13. Labour Laws

Along with France, India has some of the most cumbersome labour laws in the world.

For instance, several sectors (including soft toys) were originally reserved for the small scale sector.

Any manufacturing facility with more than a few hundred employees, has a huge difficulty in reducing its staff when business goes down.

The unions are typically controlled by some political parties and their "Gunda's" and do not really serve the average labour.

Many of these ideas have been taken from the communist countries, but if we look at even communist countries like China, these ideas are no longer applied there.

The result? Investment into manufacturing in China has been many times more than that in India. (they export more soft toys than our total exports!) China today employs more labour in a very large and truly gainful manufacturing sector, and the labour are now getting a better welfare than their counterparts in India.

If we want to really provide employment to a large number of young people of India, services and IT sector will never be able to absorb the vast population of India. India needs to have a thriving manufacturing sector, which needs to be freed from the Bureaucratic red tape and allowed to flourish.

To free this entrepreneurial energy and spirit, the labour laws need to be based on a simple principle - a company employing labour is doing a service to the society, and the nation. In good times, it does not make good business sense for a company to fire a competitive and trained employee. Let them do it when they need to.

Their can be alternate means to protect such labour, and provide them welfare. Especially, if the Industry thrives, and taxation is high, and the government is focussed on providing the welfare, there is no point dragging below a company from its competitive advantage globally.

12. Basic Welfare - Health

I recently visited some relatives at a "5 Star hospital" in India where they just had kids. There was a personal air conditioned room for the mother of the newborn, en-suite toilets, a spare bed for a visitor, the whole place was cleaned and disinfected every hour, and (I am told) the hospital even had a menu choice for the food you want for each meal. A far cry from the average maternity ward in an NHS hospital in the UK.

We have heard of similar "5 Star" hospitals all over India offering a great healthcare service, so much so that India has become a leading destination for "Medical Tourism". Elderly people waiting for years to get a hip or knee replacement, or a bypass operation are traveling to India to get the operations done at a fraction of the cost in the west, and get a much better service.

Perfect.

Perfect for people who can afford all this - err.. that would be a mere 10% of the population, (and the "tourists", of course)!

Now, take this - a World Health Organization (WHO) study of 2007-08 has revealed. that India ranks 171 out of the 175 countries in the world in public health spending. India spends 5.2% of the GDP on healthcare. While 4.3% is spent by the private sector, the government continues to spend only 0.9% on public health. This is less than some of the sub-Saharan African countries. Millions of poorer people die each year due to easily preventable diseases, for the lack of very basic health care.

It is easy for the elite and chattering classes to be cocooned in the comfort of the air conditioned 5 star treatment that their private insurance provides them, but does it save them?

An epidemic like Malaria, Dengue, Chikunguniya or, more recently, Swine Flu, does not infect people after checking their income. Even the rich in India, despite the hype of the 5 star hospitals, are actually much more exposed to simple communicable diseases because of the crumbling public health infrastructure.

A totally money oriented mindset has also resulted in wide ranging malpractices in India, such as prescribing excessive drugs to the patient, just to earn a commission from the pharmacies, performing needless procedures and tests to inflate the bill, and in some cases, scaring the ignorant patient to extract maximum money for the phony treatments later.

But what is the solution?

Keep living in the "Shining India" world, where we perform a heart bypass surgery for a wealthy American health tourist, while a poorer countryman dies for lack of medicines for cholera?

Spend more on public health services, only to see them getting destroyed by apathy and red tape? 80% of the doctors in India reside in urban areas, while the majority of the population lives in the villages.

Force the same (poor) service for all, regardless of income?

This is complex. Lets see what are the strengths and pitfalls in solutions the developed countries have adapted.

A totally private system like one in India can offer the best to people who can afford it, but become expensive over time, as americans have learnt. As a percentage of GDP, they spend much more than Europeans, but still have a large number of poorer households without any insurance. A doctor is looking at your pocket before treating you. Sometimes, the doctor has no choice - as your insurer dictates the service that you are provided. On the plus side, the covered patient, who can afford this, has a choice of providers, or the insurer.

A totally public system like the NHS in the UK, provides a totally egalitarian service. Theoretically, ("Post code lotteries" and restrictions on more expensive treatments aside), the doctor provides the same treatment to the poorest of souls as to the richer person still interested in NHS, without looking at the pocket of the patient. However, over time it can become too bureaucratic and inefficient. NHS is now one of the largest employers in the world, yet the number of doctors/nurses per 1000 people is lower than that of France. There is no incentive for a GP or a hospital in the UK to actually provide better service to the consumer, there is no choice for the patient, and with a single provider in the market, there is no chance of any competition amongst the providers.

Somewhere between the two, lies the System being practiced in France (also Japan). It covers everyone, and provides a high-quality care that WHO has consistently rated it as the best in the world. In all its entirety, it is too expensive for a country like India. Nevertheless, it is a direction we could aim for. Let us see how it works first.

Virtually all physicians in France participate in the nation's public health insurance, Sécurité Sociale. The main fund covers eighty percent of the population. There are two additional funds for the self-employed and agricultural workers. It has created a standardized and speedy system for physician billing and patient reimbursement using electronic funds. This significantly cuts the overheads and admin costs related to billing and management.

Patients can choose their own doctors, and -- unlike the U.S., where private health insurers can have a say, doctor's freedoms of diagnosis and therapy are protected - they can prescribe any therapy or drug without approval of the national health insurance.

So, back to India.

1. Health Insurance for all poor, (bit like some states like Haryana and Andhra Pradesh are doing with schemes like Aarogyashri)

2. Some degree of compulsory insurance for the employers, to provide the working class poor with a basic cover.

3. Voluntary insurance, as today for the middle class and the privilaged classes.

4. An independent regulatory body overseeing the medical education, and the ethical standards for the hospitals.

5. Government leases out its public hospitals to non-profit trusts, who become independent players in the market.