India?s political economy is currently witnessing two parallel trajectories that may seem disruptive on the face of it but have the potential to take us to a new state of institutional equilibrium. Of course, the journey to this new social/institutional equilibrium will be marked by a period of apparent disorder in the political economy. History tells us that such transitions are never smooth but, eventually, some clarity emerges from it.
So what are these forces of disruption at work? The most common lament today is that the entire government machinery has stalled because of the multiple agitations against corruption at various levels. It is true that decision-making in the government has virtually come to a standstill for nearly a year, and this has now begun to seriously impact growth in the economy. There is near consensus that GDP growth will slow down to about 7% in 2012 as fresh investments are not happening in the economy. Businesses are also postponing their decision to invest as they would want to see how the current political churn resolves itself.
So, on the one hand, growth seems to be stalling and, on the other, agitational politics, whether by civil society groups or the opposition parties, is gaining momentum. To any ordinary observer, this would seem like a double whammy that could set the clock back for India?s aspirations as a rising economic power.
However, there is also a positive way of looking at the multiple mutinies at various levels demanding good governance, even if they lead to a disruption in the process of growth and development over the medium term. The political class, which has strong survival instincts, has realised that the existing institutions of governance need an overhaul. This cannot be postponed any longer. The sense of urgency for a Lokpal reflects this desire for change immediately. Simultaneously, there is a competitive politics around bringing new legislations that promise better delivery of public services to the citizens.
In short, the citizen-state relationship is being sought to be altered drastically through some genuine efforts. This was ignored all these years. While states like Bihar, Delhi, Himachal Pradesh, Punjab and Rajasthan have enacted well-designed legislations in the recent past to ensure timely delivery of services to the citizenry, the Centre has now put up for debate a draft Citizens Right to Grievance Redress Bill 2011 in the
public domain.
Section 44 of the draft legislation empowers the Central Public Grievance Redressal Commission to record evidence against any public authority if prima facie there is indication of corruption in the non-delivery of a service to the citizen.
The good news is that there is now competitive politics around good ideas of governance related to delivery of public goods and services to the citizenry. This is the first time since the 1992 economic reforms that the state has woken up to the fact that it needs to enhance its capacity to deliver goods and services. For instance, the new draft Land Acquisition Bill seeks to completely alter the manner in which land will be acquired for the purposes of development. It is a pro-citizens Bill that for the first time seeks to embed rehabilitation and resettlement (R&R) into the legislation. If the Bill goes through, there will be far greater clarity and transparency in the way land is acquired by the government or the private sector.
In his analysis of the draft Land Acquisition Bill in the Economic and Political Weekly, Prof Sanjoy Chakravorty of Temple University, Philadelphia, has rightly argued that the cumulative ?conflicts over land acquisitions today are a result primarily of actions of the independent Indian state, undertaken over six decades of land takings and displacements, paying minimal prices and providing very little rehabilitation?.
So the draft Land Acquisition Bill seeks to correct this decades old legislative lethargy. Jairam Ramesh, minister for
rural development, last fortnight made the rare gesture of personally visiting the Parliamentary Standing Committee chairperson?s residence to underline the urgency of initiating a discussion on the Bill.
So there is a sort of legislative activism that is currently gathering momentum, whether it is to do with a new Lokpal or to bring a transparent public procurement law. Mind you, these are not initiatives the political class has voluntarily initiated. These have happened largely because of pressure from below. That is what gives hope that something positive will emerge from the ongoing churn, leading to a new institutional equilibrium as it were.
Which is why one is tempted to argue that even if growth and development get stalled in the medium term due to various agitational forces, causing a paralysis in government functioning, these very forces will eventually cleanse the system and bring about a new era of reforms. These reforms, which are directly linked to the state?s capacity to deliver, were clearly ignored in the first 20 years after India opened up its economy.
I would even contend that these governance reforms will drive the next phase of consistent growth and development in the economy. It is often difficult to put an economic value to more transparent institutions which give agency to people at large. This will also bring some level-playing field for businesses at large and has the potential of striking at the root of crony capitalism that is aided by a non-transparent state apparatus. For instance, a new entrant to the game has very little hope today of participating and winning big tenders invited by government procurement departments. These transactions happen within a cosy club of politicians, bureaucrats and businessmen. A transparent public procurement legislation can change all that.
The most heartening development of the past year is that India is witnessing a new politics that is centred around the conduct of the state machinery and its interface with the citizenry at large. Of course, there will be a lot of disruption and disorder before a new equilibrium is reached in this regard. This will also be a test for our democracy, which will be expected to manage the institutional transition in a manner that enhances the values of constitutional liberalism. This is a litmus test for both the state and civil society.
mk.venu@expressindia.com
