Right to food

This NYT article obviously is the kind of article that everybody likes about India. How despite all the bluster about growth and all, India is still a poor country and hunger and malnutrition abounds. Much of it is true however and India will have to literally "outgrow" this tendency.

Coming to many comments on article, I generally thing that Matthew Yglesias has much too simplistic take on many of the things that he discusses. However, in this case i do think that the simplistic take is the right one.

In terms of the empirical details, I’m sure there’s another side to the story. But it’s hard to think of any sound theoretical or ideological reasons to believe it would be better to try to give everyone a 77-pound bag of grain than to try to give everyone stamps or coupons. There’s a place for direct public provision of services in sectors where the private sector doesn’t deliver. But “stores that sell food” is something the private sector is more than capable of delivering. Poor people don’t get enough t eat because they can’t afford to buy the food, not because the private sector doesn’t create places to buy. Give people money and they’ll feed their families

Seems spot on.

The New US administration and India

Ideally if you want to read about this, you should just wait for Acorn to write about it, which i am sure he will in due time. Still here are my thoughts.

Overall, while i think Obama would e a better choice, i think a competent (Cos incompetent US presidents make life difficult for many more) republican administration under McCain would have been much better. Primarliy because of the Foregin policy and Outsourcing policy of the democrats. While Obama is explicitly anti outsourcing which should have an adverse effect (marginal but anyway adverse) on the Indian services industry. Also, in terms of foreign policy- Democrats tend to restrict themshelves and thus they will soon start making non proliferation noises, will want to deal china independently (thus no props for India to counter China) and the vague feeling that i get is that the foregn policy of Obama vis a vis India will be Pakistan Centric rather than China centric. So all in all, i am not very optimistic about Indo-US relations given the Indian bureacrats to be overly sensitive about insults and not trying to find out work arounds.

The only saving grace is that the better PR of Obama admin will once again empower the americans to do something good in the neighbourhood which is needed.

The need for police reforms

I completerly agree with acorn here

Dominate the battle on the ground
3. Connect every thana, every chowki (and in future every policeman) to a national database and network. Neither POTA nor a new anti-terrorism agency is crucial: connect existing intelligence and law-enforcement agencies through a common network.

4. Empower police by implementing police reforms. Use the Supreme Court of India’s judgement in Prakash Singh & Others vs Union of India & Others to generate momentum. Strengthen police-public partnerships.

5. Move internal security to the PMO. The Prime Minister should chair a Cabinet Committee on Internal Security; a dedicated internal security advisor (rank of secretary or higher) should be appointed to act as the point man covering all aspects of internal security.

Also, as i have mentioned before, police reforms can be one of the best things that can be done by the government today. We can definitely take advantage of IT and telecom technological improvements to reform the police system. This will have immense benefits, economic, political and social.

The Current Food "Crisis" or "Opportunity"

The Economist has a very good chart explaining the causes of the current crisis. While the food prices started rising, the market has started responding with in creasing yield in the last year. The other notable thing to note is how the yield growth has stagnated over the last 45 years.

I guess that the rise in food prices is following the natural rise of commodity prices in the last decade or so following increasing demand from India China etc, and thus food prices thus following commodities like Oil, Metals etc (While you may argue Metal prices are cyclic, i do believe the current upturn is more secular in nature. So, if we agree with the given analysis and assume that the increased food prices are here to stay, we shall come to the important question - What will be the impact on India, and thus How should the Indian policymakers respond.

Regarding the impact, i think there is a clear dichotomy exist(as it should), between the demand side and supply side. While the Indian consumers will suffer, there is tremendous scope for gains to the Indian primary sector. Let us focus on the structural changes due to higher prices which will improve the primary sector*

Government - Government will be unencumbered by the minimum support price (MSP) mechanism and then can fully focus on the market enabling measures to ensure that the gains in trade are diffused enough to prevent backlash of higher prices among general populace. Here the basic logic is that while the MSP does create a floor of prices, the given inefficiencies in the buffer system, means that the gains form trade are not passed on to the farmers in times of high prices. With the high prices, the burden of procurement will be on government and thus will have a fiscal impact, but anyway i don't expect the government to be fiscally efficient in near term.

Market - Higher floor prices means that enough incentives exist for the middlemen and traders to take advantage of India's improving road and rail connectivity to reach the hinterland leading to better price discovery across locations

Farmers- Incentives to improve productivity, and increasing disposable income.

Frankly, rising food prices can be an unmitigated blessing for a country like India with the worlds highest gross acreage and largest population in agriculture. Just imagine Oil Prices doubling for Saudi Arabia and Saudi Arabia on the cusp of finding more oil wells. Well for us, the oil prices have just doubled and the infrastructure and communications improvement are our new oil wells.


* Of course the glaring omission in this analysis is the effect of high prices on inflation thus leading to loss in real income for many of the populace. I still feel that the government should take a fiscal hit rather than limit the upside of the price rise for million of farmers by commodity price targeting which seems to be the current mode of thinking in the current political/bureaucrat regime.

Picture Courtesy The Economist

Beyond Washington Consensus

Dani Rodrik says

successful policy reform is at its core governance reform

I completely agree with this sentiment. For too long, the multilateral agencies have focussed on policy formulations and seeing it fail and blaming it on governance. While the link has been made many times, mostly in a post facto manner. The right way to go about is i think going for governance reform, enablers (Specifically MIS), and then policy reforms. While this seems self evident on reading, it must be noted that "washington consensus" which was the staple of reforms under development agencies, for long has focussed on policy reforms while treating Governance as an exogenous variable.

The Case for Social Security

I think the need for a social security problem in India cannot be overstated. A functioning social security system will ofcourse provide direct benefits to the people most in need of it as of now. But as i have often argued..A functional social security will also fulfill the following criteria

Movement away from Caste Based Largesse distribution to Need Based intervention - The slowing down of the identity politics - This is very indirect, but as the State moves from caste based bounty distribution to need based social security..I don't think the upside of identity based politics will be very high

"Abilty to Pay" becomes a non factor in PPP or Community based initiatives - Right now the 'ability to pay' factor means that much of the PPP initiatives can be argued against. A social security system will lessen the need for govt intervention in implementation and maintenance of facilities in the agri and other social sectors eg Irrigation Projects, Water supply etc.

Halt to mass migration to Urban areas - As the social security kicks in, People from the rural areas will be loath to live in sum urban hutments to get a livewlihood. And surely thats good for everyone. Frankly much of the desperation in the society that goes on with earning your livelihood will be removed, making everyone a lot more civilised.

As i mentioned earlier in the blog also, community participation and PPP initiatives is the most potent way in which we can improve the implementation mechanism for government schemes. The other way is ofcourse through use of Information technology. Technology here i think is just a prop to bring about change. Even just information dissemination will do, but that alone will not be allowed to happen. But all this in a separate post.

Disclaimer : Ofcourse the big assumption here is- How to effect a functional Social Security system and do we have adequate resources for the same. I am afraid we have unsatisfactory answers to both the questions. But the point of this post is, while there is need to point out the apparent lacunae in schemes like NREGS, a potent case for a Social Security system should also be made. Lat our governance system outgrow the subsistence mode.

HCR and Poverty Line

Returning to this post. I think while the issue highlighted is pertinent. The solution itself may not work. A better basket of commodities is need though. Still I do not see an end to the whole issue untill India becomes a much more regularized economy so that implicit assets and subsidies could be valued. Old post in quotes

"Should poverty measure benchmark be made a relative one ( e.g 25% of Avg Income) rather than a nutritional value based system. Especially as we see that India produces enough and trades enough in food items to make sure that availability of food is not an issue, rather its the purchasing power that is the constraining factor.

This method will be a good benchmark and will address concerns regarding 'Inclusive Growth'"

Public Health Policy

This post has been written as a response to this post. Do check the comments section of that blog too.

We must look to the government on this one. Frankly, the civic community of India as of now is too poor to keep pace with the medical technology and the accompanying costs.

Problems

1) Infrastructure - The Primary health centres barely function, not to talk about Sub Centres
2) Doctors - Too few. The government cannot train enough doctors and cannot pay the trained doctors to come work in CHCs, forget the PHCs.
3) System - For all the guidelines that state govts have for monitoring, the current systems seem not to work (this may be a non problem - ie if decent doctors with good infra available- the community will ensure that the health centres are utilised)

Solutions

1) Investment - A big push like the one in Sarva Siksha Abhiyaan is needed. ICDS is useful, but it doesn't covers the community's overall health
2) Health Workers Training Program- At the SC and PHC level, Health workers may be trained and utilised. - This will be basically an exercise in expectations management - Devise a practical training and education program for producing general physicians- dont call them doctors and expect them to work on contract in lieu of lower pay than the one you have for doctors.
3) As i said, the systems are in place, but since hardly anything works now, you cannot apportion blame to any one stakeholder which allows everyholder to have slack. General awareness and communication of all the facilities and govt schemes available may be one step forward as of now


As you can see, the solutions seem very simplistic, but i dont think we lack in identifying the solutions here. Our basic shortcoming is the lack of capacity - Investment wise, Technolgy wise, and Community sense wise, which has made it such a big problem. I believe that its not that the health spending in India is through Private sector, its just that the govt has failed to fulfill its side of the bargain

PS-
SC- Sub Centres at Village/Mouza Level
PHC- Primary Health Centres - at Block level
CHCs - Community Health Centre - at Sub District Level
ICDS - Integrated Child Development Scheme- Basically- Looking at the health of children, pregnant women and new mothers

Governance reforms redux

These last few days have made me think about the current affairs of the state. Let me enumerate what i think (Dont even think that what i say will have any structure or coherency)

1) The biggest problem we have right now is the malfunctioning of the government's implementation mechanism -
what this results into -
a) Lack of desired outcomes- allowing people to question Govt's work in areas such as Social security, Education and Food security )
b) No way to judge the policy- whether its good or bad as the policy as it is could not be implemented fully.
c) Again giving voices to left leaning people to throw more good money into such schemes - as per me wrongly arguing that the mechanism failed due to low funding etc.)
d) Allowing right leaning people (like me :)) to argue against social security (in itself a desirable goal)
d) Increasing cynicism among political class, who anyway know that irrespective of the outcomes, all that matters is whether they can establish some positive corealtion of intended outcomes with a community - whether overall the policy may not be desirable.

2) Some structural inbalances
a) Police Reforms- One of the best things that the govt can do is to ovwerhaul the current police system

b) Education system - Central Governemt should make the sector more free. Plus in the current economic scenario, becomes important that the current university system is more vocation oriented. I dont know much but do follow Atanu Deys 10 part series

c) Implementation Mechanism - RTI is the best thing to happen in a long time, now its just upto barious NGOs, bodies etc to somehow arrive a t a model which can make the bureaucracy more accountable. People maynot realise, but so many schemes give away so much money, which more often than not fails to reach the intended people. Information dissemination about schemes, People everything.

d) Agriculture sector reforms - what can be done- Land records and registration to be synchronised by all state govts. Free to sell land for non agri purposes. tax agri income. levy user charges for irrigation schemes. Strenghten WuAs

3) My solutions
a) Govt to focus on Education, Health, Social Security.
b) Instead of having big ticket program implementation, focus on governance reforms
c) Get private sector into the schemes, wherever they can (eg roads, power, Irrigation)
d) SEZs a good way ( remove the eminent domain funda, only for private parties. eg govt should not be intermediary) However ensure that no strong arm tactics are employed by Industrialists.
e) Overall, except social sector and Infrastructure, govt should be regulator not the provider