It is the season for reminiscences on reforms and charting a course for the future of India.
It is the season for reminiscences on reforms and charting a course for the future of India. After Yashwant Sinha and Rakesh Mohan have had their compilations on the past and future, another economic celebrity has published a book on similar lines. The difference is that this book, India: Priorities for the Future, by Bimal Jalan, is not a compilation of views of experts, but authored by the writer, a former member of the Rajya Sabha and one of the most respected economists of the country known for his maturity and sharpness of views.
While the book’s title talks of the future, it is natural to talk of the past. However, the approach of the author is different, as he has taken his own articles and speeches and presented excerpts from them. Such an approach provides views of the author in a time context and hence is not a retrospective. But what would have been more interesting for the reader is if the author had presented his current views on the same issues as well.
There are some original essays that are classy and thought-provoking. His views on governance and the polity are excellent. One would connect well with the point he makes on how people in a democracy like ours know how to vote, but are never able to question the same people when they come to power. He correctly points out that when a government is formed, the elected representatives become inaccessible and unaccountable. Through successive governments, it has been seen that the ministers are not accountable and never held responsible for what happens. The people also do not judge them on economic performance, which is quite singular, given that in a country where poverty is high, it is never an issue for the voters. Both in 1996 and 2004, when the economy did well, the parties in power lost. On the positive side, the author points out that the present government is doing well in making ministers more accountable.
He highlights what is now a grievance with every writer on the subject, that a large part of the elected representatives have criminal records. This is something that must be addressed by the system, as we have aspirations for being a global power, which will not be possible unless there is a major clean-up operation. His solution is that within six months of the elections, the courts should take up these cases expeditiously and provide verdicts.
Interestingly, he points out that the anti-defection law should also hold for small parties and independent candidates who keep shifting to parties with a majority in return for favours and portfolios and then threaten to leave when convenient. The author argues such persons should be asked to get re-elected or else leave the government. This sounds pragmatic, but could be difficult to implement.
Related to this aspect is also the bureaucracy, which is rarely accountable and where people become power centres. The same story ensues where they tend to misuse power and extract value from their positions. One of the topmost priorities is to make them apolitical, so that they do not become subservient to the government in power and hence the politicians. But there is no solution provided by the author for this. Today, IAS officers can be posted anywhere and in any department. Change of governments invariably shifts the equations and hence there is a lot of political interference. Unless the laws explicitly provide tenure of time and department to a civil services officer, a solution can never be found.
Another area close to the author is the functioning of the Parliament. Being a member, he has had a first-hand view of what we read about or view in discussions in the media. The amount of time wasted through disruption needs to stop, as political issues come in the way of discussions taking place in a meaningful manner on important issues like the GST. This is where we are actually losing time in taking decisions, as parties squabble in the Parliament, which has limited days of working.
One of his suggestions for a better future is to empower the states, which is becoming a policy of the government. As states are closer to the people, they should be responsible for the delivery of services. Hence, the finance commission has worked towards enhancing the flow of funds to the states. Also, the Centre agreed to decentralise the implementation of schemes by passing on the funds directly to states as part of centrally-sponsored schemes.
Related to the argument of state empowerment, Jalan supports the DBT system, which will ensure that delivery to the poor is better. However, he does not touch upon the lacunae of such a system, wherein the money received by households is spent on other items. Few economists have found solutions to this problem that could make DBT self-defeating at the individual level, even while the government may be better off in targeting its subsidies.
The crux of Jalan’s treatise is that we need to have better governance and accountability. While RTI is very good, ministries should not wait for the public to ask and must be transparent in their dealings and have it displayed in the public domain. Against the background of demonetisation, where there was less transparency in the outcomes, this sounds pertinent. While economic numbers achieved are commendable over the last 25 years, to move ahead, we need to sharpen our governance structures so that we do not lose direction, which often happens in developing countries. Until we do this, the reforms package will always be blemished.
Madan Sabnavis is chief economist, CARE Ratings