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Selfcongratulation galore

, August 24, 2016, 0 Comments

parliament-the-government-marketexpress-inThe completion of two years in power by the current government has unleashed a plethora of assessments. It is not worth adding an umpteenth assessment; a critical assessment would be taken by the government’s supporters as hostile, and an uncritical one would be waste of time. Exceptionally, however, the government has made a self-assessment, entitled Then and Now, on its website mygov.in. It displays once again the proficiency of its web artists; but it needs to be examined for the quality of its thinking.

The soil in every farm will be tested, and every farmer will get a card giving the results of the test. The test will give the farmer an idea of what nutrient his farm lacks, and tell him what fertilizers to buy. Do they not know it? How common is misuse of fertilizers? Soil does not vary from field to field; knowledge about fertilizers can be and is shared by farming neighbours. Farmers have been using fertilizer for almost half a century now; it is difficult to believe that they have not worked out what to use by now.

The government claims to have created a national agricultural market. The NAM website will report prices of 25 commodities from 585 mandis; traders and farmers will be able to trade in any of these markets. This is unlikely to be of much use to farmers. Farm produce has high transport costs, so the chance of selling it in faraway markets will be useless to farmers. And a farmer who sells something to a trader hundreds of miles away will have no assurance that the man is trustworthy and will pay.

The government has created a national scholarship portal where students can get information and apply for state government scholarships. Of the 250-million-odd students, 106,000 have registered and 50,000 have applied. Either students do not think their chances of getting scholarships are significant, or they are happy with the information they get elsewhere.

The government has built 417,000 toilets in 261,000 of its schools, in the hope that it will stop girls from dropping out. There are 1.5 million schools in India which would require at least 3 million toilets – one for boys, one for girls. The government never tells us how many schools are still without toilets – and how many schools have toilets without a door or without water. This is a peculiarly Indian story; I have not heard people in any other country link school-going with toilets. Indians may be right, but we do need a more sophisticated, fact-based analysis of school avoidance, including caste and language differences, and the returns on primary education.

The government took credit for releasing files on Netaji Bose. It was silly of the Congress to keep the files secret, and the new government used them to score points. But was it important? It did not reveal any fresh information or correct any major misconception about Bose.

The government claims to have reversed the “decline of India’s growth story” by attracting foreign direct investment. Actually, growth bottomed out in 2012, two years before the present government came to power; it can hardly claim credit for something that happened when it was nowhere in the picture. And foreign direct investment, even in its best years, is 2-3 per cent of GDP; a rise in it can have little impact on growth.

The government claims that 79 per cent of the Mudra beneficiaries were women, and that the proportion of women working in MGNREGA projects had gone up from 51 to 56 per cent. Mudra loans are given to start businesses; how does a business become more desirable just because it was started by a woman? Is the woman a real entrepreneur or is she fronting for a man? Favouring women only promotes dishonesty. And what is so good about women working in public works? It is backbreaking work in hot Indian weather; it will attract people who are in dire need of money. They do not become more deserving just because they are women.
The government claims that 67 years after independence, 18000 villages were still without electricity, and that it had electrified 7779 of them. What it meant was that of the 597,000 villages, 579,000 were electrified even before this government came to power, and that all it had to do was to electrify the handful that still remained. In two years it electrified 1.3 per cent of the villages. The problem today is not so much of unelectrified villages, but of villages where electricity reaches only official buildings and privileged officials; the government will never publish figures of the proportion of village population that gets electricity, and the number of hours it gets it.

The government says that “banking seemed a distant dream” until it opened Jan Dhan accounts and people deposited Rs 36,000 crore in them. It is silent on the World Bank’s estimate that 43 per cent of accounts in India are dormant. The government sent a bureaucrat into a village, who entered the name of a villager against a bank; that was the end. The villager never knew what the rigmarole was for, and he never used his bank account. Such is the achievement the government boasts of.

The government has installed 31000 solar pumps. There is a case for promoting solar technology, but none for promoting a single technology such as solar pumps. Sun shines only a few hours a day; those are not necessarily the best hours for pumping water. Solar power is best fed into the grid; it can then be economically fitted into the supply pattern of electricity. The way to promote it is to subsidize solar panels, and possibly help panel owners get land to spread out  the panels on. Similarly, it is none of the government’s business to buy and sell LED bulbs; it should instead give a subsidy on their sale.

The government has introduced Jan Suraksha Yojana, a family social security scheme, and Pradhan Mantri Fasal Bima Yojana, a crop insurance scheme. It has no business to start businesses it knows nothing about. Insurance schemes should be introduced only by insurance companies, and only if they make economic sense. There may be schemes that the government favours but which do not make economic sense, such as crop insurance. In that case, it should ask itself if a more sensible scheme can be conceived; if not, it should encourage introduction of the scheme by commercial providers and give it a subsidy. A crop insurance scheme is virtually impossible to run honestly because the loss of output cannot be estimated. It is much better to start a rainfall lottery: the greater the shortfall, the greater should be the prize. Farmers can then play the lottery against the risk of a bad monsoon.

As this column will suffice to show, the NDA government is full of good intentions, but the quality of its thinking is so poor that it is unlikely to fulfill its ambitions. It needs to consult more intelligent people – and more than a few of them. Contention of opinions is essential for making good policy, and intellectual rigour is more important than ideological rectitude.

The opinions expressed in this article are the author’s own and do not reflect the view of MarketExpress – India’s first Global  Analysis & Sharing Platform or the organization(s) that the author represents in his personal capacity.