Tuesday, January 23, 2018

UK NAO questions the value for money from PFI

Last week the UK's National Audit Office (NAO) released a report on the rationale, costs, and benefits of the country's much acclaimed Private Finance Initiative (PFI) to build infrastructure, the pioneering PPP experiment. The report is a very damning indictment of PFI, concluding that the country has incurred billions of pounds in extra costs for no clear benefit.

The PFI was introduced in UK in 1992 as an innovative way to leverage private capital to supplement governments investments in infrastructure. In 2010, the UK government initiated PFI2, or PF2, with some learnings from PFI and greater role for the government, focusing on smaller deals, involving facilities and services rather than buildings.  Over the past 20 years, PFI investments in social and economic infrastructure have averaged around £3 bn every year, small compared to the total £50 bn capital investments of the government. There are currently 716 PFI and PF2 projects operational or under construction with a total capital value of £59.4 bn.

Consider this on the presumed efficiency gains, 
The Department for Education is currently collecting data and developing methodology and has, so far, found that the financing route has little or no effect on the construction costs of schools being built as part of the Priority School Building Programme (PSBP)... Our work on PFI hospitals found no evidence of operational efficiency: the costs of services in the samples we analysed were similar. Some of those data are more than 10 years old. More recent data from the NHS London Procurement Partnership shows that the cost of services, like cleaning, in London hospitals is higher under PFI contracts.
On the illusion of budget flexibility, or "fiscal illusion" as a July 2017 report of the Office of Budget Responsibility described,
Private finance increases departments’ budget exibility and spending power in the short term, as no upfront capital outlay is required. But departments face a long-term financial commitment – any additional investment will need to be paid back. For example, in the first 12 years of PFI use in the health sector, PFI resulted in extra capital investment for the Department of Health and Social Care (the Department) of around £0.9 billion each year on average: £0.5 billion a year more than the a average annual spending of the Department on operational PFI projects over the same period. However, in recent years PFI has been used much less by the Department and the operational PFI contracts, which cost over £2 billion a year, have reduced the Department’s budget flexibility.
On the higher cost of capital with private finance,
Private finance procurement results in additional costs compared to publicly nanced procurement, the most visible being the higher cost of nance. The 2010 National Infrastructure Plan estimated an indicative cost of capital for PFI as 2% to 3.75% above the cost of government gilts.Data collected by IPA on PFI and PF2 deals entered into since 2013 show that debt and equity investors are forecast to receive a return of between 2% and 4% above government borrowing. However, some 2013 deals, agreed when credit market conditions were poor, projected an annual return for debt and equity investors of over 8%; this was more than 5% higher than the cost of government borrowing at the time.20 Small changes to the cost of capital can have a signi cant impact on costs – as an illustration: paying off a debt of £100 million over 30 years with interest of 2% costs £34 million in interest; at 4% this more than doubles to £73 million.
There are other ways in which PFI adds to cost. Insurance, holding surplus cash to meet stricter lender requirements, use of advisers by both government and private partner given the complex nature of private finance procurement, arrangement fees for raising money, and so on are all additional layers. The net result in terms of total capital cost,
The higher cost of finance, combined with these other costs, means that overall cash spending on PFI and PF2 projects is higher than publicly nanced alternatives. The Department for Education has estimated the expected spend on PF2 schools compared with a public sector comparator (PSC). Our analysis of these data for one group of schools shows that PF2 costs are around forty per cent higher than the costs of a project nanced by government borrowing. The Treasury Committee undertook a similar analysis in 2011, which estimated the cost of a privately nanced hospital to be 70% higher than the PSC.

Consider these snippets of the costs inflicted by way of operational inflexibility, 
The PFI structure means that changes in contracts can be expensive with lenders and investors charging administrative and management fees. For example, additional capital works of approximately £60,000 in a local authority PFI school increased to over £100,000 once fees were factored in – the local authority challenged this and the SPV agreed to reduce some of the management and approval fees although bank fees of £20,000 will still have to be paid. Department of Health and Social Care papers similarly highlight that some trusts with PFI facilities have to use alternative forms of procurement for capital variations. Government can also be locked into paying for services it no longer requires: for example, Liverpool City Council is paying around £4 million each year for Parklands High School which is now empty. Between 2017-18 and the contract end in 2027-28, it will pay an estimated £47 million, which includes interest, debt and facilities management payments, if no changes are made to the contract. The school cost an estimated £24 million to build.
On pricing in life-cycle risks, 
The Department of Health, in a paper on PFI prepared for HM Treasury in 2012, noted that “there is an inbuilt incentive to price cautiously for lifecycle risk, requiring the build up of significant reserves. This may not necessarily result in optimum value for money for the public sector, although data illustrating out-turn costs for lifecycle is scarce”. It also reported that bidders were currently pricing the cost of insurance at a 20% premium to the market price in order to provide protection against future price rises. To mitigate this, HM Treasury introduced insurance gain-share arrangements in the standard PFI contract (paragraphs 2.12–2.13). There are also other risks, for example potential tax increases, that investors may factor into the prices they bid at the outset. These risks may not materialise and in some cases subsequent changes, such as reductions in corporation tax rates, have increased rather than reduced investor returns.
And on the importance of the discount rate used to assess value for money, or comparing with public sector comparators,
The VfM assessment compares private nance costs with a government discount rate of 3.5%, which is 6.09% with inflation, known as the Social Time Preference Rate (STPR), which is higher than government’s actual borrowing costs. The higher the rate applied, the lower the present value of future payments. For example a payment of £100 in 12 years will have a present value of just £49 when discounted by the STPR. Discounting using a lower discount rate, which compares private finance with the actual cost of government borrowing, results in fewer private nance deals being assessed as VfM... HM Treasury does not consider the cost of government borrowing to be relevant in making financing decisions on PFI and PF2 deals. However, other countries, such as Germany and the United States, do compare the cost of private finance with government borrowing costs when assessing financing options like PFI.
And its legacy on the fiscal balance sheet,
The public sector will still be making PFI unitary charge payments to private nance companies in the 2040s. Future payments for existing projects are forecast to total £199 billion from 2017-18 onwards – an average of £7.7 billion a year over the next 25 years. In 2016-17, total payments amounted to £10.3 billion, of which 59% related to four departments (Health and Social Care; Defence; Education and Transport). These payments cover financing costs (debt and interest payments and a return to shareholders) and operational costs. Public bodies also have to pay for maintenance and operational costs of publicly financed buildings.
This blog has been a very consistent critic of the indiscriminate use of PPPs. It has argued that PPPs should be deployed with great discrimination, the cost of capital is much cheaper for governments than the private sector for the same project, construction and commissioning risks are best borne by governments, O&M poses massive risks of skimping on investments and cutting corners on quality, and the near inevitability of renegotiations.

Monday, January 22, 2018

Lessons from the Carillion collapse

The first month of the new year has ushered in two events which could be triggers for the definitive reversal of fortunes for public private partnerships (PPPs), not just in the UK but also elsewhere. They are the collapse of public contractor Carillion and an assessment of UK's PFI released by the National Audit Office (NAO). I shall cover them in two posts, starting with Carillion.

Carillion, a large outsourced service provider of public services and construction contractor for mostly public projects, went into compulsory liquidation on January 15 after its creditors refused any more support. Carillion, with a market capitalisation of £61 million, has left been left in the lurch with its 19500 UK employees, and £ 5bn in liabilities of which £2.6 bn goes into pensions to 28500 pensioners.

Carillion manages 200 operating theatres and 11800 hospital beds, 18500 patient meals per day, is a major contractor on HS2 rail project and Crossrail, manages 50,000 homes for Department of Defence, build and operate 150 schools, catering and cleaning at 875 schools, maintenance and repairs at half of UK prisons, many public libraries, builds substations for National Grid. These are largely public goods. None of these activities can stop, even temporarily, without enormous social and political consequences and human suffering. Irrespective of how Carillion is liquidated, in the short-term governments have no option but to take over these services.
Carillion's collapse has starkly illustrated the risks borne by governments when they outsource public services. The service provider may collapse, but governments cannot abdicate from the provision of public services and the responsibility will fall on it. This creates a potentially big moral hazard for any service provider. Imagine the situation if G4S or Serco files for bankruptcy!

For example, what prevents them from stripping assets with obscene salaries and bonuses, excessive dividend payouts, starving the company's pension fund, piling up massive debts, and then filing for bankruptcy, leaving the government to bear the liabilities? And all this while skimping on investments and cutting corners with service quality. Is there any more remunerative business to be in? Isn't this the playbook for private equity firms in public services?

This is not the only issue. There is a fundamental problem with the unqualified assumption that private providers can provide value for money from provisioning of public services. Fundamentally, there are two problems with  service delivery in public systems. The first one is the standard problem of inefficient resource deployment and management. The second less-known problem is that of constraints imposed by eco-system factors.

Eco-system constraints can vary across sectors and contexts. For example, in transportation, it may be difficult for governments to raise tariffs on a toll road operated by itself compared to a contractually obligated tariff increase. Or government employees may be captured by political and other vested interests that public managers may not be able to control. Or inter-jurisdictional co-ordination may be easier because the private management can exercise more control over their employees than government management (say, co-ordination among different sanitation wards, different property tax collectors etc). Or the private provider is better positioned in being able to ring-fence activities, cost them, and levy user fees.

The presumption is that the private provider is better positioned to reduce the significant costs these two problems impose. But if evidence from across the world over decades and across sectors is taken into consideration (a subject of several blog posts here), this presumption is just a chimera. Even if we assume that the private sector can wring out efficiencies, the second problem is not easily surmounted. In fact, addressing the second problem may be much costlier for the private sector.

This can be traced to an irony about how the public views government and the private sector. We may collectively agree that the private sector is more efficient and less corrupt than government. But when the rubber meets the road and problems surface - tariff increase, user fees, big accident, grave omissions, loss of jobs etc - debates are triggered that invariably frames the problem (correctly, most often) as one of private profiteering, and the same social mood swings violently against the private sector. In fact, the public have deeply internalised the belief that private sector delivery will be much superior that even small shortfalls in quality arouses a disproportionately (when compared to a similar failure by government) higher level of anger and public discontent.

While the public may prefer private efficiency over government sloth, they are likely to vociferously revolt at private windfalls and socialised losses. In fact, losses and quality shortfalls by private providers are certain to evoke an indignation and anger several times more than similarly sized losses and quality deficiencies by public providers.  

Further, once a service provider is large enough and service delivery interfaces closely with the civil society, it starts to face the same problems with employees and their unions, sub-contractors, local political leaders, consumer groups etc that governments struggle with. In such large entities, their managers and workers are no less prone to be captured by vested interests. And unlike the government with its institutional authority, the private provider is very badly positioned to negotiate acceptable enough bargains in such situations.

Finally, even the apparent strength of co-ordination that private providers are presumed to enjoy is questionable. More than internal co-ordination, all such outsourced activities involve significant co-ordination with external agencies, the majority of whom are again government controlled, and with civil society, which trusts the government more than a private provider. The private provider is at a big handicap compared to public providers in this regard.

Private providers and contractors hedge for all these risks. Lenders too have internalised these risks. All these add up several layers of costs. The result is higher life-cycle costs associated with PPPs when compared to the public sector comparators. In simple terms, the transaction costs due to eco-system constraints associated with outsourcing incurred by the private provider end up likely to more than offset any efficiency gains. It is this that the NAO report lays bare in great detail. 

Saturday, January 20, 2018

Weekend reading links

1. Development of sub-centres as "wellness centres" and promotion of Ayush are two priorities of the government. But data on patient preference of different health facilities from NFHS 4 shows that this may be one hell of a challenge. The sub-centre is used by just 1.5% and 3.1% of the rural and urban populations respectively. About 1% of people use Ayush facilities. It is to be noted that only 42% in urban areas and 46% in rural areas opt for government health services. 

Another striking graphic is below about the reasons for not visiting public facilities.
Note that absenteeism is among the least of problems. Even when doctors are available, people prefer to skip public hospitals for reasons like poor quality of care.

2. Justin Sandefur uses data from the new and richer dataset of the World Inequality Report to show that the famous Elephant graph of incomes gains to world population percentiles over the past twenty years constructed by Branko Milanovic and Christoph Lakner may have to be replaced by a Loch Ness Monster graph. See the original Milanovic et al graph...
And Sandefur's Loch Ness Monster graph for the same period by using WIR data
The WIR graph for 1980-2016 looks like this
The takeaway is that incomes gains have been much smaller than expected even among those benefiting from the rise of China and India whereas that accruing to those at the top of the income ladder much higher. In simple terms inequality has worsened even more than we had thought.

3. Richard Thaler's Nobel Lecture slides here.

4. Uday Kotak makes a less discussed point about foreign ownership of Indian companies,
In 1982 when I started my career, HDFC Ltd’s total market capitalization was Rs 500 crore and foreign ownership was zero. Today that Rs 500 crore has become Rs 275,000 crore. More than 80 per cent is foreign owned. Here’s a company whose core business is money from retail savers – Indian house owners. And of the entire gain made by that company, 80 per cent belongs to foreign investors... Four out of five Indian private banks have majority foreign ownership. Only one with Indian majority is us (Kotak Mahindra Bank)... Let me give the comparison of America and China. The biggest growth companies in the US are Amazon, Facebook, Google, Microsoft and Apple. Go and check out. The majority of these companies are American owned. American savers benefited by them. In China, Alibaba, Tencents and Baidu. What’s the majority holding?
He makes the point about India's relative aversion to foreign debt as against foreign equity. This one deserves a longer post. 

5. Gautum Bhatia has a good article on why the Chief Justice of India's power to allocate cases is a matter of concern.
First, the Supreme Court now consists of 26 judges, who predominantly sit in benches of two. Compare this with the US Supreme Court, for example, where all its nine judges sit together (en banc) to hear cases, or the UK’s Supreme Court, where 12 judges often sit in panels of five (or more). The Chief Justice of the US Supreme Court, therefore, has no choice in the question of which judges will hear a case, and in the UK, the choice is significantly constrained. By comparison, the Chief Justice of India has significantly more discretion in determining which judges will hear and decide a case... 
The rise of public interest litigation has diluted the practice of strict adherence to the legal text, and the Court’s habit of sitting in multiple small benches has undermined the gravitational pull of precedents. This means that when a judge surveys the legal landscape before her, she finds that it gives her greater room to effectuate a personal interpretive philosophy than she might otherwise have. Multiple examples can be cited to demonstrate this. Perhaps the starkest is a brief period in the mid-2000s, where two Supreme Court benches were hearing cases involving the death penalty. One of these benches confirmed virtually every death sentence, while the other commuted most of the cases before it. The question of whether a person lived or died, then, depended upon the lottery of which bench his case came before or — in the Indian legal system — which bench the chief justice assigned it to.
And third, the Supreme Court is dealing with a massive backlog of cases. This means that “in the normal course of things”, a petition will take many years to be heard and decided. The chief justice, however, has the power to “list” cases for hearing. Given the huge backlog, this simple administrative function becomes a source of significant power... Backlog, therefore, allows the Court, through the office of the chief justice, to engage in the practice of judicial evasion — that is, effectively deciding a time-sensitive case in favour of one party by simply not hearing it. In a legal system where a significant percentage of the judges of the Court sit on every case, where there is at least a surface consensus about the interpretive philosophy that judges use to decide cases, and where all cases are heard within a short time of being filed, the chief justice’s power as “Master of the Roster” would be purely administrative. However, in our system, where none of these three conditions obtain, this harmless administrative power has transformed itself into a significant ability to influence the outcomes of cases.
6. More on the puzzle that global equity markets have become,
In all of 2017, the Standard & Poor’s 500-stock index experienced no decline greater than 3 percent, the first time that had happened. And a widely followed volatility index known as the VIX closed below 10 on more than 40 days in a six-month period through late November, according to Citi Research. Before that, the VIX had not closed below 10 on more than six days in any six-month period.
7. The decision by India's securities regulator, SEBI, to ban Price Waterhouse, the auditing arm of PwC, from auditing listed firms in India for two years for its complicity in manipulating accounts in the Satyam scandal may sound harsh but is a very welcome decision.

We have seen too many examples of these large institutional service providers escape with slight rap on their knuckles for even very grave misdemeanours. The expectations need to be realigned. It is therefore appropriate that the regulator took the harsh step.

8. Is Amazon under-paying its workers compared to industry standards? The Economist writes,
According to available data from the Bureau of Labour Statistics (BLS), warehouse workers in counties where Amazon operates a fulfilment centre earn about $41,000 per year, compared with $45,000 per year in the rest of the country, a difference of nearly 10% (see chart 2). The BLS data also show that in the ten quarters before the opening of a new Amazon centre, local warehouse wages increase by an average of 8%. In the ten quarters after its arrival, they fall by 3%.
And adding more evidence to the growing body of reasons supporting exercise of monopoly power by large corporates,
An NBER working paper by José Azar of the IESE business school, Ioana Marinescu of the University of Pennsylvania and Marshall Steinbaum of the Roosevelt Institute finds that a relatively small number of employers account for a large share of job opportunities in many American communities. In places where such labour-market concentration is highest, wages tend to be lower. These findings suggest that if Amazon is the only major employer in the cities and towns where it operates, the company can offer wages that are well below those of its competitors.
How much more evidence will be necessary before the likes of folks at Marginal Revolution accept the reality of business concentration and its damaging social and political consequences?

9. The competition-gone-crazy (or beggar-thy-competitor) story that is India's telecom market,
Reliance Jio’s entry in 2016, with never-before tariffs, has led to a calamitous fight for dominance over the last 18 months. It dragged down Airtel’s profit by a staggering 90% in the June-September 2017 quarter while Idea swung to a loss of over Rs 1,100 crore, 11 times worse than a year earlier. British telecom major Vodafone had to write down the value of its India business by a mind-boggling 5 billion euros, even as it worked a merger with Idea to take on its competitors.


“You have built a market that expects you to give 35 GB of data for a monthly price of Rs 400 [$6.25] per month. How will you make money?,” Kapoor said. “In the US today, you won’t get more than 3-4 GB data for $100 a month. Wireless networks are not built to give you 35 GB of data a month”.
10. Finally, this may be a simplification, but the coincidence between convergence of income shares of the top 0.1% and bottom 90% in the US and the rise of populism is striking,

Wednesday, January 17, 2018

India state capacity graphs of the day - police and judiciary

From a Livemint article examining the slow pace of India's criminal justice system comes this graphic about India's policemen to population ratio.
And this about judges to population ratio!
We are stuck in a really bad equilibrium with respect to government. We have the classic "starve the beast" at work. The intellectuals, opinion makers, and media have to share the major part of the blame for creating an environment where anything government has become stigmatised and any plans of expanding the "bloated" bureaucracy is scorned upon. Even government officials aware of the gravity of the state capacity challenge being faced have become captives of this ideological hegemony. 

Leave aside the likes of teachers and medical personnel, recruitments to important regulatory positions in the government (judges and policemen, building and food inspectors, drugs and school inspectors, and so on) have been either frozen or are being done very parsimoniously. This has coincided with a period of dramatic expansion of the scale and scope of responsibilities of these regulatory officials. The result has been to make an already overburdened bureaucracy even more so, and in turn appear even more inefficient. And this makes the demands for privatisation and outsourcing grow louder.

None of this is to suggest that we go ahead and hire people and things will be fine. It is not a good use of money to just hire people without more deep structural reforms of the bureaucratic system - process re-engineering, delegation of authority, right level of regulatory engagement, use of technology to make transactions more transparent and efficient, measures to contain politicisation etc.  But hiring more people should be right at the top of the agenda! There is just no need of being defensive about this! 

Monday, January 15, 2018

Uber and traffic congestion - two sides of the same coin?

I have blogged earlier pointing to the negative externalities of transport aggregators by way of increasing traffic congestion, drivers without social protections, and crowding in large number of drivers into a business whose commercial viability (especially in developing country markets) is still not established. 

But I am surprised that the case about traffic congestion is still contested.

Consider this. Cities suffer from traffic congestion. Public policy response to address them include congestion pricing, license plate auctions, high vehicle taxes, prohibitive parking fees and so on. All of these seek to make vehicle ownership and use expensive. In other words, reduce the number of vehicles on the road. There is nothing profound here - take vehicles off the road to reduce congestion! 

Now what does Uber do. It brings those idle vehicles into the road. In other words, more vehicles into the road. Exactly the opposite of what public policy tries to do to reduce congestion. 

So here is an innovation, which in the guise of enhancing efficiency (better use of investments already made), artificially increases vehicles on to roads, which are already choking with traffic, with limited prospect of any commensurate or reasonable accompanying infrastructure expansion. 

Note that the efficiency improvement argument too is biased - it takes into account the private benefit for the vehicle owner while overlooking the social costs from all the negative externalities. In fact, I will argue that far from promoting innovations that allow more optimal use of purchased vehicles, public policy should have made the vehicle ownership itself prohibitive. Having missed the first window, the least that one can do is to ensure that vehicle use is curtailed. Aggregators do exactly the opposite!

In simple terms, the likes of Uber increase our private convenience (we can easily summon a car at any time, not own a vehicle and so on) but at the far higher social cost of greater traffic congestion. 

The real efficiency improvement would be to encourage all existing taxis (individual and operators) to move into aggregator platforms (and individual taxis can even offer their own specific rates) and there is competition among the various platforms.

Sunday, January 14, 2018

Development graphic of the day!

Stunning contrast of Doha skyline between 2006 and 2016.
This really is one small powerhouse of a country which punches way above its weight!

(HT: Spectator Index)

Thursday, January 11, 2018

Priorities for a District Collector?

It would be a useful exercise to study the priorities of District Collectors or Municipal Commissioners across India. 

I will stick out my neck and claim that in general two priorities would stand out. One, effective implementation of important (as signalled by the Chief Minister or the Government) hand-me-down government programs. Two, pursue specific individual initiatives (mostly very narrowly defined) launched by them (which generally get dismantled by the successor). 

I am not sure that this is what they ought to be doing. Come to think of it, many districts are large enough to be equivalent to full-fledged countries. Imagine a world where the main priority of national governments (or Prime Ministers) is implementation of one-size-fits-all programs made by a distant multilateral entity like the United Nations. It does not need much convincing that it would be an extremely dysfunctional world. Yet we unquestioningly adopt the same approach for our Districts. 

Now, I don't want to get into the well-known debate on the pros and cons of program design for large countries. The objective is to figure out a more relevant set of priorities for the District Collector in today's world. 

It is useful for the government, at state and centre, to go beyond programs and signal to its officers a more broad-based set of expectations, with focus on outcomes. How about economic growth, job creation, human resource quality development, and a couple of issues specific to the district? How many Collectors have sought to address job creation or learning outcomes (beyond skill development  trainings or increasing attendance/enrolment) in a comprehensive enough manner? How about economic growth, affordable housing, and transportation planning and infrastructure for the Municipal Commissioner? How many commissioners have sought to address traffic congestion or affordable housing (beyond road widening and weaker section housing construction) in a comprehensive enough manner?

Unfortunately these are not the typical uni-dimensional projectisable activities (though the components may be) nor possible to complete within the two-three year duration that is the tenure of officers. Further, meaningful attempts at addressing them demands comprehensive and multi-pronged strategies and their long-drawn implementation, not exactly the sort of things that District administrations typically do or prefer.

It is therefore important that officers be encouraged to look beyond their limited tenures and focus on the big picture of creating the enabling conditions for achievement of each of the identified priorities. This involves preparing long-term action plans (or updating an existing plan, if required), mobilising stakeholder coalitions, dovetailing resources, institutionalising implementation protocols and monitoring frameworks, and so on. In other words, laying the foundations or creating the conditions for sustainable progress. They should view success or failure of their tenure in terms of achieving progress with the priorities.

We need to make these the aspirational goals for young officers (and not claiming success with geo-tagging toilets or completing biometric attendance in schools or planting 1 million saplings in a day or getting the highest matriculation pass percentage). How about signalling accordingly with the likes of Prime Minister's Award for Excellence? How about retweeting and FB liking of achievements in these new areas (not the latter)?

This paradigm shift cannot be achieved by individual District Collectors acting on their own in the prevailing regime. It will require State and central governments embracing this world-view of development and supporting the District Collectors as required both administratively and financially. For example, programs should have sufficient flexibility to allow District Collectors to shift resources across components (of the same program) or programs themselves, as well as tweak norms based on the local requirements.

It is also not possible nor desirable to achieve this as a uniform and abrupt transformation. The State simply does not have the capacity to do this with any reasonable degree of effectiveness in most districts. Once the enablers are in place, some Collectors, both due to their own commitment and initiative as well as favourable contexts in their districts, will show the way. Staying the course over a decade can help achieve a transformation in the thoughts, priorities, and strategies at the cutting-edge of government.

None of this is to deny the importance of effective implementation of government programs. In fact, given the extreme poverty in the vast hinterland, coupled with a withering state, good old trying to just implement hand-me-downs effectively can make massive difference in savings lives and mitigating social discontent. But we should strive to gradually make them by an large (except those that sync with the district's own long-term growth agenda) simple hygiene factors to be addressed systemically without expending too much of the energy and commitment of the District Collector.  

I have blogged here and here about a closely related skew in priorities - the excessive focus on redistribution to the marginalisation of focus on growth. While pervasive extreme poverty and the stage of development means that redistributionary policies are important, the latter is no less so. In fact, if the former is about getting through life today, the latter is about creating the conditions for the world of tomorrow we aspire for. In the absence of the latter, we end up having more of today tomorrow too.