Tuesday, November 14, 2006

Traffic Problems and Solutions

Traffic Problems and Solutions

Phenomenal rise in private vehicles has resulted in
traffic congestion.Due to an acute shortage of buses
(especially during peak hours),commuters tend to buy
two wheelers or cars as soon as they can afford to own
one. Until 1980 it was normal for most middle class
people to travel by buses.

Nationalisation of buses in 60s resulted in creation
of goverment monopoly and corruption in this sector.
Mis-management, pilferage and lack of transparency and
accountability of government bus transport
corporations resulted in huge losses and acute
shortage in bus services to meet the growing demand.

The argument against privatisation that the private
operators will not service remote and loss making
routes has yet to be proved. Government MTC services
in loss making areas are curtailed. For example
many routes in Nanganallur, Chennai has been
withdrawn citing lack of patronage.

The existing private bus routes are now sold in black
market for crores of rupees. Yet private buses are
better maintained and profitable. There is a vested
interest lobby of existing private bus owners (permit
holders),bureaucrats,politicians and trade unions of
govt corporations who oppose deregulation and
privatization of bus transports. Even mini-buses are
not allowed to expand service areas. Share autos are
opposed by regular auto drivers union.

If, instead of nationalization of buses, free
competition and low taxes were encouraged since
independence, then there would have been an excellent
and efficient public transport system. The culture of
owning private vehicles for commuting would not have
grown this much. A single bus can carry upto 60
commuters while lack of bus forces these 60 commuters
to own and travel by two-wheelers, there
by shrinking road space and increasing pollution.

Private bus stands and parking lots (bus stops along
main roads and highways) can be permitted and
encouraged. Two wheeler taxis can be allowed in
suburbs and remote areas.

Decentralisation and delicensing of transport sector
will result in better services and reduce traffic

Sunday, February 19, 2006

Why Indians became cynical and corrupt ?

India achieved freedom in 1947 after intense struggle
and sacrifice by a dedicated and idealistic people. We
have slowly lost the high ideals and honesty since

The main culprit is the socialistic economic model
followed since 1950, coupled with population
explosion. Socialistic polices, in the name of
egalitarianism, created crony capitalism (license,
permit, quota raj), along with confiscatory tax regime
and double digit inflation.

The government printed enormous quantity of money to
finance its huge programs and investments. It resulted
in double digit inflation. Additional resources were
raised through very high taxation (upto 95 % income
tax rate). The triple attacks of inflation, license
raj and high taxation eroded our values and morals. A
bloated bureaucracy was created to administer the
economy, which was a breeding ground for corruption
and cronyism. Tight controls and regulations strangled
economic growth with high unemployment.

Industrialists and traders began to evade taxes which
were perceived to be unfair. The tax administration
became increasingly corrupt. Respect for the rule of
law slowly decreased. The cynicism spread slowly and
political parties promised the heaven for the people
and began to purchase votes. Subsidies and propaganda
of government machinery changed the values and outlook
of common man, who began to look upon the government
to for all his wants. When the voters began to sell
their votes for money and other considerations,
corruption set in. Irresponsible trade unionism
(especially of government sector employees) eroded
work ethics of the organized sector, while the
unorganized sector (who are the majority) were
helpless and squeezed.

Black economy is as large as the 'official economy'.

Individual initiative and enterprise were discouraged
and a whole generation of Indians became job-seekers
instead of job creators. There were isolated pockets
of excellence where enterprising attitude of locals
resulted in prosperity for the region. For example
textile industry grew in Coimbatore district while
trucking industry in Namakkal.

Reckless borrowing of governments, which were living
beyond their limits, resulted in a debt trap and high
inflation. All this took our nation to near bankruptcy
in 1990-91. And since liberalization began in 1991,
economic growth is high and the hidden potential of
our economy has been unleashed.

We are a living proof of the prediction of Lord
Keyenes who said '..there is no surer way of
undermining a nation's character than by undermining
her currency..'

'High taxation leads to evasion, which makes people
cynical ; and this cynicism is a slow poison which
ultimately destroys democracies' says Peter Drucker
in his book, The New Realities. (1999)

Our cynical attitude is highlighted in the way vested
interests and apathy have distorted, reservation
policy, trade unionism, subsidies and environmental
issues.Economic health can be restored, but morals of
a people, once lost, is difficult to repair. It may
take many decades for full restoration.

Wednesday, February 01, 2006

Peter Drucker : tax evasion leads to cynicism

Dear Sir,

While chatting you had mentioned about the connectionbetween tax evasion and cynicism. The following is from P.Drucker's 'The New Realities " (pp69-70)'....once the govt take, especially if collected thru taxes, exceeds a certain percentage of gross national productor personal incomes - the fiqure seems to be around35-40 percent or so - a silent but highly effective'tax revolt' starts. People stop working ; what is the point if the additional income is being taxed anyway ?Worse, people begin to cheat. A 'grey economy'develops. In the US there was almost no tax cheating before 1960...

'...Attempts to stamp out or even to curtail the graye conomy are ineffectual as long as tax rates remainhigh.In fact, while everyone loudly condemns the greayeconomy, most people not only participate in it but consider it morally justified and, in fact, 'clever'.But this undermines the moral cohesion of scoiety, Itproduces a dangerous political poison, cynicism.'

Seventy years ago Schumpeter warned that inflationwould destroy free society. After WW 1 , the inflations in Europe, esp in Germany amply bore out Schumpeter's warning...'


Monday, January 30, 2006

reg : creamy layer misusing reservation policy

From : K.R.Athiyaman, Chennai - 96

To : Thriru.Ki.Veeramani Ayya Avargal, Chennai

Anbulla Ayya,

The creamy layer (that is, those who are
upper middle class and above) among
BC/SC/ST communities continue to enjoy
the benifits of reservation unashamedly.
(i hail from such a family).

We propose that economic criteria should
also be included as an additional qualification
for being eligible for reservation benefits.
Families whose annual income is above say,
Rs.1,80,000/- and where the parents are well
educated may be deemed as FCs. And many schools,
where annual fees are above Rs.60,000 may be
classified as FC schools.

Reservation was meant to be a short term
issue and never a permenent institution as
it has become now. And there should be a
standing committe consisting of eminent
jurists, educationalists and honest people
to perodically evaluate the effects/abuse
of reservation benefits. The whole process
should a dynamic one, not a static one, which
is now a vote bank issue and nutured by
vested interests. And there should be a
maximum limit for resrvation (and not the
present >70%), which should be gradually
brought down.

And in promotion among govt staff only
seniority, merit and efficency should be
the criteria. Only one generation of any
family must be eligible for the benefits.
Subsequent generation must be deemed FCs.

Unfair reservation benefits to numerous
well off students has created resentment
and heart burn among FCs and many fair
minded people. The caste divisions has become
more rigid and divisive (esp in govt offices).

I am sure Thandai Periyar and Ambedhkar would
endorse my above views if they are alive today.
They were basicaly honest in all issues.

DK should have functioned as a bridge between
BCs and SCs (esp in rural areas) and established
peace committes for stopping caste clashes.
The aliented SCs have formed many organisations
of their own to fight for their rights, instead
of joinning DK. Blaming brahmins alone for all
the ills of the society will not solve any thing.

Thanks & Regards


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