Friday, May 30, 2008

Inefficiency and corruption hit the poor most

Can we afford to waste one lac crores a year just because of corruption and inefficiency when two million children die very year , that's about 6,000 deaths happening everyday, where daily income of 20 crores people is less than Rs.16 , where thousands poor people die every year, from hunger, starvation, severe malnourishment and the lack of livelihood.
There is no denying to the fact that corruption is the biggest problem this country faces today . Corruption is not only anti national but anti poor also. It is indeed not the lack of money, but the siphoning of it that is the problem. Corruption is, perhaps, the biggest reason why the most deprived sections of society continue to stay in inhuman conditions . Despite a drop in the number of people below the poverty line, the number of those who go to bed hungry is rising. Government spends thousands of crores rupees every for povery eradication programmes but very little of it reaches to correct place. The main problem is not fund allocation but poor delivery system . Rahul Gandhi recently said only 5 paise out of one rupee reaches to poor. His father Rajiv Gandhi once said that only 15 paise out of one rupee reaches to poor . It means situation is deterioating day by day. There is a cost to be paid for corruption, which is again reflected in higher prices and higher taxation. Over the years, corruption has entered our body politic to the extent that it has become second nature with a majority of our people. We seldom pause to think that this personal gain can have bad effects on the economy. In fact, corruption is visible in almost every deal. If somebody wants his tender to be accepted he has to pay a bribe. . If somebody wants his ration card prepared he has to pay a bribe. Loans cannot be raised from a bank without greasing the palm of the concerned officer. You cannot get your child admitted in a particular school or a course without paying some kind of consideration, euphemistically called a donation or capitation fee. Corruption is prevalent everywhere and it is there just because of lax admisnitration and slow judicial process .To eradicate corruption lot of things need to be done.
And the second most important problem is inefficiency . We are loosing thousands of crores of rupees every year just because we are inefficient in our operations. So far, no systematic study has been done to quantify the costs the individual or the country as a whole pays for the inefficiency. However, if such a study were to be done, the costs of inefficiency would run into thousands of crores of rupees every year. Our bureaucracy is the most inefficient work force in world. Cost of collection of income tax is just double of the cost of any European country. There is surplus work force in every section of bureaucracy . Ironically this work force is corrupt too.
Let us take public sector units for instance. There are hundreds of public sector units which are running in losses for many years. Government is spending hundreds of crores on them every year without getting any thing in return, In fact, public sector steel units are over-manned- where one worker can do the job there are three or four employed. Indian labour laws make it very difficult to lay off an inefficient worker. Those familiar with the recruitment practices for public sector undertakings (PSUs) would know that most of its workers and employees are recruited not on the basis of their skills or qualifications but on recommendations of politicians who in order to nurture their constituencies go on recruitment spree recklessly. It is true that over-manning provides employment to more people, but in the long run it turns those surplus people into parasites. The over-manning of business and industry only signifies a stagnant economy. A growing economy would generate more employment, which would be more productive. This is what is lacking in this country. In a competitive environment most of these PSUs should have been closed down or taken over by healthier units. But just because of political consideration these defunct units are still continuing and salaries being paid to lacs of employees for sitting idle.
Nothing in this world comes free. When a consumer pays for something he or she gets something tangible in return like bread or butter, or intangible, like the services of a lawyer or a doctor. This is the positive aspect. There is also a negative aspect to costs in the sense that a consumer gets nothing tangible or intangible in return but increased cost. This negative aspect of cost is nothing but the cost of inefficiency at various levels inside and outside the government, within organisations as also within the system itself . The result is higher prices and higher taxes.
Let us take steel for instance. India is rich in iron ore and many countries especially Japan buys large quantities of iron ore from India to turn it into steel. It pays the freight charges for importing Indian iron ore and also pays relatively much higher wages to its steel workers, but still Japan is able to sell steel at a relatively competitive price than India. Why is it so?. Since this is not possible in the existing circumstances, therefore, to keep the steel mills running or for that matter any PSU running, the government raises the prices to cover up a part of its losses, increases taxes to cover another part of the costs and raises the countervailing duty on imported steel to protect the steel industry.These relatively higher prices of steel and higher taxes are in fact, the costs of inefficiency, which the Indian consumer as well the Indian nation as a whole is forced to pay.
The country must get out of this vicious circle of inefficiency and corruption at the earliest. It is for the people to understand this and come out openly against inefficiency and corruption. Citizens should ask political leaders what they have done in these past six decades to root out corruption and improve the efficiency in the country!
The Right to Information Act has armed the people with the weapon to question public investments and to figure out if the money was actually spent for the intended objectives or budgeted projects. No longer will we have a situation where a project is completed only on paper, and the money pocketed by the politicians, bureaucrats and contractors. For all we know, the quantum of public money that's siphoned off may come down drastically. But only if the act works in practice will officials be forced to part with details. Anyways, Indian citizens now realize the enormous power they possess to make governments and its employees accountable

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