governance, political economy, institutional development and economic regulation

Archive for January, 2014

God and Inclusive Growth

 

Indians are born believing in God but get initiated into inclusion and growth. Conversely, Westerners are born believing in inclusion and growth but end up becoming devotees of God on reaching India. This illustrates how the two beliefs converge if citizens have the freedom to choose.

Can the devotion that God inspires be evoked for the State? The example that comes immediately to mind is of Indian soldiers spilling their blood for the nation. Overcoming the instinctive desire to save oneself is an outcome of intensive training; peer pressure; personal loyalty to the group and role model type leadership on the battle field.  This is accompanied by close, often, quite intimate, habitation and isolation from the external non-military environment and of course the harsh disciplinary regime to which everyone is subjected.

Despite Arnab’s helpful interview with Rahul yesterday, the nation continues to pin its expectations on Modi’s India and Kejriwal’s Delhi. Once Modi is PM, the expectation is that India will fall in line. Politicians will be disciplined to cease making a sorry spectacle of themselves. Babus will become decisive and diligent. Citizens will become responsible versus their duties and responsive to the needs of others.  

Modi himself is certainly an exemplary role model of growth; an inspiring story of an individual who used institutional mechanisms to break through caste and class bonds to touch the sky, though he could have done a better job of taking all his soldiers along, rather than just most of them. Kejriwal speaks for citizens, across the fault lines of religion, caste and ethnicity, when he fingers corruption and elitism as the enemy.

Translating these worthy objectives into results however requires a huge social transformation.

First, citizen duties have to trump citizen rights, as in China, so that community harmony trumps individual preference. The East Asian flying geese pattern is aerodynamically beneficial, but only if the gaps between the geese are strictly regulated. This goes against the egotistical grain of the “Argumentative Indian”.

Second, to make more palatable, the erosion of private rights and the enhancement of private duties, powers and resources would need to be transferred to participative local communities rather than centralized in remote governments. Community empowerment is incidentally healthy for minorities since they tend to locate themselves cohesively. But this will upset established elites feeding off centralized powers.

Third, if justice is to be speeded up our judicial system which presumes innocence till proven guilty, shall need to be replaced by the presumption of guilt, till proven innocent. Our system favors rich and powerful criminals (barring exceptions like Tejpal and Raja), who can get bail and stretch out a case endlessly, whilst the poor remain incarcerated in judicial custody as under trial prisoners

Lastly, every leader needs a vertically integrated and empowered party cadre, which becomes her eyes and ears (as with Didi, Amma, Bhenji or Netaji) but the cadre can undermine the constitutional arrangements for oversight (executive, judiciary and legislature). Modi doesnt have a party he can trust. Kejriwal doesn’t have a party.

Despite the likely political and social upheavals from such difficultagendas, it is astonishing how popular they are with the electorate. Kejriwal would win 60% of the votes in Delhi today and is likely to get around 20 seats in the Lok Sabha polls 2014. Modi is set to sweep the 2014 polls.

This illustrates that India may be ripe for a social makeover, loosening forever, our tenuous strings to the colonial heritage of processes for fair play and equity and political architecture.  This model has not lived up to expectations.

Formal political plurality has morphed into elite control of identity groups rather than into parties espousing different visions for implementing the Directive Principles of the Constitution. High caste Hindus, Muslims, Sikhs, Jats, Kurmis, Ahirs and Dalits with sub clans at local levels, ethnic and linguistic groups all jostle for their share of the national pie. Perversely, as in Egypt, the right to choose ones representatives has resulted in governments divorced from the tenets of liberal democratic thought; liberty, equality, fraternity.

The scale of corruption has exploded post-liberalization in 1990.  Russia, India and China are all threatened by unbridled corruption, as the rigid State apparatus for managing the economy is peeled away. Apologists, of the Washington Consensus kind, would say that there is no net loss since what is corruption today, was State inefficiency, previously. They would point instead to the gains from the growing pie and reduction in poverty.

What they are unable to explain however, is why the World is more unequal today than in 1990? Why is it that more than 50% of the benefits of growth go to a miniscule segment of the creamy layer not deeper than 1% of the population?  What indeed are the limits of greed in India?

Image

Audi, Mercedes, BMW and other super luxury brands (each car worth between INR 4 to 9 million) sold more than 20,000 cars in 2013. But there are only 44,000 taxpayers with a declared annual income of INR 10 million or more. Only around 400,000 people pay tax on an annual income of above INR 2 million.  Wealthy Indians may be privately generous but they hate to share their wealth with the State and no one thinks any the worse of them. Indeed, the salaried employee is pitied because she has no avenues for evading tax. Compare this with the 1962 war when even middle class women donated their gold to help the nation fight the Chinese. Our moral fiber has weakened.

If Modi and Kejriwal fail to address the core issues of moral fiber in public life, they shall fail to achieve many of the goals they set themselves. The first test of moral fiber is for the leader to come clean before the citizens. Confess your failings. Share your good deeds. Speak the truth and act upon it. Limit your needs. Seek to benefit citizens not identities. That is the only way to reach God and inclusive Growth simultaneously.   

Najeeb Jung shines

Image

By offering soft, warm, paranthas to Kejriwal to call off the AAP dharna, Jung, the new Lt. Governor of Delhi, has not only raised the culinary standards for political parleys but acted in a manner aligned to the high office he holds.

In sharp contrast is the behavior of the Government of India’s Ministry of Home. Leave aside the intemperate description of Kejriwal as mad by its minister…which Kejriwal, being Kejriwal, may well be willing to accept, in the same manner as he gladly accepted being termed an Anarchist. It is a sad reflection of how rusted the “steel frame” has become that apparently  the babus in the Ministry felt that Jung jumped the gun; that they could have “tired” Kejriwal out; that an “olive branch” of sending two cops on leave was an unnecessary concession.  

The problem with the Babus of today is that they cannot draw the line between the political objectives of their political masters and the obligations of the post they hold. It is not the job of the Home Secretary to improve the image of the Congress or rubbish that of the AAP. It is not the job of the police to promote political agendas.

Unfortunately, such fine distinctions between public responsibility and private gain are long gone and babus align with one or the other party to get ahead.

Till the proliferation of the Commissions, since the late 1990s (which are overwhelmingly staffed by retired IAS officers and judges), the highest prize a retired official could aspire for was becoming a Governor of a State. Unlike the President who has to be elected by Parliament a Governor is merely appointed by the Central Government; a safe non transparent process used for accommodating babus in possession of embarrassing secrets of netas; quid pro co for loyal services rendered in the past to political masters; parking slots for politicians past their expiry dates and such like. The net result is all incumbents of the post of Governor are agents of the central government. Two such ex-babu Governors are now media breaking stories because the CBI has sought the Presidents clearance to question them in the sorry story of the mis-procurement of AugustaWestland VVIP helicopters.

Governors, in general, are meant be benign observers, like the Queen of England. They don their Durga avtar when the Central Government decides to declare a state of emergency and dismisses a State Government. Effectively this transfers all powers upwards to the Central Government, which rules through the Governor.

The last time this happened was in 2002 in Uttar Pradesh. Mercifully, since then, the coalition dharma at the center has protected those on dharna from being summarily excluded from political power by the President.  

In Delhi the Lt. Governor rules directly since the Police and the Land Administration is with him nominally and actually, closely controlled by the respectively, the Home Ministry and the Ministry of Urban Development/DDA. The two powers are inextricably linked. Land and property is the safest and most lucrative refuge (with better returns than the stock market) for the loot from corruption.  You protect your wealth, power and status by controlling the police. It is no coincidence that till the Supreme Court directive the largest limousines had lal battis. The Lt. Governors real power comes from how close he is to the person calling the shots in Delhi.

Najeeb Jung may have acted on the direct orders of 10 Janpath, or its ancillary offices. However I prefer to believe that Jung acted out of a deep sense of responsibility, maturity and convention, in keeping with the sophistication his position requires.  Jung is here, with us in Delhi, till at least the election results are known. This is not the last dharna or street action he will have to deal with. It makes eminent sense for him to reach out to Kejriwal and establish a sense of trust and fair play with him. A democracy is functional only if political parties collaborate. We have not seen good examples of positive and responsible collaboration in the recent past. This is one shining example of the correct approach.

Jung has been a babu, an international civil servant, an academician and an actor. By his “warm parantha parley” approach, he has finally crossed the line and become a politician, whilst simultaneously remaining the gentleman and aristocrat that he is. This may, incidentally, also ensure his continuance as the Lt. Governor, even post 2014, since even handed and level headed Governors are scarce to come by. Who says God doesn’t reward good acts?

 

 

 

Kejriwal: triumphant in defeat

Kejriwal sleeping on the freezing ground by his Wagon R looks defenseless as a baby in the cold rain. But in his weakness lies his strength. He is the first Chief Minister to stage a dharna against the State. What does it is say of a State when a Chief Minister has to break the law to be heard?

CMs, like Kejriwal, who don’t play by the rules of “old style” politics (quid pro cos; nod and wink; mutual back scratching; Nelsons eye; keeping others off the bus you have clambered on) have no “voice” in the system. Much of the power and prestige of a CM, is derived from her ability to network the system, just like any CEO; to collaborate, compromise and cut deals.

Kejriwal, like Modi, shuns this model of “governance”. Modi is now growing into his new national role by sanding his rough edges, rubbing kites with Bollywood and learning the ropes of compromise.

Of course there is always a space for contrarians; street fighters like Didi and the imperious Naveen Patnaik, or the regal Amma who refuses to cow-tow to the hypocrisy embedded in the edifices of our “federal state”. She routinely gives scant regard to the annual jamboree of the National Development Council, which is one such federal edifice, meant to provide a fig leaf of rationality to the sharing of the annual booty handed out  annually by the Planning Commission are shared rationally amongst the state government through Central Sector Schemes. The fact is, blood is thicker than water and political bargains are the basis for the pork handed out. So why bother with speechifying?

What is Kejriwal saying when he spends a cold night on the ground, in the open, on dharna? He is screaming that this is what the common man has to endure every day to be heard. Everyone in power knows this, in theory, but it is quite something to “experience” it.

4000 policemen have been mobilized to exclude the passive AAP dharna from Shinde. The Delhi Police showed how efficient it can be when it is protecting one of its own; not just a Minister, of the Government of India, to whom they report, but also protecting the hollow “democratic” edifice we have built for ourselves over the last 60 years where protocol, process and posturing, trump direct action.

The corner stone of this edifice is exclusion of the aam admi beyond neta visits to villages and slums for photo ops. Ministers, who routinely check into luxury hotels on their own account, get instant admission into AIIMS to treat imaginary illnesses. Those without connections sleep on the road outside, waiting in queue till they can get to see a doctor. Government Ministers get free electricity and water in their homes but sagely advise the aam if basic services are free, they are wasted and advocate “user charges” as the remedy. The aam gets electricity only against payment and irregular, poor quality water or has to rely on private suppliers who charge exorbitantly.

Kejriwal has established himself as the “voice” of the marginalized. The problem is he repeatedly asserts that he did not fight elections to form a government; that he is not hungry for political office. This is difficult to reconcile with the demands of political office. Political parties are meant to provide contestability in the market for political office.  If a political party fights elections merely to be in opposition, it actually destroys the political architecture of democracy by reducing contestability. How can one imagine a majority “opposition” party. What then would be the political mandate available to the minority government?

The time has come for Kejriwal to resolve this dilemma by hiving himself off from political office and becoming what he is; an inspirational leader of the marginalized citizen; the AAPs voice of conscience; a new age Anna/JP Narayan/Gandhi. His role would be similar to the RSS, which is the soul of the BJP, whilst Modi is its executive branch.

The AAP must similarly quickly develop a small, carefully selected, executive cadre who can be committed to the dull tasks of governance. Party work is generally unattractive for netas because it is neither high profile nor lucrative. Since AAP leaders do not have worldly ambitions, finding committed party workers should not be a problem. The problem is to identify executives with the right balance of ideology, aptitude and integrity.

Yogendra Yadav is one such leader who is universally salable. Manish Sisodia is another. Kejriwal could hive-off the nitty-gritty task of being CM Delhi to Sisodia, pitch Yadav as CM Haryana, and soar triumphantly, as the man who changed India in 2014.

Image

Mother Kejriwal embraces Indian aam

Its final now. Kejriwal said as much to Rajdeep on IBN-CNN yesterday that he will be moving on to national level politics in 2014.

This is the right decision. Kejriwal is and will always be best at social mobilization. He is not a politician and would be wasted as one. The quiet Delhi social revolution he created needs to be carried forward to the rest of India and Bharat.

This would be a constitutional revolt of 45% of the national electorate, who work at petty, non-formal sector-jobs across India and whose kids are frustrated that no jobs are available, babus who have not built up political support chains and whose children are unemployed, young professionals who have jobs, surplus money but international aspirations for an equitable New India; where merit trumps family connections, caste differences converge, religion becomes a personal matter and social classes are based not on birth but accomplishments and individual preferences.

Gandhi, a Bania from Gujarat, liberated his mind with the strength of his determination and inspired people around him to break free of the chains that society imposes on us and let shine through the true, “Rousseau” nature of humans; loving, generous to a fault, reaching out constantly to improve themselves.

60 years later Kejriwal is set to do the same albeit in a different mode and for a different India.

Image

The struggle is no longer against foreign colonialism. The new struggle is against elite colonization of the poor and the middle class professionals and workers. The class equity, that the Left failed to provide, is what Kejriwal and the AAP shall now target.

Just as canny Indian business supported Gandhi in his struggle, Kejriwal also shall derive support from those Indian corporates, who are competitive and efficient and who therefore stand to gain from transparency, the reduction of red tape and strict oversight of babu discretion and corruption. The ones that are not shall hopefully adapt their revenue models and not grudge the Nation this growth opportunity.

Since Kejriwal and his band are new politicians and relatively young, India has at least two decades before they also get swept up into the sweet embrace of the chattering glitterati. Whilst this is inevitable (remember the story of Brahmrishi Vishwamitra and Menaka) in these two decades till 2035, Kejriwal can change the course of Indian history in three ways.

First, he can, at last, bust the centralized, colonial administrative structure we inherited from the British by systematically distributing the power to spend public money downwards (to state governments, districts, blocks and villages) so that government comes as close to the citizens, as is possible and technically optimal.

A good milestone for this could be to fit the entire Government of India into North and South Block with the rest of the Bhawans sold off. Defense and Internal Security, Diplomacy and External Trade, Fiscal and Monetary Policy management, Inter State Infrastructure and Taxation should be the only areas where the GOI should intervene financially and physically. The money for managing all the other areas, ranging from education to ayurvedic medicine should be sent as grants to be used by states and local government within a broad National Regulatory Framework, prescribing minimum standards of service and access. Our State Governments are very competent to manage their own economic and social development and do not need interference from the center.

Second, AAP should reduce the fiscal deficit to 2% by disciplining government expenditure whilst facilitating private sector job creation at all levels. Not just fancy jobs in IT but also ordinary jobs like chai servers (to whom the Congress has a special aversion); mechanics, plumbers, fitters, domestic help, cleaners, tailors, weavers, waiters. Grow the real sectors of the economy, where we have a comparative advantage. Leather exports have done more for Dalit economic empowerment that job reservations. Develop basic technical, language and “life” skills so that our citizens remain internationally competitive and can move up the compensation value chain. Target creating 10 million jobs a year; tenfold more than the 1 million jobs we create today.

Third, reverse the trust deficit. Citizens do not trust the State today. They distrust politicians, fear the police and are contemptuous of babus. Make public information available suo-motto so that citizens no longer need to use RTI to ferret out facts; manage grievances effectively and associate citizens with decisions. But the key ingredient is pure intentions; citizens can smell out mala-fide and hypocrisy instantly.  

It is a tough for the chatterati, high flying lawyers who spout the paramouncy of law, rules and regulations on TV, entrenched politicians and the elite flotsam surrounding them, to accept that citizens are the majority owners of government. If citizens are treated the way minority shareholders are at corporate AGMs (correctly within the law and the rules, but with no heart at all and generally as minor distractions to be endured every year) they are more than likely to take to the streets.

But don’t forget. It is we, the entrenched ones, who push citizens out into the streets and into the warm and loving embrace of Mother Kejriwal and the AAP.

 

Bharat meets India via AAP

 

Delhi chatterati has it’s knickers in a twist over the “outrageous” behaviour of two AAP ministers; Rakhi Birla and Somnath Bharti who wanted the police to take direct action last night against respectively (1) in-laws suspected to have burnt their daughter-in-law and (2) foreign drug peddlers.

Bharat has at last met India and the shock is unpleasant to Delhi police, babus and gentle Delhi folks. Listen up guys this is nothing new. Bride burning is almost a national sport in India. Drug and sex crime similarly flourishes in the knowledge and with the full support of the police who also earn fat amounts out of the relationship.

Between the two “erring” ministers I prefer what Birla did. The cause is just. The provocation extreme. Hence action should have been immediate. It was not and she stepped in because it is her constituency. The minister wanted the door of the identified home where this crime happened broken down. The police refused. Would they have had the guts to refuse if either Modi or Rahul had wanted it done?

Image

In India, the politicized, corrupt police apply the rules selectively. Zero tolerance for those who don’t bribe. Maximum latitude for those who do or the powerful. Let us not get lulled by the plaintive cry of babus who cite process and procedure as the culprits which tie their hands and delay justice. The plain fact is that if a bride is burnt and no action is taken by the police, the concerned SHO must herself face legal and disciplinary consequences.

Yes the AAP ministers are crude and uncouth. All first time grass roots parties are the same. Nehru was contemptuous of Sardar Patel and considered him “archaic”. Indira Gandhi was contemptuous of Morarji Bhai’s home grown remedies and of the Lohiaites like Raj Narain, who came to politics from the boondocks. Jyoti Basu turned his elegant nose up at Charu Mazumdar.  More recently the upper caste hereditary politicians look down their patrician noses at Modi, Bhenji, Didi and Mulayam but not Amma, who speaks in convent school perfect English. What blatant hypocrisy is this?

The case of Somnath Bharti, the AAPs embattled Law Minister is weaker. A court has indicted him for twisting and tampering with evidence whilst defending a corruption accused. Second, for a trained lawyer he displayed remarkable lack of respect for the Judiciary by trying to summon Judges to a conference presided by him. Now he has picked the wrong battle to fight.

It is no one’s case that drug peddling and prostitution are bad. It is well known that poor foreigners from Africa, East Europe and Egypt find the Indian market for illicit sex lucrative and there is a lot of illicit drugs and sex going around.

The real question is why is this the top most priority for Bharti and if it is then he is a lame duck. Those in public service must learn to pick the right battle and prioritize the problems they want to solve. The desire to appear on TV and in the media has to be curbed and Ministers need to spend time in their offices handling their portfolios, not go around like some medieval king in disguise at night, to find out what ails the people. Ministers must hand over local, constituency issues to experienced hands who are used to catering to the demands of individual constituents.

Kejriwal please discipline your flock of do-gooders if you want to stay the course to 2014. Please don’t alienate the babus. Take them with you. It works better that way. Ask Modi he knows.  

Corruption Red Flags and the Original Sin

Image

The Left has the best track record with respect to controlling corruption, followed by the BJP, with the Congress in the rear. Apologists of the Congress would be quick to assert that often corruption is part and parcel of rapid growth. They are right. China, Indonesia and Malaysia are good examples where rapid growth over the last 30 years has also resulted in large scale corruption.

Conversely, it is also true that an obsessive desire to end corruption, as projected by Kejriwal and the Aam Admi Party (AAP), also negatively affects growth. Even the NGOs and international development agencies know that corruption is like an original sin (the others being illicit sex, drinking and envy) and cannot be ended. It can only be managed, as in the developed world, so that citizens do not encounter it in their daily lives and public finances are conducted with relative probity.

Shanta Devarajan, a World Bank economist, known for his innovative take on economic problems, like Swaminathan Aiyer, pointed out in 2010 that “quiet corruption” (the kind that that the average citizen encounters) costs the economy much more than “grand corruption” of the 2G, Coal-gate kind.  http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22501207~pagePK:146736~piPK:146830~theSitePK:258644,00.html

“Quiet corruption” is the “rent” that a babu collects for delaying decisions (speed money); is a babu using her discretion to unfairly benefit someone (bribe); it is sending the government decision making process into a spin thereby benefiting someone who profits from the status quo (babu googly or red herring noting on file); it is habitually being averse to taking a decision (babu evasion).

The media reports (Indian Express, January 13, 2014) that Jayanthi Natarajan, the Environment Minister till recently, had stacked a huge bundle of files relating to clearances in her house. This instantly raises “corruption red flags”, at the very least, of “quiet” corruption.

What is odd is that of the 350 files returned to the office from her home, when she resigned, 180 files had not even been seen by her! at least there was nothing on file to indicate that she had. Even odder, she had seen and signed 119 files but had held them back in her home. Why and for what reason? An additional 50 files, signed by the Minister, were in possession of her staff!  Not reading files and keeping them in the “in tray” is a classic red flag for corruption hunters. Signing files but holding on to them is an even more significant corruption red flag. Letting her staff hang on to signed files is the biggest corruption red flag.

Despite the plethora of red flags it is a sign of low expectations from the present government that this case has not raised the kind of furor that coal-gate had. If a babe had committed these sins she would have been hanged by the government but when it comes to Ministers the rope is very, very long.

The BJP, which is the most likely party to form the next national government, or be instrumental in supporting a minority government, must draw the correct lessons, as must Kejriwal and the AAP.

First, just by ensuring that the offices of Ministers do not become clog-holes of files and insisting on time bound dealing of files, by everyone in the chain, corruption can be hugely reduced.

Second, Sarkari corruption hunters like the CVC and now the Lokpal must zero-in on cases of frequent submissions of files and reversion with queries, the favourite babu trick of avoiding a decision.

Third, it is high time, India, at least at the national level, abandoned paper files for electronic functioning as in any other modern day country. Electronic filing and processing has the advantage of security; instant file tracking; generation of management information on “clog-holes” of undealt files; audit of who accessed the file at what time and the changes made therein.

Fourth, the advantage with digitizing government functioning is the heightened levels of seamless transparency which become possible. Managing the information requirements of the Right to Information Act will become a lark with complete digitization, since all it would require is to find the data and email it or print it out.

The economy needs a kick start. What better way than to target complete digitization of government functioning from 2016. The international experience shows that corruption levels drop precipitously when “big brother” is watching as is possible in real time electronic processes. Of course this only works in regimes where “big brother” himself is not corrupt.  

Dr. Manmohan Singh: Down but not out

Image

Dr. Manmohan Singh effectively bid goodbye today; declaring that he is not a candidate for being PM in 2014; expectedly, extolling the virtues of Rahul and somewhat unexpectedly, unleashing a personal attack against Modi, asserting that he would make a “disastrous” PM.

Dr. Singh’s key virtue, as PM, was his personal honesty, in a polity seething with corruption.  Once Kejriwal (Aam Admi Party) upstaged Dr. Singh by donning the mantle of the most honest politician from mid-2013, there was little left to distinguish Dr. Singh from him. Both men ooze sincerity, humility, humble beginnings and a life spent striving to do good work. Where Kejriwal trumped the PM, was in his Gandhi like mass appeal and social mobilization skills. The good Doctor is a God fearing, economist and babu; adept at juggling numbers but completely at a loss at juggling people.

Dr. Singh will not be missed as PM. Peter’s Principle (1969) states that bureaucracies promote people to the level of their incompetence. Nothing could be truer than this in Dr. Singh’s case. He has been a nominal PM in UPA 2 (since 2009); seen sometimes in public; talked about occasionally but seldom heard and almost never listened to. Liberation from the extended coalition dharma of UPA 1 spelt his doom, as power effectively passed to the inner political core of the Congress.

It is a pity that resigning from a non-job seemingly never crossed his mind. But this was very much in keeping with the incremental approach to doing good, which afflicts all babus and keeps them slogging on, even when their incremental impact is marginal. The irony is that had he courageously displayed the gumption to walk out, he would have acquired the fire power to push through many of the reforms which continue to languish. First, bringing new Nuclear Power Contracts to fruition. Second fast forwarding UID and linked social protection cash transfers. Third, cracking the whip on getting highways built. Fourth, reeling in the coal mafia. Fifth, institutionalizing better water, waste and sanitation management. The list goes on of opportunities missed in the real sector.

It would, however, be unfortunate if Dr. Singh is forgotten or left to educate visiting foreign visitors on matters Indian. Dr. Singh’s expertise has always been in managing to walk the mean between economic fundamentalism and democratic acceptability. The art of the possible. This is what makes him an exceptional babu. His credibility overseas is far higher than his domestic ratings. He would make an exceptional, high level diplomat for spreading knowledge on the magnificent success of the Indian economy, using the time honored Indian instrument of Jugaad. A combination of problem solving skills based on the ability to spin interventions, which have no immediate international precedents, but fit the extant environment and adhere to basic economic principles.

The long term strategy to manage the external account since 1992 is one such glorious example. The cautious and selective opening up of sectors to FDI is another. The focus on higher technical education, which has endowed India with exceptional engineering, management, accountancy and pure science and social science skills, is a third example. All these are departures from the standard international prescriptions.

The India story is undersold overseas. The instability of a truly democratic, developing economy will never be the first choice of foreign investors. What we can offer them, as a trade-off for uncertainty in India, is the potential size of the Indian market. This is closely linked to the growth rate of the economy.

India has enjoyed near secular, high growth rates since 1995-96 barring downtrends during 2000-2003 with a tapering down in 2013. Growth slipped, not because India became corrupt or because the global opportunities faded nor due to the lack of entrepreneurial aggression. Growth slipped principally because no one was in charge at the top. Decision making slowed to a crawl. Oversight agencies like the CAG and the CBI became loose cannons; forum shopping between social activist supporters, the parliament and the government. The judiciary was forced to substitute for executive indecision, time and again, dangerously blurring the constitutional distinction between those who make, those who implement and those who adjudicate law. The cabinet became a set of fractious, narrow minded individuals, rather than a seamless group with common purpose and interests.

The PM is wrong to castigate Modi as a “disastrous” potential PM. India needs an empowered decision maker at the top to whip the polity into shape. Kejriwal is doing this in Delhi, using to full advantage his ingénue appeal and incorruptible past. We need a similar leader at the very top. Modi is most certainly a front runner for this task, as demonstrated by his history, his track record and the cord he strikes with those who are not “khas” (privileged) people. He is not the only one. Didi, Bhenji, Nitesh and Netaji are also products of grit and determination, albeit with limited popular appeal.

Dr. Singh was selected as PM on merits by his party. After a decade of meritocratic rule at the very top, even if it was optics more than reality, the aam admi’s and aurats (comprising 99% of the electorate) are unlikely to stomach a return to the rule of oligarchs and dynasties. As always, it is urban votes (25%) which are likely to presage this trend.

One hopes, that in the new government, post April 2014, merit will be honored, if defanged of political affiliations. Dr. Singh is an international asset and must continue to be used, in national interest, to further India’s international economic and governance dialogue. If inclusive growth is his concern, Dr. Singh cannot let transient political affiliations, stand in the way of participating, in what promises to be the golden dawn of inclusive growth in India: 2014 to 2030. 

Tag Cloud

%d bloggers like this: