Sunday, October 31, 2010

Huge Spending Cuts: the right way forward for Britain

David Cameron, the British Prime Minister, recently unveiled a series of hefty cuts to public services and the welfare system in the UK. The news has dominated headlines here ever since.

The reason for the need for cuts is that the UK’s deficit is apparently at a record high (£180bn, same as that of Greece), something that everyone is blaming on the overspending of the former Labour Government.

For me, it has been amusing and bemusing watching this news (and sensational headlines) about the new “austerity drive", having just returned to live in England from Mumbai.

We were told by Cameron that the welfare budget was to be cut by £18bn. The total benefits being handed out to a single family are now being capped at £26,000 per year (a salary an Indian could only dream of and one that most Brits have to work five days a week to get.) Here in England, the people who receive these benefits don’t need to work and have all this money all handed to them in a cheque. Often they are perfectly healthy and able to work, but they simply don’t need to, since the Govenment benefits are on offer. We are hearing on the news now that there are families in London that have been getting £400 a week in housing benefit alone, living in homes in central London, that no ordinary working person could ever afford. Some families in London get £50,000 a year in housing benefit, more than double the average salary in the UK. And that is just their housing benefit! They cash in other benefits on top.

I don’t think India has a welfare budget, like the UK does. In the UK anyone that doesn’t feel like working, doesn’t have to, and can get £65 a week in Jobseeker’s Allowance from the Government just to stay at home and watch daytime TV.

Another change Cameron wants to bring out is to raise the age at which men and women can claim a state pension to 66 here. Again, I am not aware of a state pension in India, and the country seems to be ticking along quite nicely. Why? Because people there rely on their families, not the state. The French meanwhile, are torching cars over their state pension age going up to 62!

If an Indian were watching the British headlines, that I am watching, they would be simply aghast at the amount of "freebies" (or benefits) a Briton can get. We have Jobseeker's Allowance, Housing Benefit, a Carer’s Benefit (if you care for someone); free access to hospitals, medicines, treatments ; free schools; a cash allowance just for having a child; cash for fuel for pensioners; free bus passes; free school meals, all kinds of subsidies for the unemployed…the list goes on. Our income taxes are paying for all this. And now we are being told that as we are in too much debt, they all have to get cut.

While I agree some benefits are essential (free health and education, free fuel for pensioners, incapacity benefit for the genuinely sick or injured etc), some are not and too much of some is very much a very bad thing – as it creates a layer of society that simply never works and lives off the state. Plus it encourages fraud. There are thousands of people that obtain incapacity benefit through fraud - cases of people being caught out are forever being reported in national newspapers.

What no one has thought of is what about getting all these people to work! A motivation for that would be having no money. But by giving them so many benefits, right now that incentive is withdrawn from them.

Perhaps if these people went out and worked, they would not need to rely on the state. They could pay their own rent. Then the money we are ploughing into benefits could be used on defence and anti-terrorism instead.

Can you imagine if India had all these benefits? It would go bankrupt overnight. There would certainly be no maids or road labourers. No, they would all stay at home living off state benefits instead as there would be no incentive to work. No other country would have been able to find 1,000 labourers in a day to work on the Commonwealth Games stadiums for a pittance, as the Indian Government did shortly before the Games opened....

Other cuts Cameron has announced include:

The Foreign Office withdrawing its funding of the BBC World Service. This needs to be funded by the BBC now instead. Sounds like a good idea to me, since the BBC is funded by compulsory TV licenses that anyone with a TV has to pay for anyway. Not quite sure why the Foreign Office was ever funding it.

The Transport Budget needs to be cut by £1.1 bn meaning that commuters (read: hard-working people paying off mortgages) will be forced to shell out even more on rail fares, that are already exorbitant. I am totally against this, as apart from anything, it is hardly going to promote greener living, and will hit those on low incomes as well as on high incomes. This is a matter which England would do well to learn from India on. I am not sure if rail travel is subsidised there, but it is amazingly cheap, meaning that anyone in India can afford it. And accessible transport is a vital ingredient in anyone’s quality of life. I remember how in May all the maids and watchmen would flock to their villages on trains. In England such distances by rail are far too expensive for anyone other than a fat-cat investment banker.

The Arts Budget is going to be cut by 30 per cent too, which I am also against as the Arts (theatre, films, museums, creative writing, fine art etc) are the heart and soul of Britain, something the British are proud of and a major reason why tourists visit. Many of Britain’s theatres, museums and films are currently subsidised by the Government. One could argue though that these organisations could be more efficiently run if their belts were tightened and could look to be patronised by private business instead.

University fees look set to double by 2012 and will no longer be capped for British students at £3, 290, which I am also against. It would be better if the Government forced universities to forge better ties with industry and make their courses more vocational, in my view, than simply withdrawing subsidies.

The Schools and Health budget remain unaffected, which is good and The Queen is being forced to cut her spending by £6 million.

Bizarrely, despite all these cuts, Britain, in a huge philanthropic gesture, is going to increase its overseas aid by 40 per cent, we are told. This has raised a few eyebrows.

In Mumbai, on the contrary, I saw barely any public services. The police and fire services aside (the former, which you may have to bribe, I am told), I can think of few public services, apart from road building that existed in India. To my knowledge, healthcare and education is not free for most people. (I think there are a few government-sponsored vernacular schools, but these tend to cater to the children of slumdwellers and the homeless, most of whom aspire to sending their kids somewhere better anyway. I am not aware of any free healthcare at all, as we have in the UK.) I don't remember going to any government-sponsored art galleries either, although Mani Bhavan, the highly inspirational Gandhi museum in Mumbai may have been free. Do you have to pay to go to the Jehangir Gallery? I can’t remember but I certainly don't remember seeing anyone collect the rubbish or sweep the streets. Oh, the army and defence - yes, there is a lot of money invested in that in India, for which we can be thankful. The army is very good (and the men super hot.) Airport security in India is unrivalled. But apart from defence, I am not especially aware of what public taxes in India are spent on. I don't think many Indians are either which is why there seems to be a national subversive attempt to not pay any taxes, or pay as little as possible. "All politicians are corrupt," is a comment often made in India. I do not agree with this as I have no evidence either way. Indeed the MP expenses scandal in the UK has exposed the "white-collar" corruption that exists in Britain.

And this is not the point. The point is that despite there being barely any public services in India, (and a hell of a lot of tax avoidance, which is not possible in the UK - the Inland Revenue catches everyone), Indian people do pretty well. Indians survive despite having none of the benefits on offer in the UK. One reason for this is that Indians depend much more on the family and themselves than the state. In my previous blog, Expat on the Edge, I touched on some of this:

Now, I am not for one minute advocating England axes everything and we end up like India where public services are woefully lacking; but there needs to be a happy medium between the two extremes. The worst part about Britain wasting so much money on benefits, is that there are plenty of jobs in the UK! Plenty of them. And imagine if half the money we currently ploughed into benefits was instead ploughed into more job creation and investment in British business!

At least in India there is a sense of and pride in working and saving. The ideology in India is that if you want something, you have to work for it and save to get it rather work out how to scam a benefit out of the government for it, or put it on a credit card. Perhaps a study should be done on the impact living in a society like India has on the individual and his attitude towards work, earning a living, his family, and his dependence on the state. It could reveal some interesting findings that Britain could learn from. Being born into a welfare state could  perhaps not be particulalry good for the average individual.

I wonder if as we barge forward into the 21st Century, with all the globalisation and competitiveness that comes with that, whether the welfare state, such as the one Britain currently has, can afford to continue, or whether nations like Britain will have to change and learn from countries like India.


IndianBlogger said...

Good blog Naomi. I think you have brought out the contrast between the two countries well (even though your experience is more or less around Mumbai).

I have also, as a young Indian guy growing up to earn every penny - and as you capture correctly - work hard and buy it rather than hope it is gifted by the State, wondered how 'benefits' and 'social security' worked.

I am sure like any other good thought, the motive was good, but over time the few (to many) took up the opportunity and abused the system to the fullest. I am glad that in my life time I see that time has come for them to pay!

I always was never envious of this system and kept saying to myself, that dont even think about it as something good; I would rather work hard and live than be a totally dependent, non creative, non hardworking person sitting around all day.

You may have also answered the question many would have about absolutely no 'domestic' help in these countries - well why would they wash clothes or cook when they are getting a cool 50k a year!

On the Indian context, I am not sure about museums - though I am sure the entrance tickets are nothing much - there are Government Hospitals and Schools which are either free or with very low fee. Medicines on the other hand are not free (which is strange I think).

Also, most private hospitals are required to provide a certain % free care to the under privileged - but in reality it never happens.

I dont really agree with your comments about everyone being corrupt and there not being any public service and streets being filthy - well it could be in parts or most, but NOT across cities or country - so kindly phrase carefully cause anyone reading and not being to India will think India is such - which it is not.

Though I have no comments on your analysis of what is right and what is wrong in cuts - the 40% increase in Aid (part of which will be to India surely) - is still not enough contribution by the UK in terms of its commitment along with other International community (not that most are giving so much).

I am infact impressed with the PM to take such a bold step. Aid is required - and reading of what kind of 'disguised' aid UK was anyway handing out to its people, 40% will be very easily managed by the UK.

This point relates to your views about the 'needy' requiring help - so this is a good step in this direction - and don't forget part of the Aid flows back to the UK in terms of the Consultancies and studies etc that UK firms carry out for the aided countries (of course winning the contracts through proper competition etc).

I must say I totally enjoyed my train rides in Scotland - not so much the tube in London though - and it would be sad if most people cannot afford it - this is surely some one needs to look at.

Ending by thanking you again for another thought provoking blog.

Take care

projenator said...

What I am really enjoying and appreciating about Naomi's writing these days is her new found balanced perspective. It took myself thirty years and living in both the east and the west to realize this, so Naomi, you ain't doing too bad. My mission fulfilled !

Interesting article I just read in the ET which reminded me to check Naomi's blog. Suit to Soup:Indian MBAs working as waitresses in the UK. This happens in the US as well, in a much lesser scale, maybe not enough to make it to the headlines.

BTW, with Republicans (conservatives) taking control of the house, US is headed for a legislative gridlock, the next couple years.

projenator said...

I was having an email discussion with some of my friends yesterday. One of them summarized the mid term reversal very well, which I copy and paste below. This is just to show that Americans too are going back and forth in their quest for the right balance.

"Speaking of Obama, Americans were expecting 'magic' :-) The nation is
very passionate and dedicated but still has a teenager's soul within its
National Essence. Teenagers are happy go lucky, impatient, think they are invincible and
have a youthful and somewhat infectious arrogance! And they like magic and
Shazaam! ;-)

All that mantra about CHANGE CHANGE CHANGE got them chanting and hoping for
magic, they did what was unthinkable for many in USA and abroad! They brought to
power Obama. Barely few years later, when the magic that they were expecting in
their juvenile and jovial hearts did not happen and most of the 'pocket money'
was spent, Americans seem to be going back to traditional ways and mentality and
the recent mid-term reversal (Poor Nancy is out of a job as a consequence!) is
the consequence. Now in a dance (and war too!) sometimes a retreat and a step
backwards is not necessarily a sign of failure, as long as it ends up in
progress! Let's see what the near future has in store."

I am expecting a legislative gridlock and frustration. Remember, change is always painful and frustrating, that's true about change anywhere and everywhere.

Mick said...

Come ze revelution we will remeber that you wrote that, you see if we don't!!!!

Anonymous said...

In India, the only people getting freebies are bureacrats and politicians (babu and neta as you know by now from your stay in India). The rest of the country goes to work 6 days a week, battling a hopelessly inadequate public infrastructure to mention nothing of heat and pollution, so they can pay for the posse of free security guards, free cars, free cell phones, free everything for these two categories of human roaches

While doles from the government will always be misused in any country anywhere in the world by a few, at least the majority can feel safe knowing that the taxes they pay in their youth and middle ages will be of help after retirement in the form of benefits. What does the average Indian have to look forward to after retirement? All the taxes he has paid over his work life has gone towards providing a lavish lifestyle to the babus and netas. What will happen when today's strong point about India (50% of the population below the age of 25) becomes tomorrow's bane (when this 50% retire) because there are no benefits and social security?

Mick said...

Firstly Naomi I would like to correct a misconception that has sprung up regarding the cause of the cuts. IT wasn't the out going Govt fault it was the bankers nobody else. Secondly if there are no jobs to go to then it make no difference if you take all peoples money away, and you know the cost of bus fares. These cuts and the way they have been driven through is ideological and nothing more. Gove the education minister right at the start of this had to have emergency powers rushed through parliament so that thousands of FREE school could destroy the state schools they would replace, so far just 20 have been proposed.
This is nothing but a sustained attack by the rich basically saying "If you think Thatcher was bad you ain't seen nothing yet"

Still NO tax dodging legislation, Ashcroft is still a lord, Vodafone still owe £1.25bn tax, but it's the poor benefit claimants you point your finger at just as Osbourne wants you too. Still when all the poor are driven out of the cities then I expect they will find room in the villages wont they?

projenator said...

Oops! Looks like it's now America's turn to get nasty after the Australians.

Mick said...

I feel i should also remind Naomi of the last assault on the poor by the Tories, perhaps she was a bit young them and it didn't sink in. It was called the Poll Tax for those of you unfamiliar with the Tories and their poll tax it went like this, If you owned a multi-million pound home and lived in it by yourself you paid less than a family living in a council flat. NO ONE said this was fair least of all them but they had a 140+ majority. imagine what they would have done this time with a majority like that this time. The only good thing to come out of this will be the demise of the Lib-Dems.

Oh by the way Mr Cameron now employs a personal photographer for himself and a stylist for his wife AT THE TAXPAYERS expense still we're all in it together, at least when we hang the Tories they will certainly be in it together.

Please Naomi don't compare the benefits we get to what the average Indian gets we only get these benefits to keep the rich pigs alive and rich

Mick said...

But I do think it's nice that everybody is in it together, CEO's for instance their boardroom pay went up by 55% this year but hey we're all in it together. Then there's those oh so poor teachers at private schools like St Paul's, Eton and lets not forget Harrow they have their pensions subsidised by the taxpayer to the tune of £131 million per year oh it is nice to see the poor receiving help. Naomi the real world needs you.

Yes stop the benefit of the work shy, after all there will be plenty of jobs going. But they will have to compete with the 1.000.000+ made unemployed by the scum that runs this country now.

Mick said...

By the by there was an advert for the Mumbai Yoga Club last time i logged on to this site, who says people don't read your blogs?

Anonymous said...

"...there are plenty of jobs in the UK! Plenty of them." Really? The numbers I've seen say there's an average of 7 people claiming Jobseekers Allowance for every job vacancy in the UK, rising as high as over 40 people per vacancy in some parts of Scotland and Wales. Considering many unemployed people aren't allowed to claim the dole (i.e., if you're living with a partner who works), the real numbers are probably much higher. Where exactly do you suggest all these unemployed people find work? What if their families are too poor or dysfunctional to help them?

Anonymous said...

"...there are plenty of jobs in the UK! Plenty of them." Really? The numbers I've seen say there's an average of 7 people claiming Jobseekers Allowance for every job vacancy in the UK, rising as high as over 40 people per vacancy in some parts of Scotland and Wales. Considering many unemployed people aren't allowed to claim the dole (i.e., if you're living with a partner who works), the real numbers are probably much higher. Where exactly do you suggest all these unemployed people find work? What if their families are too poor or dysfunctional to help them?

projenator said...

If someone wants to learn more about tax evasion in India, here's a nice educative article. Not everyone in India evades tax but most businessmen whose spoit brats you find splurging everywhere from high end malls to nightclubs are the usual suspects. They flout everything in fact, it's the businessman politician nexus just like it is in every country. One gives, the other accepts.

Mick said...

The latest wheeze by this Govt is selling off our national forests, Naomi will say "nothing wrong in that" except they when left to the dependents of said purchasers will not attract Inheritance Tax. This is a scum govt saying to rich pigs buy our national silver and you won't have to pay tax on it. while we demonise the poor.

Of course the welfare state can carry on all you need to do is put tax up to 95p in the pound for ALL rich pigs.

Mick said...

Cameron got a taste of things to come yesterday did he not, by the time we have finished the Tory party will be an illegal organisation.


Varahamihir said...

I read this blog with great interest and I find it surprising that someone who was associated with left wing could actually fall for the trap that bourgeoisie lays down. While billions of dollars bailout is given to the companies to pull themselves out of the hole they themselves dug and on the other hand the working class is asked to make sacrifices in whatever little benefits it receives from the state. All this talk of people living off welfare and doles is rubbish and diversionary tactics. Yes there are a few parasites who take unethical advantage of such schemes but there are thousands others who genuinely need it. Perhaps the government should consider developing a system that actually prevents the misuse of welfare funds. If the cost has to be cut, then why not start from the top i.e. with the Queen and the royal family? They do not work, they do not have face hardships faced by an average British citizen, yet their lifestyle is paid for by the hard working taxpayers. Should they be allowed to their entitlements just because of their family lineage and history? Should we not cast off this blatant example of medieval-ism?

The striking French workers, students, intellectuals and citizenry have my full support on pension reforms that has been brought by this right-wing retard Sarkozy. He is the same guy who gave himself a more than 100% pay raise when he got elected. Took campaign funds from L'Oreal owner Liliane Bettencourt and then helps her to evade millions in taxes (resulting in loss for the state exchequer) and at the same time wants to cut pension benefits and raise the retirement age for French workers to cut costs for the state.

All this talk of cost cutting measures being taken and austerity drives being launched, is nothing but a hogwash by politicians living off the money of the rich and the wealthy.

Mick said...

Well put Varahamihir, there was an article regarding cuts being in Somerset Naomi's home county. £145.000 from the arts budget cause taxpayers money has to be saved from the proles even though they pay it. But they don't mention the millions of taxpayers money that comes to the landowners of Somerset from the EU, while Cameron tries to get the budget down he doesn't say as a landowner how much less if anything he's prepared to take. it's only the little engenders that want out of that, while the Tory landowners are going give me, give me.
Perhaps Naomi is to young to remember Thatcher stopping the FREE cheese, butter and meat given away by the EU to the people on benefit when there were 3.000.000, she said and I quote "This must stop because it is socialism by the backdoor" this was when subsides had built Butter mountains etc with our money. Now the money just goes to the rich pigs.

Naomi Canton said...

Hey guys,

Thanks for all your fantastic, varied, interesting comments. For once I feel as though everyone has been able to express their views, and disagree with me if they choose to, in a restrained adult manner
Well, here are some responses…to some of you!
@ Varahamahir. Sounds like you live in the UK as you are pretty involved in the issues at hand. My understanding is the Queen is being affected by the current austerity drive as part of the budget cuts involved her reducing the Royal Household spending by 14 per cent and her grants are to be frozen. She has agreed to cancel the Buckingham Palace Christmas Party and not redecorate some of the state rooms. One ought to bear in mind that contrary to public perception, the Queen only takes a small proportion of the £6.6 billion income from the Crown Estate, (her portfolio of land, forests and property that she owns) and the rest goes directly to the Treasury/The Government. All the Queen gets is a fixed annual payment from the Government in return. I think the Royal Family would dispute the allegation “they do not work and “their lifestyle is paid for by the taxpayer.” The Queen has engagements and public duties all day long that take her up and down the country and she is extensively involved in fundraising; Prince William is a Royal Air Force search and rescue pilot and an officer in the Army. Prince Harry is training to become a pilot in the army air corps. He has also served with the British Army in Afghanistan. I’m amazed you support the striking French workers – striking over the state retirement age being put up to 62!! So, what – ours is going up to 66, and it’s fine as that is most likely the age people will have to work to anyway in future – as there is not enough money in anyone’s pension pot to retire before then. Currently the state retirement age for women is 60, and I’m a woman and I’m not bothered by the increase. I’m not torching cars. Any resort to violence over any matter is wrong, whether it is the retirement age or student fees. I don’t know whether it was reported on in India but last week students from across the UK descended on London to oppose tuition fees and ended up trashing the Conservative party headquarters, smashing glass and setting fire to it. It was utterly wrong and so is torching cars in France.
@ anonymous. Yts, there are plenty of “jobs” in the UK, by that I’m, referring to jobs at McDonalds, CafĂ© Nero, chambermaids in hotels, in shops, piazza places etc…I’m not saying they are all sought after careers such as working at the Foreign Office or BBC but we do have plenty of jobs. There is no excuse for any able-boldied healthy person of legal age not to be working in the UK, even if it is not in their dream job. If someone is disabled, sick, a carer or has a mental illness then, yes, they deserve support from the, but otherwise why not work? There are as you rightly point out people form dysfunctional backgrounds, drug addicts, criminals and people with no motivation, and I guess these people need to be dealt with differently, but handing them benefits is possibly not the solution. (Certainly not for drug addicts, for whom re-hab would be of more use.)

Naomi Canton said...

Mick I do agree that the banks need to be far more heavily penalised for their role in it all and that bankers’ bonuses should be axed completely and their salaries capped, but people tell me this is against market forces and the banks will simply uproot and set up their HQ elsewhere so I don’t know what the solution is, but it does seem obscene that bankers can earn so much, when hospital workers, doctors, teachers, ambulance drivers and so on, do not. There is something wrong and maybe they should be forced to pay higher taxes.
They certainly seems to be make a killing out of selling pensions and yet normal consumers don’t seem to be getting good results from pensions, so there is something wrong somewhere. There should probably be a Government review into the whole way banks operate and how they make money from pensions. I’m glad to see India is about to investigate money fro its citizens that is being stashed away in Swiss bank accounts.
@ anonymous you make some interesting points about the alleged misuse of public money in India. I know there is a Provident Fund – does this not hep with retirement planning? I do agree that some welfare benefits need to be introduced in India (though not as many as we have in the UK – that would kill India). I also think the rich in India should pay way more taxes than they do (taxes are way too low at the moment) and anti tax evasion needs to be improved drastically in India. With a population as large as India’s, there is a hell of a lot of money that could be collected in taxes to improve public infrastructure (and pay for benefits like a state pension.) It is refreshing to know India is investigating Swiss bank accounts where lots of money from rich people in India is stashed away.
~@Projenator - I don’t think there is anything wrong with an MBA student working as waitress. In The UK we all do that at the beg of our careers/in our holidays/when we graduate and so on. You have to start somewhere and all work experience enriches you and make you a better person. In the UK all work experience is valued and counts. It is better to work as a waitress than not work at all (something Bollywood strugglers might learn from.)
@Indian blogger I’m surprised you think Britain and other countries should give even more aid to India. Why is this? Are there not enough rich Indians and growing middle classes to pay taxes there so that it can sustain itself? Does it really need aid when it has nuclear power, nuclear weapons and keeps claiming to be a superpower?
Here is a link stating India has more money in Swiss bank accounts than any other country. Of course, I do not know if the claims in the piece are true.

I have nothing against aid. But I saw some letters in the national newspapers from readers wondering if it was wise to increase aid so much when Britain was facing so many cuts, including in the defence budget at home – but that is necessarily my view.
I do take your point that some cites have far better public services and infrastructure than Mumbai, and thanks for pointing that out – they would include Chandigarh, Ahmnedabad, Pune, Goa, Cochin, and Im sure many others. I have not travelled to enough of the cities to be able to mention them all, so please do add to this
@Thomas I’m a Catholic, but like and am interested in all religions, and even attend all services. To me it’s more about believing in God or not, as I believe the same God is present in all religions.

Mick said...

I agree with what you say in the above about the wunch of bankers (Wunch being the collective noun)perhaps the deregulation of the bankers by yes the Tories has something to do with this problem of bonuses etc.
Interestingly Mr Cameron yesterday said the he has stopped the likelihood of social unrest by capping housing benefit because people earning £20,000-£30,000 a year will riot because the poor are living in houses they couldn't afford. On the same day he announces he has spent £55,000 of taxpayers money refurbishing his office, surely this alone proves that these cuts are not about saving the economy but are simply ideologically driven.

Mick said...

Please Miss, Oh please Miss regarding the first para of you reply Miss it wasn't us,Miss, it was them other boys Miss.

Anonymous said...

Really interesting article. Hope to see same more!

Anonymous said...

Interesting for me//

jusAnotherThinker said...

As an Indian its been interesting to read both your blogs. And again as a visiting Indian to UK recently it was very surprising to see the violence unleashed in the streets over the tuition hikes. Watching it on TV looked little different from strikes seen back home.
Yes truly, I am constantly surprised by the amount of freebies offered in most European nations, not just the UK. I guess that is the reason why most European govts are so much in debt. But you're mistaken to assume that the Indian State does little welfare; its just little compared to yours.
In India most of the tax payers money does infact go to welfare schemes - ranging from 100 days assured employment(NREGA), to fertilizer and gas subsidy, to loss making state run enterprises, to subsidies in railways(yes, the Indian rail tickets are subsidised, and most of the exodus you describe do not bother buying those either) to education - free primary and heavily subsidised college education.
But despite many welfare schemes, our bane here is the corruption. One of our political leaders recently remarked that out of every allocated rupee only 5 paise reaches the recipient(1 Re = 100 paise).
I cannot but agree with you on the observation that living in a State like India does make the people more self reliant. A thought that my expat boss here(a Norwegian), agrees with. According to him, places like these make one more hardworking and competitive. And that is why he's made sure his kids move around with him wherever he goes.