Each week, we ask people working in the field of public policy what they would do if they were given a billion dollars to spend on projects. What policy initiatives would they fund, and how would they spend this money?
This week, we spoke to Rahul Bajoria, regional economist for Barclays based in Singapore, focusing on South and South-east Asia.
If you have your own billion-dollar plan, send it to email@example.com. Selected entries will be published online.
Here. Take a billion dollars. So, is that enough money to do anything substantial in public policy in India? Why or why not?
So, how does one spend a billion dollars for a good cause? India’s total government spending at the central level is around $226.5 billion, so $1 billion out of that is not necessarily a small amount.
$1 billion is 0.05% of India’s gross domestic product (GDP). For $1 billion, Kochi is getting its entire metro system in Phase I. It is also more than the planned allocation India’s atomic sector got from the central government in FY15-16.
So, while $1 billion does not sound like a lot of funding when seen from a top-down perspective, it can make a significant dent in addressing one or a few fundamental issues that the public faces at large.
What are some areas of public policy that you really care about? Feel free to go as micro as you want.
A good public policy is about not just achieving the intended policy objective, but also potentially creating positive externalities. It also should not exclude anyone from accessing the benefits of the policy or service it generates, but also should ideally be priced at their marginal cost, in order to make the initiative self-sustaining.
For India, while common wisdom would suggest spending an additional $1 billion on creating more infrastructure, I think from a bottom-up perspective, there can be a better way to spend the money, which can have a greater impact.
While I support infrastructure expenditure completely, my personal pick will be to do something in the area of preventive healthcare, using some of the current government’s initiatives. Hence, my billion-dollar idea is about dental healthcare.
India, for a country of its size, is considerably short of dentists and dental technicians, when one looks through the numbers. India currently has room for producing 23,590 dentists every year, as per the schooling capacity. Yet, for an incremental 18 million people born every year, India adds roughly 24,000 dentists alongside that.
This is not a bad ratio, considering India still has roughly 1 dentist for every 10,000 people. But the real problem is in distribution of these dental healthcare professionals. In rural areas, this ratio falls dramatically to 1 dentist for every 250,000 people, about 1/25th the national average.
Furthermore, India reports the largest number of oral cancer cases globally, and this can largely be put down to poor dental hygiene, and rampant consumption of harmful carcinogens like tobacco and pan masala.
Indeed, it is the most common form of cancer in India, with four out of 10 cases reported being oral in nature. Each year, according to the Oral Cancer Foundation, India loses about 130,000 lives to oral cancer. (http://ocf.org.in/professional/IncidenceAndPrevalence.aspx).
So, what is your billion-dollar public policy idea? Why is it important?
My idea to spend $1 billion is to partner with a dental start-up, which will set up approximately 50,000 dental clinics across India, but only in rural or semi-rural settings. The idea will be to operationalize a franchisee model, with the government subsidizing skilling of labour, setting up a small enterprise and subsidizing patient care on an end-user basis.
The aim is to broadly achieve four key objectives that the government appears to have prioritized. The most basic objective is to provide preventive dental healthcare in rural areas, with the aim of considerably reducing the incidence of oral cancer. The other three objectives are outside the purview of healthcare, but still are critical. These would be job creation, skill generation (Skill India) and enterprise management (Start-up India).
Broadly, what can $1 billion do for this particular area?
With $1 billion, I would aim to reduce oral cancer incidence by about 50% over a period of 10 years, through good and viable preventive healthcare. The $1 billion will also aim to create 50,000 dental entrepreneurs through the country, with a particular focus on rural areas.
Over time, it would also mean the creation of roughly 150,000 skilled and semi-skilled jobs, and another 100,000 jobs being created through positive spillovers.
Now, give us a sense of how you will spend this money? Be specific if possible.
I would take the $1 billion, and would look to leverage that for three initial purposes. I would first create a corpus fund of Rs1,000 crore, which will finance loans for dental education for 25,000 future entrepreneurs, with a clause of mandatory operation of the clinic in a village or small town of their choice for five years after completion of their studies. The idea will not be to finance their entire education, but to enable them to be financially independent through bursaries and loans.
Second, in order to get the programme started, I would set aside about Rs1,000 crore for 25,000 existing dentists, who will be offered an opportunity to move out of an urban setting into semi-rural areas, with a provision to partner Mudra Bank or one of the other micro lenders for small loans.
In order to underwrite these loans, I will set aside another Rs500 crore as provisions for potential bad debt. I would also keep another Rs500 crore for interest subsidies for entrepreneurs who take the plunge, to keep their capital costs low.
Third, I think the cost of setting up a basic clinic should not exceed Rs10 lakh in a rural area. This will be with interest costs partly subsidized; most of the overhead costs will be borne by the dental entrepreneur, from the fees he/she earns. Each unit will also have about three other clerical and nursing jobs attached to it, being funded through patient care costs.
Now, in order to encourage people to actually visit the clinics, I would set up an outpatient subsidy on the price, which would be approximately half of the actual cost of treatment. Now, for a clinic to be viable, I would think that the dentist sees 40 patients a day, spending 15 minutes with each one of them, six days a week. This allows them to see approximately 12,500 patients a year, while they get subsidy of Rs20 per patient, or close to Rs2.5 lakh per clinic.
I will also cross-check each patient’s records through biometric inspection on Aadhaar, in order to avoid duplication. Each patient will also be allowed to visit the clinic only once every three months, barring exceptional circumstances.
This would entail an end cost of close to Rs1,250 crore, bringing the total spending so far to Rs4,250 crore. Out of the remaining Rs2,500 crore, I would set aside Rs2,000 crore for the remaining 25,000 students undergoing training for their set-up, and I would keep the remaining Rs500 crore for any unforeseen expenses.
What outcomes do you hope to see?
With a core target of reducing oral cancer by 50% and creation of about 250,000 skilled and unskilled jobs, I would expect a sizeable value addition to India’s health sector.
The number of deaths prevented at current per capita levels will be sizeable in itself. At 65,000 deaths prevented, that alone exceeds $100 million in terms of value addition, while the jobs created with also add another $500 million in value addition to the economy, bringing a cumulative impact to $600 million.
The model will also aim to create a capacity of more than 600 million patients for preventive healthcare, a large jump in rural coverage. The value of creating a chain of dental healthcare centres across the rural economy will also lead to positive spillovers on secondary job creation in the rural areas, potentially spawning into smaller, private clinics with preventive healthcare as its main USP.
What if I give you another $1 billion? Would you keep spending it here?
If given another $1 billion, I would probably use the same model, but for the setting up of private schools which specialize in distance vocational learning. Leveraging technology, it will aim to replicate the good work that institutions like Khan Academy have been doing, but specifically for vocational training.
The eventual aim will be to create as many jobs and entrepreneurs one can with the $1 billion, as India currently needs both skills and scale when it comes to creating jobs, without having any additional reliance on the external world. In this context, creating semi-white-collared jobs in the formal or informal sector can be achieved with some creative thinking.
And finally, what if you had to just spend it on yourself? (Be decent.)
If given $1 billion for myself, I would probably put half the money away for investments for sustenance, while using the other half to travel for about one to two years, and take my time to work on a few book projects I have been aiming to work on for a while.
The views expressed here are personal.
Comments are welcome at firstname.lastname@example.org
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