Monday, June 17, 2013

Limit of Governance - Minima or Maxima?

In political science the State is defined to comprise four elements viz. Territory, People, Government and Constitution. The Government is supposed to run the state on established or proposed norms and objectives that suit the convenience of its citizens and achieve the maximum good for the largest number. History reveals that Governments have undergone drastic changes in different periods, in different places and in a different manner. Many a time these were the outcome of conditions prevalent in economic and social sphere and hastened by the advent of social thinkers and philosophers. At present different states (nations) have different forms of governments, according to their necessity and other compulsions. Broadly speaking we can classify Governments into two categories, viz. Democracy and Dictatorship.

2. Democracy may be of different types varying in content between American (USA) democracy and erstwhile Bangladesh democracy. Similar is the nature of dictatorship, which varies between Chinese dictatorship (by the Communist Party) and Burmese dictatorship (by the Military Heads). Dynastic and monarchic rule has given way to democracy like in Britain and Japan whereas the same has given birth to dictatorship like in Russia and China where a particular party is dictating, like in Iraq and Burma where a military ruler is dictating, like in Iran and Ethiopia where religious heads are dictating. A third model of Government viz. Socialism emerged a few decades ago in a few states with a view to avoiding the drawbacks of both the above models of Government - based on realistic reasoning and economic compulsions. This model is available at present in varying degrees of its content in states like India and (former) Yugoslavia. Man is at work. So it is difficult to know as tallow many are in store for other generations to come.

3. Government's basic duty (whatever form it may have) is to govern its state and achieve the maximum good for the largest number. Different Governments adopt different methods to achieve this common goal. Some achieve quicker and some later. The success or failure in governing a state depends on two major factors viz, internal and external. Internal factors mainly refer to the qualification, efficiency and experience of those placed in Government to govern. External, factors relate to the level of literacy, economic well being and the national character of its citizens. The day we arrive at a perfect permutation and combination of these two factors we may be said to have reached the opportune moment for achieving the maximum good of the largest number. The reality is that except for USA, Japan and a few West .European countries, all other states are still experimenting on and off for achieving such a goal. If perfect systems are not worked out and put to operation at the earliest, the day is not far off when the existing governments may have an uphill task in ensuring effective governance.

4. A careful analysis of the success story of USA, Japan and West European countries would clearly reveal that it was comparatively the minimum Government that achieved the maximum results and proved to be the best government. Private enterprise was allowed to work freely with certain standards of democracy and minimum control over forces of production and distribution. Quantity and quality in production were taken care of by free-trade market. Only that quantity of goods was produced which could find a place in the market. Excess goods were eliminated in the process. Quality was ensured by open competition. The Best gained and the Worst suffered in the process - the best method of avoiding surpluses and excesses, shortages and defects. In such a situation all factors of production and distribution are governed not by a few individuals, a group of persons or experts but by the process of market which have wide-ranging repercussions in the long run.

5. Governments are there to lend a helping hand to different factors of production and distribution and not to indulge itself in such a venture. Governments have varied and innumerable tasks to perform in developing the underdeveloped or semi-developed areas. It can hardly afford to think of taking over, forever, the role of its citizens viz, the management of industries, trade and commerce. Its role is to be clearly defined and achieved properly. Its role is to check abnormal growth in a particular sector or control the power of certain individuals in a sector or in general.. It can ill afford to take over others' activities blindly and mismanage itself by wasting its scarce resources, purposeful time and forgetting its godfather's duty.

6. It may be argued that some communist countries have successfully implemented their economic plans and achieved high levels of production. But the way the reports reveal about USSR, China and Poland in the recent days clearly indicate the defects and shortcomings in their system of Government. Communist and Socialist forms of Government have, of late, realized the importance of free trade or at least controlled market mechanism. The biggest drawback of such a government is that it snatches away initiative and enterprise that are very much necessary in the long run to maintain a high level of economic growth. Distribution is in turn affected by a low level production and stereo-type of product and hence the decline in standard of living or over-all dissatisfaction amongst the citizens and that too at such a high cost of freedom of speech and action. It is certainly not desirable in the interest of any state to adopt such a form of Government. It is also true at the same time that c4ntinuous and widespread poverty along with excessive inequalities of income and wealth among the citizens will surely lead to communism one day or the other with its minor defects whether one likes it or not.

7. Coming to the example of our home state (India) the situation seems to be no better. The planners of this country in all sincerity and seriousness laid the foundation for the five-year plans to achieve a desired and developed state of economy in course of time. We borrowed a model, which was neither totally communistic nor capitalistic but a via-media viz. Socialistic, hoping to achieve the best of both. But a review of the situation so far obtained indicates the contrast viz. the worst of both. We have certainly progressed in macro terms but given a better model we might have achieved much more.

8. We had failed to encourage private enterprise to the required extent. Rather we have put obstacles on the way like introduction of licenses, permits, controls, quotas etc. leading to corruption, nepotism and favoritism at all levels. The net result is that we have plenty of population coupled with shortages in almost all the commodities and services. There is hardly a thing called surplus in any commodity or service continuously for 2-3 years. But for defective planning and execution, abundance of resources and crushing shortages can hardly co-exist side by side. Country had been passing through a phase of galloping inflation for more than three decades. Nobody knows when it is going to thoroughly demoralize the lower strata or the weaker section of the society and throw them into the jungle for leading a pre-historic life. Any amount of persuasion, consolation and assurance on the part of those who govern is not going to produce any tangible results, unless of course a definite and maximum goal is set and everyone cooperates and works towards it this is possible only when the government minimizes its activities, allows others to work and only supervises or guides its citizens. On a right path. Any correction thought best for the maximum number should be done at the right time with equal amount of will power and force. The best government is the one which rules minimum but 'rules' and not merely rules to make others believe so.

9. Let us examine this concept in the light of a real and existing example viz. Public distribution system (PDS) in India. The system aims at the proper development of a net work of distribution centres throughout the country to ensure timely and prompt availability of essential commodities like food grains, sugar, kerosene oil, edible oil, matches etc. to the consumers. Of late a separate department called Civil Supplies has been created at the Centre for the purpose. Our experience for the last few years especially after 1974 with a little break in 1976-78 confirms the view that we are going to face a long period of shortages and the nerve-breaking inflation. In a war PDS is intended to be a permanent feature of our Government through which it wants to enter and operate the retail trade in essential commodities.

10. The system has not succeeded equally in all the pockets of the country M its efforts to deliver goods to the citizens. Any amount of coercion and threat of Preventive Detention (PD) is not going to set right things to the desired extent and even if we change the wrong doers from time to time there is no guarantee that the new comers of PDS will work honestly and deliver the goods. This is an example where we are unnecessarily straining a system, meant for several other important duties of the Government, for a thankless job like distribution and getting a bad name for everyone.

11. The concern of the Government can be better understood and made result-oriented if it can ensure supply of essential commodities during the period of scarcity in selected pockets, where shortage is felt, by releasing buffer stock and flooding the market instead of running retail trade through PDS and certainly not by dispatch of stocks to all corners in the country even in normal times through a rail system which is already overstrained due to various reasons. Dual policy in the price of sugar had wrought havoc in various parts of the country just on the eve of some big festivals in the recent past. The very purpose for which the price of a commodity is fixed is defeated in the end. Public will not mind paying a rupee or two extra per kilo for a commodity if it is freely available and in adequate quantity. It really minds not getting it at a lower price and at an inconvenience. Price control could be resorted to only in times of extreme hardship and when prices are skyrocketing (for a small period). This can be best achieved by heavily subsidizing the cost of manufacture if that is the reason for rise in price and the consumers are to be helped for that period as a short term measure.

12. Price control and distribution by Government agencies create a sense of artificial abnormality and shortage, which in turn encourage hoarding, black-marketing and corruption. Government can treat and tackle a scarcity for sometime but not all times to come at a stretch. It could know its limitation and stop its activities at the right moment allowing free trade to take its own course. If the citizens are to get a steady flow of essential goods at a normal rate, the price control and the PDS with its net-work of FPS (Fair Price Shops) could be reviewed and revised looking to its efficacy and necessity. It would however be advisable to create enough buffer stocks in certain items in different zones of the country and rush supplies in time of drought, flood and excessive price rise. Emergency situation may require the Government machinery to take over retail trade for sometime according to the need of the hour and it would also work successfully because it is undertaken as a short term measure and not as a permanent feature. Department of Civil, Supplies can look after this aspect of distribution more successfully by keeping vigilance over the market trends in various centres of the country and - rushing supplies as and when local administration requires so.

13. As a common man one can come across quite a few examples of this type in the working of a Government. All these tend to teach us a lesson, "Minimum Government is the Best Government!”

Wednesday, June 5, 2013

Supreme Court’s decision on section 3(d) historic

 “The Times of India”, Chennai, on Tuesday. April 2  2013 (Anand Grover) reported that after 2005, India started granting product patents on medicines. However, section 3(d), one of the safe guards introduced by Parliament, seeks to prevent patenting of new forms of known substances unless they exhibit enhanced efficacy. Were it not for section 3 (d) , the standards for grant of product patents on medicines in India would be lower, almost identical to the standards in countries such as the United States and European Union, where a large number of patents are granted on minor modifications of a single medicine.
Section 3 (d) also became the basis for the refusal of a patent to Novartis for the beta – crystalline form of imatinib mesylate, a drug used to treat chronic myeloid leukemia (CML), a type of blood cancer.  In 1998, Novartis filed a patent application in India for this medicine.  In 2005, the Chennai Patent Office heard patent oppositions to this application including one filed by the Cancer Patients Aid Association (CPAA).  The  CPAA challenge was spurred by great concern over the price Novartis set for its version of the drug (sold as Glivec)  at Rs.1,20,000 ($2,400)  per month as against generic versions that were available at a cost of around Rs. 8,000  to Rs 12,000 per month.
The Indian Parliament has balanced India’s obligations under TRIPS with the right to health through Section 3 (d).  The Supreme Court has unequivocally interpreted the true intention and spirit of this provision.  It expects the Indian Government to respect the Parliament and the Supreme Court and ensure that it does not sign away these hard fought victories by health and public interest groups in trade negotiations

Let the politics also understand the need of the hour and support the economics of the country at times.