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A Nosy Government

Harsh and I have co-authored a piece on how government interference across industries hamstrings India’s economic performance:

The irony is that farmers and billionaires alike suffer the same fate at the hands of a nosy government that wants to needlessly interfere in economic activity. Farmers, of course, have it even worse – the government retains so much influence over their industry that they can’t even price their products themselves. The romanticization of poor farmers prevents us from thinking of them as private sector participants. Various agricultural commodities in India are still subject to strangulating regulations on aspects such as pricing, transportation, packaging and point of sale. Labour and energy markets for farmers continue to be distorted. Inefficient employment schemes make labour expensive during harvest season. Power availability remains inconsistent because most states – Gujarat being a notable exception – do not have the political courage to say no to free electricity. Of course, the effective price of something which is not available is not zero, but infinite.

More here.