The Government’s Anti-Midas Touch

Continuing on where I left off the last time time, let’s once again quote Mr Bardhan:

In a state like Delhi, for instance, can any private power distributor without an established work force be able to carry out electrification?

The answer to that is of course no. No distributor, private or public, can carry out electrification without an established workforce. But if that question was intended to demonstrate that only the government can have an established workforce, that is patently false. One doesn’t quite know where to begin in trying to point out how ridiculous that contention is. It is empirically false, not just theoretically false.

The same argument was forwarded when the question of allowing the private sector into providing telecommunications. For over 100 years, telecommunications was the sole preserve of the government and one assumes that by then the government had succeeded in establishing a workforce. What did we the consumers get from that established workforce? We got to wait for years to have the privilege of having a telephone which occasionally worked and for that privilege we paid through our noses.

I will not abuse anyone’s intelligence by pointing out what exactly was wrong with the government’s involvement in the telecommunications sector. What I find most stunningly and stupifyingly astounding is why the communists don’t see what is as plain as the nose on one’s face. Do they see the government actually delivering anything more efficiently than the private sector when it comes to most private goods and services?

Every sector that the government gets it grubby fingers into, instantly turns into a pile of horse-doodoo. Air India used to be one of the most efficient well-regarded private airlines run by the Tatas. Foreign airlines used to look up to it for guidance and expertise. One airline, which later on went to become Singapore Airlines, was one such. Then the government took Air India over. Now it can only be described as a third-rate national carrier of a third-rate economy. How on earth did they (the government) manage to do that?

Like I had said before, there has to be a reason for why the government apparently has the anti-Midas touch — whatever it touches, it turns to crap. There can be many reasons but there has to be one underlying first cause which can parsimoniously explain the failures of the Indian government. I guess I will take a cue from television news channels and say, “Stay tuned. Details at 11.”

[Followup article “The Cupidity of the Indian Government.”]

3 thoughts on “The Government’s Anti-Midas Touch

  1. S. Ramachandra Friday February 10, 2006 / 4:38 pm


    Going through this archive, I have one comment. The simple reason why the Govt. makes a horse’s ass of these things is precisely because of a misunderstanding of the role of Government.

    The private sector, private enterprise and citizens in general are prefectly capable of creative ecnomic and cultural activity. They need no Govt. to help them do what is a perfectly natural or normal thing for everyone.

    Kenichi Ohmae, I thought summarised the real role of Govt. very well I thought- see if you agree-

    1. Provide a safe and comfortable infrastructure for enterprise and general living.

    This would cover the framework of law and order, regulatory fnctions and infrastructure.

    2. Educate the workforce/ population.

    This should cover policies, incetives and initatives for education, etc.

    3. Protect the environment.

    If Govt. could be limited to these activities, we might actually see better governance and improved economic and cultural development. Do few things- do them well. What struck me is that these three points kind of cover the entire gamut of what should be Public Policy.


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