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  Home > Good Governance > Why and How?
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1. Effective human capital is the key to success


It is a very positive sign that the Prime Minister & others are talking about the 2nd generation of reforms and about "good governance, transparency and efficient administration". In 1930, when the US Wall Street crashed, human capital accounted for hardly 10% of the value of the market capital. In 2001, it accounts for about 90% of the market capital. High quality effective human capital can prevent disasters, catastrophies and help plan and chart out progress and prosperity for the organizations that they represent. The first essential to good governance is quality of effective human capital, i.e., SQ*+ EQ*+ IQ* should be high.
SQ, EQ & IQ mean spiritual, emotional & intelligence quotients respectively. 70% rating of people is for SQ+EQ

2. People power in a democracy


India has about 30+2 assemblies, at the State and Centre levels, with about +300 MLAs or MPs at each location. This comes to about +6,000 politicians in power at any given time! Total number of politicians, including the ones out of power, is probably about 2 lacs, at the maximum. Total number of government employees, about 18.7 million and rest of the population, about 1020 million! So the Indian Citizen is definitely very powerful, if he or she really understands the power of democracy, of one-man one vote!

3. Economic parameters - how has India fared after 53 years of freedom?


  • India's per capita is US$440/yr, v/s China's $990 and USA's $32,000. At the present rate of growth the Chinese economy will be 10 times the size of India within 20 years time.
  • India has 17% of the world's population, but 0.6% of the world's trade & 1.4% of the world's GDP! 99.4% markets outside India! India must plan to become a resource base for the world.
  • Poverty Line per person, as per Govt., at US$ 75/yr, (Rs. 10 / day or Rs 3650 / year) as per World Bank, $1/day or $365/yr
  • Market Capitalization of 7000 Indian quoted companies at US$ 120 billion (only GE in USA, US$ 500 billion).
  • India's Free Reserves are US$51 billion vs. China + Hong Kong $312 billion. 99.4% of the world's market's are outside India. We must export more!
  • In 2000, Foreign Direct Investments [FDI] into India was US$ 2.5 billion v/s. US$ 105 billion into China + Hong Kong. Total FDI worldwide is US$ 1220 billion per year.
  • China's Literacy Rate is nearly 100% more than of India. In China, all children attend primary School for 9 years. For secondary education the attendance is about 89%. The Indian Govt.'s definition of literacy is if you can sign your name! Why?
  • Tourist visiting China are nearly 35 times more than India i.e. 87 v/s 2.5 million. Worldwide Tourism Industry is 7 times of I. T.! China has 10 air lines vs 3 in India. China is building 4 lac hotel rooms per year, India has a total of 6 lac hotel rooms.
  • If one visits Beijing or Shanghai, every thing looks "Neat & Clean". Bombay & New Delhi look like "Garbage Dumps"! Why?
  • In the Sydney Olympics, India was placed practically last, in 122 countries, with 1 medal; China was 3rd with 59 medals! Why?
  • China's World Trade is 7 times of India's. Can we pay for oil imports of US$16 billion/yr. when exports are US$42 billion/yr.?
  • Food grain production in China is about 410 million tons v/s 206 tons in India, although the cultivable land is half. Why?
  • India's share of world trade dropped from 3% in1947 to 0.6% in 2001, a negative growth of 500% in 54 years. Why?
  • Every year we have floods & droughts in certain parts of India. Does it mean that there is no solution to this problem?
  • India's birth rate is 300% more than China. We produce more than one Australia/yr.! We need to provide additional 10 million jobs / yr.! China has 13 million births per yr, India has 27 million! Life expectancy in China is 72 years vs 61 for India!
  • China - India comparison.. Steel production is 133 million tons vs 24 Cement 650 million tons vs 96 Crude oil 160 million tons vs 30 Coal 1300 million tons vs 300.. TV's installed 400 million vs 75 million Telephone lines 220 million vs 27.


4. Poor governance & ineffective administration

Poor Governance & inefficient administration are definitely the main reasons for this. In the last 54 years, we seem to have missed putting in place, the foundations of work excellence, work ethics & work culture. In the organized sector, there is "no fear of loss of job". Protection to 1.87% of the population, at the cost of the nation! Why? Who will protect the rest of the 98.1% of India, which is very poor, see below? Under the present circumstances, we CANNOT use the Best & Lowest Cost "Swadeshi" Human Capital to run our own country, public and private sector, to the highest levels of global efficiency. India needs men of steel and not of straw.

5. Poverty Line - where is India in the year 2001?

The World Bank's definition of the poverty line, for under developed countries, like India, is US$ 1 per day per person. As per this definition, more than 75% of all Indians are, probably, below the poverty line! As per the Government of India, poverty line for urban areas is Rs.296 per month and for rural areas Rs.276 per month, i.e. people in India who earn less than Rs.10 per day. As per GOI, this amount will buy food equivalent to 2200 calories per day. Medically enough, so that one does not die. At this level of earning, even in a poor country like India, survival on Rs.10 per day is a nightmare! This actually translates to Rs.3650 per year or US$ 75 per year. On what basis have our planners decided this definition of "Poverty Line"? Does it mean that the person will get enough food to stay alive? How and where is he or she supposed to cook it? What about education, housing, health services, clothing, and other basic necessities? Are we supposed to live on pavements and sleep under trees from birth till death?

6. Examples -- to highlight poor Governance & ineffective Administration


  • 10,000 municipal hospitals in India, but what is the quality of health services that the people of India get?
  • 4,000 municipalities in India, but how are our cities maintained? The US$3700 billion Tourism Industry has by-passed India! Tourism Industry is a big employment generator. China - India comparison shows - Airlines 10 vs 3, Hotel rooms 40 lacs vs 6.
  • 30 electricity boards, but what is the quality of electricity service? In DVB we cannot even stop 55% revenue leakage due to power thefts & losses, in spite of New Delhi being the seat of the President, PM, Union ministers and CM of Delhi state!
  • When one can get a driving license without any test or even visiting the RTO office, what is the quality & integrity of our regional transport officers. After 54 years of Independence, we have not even ensured that Indians should be quality drivers!
  • Can we ever hope to reduce road accidents by allowing old and dangerous vehicles on our roads & allowing illiterate drivers with "easy" licenses? India has the highest rate of road accidents per 1000 vehicles, in the world.
  • After 54 years of Independence there are only 25 million tax assessees, most of them from the organized sector.
  • The actual number of taxpayers is hardly 12 million. Affluence of the economy indicates much higher numbers! Only 1.23 million declare an annual income above Rs. 2 lakhs per year!
  • India is the largest producer of vegetables in the world, 75 million tons per year and fruits 53 million tons per year. About 40% of it is wasted between the farm and the end customer, what are we doing about harnessing this wastage of Rs.50,000 cr./yr.
  • Fiscal deficit of Central Government at Rs. 115,000 cr. or nearly 6% of G.D.P.
  • Fiscal deficit of State Governments at Rs. 135,000 cr. or nearly 7% of G.D.P.
  • 60 million tons of food grains in FCI godowns which cost Rs. 15000 cr./year to maintain. People in extreme poverty, do not have access to this food, although nearly 10% is wasted or destroyed due to bad storage.
  • Cost overrun of Centre and state projects is about Rs 40,000 to 80,000 crores per year. Why?

Is this fair to the poor people of India? When 320 million are jobless and 350 million are partly employed [unorganized sector] and 400 million below the poverty line [sectors overlap]. In the unorganized sector, mostly the poorest of the poor work, including women and children. In a poor country like India, they have to work or perish. Activists against child labour need to experience extreme hunger and human deprivation to understand why gentle children have to work to keep alive! For every one person, who wants to leave the "Organized Sector" there would be at least a few thousand willing workers, who would be happy to give any thing to get a good job. In a poor Country like India, the minimum wages are Rs. 1000 to 1500 per month, but people who earn Rs. 5000 to 50,000 p.m. are protected!

7. India - as an investment destination in the Asia Pacific Rim Area?


The overseas Indians, NRIs, numbering 25 million, save about $75 to125 billion per year ($3000 to 5000/yr/head). A substantial amount of this could flow into India, provided we put our "house in order". The NRI "world" is like "another India" of US$+400 billion GDP. In 2000,China's FDI was $46 billion, 70% contributed by non-resident Chinese & 23 times more than India. NRI's sent $0.2 billion only.
Under the present scenario, India can never use the best or the lowest cost manpower that it has within its borders. That is why countries in the Asia Pacific Rim have overtaken us a long time ago e.g., China, Malaysia, Vietnam, Thailand, Taiwan, Singapore, Hong Kong, Indonesia, etc. The same is the case of Latin America and Mexico, which are preferred areas of destination, rather than India, for manufacturing & service industries out of USA, Japan, Europe and even the Middle East. India has lost billions of dollars worth of exports and additions to its GDP, not to mention the use of the latest technologies from the developed countries, leading to a lower cost of production and more efficient methods of operation, as per global norms! A lot of jobs, skills and know-how have also been lost, both directly and indirectly, to other countries. Excepting in IT, India has not taken full advantage of its pool of highly trained English speaking manpower. Healthy and efficient organizations create wealth for the nation and jobs for the economy. Highly skilled & efficient manpower can deal with the fast changing Global Economy.

8. Reasons for India's problems - We protect some employees at any cost to the Nation!


Article 311, of the Indian Constitution, unfairly protects employees of the Union and State Governments. This needs to be abolished, as it is irrelevant and unjust, since it protects only 1.87% of Indians, who are the employees of the State & Union Government, and indirectly, the employees of the organized private sector. There is No Fear of Loss of Job whether you deliver or not! Do the U.S., U.K., and Chinese Constitutions also protect employees of the Federal or Union and State Governments?
In India, these employees, seek and get protection for lifetime employment, even if, (1) they work or not, (2) they are honest or corrupt, (3) they are absent but marked present, (4) they are efficient or inefficient, (5) they get their work done from others (subcontract their work), (6) willfully destroy public property (only the People of India are the true owners of public property and NOT employees) (7) take sick leave of 30 days/year year after year! It is impossible to be sick, every year, exactly for 30 days! (8) restrict - retraining, redeployment and restructuring, for productivity improvement within the same organization and (9) disrupt work, and damage or sabotage the fixed assets of public enterprises, in order to pressurize managements.
No country can run efficiently, especially, if some critical sections are protected, in this manner! 1.87% of India is NOT even the Vote Bank! Union Ministers, MPs, MLAs, municipal councilors can be changed after a term of 5 years or even earlier, as per the wishes of the people. Under the present system, employees of the Union & State Governments and their affiliates, as stated above, are given life long employment, irrespective of their performance. This is unfair to the people of India, most of whom are very poor.
People of different religions and faiths pray to the Almighty. All these people are basically "God Fearing". Let us ask ourselves, would we pray and respect the Almighty, if we did not fear him? Our great leaders have always said that "work is worship".

9. Conclusion - The Best "Swadeshi" or "Home Grown" effective human capital is the answer! India needs a 'Fire & Hire" National Policy to get the Best Effective Human Capital in place!


For details please see page No. 14 & 15

The only Constant in Life is CHANGE!

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