In The Productivity Explosion Government Is Left Behind - Road to the Middle Class

IN A PIECE published for India’s Independence Day, Subir Gokarn wonders why the public sector in India, from ministers down to the lowliest intern, has not participated in the productivity explosion that is going on in the private sector.

The unfortunate economic reality today is that the state, far from being a partner and facilitator in quest for faster growth and productivity gains, imposes an extra load on the system.
Precious resources that could be used in far more productive ways have to be deployed by the private sector to offset the weaknesses in public delivery.

In fact the way to make money in India is to enter sectors where the government reigns incompetently supreme and deliver replacement product. He explains:

Equipment for private supply of electricity—generators, inverters, and so on—are needed to compensate for the inadequacies of the larger system.

As the guy says in the movie Monsoon Wedding when the lights go out: “This is India’s Big Problem!”

Private security makes up for the perceived failure of the state security apparatus.
Private education at every level continues to surge, while public institutions sink. And, while access to publicly-provided drinking water eludes an increasingly large proportion of the population, the number of brands and the sales volumes of bottled water continue to climb.

As the little girl said: “Why is that, Daddy?”

“Er, well, that is something you will understand when you get older.”

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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