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Posted on: Sep 03, '08

What's Holding India Back?

“What’s Holding India Back?”

Using India’s finance minister P. Chidambaram’s recent statement that the “tiger is under grave threat” as a clever segue, the Economist takes a close look at India’s “tigerish economy,” arguing that it’s 9% a year average growth is under threat “because it has failed to reform its public sector.” economist.jpg Here’s a quickie roundup of the news package to start off your week.
The lead story “India’s Civil Service: Battling the babu raj” takes a critical look at India’s hardworking “armies of clerks” (IAS officers), concluding that “India’s malfunctioning public sector (and civil service adminstration) is India’s biggest obstacle to growth”:

Indeed, all India’s administration is inefficient. According to the Congress-led government’s own estimate, most development spending fails to reach its intended recipients. Instead it is sponged up, or siphoned off, by a vast, tumorous bureaucracy.

This is not new news. Rajiv Gandhi,, as Prime Minister of India, once lamented helplessly that out of every rupee spent for development only 17 per cent actually reached the poor. But the following explanation about the ineffective reforms of India’s bureaucracy from author of an IAS history, Sanjoy Bagchi, certainly caught my attention:

“Overwhelmed by the constant feed of adulatory ambrosia, the maturing entrant tends to lose his head and balance. The diffident youngster of early idealistic years, in course of time, is transformed into an arrogant senior fond of throwing his weight around; he becomes a conceited prig.”

I can just imagine the reporters writing this piece, going “Wow, we really have to find a way to use that quote!”

Anyway … another point that I found striking was that although the cover story expresses concern that India’s 9% growth rate is not sustainable, India remains one of the world’s four biggest emerging economies which accounts for two-fifths of global GDP growth last year — and is one of four world nations least dependent on the US: exports to America account for just 4% of India’s GDP. This, I did not know.

The entire package on India is worth checking out (and available online). Other pieces are “India’s budget: Write-offs as high as an elephant’s eye” (what is up with elephant and tiger references throughout this issue?!!) which looks at finance minister P. Chidambaram’s fiscal plans, including writing off farmer’s debts and raising the salaries of government employees.

I think that Indian government needs to go bullish on structural, administrative reforms or else, risk smothering its growth momentum.

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rajiv2008SCO said:

nice

September 04, '08

MynameRenu said:
Hope these things r better understood by these elected people on seat.

September 04, '08

manocarla said:
excllent yaar

September 04, '08

daisyann26 said:

September 03, '08

diya1992 said:
I agree with yr suggestions.Keep it up.We need more youngters like you.

September 03, '08

Chat3140 said:
I agree too that public sector reforms and administrative reforms can make India a real tiger on global map. Thanks for nice informatic post.

September 03, '08

munir0013 said:
just great praveen .
keep it up .

September 03, '08

sriangood said:
It does need to implement administrative reforms.
But how......, and who will do it,.......and where is the will?

thoughtful post.

September 03, '08

geetsudha said:
i agree with ur concerns and ideas also.more young ppl shud be thinking on that level.nothing can stop us then.

September 03, '08

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