governance, political economy, institutional development and economic regulation

Posts tagged ‘Manmohan’

Saffron India

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The saffron deluge has taken everyone by surprise, like an early monsoon. The Modi storm carried away with it, anyone who rode with him and demolished all others, barring regional stalwarts like Amma, Naveen Patnaik and Didi.

Is this the end of caste as a political weapon? With Bhenji (Dalit supremo), Netaji (Ahir supremo-UP), Lallu (Ahir supremo-Bihar), Ajit Singh (Jat supremo-UP) all biting the dust and even Haryana going saffron, are voters taking caste out of national politics? Could this be stretched to say saffron can make the country less divisive- top downwards? Is there a hope that the next step could be to take caste out of state level politics? Well that clearly is Modi’s dream. But there are limits to Hindu integration and virtues in dissonance.

The democratic problem with an overwhelming mandate is that it reduces the opposition to a redundancy. In the extant case, saffron still has to contend with the Rajya Sabha where the NDA does not have a majority. More importantly, the recent Indian experience with huge majority governments has not been conducive for reforms. Of course coalitions are not a panacea for reforms either. The United Front coalitions of 1996 to 1998 were superbly ineffective. But the Janta Party wasted its massive 1977 win and Rajiv Gandhi frittered away the overwhelming sympathy vote in 1984. In comparison, significant economic reform happened only under the Narasimha Rao led coalition government in 1991; the Vajpayee led NDA government of 2000 and the Manmohan Singh led UPA I of 2004. There does seem to be a positive link between coalitions and economic reform. Possibly huge majorities induce comfort. The lack of competition douses the fire in the belly till ones time is up and it is too late.

Modi is not unused to huge mandates. After all he has led Gujarat for over ten years now. But it would be wise to pursue the idea of a “cabinet” of Chief Ministers and to engage proactively with the opposition. The last few years have seen rising inter-party acrimony making Parliament dysfunctional. To keep engaging, when not compelled to do so, is the best route to rebuild a national consensus on development priorities.

Modi is a man in a hurry, with an agenda to complete and too little time to do it in. It is consequently unlikely that he will let the baton slip. He would do well to use the UK-Tony Blair and Malaysia precedent and constitute small, vertically integrated, fully empowered, politico-technocratic teams with specific, measurable and time bound results expected from them. His secretariat is unlikely to be the laid back, free-wheeling entity it had become under Manmohan Singh, which reported to everyone but the PM. The expectation is that Modi will come to office with a pre-formulated agenda and a team to implement it doggedly.

Is the hoary city of Delhi likely to seduce him into somnolence? Again, very unlikely, given the cultural gulf tween the macho man from Mehsana and the pleasures on offer from the glitterati of Lutyens. His “quasi married” status is likely to generate many hours of speculation of who, if anyone, is likely to share 7 RCR with him.

The world will be waiting however, for any slip up on his management of the Muslim community. Whilst Modi seeks to treat all Indians the same and goes out of his way to say so, the fact is that to reverse the “selective appeasement” of the past will take time and fiscal space. Neither is available to him. This is where proxies and symbols can help to reassure minorities that he is their protector too. One important symbol will be his choice of the Home Minister, who whilst enjoying the full confidence of the PM, must be trusted by all segments of India.

Theorists will make much of the need for Modi to build or re-build institutions. This is very time consuming and effort intensive. Many of these (cabinet system; inner party democracy; the bureaucracy; federalism; the judiciary) were systematically destroyed during the long period of Indira Gandhi’s rule. Institutions do matter, particularly in a democracy, because they provide permanence in a politically unstable system. But in India we carry everything to extremes. No institution can atrophy and yet remain productive.

The central bureaucracy is one such institution. From the very beginning, it was merit oriented only at the point of entry. Even in that limited way, it did not respond to the socio-economic disabilities specific segments of India faced in getting in. This opaque, small, mostly male club can be transformed by introducing real competition at the top. This is from where the fish rots. All babu posts of Joint Secretary and above must be filled through open competition. It must be the PM (not the concerned Minister or the Department of Personnel) who must select the candidate, out of a short list of two, recommended by the UPSC. Each appointment must have a minimum tenure of three years with no job hopping allowed, even if more attractive lateral options become available.  

One new tradition, which must be reversed, is the “in your face” security apparatus. Modi was the highest security risk even before he became the PM. Now his security needs to significantly enhanced. But this challenge should be used as an opportunity to upgrade the security apparatus, rely on technology, intelligence and rapid response, rather than on a glut of gun totting men. It is only when the PM makes his security “invisible” that it will stop being the status symbol, it is today.

It will not be easy to rein in “privilege”, which is the life blood of an elitist, patrimonial State. But much of the rot we face today can be traced to this one, ubiquitous norm. Who better to try, than one who, like Bill Clinton, made it to the very top purely on merit?

Aside

Politics and theater

Parliament disgraced it self yet again. The statement of the PM on the economic situation was a welcome window into the minds of the policracy. Perhaps it is the Shatrughan or Babbar effect, but may of the honorable members believe that they magnify their own self image by copying a fiery, rightious Bachan, a braggart Sanjay Dutt or a stylishly, thughish Pran, If we wantd to see imitation actors we would watch movies instead. Pity none of them can dance though. It would have been good to see Manmohan deliver his economic sermon break dancing to a Hritesh number. The nearest any member comes to this is the redoubtable Rajiv Shukla who vitrually goes into an attarctive “wave” dance the minute the opposition shouts at the PM.

It was not clear what the government wanted to achieve yesterday. Statements made in the house are assurances of delivery (promises) which are monitored. No new promises were announced by the PM. He merely repeated what Chidambaram had already assured the house. Worse the manner in which he read the speech out had less credibility than the assured delivery style of the practised lawyer, Chidamram. The opposition oddly thought it necessary to shout down a “maun” PM. Possibly they have become so used to not hearing him at all, that that the merest squeak out of him is tantamount to an aggressive barrage.

Yes unbridled corruption is a mjor failing of the present government but that is the election plank of the Aam Admi party which is invisible in Parliament. Only those in power can be corrupt. The UPA is in. The BJP is out, so we can’t compare apples and oranges. Corrupt sons and sons in law are not a chink of the Congress alone.

I wish the opposition had cornered the PM on the three key constraints to unlocking growth and good governance. One is the recent sense of “entitlement” of the “policracy” to massive corruption. The potential and many would say the impunity, to be corrupt, erodes the possibility of shrinking Delhi in economic decision making and the transfer functions and finance to the States. On corruption it is only the record of the left parties which is relatively clean but unfortunately, unlike their brethern in China, they join the populist bandwagon here and shed crocodile tears for the poor, with little regard for the disastrous economic outcomes of populism. In fact the left is very much like our PM….honest but ineffective and the new India does not endorse that.

 Second, we need to correct  the extravagant spending on defence of around 20% of the budget. This is a major drag which comparative developing countries in East Asia (excluding China), Latin America and Africa do not face. Since the defence sector is notoriously non transparent, little is know of how much public finance leaks…..but the growing political clout of arms dealers makes it apparent that it is they, who are king makers and not the other way around.
 Third, the dynamic economic record of some state level leaders (Modi, Nitish, Patnaik etc) has a major medium term constraint. ALL of them follow the centralised Delhi model of not devolving functions and finance downwards,  to where the real action is, at the local level. That is the third quiet revolution still to happen in India but is completely ignored by all parties.
India does not lack economic or technical expertise in the public sector, skilled labour or private entrpreneurship. What we lack is a honest, formally endorsed leader at the national level. The best cooperatives, like Amul, grow because of honest, pragmatic and enigmatic leaders, like Kurien. If INFOSYS today needs to recall Murhty, to rescue it, shouldn’t India also reach back in time and get an oldie (albeit preferably, one without a child-in-waiting), who has the experience, the rectitude and the fire in the belly to lead? India is a young country but sometimes, it is only the exprienced who can deliver what the young want.

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