlike the past. It is these services that need to be tamed in costs. Earlier, Ayurvedic, Homeopathic, Unani and naturopathy at least used to be well within the reach of the common man. Lately, the corporate culture has embraced these services as well. Regulation of health sector is the toughest of all in a country like ours. The best route is ‘Swatch Bharat’ and ‘Swatch Pani (Safe drinking water)’ as both these would reduce the incidence of disease. These two are public goods and they should be treated as such and not as economic goods. Any investment in these two services would improve the human development indices.

The well-intentioned growth agenda has been facing road blocks with over-enthusiastic party colleagues in the NDA that wasted hours of productive time in Rajya Sabha preventing legislative changes to usher in further reforms. Therefore, reining in the party colleagues and bringing discipline in the State Bureaucracies as well should receive urgent attention of the Prime Minister.


The Year 2015 for India is going to be critical and the whole world would be watching with interest the way Narendra Modi would translate his good governance agenda.

This article was first published in the Business Advisor, Vol.X Part 1, Jan 10, 2015.