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Archive for the ‘Democracy’ Category

Bimal Jalan reflects

Jalan book

 

exercises the writer’s privilege to box his reflections between three inflection points. The first is 1980, ostensibly because 1977-79 was the first time the Congress lost power at the Centre. The second is 2000, being the start of a new millennium. And 2014 is the bookend when the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) formed a majority government.
Obscure inflection points
Of these, the choice of the first two years as turning points is not immediately obvious. Conventional wisdom regards 1991 to 2014 as a near continuous development period, barring the fractious interregnum of 1997-99. In the 1980s, it is 1984 that dominates, as the end of an era with the assassination of Indira Gandhi and the beginnings of Rajiv Gandhi’s brief “Camelot” phase. The year 1980 is significant only because Sanjay Gandhi died in an air crash in June and Mrs Gandhi aged visibly. The choice of 2000 is similarly obscure, except for broadly coinciding with the start of Atal Bihari Vajpayee’s NDA government.
Dr Jalan – man for all seasons
But this is mere quibbling. The book is unconstrained by structural rigidities. It provides reflections, spanning Dr Jalan’s seven earlier publications since 1992.  It can’t get better. Dr Jalan was in the Rajya Sabha (2003-2009); the longest serving governor of the Reserve Bank of India (1997-2003) since 1992; finance secretary; secretary banking, chief economic advisor and India’s executive director to the IMF and the World Bank.
Seven key reflections
Readers would choose their own favourite reflections. But this reviewer was intrigued by the following seven.
Low public savings retard investment 
First, Dr Jalan favours the conventional view that the persistent gap between India and the fast-growing economies of Asia during the last four decades of the 20th century is explained by our low levels of investment. For this he squarely blames our ideological decision to invest in public sector industries, which failed to generate savings for future investment and instead bled scarce tax revenue to fund financial losses — a familiar story even today.
Colonial style administration ill equipped for challenges
Second, he red flags the fact that from the 1970s, we did very little to enhance the competence and efficiency of public administration. We still lack the required composition of skills and experience in the public space to provide 21st century results.
High expectation, poor execution
Third, he bemoans the fact that we unfailingly adopt best practice priorities — take the national priority for agricultural growth. But we fail miserably in making supportive policies and rules. We have throttled agriculture by ignoring the interest of the farmer to serve the interest of the consumer. Similarly, we prioritise a progressive fiscal policy. But the revenue from direct taxes stagnates while regressive indirect taxes are buoyant.
Sustained, high growth misaligned with political incentives 
Fourth, Dr Jalan’s term in the Rajya Sabha convinced him that deep political reform is the key to change India. And who could disagree? But some caveats apply. Decentralisation, as flagged by Jalan, is certainly desirable for enhanced effectiveness and public participation. But, it will not, by itself, serve to reduce the size of government. In fact, employee numbers and expenses are likely to increase as scale effects disappear.
Union government muscularity erodes state government autonomy 
In a similar vein, it is true that the Union government tends to erode the federal structure by misusing governors for narrow political ends. But constitutionally, we are a “Union of States with a centrist bias”, per political pundits, and not a federal state. Parliamentary norms and conventions are routinely subverted — a self-goal, since this reduces Parliament’s credibility.
Dysfunctional parliament erodes its own credibility
Dr Jalan cites 2006, when the budget was passed without discussion, illustrating political expediency of the worst kind. But it is open to question whether the existing process for annual Budget presentation and examination remains a productive exercise or has become mere form without substance. The cabinet system of decision-making, underpinned by the principle of collective responsibility, was undeniably subverted during the United Progressive Alliance government, since political power was dispersed beyond the government. But this was poor practice rather than a structural flaw. And it appears to have healed itself after 2014.
Judiciary – safeguarding the constitution 
Fifth, the judiciary, rightly, comes in for high praise, for progressive jurisprudence, safeguarding the principle of separation of powers, and the primacy of the Constitution. But entrenched territoriality in the judicial appointments process remains contentious.
Public sector banks – out of control
Sixth, Dr Jalan recounts, financial reforms after the Narasimham Committee report of 1998 enhanced the resilience of Indian banks. But he leaves the reader begging for more on what went wrong over the last decade to inflate stressed loans to crippling levels. Are not politicised leadership and boards the problem in public banks? And given the stakes, can UPSC selection – as Dr Jalan suggests – really be an effective bulwark? Would not ramping up private shareholding, with the government holding only a “golden share” be a more effective solution? More generally, how effective are the existing prudential norms, for limiting exposure to sector, corporate or currency risk?
Tax reform – only half done?
Seventh, Dr Jalan’s view that it is unnecessary to reopen the constitutional scheme for inter-governmental division of taxes is curious. Tax pundits advocate that GST be extended to alcohol and petroleum.
jalan 2
It is a broad canvas on which reflects, as befits one who has helmed public policy since the 1980s. Readers will look forward to his take on the more recent developments — that is, since 2014.

 

Adapted from the authors Book Review in Business Standard, September 18, 2017 http://www.business-standard.com/article/beyond-business/bimal-jalan-reflects-117091801405_1.html

 

Is hubris slowing down Modi?

Hubris

So when does hubris — the corrosive comfort of undiluted power — overtake a government? Conventional wisdom points to three early red flags. First, when routine tasks are ignored for grand ambitions. Second, when party cadres act out of entitlement rather than commitment. Third, when rant replaces reason as public outreach. Has this already happened to the BJP government?

Ignore routine tasks at your peril

Venkaih

First, consider the recurrent trail of routine lapses. Take the embarrassment in July of being unable to get the non-controversial bill to give constitutional status to the Other Backward Castes Commission passed in the Rajya Sabha because BJP MPs did not even bother to attend in sufficient numbers. There is no glory in floor management. Ergo, it gets overlooked. Next, consider the election of Ahmed Patel to the Rajya Sabha from Gujarat. The strategy to keep him out was brilliant. But shoddy execution, or worse, deliberate sabotage, let down the BJP. Finally, the mass death of children in a Gorakhpur hospital. The hallmark of the RSS has been effective management during emergencies and disasters. That oxygen cylinders couldn’t be swiftly organised speaks volumes of how low the cadres have sunk.

Rulers can’t ignore the Rule of Law

Second, consider contempt for the rule of law. Mohan Bhagwat, the RSS supremo, violated the law in Kerala by unfurling the national flag, on Independence Day, at a school in Palghat, contravening a restraining order by the district collector. The order was perverse, based on pique and politics rather than prudence. The manner of its service — just prior to the occasion — was hurried and amateurish. But it was a legal order and anyone violating it is liable to be arrested. Mohan Bhagwat got away. But the lesson he taught the schoolkids and party cadres was that no law is sacrosanct if you are powerful enough.

Gandhiji would not have approved. Disobedience of an unjust law is fine, if followed by submission to its consequences, under the rule of law.

Gandhi

This contempt for the law is visible in the cadre vigilantes protecting cows, supporting unruly, disruptive religious yatras and the demonisation of alternative voices. Add to that, the raging testosterones of a BJP “princeling” in Haryana and you have party cadres which align more with gaali (abuse) and goli (bullets) rather than the galle lagana (hug) that Prime Minister Modi has espoused as the leitmotif of New India. Third, let us consider why no one came away inspired from Red Fort this year.

Outreach by high decibel rote no substitute for passion

The Prime Minister’s speech was a prime example of zombie behaviour, where the mind is elsewhere but the motions are acted out. The wide ramparts of Delhi’s historic Red Fort have set the stage for Prime Ministers to grandstand every year since 1947. Two (Lal Bahadur Shastri and Morarji Desai) barely had a chance to give a second speech before they were gone.

Four others (Charan Singh, V.P. Singh, H.D. Dewe Gowda and Inder Gujral) were even more transient, managing not more than a single speech each from Red Fort. One — Rajiv Gandhi, a young, stunning-looking charmer — was suddenly elevated to the position but never quite unbuckled the pilot’s seat he used to occupy earlier. Manmohan Singh had a decade to hone up his act. But he knew that he was a mere seat-warmer for the Nehru-Gandhi dynasty — having been taught his lesson earlier, when party workers sabotaged his election bid to the Lok Sabha. P. V. Narasimha Rao — a friendless, private man was not given to making big public gestures from the Red Fort. His political games were deadly effective, but played entirely in privacy.

Nehru, Indira Gandhi and Narendra Modi are the only three Prime Ministers who have had the mandate and the charisma to use the ramparts to strut their act. Mr Modi thrilled us in 2014 with his energy and his earthy enthusiasm at reaching out to people — quite a change from the taciturn Manmohan Singh or the imperiously distant Sonia Gandhi. In 2015, he filled in the vacant spaces in his act with data, slogans and acronyms. We were impressed. In 2016, we were still agreeable to look kindly on him, given that the economy was racing along and government performance was projected as trending sharply upwards.

By 2017, the act was flat as yesterday’s soda. This is remarkable considering that Indian testosterones are racing at the government effectively holding off the Chinese muscle-flexing at Doklam and now in Ladakh; Pakistan is reduced to being a mere vassal of the Dragon and economically hollowed out Western powers are fawning at our doors for Indian business.

Modi 2017 Red Fort 2017 (3)

International acquiescence has bred much-needed confidence. But it is disquieting that in domestic policy it has led to complacence, drift and distance from the public. Mr Modi’s speech was rambling, glib, unnecessarily argumentative and just plan stale. The turban was way too shiny to be classy. The stance too casual to be purposive. The look too staged. Very confusing was the discrete use of the terms — Bharat, India and Hindustan.

Bharat, India or Hindustan?

Hindustan was used in the context of pledging support for the victims of the irresponsible Muslim practice of triple talaq. Bharat was referred to as the mata (mother). But it is New India that we seek to build. Meaning?

Bharat, India or Hindustan, all three remember earlier episodes of hubris — disconnects between reality and rhetoric — which ended badly for us. In 1964, we discovered, too late that India needed the world, not the other way around. In 1975, we realised Indira needed India, but we didn’t need her. In 2017 (Delhi municipal and Uttar Pradesh elections), a shallow social revolution met its downfall. In 2004, we tired of using the stock market as a metric of progress. The metrics proposed for New India are similarly flawed. Corruption, poverty, filth, early death and unemployment are long-term outcomes, unachievable by 2022.

Child India

Focus on the essentials, Mr Prime Minister: Ending poverty by providing jobs and social security; improve results in education and health; build infrastructure for the 21st century and professionalise your government. We supported you in 2014. We want to do so again in 2019. But is your party up to this task?

Adapted from the author’s article in The Asian Age, August 17, 2017 http://www.asianage.com/opinion/columnists/170817/is-a-sense-of-hubris-slowing-down-modi.html

BJP – mega political mall

bjp-new-office

The rout of the BJP, in the Bihar and Delhi Assembly elections, were loudly touted as evidence of the deep roots of the “idea of India” — so dear to the Left-leaning, “secular” intelligentsia. Two years later, Bihar is back in the BJP stable and Delhi limps along with Arvind Kejriwal nursing his 2017 defeat in the Delhi municipal elections. In parting ways with his “less than kosher” partners — Lalu Prasad Yadav and his ilk — and realigning with the BJP, Bihar chief minister Nitish Kumar has apparently, revised his views on the Hobson’s choice between aligning with corruption or with communalism. He has now switched to the latter, as the lesser evil, possibly nudged by Prime Minister Narendra Modi’s public resolve to abolish both by 2022. In the meantime, he forfeits the somewhat unlikely “halo” around him as the leader of a national “secular” Opposition. Muslims and dalits also face this choice now — between a clean and effective, albeit Hindu, government or self-serving, dynastic patriarchs, posing as ersatz secularists.

Does consolidating the Hindu vote equal communalism?

shah dalit home

For the BJP, the charge of “communalism” has little meaning. Ending “casteism” – another vicious scourge, is only possible, if the Hindu vote is consolidated, ending the use of narrow vote banks based on traditional identities, around which regional parties have grown deep roots, like the RJD in Bihar and Bahujan Samaj Party and the Samajwadi Party in Uttar Pradesh.

BJP’s strategy is to consolidate the Hindu vote across regional and caste divides to strengthen its majority government at the Centre and control enough states to cover two-thirds of the voter population. The idea is to become like a mega political mall, encompassing diverse shades of opinion. Smaller parties, like the JD(U) are welcome to buy-in or opt-out, but none would be critical to the BJP’s survival.

The BJP sees no contradiction between resolving to root out “communalism” whilst consolidating” the Hindu vote by ending archaic caste divides. It wants Muslims and Christians, both foreign religions, to harmonise their religious beliefs to fit seamlessly into the dominant local culture.

Deeper decentralisation can be a bridge to communal harmony

naga 2

India is very diverse even within large states. Eating beef and pork is fine in predominantly Christian Nagaland. Bonding over beef is the custom in Kerala for Muslims, Christians and many Hindus. But this would be unthinkable in Uttar Pradesh. A more decentralised India can give greater space for making locally acceptable choices about customs and norms at the local government level. But the principle of subsidiarity is ignored. What can be settled at the village level is decided in Delhi or a state capital where the the minority viewpoint gets ignored in favour of across the board acceptability. Today, local governments lack the administrative, political and financial clout to matter. This means for now, the onus is on the minority community in any area to negotiate workable local compromises on cultural and religious practices which conflict with the locally dominant majority. Detractors of this “majoritarian” approach say this illustrates the disenfranchised status of minorities

Nuns

To be fair to Muslims and Christians, it is a stretch for them to reach such local accommodations. They have been misleadingly nurtured, since 1947, into expecting that the Indian State shall provide special mechanisms to safeguard their right to religion and facilitate their active political participation, in view of their numerical disadvantage. They have never before, encountered a government that is coldly dismissive of their expectations and has, at best, no desire to go beyond the letter of the law.

muslim women

What does being secular mean?

There is also disagreement on what being secular means. Should the State actively shun anything to do with religion, as in France? Or be even handed with all religions, as in the UK? Or should we further refine our version of secularism. Political theorist Rajeev Bhargava, is of the view that, in India, both the State and religions influence each other. The State actively intervenes in religion — as for example taking over the administration of Tirupati or subsidising Haj travel for Muslims or opening Hindu temples to dalits. Similarly, religion actively influences State action. Demolition of the Babri Masjid by karsevaks in 1992 breached the law. But the State watched passively out of deference to Hindu sentiment. In 1986, an executive ordinance was used to specifically nullify a Supreme Court order granting maintenance to Shahbano, a Muslim divorcee – a practise unsupported by Islamic law which had greatly agitated Muslim clerics.

Modern Indian culture is syncretic – but dominantly Hindu

Shahrukh 2

Modern Indian, popular culture is syncretic but dominantly Hindu, as best illustrated by Bollywood. Our movies cater predominantly to Hindu cultural settings, ironically often on the backs of film stars, many of whom are Muslim. With 80 per cent of the population being Hindu, it cannot but be otherwise.

The constitution reflects the fraternal bond between the State and Hinduism 

Fraternal bonds

Similarly, the founders of our Constitution were prescient in anticipating that Hindu sentiment would be politically dominant. Article 25 of the Constitution, excludes Christian and Muslim religious and social institutions from State regulation. But it specifically limits the fundamental right of Hindus (which includes Sikhs, Jains and Buddhists) to practice religion, by allowing the State to intervene for reforming Hindu religious institutions. This asymmetric provision reflects an assumption that there can never be a conflict between the Indian State and Hinduism. But the potential for a conflict of interest between the State and Muslims or Christians, exists and must be guarded against.

Muslims and Christians are not the only ones isolated by the Hindu revivalism. One-fourth of Hindus (dalits and backward tribal communities) are uncomfortable with traditional, Brahmanical religious practices. Often these are just a cover for hanging onto the asymmetric power structures benefiting the upper and the “Mandal”-empowered backward castes. Babasaheb Ambedkar articulated this apprehension as a deal-breaker for political cohesion.

Testing the efficacy of mega political power

Should we be worried by a BJP mega political power mall? We are schooled to believe that pervasive, political power begets authoritarianism. This hypothesis will now be tested. The BJP believes that a “national” government, in which, political sub-interests, defined by gender, caste, region or religion, “work” the system from within, is better than the template version of parliamentary democracy, in which an active opposition keeps the transgressions of the ruling party “in check”.

The BJP had 100 million registered members in 2015 — 18 per cent of the registered voters. It has a massive majority in the Lok Sabha and shall replicate this majority in the Rajya Sabha as legacy UPA members retire. The BJP directly controls states comprising 54 per cent of India’s population whilst another 23 per cent of the population lives in states ruled by allies or jointly with the BJP. Together this constitutes more than three-fourths of the population. Why then does it feel compelled to grow bigger?

BJP rule

In any competitive market, to stand still is to lose ground. Indian sporting teams are often criticised for lacking the “killer” instinct to convert their strengths into wins. But in politics, as in business, this genetic flaw is an asset. Leaving something on the table boosts the “feel good” factor for all. This has merit in politics, where there are no permanent winners or losers.

Adapted from the authors article in The Asian Age , August 1, 2017 http://www.asianage.com/opinion/columnists/020817/the-politics-of-religion.html#vuukle-emotevuukle_div

Template Rashtrapati

Rashtrapati Bhawan

Presidential elections in India are a ho-hum event for the average citizen. At best, this is a moment when the government “signals” its political identity or its governance style. The BJP-led NDA government has succeeded in the former but not the latter.

Shivshankar Menon, national security adviser in Dr Manmohan Singh’s government, uses the “minimum cost, maximum benefit” strategy as the defining principle of India’s foreign policy. This applies equally well to identify the political incentives behind presidential nominees.

Why Presidential nominations are the outcome of a MinMax strategy

The ruling party’s biggest nightmare is to nominate a candidate who loses. This is not only egg on its face, but it opens a Pandora’s box of future antagonisms between the government and the head of the state. It has never happened thus far. But it is wise to budget for minimum risk, especially when the upside of having “your own man (only one of thirteen Presidents has been a woman) in the Rashtrapati Bhawan are limited.

The Constitution severely limits action, independent of the government, by the President. But the potential for being deviously obstructionist exists. James Mason — the distinguished political scientist — credits Babu Jagjivan Ram – the original dalit face of Indian politics – with the insight of how to do a “Putin” in the Indian context and acquire covert, unconstitutional political power. The only redress against a malevolent President is to impeach him in Parliament. Whilst theoretically possible, it requires a two-thirds majority. That is tough if the President is politically savvy and actively conspires to defeat the motion, including by requesting MPs to merely abstain from the vote.

Unrealised political ambition is not an asset for being President

In the heady days after Emergency was lifted, the Janata government — a loose coalition of political interests, opposed to the authoritarian rule of Prime Minister Indira Gandhi — came to power. But it splintered. Prime Minister Morarji Desai lost his majority and resigned. Y.B. Chavan and Charan Singh sequentially failed to build their factions into a majority. President Neelam Sanjiva Reddy (1977-82), instead of giving Babu Jagjivan Ram — leader of the largest rump of the Janata Party — a similar opportunity, dissolved the Lok Sabha and ordered fresh elections. This was, at best, presidential over-reach to force an early conclusion to the drift. At worst, it was intentionally muscular, to induce an election, in anticipation of an uncertain outcome, which would allow then the President to manoeuvre and put a “pocket” government in power.

Petulance can warp Presidential efficiency 

Later a petulant President Zail Singh (1982-’87), a “trusted” political follower of Indira Gandhi, used obstruction as a mechanism to show his annoyance at being politically ignored by the debonair, apolitical Prime Minister, Rajiv Gandhi, who stepped into his mother’s political legacy, but wanted no part of its earthier political roots.

Ego is a killer for normative functioning  by the President 

President K.R. Narayanan (1997 to 2002) was a “working President”. Nothing was further from his intent than subverting the Constitution. In fact, he felt a heightened sense of responsibility to keep the ship of state credible and morally enlightened in the face of unstable minority governments. He possibly felt, albeit unwisely, that the President, being elected by an electoral college much wider than the Lok Sabha, had a stronger, deeper representativeness. He was also decidedly uncomfortable with the BJP holding the reins of power — a hangover from the post-Independence demonisation of the Hindu right-wing party. This mutual distrust led to his public speeches and media interviews being interpreted as being critical of government policy. He departed from his prepared and vetted speech at a state banquet in New Delhi and seemed to hector President Clinton of the US – the chief guest, on the proclivity of great powers to play “headman”, quite contrary to the government’s intentions.

The game is rigged so that nominees of the Union government win elections

The process for Presidential elections is constitutionally rigged in favour of the Union government. The Lok Sabha, where every Union government has a working majority, has a vote share of 35 per cent. The Rajya Sabha — where the government, like the present one , may not have a majority – has a smaller vote share of 15 per cent. State legislative assemblies have an aggregate vote share of 50 per cent. But the weight for each state Legislative Assembly varies and is indexed to its population. Just 10 of the most populous states — out of a total of 31 states — together have a 37 per cent vote share in the electoral college. An MLA from Sikkim has vote value of seven versus 208 vote value that an MLA from Uttar Pradesh commands. This is one reason why political parties go all out to capture elections in state legislative assemblies.

Union governments have traditionally played safe and fielded nominees whose reliability trumps their candour. Political placidity is preferred to ambition. Being of an age close to permanent retirement is a key qualification.

President elect Ram Nath Kovind – the perfect fit

Ram Nath Kovind 2

Ram Nath Kovind, the BJP’s nominee and the 14th President of India, is a perfect fit. He is non-controversial and low-key. His Hindutva beliefs seem to be personal rather than aggressively political. Like President Narayanan, he is a dalit and hence a symbol of continued dalit empowerment. He is the first President from Uttar Pradesh — the most populous Indian state with the largest population of Scheduled Castes. His election reiterates that Uttar Pradesh, Prime Minister Narendra Modi’s adopted karam bhumi, remains close to his heart.

Thus far the average age of Presidents, at the time of election, has been 71 years. Mr Kovind is right on the button being 71 years of age. The youngest at 64 years was President Neelam Sanjiva Reddy. His subsequent actions reiterated that unrealised ambition is not an asset for this position. But age alone is no assurance of placidity.

K.R. Narayanan — never “a rubber stamp President” — shares the honour of being the oldest at 77 years, with R. Venkataraman (1987 to ’92).

Ironically, 81 per cent of India’s population is less than 44 years of age and 97 percent was born post-Independence. But all our Presidents have been from the pre- 1947 colonial period. It doesn’t need to be that way.

The minimum age to be elected President is 35 years. But till we effectively depoliticise the presidency, by defining a code of conduct with detailed guidelines for presidential action (an Indian Magna Carta), the potential for youthful ambition to seize power covertly, will dissuade governments from taking the risk of electing a youthful, erudite President, as the face of Bharat which is India.

children

An opportunity lost for being transformative

The government has played the “minimum-maximum” game to perfection. The irony is it didn’t need to do so. This was a low-risk opportunity to reinforce its commitment to cooperative federalism and to broaden the ambit of governance by pulling in apolitical talent. At the very least, it should have tried harder and negotiated in good faith, to get President Kovind nominated by all parties, rather than making him contest an election. Admittedly, there is no political tradition urging it to do so. But Mr Modi did not start out trying to be a template Prime Minister.

One hopes he will resist the institutional incentives to lapse into a transactional, rather than his earlier, transformative mode.

Adapted from the author’s article in The Asian Age, July 21, 2017 http://www.asianage.com/opinion/columnists/210717/template-rashtrapati.html

Fix the “market” for political power

Indian army

Citizens expect governments to intervene when the markets fail. The market for Diplomacy failed last month at Doklam. If the Chinese Army is to be stopped well north of the tri-junction between India, Bhutan and Tibet/China, then only the Indian forces, funded by taxes, can do the job. This is a satisfactory arrangement for all Indian and Bhutanese citizens, who otherwise may be hard-pressed to secure their territory.

When State failure fails to fix the underlying market failure

But not all government actions have an obvious rationale. Demonetisation was unleashed in November 2016 to end black money. Few believe that this objective has been achieved. Black money is not an outcome of market failure. It is an outcome of governmental failure to tax income effectively; control corruption or control crime. Poor governance only encourages the generation of black money, which then requires another intervention to root out black money. Economist Shanta Devarajan of the World Bank, in New Delhi last week for the NCAER annual India Policy Forum <http://www.ncaer.org/event_details.php?EID=184>  believes such iterative interventions are ineffective in improving the quality of governance, and can reduce the legitimacy of governments. Far better instead to rethink how to deal with the underlying market failure – in this case the “market” for political power.

Poor tax administration

So why do governments tax ineffectively? Most commonly, multiple objectives in the tax policy are to blame. The sale of loose groundnuts — the ordinary person’s food — may be tax-free but packed groundnuts, even if unprocessed, are taxed. This creates a five per cent tax differential for arbitrage between the two categories, which are difficult to administer separately. A single rate of tax levied on a non-evadable tax base is the most effective. But consider that this would be akin to the colonial “poll or head tax” — levied on each person uniformly. Effective, but terribly inequitable.

The killer “app” for instant equity – Universal Basic Income- how effective?

Admittedly, mechanisms like transfer of a basic income to the poor can neutralise such an inequity. But transfer of a similar amount of cash, to each poor person, itself creates huge inequities, even among the 40 per cent population vulnerable to poverty. Transferring differential amounts, depending on need, attracts the same inefficiencies as trying to administer progressive tax rates fairly.

The big 2Cs – Corruption and Crime

Why is corruption or crime so hard to control in India? If citizens feel that political power can be acquired by subverting the “popular” vote, it reduces their faith in the power of their vote. It also delegitimises the government and undermines its ability to rule, in the eyes of those who voted against the government. Bihar faced this conundrum for two decades.

It does not help that, in India, governments can be formed even with a minority of the total votes cast in elections, so long as each elected member of the ruling party gets more votes than the next candidate. This first-past-the-post system fractionalises politics. It encourages parties to form coalition governments, which are unable to discipline errant behaviour by their constituents. This “coalition dharma” fosters crime and corruption.

Are laws aligned with context?

An alternative explanation for pervasive crime or corruption is that laws are out of sync with local customs. And not enough has been done to change social behaviour beyond legislating transformative rights and duties. Ending open defecation — a prime driver to reduce the vulnerability of women to crime — is one such example. The benefits from ending open defecation are dependent on collective action. One reason why we did not do more earlier could be that the political incentives are perverse. They favour exaggerating, rather than bridging, the social cleavages of caste and religion, which inhibit collective, progressive decision making.

Feudal governance patterns breed poor accountability

Low public accountability and lackadaisical collective action can also be traced to the continuation of feudal traditions of governance and poorly distributed income growth. Richer citizens are more resilient to State encroachment of their rights and less dependent on State largesse. Luckily, over the past three decades, we have become less poor, better educated and more aware of our rights versus the State.

But the extent of inequality remains significant as does the infrastructure deficit across rich and poor areas. The privileged crust is thinner than a hand-tossed Neapolitan pizza — possibly just 10 per cent of the population. The rest seethe in forlorn frustration. Can we get away from this low-level equilibrium? Yes, we can by fixing the market for political power.

End the perverse incentives in our political architecture 

Our political architecture is riddled with perverse incentives which  constrain the will to reform. Here are four changes which are overdue – deepening decentralisation; enhancing state government autonomy; enhancing the representativeness of the legislatures and regulating political parties better.

First, bridge the trust deficit and distance between citizens and the State. Empower state governments versus the Union government and local government versus state governments. Hopefully, the 15th Finance Commission will carry forward the trend of forcing the Centre to devolve functions and Central taxes to states and directly to local governments based on performance criteria.

Second, cut the colonial fat; abolish the titular but unedifying position of state governors. These are unelected nominees of the Union government exercising oversight over elected state governments. Transfer this role to the President, who is elected. This will level the playing field between states and the Centre versus the presidency.

Third, make Parliament and state Assemblies more representative. Sharply reduce the size of constituencies. Only directly-elected members should be eligible to become Prime Minister or chief minister. A candidate should be able to contest an election for only one seat at a time. The winner must secure a simple majority of the available votes and two-thirds of the votes cast. Municipalities must be headed by elected mayors.

Fourth, the functioning and finances of recognised political parties must be made transparent. Inner-party elections must conform to common but effective guidelines. The Election Commission must be empowered to determine constituency boundaries and diversified beyond the administration, to include citizen representatives and the judiciary with the chief election commissioner chosen specifically.

Use the GST process of risk-free consensual decision making

GST became a reality as a process of cooperative federalism was followed led by the finance minister. Reforming the market for political power could benefit from a similar approach.

Adapted from the author’s article in The Asian Age, July 19, 2017 http://www.asianage.com/opinion/columnists/190717/power-structure-needs-reform.html

India’s pressured public institutions

BOOK REVIEW
Rethinking Public Institutions in India
Devesh Kapur, Pratap Bhanu Mehta, Milan Vaishnav (Eds)
Oxford University Press
548 pages; Rs 995

Rethnking Pub Inst in India

Public institutional reform has a stale air about it. There are plenty of options but little action. The sombre packaging of this book adds to this gloom. Possibly, the “monkish”, value-for-money branding is a consciously adopted tactic, setting it apart from the current trend favouring glitz and hype. The authors appear to be flinging a dare — that in their case substance needs no gloss. They are right.

PBM

The editors’ academic pedigree is reassuring. Pratap Bhanu Mehta is the best-known of them, a public intellectual extraordinaire and the acknowledged voice of evidenced, liberal political thought.
Devesh
His co-editors Devesh Kapur and Milan Vaishnav are US-based academics.
milan vaishnav
This new publication is a follow-on of a 2007 publication Public Institutions in India: Performance and Design co-edited by Messrs Kapur and Mehta.
The contributors are an eclectic mix of UK-, US- and India-based academics and Indian civil servants, serving, repositioned or retired. What is common is their deep and systematic association with public institutional development and an enviable record of publishing their work and opinions.
Are public institutions in India doomed?
So, are central public institutions going to seed? And does that explain India’s future challenges? The introductory chapter, written by the editors, provides an elegant, broad sweep of drivers and trends in institutional malaise, highlighting areas where performance has been dangerously below par. But the helicopter view is a mite too one sided, veering to a dark view of the state of national institutions.
Institutional resilience outnumbers the failures 
A more nuanced and refreshing view emerges from the succeeding chapters, each about a single institution. James Manor, writing on the Presidency, exquisitely details how this apex institution, despite the occasional failures of individual incumbents – think Fakhruddin Ali Ahmed who signed on the dotted line to impose emergency in 1975 and Giani Zail Singh, who was not averse to being actively political – has been a steady hand, safeguarding constitutional propriety and citizen rights from potential executive and legislative transgressions.
Errol D’Souza, reviewing the Reserve Bank of India, describes its pugnacious success in enlarging its regulatory space, solely through its performance-driven credibility. E Sridharan and Milan Vaishnav pen a fluid and attractively rendered tale, about the Election Commission of India, which has similarly earned its spurs. Eighty per cent of Indians trust it because of its remarkable conduct of timely, fair and efficient elections. Madhav Khosla and Ananth Padmanabhan describe how the Supreme Court has nurtured the public’s trust by courageously and consistently ruling in favour of equity, inclusion and fair play. However, they warn that dark clouds loom unless justice is delivered more efficiently.
Navroz Dubash writing on new infrastructure regulatory institutions – the Central Electricity Regulatory Commission (CERC) and the Telecom Regulatory Authority of India (Trai) – acknowledges that in the initial years both had to fight severe challenges from publicly-owned monopolies and their patrons in government. Two decades on, they are the arbiters of positive change. The CERC has overseen competition in bulk electricity supply. The Trai has curated highly competitive private telecom customer services and tariffs. However, Dubash correctly points to the need for enlarging the regulatory space such that all actors – the Parliament, Judiciary and the Executive become active players in negotiating regulatory outcomes, with the Regulator playing the balancing role,
Institutional failure more visible in sub-national entities
“State failure” is a malaise more visible in sub-national institutions, which have failed to imbibe the positive changes taking place in related central public institutions. State governors, legislatures, the lower judiciary, state public financial management institutions, electricity regulatory commissions, vigilance departments, and election commissions are often severely blemished. T R Raghunandan woefully records that institutions of local government remain ignored, underfunded and underused, except in Kerala, Karnataka and West Bengal. Consequently, inclusive growth suffers and an opportunity is lost for embellishing and inculcating local traditions of results-based democratic functioning.
But there are black sheep at the national level too
Not all national institutions, despite inherited advantages, have developed benignly. Parliament is one such. M R Madhavan ruthlessly excavates the reasons it has lost the public trust. R Shridharan similarly unravels why the Central Vigilance Commission, India’s anti-corruption agency, and its investigative arm, the Central Bureau of Investigation, have failed to establish their credentials. The former is merely a tool, to be used selectively, by the executive against its own officials. The latter is at its nadir. The moniker “caged parrot” accurately reflects why it has lost credibility in the fight against corruption.
The Comptroller and Auditor General (CAG) of India, the supreme audit institution, gets mixed reviews from R. Shridharan and Amitabh Mukhopadhyay. The CAG is uniquely placed and significantly empowered, to guide and assist Parliament to exercise granular oversight over the executive. Its path-breaking exposure, under Vinod Rai, of massive inefficiency and financial impropriety in spectrum and coal allocations lifted its public profile. But, in its “independence”, also lies the danger of it being ignored, through a “conspiracy of silence”, between a dysfunctional Parliament and a pliant executive.
The civil service, particularly its elite component – the All India Services (AIS), which constitute 0.03 per cent of the total civil employees and just 1 per cent of the Group A employees of the Union Government – have unambiguously failed. K P Krishnan and T V Somanathan admit that nothing has changed for the better over the past decade. Recruited on merit, this tiny elite thereafter enjoy the rents accruing from that initial, one-time achievement. But the authors shrink from endorsing that the AIS be phased out and its functions reallocated to the specialist cadres of the Central Services — these constitute 99 per cent of the Group A civil employees, who currently fester despondently.
This is a multi-layered, exhaustively referenced publication, which surgically exposes the dark side of public institutional dysfunction. But it also provides sufficient evidence of institutional resilience, on which an enlightened political leadership can build. A must-have, for all those who either belong to, or wish to join, the frustratingly uplifting community of public institutional developers.
Adapted from the authors review in Business Standard June 15, 2017 http://www.business-standard.com/article/beyond-business/public-institutions-under-scrutiny-117061401505_1.html
raj ghat
Raj Ghat – Gandhi ji’s memorial keeps the flame of “independence” alive

Modi: Unassailable at three

Modi parliament 2014

Modi enters Parliament for the first time in 2014 in a characteristic “Indian” manner – prostrating himself at the steps of this very British institution. Stooping to assimilate is the Indian way. Photo courtesy Indian Express 

Three years ago, when Modi’s BJP entered Parliament in May 2014, with a never before majority, the “realtors of Raisina Hill” (policy wonks and public intellectuals in Delhi) were full of doubt about whether a country bumpkin from Gujarat could navigate the gilded and suave avenues of Lutyen’s Delhi –  that part of the city, designed by the British for themselves in the 1930s, where todays rich and powerful elite lives and conspires in self-interest.

Modi does a pincer on Dehi elites

True to his Gujarati heritage and much like Gujarati emigrants to the west have done for ages, Modi made no effort to integrate or ingratiate himself into the elite. He cut his own lonely, furrow going around the established elite. Over time the furrow deepened into a moat which effectively encircled and confined Delhi’s elite to gossiping amongst themselves. Admittedly, his was an easier task than what confronted Gujarati emigrants overseas. But the tactic employed was the same. First, entrench yourself in the eco-ystem – get a job or start a small business; next, deepen your control on resources – build up capital and develop local relationships and finally look for gaps to fill – do what the lazy locals will never do.

Patels

The Patels – intrepid survivors in foreign lands – a smooth blend of modernity and tradition that makes them outstanding achievers and harmonious assimilators. 

There were initial hiccups. The BJP – essentially a north Indian, middle class party till then – first tried the babu approach of distinguishing itself from the previous government by rejecting even the good things the UPA had done – like NREGA and Aadhar. But Gujarati pragmatism and performance orientation won. The approach changed to building on what existed and exponentially expanding the scale and ambition of projects and policies, to shock and awe the public into abject Modi bhakts (followers). Nothing it seemed was impossible.

Modi’s ratings better than the BJPs

Three years on, the mood within the party is upbeat – not surprising after the massive electoral victories in Uttar Pradesh and then in the Delhi municipal elections. In sharp contrast to Trump, Modi’s popularity ratings beat those of his party. The inanities of the BJP’s rant on protecting cows rather than Dalits or projecting Hindu populism rather than political equality and security for the minorities is attributed by the common person to vested interests in the party – vigilantes who use the party’s hard line as a business or “God men” who use the saffron they wear to encroach on government land. Prime Minister Modi stands tall above this desperate fray for the crumbs of political power.

Sour grapes?

Detractors and cynics say it is hype which is keeping Modi in the stratosphere.  This is lazy analysis. There are three reasons why Modi has embedded himself into the public mind as the harbinger of a better future.

India’s Bill Clinton – responsive, charismatic peoples’ person

First, being of humble origins he feels the pulse of the people and responds to it. Demonetization was a temporary set-back for the economy and cost workers their wages or their jobs. But, they saw it as a plan to punish the corrupt and applauded the effort. Modi did not just rest on the laurel of public acclaim. He has successfully pushed the tax bureaucracy to unearth black money and investigate shady deals. Is this sufficient to end corruption? Clearly not. But it is sufficient to establish Modi’s credibility as having the gumption to take on the corrupt, rich and make them pay for their sins.

Neither Right, Left nor Liberal – for Modi, transactions matter, not ideology

Second, the expansion of social insurance schemes for the poor; progressive expansion of crop insurance; the 200 million Jan Dhan accounts opened; the switch to the direct transfer of benefits for the poor to their accounts; kick -starting the moribund highways program; the proposals to reform agriculture by legalizing the leasing out of land; freedom for farmers to market produce outside the clunky and corrupt, public sector Agricultural Marketing System; the boost in coal production by whipping the public sector Coal India; making Indian Rail more efficient with better services; the improved functioning of government offices – all serve to illustrate positive change.

Stellar stabiliser of the economy

Lastly, the Modi government’s biggest achievement has been to stabilize the economy. Wasteful public spending has been restrained by fiscal discipline; the growth momentum has been maintained and consumer price inflation kept low within the targeted 5 percent per year. New institutional mechanisms are in place now, with the Reserve Bank of India specifically charged to deal with the bad loans of public sector banks amounting to over 12 percent of their average assets.

But there are still promises to keep…

Critics of the government point to the unfulfilled promises on new jobs and the linked poor performance of industry and exports; lack of performance on the promised recovery of black money stored overseas and the continuing civil unrest at home in Kashmir and in the tribal belt, even though the BJP is now in power, directly or in an alliance, in these states. To be sure domestic violence – not least the violence injected by self-proclaimed vigilante groups- is worrisome.  The poor performance in exports is partly a function of a strong Rupee which makes exports uncompetitive but keeps imports, particularly oil, cheap – thereby restraining inflation.  High domestic interest rates protect small savings, particularly of pensioners; restrain the creation of yet another realty driven bubble economy and dissuades gold-plated, bank financed, industrial investment.

Talking freely with people, sharing and learning can build long term credibility

Modi in varanasi

Prime Minister Modi greets the people of Varanasi, Uttar Pradesh – his parliamentary constituency

Trade-offs between economic priorities are always contentious. The key is to evidence why government acts in a certain way and who benefits. Mere rhetoric will not do. It is here that the Modi government falters because of its irrational stand against spelling out how the outcomes of its policies benefit minorities. Consider that, ironically, Modi’s BJP has probably helped more poor Muslims and Dalits, than ever before, via financial inclusion, higher allocations for NREGA and the new crop and social insurance schemes. Yet, the government does not highlight this. Nor does it share granular data, whilst defending its track record on inclusion, which many regard as its Achilles heel. Talking with, not at the people, in an evidenced manner, about one’s achievements, especially when it can silence critics, is good. Try it.

A version of this blog is also available at http://blogs.timesofindia.indiatimes.com/opinion-india/modi-unassailable-at-three/

 

Delhi voters slap AAP on the face

modi kejriwal

The Lion of Delhi, Arvind Kejriwal, has been bearded in his den. The BJP’s massive victory in all three municipalities in Delhi — North, South and East — has left everyone flummoxed. However, it wasn’t all one way. The AAP held onto their seats as per the outcomes of the 2014 Lok Sabha polls in the South MCD. But it lost seat share in both the North and East MCD to the Congress. In both areas, it seems there was a “ghar-wapsi” (homecoming) of traditional Congress supporters, who had fallen prey to the AAP’s promise of transformation in the 2015 Assembly election.

Delhi State merely a jagir of the Union Government

anil baijal

Anil Baijal, Lieutenant Governor – the invisible satrap of Delhi

The forceful return of the BJP can only be attributed to the TINA (there is no alternative) factor. The confrontational politics of the AAP, which burnt its boats and utterly failed to establish a harmonious working relationship with the Centre, proved costly. Delhi is a Union territory, but with a twist — like Puducherry. Both have a Legislative Assembly that elects a chief minister. But it’s biggest asset — land — is directly controlled by the Union government, as is the police force and the civil service. The lieutenant-governor is the de facto ruler of Delhi state, and he plays to the tune of the Centre, which appoints him. Not all the hugs and shared parathas between the former L-G Najeeb Jung and Arvind Kejriwal could bridge this basic gap in political alignment. The new L-G, Anil Baijal, also follows the same route, an inevitable outcome of the fractured institutional arrangements in Delhi. Only if the same party rules the Centre, state and municipalities can this alignment be matched. This is not possible till 2020, when the next Delhi Assembly elections will be held.

Kejriwal can save AAP in Delhi by stepping down as CM

manish sisodia

Can things change even before 2020, if Arvind Kejriwal resigns, admitting he has lost the mandate to rule? This might be a canny move, and put him on the high moral ground. Ajay Maken, the face of the Congress in Delhi, has already resigned, even though his party made some gains in contrast to the 2014 Lok Sabha and 2015 Assembly results. The AAP has ambitions in Gujarat. The outcome of the recent Punjab polls should have taught Mr Kejriwal a lesson — that being an itinerant leader is only possible if one’s family is part of the political elite and has spent almost a lifetime in politics. A good showing in Gujarat would be a good base for enlarging the AAP footprint into the metros in Karnataka and Maharashtra. Left to himself, Manish Sisodia is a diligent leader with balance and the tenacity to show results, on the ground, in Delhi. More roads and flyovers built at less than the budgeted cost; more mohalla clinics and better services in the slums of Delhi is a painstaking job for an executive, not a charismatic dreamer.

Modi is the king of referenda politics

The Delhi municipal elections reinforce that charisma and shock and awe tactics work wonders. Like everywhere else, since 2014, these elections were fought in the name of Narendra Modi versus Arvind Kejriwal. In a costly tactical error, the AAP sought this face-off as a referendum. Clearly, Arvind Kejriwal has much distance to travel before he can be measured in the same metric as Prime Minister Modi.

Amit Shah is a one-man school for electoral management

The Modi-Amit Shah duo’s trademark electoral tactics of “placing” the right man to lead the Delhi BJP has paid off yet again. Manoj Tiwari, a Bihari actor, has a natural entry point into the significant voter pockets of recently-domiciled Puravanchalis — slang for immigrants from UP and Bihar. An outsider to the more traditional set of Delhi BJP powerbrokers, Mr Tiwari was also the least likely to invite backstabbing, unlike the hapless BJP late-entrant candidate Kiran Bedi, who lost the 2015 Delhi state elections. In any case, Mr Shah’s style of watertight oversight, now honed over half a dozen polls, precludes any dissent within the BJP now.

“dhili” Congress unravelled in Delhi

Compare this targeted “placement strategy” of the BJP with the Congress, which failed to rally its troops behind Delhi leader Ajay Maken. Arvinder Lovely, a Sikh leader, deserted the party for better pickings with the BJP. Manoj Tiwari’s counterpart in the Congress is Sheila Dikshit and her son Sandeep Dikshit. They have familial links to the Purabaia community via the late Uma Shanker Dikshit, Ms Dikshit’s father-in-law, who was a venerated UP politician of the independence movement era. Ms  Dikshit, Delhi’s chief minister for 15 years, from 1998 to 2013, was sidelined, possibly due to infighting between her and Mr Maken.

AAP – resource thin and exhausted post Punjab disappointment

AAP workers

If disjointed leadership cost the Congress dearly, the AAP suffered from electoral exhaustion; a dwindling bench strength and failing credibility. Arvind Kejriwal held out the ultimate bait — a promise to abolish property tax — to win over the middle class. This was the final nail in the coffin of responsible politics. Property tax is the primary source of revenue for all municipalities. Its abolition would spell financial ruin and even worse services than at present. In comparison, the BJP brings to the table the coffers of the Union government. The NDMC area, which is managed directly by the Central government, is a lush, green oasis for the gilded elite — the Lutyens people — in sharp contrast to the dusty, filthy Delhi, the rest of the national capital’s residents live in. The prospect of resembling the NDMC  area was a mouth-watering possibility that few voters would pass up.

Can Modi reproduce the well being of the NDMC area in the rest of Delhi by 2019?

NDMC2

Delhi has voted for the Modi magic to rub-off on them. The denizens of other metros may contest this, but Delhi best illustrates the diligent, aspirational and yet conflicted India — riven by caste, religious, regional and class cleavages. It is a ready crucible for implementing the PM’s vision of a prosperous, equal opportunity-oriented, highly skilled, healthy and sustainable India. Mr Modi is unlikely to disappoint.

Adapted fro the authors article in The Asian Age April 27, 2017 http://www.asianage.com/opinion/columnists/270417/delhi-gives-kejriwal-a-slap-in-the-face.html

 

Three constitutional safeguards against Theocracy

Hindu

The Rashtriya Swayamsevak Sangh “foot soldiers”- ostensibly till now a cultural “Hindu” organisation. Saffron is their colour. 

Utopian secularists are in convulsions at a “yogi” becoming chief minister of Uttar Pradesh. Of course, they have cause to worry. It does not help that Adityanath Yogi, as he now calls himself, has a history of political activism. Can he change his spots and rule equitably? Only time will tell.

The fear factor prevails 

Muslim

Secular Hindus – a minority themselves, and the religious minorities – particularly the Muslims- rightly fear even an implicitly theocratic state. The constitution specifies a secular State via an amendment in 1976. But there are no specific safeguards.

But all those who don’t subscribe to the Hindutva theology are bound to be fearful. And mere hope is not sufficient reassurance. The real question is why do we not have institutional safeguards to avoid an adverse outcome? Why are constraints on theocracy not specifically provided for by our Constitution and enshrined into workable instruments in our laws?

We kicked the communal “football” down the road in 1947

First cabinet

Pandit Nehru’s first cabinet had two Muslims and a Sikh as lip service to pluralism. But raw decision making power – in finance or in internal security, has never been out of Hindu hands – quite naturally, since close to 80 percent of India is Hindu.  

We should have known better. We have reached the natural culmination of where we have been headed since the formal adoption of a democratic architecture.  There have been early signs. But these were ignored because they largely never affected the elite. That one-fifth of Indians remain wretchedly poor shows that democracy has managed inclusion very badly. The status of women is another example where democracy has failed to translate into equity.

But the good news is that, in both cases, we have learnt and gradually built in safeguards to ensure inclusiveness. The political representation of the Scheduled Castes and Tribes has helped. Assured political representation for women in legislatures is an ongoing exercise.

Oddly, the Yogi, as CM, is a step forward towards reconciliation 

Odd as it may seem, we should welcome that the BJP has chosen pick Adityanath, the practising head of a mutt in Gorakhpur, as its chief minister. It would have been strategically better for the BJP to fudge and appoint a backward caste leader and continued to play the “game” of “political correctness”. That the BJP chose not to do so serves to highlight the existing yawning legislative gap between principle and practice. After all, the problems of Indian democracy can never be resolved unless we all speak and act from the heart, within the limits of the law.

Lets shed false pretences and bare our souls

sahibs

Much of the angst against Adityanath is drawn from the colonial “brown sahib” culture of political correctness. This culture privileges convention and process versus the outcomes of law. Examples abound. Brown sahibs believe that due process must be adhered to. Never mind that, in doing so, a poor applicant or litigant can get beggared into giving up the fight.  In the Brown Sahib’s logic, principles are not iron-clad concepts which produce and are validated by outcomes. They merely prescribe and often justify the process – rarely the outcome. Consider how shallow is our application of the principle of “right to be heard” in our law or the right to vote or the right to property.

Our constitution relies on good intentions, not iron clad safeguards

Our democratic architecture is inadequately developed to factor in the reality of India, with its multiple cleavages. If implicitly elitist rule has been possible over the last 70 years, it should not surprise us, if tomorrow brings implicitly theocratic rule. So for those of you who are uncomfortable with a Hindu yogi, a Muslim maulvi, a Sikh granthi or a Christian priest in a CM’s chair, here are three changes we need to introduce in our political architecture.

Mandate plurality in the cabinet

First, it is the privilege of the winning party or coalition to select any member of the legislature as CM. Can we not simply legislate that a religious head should never be selected as CM? Possibly not, because this would be a violation of the fundamental right to representation of a religious group. More practically, there is no watertight way of defining who is a “religious head”. Consider that Sadhvi Uma Bharti led the BJP to a three-fourths majority in 2003 in Madhya Pradesh and became CM. Unfortunately, she had to resign soon after, because an arrest warrant was issued against her on a 10-year old charge of inciting a riot. This setback also robbed analysts of a case study on how religious activists wield political power. The outcomes may well have surprised cynics. But it is best to explicitly provide for safeguards to curtail the potential for even an “implicitly” theocratic State.

One option, applicable at the national level and in large heterogenous states (not Sikkim or in the Northeast), would be to prescribe that the CM, the home minister and the finance minister can never be from the same religion or caste.  These are the three core positions in the Cabinet. This would automatically require political parties to create a rainbow leadership and not a narrow gender, caste or religion-based party cadre. Of course, it will still be possible to co-opt “nominal” members of the appropriate profile. So we need to do more than just introduce end-of-the-pipe restrictions post-election.

Second, the Cabinet must reflect the gender, caste and religious profile of the relevant jurisdiction. This is necessary for adequate plural representation at the decision-making level.

Mandate plurality in candidates nominated for elected office by political parties

Third, we must change the basis on which parties fight and win elections. Registered political parties must be required — by law — to nominate a rainbow of candidates, reflecting the gender, caste and religious demographics at three levels of government — local bodies, state or nation. This is necessary to ensure that the election rhetoric itself changes; votes are not sought on narrow or sectarian grounds and parties develop a pluralist voter base.

Three constitutional amendments to ensure political plurality

All three changes require specific changes to the Constitution so that “plurality” gets embedded in Parliament and in the executive.

It is over-the-top to believe that India or Uttar Pradesh can become a “theocratic” state just by having a “religious head” as its chief executive. As long as the Constitution remains liberal and non-discriminatory; the law is derived from the Constitution and the judiciary remains empowered, plurality and inclusiveness will remain enshrined in law. But additional safeguards are necessary to deliver inclusive policies and action on the ground. The BJP juggernaut is best placed, by using its massive majority, to display good faith by initiating these constitutional changes well before 2019.

nationalist muslims

Adapted from the author’s article in the Asian Age, March 22, 2017 http://www.asianage.com/opinion/columnists/220317/are-safeguards-possible-to-prevent-theocracy.html

 

 

 

Bulk up to beat the competition

Hulk

Scaling up is the name of the game in politics and in business. The BJP secured enviable gains in the early 2017 municipal elections in Maharashtra and Odisha. A win in the Goa state election is likely. A possible, albeit messy, near-win in Uttar Pradesh and potential inroads into Karnataka, Tamil Nadu and West Bengal portend that the Narendra Modi juggernaut is rolling out a massive, vertically integrated consolidation of party votes across the three levels of government.

Big, deep pockets business is in

In business, too, big is beautiful. Government banks and oil companies are being merged into competitively-sized entities. Reliance, India’s second biggest company by market capitalisation, after Tata Consultancy Services, still rankles at the loss of the top position due to faltering gas production. It is now hitting back at the fragmented competition in telecom, targeting an aggressive 50 per cent share by 2021.

ONGC

Bigger publicly owned enterprises and bigger government is the inevitable option if private investment response is weak 

The government sector too is expected to grow. Some of this is dictated by the compulsions of the faltering international economy. Private capital is risk averse when returns are dodgy. Public capital then is the only option. India is terribly under-capitalised in network and social infrastructure. We spend less than one half of what we should to get rid of the infrastructure constraints on growth and security. The government’s budget needs to expand by at least one-fourth to accommodate the necessary capital spend. FY 2017-18 is not budgeted to be different from the past. There is not enough time before the 2019 general election for grounding project plans into reality. Jobs will consequently be funded by public finance.

Citizen anxiety at being left out in the cold

anxious citizens

Should citizens and consumers then be apprehensive about the drive to consolidate and grow across government and business? Not really. Dominance is a systemic outcome of competition. Institutional safeguards can ensure that dominance is not misused to dilute citizen and consumer interests. The scale of operations should be a matter of choice, not compulsion, or the outcome of regulatory nudges. Citizens should rather be concerned that decent jobs won’t come unless businesses and government grow to scales dictated by market parameters.

Multiparty politics only means larger ballot boxes

ballot

The political architecture is similarly fragmented. A loose law allows a mind-boggling 1,452 political parties to be “registered” by the Election Commission under the Representation of the People Act 1951. Only 54 parties are recognised at the state level and just six are national parties. Recognition has stricter norms linked to voter share and elected candidates. Believe it or not, the commission’s powers to de-register moribund parties are not explicit.

Multi-party politics has become a fetish, far beyond its usefulness to the average voter. Tightening up on representational norms is possible without diluting the basic freedom to choose one’s political party. Just gearing up the disclosure, internal governance and accounting requirements, to the levels required for companies, can reduce the number of registered parties.

Smart regulation can weed out frivolous parties

Enforcing regulatory compliance can deter frivolous registration and ensure responsible representation. This is illustrated by the experience of companies. Of the 16 million commercial entities operating in India, just one million are registered under the Companies Act 2013, despite the benefits which accrue from registration. It is not as if only large commercial entities choose to get registered. 66 per cent of companies are very small with an authorised share capital below Rs 1 million or just $15,000. But the widespread reluctance to register is because of the accompanying higher levels of disclosure required. Political parties would respond similarly. Only the most serious ones would remain registered if regulatory requirements were increased in the public interest.

Political consolidation as a public good.

Why should we think of political consolidation as a public good? Our fractured and divisive social architecture provides ready opportunities for exploitation of the cleavages for narrow political purposes. We must make it difficult for parties. which cater solely to narrow agendas. Social inclusion fundamentalists would rebel against any institutional constraint on the freedom of a political party to represent even marginal views. But look at the trade-offs. Caste and religion find no place, in our Constitution, as legitimate grounds for political mobilisation. Introducing institutional mechanisms which encourage broad-banding of political platforms is therefore legitimate.

Mandate rainbow nominations for inclusive politics

symbols

One way to ensure such broad-banding across castes and religions is to mandate that parties must replicate the prevailing rainbow of castes and religions while nominating candidates in specific jurisdictions. Savvy political parties are already doing so. The BJP broadened its appeal to dalit and backward caste voters in Uttar Pradesh (2017). A quarter of Bahujan Samaj Party candidates are Muslims to demonstrate Mayawati’s good faith while seeking Muslim support. The Samajwadi Party’s tieup with the Congress broadens its appeal to dalits and upper castes — both long-time supporters of the Congress.

In a fragmented political market, institutional compulsions to broaden the electoral base can be an effective catalyst for consolidation. This would be a welcome change from the minimalist strategy of securing the largest number of votes polled by splintering your opponent’s vote share below your own.

Leave room to grow 

Limiting governmental and private sector dominance by constraining their ability to grow has negative social and economic outcomes. We barred Facebook from giving free access to a limited Internet space in 2016 due to the misplaced fear of deep pockets-driven future dominance. E-commerce — similarly driven by deep pockets — has somehow bucked the tendency to protect incumbents. Institutional reform to regulate big institutions is overdue. Smart laws and empowered regulators can sift destructive dominance from scaling up for efficiency enhancement. Bulking up is the international trend. We cannot but conform.

shoes

Adapted from the author’s article in Asian Age, March 9, 2017 http://www.asianage.com/opinion/columnists/090317/in-politics-like-in-biz-bulk-up-to-beat-rivals.html

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