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Open Forum
Food Processing Goldmine:WAITING FOR URGENT PUSH, by Dr. Vinod Mehta,12 March 2008 |
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ECONOMIC HIGHLIGHTS
New Delhi, 12 March 2008
Food Processing
Goldmine
WAITING FOR URGENT
PUSH
By Dr. Vinod Mehta
Former Director,
Research, ICSSR
India, one can say, is almost sitting on
a goldmine of processed food. The country is the world’s largest producer of
milk, the second largest producer of fruits and vegetables, a major producer of
spices, tea and coffee and large livestock population and vast marine
wealth.
In fact, there is not only a potential vast domestic market
for processed food but also a huge foreign market. Besides, it could become a
top foreign exchange earner provided we follow appropriate policies and capture
the foreign market. The effort required is totally indigenous, does not involve
any import of any inputs to any significant extent and with little investment
one can earn lot of hard currency.
The world processed food business runs into billions of US
dollars and India's
share in it is a mere 1.5 per cent of the international food trade. The US processed
food industry is a major participant in the global economy, active in both
exporting and foreign direct investment. More than a third of the world’s top
50 food and beverage processing firms are headquartered in the US. In 2005,
the U.S. exported $28.8 billion of product and
imported $29.8 billion. In other words, there is big market for processed food
which if properly tapped can supplement the incomes of the farmers.
As we know, India
as a signatory to the World Trade Organisation (WTO) has to open up its economy
to the import of agricultural products from all over the world within a few
years time. Already one can see fresh
imported fruit and vegetables as well as processed food items in many retail
stores in India
though their prices are four to five times higher than equivalent Indian
products.
When the WTO agreement was signed it was said that the
country stood to gain by the opening of the agricultural sector as the Indian
agricultural products would be relatively cheaper than the similar agricultural
products produced elsewhere. The reasoning was that other countries, especially
the developed ones, would be forced to eliminate or reduce their subsidies on
agricultural products while the subsidies on agricultural products in India are
already much lower than allowed by the WTO.
This is true to a very large extent. The WTO has only opened
up the opportunities to be exploited by us. However, whether India will be
able to exploit this advantage will depend upon a large number of factors. The
relatively lower prices, on their own, will not be of any help unless we make a
sustain effort in the international markets and produce goods which are in
demand in those countries. This implies
increasing the productivities of various agricultural products, improving their
quality, tastes, etc., application of highly efficient processing technologies
and improving the packaging of these products.
The foreign countries, which include both developed and
developing countries, have now increased their pressure on us to open up the
economy to their agricultural products sooner as the country now has a comfortable
foreign exchange position. For instance Malaysia
is keen to increase its export of palm oil while Mexico
is eager to increase its export of soybean oil to India. Australia
and New Zealand
are looking for opportunities to export milk and milk products as well as kiwi
fruit to the country. The US
is looking for exporting its almonds and orange juice. India has
allowed import of agricultural products but these countries expect much more
from us.
It must be understood that the country will have to open up
its economy to the import of agricultural products from these countries sooner
or later. We cannot afford to ban their entry for long as the country itself is
an exporter of agricultural products (though not up to their level) like
basmati rice, fruit and vegetables, milk and milk products, tea, coffee, spices
and so on. Notwithstanding, that the country is not yet a major player in these
products in the international market even though it has the potential. Further,
its record of consistency in quality, adherence to supply schedules is very bad
which puts off the foreign importer.
This is a minus point with our exporters which comes in the
way of tapping the export market. Thailand
and Philippines are
exporting pineapple juice on a large scale for the past several years while India is unable
to do so on any significant scale because of the non-professional attitude of
our business community. How can we enter the international markets with this
kind of attitude?
The Government has already initiated policy measures to
provide a boost to the processed food industry. In the last budget ---- the food
processing industry was declared a priority sector, 100% FDI has been permitted
through the automatic route and there is zero excise duty on a number of
processed food items .
Though incentives have been provided in the past to
encourage the growth of the food processing industry yet it is still lagging
behind by international standards. With the new incentives as provided in the
budget, the processed food industry can hope for a big boost.
But there are other minus points. The food preservation
technology in most of the cases is more than two decades old. Similarly,
packaging of the products is much below the international standards. On the top of it no attempt has ever been
made to develop brand names in foreign countries.
It is only for the past few years that some of the companies
have started marketing their products in the international markets under their
brand names. For instance, till recently Indian tea was being auctioned in bulk
to foreign buyers rather than selling them in a packaged form. The Tata’s have
now started selling their tea in a packaged form in the international market
under its own brand names.
Similarly, the cooperative sector producer of milk and milk
products, Amul, has also started marketing its products in the international
market under its own brand name. But these are only few exercises in brand
building and cannot be said to establish markets for Indian agricultural
products in a very big way.
Therefore, what the country needs to do immediately is to
chalk out a concrete programme for the development of the processed food
products industry so that the country can become a major player in the
international market in the next three to four years.
As a first step, we should concentrate on increasing the
productivity of those agricultural products in which we have a comparative
advantage. It could be basmati rice, tea, coffee or fruits like mangoes or
bananas. Moreover, some of the energies of our agriculture research centres
should be concentrated on developing high yielding varieties of these products.
In fact, our agricultural scientists have successfully developed a new strain
of basmati rice which provides 25 to 30% more yield per hectare without any
compromise on quality or aroma.
The second step should be the development of new
preservative technologies, which are of international standards and can prolong
the shelf life of those products without any much refrigeration. For instance, we are producing a large number
of oranges including kinnow yet 30% of this fruit goes waste as we have
not been able to develop any technology to preserve its juice. Therefore, before bottled orange juice from
Florida (USA) enters the Indian market we must perfect the technology to
preserve the citrus fruit juice in India
so that we can compete effectively with the US producers not only in our own
domestic market but also in the international market.
The third step is to improve the food processing technology
and bring it up to international standards. One public sector organization is
engaged in the development of such technologies but it has had very little
impact till date.
Finally, the food processing industry will have to pay
attention to packaging of the processed food products. At the moment the
packaging of most of the processed food products is so repulsive that even if
we have very good product to offer it will not sell in the international market
because of its poor packaging.
In sum, India
has a comparative advantage in selling its agricultural products at competitive
prices in the international market but it will not be able to capture the vast
international market for various agriculture products without first improving
the quality of its products and its packaging in every aspect. We have a lot to learn in this respect from
the South-East Asian countries like Thailand,
Philippines and Malaysia, which
have a well established food processing industry. We must now move fast enough to take
advantage of our comparative advantage in the agricultural sector. ---- INFA
(Copyright India News & Feature Alliance)
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Monitoring Programmes & Allocations:BRING EXECUTION IN PUBLIC DOMAIN, by Dr. Vinod Mehta,7 Mar 08 |
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ECONOMIC HIGHLIGHTS
New Delhi, 7 March 2008
Monitoring Programmes & Allocations
BRING
EXECUTION IN PUBLIC DOMAIN
By Dr. Vinod Mehta
(Former Director, Research, ICSSR)
As
the euphoria over the Rs 60,000 crore waiver of farmers’ loan dies down various
political parties and financial experts have expressed reservations and doubts.
Allocating funds is perhaps the easiest task but deploying them efficiently is
the most difficult one. If one goes by India’s track record of
implementing various schemes there is nothing much to cheer about.
Last
year also, the Finance Minister Chidambaram had made large allocations to
agriculture, education, health etc, but still there is no information as to how
this allocation was spent and what has been the progress. This year too,
Chidambaram, apart from writing off the loans of marginal and small farmers has
made large allocations for the agricultural, education and health sectors.
It
is, however, common knowledge, that there are leakages and the schemes are
rarely completed on time. In one of his oft quoted remarks the Late Prime
Minister Rajiv Gandhi is stated to have said that of the one rupee allocated,
less than 15 paisa reaches the people. This observation was also corroborated
by a Deputy Chairman of the Planning Commission a few years ago.
This
time, the Finance Minister has announced that a monitoring cell will be set up
in the Planning Commission to monitor the progress of various schemes and the
allocations. This is a welcome proposal.
The
programmes are implemented by the respective Ministries and not by the Finance Ministry.
In the case of agriculture, education and health; the onus is now on these
three Ministries. Again, agriculture, education and health are mainly State
subjects with some in the concurrent list. Therefore, the successful
implementation of the schemes announced in the budgetary proposals would depend
upon the cooperation between the respective Central Ministries and the State Governments. But again the record of the many of the State
Governments and the Central Ministries leaves much to be desired.
The
Finance Minister has now to ensure that the money which he has allocated for
various schemes such as credit to farmers, irrigation, insurance for farm
labourers, development of high yielding varieties of seeds, employment of more
teachers, scholarships to check school dropouts, rural health mission etc. is
properly used and results delivered.
Many
a times it happens that programmes announced in the beginning of the fiscal
year are taken up almost at the end of the fiscal year. The bureaucracy moves
very slowly to implement the schemes. If the programmes announced in the
budgetary proposals are to be sincerely implemented than the monitoring of the
programmes should be brought in the public domain. It is not enough that the programmed
implementation is monitored in the Planning Commission but it should be in the
public domain; the tax payer should know if the tax revenues are being properly
used as indicated in the budgetary proposals.
Within
a week of the budget being passed by the Parliament, all the specific
programmes should be placed on the web site with the total amount allocated and
then provide monthly updates on the progress made by each of these programmes. For instance if the programme relates to
installing water sprinklers under irrigation then the actual money allocated
for this purpose, procurement and installment of equipment on a monthly basis
must be shown on the web site.
There
should be web site for each single programme as proposed in the budget and the
public given the right to monitor its implementation. Once the implementation
of the programme is in the public domain the chances are that they will be
implemented efficiently and the desired impact ensured.
It
is difficult for any Finance Minister to address all the problems of the
agricultural and the social sectors in one go but there are human problems and
problems of quality in health and education which need to be attended to.
It
is true that writing off of loans will provide much needed one time relief to
the marginal and small farmers. But the problems of these set of farmers are
much deeper and need to be tackled on a different basis. Like any other family,
the farming family also needs a minimum of regular monthly income especially at
a time when his crop has failed. In such a situation he not only needs money to
plant new crop but also to look after his household expenditure. Farm loan can
take care of his need to plant new crop but who will take care of his daily
needs till the new crop is harvested?
According
to farm economists a farm household needs a minimum of Rs. 2,000 to 3,000 a
month to meet its household expenditure. Therefore, can there be a mechanism
whereby a farm household is ensured a minimum household income of Rs. 2,000 a
month when his crop has failed? For a
farmer in distress a regular monthly income is more important than a farm loan.
Last
year also the Finance Minister had allocated funds for agricultural research
especially for the development of high yielding varieties of seeds for pulses.
It is a well known fact that development of new high yielding varieties of
seeds is a time consuming process. When will the money allocated now lead to
the production of new improved seeds is any body’s guess.
The
shortages in the production of pulses has been there for almost two decades.
One is then tempted to ask what research has been done by the numerous
agricultural research institutes in the development of new improved pulse seeds. If not much has been done in this direction
in the past two decades then what is the guarantee that we will come out with
new improved pulse seeds during the next fiscal year?
The
point is that we have to focus our research on certain important crops
especially food grain, edible oil seeds and pulses to tackle the shortages of
these essential commodities. Increasing allocation for research on them is not
enough we also need to revamp our agricultural research institutions and the
research culture therein. And this is clearly the task of Agricultural Ministry
and not that of the Finance Ministry.
Similarly,
we have increased the allocation for education and health but the quality
parameters are not reflected anywhere. It is one thing to say that more
colleges and universities will be opened but another thing to ensure quality
education. As per the last budgetary proposals two lakh more teachers were to
be appointed during this fiscal year but there is no information as to how many
new teachers have been appointed and what has been the quality of those
teachers.
Therefore,
to ensure that the allocations for various programmes are well spent it is
essential to bring the implementation in the public domain. Otherwise the
allocations will go down the drain as has been the case till date for a majority
of our programmes. ---- INFA
(Copyright,
India News & Feature Alliance)
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Strengthen Agricultural Sector:WHERE IS THE SURPLUS FOODGRAIN?, Dr. Vinod Mehta, 20 February 2008 |
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ECONOMIC HIGHLIGHTS
New Delhi, 20 February 2008
Strengthen Agricultural
Sector
WHERE IS THE
SURPLUS FOODGRAIN?
By Dr. Vinod Mehta
(Former Director
(Research) ICSSR)
While the Government is planning sops for the farmers in the
coming Budget, reportedly wheat output might fall in the coming months as the
farmers are said to have reduced the area under wheat crop. This is likely to affect the availability of
wheat as well as the Public Distribution System (PDS). Besides, the international prices of wheat
are very high and importing wheat in such a situation to boost wheat stocks
could be a very expensive proposition for the country.
The Economic Survey and the budgetary proposals (2007-08)
rightly drew the attention of the country to the lopsidedness in our economic
growth. The manufacturing and the
service sectors are doing relatively very well while the agricultural sector is
lagging. Now we are getting ready for
the budgetary proposals for the next fiscal but the agricultural sector
continues to remain sluggish.
The import of grain can at best be a temporary solution for
a big country like India.
The real solution, however, lies in increasing the productivity of food grains
along with the other essential commodities.
Productivity of our agricultural products is ridiculously low by world
standards.
If we compare the productivity of the Indian agriculture to
that of the productivity in other countries, we will find that our agriculture
is way behind them. Take for instance China, which can be our competitor
in the international agricultural market. With only 100 million hectare of
agricultural land, China is
producing 400 million tonnes of grain while India with its 146 million hectares
of agricultural land produces on an average only 108 million tonnes of food.
If we take the production per hectare of individual crops too
we will find that the country is way behind other countries. The average
production of rice per hectare in India
is around 1,756 kgs compared to 5,475 kgs of North
Korea; we are harvesting only 2117 kgs of wheat per
hectare compared to 7,716 kgs by the Netherlands. Similarly, India produces only 1606 kgs of corn per hectare
compared to 9091 kgs of corn per hectare by Greece.
It is the same story when it comes to soyabean and groundnut.
The production of soyabean per hectare in India
is 804 kgs compared to 3,453 kgs in Zimbabwe. As for groundnut, the
country harvests only 929 kgs per hectare compared to 4,600 kgs per hectare
harvested by Israel.
In other words, Israel is
getting five times the groundnut per hectare as against India.
Similarly, India produces
15,817 kgs of potatoes per hectare compared to 45,349 kgs produced by Belgium. As for
sugarcane we produce 65,382 kgs per hectare as against 135,448 kgs per hectare
produced by Peru.
If we take these comparisons seriously, which we as a nation
should, then India
has a lot to explain and lot to do. The feel good factor will not deliver
results here. It may be all right to have a record harvest occasionally and
overflowing granaries in a relative sense. But we are just able to meet the
domestic demand for foodstuff and may have surplus to see us through one or two
bad harvests.
For a country, which also looks forward to entering the
international agricultural market in the near future this is not enough. It is
necessary to have a substantial surplus of agricultural products every year on
a fairly continuous basis if we are to emerge as one of the important exporters
of agricultural products in the world like Australia,
USA
or the European Economic Union countries and also meet our own domestic demand.
The figures also show that the potential of increasing the agricultural
productivity is immense. If other countries can get three to five times the
production per hectare of any agricultural product why can't India at least
double its output per hectare of the agricultural produce? The potential for such an increase exists and
there is no reason why the country cannot achieve this.
Additionally, in spite of the fact that we are spending so
much on agricultural research, the country has not yet been able to produce
seeds of high yielding varieties of international standards --- seeds which can
change the face of Indian agriculture. There has to be some match between the
funds we spend on agricultural research and the actual results we get in the
form of produce per hectare.
The figures also reveal that India is not using its agricultural
inputs to the optimum level. A country
like China which has less cultivable land than India has developed one of the
best water management systems to get the maximum advantage. Similarly, Israel has
turned the desert into an arid land, again mainly through its water management
system. A country like Netherlands
which can grow only one crop a year because of the cold weather and snow makes
the best use of its inputs to get the maximum output per hectare.
The lessons which the experience of other countries in the agricultural
sector holds for us are that we have still a long way to go to tap the full
potential of our agricultural sector. Moreover, by following an appropriate
strategy we can increase the produce of our agricultural products several-fold.
There is no getting away from research in the agricultural
sector. All efforts need to be put in to develop the high yielding varieties of
various kinds of agricultural products which go well with the kind of weather
conditions we have in the country. Also, this research would have to be
extended to other allied activities like animal husbandry, fishing and
plantation.
However, the kind of bureaucratic environment that exists in
our agricultural research institutes is not conducive to research that is
needed for the development of the high yielding varieties of crops or milch
animals. The number of suicides in the ICAR in the past goes to show how
callous we are towards the agricultural research scientists.
Therefore, as a first step we must revamp the setup of our
agricultural research institutes and agricultural universities and fix some
goals for the development of high yielding strains of food crops, edible oil
seeds, sugarcane etc. Increasing allocation for agriculture research is not
enough. We have to deliver results.
But pending the development of our own high yielding
strains, we should make the best use of the available high yielding seeds of
various crops that are available in the international market. If the seeds
being sold by the multi-national companies can substantially raise the
agricultural productivity per hectare, why should not the country go in for the
use of such seeds immediately, even if they are expensive? The use of such seeds would also increase the
earnings of the farmers.
What the agricultural research institutes can do is help
identify the seeds being sold by multi-national companies which would be more
suitable to the Indian climatic and soil conditions and would yield the maximum
produce per hectare.
In fact, Professor M.S. Swaminathan, the architect of India’s Green
Revolution, has been expressing his concern for a long time over the trends in
the agricultural sector. He is disturbed by the fact that there are no real
policies in the agricultural sector except for subsidies. His observations need to be taken seriously.
This fiscal the growth rate is estimated to be between 7 and
8 per cent, but the Prime Minister speaking at the 80th AGM Meeting of the
FICCI recently stated that he was confident that the country would realize a
growth rate of 9 per cent during the Eleventh Plan period. The manufacturing
and the service sector are doing relatively well and therefore to realize such
a high overall growth rate we will have to push up the growth of the
agricultural sector by focusing on increasing the productivity not only of food
crops but also of commercial crops. ---- INFA
(Copyright,
India News & Feature Alliance)
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Research Holds Key:CHINA TO OVERTAKE AMERICA, by Dr. Vinod Mehta,14 February 2008 |
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ECONOMIC HIGHLIGHTS
New Delhi, 14 February 2008
Research
Holds Key
CHINA TO OVERTAKE AMERICA
By Dr. Vinod Mehta
(Former Director, Research, ICSSR)
China is being billed to replace the US as a
powerhouse of scientific research and development of new technologies in the
coming years. As acknowledged by even the Americans. A new study of worldwide
technological competitiveness in the US
suggests that “China may
soon rival the US as the principal
driver of the world's economy - a position the U.S. has held since the end of
World War II. If that happens, it will mark the first time in nearly a century
that two nations have competed for leadership as equals.”
Thus China
will overtake the US
in the critical ability to develop basic science and technology, turn these
developments into products and services and then market them to the world.
“Though China is often seen as just a low-cost producer of manufactured goods,
the new ‘High Tech Indicators’ study done by researchers at the Georgia
Institute of Technology clearly shows that the Asian powerhouse has much bigger
aspirations.”
The US
researchers have also noted that in 2007 China
had a technological standing of 82.8, compared to 76.1 for the US, 66.8 for Germany
and 66.0 for Japan.
Just 11 years ago, China's
score was only 22.5. The US
peaked in 1999 with a score of 95.4.
Again, Israel, a nation of just 6 million
people, is also fast becoming a world leader in high technology. With 135 engineers
per 100,000 people, it has the highest number of engineers per capita in the
world, a proportion double that of the US. Numerous American and Silicon
Valley firms have set up research and development facilities in Israel like
Microsoft, Intel, Hewlett-Packard, Sun Microsystems and IBM. And the country,
home to some 2,000 technology start-up companies - has the world's greatest
concentration of such firms outside of Silicon Valley.
Where does India stand in
terms of scientific research and development of technologies? We are a nation of one billion plus and one
of the fastest growing economies. Can we sustain this growth rate without
scientific research and development of new technologies? Some of our business houses are taking over
businesses in other countries including developed countries but what do we have
to contribute to technological innovation of these businesses?
Frankly, speaking except for a few
areas like space we are duds as far as scientific research and development of
new technologies are concerned. We have
spent large funds over the years on developing a main battle tank and a light
combat aircraft and yet we are still nowhere.
Given the situation in our
neighbourhood, our defence preparedness requires that we are battle ready with the
latest technologies. Sadly, since we are unable to develop critical
technologies the country is spending huge sums on importing defence
equipments. If we were to make these
equipments with our own technologies we would not only be generating jobs in
the manufacturing sector but also saving a lot of money.
India has one of the largest railways
networks in the world but the country is dependent upon nations like France and South
Korea for reliable signaling system, on Germany for
designing of ultra modern passenger coaches. This is true of many other areas
like machinery for the manufacturing and the construction sectors. Yes, India is way ahead in the
development of IT software but we cannot design and manufacture a pen drive or
flash cards for use in the computers, digital cameras and mobile phones.
Scandalously, all these are being imported from China!
Sometimes while purchasing
equipments from foreign companies the powers-that-be insist on the transfer of
technology. But in most cases, the so-called transfer of technology is a mere
eyewash. No country or foreign company which has spent millions or perhaps
billions of dollars on scientific research and perfecting technologies is going
to transfer it to India.
And why should they?
If India wishes to be counted among nations like the
US, Russia, UK,
France, Germany, Japan,
South Korea and China it has no
option but to rely on its own basic and applied scientific researches. It needs
continuous development and perfecting of new technologies in every field be it
defence, space, industry or agriculture. To achieve this we have to attract
talent and reward them handsomely. At
times even hire foreign talent for critical technology.
Remember, what set the US apart from
other countries as an economic power after World War 1 was its scientific
research and the technologies it developed and used in various fields like
space, defence, medicine, industry, agriculture et al. The strong point of
European countries particularly UK,
France and Germany along with Japan too was the same.
However, the Soviet
Union directed all its energies to develop defence and space
technologies, given the Cold War Era. And, Long after World
War II, South Korea
concentrated on scientific research and development of new technologies and
today stands close to Japan
in terms of research and technology in the industrial sector. Israel, like
the Soviets, has concentrated on defence technologies. Except for the US and erstwhile Soviet Union most of the other
countries are smaller or much smaller in size than India.
However, unlike India, where
researchers are paid peanuts, other countries reward their researchers
handsomely. In the Soviet Union scientists
engaged in defence and space research are paid salaries and perks which are
much higher than the salaries and perks of the Politburo members. In the US those
engaged in scientific research are not only highly paid but it faces no problem
in hiring the best foreign researchers. However,
post 9/11 hiring of foreign scientists has become strict leading to the US losing
ground to other countries in the development of new technologies.
On the heels of
the US, China too is following
suit. It is single-mindedly concentrating on training scientists and engineers
who conduct researches needed to maintain the country’s technological
competitiveness. And if China persists as it will, India by
comparison will become a weak economy.
Clearly, if the
country has to maintain its growth rate at around 10 per cent to be counted as
a developed nation and stand up to others, we must strengthen our research
base, develop our own technologies and stop looking up to other nations for
joint researches or transfer of technology.
Attract talent and reward them handsomely. There is no short cut to this. ---- INFA
(Copyright, India
News & Feature Alliance)
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More Economic Reforms:CHANGE MINDSETS PLEASE, by Dr. Vinod Mehta,7 February 2008 |
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Economic
Highlights
New
Delhi, 7 February 2008
More Economic
Reforms
CHANGE
MINDSETS PLEASE
By Dr. Vinod
Mehta
Former
Director, Research, ICSSR
The process of economic reforms has taken roots
in the past 15 years. The CPM too cannot deny its necessity. Deng Xio Ping was
the first Chinese communist to have understood the importance of market economy
and economic reforms. He knew these could catapult China into a major economic power
and put the economy on the reform path. It was in the 80s, much earlier than India
did. Look where the Chinese economy stands today.
And, if we even after these long years were to
ask: what is the greatest hurdle in the way of economic reforms the answer
would be the bureaucracy. Yes, even today. That is to say, those who are
responsible for liberalizing the economy have still somewhat outdated mindsets
and are unwilling to implement the reforms in spirit. But they are a hurdle not by any design but by
a mindset, which has been nurtured over the past six decades i.e to say the
least anti-developmental.
Let’s go step by step. The first point to be
noted is that the main duty of any bureaucrat is to provide efficient
government administration -- in all aspects, such as maintenance of law and order,
provision of welfare measures, including education and health care, provision
of clean drinking water, maintenance of land and other records, collection of
taxes etc. And, this calls for a particular mindset and a different kind of
administrative training.
But, when you put such administrators to take
economic or business decisions they would in all probability mess up the whole
situation by applying the same yardstick as in basic administration. A person good at maintaining law and order or
in running a good system of schools will not necessarily
run economic enterprises with same efficiency.
This is because the Indian Administrative Service
produces general administrators, who are rotated throughout their tenure in various
departments or ministries. An officer could well be posted one day in the Law Ministry,
the next day in Commerce Ministry, the next in the department of animal
husbandry (Ministry of Agriculture), or the next to the Department of higher
education (Ministry of Human Resource Development) and eventually retire in the
Department of surface transport.
Therefore, when such people are asked to man
economic enterprises majority of them would mess up. One can list a number of
examples, but let’s take the case of Air India and Indian Airlines, which
stand merged today. While the world over, airlines are run by professionals, it is in India that the bureaucrat has been
given the day-to-day charge of Air India; elsewhere airline companies have expanded
at a feverish pace, whereas Air India and Indian have yet to grow (of course
some have closed down). Airlines such as Singapore
or Thai are popular with travelers, however, Air India is opted by those who have no
other option or when the Government forces its employees to fly only this
carrier.
So, bringing untrained bureaucrats to man
business-related units will not only mess up the whole unit but may also bring
a bad name to bureaucrats. Thus, the best way out for the Government would be to
get out of the business of running
economic enterprises and concentrate on governance alone. If this is not possible
in the immediate future, the Government could consider at least retraining them.
It would help change mindsets so that they are capable of running economic
units.
At the same time, the Government needs to re-look
the structure of ministries; a comparison with other countries would show that
some of the ministries existing here don’t exist elsewhere. For instance, countries such as the U.K. and Thailand have no ministries as
Civil Aviation, Information and Broadcasting, Food Processing. Further, many countries do not have like us the department
of banking under the Ministry of Finance as commercial banks come under the
supervision of the central bank.
Then there are so many additional ministries that
bureaucratization of every activity appears to have taken place. Abroad, say the
Ministry of transport would cover all modes of transport, whereas here we have
the three ministries-- railways, transport and civil aviation, which have
little coordination amongst each other. Likewise, when there is a ministry of
industry where is the need to have separate ministries for steel, for textiles
and food processing? Add to this,
equal number of bureaucrats in each ministry. Let us, therefore, rethink structures
of our ministries and wonder why any ministry should be running hotels, steel
mills or textile mills?
On the question of mindset, it is equally, if
not more important to change the mindsets of people at the junior level – say of
directors, deputy secretaries, undersecretaries and section officers. This is
because it is they who put up the cases before their seniors --joint
secretaries, additional secretaries and secretaries. In all likelihood, the senior
officers do not have the time to go through all details and to quite an extent
would accept opinions and take a
decision on the notes put up by their junior staff.
Tragically, the ministry of finance, which is
supposed to be pioneering the economic reforms, is too a victim of this mindset. Ask staff in the autonomous bodies under various
ministries whether the babus in the
finance ministry have forced them to have sleepless
nights over questions which could pass off as irrelevant. The answer may well
be a resounding yes.
This apart, it needs to be emphasized that most
of the ministries have their fingers in every pie. Though there are autonomous
bodies, statutory bodies or special organizations created under an act of
Parliament, at the end all would ultimately be controlled by the babus in ministries. Unless we make
efforts to change mindsets, which don’t go well with the philosophy of economic
reforms we shall not be able to implement economic reforms, even if we
seriously wanted to.
Given the developments of the past 15 years, it
is clear that unless we spell change
the process of implementation of
economic reforms is going to be tardy. Outdated mindsets, which we have
inherited, shall unintentionally continue to put spokes in the wheels of economic
reforms.---INFA
(Copyright,
India News and Feature Alliance)
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