A STATELESS NATION RULED BY A GATED NATION-MOHAN GURUSWAMY
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Less Government and Good Governance. Mohan Guruswamy
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The most basic dictum in Public Administration is that “the nature of the regime determines the nature of the outcome.” Regimes dominated by elites tend to be extractive, while regimes based on popular participation tend to be inclusive and where the fruits of development are more shared. Make no mistake, whatever be a system of government there will always be elites. The difference lies in the difference between the elites. A privileged and self-perpetuating elite is by nature extractive. Equitable distribution is an ideal that is invariably unattainable. But justice for all is an ideal that is attainable. It’s true that all men are created equal. But what we get and attain depends, as Karl Marx is widely attributed with, “each according to his need, each according to his ability.” Marx was just repeating a slogan popularized by the French socialist Louis Blanc in 1851. Needs and abilities can never be identical for all. Thus the goal of modern democratic systems is to cater to the former, and nurture the latter. Which means that the basis of modern democratic systems is to give all the same opportunity and then allow abilities and talents to compete and prosper. There are many systems of government. The one we are most familiar with is democracy. There are many kinds of democracies in vogue, but the common foundation is that they all strive to institutionally reconcile needs, aspirations, demands and rights of all the people, and consider all people equal. We therefore call them reconciliatory systems. Then we have regimes, which are controlled by elites. These typically are all kinds of monarchies, theocracies, dictatorships, colonial and random despotic regimes. Since power is vested in the hands of a small number of people, we call them bureaucratic systems. The last kinds are the communist and post revolutionary systems that depend on a very high degree of mobilization. To be a mobilized system you invariably need a common goal or enemy, and usually a charismatic leader. Governments rely on three main instrumentalities of power - the power to condition, compensate and coerce. What then really distinguishes nations is how much of each is used by the state on the people, the people on the state and by people on each other. In reconciliatory nations the emphasis is on conditioning and compensating. In mobilized states the emphasis is more on conditioning and coercion. Bureaucratic systems have to rely more on coercion because they mostly are without legitimacy. But the problem with reconciliatory and mobilized states is that sooner than later, elites take them over too. Often these elites become hereditary as in very diverse nations like India and North Korea, or bureaucratic elites from internally competitive and politicized structures like the Chinese Communist Party...
Transcript of A STATELESS NATION RULED BY A GATED NATION-MOHAN GURUSWAMY
Less Government and Good Governance.
Mohan Guruswamy
11/19/14 2Mohan Guruswamy
The case of the two halves of Nogales.• An institutional divergence took place in the early days with
the implications lasting into the present day. • One system evolved to milk the land for the colonial masters
in Europe, while the other evolved due to the colonization by the settlers and for their benefit.
• While economic institutions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institutions a country has.
• Standing in sharp contrast to the nations dominated by extractive political institutions are the nations based on inclusive political and hence economic institutions.
• An institutional divergence took place in the early days with the implications lasting into the present day.
• One system evolved to milk the land for the colonial masters in Europe, while the other evolved due to the colonization by the settlers and for their benefit.
• While economic institutions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institutions a country has.
• Standing in sharp contrast to the nations dominated by extractive political institutions are the nations based on inclusive political and hence economic institutions.
11/19/14 3Mohan Guruswamy
A sum of Rs.1,74,081 crore has been earmarked to pay the central government's employees this financial year - about 10.45 per cent of its overall expenditure.
Combining pay, allowances and travel expenses for central government and railway employees, the State spent just under Rs.1,00,000 crore in 2011-12, a number that ballooned to Rs.1,13,785 crore in 2012-13 and Rs.1,24,646 crore in 2013-14.
A sum of Rs.1,74,081 crore has been earmarked to pay the central government's employees this financial year - about 10.45 per cent of its overall expenditure.
Combining pay, allowances and travel expenses for central government and railway employees, the State spent just under Rs.1,00,000 crore in 2011-12, a number that ballooned to Rs.1,13,785 crore in 2012-13 and Rs.1,24,646 crore in 2013-14.
Cost of Government.
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Central Government’s wage bill 2013-14.
Central Government Wage Bill.
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Number of people in the Service of the Nation!
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The estimated wage bill of government at all tiers is around
Rs.10.42 lakh crores
or
about 10% of the estimated 2013-14 GDP of Rs.120.00 lakh crores.
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Why more Government gives us little Governance?
• We have 185 lakh public servants at the three tiers of government.
• Only one out of six is with the local government institutions.
• Which simply means we have six persons telling us to do this or do that, for every one supposedly serving us?
• Who are these people answerable to?
11/19/14 9Mohan Guruswamy
India has 1,622.8 government servants for every 100,000 residents. In stark contrast, the U.S. has 7,681.
The Central government, with 3.1 million employees, thus has 257 serving every 100,000 population, against the U.S. federal government's 840.
This figure dips further if the 1,394,418 people working for the Railways, accounting for 44.81 per cent of the entire Central government workforce, are removed. Information technology and communications services account for another 7.25 per cent of the Central government's staff. Then, there are only about 125 central employees serving every 100,000 people.
India has 1,622.8 government servants for every 100,000 residents. In stark contrast, the U.S. has 7,681.
The Central government, with 3.1 million employees, thus has 257 serving every 100,000 population, against the U.S. federal government's 840.
This figure dips further if the 1,394,418 people working for the Railways, accounting for 44.81 per cent of the entire Central government workforce, are removed. Information technology and communications services account for another 7.25 per cent of the Central government's staff. Then, there are only about 125 central employees serving every 100,000 people.
Do we have too much Government?
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Who gets more Government and possibly less Governance too?
11/19/14 11Mohan Guruswamy
For the most part, India's relatively backward States have low numbers of public servants. This means staff members are not available for the provision of education, health and social services needed to address the worst kinds of poverty.
Bihar has just 457.60 per 100,000, Madhya Pradesh 826.47, Uttar Pradesh has 801.67, Orissa 1,191.97 and Chhattisgarh 1,174.62. This is not to suggest there is a causal link between poverty and low levels of public servants: Gujarat has just 826.47 per 100,000 and Punjab 1,263.34.
For the most part, India's relatively backward States have low numbers of public servants. This means staff members are not available for the provision of education, health and social services needed to address the worst kinds of poverty.
Bihar has just 457.60 per 100,000, Madhya Pradesh 826.47, Uttar Pradesh has 801.67, Orissa 1,191.97 and Chhattisgarh 1,174.62. This is not to suggest there is a causal link between poverty and low levels of public servants: Gujarat has just 826.47 per 100,000 and Punjab 1,263.34.
Who gets less Government and less Governance?
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Centralization in India: Administrative Expenditure
Central Govt.
State Govt.
Local Govt. Central Govt. share
in Total Administrative
Expenditure(%)(in Rs. Crores)
1960 365 525 141 35.00
1965 990 881 339 44.80
1970 1514 1540 630 41.10
1975 3072 2935 993 43.89
1980 4589 6029 1702 37.25
1985 11112 13075 3047 40.80
1990 22815 28653 6410 39.42
1995 44850 55746 12746 39.57
2000 99965 120190 27250 40.41
2004 101045 141334 32535 38.10Source : National Accounts Statistics 2005
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Decentralization in China till 2004
0
10
20
30
40
50
60
70
80
90
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
Year
Shar
e of C
entr
al G
ovt.e
xpen
ditu
re in
tota
l exp
endi
ture
(%)
Source: Chinese Statistical Yearbook 200511/19/14 14Mohan Guruswamy
Decentralization in India till 2004
0
10
20
30
40
50
60
1960-61
1962-63
1964-65
1966-67
1968-69
1970-71
1972-73
1974-75
1976-77
1978-79
1980-81
1982-83
1984-85
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
Year
Sh
are
of
Cen
tral G
ovt.
Exp
en
dit
ure
in
To
tal
Ad
min
istr
ati
ve E
pen
nd
itu
re (
%)
Source: National Accounts Statistics, Government of India, Various Sources11/19/14 15Mohan Guruswamy
Population according to standard projections 1991-2051
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Budget Estimates 2012-13.
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The Lost Economy.
• The NIFMP, under the MoF in its confidential report estimates the “black economy” now to be equal to 75% of the official GDP, now estimated to be around Rs.120 lakh crores.
• This means the Government does not capture almost Rs.90 lakh crores in the National Income Accounting.
• In turn this means a Revenue foregone of approximately Rs. 30 lakh crores.
• The NIFMP, under the MoF in its confidential report estimates the “black economy” now to be equal to 75% of the official GDP, now estimated to be around Rs.120 lakh crores.
• This means the Government does not capture almost Rs.90 lakh crores in the National Income Accounting.
• In turn this means a Revenue foregone of approximately Rs. 30 lakh crores.
11/19/14 18Mohan Guruswamy
Gross Savings/GDP ratio.
This is the sum of voluntary and involuntary savings or, if an economist has to describe it, gross national income less total consumption, plus net transfers.
This ratio has fallen from 37% to 34% in the past three years seriously impairing our national ability to invest.
China’s Gross Savings/GDP ratio has remained a steady 53% over the years.
This is the sum of voluntary and involuntary savings or, if an economist has to describe it, gross national income less total consumption, plus net transfers.
This ratio has fallen from 37% to 34% in the past three years seriously impairing our national ability to invest.
China’s Gross Savings/GDP ratio has remained a steady 53% over the years.
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The main business of the government is to collect revenues, mostly in the form of taxes, to spend on the well-being of the people.
India’s Tax/GDP ratio of 16% is among the lowest for a major economy
Together with states' collection, tax revenues of the government account for just about 16% of GDP.
That compares very poorly with the tax-GDP ratios of developed nations. For instance, the tax-GDP ratio for the UK is 34.3%, for Germany 37% and about 24% for the US. China collects a little over 21%.
The main business of the government is to collect revenues, mostly in the form of taxes, to spend on the well-being of the people.
India’s Tax/GDP ratio of 16% is among the lowest for a major economy
Together with states' collection, tax revenues of the government account for just about 16% of GDP.
That compares very poorly with the tax-GDP ratios of developed nations. For instance, the tax-GDP ratio for the UK is 34.3%, for Germany 37% and about 24% for the US. China collects a little over 21%.
The Tax/GDP ratio.
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The consequences of prolonged mal-governance.
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The consequences of this.
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So what do we have here?
• The STATED nation.• The STATELESS nation.• The GATED nation.• The NEXT nation
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“The interference of the state power in social relations becomes superfluous in one sphere after another, and then ceases of itself.
The government of persons is replaced by the administration of things and the direction of the processes of production.
The state is not “abolished,” it withers away.”
“The interference of the state power in social relations becomes superfluous in one sphere after another, and then ceases of itself.
The government of persons is replaced by the administration of things and the direction of the processes of production.
The state is not “abolished,” it withers away.”
Freidrich Engels in Part 3, Chapter 2,
of Anti-Dühring.
11/19/14 24Mohan Guruswamy
Now think of this:
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• India is the third largest economy in the world in PPP terms and it is predicted that by 2050 it will be a $30-55 trillion economy.
• This is not daydreaming. In 1990-91 when PV Narasimha Rao initiated the first dismantling of the centrally planned state the GDP of India at current US$ was a little over $200 billion.
• Twenty-three years later it is ten times that. Increasing twenty-fold in 36 years is really not a tall order
The government tries to downplay the numbers by having a somewhat self serving index (now 22%), other measures such as the UNDP’s $1.25 a day suggest that almost 37.5% of Indians live in dire poverty.
At $2 a day as much as 70% of India is below an internationally determined basic standard of living index.
Others indices are just as damning. India's abysmal track record at ensuring basic levels of nutrition is the greatest contributor to its poverty as measured by the new international Multi-dimensional Poverty Index (MPI).
About 645 million people or 55% of India's population is poor as measured by this composite indicator made up of ten markers of education, health and standard of living achievement levels.
The government tries to downplay the numbers by having a somewhat self serving index (now 22%), other measures such as the UNDP’s $1.25 a day suggest that almost 37.5% of Indians live in dire poverty.
At $2 a day as much as 70% of India is below an internationally determined basic standard of living index.
Others indices are just as damning. India's abysmal track record at ensuring basic levels of nutrition is the greatest contributor to its poverty as measured by the new international Multi-dimensional Poverty Index (MPI).
About 645 million people or 55% of India's population is poor as measured by this composite indicator made up of ten markers of education, health and standard of living achievement levels.
The incidence of poverty in India.
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Provisions as to the Administration and Control of Scheduled Areas and Scheduled Tribes
• Report by the Governor to the President regarding the administration of Scheduled Areas.
• Tribes Advisory Council. It shall be the duty of the Tribes Advisory Council to advise on such matters pertaining to the welfare and advancement of the Scheduled Tribes in the State as may be referred to them by the Governor.
• Law applicable to Scheduled Areas.— Notwithstanding anything in this Constitution, the Governor may by public notification direct that any particular Act of Parliament or of the Legislature of the State shall not apply to a Scheduled Area or shall apply to a Scheduled Area
• No regulation shall be made under this paragraph unless the Governor making the regulation has consulted the Council. 11/19/14 27Mohan Guruswamy
“And the Gods were greatly troubled/ in their heavenly courts and councils/ Sat no Gods of Gonds among them. /
Gods of other nations sat there/ Eighteen threshing-floors of Brahmins/
Sixteen scores of Telinganas/ But no Gods of Gonds appeared there/ From the glens of Seven Mountains/ From the twelve hills of the valleys.”
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