governance, political economy, institutional development and economic regulation

Archive for the ‘Judiciary and Law’ Category

Electric subsidy – Haryana’s burden of riches

Khattar

Today we found the grandfatherly chief minister of Haryana Mohan Lal Khattar smiling at us out of a half-page advertisement, paid for by taxpayers, announcing an “unprecedented decision” of his government. From October 1, 2018 onwards, electricity customers consuming less than 500 kilowatt hours per month would pay between 16 to 47 per cent less to their distribution utility. The advertisement proclaims that 4 million consumers in Haryana would benefit.

Cross-subsidy will increase

So who is going to pay for this pre-election bonanza and why is it necessary? In 2017-18 the Haryana Electricity Regulatory Commission (HERC) estimated that the all-in cost of supply to a low tension (LT) consumer – low tension here refers to the voltage of supply and not the potential for aggravation – was Rs 7.25 per kWh. Compare this with the paltry existing tariff which ranges from Rs 2.70 to 5.56 per kWh, increasing progressively up to a monthly consumption of 500 kWh. At no point of consumption, till 500 KWh per month, does the utility recover its cost of supply.

Fiscal red flags may be raised

With the latest bonanza, this loss would further increase. To be sure the HERC can recover some of this loss by charging even more than the cost of supply to other consumers who use more electricity at LT or increasing the tariff for Industry which uses High Tension supply. That has been the strategy all along. But there are problems with continuing the “robbing Peter to pay Paul Robin Hood” approach to finance a utility.

So why have an Electricity Act at all if it is to be flagrantly flouted?

First, the Electricity Act 2003 enjoins regulators and utilities to decrease (not increase) cross-subsidies (meeting the loss from one by over-charging another). This is not just an issue of commercial equity that customers should be charged what it costs to serve them.

Far more important, excessive cross-subsidy can and does severely distort prices and business decisions. Those charged below market rates are prone to wasteful use. Those charged more are prone to steal, game the system (by getting multiple meters) and in the case of industry, become uncompetitive versus other producers in states with more rational tariff policies.

That Haryana’s prices are severely distorted is clear from the fact that the new reduced tariffs (Rs 2 to 4.27 per kWh up to 400 kWh and Rs 4.56 per kWh up to 500 kWh) will not even meet the utility’s cost of power purchase which was Rs 4.13 per kWh last year. Increasing rather than reducing the cross-subsidy and taking it beyond the statutory maximum limit of 20 per cent is ultra vires the objectives of Section 61 of the Electricity Act 2003.

Where are the poor in Haryana and how many are they?

Trump Village unveiled in Haryana

Waiting for goodies – A village in Haryana’s backward district Mewat renames itself as “Trump Village”. 

Second, does the average Haryana electricity consumer need the deep subsidy? The answer is a resounding no. First, the level of poverty in Haryana was one of the lowest in the country at around 11 per cent in 2011 (census data) when the national average was 22 per cent. Since then it has been a high growth economy clocking 11.5 percent per annum in current prices. Poverty in Haryana is low, possibly less than the 3 per cent red flag. Second, the average per capita income is the fifth highest (2014-15) with only Delhi which is part of the contiguous National Capital region and Chandigarh which is Haryana and Punjab’s combined capital ahead of it, along with Goa and Sikkim. Third, it is a 100 per cent electrified state which had 4.1 million electricity customers in 2007. The existing retail tariff subsidizes consumption up to 500 kWh by between 63 to 23 per cent. The new tariffs would increase the subsidy to between 72 to 35 per cent.

Has HERC lost credibility?

Why was the state government in a hurry to announce these new tariffs without any supporting announcement from the regulator? Possibly, this illustrates the current impatience with due process and cynicism around independent regulation. But more likely, this is just one in a series of pre-election bonanzas.

Haryana joins the race to the bottom of the tariff reform ladder

Can Haryana afford to waste money on poorly targeted freebies? The answer is a qualified yes. Haryana’s fiscal stability, as measured by the “revenue deficit (RD)” – the excess of current spending over revenue, is better than its immediate neighbours- Rajasthan and Punjab. Haryana’s RD was high at 2.4 per cent of gross state domestic product (GSDP) in 2015-16. But it is expected to reduce from 1.4 per cent in 2017-18 to 1.2 per cent in 2018-19. The latest subsidy bonanza may, however, upset plans to meet that target.

amrinder khattar

Comparing oranges with oranges, Haryana comes out smelling sweeter than Punjab. The latter state’s RD was 3.1 per cent in 2017-18 and an estimated 2.5 per cent in 2018-19. Rajasthan is an also-ran, with an RD of 2.4 per cent in 2017-18 and 1.9 per cent in 2018-19.

Three other non-contiguous states are worse than Haryana in 2017-18 – Assam, Kerala and Himachal Pradesh. But that still leaves 24 other states doing better than Haryana. That statistic alone should make Haryana’s combative leadership and progressive citizenry stop and re-think their fiscal allocations.

Negative messaging on reform

Even if Haryana has money to spare, subsidising electricity customers is a poorly targeted priority for its resources. It also does not speak well of party discipline and ideology since the Union government ruled by the BJP, as in Haryana, has diligently followed the fiscal stability agenda.

15th Finance Commission should penalise Haryana for poorly targeted fiscal exuberance

Fiscal exuberance in “rich” states just prior to elections needs to be penalised. One hopes the Fifteenth Finance Commission evolves a formula for penalising freebies (political gifts). The judiciary can also bell the cat as it is doing in an environment and human rights. Adding the fiscal review to the overburden of the higher judiciary is a bad option. But we may be heading there if public funds are spent with impunity for partisan benefits.s

Also available at TOI Blog, September 13, 2018 https://blogs.timesofindia.indiatimes.com/opinion-india/haryanas-burden-of-riches/

Unbundling State effectiveness – current perspectives

dreams

Context is everything. No one model exists of an effective State. Hugely diverse countries like India can benefit from a modular approach enabling sub-national jurisdictions to shape their State architecture taking into account their context, the available resources and their dreams. The last is important. “Dreams” -as opposed to short-term ambition- are a mix of inherited drivers for action. They determine who we want to be- a long term goal. Consider, that in the long term – any period after 20 years – every factor of production that appears fixed today -technology, natural resource use, and human capital- can be changed.

Core sovereign functions

A large part of the modern sovereigns effort relates to overcoming negative “externalities” (war, insecurity, crime, environmental degradation) or enhancing positive “externalities” (sanitation, public health, basic education, transport, energy and communication networks). An externality is a cost which cannot be allocated to any one entity or a benefit which is not enjoyed by just one individual. This results in the need for “collective action” to finance and execute plans to deal with externalities.

Dealing with the problem of “collective action”

Using State executive agencies to deal with externalities was the pervasive form of “collective action” till the 1970s. Experience shows that those State interventions, which work “along the grain” and align with public sentiment are effective. Consider the baffling, continuing insecurity in Kashmir despite a massive deployment of security forces. A wider domestic and diplomatic engagement with the root causes of Kashmiri disaffection could help. Note that in sharp contrast, China deals with Uigur resentment in its Xinjiang province with a heavy, repressive hand. If the Economist is to be believed, it keeps 1 million Uigurs – more than 10 per cent of this Muslim minority group- in detention camps for “re-education”.

Hybrid options for “collective action”

Hybrid options for “collective action” have emerged over the last four decades. These unbundle the core sovereign functions from those which can be undertaken by private entities. Private contractors perform even routine security functions; lease out, maintain and even operate equipment for government agencies. Government can get things done by others rather than do them itself. But using this model extensively requires government agencies to change its skill set from project implementation to project design, contracts, finance and monitoring. There is insufficient evidence that government is making that transition. Public Private Participation (PPP), with the private sector putting in capital and bearing the implementation risk, has died in India.  Government was unable to make the functional transition to design and manage contracts effectively for mutual gains. Private investors used the mechanism as a way of earning riskless returns using bank loans. The term “Public” in PPP gave banks carte blanche to extend loans to “lemons”- projects with dodgy financials.

Bridging information asymmetry

Managing information asymmetry is also a key sovereign function to reduce the transaction costs to efficient levels and allow market to grow. Legislating standards like “weights and measures” makes trade more efficient; making rules for disclosures on operational and financial results by business, makes stock markets more efficient; regulations for public disclosure of product contents, as in medicines and food, protect public health. These are “in situ” measures to bridge the information gap between buyers and sellers within a given market structure.

Making markets competitive

Non -competitive markets induce inefficiency and impede growth. On the supply side, the government’s job is to avoid cartelisation by existing suppliers and regulate the level of market dominance of individual suppliers. The Competition Commission of India, backed by appropriate legislation is the vehicle for doing this.

Aggregating demand is the flip side option to keep markets competitive. User’s cooperatives are one traditional option. Government owned demand aggregators, like the Energy Efficiency Services Limited (EESL) are another option. EESL reduced the retail sale price of energy efficient LED bulbs by 75 per cent over 2012 to 2015 just by buying and distributing at scale. Private demand and supply aggregators like Amazon and Flipkart are newer options which operate like mini-markets reducing transaction costs for both sellers and buyers.

Markets – building blocks of the future

Global ideological polarisation around the usefulness of markets for reducing transaction cost and spurring competition via innovation came when China, under Deng Xiaoping adopted, in 1979, what later came to be known as “capitalism with Chinese characteristics”. Collapse of the Berlin Wall in November 1989, signalled the end of Soviet Union style socialism and the ensuing ideological polarisation around markets.

Bumbling liberal democracy versus totalitarian efficiency

Political Science became simpler post 1990 as nations clustered around two major clusters. The larger chunk consists of nations which align with, or aspire to, the western model of governance – democracy, multi-party elections, citizen rights and public sector governance reform to minimize the direct intervention of the government in the economy. India fits squarely into this set.

A smaller set of nations, with China in the lead, subscribe to the supremacy of the Party as the mediator between the State and the people. State control remains pervasive via public investment and Party cadres in key positions in the private sector. The “national interest” dominates citizen interest. Controls on family size (till recently), continuing controls on domestic migration and a weak judiciary are the downsides.

The “middle kingdom” shines

china shine

The spectacular economic success of China over the last four decades, including in reducing poverty below 3 per cent, provides powerful evidence that the State can function as effectively as the private sector. This model produces results but also future tensions in an artificial short-term, trade-off between citizen rights and economic progress. If development empowers people, how will a system based on the sacrifices of the many for a few, shake-off the bonds of political subservience it engenders?

Listening to discordant voices or ignoring “noise”

China has the managerial freedom to implement decisions without catering to the “noise” from political opponents or muted public opinion. Curiously, this is not too different from what Elon Musk, the founder of Tesla wants. By taking Tesla private he can avoid the relentless scrutiny of shareholders and the discipline of market expectations.  In India the need for consensus is a brake distorting efficient solutions. Consider the case of the Goods and Services Tax.  The GST, an efficient tax reform, languished for over a decade. In 2016 the Union government conceded managerial ground to the GST Council. It agreed to make implementation “revenue neutral” for state governments. A back stop Union government guarantee protects against short fall in tax revenues. The potential risk of “moral hazard” is the risk.  Multiple tax rates, knowingly sacrifice the efficiency gains from a single rate of tax. But the architecture now exists; systems are stabilizing, the rates can be adjusted based on experience. Listening to the people via the state governments has paid off.

Living with the “nuisance” of judicial review

China has no patience with judicial review of its decisions. This makes the government and the Party supreme. India is a liberal democracy, even though we chose to call it “socialist” in 1976 via an amendment to the constitution. The power of “public interest litigation” effectively restricts the ability of the government to undertake significant change, except via constitutionally aligned legislation.

The initiative of the Vajpayee government to privatise State Owned Entities in 2000 quickly ground to a halt. It became impossible to implement the legislative changes required to change the public ownership of state owned enterprises like ONGC, what have statutory status since 1956 or banks, which were nationalised by legislation in 1969 and select private industries nationalised in the 1970s.  “Reform by stealth” – the Indian approach, truly has its limitations.

India, stolidly elephantine moves

Elephant

It is instructive that one and a half decades after electricity reforms were initiated in 2003 there are privatised electricity distribution utilities in the national capital of New Delhi but a State Electricity Board, created under the Electricity Supply Act 1948, continues to function in the state of Kerala – the last bastion of the Left.  India assimilates multiple ideological regimes, per the local context.

Local governments bring innovation and accountability

Successive Finance Commissions have devolved more resources and responsibilities to local bodies. But Panchayati Raj, the third level of government, embedded in the Constitution in 1992, remains sparingly implemented. One third of the annual growth in the pool of Union tax revenue must be incrementally, directly devolved to local government, as shared benefits. This will enhance local ownership of the growth process and facilitate empowered grassroots leaders to grow into future national leaders.

A nation of itinerants

train stations

Decentralisation brings to the fore, multiple potential threats – the problem of equitable allocation of funds; ideological permissiveness and political dismemberment. These are real threats.  But India has stabilizers built into the constitution– free migration and the rule of law. So long as our laws promote non-discrimination and equality, the market for work and liveability will make a person vote for national integration with her feet and move to a place, where she feels secure and productive.

One fourth of Indians do not live in the place where they were born. This is why the Aadhar unique digital identity, with appropriate safeguards for private information, is vital to secure seamless access to public services anywhere in this country of itinerants.

There is a curious dichotomy today. The world looks at India as a major determinant of its future. But we, within India, are still staring at our navel awaiting enlightenment from without. It is time we claim our place in the Sun by making our actions speak for us.

 

From the authors opinion piece at the Law School Policy Review, gust 19, 2018 https://lawschoolpolicyreview.com/2018/08/19/unbundling-state-effectiveness-current-perspectives/

Secrecy, privacy and property rights

access denied

Rahul Gandhi alleged, during last week’s doomed-from the-start no-confidence motion in Parliament, that corruption in the 2016 agreement signed by the Narendra Modi government to purchase 36 Rafale fighter jets from France had forced defence minister Nirmala Sitharaman to backtrack from her assurance to disclose details of the price of purchase.

Parliamentary subterfuge – unnecessary, if there is nothing to hide

The matter could have been ended by Ms Sitharaman admitting that being new, she had overlooked the confidentiality clause – a plausible explanation since military purchases are a tough, black box to unravel. Instead, the government chose to hit back by pinning the blame on a 2008 bilateral security agreement signed by the then UPA government with France. This needed both parties to protect classified information which could compromise the security and operational capability of the defence equipment of either.

It is quite a stretch to argue that keeping the price paid a secret meets the test of “necessity” or “proportionality” which guide how much a citizen’s right to know can be restricted. The Chinese or the Pakistanis couldn’t care less what the Indian taxpayer shelled out for the fighter jets.

They likely already know the specifications of our purchases. But at the same time corruption cannot be lightly presumed to be the reason why Ms Sithraman backtracked. Expect this unresolved debate to hang like an ominous cloud as the counter to the BJP’s allegations of corruption during the previous UPA government.

The underside of unrestrained privacy

Privacy is to individuals what secrecy is to the State.  The debate on privacy got muddied by the recent arraignment of WhatsApp for being the conduit of fake news, which incited vigilante violence and hate crimes.

WhatsApp encrypts content in its pipes end-to-end like no one else. Complete secrecy attracts 1.5 billion active monthly users and 60 million messages per day. Its end-to-end encryption cannot even be decrypted by its own administrators. This rabid commitment to secure the privacy of its users doesn’t align with the extant law and is as over-the-top as is our government’s thirst for secrecy. The fundamental right to privacy is restricted by other fundamental rights, including public order, security and those embedded in Article 21 of the Constitution of India, to which privacy was also mapped by the Supreme Court in 2017.

A fundamentalist view on the right to privacy has spawned “dark”, impenetrable means of communication, like WhatsApp. This is a precursor of what could happen if the “dark web” becomes the norm. Similarly, if crypto currencies are allowed to subvert a sovereign’s power to issue currency and bury crime-related financial transactions underground, catastrophe beckons.

WhatsApp managers initially expressed technological helplessness to regulate the unsavoury use of its technology. They are now making conciliatory noises with an eye to their bottomline. Non-compliance could jeopardise their application for adding-on a payments app in India.

Psst! I have a secret

Secrets

Why has WhatsApp been allowed to linger on and not simply told to shut shop, as is China. The bottom-up view is that encrypted communication has wide appeal across political parties and individuals. We all have secrets.

WhatsApp democratises the power to have secrets, unlike the Official Secrets Act 1923, which locates this power only within the State. WhatsApp allows everyone to have secrets. This suits freewheeling democratic India.The last word on the privacy of digital data will be from the Justice B.N. Srikrishna Committee on data protection. This committee, appointed in August 2017, has worked in unprecedented grand isolation. Presumably, things have been decided behind closed doors and the collective wisdom will be revealed in due course.

TRAI recommendations on data privacy and security mundane, at best 

But in chaotic India, surprises are routine. Days before the report was to be submitted, the Telecom Regulatory Authority of India (Trai) published, on July 16, 2018, its recommendations on privacy, security and ownership of data. The TRAI recommendations are unlikely to make the committee pause and think again. It is already broadly agreed that the individual’s ownership of data is paramount. But both the fundamental right to privacy and the right to property over data are restricted. If the necessary safeguards exist to mask sensitive and personal information, the plea of privacy loses force for denying access to data, at least to the State.

Artificial intelligence requires masses of data to train machines to think and behave better than humans. Anonymised data aggregated across a large number of individuals is more valuable than oil, in order to understand and predict contextual human behaviour.

Who is “Free riding” on data?

The debate on free riding on data has focused on how aggregators free ride on individuals data. However, if an aggregator “pays” explicitly for using individual data, ownership over data should stand transferred to the aggregator. Consider that in touristy locations across the world, locals demand a fee to be photographed. Such contracts, for non-anonymised data, with adequate safeguards, should be encouraged not pushed underground.

With respect to strictly anonymised data the right to deny or withdraw access to, despite adequate masking safeguards, can be viewed as anti-development and also at a stretch anti-national. At the very least, denying or withdrawing access to anonymised data should attract a cost to be paid, since it amounts to “free riding” on the technological benefits gained by others providing their anonymised data.

TRAI has passed up an opportunity to assert that the ownership of anonymised aggregate data should vest with the entity doing the aggregation if a specific contract exists with the data generator (app user). This needs to be clarified to retain the value proposition in data aggregation.

A market for anonymised data

Conversely, TRAI has ignored the need for a market to price data. A market exists even today. But it is an informal and non-transparent market which hurts the commercial interests of the individual data owner and puts the controller or processor of data in the driver’s seat. This information asymmetry can be removed through innovative institutional development to ensure that individuals are not shortchanged and have to sell their data cheap – much like innocent tribals selling their land for peanuts. If data is the new oil, it must priced accordingly.

Restore property as a fundamental right 

demolition

We have grossly neglected property rights in general and specifically in the context of  data management. Civil society mostly focuses on safeguarding the privacy aspect of data management. There is a reason for this. Unlike privacy, the right to property stopped being a fundamental right in India in 1978. This makes it difficult to challenge laws infringing on property rights.

Conversely, the higher judiciary has been indulgent in admitting public interest litigation  (writs) challenging laws threatening fundamental rights generally, so privacy gets privileged legally over property. Privacy rights also align with the need to decriminalise gay sex. It is an emotive issue. In comparison, a right to property seems almost crass, where 60 per cent of people own no land or electric consumer durables; 40 per cent of households live in just one room and can fit their possessions into a gunny sack.

But make no mistake. Socialism erred in hiving-off the right to property from human rights. Property is intrinsic to the right to privacy and liberty. But we will have to keep arguing till we fix this error, eventually.

Adapted from the author’s opinion piece in The Asian Age, July 24, 2017 http://www.asianage.com/opinion/oped/230718/whatsapp-row-on-secrecy-privacy-property.html

Who rules Delhi?

Delhi throne

Khichdi – Risotto if you prefer the Italian version – is a traditional palliative for Delhi belly. But Delhi’s khichdi style political governance systems are guaranteed to give anybody the runs. So bad is the mess that it is difficult to find out who rules Delhi. The Delhi Government, a contender, appealed against orders of the Union Government to clarify its constitutional mandate.

Supreme Court clarifies the law

The Supreme Court, in its July 4, five judge bench, judgement, patiently re-explained the law, without venturing to drill down to the crux of the dispute between the Aam Admi Party (AAP) government and the BJP ruled Union government – who controls the public servants in the government of Delhi? The dispute closely resembles a Saas -Bahu quarrel – principally, who gets to jangle the house keys and run the house.

Judicial decisions unlikely to resolve political power stand-off

The AAP came to power by promising to the good but poor, people of Delhi, to set right the tyrannical, corrupt Delhi bureaucrats and other elites. The AAP found, to its dismay, that they had less real powers than the Municipal Commissioner of Mumbai. Being a glorified Municipal Commissioner was of no use in leveraging the AAP onto the national level and that too within months of coming to power. AAP chose the path of open, tactically public confrontation with the Union government in a David versus Goliath stand-off.

To be sure, the BJP run Union government’s intention were hardly kosher either. It tried to swat the AAP at every opportunity. The previous Lieutenant Governor (LG), Najeeb Jung – appointed by the Congress, called an end to his stressed innings in December 2016.

Will the Supreme Court verdict change things? India is peculiarly American in its belief that good laws and sound judgements can set things right. There is little evidence to support this belief. Laws, which are out of sync with reality and judgements which are legally correct but practically iffy are not the stuff that good governance is made of.

Expectations build reality. Delhi is often described as “closely resembling a State government”. Delhi is as much a state government as we are a “federal” country – another slipshod simplification used for the essentially unitary form of our polity albeit with some federal characteristics.

How it all began

Delhi government is a “special” child of the Indian National Congress, which was in power in the Delhi Metropolitan Council uninterruptedly from 1972 till 1990. In 1991 the INC decided to embellish their jagir with a totem of statehood- possibly to appease citizens with a magic bullet which would solve all their problems. In 1992 the 69th Amendment to the constitution – prescribed a special status for Delhi. It became a hybrid between a Union Territory, like Puducherry and a State government, like Goa.

But no matter how many new, white Toyota Innova’s Mr Kejriwal adds to his cavalcade, he will remain a Chief Minister in name only and Delhi’s Legislative Assembly a caricature of democracy. This is not because Mr Kejriwal or the legislators are wanting on merits. But the constitutional arrangements militate against them having a free hand in providing good governance.

Kejriwal

The proximate cause of the constitutional spat is that the Union government claims the Delhi government has no independent powers of managing their employees. It must do so only with the concurrence of the Union government. Municipalities face a similar constraint versus the State governments, which sit on their heads. The Supreme Court (SC) has not dealt explicitly with this critical issue. But reading between the lines, two implicit messages emerge.

SC judgement implies Delhi Government competent to legislate and execute on Public services

First, the SC has specifically stated that all matters in the State list, other than the three exempted subjects of Public order, Police and Land are within the legislative authority and hence also the executive authority of the Delhi government. State public services are one such subject at entry 41 of Schedule 7, List II of the State List of the constitution. A plain reading of the SC order indicates that this subject is within the mandate of the Delhi government.

But Delhi does not have its own cadre of IAS officers allocated to it or Provincial Service Officers appointed by it, unlike other states. It is staffed by IAS and DANICS (Delhi, Andaman and Nicobar Islands) officers, made available to it by the Union government, which is the cadre control authority.

Union government’s view on services too expansive

It is unclear where the Union government’s powers to manage these cadres end. Allocation of specific officers to Delhi, training, promotion and disciplinary action are powers intrinsic to cadre management. But must the Union government also approve their posting to or transfer from one position to another within the Delhi government? These are routine decisions which affect individual officers but do not impinge on cadre management.

LG only an “engaged watcher” on all matters except Public order, Police and Land

Second, the SC drew a useful distinction between the right of the LG to be informed of all decisions of the Delhi government and his specific power to reserve a matter for the orders of the President. It was careful to emphasise that the latter is to be used only in exceptional cases. This indicates that the Supreme Court veers towards a rational and harmonious sharing of personnel management powers between the Union and the Delhi government.

The sprawling Delhi bureaucracy prefers the Union government as “Mai-Bap”

A May 21, 2015 notification of the Union Home Ministry espoused the view that the Delhi government has no powers with respect to management of public services on the specious grounds that it has no public services or State Public Service Commission of their own.

The Union government’s unorthodox viewpoint draws support from the all-powerful IAS/DANICS cadre which fear loss of prime status, versus the uniformed services, if they are subjected to control of the Delhi government whilst the police remain directly managed by the Union government. The Delhi High Court will now rule on this sensitive issue.

Dharna

Delhi’s bloated administrative architecture wastes public money. It creates a clash of political egos and a surfeit of elected authorities all elbowing for space in just 700 square km of urban space. Delhi should revert to the 1956 arrangements – Union Territory with an Administrator overseeing the existing four civilian municipalities. But each must be headed by a directly elected Mayor. If the experiment works, India’s metros could finally join the world in participatory local governance.

Delhi babus – between a rock & a hard place

delhi strike

The breakdown of a working relationship between the Aam Aadmi Party (AAP) government of the National Capital Region and its officers is a seminal moment. On February 19, AAP legislators heckled, abused and allegedly assaulted Chief Secretary Anshu Prakash, the Delhi government’s topmost bureaucrat, at the residence of the Chief Minister (CM). Both CM Arvind Kejriwal and deputy chief minister Manish Sisodia were present.

The legislators allege that the chief secretary (CS) used intemperate language in the shouting match between them. Cross-first information reports have been lodged by the two rival parties with the police. Further investigations would reveal the facts.

Chief Secretary’s complaint is, primae facie, more credible

But the circumstantial evidence favours the chief secretary’s case. He was summoned to the CM’s house for discussions at around midnight. He found a group of 11 legislators and/or partymen — notably all male — assembled. He was made to sit on a sofa, sandwiched between two legislators, who subsequently assaulted him. The bone of contention, according to the CS, was that the legislators were outraged that TV advertisements on the completion of three years of the AAP government in Delhi were not approved in time. The CS avers the advertisements violate the Supreme Court guidelines for government advertisements. The AAP contends that holding up the advertisement, churlishly, is yet another instance of how the Central government uses the office of the lieutenant-governor (L-G) to shackle the state government.

The state government-level staff and officer unions have demonstrated and resorted to work-to-rule tactics against the criminal assault on a government servant while on duty — which attracts severe punishment under the Indian Penal Code. Two legislators — the alleged assailants — have been arrested. The Delhi government is in turmoil.

Partial devolution creates potential for conflict in operations 

Beyond the inter-personal behaviour issues, which may have sparked the conflict, a larger problem looms. Are institutional arrangements for governance in Delhi so fraught that they breed conflict between politicians and the hapless bureaucrats, who have to play to the tune of two masters?

Long-term observers would say that no, that is not true. After all, for over two and half decades since 1993 — when elections were first held for the Government of the National Capital Region — this is the first instance of violent conflict.

Delhi is just a “half-state government” — to twist Chetan Bhagat’s evocative phrase. The management of land, the police and the civil service remains with the Union government, represented by the L-G. If the same party is in power at the Centre and in the state government, any conflict can be resolved internally. This safety valve is taken away when different parties are in power.

In the past – guile, maturity and sagacity avoided a breakdown of governance

However, this is hardly the first time that different parties have been in power. In 1993-98 the BJP under Madan Lal Khurana ruled the state, while the Congress under Prime Minister P.V. Narasimha Rao ruled the Union government till 1996. In 1999-2004 the tables were reversed with Prime Minister Atal Behari Vajpayee of the BJP heading the National Democratic Alliance government at the Centre and chief minister Sheila Dikshit, of the Congress, at the state level. So why the open conflict this time?

One difference is, that on the previous occasions, when power was split in Delhi between two parties, both were national parties with mature leaders, well versed and socialised in working within the constitutional constraints of the separation of powers. Put simply, ever since Independence in 1947, a “Lutyens’ political set” has evolved, which often seems to have more in common with each other than their own party brethren from out of town. This is not unlike the Washington “Beltway” syndrome in the United States.

Its different now – the Lutyens consensus is shattered

Since 2014, this “Lutyens’ consensus” lies shattered. Prime Minister Narendra Modi shuns the airy, closeted politics of the Lutyens kind. He draws power directly from the masses. Arvind Kejriwal, chief minister of Delhi, is cast in a similar mould. He exults in being “common” — preferring sweaters to jackets even in Delhi’s winter, with a trademark muffler around his head to keep the wind at bay and is usually clad in sandals rather than shoes. His partymen emulate his casual dress style.

PM Modi and CM Kejriwal are zero-sum people

Mr Modi and Mr Kejriwal are both visceral men. Every election is a zero-sum game which must be won. Compromise is akin to defeat. This strategy has worked for both of them. Neither is likely to change.

Delhi has become the battleground for Goliath Modi to slug it out with David Kejriwal. When elephants fight, the bureaucratic grass is bound to get trampled. Anshu Prakash, the incumbent chief secretary, finds himself between a rock and a hard place. A mild-mannered old-school bureaucrat, he has none of the Machiavellian skills needed to become a trusted adviser, simultaneously, to two implacable political adversaries.

Poor devolution impacts all municipalities in India

Is this sorry state of governance an outlier? Unfortunately, no. Till 1993, Delhi was a Metropolitan Council working under the Union government. In the states, municipalities work under state governments. There is inevitably a potential for conflict, or at the very least neglect (as in Calcutta through the long years of communist rule in West Bengal), if different political parties are in power in the state government and the municipality. Delhi municipalities are currently ruled by the BJP. Their staff have demonstrated in favour of the Chief Secretary. They face symmetric harassment too.  Fuzzy separation of powers and functions and inadequate devolution of finance make local bodies dependent on state governments. This stops cities from becoming the fulcrum of participative democracy and keeps them from becoming vibrant growth centers.

Delhi is a tinder box for igniting urban class-conflict – restraint is advised

Delhi violence

More immediately, in Delhi, we need a truce. The AAP would relish being dismissed by the President of India on the charge of a breakdown in the constitutional machinery. Even as traditional Communist parties remain immersed in obscure, internal ideological battles, it is the AAP which has succeeded in igniting a genuine class war in Delhi, between the “haves” and the “have-nots”. Alas, there are too many of the latter. In this classic struggle, it is the establishment — the bureaucracy and the police — which bear the brunt of public frustration. A dangerous trend, which could be a tipping point, in urban governance.

Adapted from the author’s opinion piece in The Asian Age, February 24, 2018 http://www.asianage.com/opinion/columnists/240218/trouble-in-lutyens-land-babus-as-political-fodder.html

Supreme Court – between a rock & a hard place

supreme-court

Chief Justice of India Dipak Misra and the four judges who went public  Justices N. Chelameswar; Ranjan Gogoi; Madan B. Lokur and Joseph Kurian.  Photo courtesy Freepressjournal.in 

 

………will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India, that I will duly and faithfully and to the best of my ability, knowledge and judgement perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws.

The Oath of Affirmation for Supreme Court Justices 

The Supreme Court is a solemn place, as if in mute recognition, of the enormous faith reposed by 1.3 billion Indians in it’s 25 Justices to safeguard democracy.

But last week it was thrown into a tizzy, as four senior-most Justices of the Court, adopted Gandhiji’s tactics of “direct action” and went straight to the people of India with their anguish. So deep was their despair that they bared their anguish in public at a press conference and released a letter they had addressed to the CJI, adding that they had tried to settle the matter internally, by talking to the CJI, who apparently gave them short shrift. The cause of their worry is that the Chief Justice was using his traditional discretion in allocating cases amongst judges, to direct “politically sensitive” cases to judges who could be expected to rule in favour of the government.

Prising open the clannish Supreme Court of India

Indian Supreme Court is notoriously clannish. A “collegium” of the CJI and four senior-most judges, recommend new judges for appointment to the higher judiciary. The process is opaque. The President of India -ergo the government of the day – must formally approve the appointment. This provides an opportunity to the Government to hold up an appointment. But it cannot appoint a judge by itself. This system dates back two decades when the Supreme Court ruled, in 1993, that the power of appointing a judge was inherent to its ability to safeguard the basic structure of the Constitution – its key mandate.

Failed attempts to democratise the appointments process

The earlier UPA government and subsequently the Modi government sought to substitute the “collegium” with a Judicial Appointments Commission comprising the CJI and two judges of the Supreme Court, the Law Minister of India and two eminent persons appointed by a committee consisting of the CJI, the Prime Minister and the Leader of the opposition in the Lok Sabha. The act was approved in both houses of the Parliament and by a majority of state legislatures, as is required for a constitutional amendment and notified as the National Judicial Commissions Act 2014.  However, a five-member bench of the Supreme court struck down this amendment to the constitution on October 16, 2015, thereby restoring the “collegial” appointments” system.

Justice J.S Kehar who led the bench striking down the Act went on the become the Chief Justice of India under the Modi government, as observers hailed the victory of the rule of law, constitutionality and the preservation of the fundamental principle of separation of powers in a democracy. The Modi government silently licked its wounds. But recompense was not long in coming.

The “collegium” system is not fail-safe

CJI Kehar retired on in September 2017 and the senior most Justice Dipak Misra was sworn in as the CJI on August 28, 2017 per precedent in the “collegium” system. On Friday last, the earlier supporters of the collegial system of judicial appointment were on their feet again, this time praising the four judges, who had saved democracy and lauded them for their courage and resoluteness in coming out in the open against the CJI chosen by the very same collegial system.

This just doesn’t square. So, lets assume, for arguments sake, that the CJI was sending “sensitive” cases to judges, whom he felt would decide them in a particular manner. What were the possible options available to the four judges?

Hierarchy and faux seniority rules the Supreme Court, rather than genuine collegiality

Clearly the first was to have a chat with the CJI and apprise him that they took a dim view of what he was doing. The judges say they did do that. But when nothing changed they decided to go public with the amorphous charges.

It is pertinent to ask, why they never sought to rally around them, their brother judges. There are 25 Judges in the Supreme Court. Why could they not convince the 18, or so, other “uncommitted” judges, that something needed to be done? Surely, if the four judges had managed to get an additional 10 judges around to their point of view and had they put up a common viewpoint to the CJI, the outcomes could have been different.

Why did only one, of the five Justices, who, are slated on seniority, to become CJIs till 2024, speak up?

One of the four judges, who went public, is Justice Ranjan Gogoi, who is set to take over as CJI, once the present CJI retires, in October 2018. Why did they not similarly try and get the four other Justices who can become the CJI all the way till 2024 converted to their cause? Sharad Arvind Bobde – due to become CJI in November 2019; N.V. Ramana – due in April 2021; Uday Umesh Lalit – due in August 2022 and D.Y. Chandrachud – due to become CJI in November 2022. Was it because these judges did not feel similarly oppressed? If this be the case, it significantly takes away from the bite of the allegations voiced by the four judges.

Justice Gogoi- a profile of passionate courage or a lightning rod of deep dissent?

Justice Ranjan Gogoi has certainly put his neck on the line by disrupting the placid exterior of the Supreme Court. He has also certainly riled the government. Readers may recollect that Justice Khehar, the previous CJI had also riled the government, by heading the five-judge Justice bench which totalled the NJAC Act. He became CJI nevertheless. The Judiciary and the Bar have aligned view-points which are penetrable only by insiders.

It is unlikely, that, Justice Gogoi would have gone public without consulting with and getting the support of his brother judges and the Bar. Even Supreme Court Justices are human and are allowed a touch of self-preservation. More important they are expected to be rational, sans emotion, with their heads ruling their hearts.

Does this imply that dissatisfaction, with the administration of the Supreme Court, runs deep within the brotherhood? Also does this not show that the judiciary needs to change with the times?

Good governance is about narrowing discretion, even in the Judiciary

Specifying the procedure for case allocation narrowly, rather than leaving it to the discretion of the CJI, would be a good start. Cases can be randomly allocated, using a specially designed algorithm, since all the Supreme Court judges have the same status and come to the court after years of experience. Most importantly, if the “collegial” system is not fool proof in selecting judges true to their salt, why not try the collaborative approach of the NJAC. After all, Justice N. Chelameswar, one of the four judges, wrote the dissenting judgement supporting the NJAC. No one arm of the State has a monopoly on virtue.

 

Also available at TOI blogs January 18, 2018 https://blogs.timesofindia.indiatimes.com/opinion-india/the-supreme-court-between-a-rock-and-a-hard-place/

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