It’s Part of The Problem

Source: Indian Express

Relevance: The article highlights the issues in the Public Sector companies, compared to the private sector.

Synopsis: There are questions about the state’s proactive and productive role in helping its citizens.

  • The typical Indian worker in 1983 had three years of education.
  • It means India delivered glorified illiteracy to the majority of Indian workers in 36 years of post-Independence governance.
  • In this regard, 1991 reforms resulted in the doubling of GDP growth and the lifting of over 200 million people out of poverty in the two decades that followed.

This was the effect of less controlled regulatory conditions.

Poor delivery of Public goods by the State:
  1. Education: The educational situation began to improve only after the reforms of 1991.
    • By 2012, the average urban worker had secondary education while her rural counterpart had attended middle school. A large part of this improvement was facilitated by private schools.
    • This rise of the private sector in education was driven by the inability of public education to meet the demand.
  2. Health: As late as 2020, there were five hospital beds per 10,000 Indians.
    • The situation in terms of doctors was not much better, with nine doctors per 10,000 Indians. For comparison, the corresponding number was 10 for Pakistan and Sri Lanka, while Brazil had 22 and China 20.
    • Wealthy Indians living in urban areas tap into the private health network. The urban poor and rural Indians essentially are left to the vagaries of the under-funded and under-serviced public health system.
  3. Electricity: Electricity distribution utilities are routinely close to bankruptcyThe state hands out freebies in the form of free or subsidised electricity, while the state sits on subsidy bills.
  4. Public Sector banks: NPAs of these entities have routinely exceeded 10 percent with borrowers relying on the state patronage networks.
  5. Vaccine delivery: the recent performance on vaccine planning and delivery has been shambolic.
  6. Taxation: The design and delivery of the much-touted GST network continue to hamstring large parts of the economy five years after it was introduced.
Way forward:
  • The government should play a role in providing social safety nets for unfortunate health and labour market outcomes. It should provide a clear regulatory framework that generates an equal playing field for all.

Hence, the state is part of the problem, not the solution. That is why, State should do its duty towards citizens, not interfere in their economic lives.

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