Sustainable Welfare Responsibility of Political Parties

& NGOsBy

DR T.H. CHOWDARYDirector: Center for Telecom Management and Studies

Fellow: Tata Consultancy ServicesChairman: Pragna Bharati (intellect India )Former: Chairman & Managing Director

Videsh Sanchar Nigam Limited &Information Technology Advisor, Government of Andhra Pradesh

T: +91(40) 6667-1191(O) 2784-6137& 2784-3121®F: +91 (40) 6667-1111

hanuman.chowdary@tcs.com

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Growth & Development • Development includes growth; the reverse

need not be true.• Development –Economic Human• Humans can be happy w/o prosperity – a

condition of mind.• Prosperous can live in pain with comfort!

[Nurses, ICUs, Dialysis, transplants, steroids]

• Human Development Index Happiness Index

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World GDP per Person, 1000=100S & T for Wealth Creation

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World Population and the Poor

Year Population % of the Poor1820 1.1 billion 85%1980 5 billion 30%2000 6 billion 20%2007 6.5 bln 18%2012 7.0 bln 15%

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Economic DevelopmentRural Population Developed

( 5 to 10)% Developing(50 to 70)%

Contribution of Agriculture to GDP < 5% (20 to 50)%*% Labour engaged in Agri-related work

< 5% upto 60

* Agriculture contributed 65% to GDP in 1951 & 28.5% in the 9th plan. It came down to 15% in the 11th Plan in India.

* In China it is now 12% down from 70% in the 1950sIndia’s GDP

1992-93 2010 2012

293.26 1.0Tln 1.8 tln

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Time taken to double the per capita income (1)

Country UK USA Japan Indonesia S.Korea China

Years 58 47 33 17 13 10

Since 1780 1840 1880 1965 1970 1978

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Time taken to double the per capita income (2)

GDP Growth Population Time taken

3.5% 2.0% 50 Y

6.5% 1.8% 15 Y

10.0% 1.0% 7 Y

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Poverty came downCountry Indonesia Malaysia Thailand S/pore India

From % 58 37 49 24 75

(1972) (973) (1962) (1972) (1951)

To % 17 14 26 10 30 (1982) (1987) (1986) (1982) (2002)

Life expectancy up from 56 to 71 during this period

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Development

• Economic:– Family Income– Old Age Pensions– Insurance

• Life, Health, Work

• Human:– Health– Longevity– Education– Quality of Life ( air, water, leisure, communion…)– Stable Family– Stress

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Period GDP POP PCI YRS1951 to 2000

3.5 2.8 0.7 70

2004-07

9.0 1.8 7.2 10

Growth of GDP; Population;

Per Capita Income (PCI) &

Years for doubling PCI

•Lesson from China: Control population during period of growth [JRD’s advice to Nehru in 1950s dismissed.]•BPL ratio is the index: in India it came down from 70% in the 1950s to about 30% now [BPL ratio in A P is 85% according to white ration cards & increasing.]

Wealth Creation &Poverty Reduction

• Education * Population control• Free enterprise• State: intervention/involvement in infrastructure• Education * Health• Drinking water * Irrigation• Highways/Railways• Air & Sea Ports * Electricity• National water grid• All these help (1) industrialisation (ii) growth of

services enterprises (3) Migrate people from Agriculture to industry & services

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State Monopoly

• Law&order• Defence• Internal security• Judiciary• Currency• Elections• Power Transmission (Generation by multiple

sources)

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Regulation

• Every sector • promote competition• Consumer protection• Independent, competent, constitutional • Avoid re-employment of retired government

employees in regulatory bodies

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Financial Health of India (1)

Debt of Government • domestic = $ 400 bln (Rs. 22,00,000 cr) • foreign = $ 260 bln (Rs. 13,00,000 cr)• Total = $ 660 bln (Rs. 35 lakh cr)= 40% of GDP=Rs. 30,000/ HeadIndia’s public debt at end of Sept 2012

June 2012 =Rs. 37,63,264 cr Sept 2012 = Rs. 39,00,386 ( 52% GDP )

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Financial Health of India (2)

• Interest & Principal repayment (as per budget) Rs. 2,20,000 cr

• A.Ps debt: up from Rs. 54,000 cr in Y 2004; to>Rs. 1,50,000 cr now

• India’s Trade gap (Imports-Exports)• Foreign exchange reserves• China- $3,200 bln; India- $295 bln• The gap is covered by

– Remittances– FDI

• Equity into new plants• Share market

– NRI deposits

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Financial Health of India (3)India’s Imports Exports

(US$ Bln)2008-9 2009-10 2010-11 2011-12 2011-12Imports 303.7 288.4 360.97 488.6Exports 185.3 178.8 251.1 303.7deficits 118.4 109.6 118.7 184.9

India’ s borrowing * 2012-13 budget Rs. 5,75,000 cr•Actually borrowing Rs.2000 cr/day* China’s exports (April- Sept ‘12) $ 1.5 Trn; up7.4%* India’s 2011-12 $ 300 bln; 2012-13= $ 325 bln

Losses of some PSUs Telcos

Year BSNL MTNL2010 -1,823 -2,6102011 -6,384 -2,8022012 -8,851 -4,109

Air IndiaAccumulated debt Rs. 47,000 crLoss last year Rs. 8,000cr

APSRTC

• Interest payout = Rs. 300 cr ; * Interest paid by GOAP =Rs. 48 cr• Borrows = Rs. 600cr/yr to pay interest & principal• RTC Debt Rs. 4,200 cr * Loss in 2011-12= Rs. 450 cr

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Give-Aways (1) • Agri debt written off Rs. 70,000 cr * (A.P in addition Rs. 5000 cr) • NREGA - = Rs. 40,000 cr/yr * Paavala vaddi in A.P• No vaddi * SC/ST Rs. 1900 or• Minority = Rs. 1900 cr * Weavers= Rs. 350 cr• Fee reimbursement = Rs. 24,000/y• Student loans as of March 2012 Rs. 50,000 cr• Central &State Subsidies & Welfare Rs. 500,000 cr/yearly (85% turns into

Black money) G.O.I borrowing Rs. 6/7 lakh cr)• Haj subsidy Rs. 900 cr/yr ( begun by Nehru in 1959) 2004 = Rs. 160 Cr; 2005 = Rs.185.85 cr 2009 = Rs.826cr 2012 = > Rs.1000

cr

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Give-Aways (2)in A.P

• Christian pilgrimage – Rs. 25,000/person• Construction of church – Rs. 200,000 /village• Rs. 20,000 for celebration of Christmas per group• Payment to madrassas• Indira Awas cumulative total in A.P 1,75,00,000

Houses i.e 80% of families in A.P must be living in government houses !

• Rs. 6700 free electricity for farmers• Rs. 3,500 cr sub-plan for SC/ST

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Give-Aways (3)

• TV sets, mixers, grinders, laptops ( cell phones-)• Payment to unemployed ( 75 mln young..)• Old age pensions-• Pensions to freedom fighters• Free electricity (Rs. 6700 cr/year in A.P)• Nutrious food for pregnant women• Bicycles, dresses, shoes, sanitary towels for

school children.

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Give-Aways (4)

• Trinamul Congress government in West Bengal financed construction of 10,000 new madrasas

• Pays Rs. 5000 p/m to tens of thousands of Imams (none to Archakas)

• Parties compete to provide reservations for Muslims – 5% Tamilnadu, 12% TDP & TRS in Andhra Pradesh, 20% in UP…

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Give-Aways (5)

• In the 5 years to 2009-10 India moved 52 mln people out of poverty ( 22.4 mln from rural areas and 28.6 mln from urban areas)

• In 1973-74 the Tendulkar Commission put BPL people at 37.4% . Now it is stated to be 25% - a miserable performance. In 38 years

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Give-aways (6)

G.O.A.P’s • Free electricity to farmers = Rs. 6,700 cr/y• LPG Cylinder cost Rs. 931• Price = Rs. 410.50• 24 lakh students availed Rs. 52,000 cr loans

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India’s Subsidies (Rs. Cr)2003-04 2009 2010 2011

Rs. 44,323 1,29,240 2,50,000 3,50,000

Promises

• Separate budget for Muslims - Rs.2,500cr• Separate Bank for Muslims Rs. 50,000 for a

Muslim girls’ marriage• Bicycles for Muslim girl students• Loans without any security for whosoever asks• From Rs. 2/kg rice to Rs. 1 kg to free 30 kgs!• Free medical check up• All debts to be written off• Separate Budget for B.Cs

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Competition in Promises of more & more Welfare

• Where will money come from• Higher taxation leads to avoidance, evasion, flight to secret account in

foreign banks• Less investment in industry, less jobs• Population growing @ 19 mln per year• Jobs never more than 10 mln in an year• Unemployed, unemployable, “educated” are right stuff for crime,

anarchy, Maoism revolution• Reservations in Promotions• Reservation in private sector jobs• Reservation for Muslims in government & schools• Reservations for Christian Dalits• 2% of company’s pro fits for CSR

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Minority Rights DayDec 12- 2012

• Under PMs 15 point Muslim First progarm 2,69,770 Indira Awas Houses built .• Rs. 1,71,960.7 cr lent under priority sector lending • Rs. 389.96 cr for construction of 4,590 more IAY houses, 106 health centers,

1081 Anganwadi centers, 14,293 hand pumps, 19 school buildings , 613 additional class rooms, 27 ITIs, 11 Polytechnics , 77 hostels..

• Rs. 438.93 cr for scholarships • Computerization of all state Waqf Boards • 25000 more merit scholarships for Muslim girls • Grant in aid to develop ed. Infrastructure for Muslim schools• Rs.133.25cr loans to 32,374 Ms by NMDFC• More campuses for Muslim & Urdu Universities • More Madrassas• 90 Muslim Districts

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What are the costs/penalties (1)• Highway programs * Electricity• Defence * Security• Quality education * R&D; manufacture• Justice; not enough courts, judges• PHCs starve – Arogyasree for benefit of corporate hospitals• Jalayagnam – Mobilisation money?

– Canals w/o dams– Dams w/o canals– Already costs up 3 times

• Moral fiber destroyed – Dependency– Promoting idleness

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Costs & Penalties (2)2004 2011-12

Government of India’s capital expenditure from the budget

25% 12.5%

Subsidies 9.4% 16.4%

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Costs & Penalties (3)Parties Prosper

Political parties reported receipts Y 2010-11 Congress Rs. 2,008 crBJP Rs. 994 crBSP Rs. 484 cr CPM Rs. 417 cr SP Rs. 279 cr TDP Rs. 54 crTRS Rs. 10 cr

What should be done(1)

• Limit welfare to one child families • Stop when 2nd child comes• Reservations for one –child in a family • Only for one generation• NREGA work only in project areas • Those who seek, should move; tented

accommodation/dormitary, project school• Unemployment dole for one year only• No fee reimbursement • But merit scholarships and interest free loans

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What Should be done (2)

• Stipulate political parties should estimate costs of “welfare” they promise and state thro’ what taxes/measures they would raise revenue for the welfare

• Political Parties Regulatory Authority of India to ensure accountability, transparency & liability for default and inner party democracy.

• Stop vote bank building through religion ad caste specific welfare, and laws and rules & privileges, favours

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What NGO’s may do (1)

• Educate public about duties, work and self-help ethic• Call parties to publish costs of welfare they promise

and how they would raise revenue• Assist financially and intellectually,

entrepreneurship among educated young• Institute scholarship, supply resource/talent persons

to schools/colleges thro’ chairs /programs• Adopt schools/colleges to improve quality of

teaching/learning

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What NGO’s may do (2)

• Institute extension lectures• Partially fund Panchayat/Municipal plans for

libraries, tree-plantation, sanitation (drains, sewers, toilets, community baths; link roads, ware-house, school-building, function hall…)

• Open old-age homes• Open orphanages• Fund Ekal Schools in tribal areas

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Abraham Lincoln

“You cannot bring about prosperity by discouraging thrift.You cannot strengthen the weak by weakening the strong.You cannot help the poor by destroying the rich.You cannot establish sound security on borrowed money.You cannot keep out trouble by spending more than you earn.You cannot build character and courage

by taking away man’s initiative and independence.You cannot help men permanently by doing for themWhat they could do for themselves.” (Source: Freedom First, May 1989)

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Nani PalkhiwalaOn India’s governance

• History will record that the greatest mistake of the Indian republic in the first 50 years of its existence was to make less investment in human resources- education, family planning, nutrition and public health- than in brick and motor dams and factories.

• We have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare.

• Indian liberalisation encounters formidable opposition from three quarters.

• The top heavy bureaucracy reluctant to shed its enormous powers• Influential politicians who prefer to let socialism remain the opium

of the people and of whom it can be truly said that if ignorance is bliss, they should be the happiest men alive.

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Nani PalkhiwalaOn India’s “Socialism”

• Quite a few Indian businessmen men who are much interested in their own personal prosperity than in the future of the country and who preferred to flourish in the non competitive environment.

• These three are the obstructionist forces…India continues to remain the only significant country in the free world to hold aloft the tainted and tattered flag of socialism.

• “ We shut our eyes to the fact that socialism is to social justice, what ritual is to religion and dogma is to truth”.

• Socialism as practiced in India has been a fraud: Our brand of socialism did not result in transfer of wealth from the rich to the poor but only from the honest rich to the dishonest rich

• •The sleeping sickness of socialism is now universally acknowledged – but not officially in India… The public sector enterprises are the black holes, the money guzzlers and they have been extracting and exorbitant price for India’s doctrinaire socialism.

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Nani Palkhiwalaon Laws & Taxes

• A law suite once started in India is the nearest thing to eternal life ever seen on this earth….

• Over taxation corrupted the national character overtly. The nation survived only because the tax system continued to breathe through loopholes and the economy used to breath through window of tax evasion.

• We have too much Government and too little administration; too many laws and too little justice; too many public servants and too little public service, too many controls and too little welfare.

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This presentation & Many more can be seen and downloaded from my website:

www.drthchowdary.net

DhanyawadThank You

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