Health Economics

STEP BY STEP THE AUTHOR TAKES US THROUGH A MASTERL ANALYSIS OF CONSUMER BEHAVIOUR, ECHANGE AND MARKETS, THEORIES OF THE FIRM AND EFFECTS OF INTERVENTION IN THE MARKET AND WELFARE

– Book Review by P. P. RAMACHANDRAN

A ccording to a Senior Executive of the Reserve Bank, " Shri. Pendharkar had a superb career but the work he did after retirement is even more praiseworthy. I well remember his book on the UTI. It sets out the genesis of the problem that hit the UTI in 2001." Here is " How". V. G. Pendharkar was the Alternate Executive Director of I M F and World Bank, Member - Secretary of the Banking Commission, first Executive Trustee of Unit Trust of India, Executive Director of RBI, Director of ECGC, Director Industrial Finance Corporation, Chairman Committee on the future of National sample Survey Organisation, Leader Indian Delegation to ECAFE Conference on Asian Currency Union and Chairman of Working Group on the System of Bank Inspections. In addition to holding such highly coveted posts he was appointed by the IMF as Adviser to the Bank of Tanzania. His first book " Unit Trust of India- Retrospect and Prospect" is the most authoritative account of the history of the formation of that unique institution and provided a cogent analysis of the UTI's Flagship " U. S. 64" and the serious problems it was riddled with. The book also gave vital guidelines for restructuring the UTI. P. V. Sukhatme, founder of the Indian Society of Agricultural Economics, requested Shri. Pendharkar to look into the subject " Heath Economics" - and teach it at the newly created Department of Health Economics of the University of Pune. At the young age of 70 Pendharkar, singlehandedly, prepared the course for the Masters degree programme. He did all these at his own cost. He used to drive in his own car and take classes for this course. The book under review is the result of these efforts. He completed the book at the age of 86! During the period 1993 to 1995, he taught Mathematics and Statistics to MA students of the Gokhale Institute if Economics. What better exponent of " Health" and " Economics" can be there than Shri. Pendharkar? The book is divided into two parts. The first part is an introductory course on Economics for students and deals with the basic definitions of economic parameters- the evolution of ' economics' from the earlier ' political economy'. Step by step the author takes us through a masterly analysis of consumer behaviour, exchange and markets, theories of the Firm and effects of intervention in the market and welfare. All propositions are explained with admirable precision and one notes the economy in use of words. With the help of charts and diagrams Shri. Pendharkar makes the esoteric subject Economics easily comprehensible. This undoubtedly is the result of a lifetime of coherent thought and rigorous analysis of economic concepts and extraordinary ability to communicate.

The second part of the book is devoted to Health Economics. Beginning with an impressive analysis of the problems, the author goes on to identify technical problems in measuring health. Three chapters are dedicated to an analysis of the problems from the point of view of the Individual. What follows is a critical study of backward linkages of health industry, manpower supply and medicare provisions - ranging from general practitioners to hospitals. The author devotes four chapters to cost benefit analysis, appraisal of an appropriate policy for the country as also cost effectiveness of health programmes. There is abundant evidence of Pendharkar's love for Sanskrit by his references to ajurveda, Sushruta, Kalidasa and other writers.The author has succeeded in providing a very useful framework for further research on ' Health Economics'. Each of the fourteen chapters has valuable references, which can be used with profit by students and scholars alike. This is truly a source book on this important subject.

FPJ   

Queues set to get longer at PSU bank ATMs

New Delhi: The wait outside public sector bank ATMs is set to get longer with banks putting on hold plans to install new cash dispensing machines in the wake of a government decision to centralize procurement. While the finance ministry has informed banks about its intent to go for a common purchase contract for all public sector players, it is yet to firm up the modalities, including the agency that will undertake the procurement. In addition, a bank chief said that the government is looking to put in place a mechanism through which banks can mutually decide the locations for new machines.Given the experience in metros and big cities, where multiple machines can be found in a building or a mall, this move is aimed at avoiding duplication in smaller towns and rural areas. So far, each bank independently decided on setting up branches and ATMs based on its estimate of business that the machine or the outlet would generate but this is the first time that the government has decided to step in. Public sector banks between them generate around three-fourths of the lending and deposit business in the country although the use of ATMs is much lower. For most state-run players, around 20% of the transactions are done through ATMs, while it hovers between 30% and 40% for the new generation private sector players.

TOI

Common KYC for all fin products

New Delhi: In a few months, you may be able to use your know-your-customer (KYC) registration with a mutual fund or depository participant to open a bank account or purchase insurance. Financial sector regulators are veering around to a common KYC norm for investors across financial instruments — stocks, bonds, bank deposits and insurance and pension plans. While Sebi has already decided to move to a common standard for all products regulated by it, there has been discussion with other regulators on the subject. An official told TOI that while there is broad agreement on the issue, regulators wanted to try the Sebi experiment and are looking to plug into its system once it stabilizes in a few months. “But that’s a few months away. It’s not happening overnight,” an official at a regulatory agency said. n due course, KYC done by one of the financial sector players may become the enabling tool for all products. The issue was discussed at a meeting of sub-committee of the Financial Stability & Development Council, an interregulatory co-ordination mechanism set up last year. A transition to a common KYC will come as a major boon for individuals, who have to submit all the documents — from identity proof to address proof — even if they open a second account in a branch in which they have a bank account for years. Similarly, even if you are buying a second or a third insurance cover from the same company, the entire documentation work has to be done all over again, which not only increases the procedural burden but also enhances transaction cost. At present, it is only in case of mutual funds that one KYC clearance entitles investors to put money in multiple schemes. Over the years, with money laundering concerns on the rise, even KYC compliance norms have become stricter with individuals asked to periodically submit fresh documents to conform with the guidelines.

TOI

'A central act alone can save microfinance'

.....The government machinery had resolved to a negative propaganda, saying MFIs are bad and hence, loans need not be repaid. Now, the same machinery has to be deployed to say MFIs are RBI-regulated institutions and repayment of loans is a contractual requirement, and borrowers should abide by this......

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Transforming downward spiral of Microfinance in India

... RBI, the so called watch dog of financial sector completed its duty by merely warning the MFIs on periodically, no strict step was taken against the greedy MFIs and money lenders......

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‘RBI should intervene to check FX volatility’

As if the economic policy managers did not have enough problems coping with the Indian economy in dire straits, the sharp rupee depreciation this week comes as the latest one.  Key policy makers over the last couple of days have expressed concern over the developments but a consensus seems to be lacking within the policy establishment over how to deal with this phenomenon.  Chairman of the PM’s economic advisory council and former RBI governor C Rangarajan said Saturday the central bank should intervene to check the depreciation of the of rupee that has fallen to Rs 51.30 against the US dollar, the lowest in 32 months. “The RBI should intervene when volatility in exchange rates is high”, he added. This comment was in contrast to the view expressed by RBI Deputy Governor Subir Gokarn, who said it might be risky for the RBI to use forex reserves to defend the rupee given the volatile global economic situation. Some analysts have criticized the RBI stance on the grounds that by not giving any signals to defend the rupee it was fuelling the fall of the rupee.  Meanwhike, Finance Minister Pranab Mukherjee said Saturday the RBI was “keeping an eye” on the situation. “The RBI is keeping an eye on it (depreciation of rupee). They are watching the situation at the appropriate level,” he said.  On the question about what would be a comfortable rate of exchange and the likelihood of intervention by the central bank, Mukherjee said, “I’m not guessing anything and I’m not finding what is a comfortable level”.  There has been speculation that the RBI has asked public sector banks to release dollars to arrest the fall of the rupee.  Although several emerging market currencies have fallen, the rupee is the worst performing currency in Asia falling by 14% this year and from its high in July. Analysts are predicting that the rupee may fall further to test its lows of Rs 52 hit in 2008. The rupee depreciation is being exacerbated by the drying up of inflows into India, both in the stock markets through FIIs and in projects via FDI. This will have an adverse impact on oil prices in India by pushing them up further. Moreove, all imports will become costlier.

Chandigarh Tribune

Bank of Baroda tops the BT-KPMG Best Banks Survey of 2011

...But at a time when central bankers and governments around the world are striving to ensure that banks don't become too big to fail, size is certainly going to take a back seat. .....

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Do Lenders Ever Stand Up To India Inc?

... This is more like an environmental sickness- good projects will also find funding difficult, will also find repayments difficult- so RBI should take a more holistic view and evolve a counter cyclical policy so that when the bad time comes, you try and reduce the rates and all that...

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Current measures against inflation are short-term: Basu

...The Government and RBI expect inflation to come down to around 7 per cent by the end of the current financial year.....

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Aadhaar-MGNREGA experiment to be launched in Ramgarh

...Soon, however, the RBI amended its order saying that even while accepting UID numbers, banks should secure other documents for proof of identity and residence.....

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