The Exchanges

Q And how do you get government, like said, by doing these podcasts or writings?

A Yeah. So governments have various ways of, uh, interacting. Now, for example, uh, many of the laws or many of the, uh, Policies are put into the public for draft comments. So every, let's say Ministry of Electronics has made a policy. They'll put generally into the public domain for draft comments. Anyone can respond to it. You know, you and I, we can just respond to it. There are many organizations which are trying to bring together people to systematically respond to these draft comments. So that is one way. The other way is there are standing committees that the parliament has. On each of these ministries, there will be an equivalent standing committee, which will question the, it's a check and balance where the legislature will question the executive, that defense, for example. So it'll be a standing committee of defense where there'll be people from the opposition parties and, uh, the ruling party. They will ask questions from the, uh, ministry of defense that why didn't you do this? So you can respond to those. There are, you can depose before a parliamentary standing committee. Then, uh, more indirectly, the idea is, uh, just our, our, uh, what theory of change is to just flood the system with good ideas. So at Takshashila, what we are doing is just write a lot, write policy papers, which make the argument to move the overturn window in the direction which we think is an…

AI assessment note: “So governments have various ways of, uh, interacting.”

Q So what, just to summarize it, what you're saying is, you're saying the good policy, uh, That the government will make in the future, or is it making right now? These are the things that have been Discussed over the last decade. And some of these things would have captured the masses attention and thereby capturing government's attention that either timing is ripe right now to make it happen.

A Yeah, absolutely. Yeah. It, it might not have captured the masses attention. That's the only correction I'll make, but it will largely, uh, arguments would have been made. So that's why, you know, for example, the, uh, Ajay Shah and Vijay Kelkar who also have a very good book on public policy called In Service of the Republic. They talk about a idealized policy pipeline. You know, how does a change happen in India? So first they have around seven steps. I'm not going to discuss all of them, but first step starts with having good data on that particular area, right? So for example, health, you should know what is the problem in public health in India. So first you have a good statistical system in place. The, Next thing is once that statistics is largely accepted, then there will be the role of think tanks and where you then propose ideas that, okay, this is a problem. This is the way to go about it. Some others will have completely other, uh, you know, opposing ideas. That's fine. There is that intellectual sparring as a natural selection of ideas takes place, right? Just like in biology. So people will argue, et cetera. People will write in opinion pieces or discussion documents. Some of them ideas will go away. Then comes the role of, uh, committees. So out from outside the government, we think of committees in a very cynical way that government committee, but change will nev…

AI assessment note: “Yeah, absolutely. Yeah. It, it might not have captured the masses attention.”

Q So, you are saying this budget is given to the state government by the union government to work on education and health?

A So, there are two things. One is, there is a constitutional division, right? For example, you pay GST, there will be a SGST and there will be a CGST, right? So, that SGST directly goes into the state's kitty. So it's constitution. The union government doesn't give. It's their right according to the constitutional division of ours. That is one. And then union governments run certain schemes when state governments like Sarva, Shiksha, Biyan. So for that union government gives some portion of the money and state governments give some portion of the money. But the implementation of all these is done at the state level. So if you want India to jump to the next level, if you want India Uh, to progress. You need strengthening of the states, of the union, of the, uh, uh, local governments, and then for the union governments to do what it should be doing, which is defense, external affairs, etc. But so that's the conceptual jump we have to take. It has happened in China in extremely centralized systems where there would have been no incentive. So it can happen in other places as well.

AI assessment note: “The union government doesn't give. It's their right according to the constitutional division”

Q especially, right? Because it dives into the recent, uh, you know, uh, episodes in public policy in India that we're going to discuss on this podcast. Right now. And the, and the other one, uh, also. So, so Prane, before we dive into the podcast, right, I want to make sure that our audience understand, uh, the basics of something. So for example, let's start with what is public policy?

A In short, public policy is essentially a study of the actions that all arms of the government do, which is legislature, executive judiciary. So an analysis of that The aims and objectives of what the government is trying to do, and then analyzing, uh, whether those methods which are used to achieve those aims and objectives, what are the problems? Are they being able to achieve the goals is essentially broadly, it falls under the realm of public policy analysis. So that's what we do. Uh, and public policy, as I said earlier, there was a lot of apathy, but now I think public policy has become a spectator sport, just like politics, right? We already have chosen our favorite government or our favorite political party, and then we are trying to rationalize whatever governments are doing on that basis. That's what we want to challenge in our books, because public policy also has some framework, some core ideas, some ways to anticipate the unintended, you know. So for example, every government policy has trade offs. There will be unintended consequences, but governments often say, No, overall things were good. So why do you care? Like demonetization happened, right? There were a lot of unintended consequences, but many of those unintended consequences could have been anticipated. So that's what a public policy analyst will do, right? So not just say one policy is good or bad because …

AI assessment note: “public policy is essentially a study of the actions that all arms of the government do”

Q There's another thing that you mentioned is, uh, right. Uh, how India got left behind China in manufacturing? Where does it come from? What are the origins and cause? Yeah.

A Again, this lot of, uh, again, complex system, many causes, so very difficult to pinpoint one thing, but we had given an example of a policy where Especially why India didn't have an electronics manufacturing base. So there are two parts to this. One, for example, we had in, out of great intentions, we had this policy called the reservation of, uh, manufacturing for small scale industries, some weird, big name like that. But the idea was that some sectors will only, uh, to encourage small businesses, they said, you can't mechanize that sector a lot. You will, ah, it is literally reserved. So you have the, the entire sector is reserved for very labor intensive companies. So for example, if you have machinery or capital, which is up to 50% of your total, uh, cost structure, you can't produce that. Now, again, initially with good intentions, there were some eight, nine things added. By 1997, this list had grown. You had more than About 506 hundred items, including electronics, electrical manufacturing in that small scale electric. So again, there's no incentive for, you will have really small businesses which won't scale up. And once there's this incentive for scale, right? You don't want to scale up. You don't want to cap in, introduce capital in it. So you will do barely, you will make ends meet, but you will not be very productive. Whereas that these kinds of policies weren't t…

AI assessment note: “we had this policy called the reservation of, uh, manufacturing for small scale industries”

Q Yeah. Mumbai lost out economically. Yeah. And, and the other story, which I would love to learn from you is the Sandalwood story. How did Veerappan got created?

A Yeah. So this is something we call Daastanes Sandal in the book. So again, this is a, there is a Netflix movie also, right? I guess movie or documentary on Veerappan. Uh, and Again, that looks at this idea, uh, about what he did or, uh, was he doing good things for the people in that area? I think, but no one thinks about how it is connected to the state. Again, there is a very important role of the state here, which we need to know. For example, now, uh, Sandalwood are around 90% of the Sandalwood, uh, the one which we want is Was found in the three states of Karnataka, Tamil Nadu, and Kerala. So we are actually abundant in this particular resource. And sandalwood right from the 1700 was an important thing. You know, it is used for religious functions, for making incense sticks, not just in India, but in China and all also. So there was huge demand for this. It was a precious commodity. In 1792, it was declared a state tree.

AI assessment note: “Again, there is a very important role of the state here, which we need to know.”