As we have discussed in these columns, politics is an incredibly hard calling in any democratic society. It is particularly vexing in poor societies. A government comes to office and survives in power with the willing consent of the people. There is a need to address the short-term needs of voters, even as the long-term interests of the society at large are promoted. And there is a moral imperative to mitigate the pain of poverty immediately, even as steps should be taken to eliminate poverty altogether by enhancing the earning capacity of people and providing opportunities for a better life in the future.

Clearly, the Union government and some of the states are doing a commendable job of maintaining growth momentum by reconciling the short-term individual welfare with long-term public good. But some states are running into serious problems because of fiscal profligacy, uncontrolled expenditure and unsustainable debt without corresponding creation of usable and productive assets. Let us examine the realistic measures that can be adopted to improve the health of public finances.

First, public sector wages have gone out of control in many states. In general, the government employees are paid two to four times the wages in the private sector for the same job, especially at the lower and middle levels. And yet, productivity is lower in government because of job security, time-bound promotions, and lack of accountability. In many........

© Free Press Journal