Saturday, June 09, 2007

Caste Aside
By ARVIND SUBRAMANIAN

Only in India are people clamoring to be called socially inferior. Last week, over 20 people died in protests in the state of Rajasthan when a group called the Gujjars demanded to be legally downgraded so they could benefit from job guarantees and handouts that flow from "reservation," India's form of "affirmative action" for its lower castes. Last month, citizens in Uttar Pradesh, the country's largest state, went to the polls and delivered an overwhelming mandate to a party committed to expanding reservations for the Dalits -- the caste formerly known as the "untouchables." Both events bring into sharp focus a larger question: Is it guarantees or opportunities that offer the best way out of social and economic backwardness?

Historically, the government's answer to this question was clear, if somewhat schizophrenic: Elites were given opportunities, while the poorer classes were given guarantees. The Constitution itself envisaged free universal and compulsory education for children up to 14 years. But in practice, policy makers since the 1950s emphasized higher education, which largely benefited urban elites who had excellent primary and secondary education. The relative neglect of basic education for the masses, meanwhile, deprived historically disadvantaged classes of similar opportunities for upward mobility. Instead, they were given guaranteed seats in colleges and public sector jobs. While these did have some benefits, by definition, only a small fraction benefited from the guarantees. This temporary, targeted fix, however, came to be regarded as a permanent solution. Guarantees have now become, insidiously, a substitute for creating opportunities.

Unlike the United States, where affirmative action came many decades after the nation's creation, reservation was an integral part of India's founding. And unlike in America, it is a large and blunt instrument of social engineering, taking the form of quotas. Thus, India's founding fathers mandated that 22.5% of all public sector employment and enrollment in government-financed higher education institutions should be reserved for "lower" groups called the scheduled castes and scheduled tribes (SC/STs).

Instead of shrinking with time, these quotas have vastly increased. Today, at least 50% of all public sector jobs and educational seats are reserved for SC/STs, along with another category called "Other Backward Classes," who were traditionally also discriminated against but occupied a slightly higher rung than the SC/STs in the old Indian caste hierarchy. In some states, like Tamil Nadu, the quota can approach 80%.

In politics, reservation used to be a dividing axis pitting the Congress Party, which broadly supported reservations, against its main national rival, the Bharatiya Janata Party, which historically opposed the policy. Over the last few years, however, in a remarkable shift, reservation has become a bipartisan issue, with politicians of all stripes embracing it as an imperative of electoral success. In this environment, reservation's reach is being extended to elite educational bastions of merit such as the Indian Institutes of Management -- which populates India's most visible companies, such as Infosys and Wipro, as well as many prominent multinational firms. More strikingly, for the first time, there is talk of extending it to private sector employment, an objective that was articulated in the electoral manifesto of the current government.

Is India fated to affirmative action in perpetuity? Interestingly, the public and private realms are moving in opposite directions: While federal and state political actors are reinforcing guarantees over opportunities, consumer choices are clearly reflecting a preference for the latter. The trigger has been provided by the turnaround in India's economic growth, which is now running around 9% annually.

Economic growth has increased the returns to education dramatically enough to set off a mad scramble to acquire education. Even the poorest rural households have internalized the imperative of acquiring education to survive in the new knowledge-based economy. But getting this education is, unfortunately, not always easy. In rural India, free public education is supposedly universally available but it is largely dysfunctional -- teachers often don't turn up to class, and when they do, they impart little of value to students. In a surprising new trend, even the poorest are willing to forego such free public education for costly but (slightly) better private education.

Yet it is a bitter choice when they must forego necessities to access a right accorded to them in the nation's constitution. India is therefore ripe for a voucher system that would combine public financing with the private provision of basic education. Such a scheme could be tailored to individual state needs: One possible twist could be to graduate the value of the voucher, increasing it for the backward classes. The benefits of this would be twofold: It would appease the populist clamor for equal opportunities and it might even be necessary to overcome any discrimination by private providers against enrolling children from backward castes.

Unlike many economic policies that involve trade-offs between equity and efficiency, vouchers can satisfy both objectives. Voucher programs, especially in their graduated variant, are particularly beneficial for the poor. And, by improving incentives and spreading opportunities, a voucher scheme would simply accelerate an ongoing market-driven trend toward the spread of basic education, helping to ease the supply constraints of the Indian educational system and adding to the pool of labor that is at the heart of the country's growth turnaround.

Voucher schemes could also be politically appealing. Studies show that bad policy choices often stem from an attribution problem: Voters can more easily credit politicians for targeted favors such as reservations than for diffuse benefits, such as better economic policies. Ironically, with vouchers, like for other handouts, identifying the benefactor would be easy. The first voucher scheme, instituted in New Delhi for the academic year 2007-08, attracted 100,000 applicants for 400 vouchers.

A general concern with voucher schemes -- their potentially negative impact on public education, as students flock to better, often private, competitors -- would be less relevant than usual in India because public education, particularly in the poorest states like Uttar Pradesh and Bihar, is considered very difficult, if not impossible, to repair. That makes private provision a viable, even unavoidable, long-term alternative. For this reason, public teachers, with their close links with local politicians, will oppose vouchers, but the large and widespread benefits could help overcome this opposition.

Reservation may have been necessary to redress India's historical inequities. But even its intended beneficiaries -- the poorest -- are becoming wise to its limitations. Voucher-based education cannot take reservation out of the popular political debate but, over time, it can be made less important, as the real opportunities created by better education reduce the illusory appeal of guarantees. A sign of that successful transition would be street protests aimed not at rejigging social classifications, but demanding that teachers actually show up in the classroom.

Mr. Subramanian is a senior fellow at the Peterson Institute for International Economics in Washington, D.C.

Tuesday, June 05, 2007

Delhi Metro helped save 33,000 tonnes of fuel

New Delhi, June 04: The Delhi Metro helped save 33,000 tonnes of fuel and prevented the creation of over 2,275 tonnes of poisonous gases in the national capital, a new report has said.

The completion of Phase I of Delhi Metro, covering 65 km, resulted in a reduction in road accidents, helped improve road traffic and travel conditions and made a substantial impact on the environmental well-being of the capital, the report by the Central Road Research Institute (CRRI) said.

"As a result of less use of road vehicles with the coming of the metro, 57,858 tonnes of petrol, diesel and CNG would be saved by the end of year 2007. Over 33,000 tonnes of this have already been saved between 2002 and 2006," it said.

"Since the metro began operations in December 2002, the Delhi Metro Rail Corporation (DMRC) has already taken 22,697 vehicles load onto its system which is likely to increase to about 40,000 by the end of year 2007."

As a result, 16.6 lakh vehicle kilometres would be saved and Rs 218 cr would be saved on maintenance of vehicles by the end of 2007, apart from fuel savings of Rs 172 cr, it said.

The report, commissioned by DMRC as part of the first ever study of the impact of its operations, also stated that "Delhites would have a saving of Rs 129 cr by the end of 2007 owing to the Metro".

Apart from monetary and environmental benefits, the report suggests the metro has made a substantial improvement in travel conditions and earning capacity per person in the capital.

"A person saves around 66 minutes every day by traveling in the Metro, which translates to the additional earning capacity of Rs 725 cr by 2007-end," it said.

In addition, passengers traveling on the Delhi Metro save on human energy consumed due to the smooth and comfortable journey, and this has resulted in saving of 40.19 tera joules of energy by 2007.

In terms of the human lives saved in road accidents, the report said, "Delhi Metro has helped in already saving 280 lives upto 2006 which would have lost if they had travelled on other modes of transport."

The report also concluded that the metro would lead to total savings of around Rs 2,072 cr for the people of Delhi by the end of 2007.

"These benefits are a result of passenger time saved, fuel cost saved, reduction in capital and operating cost of vehicles, reduction in environmental damage, accidents and time saved etc," DMRC spokesperson Anuj Dayal told agencies.

"In fact, in terms of the total saving for Delhites, the CRRI report says that the total capital investment on phase i of Delhi Metro will be recovered by 2013," he added.