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The Curious Case of the Bloated State

May 15, 2011 4 comments

A distinct feature of the developed world is the size of the bureaucracy and State employment. Fully 10% to as high as 30% of the labour force depend on the State for income and employment.

Iceberg ahoy!

With ‘advanced’ EU countries like Ireland, Greece, Portugal, Spain, (PIGS) on the verge of bankruptcy, strangely mainstream media is silent on the important aspects of this crisis.

The mammaries of the Welfare State?     If everyone is part of the Government, who will you tax?

The mammaries of the Welfare State? If everyone is part of the Government, who will you tax?

Overpaid public servants

Critics, however, are also questioning the present government’s decision not to touch civil service pay and pension. The civil service, apart from the bureaucracy, also includes health service and education administrators etc. As a group, this has over 300,000 members and a massive vote bank no government wishes to antagonise, least of all a very unpopular coalition government led by the Fianna Fail party. In 2002, the government had agreed to massive rescaling of civil service pay and pension benchmarking it on private sector scales. Today despite a fall in private sector pay, government servants have managed to stick to their higher salaries, which some today estimate is 30 per cent above their private sector counterparts.

Ireland is a 4.5-million strong country which is about one-fourth the size of the National Capital Region in India. Its economy is primarily supported by exports, which today accounts for 80 per cent of its GDP. Information technology and pharmaceutical industries are the largest exporters from Ireland. Ireland incidentally also has the largest number of US FDA-approved plants outside the US. Food, retail and logistics also account for a sizeable portion of its export today. (via Exporting out of the mess).

This economic model needs a perpetual supply of victims to support this bureaucracy. | Cartoon by Bill Day; courtesy - cagle.com| Click for larger image.

This economic model needs a perpetual supply of victims to support this bureaucracy. | Cartoon by Bill Day; courtesy – cagle.com| Click for larger image.

Irish cream

Ireland is truly a remarkable case.

In a country of 45 lakhs, an estimated 69% are in the 15-64 years of employable age – leaving us with a workforce of 30 lakhs people. Of these 30 lakh people some 3 lakhs are highly paid government employees – fully 10% of the Irish workforce is in the Government.

With such a bloated bureaucracy, apart from bankruptcy, what else can happen in Ireland? Is Ireland an exception?

Is the situation different in other countries?

The coming storm

Let us look at 3 countries (UK, USA, India) which for the time being are not in the ‘bankrupt’ position.

A look at British situation is revealing. The size of the British public sector is “6.1 million people on the state payroll, (and) an increase of about 900,000 in 13 years.” From a working population of some 30 million, and total population of some 60 million.

Faceless bureaucrats who devise wars, famines, disease to keep their jobs | Cartoon by Clay Bennett | Courtesy - claybennett.com | Click for larger picture.

Faceless bureaucrats who devise wars, famines, disease to keep their jobs | Cartoon by Clay Bennett | Courtesy – claybennett.com | Click for larger picture.

 For every four private sector employee, there is one public-sector employee.

That is the British situation for you.

In the land of the free enterprise?

How about the US?

Surely, the land of free enterprise, free markets, has to be different.

The estimated gross US labour force for 2010 is 15.4 crores. US Government – local, state and federal, has some 2.0 crore (20 million) employees. And we are not talking of contract staff in the US Govt. who are off-rolls. Experts worry about

the 10.5 million federal contractors and grantees the government’s “hidden workforce” because politicians tend not to mention them when discussing the size of the federal bureaucracy. Yet such workers absorbed nearly $400 billion in federal contracting funds and $100 billion in federal grants in 2005. They often performed vital work such as researching new vaccines, running federal computer systems and making body armor, weapons and meals for the military.

The number of civil servants is increasing, too, up 54,000 since 2002 to 1.9 million workers. That is still fewer than the 2.2 million civil servants on the federal payroll in 1990, at the end of the Cold War.

Doors shut, minds closed, opportunities lost, lives destroyed. The Bloated State | Cartoon by Clay Bennett | Click for larger image.

Doors shut, minds closed, opportunities lost, lives destroyed. The Bloated State | Cartoon by Clay Bennett | Click for larger image.

To this figure now add unemployed people – who are also State responsibility – part of the public sector. US unemployment is running

at 9 percent, well above historical norms, with about 14 million Americans looking for work. Those figures don’t tell the whole story. In addition, the Bureau of Labor Statistics says more than 8 million people are working part-time but would rather be working full-time.

We are sitting at a total of 4.4 crore people from a labour force of 15.4 crores.

Nearly 29% of the labour force is used and paid by the US State.

Aha .. Where is India?

Examining India shows a vastly different picture.

A report on Indian bureaucracy reveals

The size of government employment is not that large. On 31 March 2005, total public sector employment was 18 million, divided into 3 million for the central government, 7.2 million for the state governments, 5.7 million for quasi-government and 2 million for local bodies. With an estimated labour force of 420 million in 2004-05, government employment thus accounts for 4.1 percent of total employment within the country.

One small guy against a huge bureaucracy - bought, paid and controlled by the powerful few | Cartoonist - Jim Morin | Click for larger image.

One small guy against a huge bureaucracy – bought, paid and controlled by the powerful few | Cartoonist – Jim Morin | Click for larger image.

The Indian figure includes the railways, which the world’s single largest, employer, all the public sector corporations (like banks, govt. telecom companies,  etc.).

Global disease

A bloated State, over-sized bureaucracy that controls every aspect of our life. On one side, these States speak of freedom,  liberty, human rights. The reality is increasing prison populations and an expanding police State.

Fundamentally, the country model of the West has failed – and the time for भारत-तंत्र Bharat-tantra draws near. In the last 200 years, भारत-तंत्र Bharat-tantra has gone into regression. But, in this period, the world has also learnt more about the limitations of the Desert Bloc ideology.

People get ready!


Fat in the wrong place

November 2, 2009 9 comments

As more Indians moved away from the brink of survival, they have come to demand and depend less on public health care and public food grain distribution.

Liberty will do ... as long as my Welfare State and my bailout is safe! | Cartoon Michael Ramirez; on 8th April, 2009; Source and courtesy - investors.com | Click for larger image.

Liberty will do … as long as my Welfare State and my bailout is safe! | Cartoon Michael Ramirez; on 8th April, 2009; Source and courtesy – investors.com | Click for larger image.

The generally accepted view is that the government runs a bloated bureaucracy. Its current employee strength is 3.32 million. But over 80 per cent of this number is accounted for by specific service departments: posts, central police forces and the railways. Logically, these should not be counted as part of a “bureaucracy”, which as a consequence stands reduced to a relatively modest 600,000. Since the overwhelming majority of even that consists of clerical and support staff, the operational part of the government is quite simply too small. (via Fat in the wrong place).

The good news!

2ndlook has been consistently saying that the Indian Government is NOT fiscally expanding – as percentage of GDP. In terms of employee numbers, like this post (linked above) shows, it has shrunk. As more Indians have moved away from the brink of survival, they have come to depend less on public health care and public food grain distribution.

Who will cut health care costs? For instance in the US, the majority wants the State to increase its powers!  |  Cartoonist - David Horsey; Originally published on August 24, 2009; courtesy - sfgate.com  |  Click for larger image.

Who will cut health care costs? For instance in the US, the majority wants the State to increase its powers! | Cartoonist – David Horsey; Originally published on August 24, 2009; courtesy – sfgate.com | Click for larger image.

It wuz jes poor service

Critics may carp that the those who have moved away, have done so due to the ‘poor’ service levels at Governmental health care and public food-grain centres.

What the carpers forget is that there is a decrease in total demand for such centres or any vocal activism to improve the ‘free’ system.

Quite unlike the citadel of the welfare state – the West.

Indians see a decreasing role for the State in the future – in spite of the best efforts of the State to increase its role. And a ‘progressive’ lobby, like the writer of the post (linked above), who would like the Government to have a better ‘teeth-to-tail’ ratio.

The Indian State meets its colonial cousin

Under the garb of ‘growth’ and ‘progress’ the Indian Government has launched new mega projects to expand its footprint. For instance, the NREGA and Unique Identification Database Authority of India (UIDAI; headed by Nandan Nilekani of Infosys fame). Will the Indian Government sheds it colonial baggage and Western leanings and go for an Indic model?

So, what will it be, India?!

The world’s first (and only?) lean Government – or a bloated Western style ‘Welfare State”?



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