"The new Prime Minister will have to fight the enemies of change" - Arun Shourie

Session - The Dead Hand of the State: Why the Government has no business to be in business

Former Union Minister for Disinvestment and noted author Arun Shourie said the new Prime Minister will have to make radical changes in the Indian system to reduce the role of Government in areas where the private sector can play a much better role and reinvent India into a meritocracy by changing the nature of the State by taking cue from China.

Speaking at the India Today Conclave, he said things have to change and bold decisions have to be taken by the new government because India is becoming a recipe for disaster today with mediocrity becoming a norm, caste becoming a class, and assault becoming a proof.

Government allocations and subsidies should be done not on the basis of regulatory inputs but on the basis of outputs because that will bring in performance based on merit, curb corruption and lead to optimum use of government resources, he said.

Coming down heavily on regulatory governance in sectors like education, Shourie said this has done immense damage to the system because regulators use the power they have to indulge in massive corruption, as indicated by the cases of corruption against heads of Medical Council of India, Council of Architecture, All India Nursing Council and Dental Council. A compounder of the Nursing Council of India was caught while taking bribe of Rs 5 lakh and later, CBI found he had assets worth Rs 200 crore.

He revealed that in all, there were 13 regulators in the education sector and 36 in the finance sector which has only led to more corruption and downslide in standards. There were unreturned loans worth Rs 35,000 crore in the regulated banking sector, he said thus, highlighting the ill effects of the regulatory nature of governance.

Citing an instance of how Government's role in private sector leads to mediocrity at the cost of merit, he said during when Rajasekhara Reddy was chief minister of Andhra Pradesh, 23 universities enrolled 38,000 students for PHD and gave 13,000 PHds.

Giving an example of the pitfalls of subsidy as it is given today, he said in Alwar district, IOC found that the intake of subsidised kerosene had come down by 40 per cent when it gave vouchers instead of actual kerosene to the beneficiaries because when actual kerosene was given it was being used by scamsters to adulterate diesel.

Shourie said labour laws were primarily responsible for the reduction of apprentices in India which had a direct impact of growth, adding there are 20 million apprentices in China and 14 million in Germany.

"India needs change if it is to capitalise on its inherent strengths and the new Prime Minister will have to fight the enemies of change if he is to usher in a new era."

Source : Equity Bulls

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