Dr. Kalpana Gopalan IAS, PhD: Is Business the Business of Government? Business-Government Interface: The Indian Experience:21.03.2014

DR. KALPANA GOPALAN. IAS, Ph.D.IIMB.

CHAIRMAN, KARNATAKA APPELLATE TRIBUNAL, BANGALORE.

VISITING PROFESSOR INSTITUTE OF SOCIAL & ECONOMIC CHANGE, BANGALORE.

VISITING FELLOW, INDIAN INSTITUTE OF SCIENCE, BANGALORE.

VISITING FELLOW, INDIAN INSTITUTE OF MANAGEMENT, BANGALORE.

GRAAM FELLOW, SWAMI VIVEKANANDA YOUTH MOVT,MYSORE.

SENIOR RESEARCH FELLOW, NATIONAL INSTITUTE OF URBAN AFFAIRS, NEW DELHI.

ADJUNCT FACULTY, KUVEMPU UNIV, SHIMOGA.

Is Business the Business of Government?

Business-Government Interface: The Indian Experience

KALPANA GOPALAN IAS PHD(IIMB) 2 3/23/2014

AGENDA

3/23/2014 KALPANA GOPALAN IAS PHD(IIMB) 3

A SNEAK PEEK

GOVT IN ECONOMY OVER THE YEARS

THE POST LIBERALIZATION SCENARIO

GOVT AS REGULATOR

GOVT AS PROMOTER

GOVT AS ENTREPRENEUR

GOVT AS PLANNER

GOVT AS PARTNER

ACHIEVEMENTS & CHALLENGES

THREE BRANCHES OF THE INDIAN GOVT

3/23/2014 KALPANA GOPALAN IAS PHD(IIMB) 4

License :

Industries

Devpt &

Regln Act

Location: Industries

Devpt & Regln Act &

Environment Act

Funds:

SEBI

clearance

Operations:

Companies Act,

Minimum

Wages Act,

Gratuity Act,

Workmen's

Compensation

Act, Contract

Act, Tax Laws,

FEMA.

Unrest:

Industrial

Disputes

Act

Marketing:

Consumer

Protection act,

BIS act

Competition

Law.

5 KALPANA GOPALAN IAS PHD(IIMB) 3/23/2014

To close

down:

Companies

act, BIFR

Sick

industries

regln act

GOVERNMENT IN ECONOMY: A HISTORY

Post-independence Leaders Influenced by Socialist

Ideas

Commanding Heights of Economy

Mixed Economy

Government Intervention to Guide Economy

Protectionism, Self Reliance, Import Substitution,

Export Promotion

State Ownership of Key Industries

Objective to Achieve High & Balanced Economic

Development while Particular Programs & Measures

Helped the Poor


TRAJECTORY OF EXPANDING GOVT ROLE

Industrial Policy Resln 1948,1956, 1977, 1980: Manufacturing

Natlzn of service sector: insurance & banks

Legal & Constitutional framework: Industries (Development and Regulation) Act ,1951 & Essential Commodities Act ,1955 ,

Licensing & Controls

Expansion of bureaucracy, blackmarketing, anti foreign firms (PepsiCola, Pepsi, KFC, Dabhol), Hindu rate of growth


Balance of Payments crisis 1991

• Industries opened to pvt sector except defense

•Devaluation of rupee

LPG

Balance of Payments crisis

1991

LPG

Private Invst Friendly

Foreign-exchange deregulation,

foreign invst, import regln simplified

Only 3 industries exclusive to public

sector

Opening up to FDI Licensing only for 5

industries

FEMA replaces FERA

Independent Regulators


POST-LIBERALIZATION SCENARIO

GOVERNMENT AS REGULATOR Direct & Indirect Controls

Restraints on Private Activities

Control of Monopoly & Big Business

Protection of the Consumer

MRTP Act 1960, Consumer Protection Act 1986, Sale Of Goods Act

1930, Agriculture Produce Act 1937, Essential Commodities Act

1955, BIS Act 1986, SEBI Act 1992.


GOVERNMENT AS ENTREPRENEUR

Competitive Dualism: Development Of Public Enterprises as Alternatives to Private Enterprises

Impressive growth of the public sector

Strategic industries: defense (BEML), heavy machinery (HMT, HAL)

“Social entrepreneur : sectors/geographies where private sector will not enter; rural banking, rural telephony, bread

Price stabilization role: silk yarn, stock exchange

Developmental role: handicrafts


GOVERNMENT AS PROMOTER

Providing Finance : Tax Concessions, Subsidies, Concessional Loans

Granting Incentives: For Backward Regions, Export Promotion, Strategic Sectors

Creating Infrastructure: Railways, Energy, Airports

Development Of Money & Stock Exchanges

Creating Social Capital: Health, Education, Employment Exchanges


Government as Planner

Planning Commission

Five Year Plans

Priorities & Sectoral Allocation of Resources

12 Five Year Plans

Not Much Change in Role

Movement from a Highly Centralized Planning System to

Indicative Planning

Long-term Strategic Vision & National Priorities


GOVERNMENT AS PARTNER

Public Private Partnerships

National and sub-national govts

Large Economic Infrastructure: airports, power, roads

Poor investment climate

Lack of an enabling institutional framework

High risks

Insufficient capacity in bureaucracy & polity

Erosion of public confidence

3/23/2014 13 G.KALPANA FPM(CPP)

Social Role of Government

Directive Principles of state policy

Direct Attack on Poverty: Anti Poverty programs, PDS

Wage Employment Programs: JRY, MNREGA

Rights based Legislation: RTI, RTE, RTFS.


INDIA: ROLE MODEL FOR GOVT TRANSFORMATION

India’s achievements more political than economic: a democratic polity, Established electoral process

Growth with Equity: self sufficiency in food

Social: caste based reservation

Institutional: setting up of institutions, laws

Security: military capability


CHALLENGES

Public investment crowding out private entrepreneurship

Corruption

Red tapism & bureaucracy

Growth with inclusion

Neo liberalism vs old socialism 16 KALPANA GOPALAN IAS PHD(IIMB) 3/23/2014

Thank you

Dr. Kalpana Gopalan IAS, PhD: Is Business the Business of Government? Business-Government Interface: The Indian Experience:21.03.2014

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