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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
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
navshot - 30 July, 2008 - 06:31
KSDL or not, I understand that sandalwood is in short supply. I mean, more demand than supply, very similar to elephant tusks. To me it makes sense to protect both of them.
-- navshot
shas3n - 30 July, 2008 - 11:15
I personally believe in government stepping out of the way in such matters where market economics can help everyone to be happy.
From a very relevant piece in Indiauncut,
Now, what happens when you ban something that has a high demand? The underworld gets in. As it operates beyond the arm of the law, there is no transparency, and the cost to consumers is higher. It is hard to monitor and, since it’s illegal, there is no industry mechanism to do so.
The writing talks about betting, prostitution and drugs, but I guess the underlying theme is very relevant here.
ಸುಬ್ಬಣ್ಣಾ,ಥ್ಯಾಂಕ್ಸು! ತೇಜಸ್ವಿ ಪುಸ್ತಕಗಳ ಸಹವಾಸ ಸಿಕಾಪಟ್ಟೆ ಮಾಡಿರೋದ್ರ ಪ್ರಭಾವ.
-Shastri
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
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