Tuesday, March 07, 2006

More bang for the government buck?

Heres a fantastic piece about Walmart efficiencies. Titled, Wal-Mart's Shelf-Correcting System Is Model for Government,argues that the government (of USA) does two things well.

...Anyone who's ever filed a tax return or visited the Department of Motor Vehicles
understands that government does two things well: spends our money and wastes our time...

The piece goes on to describe, how during Katrina, the government was flat footed in
response and sent millions of dollars down the drain in wasted efforts.

...As Sen. Susan Collins (R-Maine) explained, the waste happened because the government
took a "pay first, ask questions later" approach
...

But there was another institution that did not fail.

...It would be better to look toward an institution that didn't fail during Katrina: Wal-Mart.

The world's largest retailer had 171 facilities in the path of the storm. But as Jason
Jackson, the company's director of business continuity, told a Senate committee, "We were
able to recover and reopen 83 percent of our facilities in the Gulf area within six days."
One key reason for Wal-Mart's success, Jackson said, is "associates who are dedicated to
their communities." That local connection helped it deliver goods when government failed.
As Investor's Business Daily reported in September, "While local and federal groups
suffered communications problems and bickered over who was in charge, Wal-Mart sprang into action."...

...Wal-Mart does what government intervention can't: It drives down prices
and makes life better...

Anybody who read the recent budget of India will agree with this.

We reap what we sow. We are the makers of our own fate.The wind is blowing; those vessels whose sails are unfurled catch it, and go forward on their way, but those which have their sails furled do not the wind. Is that the fault of the wind?......We make our own destiny.

The budget key features document opens with this quote of Swami Vivekananda and perhaps goes on to furl the sails. A quick glance at the above document leaves us with these figures with the pay first, ask no questions model.

Totally, INR 18,696 crores to be provided to the Bharat Nirmaan programme (last year it was INR 12,160 crores). For eight flagship programmes allocation to increase to INR 50,015 crore (last year it was INR 34,927 crore). Theres anther INR 16,901 crores provided as equity support for PSEs. And another INR 2789 crores as loans.

Just to break the monotony of numbers (there is a lot of numbers in the summary report), the point is, the pay first ask questions later means that a lot of good money is going down the drain with no accountability. What happens if targets are not met (as is seen in most programmes in the above report?). I doubt if the sky will fall, much less, if even a heartbeat will be skipped.

Why not rope in companies to do this work? I couldn't cite an example like Wal-mart for the purpose of comparion, but another corporate social responsiblity scheme came to my mind. ITCs e-choupal scheme (from its website) today looks like this...

...Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. 'e-Choupal' services today reach out to more than 3.5 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp - in over 31,000 villages through 5372 kiosks across seven states (Madhya Pradesh, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra, Rajasthan and Kerala).

From the chairmans speech on the ITC website:

... Despite daunting implementation challenges, this (e-choupal) initiative now comprises about 5200 installations covering nearly 31,000 villages and serving over 3 million farmers. Over the next 7-10 years it is your Company's vision to create a network of 20,000 e-Choupals and over 700 Choupal Sagars entailing investments of nearly INR 5000 crores, thereby extending coverage to 100,000 villages - representing one sixth of rural India.

INR 5000 crores for 1/6th of rural India in 5 odd yearts, INR 30,000 crores for a networked India? And 50 plus years after independence many of our villages struggle for electricity, water and food - the basics. That (successive) government(s) have not delivered is an understatement. Indeed has any government program achieved as much as ITCs e-choupal has? Remember Rajiv Gandhis famous observation that out of a rupee spent by the government only 15 paise reaches the poor because implementation is so poor. Why not engage companies (such as ITC or others known for fairness) in such programmes and ensure greater accountability in implementing development programmes instead of pouring money into leaky buckets.

(Cross posted at The Indian Economy Blog)

1 comment:

manoj said...

neel,
link this to IE.org