Reaping the wages of state oligopoly/monopoly

I recently read a lament by India’s Surface Transport Minister, Nitin Gadkari, on how vested interests were thwarting the passage of the Road Transport and Safety Bill in Parliament. One would have thought that legislation aimed at reducing India’s horrendous record of road fatalities/injuries (1,50,000 fatalities and over 5,00,000 injured in the calendar year 2015 alone) would have received widespread support and would have passed through both Houses of Parliament in a jiffy . Alas, this bill languishes, like many others, while the God of Death continues to add to his numbers. And the sneaking suspicion lingers that powerful lobbies are at work to forestall the coming of this law. The commercial road transport lobby is against any measures that would require them to invest in new, safer transport vehicles. The bare-headed idiot wants to ride his scooter/motorcycle without the impediment of protective headgear, blissfully oblivious to the implications for his life and the future of his family. Above all, the state road transport authorities are totally averse to what they see as this encroachment on their divine right to extract economic rent from the licensing and operation of motor vehicles, which is why the transport portfolio is one of the most sought after by politicians. This huge state oligopoly (actually a monopoly in any one state) has been responsible for a large part of the mess in India’s road transport sector. Visit any state road transport office and you can hardly miss the ubiquitous tout peddling his wares in full public view. Every service has a price, whether it is the registration of a new vehicle, the transfer of vehicle registration from one state to another or the issue/renewal of driving licenses. No wonder even the Minister admits that at least 30% of driving licenses (almost certainly an underestimate) are wrongly issued. The road transport imbroglio goes even further. A mobile, globalised economy requires frequent labour movements. But move to another state with your vehicle and the authorities are after you to pay your lifetime road tax afresh in the new state. Take a private taxi from one state to another state and you end up paying for the privilege of entering that other state: an amount that varies from ₹ 1000 for Andhra Pradesh to ₹7000 for Maharashtra. Road transport checkpoints (along with other state monopoly agencies extracting their pound of flesh) are responsible for interminable delays in shipments to other countries and adversely affect India’s export competitiveness. But who cares: certainly not state governments, which are interested only in short-term revenue collection.

Things are only marginally better in the sector that fuels the transport sector. In spite of valiant efforts by reform-minded administrators to introduce free markets in this sector, supply of petroleum products has remained the preserve mostly of the three public sector marketing giants. Political patronage played a significant role in the allotment of dealerships in petrol pumps and cooking gas, a fact which attracted adverse attention of the higher courts about two decades ago. Politically powerful owners of these distribution agencies consider themselves immune to punitive action even when they supply adulterated fuel or indulge in black marketing of cooking gas cylinders. Booking of gas cylinders on phone has certainly been a welcome step and has reduced retail consumer uncertainty on when their supply will be replenished. But there are still areas where service falls woefully short, including the crucial one of safety. If your gas cylinder or stove develops a leakage after 6 PM, rest assured that you will receive no response till 9 AM the next morning from your gas agency, presuming that the next day is not the weekly off day for your agency. The three distribution companies have provided contact numbers. The problem is that, when you call those numbers, all you get is a polite message informing you that your complaint will be attended to. Even the agency responds in a leisurely manner, three to four hours after they are informed.

The two sectors that meet basic requirements of the citizen, health and education, are prime examples of how state monopoly has impeded the process of economic development and, more importantly, meeting customer needs. The public health system is the only avenue for a large section of the population which cannot afford private health care. Apart from a few islands of excellence, the public healthcare system falls miserably short of the expected standards of effective, good quality service provision. Especially in remote tribal areas (but also elsewhere), doctors just do not turn up for duty; when they do, attention to patients is often perfunctory, if not dismissive. Diagnostic equipment, like x-ray and scan machines, are, when provided, often out of order, generally because of outmoded bureaucratic procedures that prevent timely supply of spares. I speak from personal experience: antenatal care in primary health centres is generally routinely and superficially carried out, with no clear focus on mothers who face high risks at delivery time. Post-delivery, neonatal follow up is extremely poor, with the result that a large proportion of child deaths occur in the first year of birth (of that, a large proportion occurs in the first four weeks after birth). The public health machinery also takes no responsibility for severely malnourished children, disregarding the dictum that prevention is better than cure.

Education is an even more unfortunate example of the malevolent effects of state monopoly. Oligarchies have taken root in this system – the state education bureaucracy and the teachers’ unions. State schools are tightly controlled by the bureaucracy, which decides every aspect from school location and curricula to teacher remuneration and career progression. Unions have resisted efforts to enforce accountability, leading to the phenomena of absent teachers, poor quality instruction, high dropout rates and unemployable students with limited language and arithmetic skills. Growth of private schools is stifled by the system of recognition by the education department, with its inbuilt tendencies towards patronage and corruption. Higher education also suffers from the stultifying effects of bureaucratisation. Low quality, private education empires, run by those with political muscle, have become the norm, rather than the exception. Even more unfortunate has been the tendency of the state, more so in recent years, to encroach on the autonomy of once reputed public institutions of higher learning by stacking their managements with pliable, political appointees and, increasingly, seeking to dictate the content and pedagogy to be followed by these institutions.

Public service can be efficient and effective only if it adheres to the three basic principles of integrity, professionalism and empathy. Integrity implies both financial probity and a commitment to the outcomes that are sought from the provision of the service. Professionalism requires a clear understanding by those in the system of their tasks and a willingness to discharge their duties honestly and to the best of their abilities. Above all, public service requires the very human quality of empathy, of placing oneself in the shoes of one’s’ less privileged brothers and sisters and understanding what difference the access to high quality public service can make to their lives: as a government functionary, one needs to look behind the file/statistic and visualise the face of the person you are dealing with. Since these attributes are becoming increasingly difficult to inculcate in a bureaucracy that is influenced by the prevailing social values of consumerism and self-centredness, what is required is the introduction of competition (to the extent that it is possible) in every sector of economic and social activity.

Competition has certainly helped in the telecommunications and automobile sectors. The public sector behemoths, BSNL and MTNL, have lost a lot of ground to private telecom operators but their loss has been the consumers’ gain, leading to an explosive growth in mobile communications. Gone are the days when one waited for days for a telephone connection. Nor does one wait patiently month after month for the supply of an Ambassador or Fiat (Premier Padmini) car, or, later on, a Maruti 800 car. Hyundai, Honda, Ford and Toyota cars are available today virtually off the shelf. Of course, there are sectors like utilities (energy and transport) and public goods (education and health), where, because of heavy, long gestation investments, the nature of technology or the impact on human capabilities, some regulations on entry and on quality/price will have to be implemented.

Competition in sectors like health and education can be introduced by providing options, in addition to state-provided ones, to the consumer. These could take the forms of private health care and education provision, as in the case of charter schools in the USA. Unviable or poorly functioning state institutions could also be entrusted to private management, with accountability for performance and sound management. The fundamental aim should be to ensure that public sector providers compete with private parties for funding for providing services of a specified quality (with designated outcomes) at reasonable prices. Provision of cash vouchers for spending on health and education would provide the consumer with the choice of that provider who best meets her expectations. Of course, this will require a high quality of regulation, with the regulators ensuring a level playing field for both parties and monitoring performance and cost of services to the consumer. In the infrastructure and utility sectors, the same principle of competition will have to be applied, with existing public sector providers having to compete for customers with private participants. An auction route is the best method of attracting the best offers, whether from the public or private sectors.

The state has two major responsibilities in such a competitive set up. Firstly, it has to set up autonomous regulatory systems in different sectors that discharge their duties in a fair, impartial manner and ensure the provision of reliable, reasonably priced goods and services to consumers. Secondly, the state also has to work towards providing an environment to public sector providers which gives them the freedom and flexibility to compete in the marketplace, with the clear understanding that there is no guarantee of their survival if they do not perform. It would be in the best interests of all for the state to abide by the maxim “The business of government is not business”.

The politics of infant mortality…and the tragedy

“There are three kinds of lies – lies, damned lies and statistics”
(Mark Twain: Chapters from My Autobiography)

A recent comment by India’s Prime Minister (PM) during an election speech comparing the infant mortality rate (IMR) in the tribal areas of Kerala state with those in Somalia kicked up a furore. A wounded Chief Minister of Kerala (from the opposing political party) has threatened to sue the PM, though the exact nature of the offence is not clear. Now that the electoral battle in Kerala has been lost and won, it is time we dispassionately analysed the contention of the PM and the implications for health policy in India. Let us first get to the numbers; at 60 deaths per 1000 live births in the tribal areas of Northern and Eastern Kerala, he felt that the area was not lagging far behind the African country of Somalia, which, as per the number he had, registered 85 deaths per 1000 live births in 2015. This is where statistics can be dangerous, and it does not need a Mark Twain to convey this message. Firstly, there seems to be no basis for concluding that the tribal areas of Kerala have an IMR of 60: whether this covers just the tribal population or the districts with a larger proportion of tribal population is not clear. Secondly, the PM’s information feeders seem to have culled the magic number of 85 from the latest country wise estimates of infant mortality released by the UN Inter-agency Group for Child Mortality Estimation ( The problem, as with all statistics, lies in the level of confidence reposed by the estimators in their own estimates. In the present case, three sets of numbers are given for each country: low, median and high. While the variation in these three numbers in countries like the United Kingdom with excellent reporting systems is minimal (3.0 to 3.5 to 4.1) and reasonable for a country like India (34.1 to 37.9 to 41.8), the range from the low to high figure is from 53.3 to 143.3, with a median figure of 85, for a country like Somalia with underdeveloped reporting systems. The UNICEF State of the World’s Children Report 2015 gives an IMR of 108 for Somalia and the CIA Fact Book places it at 98, showing that there is no unanimity on the number. With such a vast range of uncertainty regarding the numbers, it would be hazardous to plump for a number like 85 with any degree of confidence. The matter is further complicated when we compare the tribal population of Kerala with that of Somalia – 0.49 million versus 34 million. A small population, especially when it is largely comprised of poor tribals, will display higher figures of mortality in infants, given the prevalence of poverty and the poor reach of essential health services. The law of averages operates as the sizes of populations increase. To give one graphic example: just two infant deaths in a village with a population of 1000 (with an annual population growth rate of 2%) imply an IMR of about 100 per 1000 live births: which is why mortality statistics are never calculated below the district level. As statistics combine disadvantaged with more prosperous
areas, these numbers come down, in the case of Kerala state to 12 per 1000 live births, which compares very favourably with many developed country figures.

The tragedy lies in the lessons that are not learnt from areas in Kerala like Wayanad, Idukki and Attappady, Palakkad (in the news a couple of years ago for infant deaths in significant numbers) and the mistakes committed through apathy and misgovernance across much larger swathes of India. Politicians would do well to remember the adage “Those who live in glass houses shouldn’t throw stones”. Of the nine states that are at the top of the high child malnutrition pecking order, seven are presently ruled by the party whose PM has spoken disparagingly about IMR levels in the tribal areas of Kerala, and all nine, including his own state of Gujarat, have or have had BJP governments (either on their own or in alliance with other parties). Barring two states where the BJP has recently come to power, its governments have had ample time to tackle the menace of child malnutrition, which is attributed by experts to contribute at least 45% of child deaths in India (and probably an even greater percentage of infant deaths, given that an overwhelming majority of under-5 children die before they cross the age of one). And yet, it is precisely these states which are the greatest contributors to infant mortality and child malnutrition. Don’t get me wrong: I am not in any way absolving other political parties which have ruled these states for many years without making a significant difference to the problem. The fault, dear Brutus, lies not in our stars, but in ourselves: in our dysfunctional systems, our cavalier disregard of data, our failure to focus on key geographical areas with a high child malnutrition burden and our failure to evolve a coherent, time bound public policy to effectively tackle the problem.

Let us start with our dismal grasp of the magnitude of the problem. Growth monitoring has always been one of the main components of the ICDS strategy right from its inception. Unfortunately, the monthly exercise of weighing of all under-5 children by the Anganwadi Worker (AWW) has been treated mostly as a routine task, with little or no importance being given to the use of this massive body of raw data. In the absence of weighing scales, weighing is sometimes not carried out; where weighing is done, there is no analysis of the data to chart out a meaningful course of remedial action in case of underweight children at any level, whether the anganwadi, ICDS project, district or state. Almost no state posts aggregated data, ICDS project wise, on the nutritional status of children online and it is doubtful if any administrator, at the project, district or state level, pays any attention to this data.

This blissful neglect of valuable data leads to governmental failure to identify and focus attention on the geographical regions requiring urgent, sustained intervention, be they remote tribal areas or congested urban slums. Aggregated data of monthly weights of children helps identify the specific localities (villages, hamlets, slums, etc.) that need to be focused on to reduce the burden of child malnutrition. The common budgetary approach of allocating funds to areas on a child population basis, without weightage for high burden malnutrition areas, discriminates against the latter. Poor infrastructure and inadequate staff in tribal areas lead to underutilisation of even allocated budgets.
Resources of different departments are generally not combined in an innovative manner to deliver the crucial health and nutrition (both nutrition-specific and nutrition-sensitive) services to children and women that can reduce undernutrition and mortality. The new methodology of untying central fund releases to states is likely to see even further diminution in fund allocations to politically weak tribal regions of states and to urban slums. Public nutrition and health services for mothers and children are in short supply in urban slums. There are no systematic efforts to reach out to urban communities to develop their capacities to self-manage their nutrition and health issues. This limited attention given to identified high burden geographical areas is likely to see a continuation of high child malnutrition and mortality rates in these areas.

Resource misallocation to this critical area is aggravated by the absence of a clear cut vision on how to most effectively tackle the problem in the short run. India’s policy makers refuse to use height/length of under-5 children as a measure of nutrition status, in addition to weight (which has been used for nearly four decades). This would enable an immediate estimation of wasting (weight/height) status for taking action to improve the health and nutrition status of children suffering from severe acute malnutrition. Software exists to record both anthropometric measures digitally so that the wasting status of any child can be immediately established (a pilot project in Attappady, Kerala has proven the feasibility of such a digital approach to recording data using IVRS technology). Tackling moderate and severe wasting in India’s children (which goes upto 25% in many states) through inpatient and outpatient methods would significantly reduce malnutrition. But India’s ICDS and public health departments are unconvinced that they need to make this programme a key step to reduce child malnutrition and mortality. Adequate international evidence linking child malnutrition (especially wasting) to a higher incidence of mortality has had little to no impact on the thinking processes of the bulk of India’s medical professionals. Governments (at central and state levels) have failed to make such a programme the cornerstone of efforts to reduce malnutrition/mortality. The ICDS Commissionerates/Directorates are obsessed with centralised, contractor-dominated food supplies (rather than child feeding practices and micronutrient interventions), a policy which has drawn much critical comment from the Supreme Court and High Courts (the reasons are not difficult to fathom!). The resultant haphazard, ill-directed programmes to manage malnutrition, with no systematic measurement of nutrition outcomes and no focus on geographical areas most in need of such programmes, are the reason for India’s dismal world ranking in child nutrition indicators.

Finally, there is gross underutilisation of one of the most extensive systems set up anywhere in the world to deal with the issue of maternal and child nutrition — the ICDS. With anywhere from 50,000 to over 100,000 AWWs in each state of India, spread over almost every habitation in the country, this valuable human resource could well be the underpinning for a revolutionary transformation of the child malnutrition scenario in India. Unfortunately, with the ICDS largely functioning as a khichdi kitchen, these workers have never been empowered with the knowledge, skills and resources necessary to fulfil their innate potential. My experience in the nutrition sector in Maharashtra opened my eyes to the fantastic work they can do given the right working environment — upgraded knowledge/skills, access to resources, appreciation for their good work and the development of self-esteem for the important tasks they are undertaking. Even the huge public health system has no specific focus on the preventive aspects of health and good nutrition that could develop a generation of healthy girls and mothers, leading ipso facto to the birth of healthy, normal weight children.

For a country on the cusp of economic power and a growing global presence, it reflects poorly on India that she takes her place among the league of failed and failing nations in indices of child/infant mortality and undernutrition, whenever the exercise of evaluating each country’s performance in these areas is taken up. Latin America and East Asia have left us behind, as they made significant strides over the past few decades. Our immediate southern neighbour, Sri Lanka, is an object lesson to us that improvement in human development indicators can be achieved. Even within India, states like Goa, Kerala, Maharashtra and Tamil Nadu have performed far better than their counterparts in Northern and Eastern India in reducing IMR, though they still need to reduce wasting rates in under-5 children. If “Make in India” is to have any real meaning, children born in India need to have the guarantee of a healthy, disease-free, long and productive life.