And when as a consequence the Indonesian economy was caught in a financial crisis characterised by hyper-inflation and collapse of the Indonesian Rupiah, there were riots in the streets and the dictator had to resign. Prof. Sen probably implies that in a watchful democracy with an alert public opinion such misuseof resources would not have gone unchecked and an orderly solution would have been found out through democratic process.

But ifhe were to analyse the Indian situation he would have clearly seen that democracy far from countering the fiscal crisis could be the cause of it. Several bank scams exposed in recent years have clearly shown that it is with the blessings of the politicians in power that they took place. In the urea scam in which the State Bank of India, India's premier bank was involved, the people closely connected with the then Prime Minister are alleged to have pressurised the bank officials to provide funds for urea which had yet to reach the Indian shores.

In the Indian Bank case, the Managing Director, who was given several extensions at the behest of powerful politicians was alleged to have overlooked the sanction of loans for non-viable purposes and in the case of the biggest scam, viz. the security scandal, the joint committee of the parliament far from fixing responsibility tried only to whitewash the whole affair leaving the main culprit to go scot-free and come back with a bang in the stock market to indulge inspeculative transactions.

The government has been for last several years unable to contain the fiscal deficit. And as a result inflationary pressure has been let loose in the economy. One of the main reasons is the wasteful public expenditure which has gone on uncheacked year after year. Indian democracy has given rise to jumbo cabinets in almost every state - U.P. taking the lead.

The proliferation of the ministeries with their accompanying staff and innumerable perks like apalatial housing, extravagant furnishing, travel expenses specially on foreign tours which hardly serve any purpose has put tremendous burden on public exchequer.

The VIP security has reached scandalous proportions. Ruling politicians are representatives of the people and should not need to be protected with a security barrier all the time and yet such a situation which is totally inconsistent with democratic governance goes on with impunity. Ministers are now addicted to five star culture and avail at public expense of medicaltreatment abroad when common people who vote the government in power in democracy go without any basic services.

Instead of providing funds for sound schemes and projects which bring adequate returns democratic leaders everywhere have wasted public funds on populist schemes and non-viable projects. Anti-poverty schemes named after national leaders have proliferated but they have not enabled the poor to cross the poverty line or make a substantial dent on poverty.

Prime Minister Rajiv Gandhi himself once said that only 15 paise out of a rupee spent on anti-poverty scheme reach the people. But he did not abolish the schemes and leakages continued. It is frequently alleged that muster rools at works programme carry fictitious names. No solid work is done and no assets created.

Loans under IRDP are taken only to avail of the subsidies attached to them. the loanee does not use the funds to acquire an asset and to engage in a productive enterprise. After the natioanlisation of banks, loanmelas were arrangedto impress the rural people but they set a bad tradition of indiscriminate lending resulting in large overdues turning the banks sick.

The remedy adopted was to write-off loans in a wholesale lender. Far from tightening the system Prime Minister Narasimha Rao thought it fit to allot a fund of two crore to every MP to use it in any manner he likes. The constitutional propriety to allow the legislators to operate on public funds has been questioned. The CAG evaluation has shown that funds entrusted to MPs have not been properly used.

The sanction of projects without any regard for availability of funds has been rampant in our democracy. Recently under the threat of Mamata sword, Railway Minsiter Nitish Kumar of Vajapyee government was forced to sanction railway project in West Bengal when already there is such a huge accumulation of railway projects that funds for them will not be available for years to come.

Every Railway Minister has thought it fit to sanction new railway lines in hsi area and to opennew zonal offices requiring commitment of huge funds. Similarly Civil Aviation Ministers forced the Indian Airlines to operate fights which landed them in huge losses. Irrigation projects are sanctioned by ministers in several states without availability of funds. They go on languishing for years without getting completed inevitably resulting in scheduled slippage and cost over-runs.

The projects and services provided at huge public costs ought to bring adequate returns to public exchequer over a period of time so that a rotating development fund evolves which keeps on getting continuously replenished through returns. But our politicians in power go on making wild promises of free water and electricity. No wonder most of the state eletricity boards have become bankrupt.

The fiscal crisis in India is the direct result on the economic profligacy of our democratic rulers. Our voters have continuously fallen a prey to wild promises of populist schemes and subsidies. The mood of the people and our democraticpoliticians was displayed throuh a chorus of opposition to the recent decision to raise the prices of commodities distributed through PDS.

It is our democracy which has created an addiction to subsidies of all kinds, open or hidden. It has also given rise to extravagant expenditure and even financial scandals and corruption. Prof. Sen has often praised democracy as a system which redounds to the economic welfare of the common people.

He has pointed out that if mass starvation and death took place in China during famine in which millions of people died while no such phenomenon took place in post-independent India it was because of absence of democracy in China and its presence in India. However, if he now thinks that democracy in India can save it from fiscal crisis, one cannot help feeling that even a Nobel laureate in economics can be a victim of naivete.

Democracy, it is said, is a self correcting form of government. If mistakes take place, the correcting mechanism is set into motion through thedemocratic processes. But Indian experience has shown that this does not always take place. Mistakes are repeated and even exaverbated.

Parties and leaders indulge in competitive populism, and fiscal discipline is compromised more and more blatantly. Gresham's law prevails, bad politicians driving out the good ones. Politics get criminalised and as in the fodder scandal case in Bihar public funds are looted from the public treasury by unscrupulous politicians in connivance with corrupt bureaucrats. In such a situation, how can one agree with Prof. sen's statement that "democracy keeps you out of trouble in fiscal crisis?"