Public policy implemetation

Conservatives are always scary about the increase in the size and scope of government. If the pitfalls and costs of implementation were properly understood, many policies would not be authorized, no matter how well intentioned. Recognize that central programs must be implemented locally. Implementation costs money and money is especially important politically when tax payers are in revolt.

Conservatives distrust governmental authority and wish to minimize the scope and cost of governmental activities. They are inherently suspicious of governmental bureaucracy. Liberals propose public policy solutions to a wide range of social problems, often ignoring the questions of the feasibility of implementation. Keep the government's hands off. Let the local level control and implement policy wherever feasible. Minimize and localize the activities of government and the scope of public policy. A policy may face unforeseen problems and must come with enough flexibility to allow government to change the course.

This is how governmental programs should be put into effect: 

1. When in doubt, stay out.
2. If something must be done, understand the behavioral dynamics and change the rules of the game without spending money.
3. Hire a private contractor and do not try to produce the good or service directly through government. 
4. When government must finance something, make sure that the money goes directly to the beneficiaries, not through indirect channels.
5. If government must finance and administer, competition must be permitted as a yardstick to gauge success and cost.
6. When government must obtain resources, it should purchase them in markets.
7. When government produces a good or service, it should, when possible, charge the users a pro rated cost, not give away the good or service free of charge.
8. Only as a last resort, when all the above has failed, should government finance, administer, and deliver the good or service free of charge.

Increased governance stresses the cost of government. And taxes depress other forms of spending, such as consumption and investment. A public policy will necessarily spend money, and money is central to this subject. 

Any policy is as good as it is administered

Authoritarian regime of Modi believes in majoritarianism and not secular at all. Ambedkar has rightly described as 'democracy in India is only a top-dressing on an Indian soil, which is essentially undemocratic'. Opaqueness in administration is increasing and none of the principles of democracy are being followed by Modi regime and institutions are getting reduced to nothing. None of the above rules are being followed in public policy administration. Whims are in the forefront.

What eased doing business in India?

• India jumped up 30 notches into the top 100 rankings on the World Bank’s ‘ease of doing business’ index, thanks to major improvements in indicators such as resolving insolvency, paying taxes, protecting minority investors and getting credit.
• While the jump is impressive, that is not the whole story. Excepting few increases due to increase in computerisation everywhere, nothing much has changed on the ground.
• Modi hailed the jump in India’s ranking as “historic” and said it was a result of “all-round and multi-sectoral reform push.” Jaitley said India’s jump is the highest by any country, and that reaching the ‘top 50’ target set by Prime Minister Modi is “doable”. These guys bombard with publicity every minor uptick but avoids talking about negatives whether it it happened on its own or whether they have done it is immaterial. 
• This ease of doing business in India helps only large corporates and MNCs and has nothing do with informal businesses which contributes 45% GDP and 80% jobs, that stands decimated by Modi's 'hare brained demonetisation' and 'badly implimented noble GST'.
• The persistent problems of India namely agraian distress, joblessness, spiralling down of economy, healthcare & education in doldrums and so on has nothing to with this ‘ease of doing business’.
• While common man continues to suffer, government's coffers could see increased inflows over time.

Why Indians evade taxes?

No body in this world pays taxes most willingly and smilingly. That would be very strange economics and irrational. In India with 40% people being poor and 60% people living on daily wages, the real number of people with liability of income tax in any case can not exceed 10%. While salaried class in formal economy are inescapable, most people in cash based informal economy don't maintain books of accounts and avoid income tax and other taxes as well. In the past there was thinking of expanding tax base and research discovered that this would result in much work and less gain and government then decided to have narrow tax base with efficient realization of taxes. With corruption and tax evasion rampant, the economy is in trouble and unless all loopholes are plugged, citizen trust in government, which is already low,  will vanish. With technological advancements it is not a difficult task to improve efficiency with time.

The tax evasion propensity of Indians stem from some deep seated hangover from feudal times when the state was exploitative and citizens considered taxation system as - exorbitant and arbitrary; fundamentally illegitimate; excessively burdensome; irrationally complex; patently corrupt; simple greed. It is usually a varying combination of the above. As long as people are poor and less educated and governments are irresponsible, inefficient and blatantly corrupt in public spending, efforts for higher tax realizations will be thwarted by its citizens.

• Tax evasion was determined by the trade off between tax rates and the cost of punishment for noncompliance. Higher tax rates increase the incentive to cheat as one saves more money from evasion, while the cost of noncompliance deters avoidance. 
• In the United States cheating on taxes is a criminal offence and offenders will be imprisoned as a consequence. In Switzerland, it is a civil offense: they levy a fine, then send you back to work, in order to earn and pay. Some Scandinavian countries with high tax rates and comfortable prisons have low tax evasion.
• It is the psychological factor of "citizen trust" that is determinant in explaining the pervasiveness of tax evasion in India.
• With respect to taxation, citizens need to sense three types of trust: (i) The taxes levied will be used to pay for valued services (ii) Their fellow citizens will pay their due share (iii) There is a fair process for revenue collection.
• In India, less than 2% of the population pays income tax, is that the trust of citizens on all these three dimensions is low. 
• Taxes are necessary for government for meeting expenses of governance, law and order, defense, welfare, infrastructure, etc. While governments will always be inefficient, because they are spending someone else’s money rather their own, it is a question of how much inefficient they are.
• It is crisis in trust between citizens and the government. While revenue collection has grown by leaps and bounds, citizens do not see any tangible effects on their lives. Roads are worse, public transportation is broken, the police are viewed as widely corrupt, and government schools and hospitals are always the last resort. Consequently, Indians do not see their taxes being used efficiently.
• The perception is that the largest tax offenders go scot free, while the more honest or compliant individuals and enterprises are pursued aggressively. To many, it seems there is a penalty for being honest. 

Our distrust is very expensive ... RW Emerson

My View:
It is well known that corruption is rampant at all levels in public domain. Any honest person is either sidelined or crushed. Govt schools and hospitals, in dilapidated condition, are the last resort of poorest person. Firstly, transparency and accountability, legitimacy, checks and balances must be enforced at all levels in public domain encompassing politicians, civil servants, police, judiciary and businessmen by bringing them under Lok Pal and RTI and granting autonomy & teeth to CVC, CBI, ACB etc, otherwise rebuilding public trust & confidence is impossible. Secondly, reforms in elections, justice dispensation systems etc to reduce role of dirty money effecting day to day life of common man. Thirdly, discretionary powers should be replaced with well defined processes at all levels. Fourthly, no public expenditure should be incurred without budget and prior legislative approval with the exception of managing calamities & disasters. All these require several years or even decades, but foundation has to be laid now. Quality education and healthcare should be made affordable and accessible to even to the poorest man. Education, awareness creation and strengthening institutions are the keys. Corruption, tax evasion, crimes etc are at present high profit and low risk activities and should be transformed into low profit and high risk activities, with active vigilance and heavier penalties & punishments. Finally tax administration reforms and tracking data, without intruding citizen's rights and privacy, will yield favorable results over time. Both political will and administrative honesty are necessary for any meaningful reforms and transformation to take place. Integrity, transparency, accountability, legitimacy, honesty, ethics, efficiency, economy, effectiveness, professionalism and social equity are principles of public administration and politics. These traits must be inculcated through continuous training especially in civil servants, who are the face of government with people. Not so easy, but beginning must be made and over time every thing will happen otherwise we will diminish ourselves into rogue nation.

Saddled with corruption, when government becomes unresponsive, people will ignore or bypass it and takes law into their hands or takes help of mafia. Laws can only punish culprits, if caught, but education transforms and empowers society.