Sustainable Welfare Responsibility of Political Parties & NGOs By DR T.H. CHOWDARY Director: Center for Telecom Management and Studies Fellow: Tata Consultancy Services Chairman: Pragna Bharati (intellect India ) Former: Chairman & Managing Director Videsh Sanchar Nigam Limited & Information Technology Advisor, Government of Andhra Pradesh T: +91(40) (O) & ® F: +91 (40)

S683 _Dec2012 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

S683 _Dec Source: Angus Maddison; J.P.Morgan World GDP per Person, 1000=100 S & T for Wealth Creation

S683 _Dec2012 World Population and the Poor YearPopulation% of the Poor billion85% billion30% billion20% bln18% bln15%

Economic Development Rural PopulationDeveloped ( 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 9 th plan. It came down to 15% in the 11 th Plan in India. * In China it is now 12% down from 70% in the 1950s India’s GDP Tln1.8 tln S683 _Dec2012

Time taken to double the per capita income (1) Country UK USA Japan Indonesia S.Korea China Years Since

S683 _Dec2012 Time taken to double the per capita income (2) GDP GrowthPopulationTime taken 3.5%2.0%50 Y 6.5%1.8%15 Y 10.0%1.0%7 Y

S683 _Dec2012 Poverty came down Country Indonesia Malaysia Thailand S/pore India From % (1972) (973) (1962) (1972) (1951) To % (1982) (1987) (1986) (1982) (2002) Life expectancy up from 56 to 71 during this period

S683 _Dec2012 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

S683 _Dec2012 PeriodGDPPOPPCIYRS 1951 to 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 S683 _Dec2012

State Monopoly Law&order Defence Internal security Judiciary Currency Elections Power Transmission (Generation by multiple sources) S683 _Dec2012

Regulation Every sector promote competition Consumer protection Independent, competent, constitutional Avoid re-employment of retired government employees in regulatory bodies S683 _Dec2012

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/ Head  India’s public debt at end of Sept 2012 June 2012 =Rs. 37,63,264 cr Sept 2012 = Rs. 39,00,386 ( 52% GDP ) S683 _Dec2012

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 S683 _Dec2012

Financial Health of India (3) India’s Imports Exports (US$ Bln) Imports Exports deficits India’ s borrowing * 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 $ 300 bln; = $ 325 bln S683 _Dec2012

Losses of some PSUs Telcos YearBSNLMTNL ,823-2, ,384-2, ,851-4,109 Air India Accumulated debtRs. 47,000 cr Loss 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 = Rs. 450 cr S683 _Dec2012

Give-Aways (1) Agri debt written off Rs. 70,000 cr * (A.P in addition Rs cr) NREGA - = Rs. 40,000 cr/yr * Paavala vaddi in A.P No vaddi * SC/ST Rs or Minority = Rs 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 cr 2009 = Rs.826cr 2012 = > Rs.1000 cr S683 _Dec2012

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 free electricity for farmers Rs. 3,500 cr sub-plan for SC/ST S683 _Dec2012

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 cr/year in A.P) Nutrious food for pregnant women Bicycles, dresses, shoes, sanitary towels for school children. S683 _Dec2012

Give-Aways (4) Trinamul Congress government in West Bengal financed construction of 10,000 new madrasas Pays Rs 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… S683 _Dec2012

Give-Aways (5) In the 5 years to India moved 52 mln people out of poverty ( 22.4 mln from rural areas and 28.6 mln from urban areas) In the Tendulkar Commission put BPL people at 37.4%. Now it is stated to be 25% - a miserable performance. In 38 years S683 _Dec2012

Give-aways (6)  G.O.A.P’s Free electricity to farmers = Rs. 6,700 cr/y LPG Cylinder cost Rs. 931 Price = Rs lakh students availed Rs. 52,000 cr loans S683 _Dec2012

India’s Subsidies (Rs. Cr) Rs. 44,3231,29,2402,50,0003,50,000 S683 _Dec2012

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 S683 _Dec2012

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 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 S683 _Dec2012

Minority Rights Day Dec 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 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 cr for scholarships Computerization of all state Waqf Boards more merit scholarships for Muslim girls Grant in aid to develop ed. Infrastructure for Muslim schools Rs cr loans to 32,374 Ms by NMDFC More campuses for Muslim & Urdu Universities More Madrassas 90 Muslim Districts S683 _Dec2012

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 S683 _Dec2012

Costs & Penalties (2) Government of India’s capital expenditure from the budget 25%12.5% Subsidies9.4%16.4% S683 _Dec2012

Costs & Penalties (3) Parties Prosper Political parties reported receipts Y CongressRs. 2,008 cr BJPRs. 994 cr BSPRs. 484 cr CPMRs. 417 cr SPRs. 279 cr TDPRs. 54 cr TRSRs. 10 cr S683 _Dec2012

What should be done(1) Limit welfare to one child families Stop when 2 nd 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 S683 _Dec2012

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 S683 _Dec2012

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 S683 _Dec2012

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 S683 _Dec2012

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 them What they could do for themselves.” (Source: Freedom First, May 1989) S683 _Dec2012

Nani Palkhiwala On 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. S683 _Dec2012

Nani Palkhiwala On 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. S683 _Dec2012

Nani Palkhiwala on 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. S683 _Dec2012

This presentation & Many more can be seen and downloaded from my website: S683 _Dec2012

Dhanyawad Thank You S683 _Dec2012