Tuesday, June 19, 2012

Don’t waste a good crisis, learn from the 1991 lessons

Don’t waste a good crisis, learn from the 1991 lessons The reforms in 1991 took away some of that discretion but many sectors of the economy are still unreformed. Thus, scams happen in the dark alleys of unreformed sectors such as land transactions, mining and government purchases. So, the answer to corruption may well lie in actions of the 1991 variety. The real crime of the UPA government lies in not initiating the second-generation reforms. These would have significantly reduced the chances of scams in mining, 2G spectrum, Adarsh housing and purchases for the Commonwealth Games. Anna Hazare’s team has rightly blamed “crony capitalism” but it has not explained that the nexus between business and politics exists because there’s still too much discretion with public officials. Countries free of corruption do not allow discretion to officials but rely on the impersonal forces of the market to decide economic outcomes. The 1991 reforms succeeded in wiping out crony capitalism in many parts of the economy and replaced if with rule-based capitalism. There existed much greater corruption before 1991. The numbers were not as large because the economy was smaller. But the state intervened in almost every business decision. Evidence from around the world shows that a citizen’s freedom to do business’ is negatively related to the ‘corruption index’. In 2011, seven of the world’s 10 ‘least corrupt’ countries were ranked in the top 10 for ‘business freedom’. Among these were New Zealand. Singapore, Denmark, Canada, Sweden and Finland. The 10 most-corrupt countries had the lowest rank in business freedom. India ranked very poorly-167 in ‘business freedom’ and 95 on the corruption index. Our unprecedented corruption today is matched only by an economic crisis which has brought the nation to its knees. Inflation is unacceptably high, the rupee has weakened more than any currency in Asia, both fiscal and current account deficits are in a dangerous zone, and growth has plummeted from 9% not so long ago to 5.3% in the last quarter-the lowest in nine years. So, what is to be done? They say, ‘Never let a good crisis go to waste’, and this is the best advice for Manmohan Singh. A 1991-type crisis needs a 1991-type response. So, reform, more reform and still more reform. Not only will this bring enormous prosperity but is will scare away the corrupt. Extracts of an article by Gurcharan Das In TOI 10 Jun 2012

Gujarat: Myth And Reality

Gujarat: Myth And Reality For the last several years, Modi has been successful in projecting his “vibrant Gujarat” as a role model of economic growth and himself as “Vikas Purush”. Though one must give due credit to Modi for his effective skills in making projections, one must also critically analyse this “growth story of Gujarat” based on facts and figures. Regretfully, as one examines the facts since Modi came to power in Gujarat in 2001, the story appears to be hollow and, at times, contrary to what is being projected. First, about the rate of economic growth. During 1995-2000 and 2001-10, Gujarat increased its annual rate of growth from 8.01% to 9.68%. But so is the case with other major states such as Andhra Pradesh, Haryana, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh. During 2001-04, the rate of industrial growth for Gujarat was 3.95%, and during 2005-09, it was 12.65%. During these sub-periods, industrial growth for Orissa was 6.4% and 17.53%; for Chhattisgarh 8.10% and 13.3%; and for Uttarakhand 18.84% and 11.63%. In FDI, too, Gujarat has not been a leading state. During 2006-10, Gujarat signed MoUs worth Rs. 5.35 lakh jobs. But Maharashtra and Tamil Nadu with Rs. 4.20 lakh crore and Rs. 1.63 lakh crore worth MoUs, expect about 8.63 lakh and 13.09 lakh jobs. To top it all, Chhattisgarh and Orissa have signed MoUs worth Rs. 3.61 lakh crore and Rs. 2.99 lakh crore more than Gujarat without much fanfare and Modi’s much-hyped industrial summits. In terms of per capital income (PCI), in 2011, Gujarat ranged sixth among mojor states with PCI of Rs. 63,996, after Haryana (Rs 92,327), Maharashtra, (Rs 83,471),Pubjab (Rs 67, 473), Tamil Nadu ( Rs 72,993) and Uttarakhand ( Rs 68, 292) What about inclusive growth in Gujarat? Though Gujarat, with 31.8% people below the poverty line did better than Maharashtra and Karnataka, it still lagged behind Kerala, Punjab, Himachal Pradesh and Haryana, where poverty levels were 19.7%, 20.9%, 22.9% and 24.1% respectively. On three important social indicators, viz life expectancy at birth (LEB), mean years of schooling (MYS) and school life expectancy (SLE), Gujarat is far behind some other states. In Gujarat, the LEB during 2002-06 was 64.1 years and it ranked ninth among major Indians states. In the areas of MYS and SLE, during 2004-05. With respect to Human Development Index (HDI), Gujarat’s story is devastating. The HDI for Gujarat, in 2008, was 0.527 and it ranked 10th among major states. Kerala stood first (HDI: 0.790), Himachal Pradesh scored 0.652, Punjab 0.605, Maharashtra 0.572 and Haryana 0.552. It is found that inequality with respect to income, education and health is higher in Gujarat than some of the major states. Shockingly, in terms of hunger-as revealed by the ‘State Hunger Index 2008’ – Gujarat ranked 13th among 17 big states and worse than Orissa. In Gujarat, the percentage of women suffering from anemia has risen from 46.3% in 1999 to 55.5% in 2004, and amongst children from 74.5% to 80.1%. The conditions of details and women have deteriorated during the last decade; while those of Muslims and tribals are still worse. Thus, Guajarat’s growth story as claimed by Modi is more a myth than reality. Extracts of an article by Balchandra Mungekar In TOI 12 Jun 2012


20 June, 2012 ANNA, NOT THE ONLY ONE SALUTE Anna Hazare may continue to stay in the news as the face of the fight against corruption but he is by no means the only one. Meet the other Annas – people who are fighting the system with commitment, except they are doing it away from the limelight. I’LL BRING OUT ILLEGALITIES OF GOVERNMENT’ S R HIREMATH (68). Takes on environmental issues. BASED IN: Karnataka. USP: He has been battling the issue of illegal mining rampant in Karnataka and Andhra Pradesh ‘I WANT TO TAKE MY FIGHT TO THE LOGICAL END’ ANAND RAI (35). The doctor who used RTI to stop illegal drug trials. BASED IN: Indore. USP: He has angered his fraternity by stopping illegal drug trials on poor patients ‘RTI IS THE ONLY WAY TO ERADICATE CORRUPTION’ HARI CHAND ARORA (60). Banker turned advocate and RTI activist. BASED IN: Punjab, Haryana and Chandigarh. USP: Takes information received under RTI to their logical end by filling PILs in the high court ‘MY EFFORT LED TO THE DISMISSAL OF SPURIOUS TEACHERS’ SHIV PRAKASH RAI (53). Farmer with 1999 RTI interventions. BASED IN: Bihar. USP: The leading RTI activist in the state,Rai has had many successes ‘I DON’T WANT TO BE A MESSIAH. PEOPLE SHOULD LEAD CHANGE’ VARSHA DESHPANDE (45). BASED ON: Satara and Mumbai. USP: Conduct sting operations to expose doctors performing sex determination tests ‘ALL FAITH LEAD TO ONE GOD, SO WHY DIFFERENTIATE?’ BHAIYYA JEE (85). Works in a range of areas from consumer rights to educating destitute and rehabilitating lepers. BASED IN: Lucknow. USP: The most visible social worker in the city, he is accepted across class and community lines. ‘RTI HELPS THE POOR FIGHT EXPLOITATION: SIMPREET SINGH (32). RTI activist fighting housing scams. BASED IN: Mumbai. USP: has been using RTI to unearth high profile scams ‘WE ARE TRYING TO MOBILISE THE MASSES’ AKHIL GOGOI (36). RTI activist and peasant leader. BASED IN: Guwahati. USP: He fights for farmers’ right and for indigenous peoples. Compiled from HT 10 Jun 2012