Financial Daily from THE HINDU group of publications
Thursday, Dec 12, 2002

Port Info

Group Sites

Home Page - Economy
Industry & Economy - Economy

A pretty good service for all you know, sir?

D. Sampathkumar

CHENNAI, Dec. 11

INDIANS have perhaps intuitively known all along. But there is official confirmation now. The Government has been delivering them in recent times a great deal of public administration. The value of its service output - administering the public for their collective well-being and defending them against external aggression - in 1999-00 was worth Rs 1,15,299 crore; that is a good Rs 71,633 crore more than what the general public received by way of such service in 1993-94.

This is revealed in the National Account Statistics published by the Central Statistical Organisation (CSO) of the Indian Government. (Statement 26: National Accounts Statistics, 2002.)

Let no one think that the enhanced value of this `service' is due entirely to inflation. The general public has received lot more `real' administration as well, such as it is. Adjusted for inflation, the value of public administration and defence in 1999-00 was worth Rs 65,596 crore in 1993-94 prices, up from Rs 43,636 crore in that year.

As an output in the economy, the growth of this sector has been quite impressive. In constant terms, administrative services have grown at a compounded annual rate of 9.8 per cent, which is higher than the growth in the economy as a whole, which grew at only eight per cent during this period. The GDP grew from Rs 7,81,345 crore in 1993-94 to Rs 11,48,500 crore in 1999-00 when measured in price levels prevailing in 1993-94.

The private sector might have found the going tough in recent years in the face of recessionary conditions in the economy. But, evidently, there is a growing market for the administrative service rendered by the Government to its citizens.

But not every one has received this largesse in equal measure. For instance, those residing in Assam would have seen the value of service (public administration) rendered by their State Government grow a lot more sluggishly than their counterparts in certain other States. It grew by a little over six per cent annually with the gross value services received by them rising from Rs 590 crore in 1993-94 to Rs 802 crore in real terms. The State of Bihar and Uttar Pradesh too haven't fared much better with the public administration output growing by a little over seven per cent.

But residents of Tamil Nadu or Gujarat can hardly complain. Their respective governments have been stuffing them with hefty additional doses of public administration year after year at nearly twice the rate of their counterparts in Bihar and UP. Even the State of Rajasthan hasn't done too badly. Its residents may complain of not enough food on their plates and if local Opposition parties are to be believed, even die from sheer hunger. But they certainly cannot complain of a lack of administration from their Government. The value of such output in 1999-00 is in excess of Rs 1,200 crore in 1993-94 prices having grown at an average rate of 10 per cent, between 1993-94 and 1999-00.

Public expenditure on both health and education has gone up roughly by an annual average rate of 20 per cent. But expenditure on capital account (a measure of outlay on buildings and equipment etc.) constitutes a minuscule portion of the total. In the case of education sector, the capital expenditure in 1999-00 is a mere 2.4 per cent of the total outlay while for health it has been around 10 per cent.

Even the current consumption expenditure is heavily skewed in favour of employee compensation and very little by way of consumption of goods and services. Thus public consumption expenditure in 1999-00 by way of staff costs on education was Rs 31,407 crore out of a total outlay of Rs 32,886 crore. Similarly, staff costs on health accounted for Rs 10,770 crore in a total expenditure of Rs 12,702 crore.

Even if we assume that the entire wage cost is on teachers and doctors in the respective sectors (there is enough indirect evidence to suggest to the contrary, though), there is very little to pay for chalk pieces or medicines.

Send this article to Friends by E-Mail
Comment on this article to

Stories in this Section
Skyteam turns sour; Air India looks to Star Alliance

A pretty good service for all you know, sir?
Rupee touches one-year high
Yamaha sees India as component hub
Australian bank seeks nod for NBFC
EIL sell-off set for smooth course
Vijaya Bank eyes northern peers
Banks told to make NRE rupee deposits unattractive
Nani Palkhivala passes away

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line