HOT TOPICS
SPOTLIGHT AGENCIES
Just how to regulate wisely - remains the question today
Written By murali772 - 30 July, 2008
In the West, the Left tries to conserve the welfare state. The liberal, economic right wants to dismantle it. Beyond that, the distinctions are blurred. The Right has accepted transfers to the poor but it wants them to be efficient. The Left no longer wants government to run businesses. Few oppose the market - the debate is on how to regulate it wisely. Read more in this TOI column.
We too are moving in the same direction, and correctly so - except some refuse to see it. In this post, I had stated that government appears to have made up its mind to get out of manufacturing. However, even today, units like KSDL, KAVIKA, etc continue in business only to perpetuate all kinds of artificialities in their respective domains.
For the sake of KSDL, the government has to 'protect' the sandalwood tree. The text of the letter I sent to the press in Nov, '07, in this connection, is reproduced below:
Veerappan was just an ordinary tribal living of forest produces until the government turned him into a criminal (sandal-wood smuggler), and later to a monster, using some archaic law, the need for which nobody quite understood fully. Somewhere along one had read that the law was being amended making dealings in sandal-wood a lot more liberal. Apparently, that is not quite so, going by the reports about Natesan Antiquarts, who by all appearances were doing a fairly good job of promoting age-old Indian traditions in handicrafts by creating a lucrative market for them in wealthier homes in India and abroad, landing up at the receiving end of the law.
The fact of the matter is that there are so many laws in this country that even by the mere act of breathing fresh air, you may be violating one, and the numerous babu's who have nothing better to do, can use it against you to extract their pound of flesh. It is a true testimony to the spirit of Indian entrepreneurship that it is flourishing inspite of all these.
BESCOM is obliged to procure not less than 50% of its requirement of distribution transformers from KAVIKA. Incidentally, KAVIKA's original name was Government Electric Factory (GEF). Back in the 60s, the government decided that it needed to upgrade technologies and promoted NGEF (the N here being for 'New'). NGEF was a technology and market leader during its heydays. All the same, the government didn't bother to sustain it - politics playing a major part in its eventual death. The GEF (or KAVIKA), even with its outmoded technology and Jurassic age facilities, chugs along merrily, thanks to BESCOM patronage - another reason why power distribution desperately needs to be privatised - read more here.
Muralidhar Rao
COMMENTS
murali772 - 20 October, 2008 - 05:23
Excerpts from an article titled "The much maligned public sector" which has appeared in today's Deccan Herald (http://www.deccanherald.com/Content/Oct142008/panorama2008101394963.asp), and my responses to them (in red), posted in the CAF google-group:
<!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} -->
Aping the capitalist model for our economy is not the panacea for the ills affecting our economy. In fact, the debate 'public sector Vs private sector' is unproductive as there is scope for better interaction and support between the two sectors, which could be a model for other developing countries. One shouldn't forget that without the infrastructure provided by the PSUs our process of industrialisation couldn't have taken place so fast.
They did play a role, but whether it could have been a lot better if the country had followed C Rajgopalachari's route is a matter for debate.
Let there be a competition between PSUs and the private sector on a level playing field. ( I would even say on a slightly sloping field favouring PSU's - but, monopolies should go) of. Of course, PSUs need not operate in certain non-essential fields that are best served by the private sector.
Upto about a few years back, telecom, civil aviation, insurance, banking, etc were all considered fields where government's presence was essential. Today, I can think of only defence, policing, primary education, primary health, and a very few other areas as where their presence is essntial. Also, apart from a rare BEL or a BEST (Bombay bus service provider), I wouldn't consider many other PSU's as real "ratna's". Even a BHEL's strength can be attributed largely to the 'price preference clause' in government tenders.
Political leaders, including ministers, should keep off the affairs of PSUs (Isn't that essentially where the problem lies?) except to provide overall guidance. The role of employees and labour unions is also important in improving the efficiency of the units and for accepting changes willingly.
The labour aristocracy in the public sector is what is responsible for holding back labour reforms, therewith contributing in a large way for the employment-less growth.
Moreover, fruitful co-operation between PSUs and the private sector could benefit both, while reducing costs and improve production as well as distribution.
I am not enlightened any by this article. And, more and more, it’s getting to be a one-sided debate.
Muralidhar Rao
murali772 - 30 July, 2008 - 07:13
In a liberalised regime, if the demand for sandalwood increases, people will start farming it to meet the demand. Government creates unnecessary artificialities.
Ivory trade, on the other hand, is prohibited and rightly so, to protect elephants.
Muralidhar Rao
navshot - 30 July, 2008 - 07:30
But in reality, they (source of supply chain) take the easy route - cut trees illegally from core areas of the forests and from anywhere else they're found, esp. as it takes years to get the yield if they had to farm it. I think the special treatment is there, as it demands high price as compared to other types of wood.
-- navshot
idontspam - 30 July, 2008 - 06:12
Interesting that I had this conversation today with someone while driving to work on how quality of living matters to the voter rather that ideology. The TOI writer is on the spot in his assessment. We were discussing how the Nordic region where he comes from puts up with socialism and super high taxes and still there is no major revolt from the people. While the slightest hint of tax increase in India can bring down the govt.
I believe while nordic countries charge high taxes the benifits largely is fed back to the tax payer while in India it dissappears into MP's pockets to be brandished about indecently in parliment. Some steps include
1) Remove corruption and plough back ill gotten wealth back to society. How much money can the politicians and bueraucrats hoard anyway? some have enough for generations and are still greedy. What happened to the regulator who ensures this? Well I know he is himself hoarding up.
2) Improve social security system. Privatization of EPF fund management started as of yesterday. Is it enough? Where are minimum garuntees for the poor with no income and minimum wages which are realistic to the prices prevailing in the market today (the 25 paise doesnt exist anymore and the 50 paise will dissappear soon) Where is the regulator who can ensure this?
3) Protection of consumer rights. We were discussing the difference btwn how the consumer is treated in the west Vs how the indian consumer is treated like a cash box. Companies recall products voluntarily when a defect is found while the same MNC's in India pawn off defective products and take the consumer for a ride. Forget recall we have to stand in court to get our money back. Points to lack of regulatory penalties for such misbehaviour. Regulator is reactive has no rules for doing business in india.
4) Financial market are gettin around and being regulated better (RBI and SEBI are working well)
But thats it in 17 years of deregulation, baby steps in financial markets, swindled and looted by manfacturers. No social security cover for underpriveliged. In the name of deregulation we have let loose anarchy. We need to fix the anarchy. We are not going to be super power we havent passed kindergarden in maturity. Ideology doesnt even need to be discussed as it is a tactic of the swindlers and mentally bankrupt
murali772 - 28 February, 2014 - 14:05
Is there a crisis in Gandhada Gudi (temple of sandalwood) as Karnataka prides itself? Experts at an international seminar here on Wednesday believe there is.
They cited the increasing instances of smuggling of sandalwood and the sharp dip in its production to back their crisis theory. The seminar 'Sandalwood: Current Trends and Future Prospects' was organized by the Institute of Wood Science and Technology (IWST).
Where did things go wrong? "State ownership was a cause of concern. Despite opening it up for farmers to grow this commercially-profitable species, apart from forest lands since 2001, the prohibition on free trade has been a big area of concern," said HS Anantha Padmanabha, forestry consultant.
"The only tree in the world which is sold in kilograms, sandalwood in its natural habitat is always a plant. Before it grows into a tree, it is cut and smuggled out. Farmers initially struggled to grow sandalwood over a height of 1 foot, but now they're cultivating it successfully. The problem lies with the state's policies," said V Ramakantha, director, IWST.
Significantly, the government of Karnataka retracted this monopolistic policy in 2001, and Tamil Nadu did so in 2002, liberalizing sandalwood cultivation and harvesting by individual entrepreneurs and corporate bodies. Yet, they retained control at all levels. Farmers in Karnataka can sell their produce only to government agencies.
The experts hoped the Sandalwood Protection Bill, the draft of which was placed before the Centre in August 2012, will make a difference. They felt the rules must be farmer-friendly.
For the full report in the ToI, click here.
The farming liberalisation happened in 2001. From then, it has taken over a decade to place a bill before the centre to correct certain anomalies. But, when the caption of the bill has the word "protection" in it, I am not sure, it's going to make much of a difference. Sandalwood needs protection more from the government than anybody else.
And, another decade down the line, the another international seminar will be held, delegates will fly down from across the world, will make similar noises, wine and dine, and go back home. And, the Sandalwood tragedy will continue to cause shedding of bucketfulls of tears for the sacred tree.
PRAJA.IN COMMENT GUIDELINES
Posting Guidelines apply for comments as well. No foul language, hate mongering or personal attacks. If criticizing third person or an authority, you must be fact based, as constructive as possible, and use gentle words. Avoid going off-topic no matter how nice your comment is. Moderators reserve the right to either edit or simply delete comments that don't meet these guidelines. If you are nice enough to realize you violated the guidelines, please save Moderators some time by editing and fixing yourself. Thanks!