Thursday 9 July 2009

Profit Centre Based Governance in India

The current Administrative and governance system followed in India is out of touch with reality. We inherited an archaic system from the British, whose only objective was to control the whole of the country from a single point. Initially, when India got independence, the need of the hour called for a strong Centre.

But times have changed. The need of the hour is more devolution of power. And I am not talking about Panchayati Raj as it is practiced today. A growing country of India's size just cannot afford to have a Centralized Plan thrust down the line.

We need to have a radical rethink in terms of having Profit Centres. When we talk of profit, I am talking about economic, social and cultural profit. We need to identify thousands of profit centres across the country and ask them to produce budgets, which then can be compiled at various levels. In short, I am calling for a bottom up planning than a top down one, but with a focus on profit.

If this can work for giant global MNC's, I dont see any reason why it cant work in India.

For example, each village can be a profit centre, ditto a District as a whole. Air India, Railways, Power Plants, Sports Authority, Educational Institutions, Municipal offices , why even the Prime ministers office should be a profit and cost centre. We need to take out of our mindset that profit is a dirty word and that we can make investments without an IRR of at least 10%, plus the social and cultural returns.

Your thoughts on this are welcome

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