Friday, May 07, 2004
Re: Re: Unemployment, migration, and 'sons of the soil'

Carl and Ramki

To me employment and economic development are not mutually exclusive. That X and Y get displaced because of 'development' is always highlighted. But A, B and C got jobs in the bargain is often ignored. Lets take Naidu for example. He has focused on 'modernising' his state and creating the requisite infrastructure that eventually will attract companies and create jobs. In the bargain, he also sets up schools and technical training institutes to train his workforce to benefit from the development. Gains from such initiatives have various negative effects, at least in the short run. We must take it with a pinch of salt.

I have personally witnessed Naidu giving one of his famed presentations. And he actually came there asking companies to give money to AP to fund various developmental projects.

Migration occurs when he does all of this Hyderabad. So you have every youngster in AP aspiring to come to Hyd, which leads to lop-sided development.

I view it as a necessary trade-off. In fact, I'll go to the extent of saying that everything in life is about trade-offs. Are Naidu's priorities misplaced? Should he have focused on something else? What is the cost of the trade-offs he made - economic, social, political? Further, is 6 years in Government enough to engineer all the changes one wants to see? Its very easy to beat down the reformer saying your reforms are of good intent, but you're spending money in the wrong areas. So the core issue here is where does the government rupee go? where should it go?

I agree with Carl about infrastructure projects being taken up post-elections. But remember, that most of the employent for infra projects is temporary, unless labor is geographically mobile. If thats the case, then migration is bound to occur. About the tax structure, I believe we have a tax code thats filled with loopholes. But the bigger problem is that a large part of the business community does not pay taxes. In India, tax planning and tax evasion are akin. The issue with taxes therefore is of enforcement.

On migration, Carl, you say that migration needs to be regulated effectively - any ideas on what an effective regulation might be?

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