More than twenty years after its first publication, I laid my hands on a copy of William Dalrymple’s “City of Djinns: A Year in Delhi”. As a Delhiwallah who spent nearly three decades in the city (though not at present), the book paints a fascinating picture of the history of a city in which I spent the formative years of my life. What struck me was his characterisation of British New Delhi as “imperial”. “In New Delhi” as he aptly puts it “…the individual is lost.” From there, my mind went back in time to Delhi’s past and fastened on a phrase I had first heard in the Son et Lumiere showcasing Delhi’s history at the Red Fort “Hunooz Dilli Door Ast”. These words were reportedly uttered twice; the first time by one of medieval Delhi’s great spiritual savants, the Sufi Nizamuddin Auliya, when informed of the intention of the then ruler of Delhi, Ghiyasuddin Tughlaq, to have him beheaded on his return to Delhi. The unperturbed old man merely observed that Delhi was still far away, since the Sultan’s threat was made while he was on a military campaign in Bengal. (As events transpired, Ghiyasuddin Tughlaq never made it back to Delhi, meeting his end in an accident en route). The second utterance did not have such a providential ending: the Mughal emperor Muhammad Shah Rangeela’s complacency about Nadir Shah’s distance from Delhi led to the ransacking of Delhi and the massacre of its citizens in the eighteenth century.
My current reflection is on an inversion of this phrase. While Tughlaq’s distance from Delhi was the theme of Nizamuddin Auliya’s utterance, I am more concerned with the distance of Delhi from what goes on in India that is Bharat. The immediate provocation was the mention in the Prime Minister’s Independence Day address that the Planning Commission in its present avatar is going to be wound up, to be replaced by a structure more suited to India’s current requirements. No sooner had this announcement been made than intellectuals (based for the most part in Delhi) wept bucketfuls at the imminent demise of this hoary institution. There were wistful encomiums to the luminaries of the Planning Commission of yesteryears. Some writers attempted to highlight the areas where, in spite of the almost total irrelevance of the central planning process, the Planning Commission had tried to make a difference in recent years. I must confess that I have no regrets on the passing of this grande dame of centralised planning: on the contrary, there is relief that one of the relics of the Soviet-style planning era is soon to become history. I am all for the government playing a major, indeed commanding, role in infrastructure development. However, the twisting of this logic to justify government entry into areas ranging from power plants to scooters and bread is quite bizarre, to say the least. This led to a stifling of individual initiative and the experience of a “Hindu rate of growth” of about 3.5% for almost three decades. The economic crisis in India, post the two wars with China and Pakistan and the recurrent droughts, led to the sidelining of the planning process from the late 1960s. From then on, politics dictated what the Planning Commission could do, which was largely the preparation of elaborate econometric models with little relevance to the realities of India. Apart from this, the Planning Commission determined the annual plan sizes of the various states of India. This created what I would term the development of a “beggar mentality” where Chief Ministers of states exulted when they felt they had been able to get a bigger plan size allocated to their states. It is another matter that, very often, this annual plan bore no resemblance to reality; come November-December, there would be cuts in plan size, when the financial resources of the state government came under strain, generally because of some populist concession to some group that the government of the day was keen to pander to. The bureaucrats of the Planning Commission, and of Ministries like the Finance Ministry, sit in judgment on investment decisions of public sector undertakings, of which they have little knowledge, as members of the Expenditure Finance Committee. I remember how, seeking clarifications on some technical issues of the investments of a huge company like ONGC, decisions were postponed for months and sometimes years, with concomitant adverse effects of deferred oil and gas production and cost escalations.
The bifurcation of expenditures into “plan” and “non-plan” is another inexplicable contribution of the Planning Commission and centralised planning to India’s economic wisdom. As a bureaucrat, I was mystified as to why a “plan” expenditure in one five year plan period became “non-plan” expenditure in subsequent plan periods. The babu twist to this logic was to press for at least a token plan allocation for some pet scheme of some politician; once inside the chakravyuha of the budgetary exercise, the scheme could merrily continue for years with no prospect for its exit. This subterfuge was a major contributory factor to the bloated bureaucracy that is not only a millstone around the neck of public finance but also a hindrance to efficient decision making. It would have made far more business and economic sense to classify expenditures as “capital” and “revenue” to ensure that governments balanced budgets and that capital investments were not hit by inadequate financing caused largely by unrealistic plan allocations.
There are also the “one-size fits all” centrally sponsored schemes that are thrust down the throats of state governments, regardless of how and whether the schemes fit in with their geography and economic and social priorities. The rural employment guarantee scheme, MGNREGA, exemplifies the wooden thinking of the Government of India. All districts are given allocations under this scheme, regardless of whether there is a demand for off-season employment or not. In a state like Maharashtra, high irrigation districts like Kolhapur do not require to provide off-season employment to rural labour. Recognising this economic reality, the Maharashtra Employment Guarantee Scheme (EGS), started in 1972, provided for starting rural works where there was local demand. The scheme was demand rather than supply-driven and expenditures on the scheme varied from year to year depending on the rural economic situation, being high in years of drought conditions and lower in years of good rainfall. The MGNREGA ostensibly has a similar provision for demand for rural works; however, the tendency is for the babus of the central government to issue good-performance certificates based on (you guessed it!) expenditures rather than outcomes in terms of man-days of employment and physical assets created. The scheme has also placed heavy reliance on a rickety (in many states, non-functional) local government structure. Not surprisingly, there are many complaints of misuse of funds and poor performance of the scheme in different states. In an ironic twist, the pioneer of the scheme, Maharashtra, is one of the poorer performers, a telling commentary on what happens when a state is made to fit into a universal straitjacket.
If the Central government wants to direct what goes on in every state and district in the country, can our elected representatives be far behind? The local area development schemes give every Member of Parliament Rs. 50 million annually and a Member of a Legislative Assembly or Council of a state gets anywhere from Rs. 15 million to Rs. 20 million annually. More than Rs. 60000 million or US$ one billion is annually at the disposal of what can best be termed individual discretion. Guidelines issued by the central and state governments have not always been followed; local governments, in whose areas the projects are implemented have no say in what would benefit their areas. Focusing these resources on meaningful schemes that add to the abilities of local communities would have been far more desirable.
India is far too big and too diverse a country to fit into any development mould, as Soviet Russia also learnt to its cost. With increasing private investment and recourse to capital markets, it is going to be well-nigh impossible to chart out a straitjacketed course of growth and development. Indian state governments are also getting increasingly assertive of their rights and competing for domestic and foreign private investment. In the decades to come, the central government should stick to promoting major infrastructure investment and managing macroeconomic stability. There is more than enough entrepreneurial initiative and enthusiasm in many states to propel their growth stories forward. The “laggard” states have started displaying an appetite for development and people in most states have put their governments on notice for non- performance. It is time now to move the decision making process from Dilli to the galli.
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