Safety, a Cost and an Opportunity

The lack of safety is actually all-pervasive and runs deep in the Indian system. There is a need for the expansion of safety features in constructions, transport arrangements, working conditions, scavenging, public places, tourism, hospitals, educational institutions, and so on.

And, of course, there is a need for air, water, and food that are safe. Also, we need greater safety from “natural” calamities. Finally, citizens require safeguarding from random “factors” such as stray dogs on the streets, road rage, gas leakages, stampedes, spurious liquor, hacking, water logging, fraud, sexual and non-sexual harassment, rape, messy electrical wiring on roadsides, trolling, encroachment, loan sharks, and so on.

Higher safety standards have a cost. But this holds true at the microeconomic level. At the macroeconomic level, there is actually an opportunity.

It is true that when an entity spends a little more on safety, it spends less elsewhere. With implementation of higher safety standards, primarily, it is the profits that take a small hit there. But new jobs are created and significant profits arise in the industry. So, there can be an overall gain.

Though the change in safety standards needs to be carried out incessantly, it should be a gradual process. There is a need to deal with different sectors one by one. And, the legitimacy of the economic reform needs to be communicated well and on an ongoing basis to increase acceptability.

Overall, higher safety standards can contribute to an increase in gross domestic product (GDP) and economic welfare. This rise in welfare is over and above what is attributable to a shift from the prevailing suboptimal level of safety. To conclude, if the public authorities raise safety standards carefully, the public can be safer and the GDP can grow a little faster, not slower.

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