The Indian Economy Blog

Archive for April, 2008

The Evil That Manmohan Did Will Live After Him

Wednesday, April 30th, 2008

He advocates a false morality to disguise his government’s failures Dr Manmohan Singh the prime minister has routinely relied on platitudes (instead of on incentives) to motivate the UPA government’s policies. But he is getting even the platitudes wrong. In a country where the average annual per capita income hovers around an unacceptably low US$1000, [...]

Is Jain-To-Jain Better Than Jain-To-Many?

Wednesday, April 30th, 2008

Long-time reader Joydeep Mukherji sends us this (via email) This article talks about a program for Jains to donate money to help teach Jain students for free. It seems like a nice idea. Perhaps other groups (Patels, Jats, Chettiars) can follow their example. However, it may be a bad idea if you think that such [...]

India – Africa Forum Summit

Saturday, April 19th, 2008

The first Africa-India Forum summit was held at New Delhi earlier this month. There were several other events organised on the sidelines of the Summit: the first ever India-Africa Editors Conference, joint performances by Indian and African cultural troupes a seminar of intellectuals from Africa and India on India-Africa Partnership in the 21st century, a [...]

The Indian Real Estate Bubble — circa 2008

Friday, April 18th, 2008

There was a post on IEB in December 2006, on whether there was a bubble in Indian real estate (Link), courtesy IEB reader Annamalai Veerapan. 16 months later, Annamalai is back with a follow up post on the real estate bubble. It is reproduced below in full – ______________________________________________________________ Who owns real estate loans in [...]

To Hoard Or To Invest…

Thursday, April 17th, 2008

The Reserve Bank of India is considering launching a Sovereign Wealth Fund which will effectively allow it to invest its excess reserves in higher yielding assets that are off-limits to it right now. This is on the back of the $5 bn set aside in the 2007 budget for the India Infrastructure Finance Corporation. Critics [...]

From Helping Farmers To Hurting Them

Tuesday, April 8th, 2008

Who gets hurt when grain exports are banned? Swaminathan Iyer took the words out of this bloggers mouth. The UPA government, he writes “has suddenly shifted from protecting Indian farmers against cheap imports to protecting the consumer by cheapening imports”. He is referring to the ban on rice exports (which follow the export of wheat [...]

Education and The State: Seeking Balance

Monday, April 7th, 2008

It is widely accepted that India’s education system has and continues to fail the vast majority of its population. As the challenge of providing education to millions persists, despite efforts by the Central government, there are calls by many for a shift towards privatization of primary and higher education. In particular, calls emerge to disconnect the funding of education from its operation, through the provision of education vouchers. While privatization has worked well elsewhere, would it work in the field of education?

The argument for privatization is at once political and ideological. It is political because it reflects how societies feel about the role of the State in providing “public” services such as healthcare and education. It is ideological because proponents often supplement demands for privatization with terms such as “economic freedom” or “choice” to justify their preference. Yet, this last confuses means with ends. The existence of choice can hardly be viewed as an end in itself in this discussion. Not only does such terminology presume that choice is informed but it is relevant in this debate only if it improves actual educational outcomes, rather than the perceived satisfaction of parents.

This analysis suggests that privatization is neither necessary nor sufficient for better quality and access to education. Nor is money the only or even best incentive available to improve either. Yet, the debate does offer valuable insights into why our system has not worked and how to fix it. The current system can, therefore, gain much through greater competition and better (possibly non-financial) incentives.

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