Issues facing India

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Issues facing India
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Naxalism
Terrorism
China
Corrupt Media
Unemployment
Infrastructure
Quality of Education
Environmental degradation
Business Environment
Dependence on Agriculture
Inefficient Police
Crimes against women
Poverty
Slow Judiciary
Ineffective system of Justice
Population growth
Over Regulation!
Votebank Politics
Corruption
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As things stand...
Poor Business Environment
Unemplyment
Poor Educational standards
Poor Implementation of Govt. Policies
Poverty
Political control over Govt. Policies
Poor Agricultural Productivity
Status of Women
Ailing Judicial system
Corruption
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Agenda

• Political Leadership
• Business Environment
• Poverty
• Education
• Law and Order

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Global ranks

• Per capita GDP 141
• Human Development Index 136
• Ease of doing business Index 134
• Corruption Perception Index 94
• 4th most dangerous place for women (after
  Afghanistan, Congo, and Pakistan)

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Political Leadership
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India grows despite and not because of the
Government!
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Political Leadership

• Control over executive and judiciary
• Populism inherent to Democracy
• Corruption
• Electoral System
• Coalition Dharma

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Control over Executive and Judiciary

• Civil Services
• CBI
• Vigilance
• Police
• Issues with Judiciary

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Populism inherent to Democracy
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Corruption Can it be solved?

• Judicial Police reforms and Independence of the
  Anti-corruption wings
• Privatization
• RTI
• Use of IT
• Initiative by private players
• Income tax reforms
• Simplification of the laws, lesser role of
  beureaucracy.
• Protection to whistle blowers

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Political Leadership Electoral System
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Coalition Dharma

• Ideological differences fractured policy debate
• Blackmail
• Uncertain fate of the govt

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Representation of People Bill, 1951
that should be "torn and thrown out".
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Representation of People Bill, 1951
that should be "torn and thrown out".
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Business Environment
Ease of DB 2013 rank
Doing Business (Overall Ranking) 132
Starting a Business 173
Dealing with Construction permits 182
Trading across Borders 127
Enforcing contracts 184
Resolving Insolvency 116
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Growth rates of India and China

• Growth rates of China, S. Korea, Taiwan, India
• Infrastructure growth

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Poor Infrastructure

• Growth rates of China, S. Korea, Taiwan, India
• Infrastructure growth

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Slow Reform Process

• Refrain from touching politically sensitive areas
• Land Acquisition New LARR Policy, 2013
• Labour Laws
• Tax rates - GST
• FDI in Multibrand Retail

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Divergent State Policies

• Example West Bengal / Gujarat / Kerala /
  Maharashtra / MP / UP / Bihar
• Difference in the style of functioning leads to
  different growth trajectories.

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Business-politician Nexus
Business control over policy making, media,
implementation etc. Creates
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Bureaucratic Inefficiency

• Scale of implementation
• Performance measurement metrices
• Political control
• Ill conceived policies
• Corruption

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Business Environment Government Initiative

• New RR Policy
• Thrust areas/sectors, priority sector lending
• Creating infrastructure through PPP, BOT, FDI
  etc.
• Tax holidays, single window clearance
• Micro-finance

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Land Acquisition, Rehabilitation and Resettlement
Policy, 2013

• Heavily loaded in favour of land owners
• Huge mark up to the historical market price to
  determine compensation amounts
• Numerous entitlements to landowners including
  permanent job and upfront payment
• Prohibiting the use of fertile agricultural land
  (beyond 5 per district) may be counter
  productive.

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Socialism is the destiny of any society. But it
must pass through Capitalism first.
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Agenda

• Poverty
• Business Environment
• Education
• Political Leadership
• Law and Order

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Poverty

• Population below poverty line 29.8
• World Hunger Index Rank 94 (of 119)
• 43 Indian children under 5 are underweight and
  58 stunted as of 2008 - the highest in the world

Sector wise contribution to GDP
Sector Employment () Share of GDP ()
Primary 51 17
Secondary 22 26
Tertiary 27 57
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Govt Initiative Subsidies
Money granted by the Government to keep down the
prices of commodities.

• Issues
• Opportunity cost of money
• PDS losses
• Market distortions
• Inclusion/exclusion errors
• Environmental impact

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Subsidies in India Alternative

• Direct Benefits Transfer Scheme
• Bolsa Familia Programme
• Implementation
• UID Programme
• Aadhaar Integration, ERP Integration and
  Integration with nodal bank and payment gateways

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Subsidies in India Alternative

• Direct Benefits Transfer Scheme
• Conditional Cash Transfer
• Bolsa Familia Programme
• Implementation
• UID Programme
• Aadhaar Integration, ERP Integration and
  Integration with nodal bank and payment gateways
• Direct transfer of Subsidy through state govt
  followed by UID based benefit transfer to the
  targets

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DBTS Risks

• Proper Identification of beneficiaries
• Addressing the liquidity constraint
• Price indexing of the subsidies
• Controlling the overall scale of expenditure
• Black marketing

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Govt Initiative Food Security Bill

• Provision of subsidized food grain for 67 of the
  population (75 rural and 50 urban population to
  be covered)
• To provide Rice, wheat and coarse cereal at Rs.
  3, 2 and 1 respectively.

The most optimistic estimates put the cost of the
scheme to Rs. 1.3 lakh crore per annum (11 of
the net expenditure)
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Food Security Bill Critique

• Do we need it?
• How are we going to fund it?
• Impact on other items?
• Can we deliver?
• Isn't it too obvious?

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Govt Initiative Food Security Bill

• Political implications
• Public distribution system
• Cross Subsidy

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Govt Initiative MGREGS
"the largest and most ambitious social security
and public works programme in the
world" Issues Net value add Impact on the job
market Impact on the budget
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Poverty Summary

• Poverty and Unemployment go hand in hand.
• Govt. schemes for poverty alleviation focus on
  creating jobs subsidies in agri other
  produces.
• Govt schemes are marred by ill-conception, scale
  of implementation and corruption.

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Education

• Literacy rate 74 (82 for men and 65 for
  women) (world average 84)
• Only 15 of Indian students reach high school,
  and just 7 graduate
• Consistent share of at least 3 in the budget
  spend since freedom.

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Access to Education
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Right to Education Act

• Education is the fundamental right of every child
  between the ages of 6 and 14
• Private schools to reserve 25 of seats to
  children from poor families
• It prohibits all unrecognized schools from
  practice
• No donation and no interview for admission
• No child shall be held back, expelled, or
  required to pass a board examination until the
  completion of elementary education.

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Quality of Education

• Role of govt bodies (UGC, AICTE, MCI etc)
• Teacher student ratio
• Balance between acads and extra-curricular
  activities
• Rote based teaching
• Skill development

75 of technical 85 of general graduates are
unemployable by industries. (WSJ) No Indian
university appeared in top 200 (including the
IITs). (QS World University Rankings (sept
2011)) The number of students writing CAT 2013 is
2 Lakh (for 3500 seats), GATE 2013 is 12 lakhs
(for less than 500 seats), over 5 lakh students
for IITJEE 2013, 7.5 lakh for NEET 2013 etc.
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Education Important issues

• Fee and Funding
• Pvt participation and degree of control
• Attracting foreign universities
• Limited job opportunities post graduation
• Adult Education Literacy vs Education

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Education Summary

• The govt has spent a lot of money on Literacy but
  to not much avail.
• The policy is misdirected Education and not
  Literacy should be the target.
• Focus on employability and alternately creating
  more employment opportunities is the ultimate
  solution to the problem.

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Agenda

• Poverty
• Business Environment
• Education
• Corruption
• Law and Order

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Law and Order

• Police
• Judiciary
• Status of women

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Police

• System of policing is governed by "Police Act of
  1861"
• Police-population ratio of 120 against global
  avg. of 270 per one lakh
• An average of 50 transfers every month in a
  state that has around 350 IAS officers...43 IPS
  officers have been transferred 40 times in their
  career.
• the bureaucrats should work in close
  coordination with party leaders or face the
  music.
• - State of affairs in UP
• Read article A hell hole for Civil Servants by
  Tehelka

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Police Reform

• Minimum tenures for senior police offices
  (Station Inspector upwards).
• Setting up of a body to decide transfers,
  postings, promotions and other service related
  matters of police officers.
• Police Complaints Authority at state level to
  inquire into public complaints against police
  officers.
• Increase in the funding/budgetary allocation for
  the Police department.
• Separate the investigation and law and order
  functions of the police.
• Greater integration of various arms of
  investigation.

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Judiciary

• More than 3.7 Crore cases pending at various
  levels of courts (district, high and Supreme)
• High pendency levels at the quasi judicial forums
  (like MRTP commission, consumer forums, Company
  Law Board, Administrative tribunals, taxation
  tribunals etc).
• Justice delayed is justice denied.
• Justice should not only be delivered, it should
  also be seen as being delivered.

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Judicial Reforms

• Simplification of the court procedures
• Service of summon, recording of evidence,
  arguments, decision
• Suitable changes to categories of laws with high
  pendency
• Dishonored cheques, Motor Accident, Land
  acquisition, maintenance to dependents
• Compounding/amnesty schemes for penalty related
  offences
• Alternative dispute resolution mechanism
• Lok Adalat, pre-litigative redressal, expert
  tribunals and regulators,
• Fast-track courts
• Use of IT

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Status of Women

• Foetecide (sex ratio 941 914 for children below
  6 years),
• Discrimination (male vs female literacy rates)
• A crime against a women is committed every three
  minutes, a women is raped every 29 minutes, a
  dowry death occurs every 77 minutes - National
  Crime Records Bureau
• Causes
• Social Justice and policing, Mindset
  (Patriarchy, Tradition, Marriage)
• Economic Lack of job opportunities, Limited
  family income
• Biological Nature of work, maternity,
  self-defense

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Government Initiative

• Woman Reservation Bill (pending for over 4 years)
  
• The sexual harassment of Women at workplace Act,
  2013
• Protection of Women from Domestic Violence Act,
  2005
• Justice JS Verma Committee report and Nirbhaya
  Act (Criminal Law Amendment Act, 2013)
• Women empowerment through Self Help Groups,
  Microfinance, reservation in education etc.

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THANK YOU