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Business News/ Opinion / Online-views/  Views | The Aamir Khan approach to policy
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Views | The Aamir Khan approach to policy

Views | The Aamir Khan approach to policy

A file photo of Sonia Gandhi.Premium

A file photo of Sonia Gandhi.

Maybe we can call it the Aamir Khan effect. The Sonia Gandhi-led National Advisory Council (NAC) on Wednesday cleared proposals to improve the declining child sex ratio in the country. The proposals fell into the usual pattern: stricter laws on sex-determination tests, conditional cash incentives --- this time for both poor and non-poor --- and awareness programs, possibly led by Prasar Bharti. It’s the same old wine poured into a new bottle.

A file photo of Sonia Gandhi.

Consider another recent state initiative that is being proposed with the blessings of the NAC: a new legislation for domestic help that will provide them with entitlements similar to workers in the organized sector, such as paid leave and the right to form a union.

Great idea. But what is the probability that domestic servants will actually be covered by the eight existing laws for the organized sector? Close to zero, in a country where posts of labour inspectors routinely lie vacant and existing laws are not implemented.

The poor wages and working conditions of domestic workers are because of a simple textbook case of excess supply. Domestic help earns less in real terms in small towns than in cities such as Mumbai because of the same principle, not because of welfare schemes or the average Mumbaikars’ benevolence.

Such Smithian logic is lost on the NAC. Its stale ideas seem to stem from a belief that an ever growing list of schemes, entitlements and legislations will automatically usher a new era of welfare.

If enacting legislation alone is the path to social equity and prosperity, we would have actually ended dowry in 1961 and child labour in 1986. Every citizen would have been paid minimum wages since 1948. The list can go on. Indian history is replete with well-meaning legislations that did not work either because they involved social mores that could not be changed through legislation, or because the laws of economics outweighed the laws of our legislatures.

To its credit, the NAC has tasted success in legislation such as the Right to Information Act that has become a potent weapon in the hands of information-hungry citizens. But, for the most part, the legislation raj of the NAC seems to be creating unenforceable entitlements.

Just as a growing economy needs to ease supply bottlenecks to avoid hitting a wall of inflation, a bigger role of the state that the NAC envisages requires additional state capacities and delivery reforms to avoid leakages and enormous social waste. But that will involve hard work. It requires greater attention to detail, to incentives, and to the lessons history and economics have to offer.

One doubts whether NAC is up to the challenge. After all, the NAC chooses not to reflect on why one of its grandest ideas --- the Mahatma Gandhi National Rural Employment Guarantee Scheme --- works well only in 2 of the 29 Indian states, going by the central rural development ministry’s analysis.

In happily spinning one grand scheme after the other without thinking through how they will work, the NAC is betraying the poor whom it claims to speak for. A similar centralized strategy filled with pro-poor rhetoric, adopted in the seventies and eighties had to be discontinued in the nineties when the liberalizers found the costs of that approach outweighing the benefits. There is no reason why the current entitlement regime will not meet a similar fate if the growth slowdown of the Indian economy turns out to be structural.

It will be both ironic and sad if the lasting contribution of the council is the notoriety it has lent to the very idea of welfare schemes in India.

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Published: 25 May 2012, 03:17 PM IST
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