Rajesh K. Sharma
The concept sounds funny as to how a thing which is uncertain can have a cost. However, going deep into the concept will bring to the fore that most of the time public especially the inhabitants of developing nations bear this cost of uncertainty at each and every step of their lives throughout.
According to Wikipedia, the Free Encyclopaedia, “Uncertainty means lack of certainty. A state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, a more than one possible outcome.” E.g., if you do not know whether it will rain tomorrow, then you have a state of uncertainty. Uncertainty can also be vagueness or ambiguity about a certain concept. It may be purely a consequence of lack of knowledge of obtainable facts.
The term ‘cost’ has a wide variety of meanings. Different people use this term in different senses for different purposes. For example, while buying a book, we generally ask, “how much does it cost”. Here the word cost means price but the term ‘cost’ refers to expenditure and not the price. Cost is the resources consumed to obtain a particular thing.
By Cost of Uncertainty, we mean to refer to that cost which has to be incurred due to uncertainty about availability of a particular facility especially when it can be provided either free of cost or at a nominal cost by the Governments in developing or underdeveloped nations. In these countries, Government may save some money by providing inadequate or uncertain facilities to the people but finally public end up spending its hard earned money in providing safeguard against that uncertainty which can be very much avoided and diverted towards productive uses. Some of these costs of uncertainty are as follows:
Water Supply: Due to uncertainty, inadequacy and untimeliness as also unhygienic quality of water supply schemes of Government, people have to bear huge but avoidable cost of water pumps, underground/overhead tanks, water purifiers and purchase of water from private parties. Moreover, it has implication of social cost also as it causes wastage of time waiting in long ques and sometimes quarrels over trifles while taking water from public taps.
Power Supply: Due to lack of certainty about availability of power supply coupled with incessant fluctuation in voltage, recurring power cuts, people are left with no other alternative but to purchase back-up gadgets like UPS, invertors, transformers, batteries. Social costs involve loss of productive time when there is unscheduled power cut, students not being able to study in exam days, patients having tough time and sometimes even collapsing especially in summer days.
Medical Facility: Uncertainty about availability of doctor or medicine may result in self-medication by people causing loss of health and sometimes even precious lives. This phenomenon is quite common in rural areas.
Uncertainty about security: Uncertainty about security involves cost of lockers, heavy duty locks, deployment of private security, close circuit cameras, etc. It encourages acquisition of private weapons which at times creates law and order problems like reckless firing by a mentally retarded person. It involves loss of health as an insecure person will continuously live under stress, lack of sleep, depression, etc.
Uncertainty about public transport: This results into purchase of more and more private vehicles by public draining out scarce source of petrol/diesel, more traffic jams, road accidents, wastage of time and more and more police intervention which at times may be uncalled for and to the detriment of public.
Uncertainty about bank finance: Thanks to schemes like Kissan Credit Card, Prime Minister’s Dhan Jan Yojna, bank account for all the citizens is now becoming a reality. Otherwise uncertainty about bank finance was costing people heavily when moneylenders used to fleece public by charging hefty amount of interest and in the event of their inability to repay the same, resulting into their exploitation by way of bonded labour, child labour and even forced marriages.
In short, cost of uncertainty is all-pervasive these days in India and other developing/underdeveloped nations. E.g., India is paying heavily due to uncertainty about political stability in Pakistan causing loss of life and property in the wake of cross-border terrorism and incessant firing on LOC and International Border. Development of nuclear weapons was also to ward off uncertainty about peace and tranquillity among nations but it has in fact added more uncertainty about even the very existence of human race. Cost of uncertainty although cannot be avoided altogether. However, Governments can bring about efficiency in delivery of services to the public so that this cost can be reduced to a reasonable extent. In developed nations, power supply, water supply is round the clock, public transport is quite efficient and medical facility is well regulated. All these have resulted in reducing cost of uncertainty, a portion of which Governments of these nations even resource from public by way of taxes. Let’s hope that we also take a cue from these nations and cut cost of uncertainty to our people in the times to come.
(The author is CAO, JDA)
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