Column: Crisis What crisis

Written by Meghnad Desai | Updated: Aug 19 2013, 06:09am hrs
We are as close to a crisis as we have been in the last 22 years. Inflation is back near double figures and onion prices dominate Independence Day celebrations. The UPA only cares about their new vote winning spending bonanza, the Food Security Bill. The current account deficit is out of control. The Budget deficit so deftly brought down for the Budget will prove pure window dressing. In the meantime, everyone in politics pretends that life is normal; Parliament is disrupted on any ground other than the economic crisis. Civil servants are sacked and new scams discovered. What is going on

Sixty-six years on after Independence, how do we understand India Ancient, incredible, inefficient, corrupt, democratic, divided, secular, dynastic, miserably poor, a member of G20, miracle economy or a basket case Or maybe all these things simultaneously

The country which became independent on August 15, 1947, saw a smooth transition from colony to dominion. The colonialist collaborators of yesterdayICS, Armybecame the pillars of new India, a state modelled on British constitutional and legal traditions. It had a British-type civil service with files tied in red tape. It had a Parliament which looked much like the British cousin, a President by 1950, who looked much like the British monarch. It was just that the new rulers were not as white as the previous ones, though many were quite fair-skinned.

This was Nehrus India and that layer still persists somewhere beneath all others. The elaborate processes unleashed by CAG or Planning Commission are from that layer. The next layer was laid by Indira Gandhi. She privatised the Congress party, preached the doctrine of mandate, which meant the elected executive had infinite and unchallengeable powers, and made the legislature subservient to her diktats. Alas, for her, the judiciary was still living in the British layer and hence she had to declare Emergency.

But independent judges did not fit the Gandhian layer. Hence, arbitrary transfers or the mere threats of transfer were used to tame the judiciary. The British-style Westminster state was Indianised in style of Mughal durbar with Diwan-i-Khas and Divan-i-Aam. But just as the Mughal state fell apart after the death of Aurangzeb, yet surviving for another 150 years, the Nehru-Gandhi state began its unravelling as soon as the Emergency ended. The Janata government saw a totally un-British experiment in regional satraps running India and were just as successful as the many who tried to rule from Delhi during the 18th century. This was the JP layer.

Alas, the disease of coalitionism proved to be much more authentically Indian than the imported Westminster system. Governments in India became a temporary coming together of regional satraps with some Delhiwalas, who were too self-important to acquire regional power. The regional satrap had seen Indira Gandhi in power and began to emulate her. Officials were transferred, sacked, replaced or adopted into the political party. This was the Lohia layer. The mandate became all. Anyone with a majority could flout all laws, regulations and conventions. Of course, the language of British India had to be used in the exercise of arbitrary powers. Hence, the delay in formally transferring Durga Shakti who was fired in 41 minutes. Regional satraps want just to loot the public fisc legally as well as illegally. Public expenditure allows both types of loots. That is why we are all populists now.

Of course, the sweet elixir of corruption gives zest to political life. To begin with, it was rather like country liquor and was imbibed only at the lower levels. But soon it reached the top with increasing sophistication; from the local bevada to single malt, corruption now sweetens all layers of power. True British style, there are laws forbidding it and punishing those who indulge but true Indian style hypocrisy covers all sins.

Independence had allowed the influence of one peculiar British virussocialismwhich attacked the first generation of rulers. It gave them more control over the economy than was wise. Indira Gandhi turned that into a money-making machine for the party in powerthe Permit Licence Raj allowed the leader to issue permits which became a license to loot. When socialism passed away and was replaced by liberal reform, the subsequent prosperity was not allowed to interfere with its progressive uses for enriching parties and their leaders.

European welfare state is the latest fad. Entitlement to food, education, health is the newest layer. This is the Sonia Gandhi layer. The pity is that the delivery structure beneath is rickety in terms of schools, hospitals, ration shops. The point, however, is not to deliver any services but to profit from them. This is because fighting elections requires black money. True (Mahatma) Gandhian hypocrisy requires that we pretend to run our politics on shoestrings.

The Indian palimpsest is indecipherable. As a famous British Prime Minister once said Crisis What crisis

The author is a prominent economist and Labour peer