Getting our act together

[ Baijayant ?Jay? Panda ]

If the stalled engine of reforms is not restarted, recently legislated social objectives can?t be achieved

It is no secret that economic reforms have been stalled for some years now. There are many reasons for this. One of the main reasons is the lack of overt efforts, even by the original architects of reforms, to espouse the cause. Economists keep proclaiming that two decades of reforms have benefited the poor far more than the previous quarter century, but politicians are still unconvinced that this can be sold to the electorate. The result: enormous misinformation and the continuing absence of a broad-based reform constituency.

It is astounding, for instance, that some are blaming economic reforms for the massive corruption that India has seen, when in fact the opposite is true. Industrial licensing is no longer the major cause of corruption because it was abolished by the 1991 reforms; today?s sources of rent seeking are those areas where discretionary powers continue to rule, resisting the transition to rule-based, transparent procedures.

At this juncture, it is imperative that the stalled engine of reforms be restarted. Otherwise, all the other social objectives that have recently been legislated or are being contemplated will simply not be implementable due to paucity of funds. There is a large backlog of work to be done towards this, but at the very least, a few items should take top priority and be jumpstarted quickly. These include a judicious mix of both the urgent and the important, and are critical to get India back on track and keep it there.

First and foremost is corruption. This issue has led to a political stalemate, and will need to be resolved before the government can get back to governing. Here, the first hurdle is to get the proposed Lokpal bill through parliament, but in a manner and with such amendments as will give it true legitimacy; otherwise, even after passage, it will continue to be a disruptive issue.

But a widely accepted Lokpal Bill will only be a partial cure, whereas there is an equal need for prevention; in other words, measures will need to be taken to tackle one of the root causes, which is the need for legitimate political funding. It is high time a six-decade old democracy stopped being coy about the need for legitimate funds in politics, which does not run on love and fresh air. State funding could be one answer.

The long delayed legislation on land acquisition is another urgent need. Unless it is implemented, this vestige of the Raj will not only continue to bottleneck the economy, but will also deepen the dangerous ?us vs them? paradigm. What has exacerbated the situation till now are several examples of rapacious crony capitalistic land grabs. The reality is that most farmers, or tribals, or other landowners are not fundamentally against giving up their land, but are seriously allergic to getting ripped off. Finding a win-win solution is not rocket science, but it does require give and take, and can be done.

Labour law reform remains the holy cow that no government has dared touch, despite one or two tentative announcements of intent. But talk to just about any economist, and this remains at the top of the to-do-list for India to truly unleash its potential. It is ironic that a law that ostensibly protects labour but in fact has exactly the opposite effect?by strongly disincentivising employment in the organised sector?continues to be such a touchy subject. A modern labour law would see a surge in manufacturing investment, and boost employment in general.

Reforming the agricultural sector is another critically important area on which there has been much foot dragging. Lack of a nationwide common market for agricultural produce, no cold chain to save on abysmal wastage of higher value farm products, and barriers to scale are only some of the hurdles that need to be tackled. Unless these are taken up, supply and demand imbalances will keep fuelling inflation, not to mention continued long term pressure on food supply.

Finally, a gradual shift towards direct cash transfers to the poor, replacing unwieldy, inefficient and corrupt government-run anti-poverty programmes, will make a big difference to how India is governed. Apart from improving efficiency?remember, the present system spends R3.65 to deliver one rupee?s worth of foodgrains to the poor?it would also mean a paradigm shift in governance. It would bring the benefits of disintermediation to social services, largely bypassing a long chain of creaky government machinery, and its associated gangs of middlemen.

Typically, in heralding policy shifts, governments go through three phases: an initial burst of activity during the honeymoon period, followed by a mid-term lull, then again a burst of activity in readying for elections. This government has not followed that pattern, having squandered valuable time, not to mention political capital; but there are signals that it may now finally be getting serious about the next round of reforms. It may be a case of being politically gridlocked and thus having nothing left to lose. Whatever be the impetus, it would do the country immense good if these reforms would be pushed through.

Baijayant ?Jay? Panda is an MP and industrialist

[ RK Pachauri ]

India?s growing challenges need to be addressed with a more enlightened approach

The whole issue of natural resources and their exploitation has been very much in the news in recent months. Often extreme views are expressed depending on who is voicing them. Those in business and industry take the position that environmental concerns which block, for instance, the implementation of coal mining projects are against the interest of the country. On the other hand civil society activists express a sense of outrage at the damage being done to the environment. The problem gets exacerbated with examples of illegal mining and indiscriminate exploitation of natural resources.

In Haryana, for instance, quarrying of stones has led to major devastation in the Aravalli hills to a point when the courts had to step in to arrest the growing crisis. More recently, we have seen the devastation that has taken place in the region of Bellary in Karnataka with what has been reported as illegal mining of iron ore. Civil society has been increasingly vocal and proactive in highlighting these problems, but much of this confrontation is due to business being largely negligent of its responsibility to society.

It is important to provide a balanced perspective on this issue. At one level the pattern of economic growth in India has essentially emulated the example of the developed countries. Indeed, in the early years after independence, given the abysmal level of poverty in the country and the huge inadequacy of modern forms of energy, our decision makers had no choice but to follow the western path of development. There was really no attempt to intelligently interpret Mahatma Gandhi?s words of wisdom which have been epitomised by one anecdote. Gandhi was once asked if he expected India to attain the same standard of living as Britain. He replied, ?It took Britain half the resources of the planet to achieve this prosperity. How many planets will a country like India require!??

Even after the first oil price shock of 1973-74 even though the government set up a series of committees to articulate a forward looking and proactive energy policy, in essence, nothing tangible was introduced to reflect concerns on the security of energy supply with growing dependence on imports of fossil fuels. There was no meaningful effort to explore means by which a far more energy efficient and resource conserving pattern of development could be structured. Nor was there a serious effort to tap renewable sources of energy and invest in focused research and development by which the abundance of India?s resources in this area could be harnessed economically for the benefit of society. The result has been growing dependence on fossil fuels, inflexibly proportionate to economic growth. This represents a major failure of policy and lack of vision that should incorporate the scarcity of fossil fuels that India would face in the future.

At the level of business and industry, there has been a neglect of efforts to conserve natural resources and protect the environment, which were often seen as a dispensable nuisance rather than an important element of business policy and corporate social responsibility. As a result, environmental protection which should be an inherent part of the design of every project, is often an add-on and an end of pipe solution. Additionally, even when, along with the environmental impact assessment (EIA), an environmental management plan (EMP) is prepared, submitted and approved, the implementation of the plan is generally tossed out of the window. Our enforcement and monitoring institutions are so weak that neglect of these plans is never highlighted. Once the project has been approved, it is only the financial objectives that get the attention of the promoters of the project, with total neglect of the environmental implications and mitigation actions.

As a result of these realities India has growing challenges, which need to be addressed through a far more enlightened approach than has been in evidence in the past. Firstly, far beyond our five year plans, the country has to come up with a 20-year plan that envisages much lower intensity of fossil fuels and natural resource use. The measures and instruments to bring these about should be an inherent part of the plan itself. Secondly, we need far more effective institutions for carrying out assessment of environmental impacts and monitoring of mitigation measures. We need a far more proactive and forward looking civil society, which should not only act as a whistle blower in the case of violations but also as creators of public awareness, such that the reputational damage to a business organisation which violates norms and regulations becomes a liability for it.

The problem is serious enough for a new strategy and approach to be articulated by which the country achieves high rates of economic growth, but is able to do so while using our natural resources efficiently and on a sustainable basis.

R K Pachauri is director-general, TERI; chairman, Intergovernmental Panel on Climate Change ; and director, Yale Climate and Energy Institute

[ Naveen Jindal ]

The skewed nature of distributive justice has led to unwarranted repercussions

The Indian tricolour represents the supreme spirit of sacrifice, perpetual peace and continual prosperity for our nation. The chakra in between stands out for speed, dynamism and change. Our Independence Day with the unfurling of our national flag and the celebration that follows makes us sit back and ponder as to how we traverse together in a spirit of ?cooperative endeavour?as a nation and as people with diverse politico-socio-economic backgrounds pursuing a common destiny.

As we have moved forward since then for the last six decades, it has been the unfolding of the great Indian development story. The five-year planning process has been instrumental in bringing about a transformation in our country with the objective of achieving modernisation, growth and development. However, the objective of achieving socio-economic distributive justice has evaded us if not in full measure, but still quite substantially.

Today, we are the largest democracy in the world and one of the most stable. We have held 15 general elections to Parliament, in which power has been transferred to different political parties and groups. Democracy has given a voice to all citizens of the country.

However, a caveat here. The benefits of the upsurge in the economy have not reached all sections of our population in equal measure. The skewed nature of distributive justice in terms of the socio-economic benefits has ensured that a privileged 20% of our population has reaped more than 85% of the wealth that has been generated in course of our development process post-1947.

Amongst others, this has led to several unwarranted repercussions. Rise of left-wing extremism, terrorism and wanton corruption, which feeds both of them, are just a few to be named. Even a superficial examination of these brings out the simple truth that we need to understand them as mere symptoms of the disease of our society?s skewed process of distributive justice. Those on the periphery of our development process have been left high and dry in an environment where their political ambitions do not match the socio-economic and cultural underpinnings.The political system should have ensured that the socio-economic disparity is necessarily less skewed to let each and every section avail the political freedom it provides and be more ?real? as also ?sustainable in the long run?.

Add to this the complexity of our laws, systems and beauraucratic red-tapism and we have had before us a designed prescription for making things worse.

If, therefore, we have to live up to the glorious ideals enshrined in our constitution, especially the provisions related to the directive principles of state policy, which talk about socio-economic justice being provided to one and all, it is important for us to realise that we introspect our ways of working, systems and processes as individuals as much as a nation.

While the government must do what it should, the government alone cannot be depended upon. We have to all individually as also collectively contribute to this. If every individual does what he is supposed to do, we would surely have created a process wherein collectively we could synergise all such efforts and contribute to the development of nation and that too ?in the right direction? of addressing amongst others the bottom of the pyramid as well.

Under the canopy of our flag and the principles it upholds we need to reaffirm our efforts for achieving and sustaining the objectives of our founding fathers. The unfurling of the flag in the 65th year of our political birth could be the starting point of a new beginning with this new realisation.

Naveen Jindal is an industrialist and member of parliament

[ Rajeev Chandrasekhar ]

Governance reforms are about creating a more citizen-centric model of government

The prime minister?s speech from the ramparts of the Red fort was originally meant to serve as a rallying cry for Indians?inspiring us with the vision and direction that our country would be taking. But more than 60 years after Independence, this great occasion and platform has been reduced to trotting out a litany of government promises and programmes.

The country is befuddled and drifting today beset with this perfect storm of scams and skeletons tumbling out almost every day. So I hope this Independence Day, the prime minister sets about commencing the heavy lifting of setting the country, its government, its economy and its people back on the right track?a track of progress, good governance and growth that our founding fathers envisioned when they first spoke on this day over six decades ago.

The agenda for the next two years has to be very clear. Just like the agenda of the last two decades was about economic reforms, the agenda of the next decade must be about governance reforms. The next two years should set the tone for that. If we are to be an economic superpower, as many in New Delhi and IT sector keep prattling about, real work is required – and required in India and not Davos. Because a country of a billion people, a majority of whom are young and have most of their lives and dreams ahead of them, deserves a better government.

The issue of governance reforms is a much more difficult job than economic reforms. In economic reforms, the government had to simply step away from the inherent energy and entrepreneurial talent in our country. But the issue of governance reforms is a much harder job because it has to confront the decline and decay of institutions, vested interests and crony business interests that have long since started exerting significant influence on governance. The focus has to be to fix and transform government. Make government and politics something to be proud of instead of being ashamed and embarrassed about.

Governance reforms are seen as something very complex, and therefore, the limited debate and discourse about them. It?s not really. It?s about a handful of initiatives that when working together work to create a far more citizen focused model of government?a more public service model of politics.

So let?s look at what governance reforms could be: To make government more transparent, and therefore responsive, honest and effective. To create a culture of value for public money and public assets within government. To take governance into an outcome-driven form of governance. To streamline government spending and contracting around these outcomes. To undertake a major administrative revamp?where merit and performance are the criteria for growth and corruption, and ineptitude is weeded out. To ensure that the IAS is not the government and the government is not the IAS and bring in more specialist talent to complement the very general skills of the IAS. Revamp the IAS and allow excellence and domain skills to be introduced within the IAS, so like there are state cadres within the IAS, let there be cadres in security, economy, agriculture, etc.

I have no doubt that the government?s initial instinct would be to soft sell a series of impressive sounding initiatives, but with limited depth and impact as governance reforms. But this drift in governance needs arresting and reversing and if not it will create frustration and anger that is the fuel for revolutions and other forms of public anger!

Rajeev Chandrasekhar is a member of parliament and entrepreneur

[ Rajesh Tandon ]

It?s in the interest of businesses to make democracy work for all citizens, not just a few

Hardly a day passes now when ?civil society? and ?governance? are not being talked about in Indian media. This was not the case 10 years ago. So, what has changed? The developmental discourse around the world ?rediscovered? the significance of ?civil society? after the fall of Berlin Wall and the ?demise? of the former Soviet Union. By mid-1990s, international agencies like UNDP and the World Bank had begun to openly ask for ?good governance? as a necessary part of poverty alleviation and social justice. While these concepts caught on in many parts of Africa and South America where authoritarian regimes were functioning, they didn?t gain much currency in established democracies like India. It was somehow assumed that governments legitimised through periodic elections and popular vote were examples of ?good governance? any ways.

Since the turn of this century, it has been becoming clearer that making democracies like India function efficiently and accountably is the biggest challenge; hence, ?good governance? in Indian democracy is far more urgently and critically needed than hitherto acknowledged.

In this decade, therefore, there has been a growing recognition among policy-makers as well as social activists alike that ensuring accountability of governments to deliver what they have been mandated to do is the larger responsibility of civil society. This recognition has led to two independent, yet interrelated, phenomena. First, many social organisations, voluntary agencies, NGOs, citizen action groups and media have begun to focus on governance institutions and their performance in a direct manner. This has led to hundreds of initiatives throughout the country, like making panchayats more accountable to gram sabhas, engaging municipalities to work with mohalla samitis, citizens monitoring service delivery (like basic education, water, health care, etc), monitoring of budgets of state and national governments, monitoring implementation of such legislations that focus on rights of citizens, monitoring elections and seeking information on candidates? assets, filing PILs, etc.

Second trend has been that national policy-makers in the Planning Commission and other ministries, as well as several state governments, have begun to involve independent academics, social activists and NGO professionals in formulation of policies, laws, schemes and programmes. Enactments of Right To Information (RTI), Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) and Jawaharlal Nehru National Urban Renewal Mission (JNNURM) can be partly attributed to this collaboration. Formation of National Advisory Council (NAC) and several task forces in the Planning Commission with respect to 10th, 11th and 12th Five Year Plans with the active participation of civil society members has furthered their contribution.

Now, the same agencies and protagonists in the government have become somewhat wary of engaging with civil society as issues of major corruption have come to public light in the past couple of years. Civil society actors are now active and vocal on issues of corruption and deliberate ?malgovernance?, be it mining rights, land acquisition, Commonwealth Games (CWG) or any other publicly funded programme. This momentum of citizen anger, activism and protest may hopefully result in more efficient, accountable and better quality performance of various organs of governance in this largest democracy of the world today. Hopefully, this will result in better practices in ?rule of law? so that no one (irrespective of their political clout or economic status) can flout the laws and get away with impunity.

It is in this sense of more predictable and equitable implementation of laws, policies and procedures that the interests of India?s growing private sector also lie. For sustainable economic activity, investments and returns, private business requires all the same aspects of ?good governance? that an ordinary citizen expects?transparency, accountability and predictable, uniform rule of law. In fact, the growth of capitalism in Europe and North America several centuries ago coincided with the elaboration of rule of law and accountable democracy. In those countries, progressive business leaders have always championed and supported the cause of ?good governance? and many of the philanthropic foundations set up by them over the past century have worked on financing civil society initiatives to strengthen accountable governance in their own countries, and internationally. Open Society Initiative by George Soros is one of the best recent examples of this tradition.

Therefore, as we complete 64 years of our independence and celebrate our democracy, it may well be worth reflecting why Indian private sector is not partnering with, and standing by, Indian civil society in its crusade for good governance today? How can Indian private philanthropy support civil society initiatives and coalitions to continue to struggle for broader citizen awareness, empowerment and voice in order to make our democracy work for all citizens, not just a few? In what ways can Indian business leaders demonstrate ?enlightened? self-interest in the long run to support Indian civil society in the task of ?democratising our democracy??

Rajesh Tandon is president, PRIA (Society for Participatory Research in Asia)