From: narayana@psuvax1.cs.psu.edu (Kuram T Narayana)
Subject: Re: Should Indian states need more autonomy?
Organization: Penn State Computer Science
Date: Fri, 4 Sep 1992 23:58:45 GMT

In article <92Sep04.203911.11585@acs.ucalgary.ca> kudu@enel.ucalgary.ca (Dr. GeeKay) writes:
>In article <1992Sep2.155100.5571@oracorp.com> narayana@oracorp.com (K. T. Narayana) writes:
>>In article <3379@creatures.cs.vt.edu> juvvadi@csgrad.cs.vt.edu (Ramana R. Juvvadi) writes:
>>>In article <1992Aug30.202729.519@udel.edu> godura@mercury.cis.udel.edu (Ruchir Godura) writes:
>>>
>>>
>>>
>
>>States are allowed to spend their own way the moneys acrueing
>>to them.
>>
>But they are not allowed to let private industries start, operate, 
>restructure, raise equity inside and outside India, and allow foreign 
>participation without central intervention at every stage (in most 
>industries). Heck, states are not even allowed freedom in financing
>patterns of state government-run industries (like for example, raising
>equity from the public, and selling off infrastructure industries).
>
The  industrial policy resolution and the national planning commision
were an act of parliament. There are varied opinions even from private
industrialists on whether the control-permit raj was useful or not. 
Dr. Bharatat Ram, who was one of the Sriram brothers of DCM Industries,
gave a key note speech for us at indian institute of science sometime
in 1975 (i think it was one of JN Tata Memorial Lectures). Of all the
Sri Ram brothers, Dr. Bharat Ram was the most educated; he was an economist.
He unfailingly supported most of the control regimes of the state 
but he only condemned on the production capacity licencing and
on licencing product mix of monopoly industries. He was ofcourse
critical of the MRTP for the then existing cap. Note that he argued
at that time that the public sector sector is necessary for industrial
growth, that the private sector is incapable of (at that time) raising
the resources necessary for investment in core sectors and more
importantly in infrastructure development. Even JRD Tata in one of his
lectures at the IISc did echo the same sentiment; I had the good
fortune of hearing him. If you have a chance to hear him talk
you should! He is one of the finest indians.

So the problem of investment is not so much about the rights of
the center and of states. It is more about the then perceived advantages 
of mixed economy and achieving self-sufficiency. I am sure most of
us were inconsonance with that approach at that time.
The Nehruvian model was generally the national consensus at that time,
and resource and infrastructure developement was a national and public
sector priority. Even if you ask an industrialist in USA whether he
would like to invest in India, his immediate reaction will be,
"Is there the necessary infra structure?" That was the problem
and continues to be the problem in attracting foreign investment.
That states could attract foreign investment over and above the
shoulders of the center is a myth; this has been convincingly exposed
by NT Rama Rao's Vibhuthi and Locket trip to USA. Every chief minister
had similar experiences. The whole notion that states can independently
develop (become some sort Singapore) if only the center wasn't there
is simply questionable. 

>>States are allowed to police! The federal government does not police
>>states! It is because the states are thoroughly incompetent in enforcing
>>the law and order that time and again the center had to step in.
>>
>An excuse used too often for central intervention in policing.
>
It is not an excuse. It is the truth. In every roit, the district 
collector request the CRPF use only after he fails to control the
goons with his police battalions. It is only because the states
are thoroughly incompetent in protecting the constitutional rights
of law abiding citizens that center has to step in. Thank god,
we have a center. Otherwise in Tamilnadu the fascists would have
killed all the brahmins; they are a real cultureless lot.
>
>See above.
>
>>...kt
>
>
>-- 
>Dr. GeeKay (kudu@enel.UCalgary.CA)