Archive for the ‘public affairs’ Category

10 Feb

The Governor – His Master’s Voice?

Posted by vramani in government, irony, political economy, public affairs. Tagged: , .

The ongoing political drama in Tamil Nadu once again focuses the spotlight on the role of the Governor of a state. The Chief Minister of Tamil Nadu sent in his resignation letter to the Governor on the first Sunday of February, 2017. The Governor, who was holding additional charge of the state of Tamil Nadu, was, on that day, ensconced in the salubrious climes of Tamil Nadu’s premier hill station, Ooty. What he did subsequently defies comprehension. Instead of moving immediately to Chennai to ascertain who in the ruling party enjoyed the confidence of its legislators, he chose to decamp from the state, apparently reaching Mumbai via Delhi a day later. Meanwhile, the outgoing Chief Minister, after communing with the spirit of his mentor, decided that he would rather continue as Chief Minister. The subsequent Mahabharata saw the s**t hit the ceiling, with the current Chief Minister and his likely successor, a long-time confidant of the deceased Chief Minister, trading ugly charges of conspiracy that would have done credit to a William Shakespeare play.

More to the point, what ought to concern us is not the Tamil Nadu drama, which has all the makings of a successful Tamil movie, but the way in which, once again, the institution of the Governor has taken a beating. Governors have come (and gone) in all shapes, sizes and political hues, contributing more than their share of controversy to the wonder that is India. We have seen Governors pressurising administrations of Universities to alter marks of politically influential students, indulging in unbecoming behaviour in Raj Bhavans and, recently, leaving after allegations of sexual harassment. More par for the course have been the efforts of Governors to interfere with the constitutional process for government formation in the states (especially opposition ruled ones), generally at the behest of the political masters who appointed them. Arunachal Pradesh is still fresh in our memory, with the death of one Chief Minister and the overthrow of another following gubernatorial actions; ditto for Uttarakhand, where it needed the Supreme Court to reestablish constitutional norms. Any government coming to power in Delhi exercises its divine right to sack existing incumbents and appoint its chosen favourites as Governors. Out of work or inconvenient politicians are generally the first choices, though the list often extends to bureaucrats, police officers and army officers who have established good equations with the ruling dispensation. There being nothing like a free lunch, especially in statecraft, favours have to be returned by the appointees, mostly through political meddling and (in case of opposition ruled states) making life difficult for the government of the day. Rare, or nonexistent, would be the Governor who takes any decision of consequence without the prior nod of the political bosses in Delhi. A more recent bad habit of the central government has been its propensity to not appoint a full-time Governor for a state but to give additional charge to another Governor. A major state like Tamil Nadu, which has had more than its share of political turmoil and natural calamities in recent months, has been among the victims of this cavalier approach of the Delhi Sultanate.

It would, of course, be unfair to tar all Governors with the same brush. There have been outstanding personalities like Surjit Singh Barnala and Gopalkrishna Gandhi, who have not only displayed qualities of independence from the Delhi Darbar but have also rendered sage counsel to their state governments. In my own karmabhumi of Maharashtra, I remember the quiet dignity of C. Subramaniam, the political father of India’s green revolution and the dedication of P. C. Alexander to removing the developmental backlog of the Vidarbha, Marathwada and Konkan regions of the state. Despite being close to both Indira and Rajiv Gandhi and being appointed Governor by a Congress government in 1993, Dr. Alexander enjoyed a close rapport with the Shiv Sena-BJP government in Maharashtra and, paradoxically, was supported by these parties for elevation to the post of President of India, though not by the Congress Party, proving that a Governor can endear himself to all shades of political opinion through a professional, nonpartisan approach.

However, since such Governors are the exception rather than the rule, there is need, in a situation where, increasingly, the centre and states are ruled by parties with different ideologies and political beliefs, for the Governors of states to be selected by an independent process. I suggest that Governors should be selected by a collegium comprising the Vice President of India, the Prime Minister, the Chief Justices of the Supreme Court and the concerned State High Court and the Leader of the Opposition in the Lok Sabha. This would ensure that a totally incompetent political apparatchik is not foisted on an unwilling state government. It also gives scope for a reasoned choice where a state faces major challenges like insurgency, political instability or law and order breakdown.

Nonpartisan choices of competent public figures for the post of Governor are the need of the hour in a scenario where the professional politician in power in the states is increasingly pandering to the urges of the lowest common multiple in the electorate and is concerned only with hanging on to power at all costs, consequences be damned. More disturbingly, political flunkies who, as Governors, act neither as per convention nor in accordance with the Constitution damage the credibility of the democratic process. A misstep in a state like Tamil Nadu with a history of strong local sentiment could well have consequences that endanger the federal consensus that is the bulwark of a republican democracy. The sooner the political elite of Lutyens’ Delhi realise this, the better it will be for the health of the Indian polity.

10 Jan

The Perils of Power

Posted by vramani in irony, public affairs. Tagged: .

In the news reports detailing the political battle in Uttar Pradesh, one small item caught my attention. It mentioned that the doughty warrior of many a battle, Mulayam Singh Yadav, was close to tears when witnessing on television the open rebellion of his chosen heir, Akhilesh Yadav. Part of his sorrow would, no doubt, have been caused by the absence of filial loyalty on the part of a family member he had personally raised to the pinnacle of power. But another significant contributor to his dejection would likely have been the realisation that he had reached the end of the road marking his political trajectory. The die was cast when the son mustered over two hundred legislators in support while the father barely managed twenty. Realism hit when the father was forced to postpone the National Convention of his party in the knowledge that there would be few attendees. This reminded one poignantly of that day in January 2003 when the then Chief Minister of Maharashtra, Vilasrao Deshmukh, landed up at Aurangabad, where I was working as Divisional Commissioner, to inaugurate the state-level sports meet of the Revenue Department. Rumours had started from early morning that the Congress High Command had decided to remove him from the Chief Minister’s post. Imagine my shock when I saw an almost empty Subhedari Guest House, with only a handful of supporters greeting him on arrival. Compare this with the hundreds of people vying for his attention on his earlier visits to Aurangabad, where he was a very popular figure. That day, the realisation dawned on me that support evaporates for a public figure the minute hangers-on and favour seekers scent that he/she is on his/her way out.

My thoughts went back to 1985, when the wife of a very senior Minister in the Maharashtra Cabinet voiced her fears over her husband surviving as Minister, following an imminent change of Chief Ministers. She was, very obviously, more concerned about the withdrawal of the facilities of नौकर-चाकर-बंगला-गाडी (servants, house and car) once they left the confines of Malabar Hill. She confessed that, after years of being used to these comforts, she was terrified at the prospect of going back to routine housework and travelling by auto rickshaw. Her husband was probably more terrified at the thought of losing the perks of office, which included a ceremonial reception at the Government Guest House, attendance of the District Collector and Superintendent of Police and the fawning audience of those seeking the crumbs of power.

More than anything else, it is the “desire for recognition” that impels the drive to cling to the trappings of power. What can explain the pitiable spectacle of an octogenarian, obviously infirm senior politician being virtually lifted onto the dais to take the oath of office? Or the phenomena of superannuating bureaucrats jostling for post-retirement sinecures and seeking to continue in public positions till well into their eighth decade of life. Not forgetting, of course, political leaders who seek to retain control of parties and governments till they are close to the century mark and an unsympathetic Providence carries them away from this world. (The Supreme Court should probably, as it has for office bearers of Cricket Associations in India, impose an age limit of seventy for holding political and bureaucratic offices as well).To all of them, I can only offer this stanza from Adi Shankaracharya’s Bhaja Govindam:

मा कुरु धनजनयौवनगर्वं

हरति निमेषात् कालः सर्वँ।

मायामयमिदमखिलं हित्वा

ब्रम्हपदं त्वं प्रविश विदित्वा।।

(Do not be proud of your friends, wealth or youth. Time destroys everything in a moment. Give up attachment to this illusory world and seek to know the Self)

 

21 Dec

Oh! to be in Estonia

Posted by vramani in irony, public affairs, public policy. Tagged: , , .

I wonder how many people in India would even be aware that there is a country on planet Earth called Estonia. Tucked away in the Baltic corner of Europe, Estonia was one of the republics constituting the former USSR. The dissolution of the Soviet Republic in 1991 saw Estonia, along with a clutch of other erstwhile republics, achieve her separate identity. But what is truly remarkable about this small country of barely 1. 3 million people with a geographical area straddling not even 50,000 square kilometres is the rapid strides she has made in the digital revolution sweeping the globe. Estonia has an e-police, e-schools and an e-cabinet: you can now even apply for e-residency in that country. Estonia is virtually the digital hub for Eastern Europe and hosts the NATO Centre for Cyber Excellence. Not that digital progress does not come without a price; Estonia was literally brought to her knees by a major cyber-attack by Russian hackers some eight years ago and, has since, tightened cyber security measures. Her logic for offering e-residence facilities to non-citizens is, among other reasons, aimed at facilitating access to the European market to foreign investors at minimal cost and with a minimum of tiresome legal formalities.

No, I am not planning a shift to Estonia. The weather there is too cold, one has to keep worrying about a possible Russian re-takeover of the country and I am too tied to the earth of Bharat Mata. But I do think wistfully of Estonia’s e-topia whenever I run into India’s bureaucratic conundrums. The latest one is something called the FATCA declaration. For the uninitiated, this acronym stands for “Foreign Account Tax Compliance Act”. India and United States of America have an agreement under which the governments of the two countries will exchange information on taxable transactions by residents in the respective countries. So far, so good…but what gets my goat is the declaration to be signed by every Bharatiya whenever she opens a demat account or commences mutual fund trading, specifying her country of citizenship and place of residence. I am all for unearthing stashing of black money in safe tax havens, but getting over 99% of Bharatiyas, many of whom have not even crossed the Palk Straits or the Wagah check post, to sign one more silly document is surely the height of bureaucratic stupidity. More so, because these Bharatiyas generally transact through banking channels, where details about their citizenship, place of residence, etc. are already available with the banks.

But even the meaninglessness of FATCA pales before that other abomination, inflicted on us by the mandarins of the Finance Ministry, infamously known as KYC. Used by banks, gas agencies, mobile companies and sundry others to harry the unsuspecting customer, KYC officially stands for Know Your Customer. To my mind, it stands for Keep You Confused. I suspect that each time there is a change of Finance Minister or Finance Secretary in the Government of India, 600 million bank customers are once again asked to confirm their place of residence. Why else has one had to go through this exercise three times in the past six years? It is not as though seeking address details leads to lesser tax evasion or concealment of ill-gotten gains. We read daily about the number of fake accounts being uncovered in reputed private and government-owned banks: the mind boggles at what may be going on in cooperative banks.

As a matter of fact, asking for residential details of a customer wanting to open a bank account is itself a source of harassment to a citizen who moves for employment to different parts of the country every couple of years. I have read horror stories of young professionals who had to run from pillar to post to open a bank account when they moved in to stay with their parents and had no independent proof of residence. If the customer retains her bank account at the branch near her earlier residence and largely transacts through internet banking, she still needs to update her address to receive new debit and credit cards or for other transactions like securing loans. The agency that provides a service will invariably insist on a document like the Aadhaar card, passport and driving license or ration card for proof of residence, although a recently relocated customer is unlikely to have the new address on any of these documents. Nor do banks follow a uniform procedure for accepting address changes. One private bank allows for change of address through phone banking, while others ask for scanned copies of address proof. What defies comprehension is why the individual who can transfer/withdraw lakhs of rupees through net banking transactions cannot be trusted to change her address through the same net banking channel, without further verification. This underlines government’s basic lack of trust of the citizen and its permanent suspicion about her motives.

I have also not understood why the Aadhaar card needs to have the address on it at all. As a pan-India identity symbol, it is enough if it testifies to the fact of Indian residency. Updating the address every few years is an avoidable irritant for the geographically and socially mobile Indian: the fate of her economically worse-off migrant sisters and brothers is much more difficult to envision. Equally meaningless is the police verification at the time of issue or renewal of a passport, when any police station would have the list of persons whose record does not entitle them to issue of a passport. The police constable visits the house of a passport-seeker just to verify if she does stay there, never mind if the person moves house a few days after that. All this exercise does is to give a few more rent-seeking opportunities to the official machinery. It has not prevented gangsters and underworld henchmen from acquiring multiple passports at the drop of a hat.

Actually, the concept of a permanent residential address is so antiquated and irrelevant for members of the post-independence Indian domestic diaspora, who (and whose parents) have travelled wherever their employment took them. Most of us today have virtual email addresses that have survived longer than our present residential addresses. So when will our beloved Bharat be rid of this medieval fetish for permanent addresses? Probably when we move in the course of the next few months and years to a cashless economy. Once every transaction of ours leaves an electronic trail, there will be no need for any officious Finance Ministry bureaucrat to insist on an address. Till then, may I request the powers that be to content themselves with a correspondence address and trust the individual citizen when she furnishes that address?

1 Dec

Demonetization – Phase 2 – from cash to cashless

Posted by vramani in government, political economy, public affairs, public finance. Tagged: , , , , .

The first month of demonetization has been a trying one: long queues, frayed nerves, some panic and the usual meaningless political drama. Now that the genie has been let out of the bottle, it makes more sense to work out the future steps than to flog the dead horse. I chanced on a news item where a Pune-based not-for-profit outfit, Arthakranti, has claimed credit for planting the idea in the Prime Minister’s brain. Unfortunately, they have also pointed out that, of their recommendations, the government of India implemented only one. Since not many would have gone through their suggestions, I am detailing them below, along with my views on the way ahead, as well as two critical issues that will need a push from the government if the cashless economy is to become a reality in the not so distant future.

Withdrawal of high denomination notes (₹ 1000, 500 and 100) from circulation was the one recommendation that has largely been implemented. Arthakranti had, however, proposed a phased withdrawal programme starting with the ₹ 1000 note, then the ₹ 500 note and finally the ₹ 100 note, spread over three six-month periods, with an adequate supply of newly printed notes of the next lower denomination to substitute for the withdrawn currency note. Finally, the highest denomination note in circulation was to be the ₹ 50 note. Without trying to guess the compulsions of the government in rushing through such a monumental process in fifty days without ensuring adequate supply of currency of legal denominations, there is no denying that much pain has been caused to the general public, apart from the man-days lost in queues and the depression in economic activity just when the kharif crop has been harvested and the rabi sowing is due. Having done what it did, the government should now move towards a gradual phase out of the ₹ 2000 and ₹ 500 notes, probably over the next 12 to 18 months, with adequate provision of ₹ 100 notes to avoid the situation we went through in November. I would advocate continuing with the ₹ 100 note for at least another three to five years till cashless payment systems are firmly established as the preferred transactional mode.

A cap on legal cash transactions of ₹ 2000 has tentatively been proposed by Arthakranti. Given the large number of unbanked Indians and the gestation period that will be needed for cashless payment systems to be put in place, I would be more comfortable with a cap set at ₹ 10000 for the period when the ₹ 100 note continues to be legal tender, with the cap being reduced to ₹ 5000 once ₹ 50 is the highest currency note in circulation. Any transaction in cash above this cap should be made illegal and liable for punitive action.

The truly revolutionary recommendation of Arthakranti is the replacement of all domestic direct and indirect taxes (central, state and local) by a banking transaction tax (BTT), with only import and export duties continuing in respect of internationally traded goods and services. This is tantamount to killing many birds with one stone. Coupled with the cap on legal cash transactions, this brings every transacting citizen into the tax net. Any transaction through a bank account (with automatically attached Aadhar and PAN card details) attracts a BTT of 2 percent, as suggested by Arthakranti. The BTT is added to the transaction value and deducted from the amount realised by the payee. The BTT realised is shared between central, state and local governments and the banking intermediary. With the tax net covering all transactions over ₹ 10000 (ultimately ₹ 5000), the system can be revenue-neutral even at a rate which is barely 7% of the currently highest marginal income tax rate or 10% of the anticipated GST rate. The ordinary citizen will be spared the ordeal of filing direct and indirect tax returns, an exercise that today taxes even the most nimble-minded chartered accountant. Governments at all three levels can save money on the huge army of tax inspectors, assessors and enforcers in departments ranging from income tax and central excise to state excise, land revenue, stamp duty, registration fees, commercial taxes, road tax, entry tax and property tax. User charges paid online will not only accrue immediately to the concerned department/agency but revenue receipts to the concerned governments and banks will also be instantaneous. The BTT would also cover agriculturists, who are out of the income tax net for political reasons, despite the recommendations of the K. N. Raj Committee over four decades ago. Most importantly, black money generation through corruption and tax evasion, and its conversion from cash to other asset forms like real estate and jewelry, can be checked.

Reaching out to the huge unbanked portion of the Indian economy requires, as a prerequisite, a digital revolution: the cashless economy can be built only on the foundations of a digital economy. Efforts to promote cashless payments and cash transfers in MGNREGA and the PDS have foundered on the absence of virtual connectivity in large swathes of the country. With banking services not covering even the last ten miles, let alone the last mile, banking correspondents, armed with point-of-sale machines, and mobile wallets are probably the major means by which money can be accessed. This, however, requires microwave towers, with reliable electric supply. Where the terrain does not suit microwave tower connectivity and where electric supply is yet to reach (which are the areas where the most disadvantaged sections of Indian society live), there is need to rely on satellite connectivity coupled with towers powered by solar energy. A second concern is that of cyber security. With increasing criminal infiltration of cyberspace, development of secure, encrypted systems is the need of the hour to avoid economy-wide disruption of financial systems.

Demonetization was initially promoted as the solution to check tax evasion and corruption and deal with counterfeiters and terrorists. With growing public irritation and the downturn in business, the government has started trumpeting the virtues of a cashless economy. This requires a paradigm shift in technology and in individual mindsets. But above all, it requires certain crucial reforms in other sectors of our democracy and polity. I will deal with these in a future blog.

19 Nov

Money…the root of all evil

Posted by vramani in government, irony, political economy, public affairs, public policy. Tagged: , , , , .

“For the love of money is the root of all evil”
(Timothy 6:10, The Bible, King James Version)

The Bible makes it clear that it is not the medium which is evil but the inordinate attraction to it. Before we castigate that poor banknote or coin, let us also reflect that greed is only one of the human failings, on par with envy, fear, lust and anger. And yet, the action of the government of the day to render worthless ₹ 500 and ₹ 1000 denomination notes at the drop of a Prime Minister’s speech has left the common citizen speechless and in the grip of a welter of emotions. The intentions may be good and the purpose may be noble : there is a groundswell of support today for the government’s actions among the chattering classes, even though the silent masses are going through difficult times. But is “black money” so easily tamed? Since there seems to be popular misconceptions about “black money”, its origins and nature, some clarifications are in order.
Black money can refer to a flow or to a stock. It is the activity through which the money is generated which determines whether it is black or white, while the subsequent use of the money determines its colour at that time. For example, a private engineering college accepts a donation in cash from a student and declares only 25% of the amount as received. The remaining 75%, which is held in cash, or converted to other assets (and not declared as income), constitutes black money. If this money is used to pay cash salaries to the college employees, the money gets converted from black to white, since the employees use it for their legitimate monthly expenses. Similarly, undisclosed “black money” income parked abroad (as stock) is converted to a “white money” flow when it legally reenters India as foreign institutional investment from foreign tax havens. The roots of black money can lie where activities are wholly illegal (smuggling, drug dealing, arms transactions), or where the activity is legal, but part or whole of the amount realised is not disclosed, either because there has been some violation of permissible limits (illegal mining, capitation fees) or simply to avoid tax payments of any kind. The mythical metaphor could be Ravana’s ten heads in the Ramayana or the Lernaean Hydra in Greek mythology: chopping off one head would see more heads grow back again. A modern day analogy would be the Jackal, the terrorist tasked with the assassination of President Charles De Gaulle of France. With his multiple stolen passports and the ability to change his appearance to suit the passport photograph, the Jackal evaded stringent police surveillance and was finally stopped in his tracks by a patient, persevering French policeman only after he had managed to take a crack at his target. Black money is similar: just when the enforcement agencies think they have got the beast, it will reappear in a new form elsewhere.

In these days of highly fungible economies, the very processes of economic and government functioning give immense scope for the generation of black money. Since I started this article with a quote from the Bible, it would be appropriate to list the Ten Commandments that the Government of India must follow if the current demonetization drive is to come anywhere near yielding the desired results:
I. Thou shalt make bank accounts mandatory and easily accessible
The innovative idea of the Pradhan Mantri Jan Dhan Yojana (PMJDY) to provide every Indian citizen with a bank account has seen as many as 254 million accounts being opened till November 2016. By the government’s own figures (gathered from banks), nearly 25% of these accounts have zero balance; there is an average of about ₹ 2500 in the remaining accounts. The geographical spread of these accounts would be highly skewed: remote tribal and rural areas are likely to be underserved. It is the poor with no access to bank accounts who have been hardest hit by the demonetization exercise. The significant percentage of zero balance bank accounts is testimony to the fact that bank accounts are still not perceived as useful by the poor, especially where they have little bankable surplus and where bank locations and timings are such that they cannot easily be accessed. Making the opening of a bank account by every citizen above the age of 18 mandatory would popularise the use of banking services and compel hitherto reluctant bankers to actively seek customers. There will still be areas where access to bank branches is difficult, either because of geographical location or, more often, because of timings which do not suit the customer. It is here that the Second Commandment comes into play.
II. Thou shalt actively promote the cashless economy through the use of technology
Mobile wallets and payments through mobile phones and computers using internet and wireless technology can obviate the need to visit banks. Use of point of sale (POS) terminals at all transaction outlets would promote cashless transactions. Money transfers (salaries, etc.) can be done online or using mobile phones. Banking correspondents can ensure needed cash payments from and deposits to customers’ bank accounts. This will need some knowledge of how to use these systems. Having seen how quickly nearly 900 million Indians have mastered the use of mobile phone software, including the use of WhatsApp and the downloading of videos, I do not foresee any problems of adapting to modern technology. There is, of course, still the need to ensure that the temptation to escape the electronic trail is checked…enter the Third Commandment.
III. Thou shalt declare illegal and void any cash transaction exceeding ₹ 10000
Given the Indian propensity for jugaad, all efforts will still be made to evade scrutiny of economic intelligence agencies by going in for over and under the counter cash payments, to avoid payment of direct and indirect taxes. Black money will be converted into holdings in real estate and gold/jewelry. To ensure a clear electronic trail of all transactions, any cash transaction over ₹ 10000 should be made illegal and liable for punitive action, including confiscation. This will also, hopefully, check the widespread and pernicious practice in India of large-scale cash transfers in real estate dealings to evade payment of capital gains tax, stamp duty, registration fees and other related levies.
IV. Thou shalt demonetize ₹ 2000 and ₹ 500 notes
The rationale for introducing ₹ 2000 notes when the lesser denomination of ₹ 1000 has been scrapped has raised many eyebrows: suitcase payments become easier when the number of currency notes required to be packed into the suitcase are reduced by 50%. A strong case can be made for scrapping all currency notes of a denomination greater than ₹ 100. In fact, there is growing support from American economists for withdrawing from circulation the 100 dollar bill which, they feel, helps only drug dealers, terrorists and illicit activities while rarely being used for transactions. India may not be quite in the same cashless economy boat as the USA, but moving the economy in the cashless direction requires demonetization of ₹ 500 and ₹ 2000 currency notes. The presence of currency in only small denominations from ₹ 1 to ₹ 100 would force reluctant merchants to go in for cashless technology. It would also render more difficult the task of using low denomination currency notes in large numbers for high value transactions.
V. Thou shalt make Aadhaar and PAN card details mandatory for all transactions above ₹ 10000
Despite the objections of neo-Luddites opposed to the universal deployment of the Aadhaar card for all, it is heartening that, for schemes like the LPG subsidy transfer, Aadhaar cards are being linked to bank accounts. Since opening a bank account does not require either Aadhaar card registration or PAN card details, there is every scope for diversion of unaccounted for income to benami accounts. What is urgently required is to link Aadhaar and PAN card details and to make PAN details mandatory for any transaction exceeding ₹ 10000. This would check possible misuse of bank accounts which are not on the income tax radar (due to non-availability of PAN details) and would also ensure that non-income taxpayers (like agriculturists) are not used as conduits for undisclosed payments.
VI. Thou shalt discontinue top-level political decisions in all discretionary matters
A major scope for corruption lies in the centralization of decision making powers at the political apex, especially in state governments and local bodies. Whether it is the posting of officers, the permission to start primary schools or the award of contracts for anything from chalk pieces to supplementary nutrition for children to major constructions, the ministerial seal of approval is a must. This has spawned a major corruption industry which enmeshes a significant portion of the bureaucracy as well. We are also often regaled with stories of the MLA or local body corporator who becomes a multimillionaire within a year or two of getting elected. The standard defence is that elections are a costly business, although how that justifies corruption is beyond one’s comprehension. Be that as it may, there is no denying that, apart from lowering administrative efficiency and providing substandard services to the aam aurat/aadmi, high-level political corruption is a significant source of black money, often ploughed back into real estate and conspicuous consumption. Since this is a disease that cuts across political boundaries and is particularly common at state and local government levels, the Government of India must, through a combination of incentives and shaming, compel governments to restructure their governance processes and decentralize decision making powers.
VII. Thou shalt implement a sound public procurement policy
The Government of India had introduced a Public Procurement Bill in 2012 to regulate and ensure transparency in procurement by the central government and its entities. The bill was allowed to lapse and there have been no efforts subsequently to resuscitate it. Most state governments have no public procurement policy or legislation in place. Even in the few states where such legislation has been passed, its effectiveness has never been assessed. Since, apart from administrative postings and patronage in resource allocation, public procurement is the greatest source of political and bureaucratic corruption, some urgent action on this front is essential to check amassing of illegal wealth by the politician-bureaucrat-businessman trinity.
VIII. Thou shalt eliminate the inspector raj through online processes
The permit-license raj was curtailed in 1991; unfortunately, the then government lost steam before the death blow could be delivered to the inspector raj. There are still too many ‘inspectors’ in local bodies, police, road transport, liquor licensing, education, industry and labour welfare, whose major function appears to be the collection of economic rent, for themselves and those above them in the government hierarchy. Some streamlining of licensing processes has taken place but the overall picture is still one where the inspector-tout system flourishes: just visit any Regional Transport Office and see for yourself. This corruption has two “black money” aspects: firstly, the unlawful gains to the organs of the state and, secondly and more dangerously, the operation of a parallel economy that can threaten national security and financial stability. Technology is, again, the only answer. As more processes go online, self-certification by licensees and only minimal, essential contact with the human element can help reduce corruption and harassment.
IX. Thou shalt streamline the justice system to deliver just deserts promptly to all bribe-takers, bribe-givers, tax evaders and hawala traders
As an American jurist put it “The millstones of justice turn exceedingly slow, but grind exceedingly fine”. Justice in India often seems inordinately long in coming. It is rather ironic that, in recent times, a public prosecutor of Indian origin investigated and secured the conviction of two well-known individuals of Indian origin on charges of insider trading in a matter of four years in the USA. While we may not all support his approach, it is a fact that high profile cases involving top political and bureaucratic functionaries in the previous central government are still far from closure even in the trial court. Lengthy, tortuous legal processes not only breed cynicism in the populace at large (not a healthy sign for a democracy) but also embolden lawbreakers with political and economic clout. Sincere and speedy implementation of the provisions of the Benami Transactions (Prohibition) Act, Prevention of Money Laundering Act, Prevention of Corruption Act and related legislation will show that the government means business. Along with the government, the judiciary also needs to tighten its processes and dispense justice fairly and speedily.
X. Thou shalt ensure that all elections are funded only through legal contributions and that all transactions relating to elections are closely monitored
The final Commandment covers a subject which is at the foundation of the efforts to tackle the genesis of black money: electoral corruption. Election funding is itself a small portion of the black money generated. But the politician-businessman nexus that unaccounted election funding sustains has deleterious long-term implications for the economy as well as for the credibility of democracy in the eyes of the people. There are politicians who proudly claim that they have never enriched themselves personally but have taken money only for their political party. Political parties have never been required to account for the sources of their funds and have stubbornly resisted efforts to bring them within the ambit of the Right To Information Act. Demonetization should bring about a situation where all receipts and all expenditures, small or big, by parties and their candidates can be electronically tracked. This will give the Election Expenditure Observers far more teeth than they have at present. With rigorous monitoring of electoral expenses, the last fig leaf for justifying corruption before, during and after elections will be gone.

I write this piece at a time when the nation is probably going through one of its greatest phases of turmoil since independence, rivalled only by the churning of the polity in the closing months of the Emergency in 1977. As one who lived for over a decade in the vicinity of Muhammad Bin Tughlaq’s aborted capital of Daulatabad, his other aborted experiment with currency comes to my mind. Of course, 2016 is not 1333 and we are not minting brass and copper coins, though the flimsy quality of the Rs. 2000 currency note makes me slightly apprehensive. There will always be insinuations that raw political calculations dictated the demonetization decision. The current pains that large sections of the population are going through could have been mitigated somewhat if some of the Ten Commandments had been implemented prior to the “surgical strike” on the currency. As matters now stand, systemic changes on the lines suggested above would give the government some victories on the black money front in the months and years to come. Human greed will remain, the craze for conspicuous consumption and the Big Fat Indian Wedding will continue unabated and the Cayman Islands and other tax havens will always beckon those with an insatiable appetite for moolah. But the government would at least have the satisfaction that it made earning a fast buck that much tougher for those who are never going to respect the rule of law, while also ensuring that it does not make the wretched life of the common (wo)man even more wretched.

1 May

What’s in a name?

Posted by vramani in government, irony, public affairs.

 

“What’s in a name? that which we call a rose

By any other name would smell as sweet.”

(William Shakespeare: Romeo and Juliet)

William Shakespeare would never have had the hapless Juliet fret about the irrelevance of a name in the face of true love if he had been a twentieth or twenty first century inhabitant of India that is Bharat. My first tryst with our name-changing proclivities came when, as a newly posted probationer in the civil service, I landed at Bombay (Mumbai?) Central railway station one hot May morning in 1981. Getting into a taxicab, I directed the cabbie to take me to the Maharashtra State Administrative Training Institute located on Hazarimal Somani Marg, where I had been ordered to report for being inducted into the state bureaucratic culture. For good measure, the letter from the Institute informed me that the Institute was close to the Victoria Terminus (VT) (Chhatrapati Shivaji Terminus?) railway station. At VT, the cabbie asked me which road he should take. Clueless about Bombay’s (Mumbai’s?) roads, I directed him down the road to Flora Fountain (Hutatma Chowk?). Not finding the Institute, we took a one-way road back to VT and explored other alleys in our vain search for the elusive Institute. On our tenth or so sortie (as the taxi meter merrily shot up), we finally located the Institute located in a modest, single-storey premise, it’s innocuous signboard hidden from public view by large creepers. My eureka moment was spoilt by the contemptuous glance I received from the wizened cabbie who growled “Why didn’t you tell me it was Waudby Road?” before driving off with the inflated amount he received from me.

My engagement with Mumbai’s road names continued when I joined the Greater Mumbai Municipal Corporation (better known to the locals as BMC) in 1996. I was allotted a house within the premises of the Mumbai Zoo in midtown Byculla. Its northern boundary abutted E. S. Patanwala Road. Intrigued by the name, I made inquiries and discovered that Mr. Patanwala was the founder of a large cosmetics empire, responsible, among other products, for Afghan Snow, a vanishing cream that was applied on my face before I left for school every day. As fate would have it, my boss allotted me the subject of maintenance of Mumbai’s roads. My padayatras across many kilometres of Mumbai’s roads and pavements threw up many names hitherto unknown to me: Barfiwala Road, Veera Desai Road and Lokhandwala Road, not to mention Bhulabhai Desai Road and Gopalrao Deshmukh Road, better known by their earlier names of Warden Road and Pedder Road respectively. But it was at my weekly attendance at the General Body meeting of BMC corporators that I was privy to the extreme interest that the subject of road naming (and renaming) generated in the city fathers (and mothers), something that dreary budget items failed to excite. The meeting agenda was never complete without the inclusion of at least one item pertaining to a stretch of road that was to be renamed, often after some local benefactor or even some deceased relative of a corporator, whose memory was thus preserved for prosperity.

If the BMC was so active in the game of the name, how could the Maharashtra state government show tardiness? Shortly after it assumed state power in 1995, the ruling Shiv Sena-Bharatiya Janata Party combine put all its might behind renaming Bombay as Mumbai. Not content with this, the government of the day strove valiantly to rename Aurangabad as Sambhajinagar and Osmanabad as Dharashiv, hoping probably to erase the Mughal-Nizam legacy. While Bombay became Mumbai, the then state government was not successful in renaming other cities, though politicians of parties like the Shiv Sena still use Sambhajinagar to refer to Aurangabad.

If you think Haryana’s politicos showed great drive in renaming the urban jungle of Gurgaon as Gurugram, please shower your appreciation on Karnataka’s present government which has, with great gusto, gone about renaming the state capital and just about every district, albeit sometimes only to reflect the Kannada inflection of tone — Bengaluru for Bangalore, Mysuru for Mysore, Mangaluru for Mangalore, Belagavi for Belgaum, Vijayapura for Bijapur and Kalaburagi for Gulbarga. The epidemic is now spreading further; the Vishwa Hindu Parishad is demanding that Shimla be renamed Shyamala!

It is almost as though the rechristening of places indicates a deep rooted desire to erase certain not so pleasant historical memories, especially of the colonial era. Delhi went through the phase of historical cleansing when Cornwallis, Canning, Curzon, Hardinge, Irwin and Willingdon, all representatives of East India Company/British rule in India, made way for their Indian counterparts after independence. Mercifully, smaller places in India named after Britishers who made a local impact — Forbesganj, Daltonganj and McCluskieganj — have withstood the renaming mania. More recently, the present central government decided to remove Aurangzeb’s name from a Delhi road, renaming it after a respected former Indian president to forestall any criticism of religious or historical bias. Each government obviously favours its admired icons in the naming/renaming exercise. While the Congress pantheon dominated the landscape in the first few decades after 1947, governments of other political persuasions have been no less diligent in introducing their favourites into road names. Sometimes, the repetition of the same name can cause confusion in giving directions; my area in Bengaluru has many roads named after the great engineer, M. Visvesvarayya. Mahatma Gandhi, Jawaharlal Nehru, Chhatrapati Shivaji Maharaj and Netaji Subhas Bose are perennial favourites across towns and cities of India and are often repeated in the same city. Ideological, literary and anti-colonial affinities also influence road names: Kolkata has its Ho Chi Minh, Lenin and Shakespeare Saranis, while Delhi has roads named after Nelson Mandela, Josip Broz Tito and Archbishop Makarios; where Olof Palme fits in this group is still a matter of conjecture.

Actually, names are meant to be markers of one’s origin, ethnicity and religion in the masala dabba that represents India’s diverse, heterogeneous population, although the forces of national integration and globalisation are ironing out these distinctions. Still, in a country that is more a continent (like India), there are delicious vignettes that highlight the complexities of names that are commonplace in some parts of the country but are foreign to the ears of those from other parts. Take my own example. I stuck to a six letter name like Ramani since, based as I was in Delhi, I was not sure how my northern confreres would mutilate Subramaniam. Now, Ramani is generally a name more associated with the female sex in its linguistic origins, including in states like Kerala, although there are hordes of male Ramanis emanating from Tamil Nadu. But when I was to join the civil service training academy at Mussoorie, the Assistant Course Director (from a northern state) used his extant knowledge to assign me accommodation in the Ladies Block. My good fortune (??) at this turn of events did not, however, last long. The other Assistant Course Director (a Tamilian) promptly rectified the gender error. He gleefully related to me how he inadvertently paid back his colleague in the same coin. The Tamilian allotted Maheshwari to the Ladies Block, till his northern colleague pointed out that Maheshwari was a male surname in the northern reaches of India. Imagine also the plight of the Punjabi receptionist at the entry desk of Shastri Bhavan, in the heart of the Indian government, who asked this strapping Tamilian visitor his name. When the visitor blithely replied “Thirunavukkarasu”, the receptionist, visibly blanching, hastily handed over his pen to the Tamilian to enter his name in the entry register, a name as Greek to the receptionist as Varoufakis (for more on the latter, refer to the Greek economic crisis).

I wonder if Nandan Nilekani devised the unique identification Aadhaar number for every Indian to get over the problem of mutilation and misspelling of names. A number (accompanied by fingerprint and iris scanning) that enables individual identification from Kashmir to Kanyakumari and Dwarka to Dimapur would do away with the need to get the spelling right. Pronunciation is another matter altogether. Maybe we should all adopt the Beagle Boys formula — the three brothers were distinguished solely by the numbers boldly emblazoned on the front and back of their sweatshirts: 176-167, 176-671 and 176-761. After all, there’s always safety in numbers!

 

15 Apr

Secession of the urban Indian

Posted by vramani in government, Innovation, political economy, public affairs, public policy. Tagged: , , .

Amidst all the recent furore over “seditious” behaviour on one of India’s premier university campuses, my mind went to the steady secession of sections of Indian society from the larger populace around them. Now, secession is no laughing matter; any talk of it in the context of a region seeking to separate itself from the republic constitutes a serious crime. And yet, through its actions (or rather inaction), the Indian state itself has been guilty of creating a secessionist mindset in certain groups residing within its frontiers. Before I am hauled up before the guardians of law (one never knows in these hyper-excitable times), let me expand on my theme to set all apprehensions at rest.

I still remember a childhood when those of us living in cities like Delhi, Bombay and Madras received, and enjoyed, the benefits of public services. Electricity came from the local power undertaking and water from the local water board. Those living in Bombay and Madras were fortunate to enjoy good public transport (local train and bus) facilities. We Delhiwallahs were not so lucky; a six kilometre journey from school to home could take anywhere up to two hours, earning the Delhi Transport Undertaking (DTU) the sobriquet Don’t Trust Us. Public health facilities were extensively used: the Central Government Health Scheme (CGHS) for minor illnesses and (in Delhi) public hospitals like Safdarjung and Willingdon (later christened Ram Manohar Lohia) for major ones. The doctors were reputed and trusted by their patients, the nursing staff was dedicated and competent and many of our friends went there for minor and major surgeries. While I don’t even remember seeing a uniformed policeman in our government colony, the friendly Gurkha watchman on his nightly vigil made us feel secure. The seeds of secession were already then being sown in primary and secondary education, though not in higher education: many of us went to private (euphemistically termed public) and missionary schools (with parental confidence in municipal and government schools at a fairly low level) but subsequently to publicly funded universities.

The last quarter of the twentieth century marked the watershed for the transition to a dual society. As the pressure of population grew, with large migrations to urban areas, shortfalls in public services and the unwillingness of better-off sections of the citizenry to live with these infrastructural deficiencies led to the Great Secession. The success of the Indian diaspora and their affluence created envy in their humble country cousins, who had to look forward to the casually tossed out gift on the annual pilgrimage home of the non-resident Indian. 1991 was the first window of opportunity for the great Indian middle class. Easier and cheaper imports, the opening up of the consumer sector to private investment and the information technology boom saw an explosion in the availability of hitherto forbidden fruit, which the Indian consumer was only too eager to acquire and consume. Money is the medium for the transfer of goods and services from the hitherto totally public domain to private enclaves of wealth and prosperity. As living standards improve for a growing middle class with aspirations to the “good life”, it would be instructive to examine how this stratification has worked in different sectors of services and how it has had its impact not just on the wealthier classes but also on the common woman/man living in urban settings in India.

Electric power supply has always been the country’s Achilles heel. Rural areas, especially in the more backward northern and eastern regions of the country, have long been inured to the absence of electricity. But urban areas, inhabited by industries and by the relatively wealthier segments of society, would not accept such a scenario. Industries went in for diesel generator sets and, where possible, captive power generation. Households followed suit very soon; as disposable incomes went up, generator sets made their appearance in private residences and housing societies. Even after the initiation of power sector reforms in the early 2000s, the scenario is yet to change, with problems persisting in all the three sectors of electricity generation, transmission and distribution. A nuclear deal was concluded, but power from nuclear plants still seems a distant dream. Oh, of course, there has been a lot of talk but, as yet, only limited progress on the renewable energy front, the inspiring example of countries like Germany notwithstanding. Bengaluru, India’s IT capital, sees its citizens stoically settling down to power cuts of three to five hours daily, while its energy policy makers scramble for excuses like low water supply positions in reservoirs.

Drinking water supply poses a major issue everywhere, and not just in years of scanty rainfall. Politicians and bureaucrats have failed to anticipate the demand for this crucial, life-giving resource, not just in rapidly growing urban centres, but also in rural areas, where water supply is fast depleting. There are a variety of reasons for this critical situation, best summed up as “the triumph of private greed over public need.” What is glaringly evident is the absence of any long-term planning for urban water management. No efforts have been made to recycle wastewater for use for non-drinking purposes, nor is there any coherent policy in place to desalinate seawater, on the lines of countries like Israel, Saudi Arabia and the United States. The only ones laughing all the way to the bank are the bottled water companies, which are the major drinking water supply source to populations in cities like Chennai and Bengaluru. With a steadily worsening groundwater scenario, water tankers are the order of the day in every metropolitan area. The urban poor have to make do with the trickle that comes from their public taps or fight for access to the tankers that service their areas.

The steady deterioration of public health services has, over the years, put an enormous financial burden on the aam aurat/aadmi. Money is again the feature that distinguishes the quality of services for the rich and the poor. Corporate, multi-specialty hospitals with state of the art technology are available to those who can pay, while the poor flock to already overloaded public hospitals. The average citizen has come to distrust the medical attention she can expect to get in public health institutions, forcing her to get into debt to meet the costs of private medical care. A moribund public health care system functions (??) under the benign gaze of governments (both central and state) and a controversial Medical Council of India.

Public transport, almost the only commuting option a couple of generations ago, is probably the most striking example of the widening chasm between the rich and the poor. City transport systems have come under immense strain, even as private car registration figures shoot up. Mumbai’s famed local trains are groaning under the sheer weight of numbers and even the Mumbai bus system (BEST) is not quite what it used to be. Indian city roads have, of course, proved to be somewhat of a social leveler — the potholes on the roads are no respecter of private or public transport modes and congested thoroughfares allow for no distinctions in time spent on travel, regardless of whether you are in a BMW or on a city bus. The Delhi Metro has been the only bright spot in an otherwise abysmal tale of stalled public rail transport and Bus Rapid Transit systems in nearly all Indian cities.

Most unfortunate has been the privatisation of security systems as inadequate police forces battle with multiple responsibilities in the diverse areas of criminal investigation, law and order maintenance and VIP security. It is bad enough when housing becomes segregated (although the coexistence of prosperity and squalor serve as reminders that “no man is an island”). It is worse when these residential islands also shut off the rest of humanity (including visitors’ vehicles) and seek protection behind high walls and iron gates. As the perception of individual insecurity grows, those who are well-off but not fortunate enough to be provided taxpayer-funded security go in for their private armies of security guards. The aam aurat is left to manage on her own against antisocial elements, with no beat patrolling by constables in even crowded localities.

The final act in this secession drama is the scramble for job opportunities overseas. The earlier flight to the Gulf at least saw many of the migrants return home to better living standards in states like Kerala. The subsequent exodus to the West, especially the United Kingdom and the United States, and other areas in South-East Asia and Australia, has been rather more one-way traffic. While there is the feeling in expatriates of a homeland lost, there is also the realistic recognition that India still cannot offer the same opportunities for innovative thinking and risk taking that many other countries both to the east and west of us offer. If you don’t believe me, ask a budding research scholar in any university or an entrepreneur starting a new venture. It should occasion no surprise that India’s only Nobel award in the basic sciences came during British rule (C. V. Raman, 1930). Indians have since won Nobel awards in the basic sciences, but their research has been conducted in foreign institutions.

Ultimately, the issue boils down to the pursuit of excellence. Islands of excellence in the country still float in a sea of mediocrity, a consequence of unimaginative education systems, blatant patronage based on ethnic and other considerations and an acceptance of sloppy, disinterested performance. Perhaps we should heed the prescient words of John Gardner, Secretary of Health, Education and Welfare in the Lyndon Johnson administration “The society which scorns excellence in plumbing as a humble activity and tolerates shoddiness in philosophy because it is an exalted activity will have neither good plumbing nor good philosophy: neither its pipes nor its theories will hold water.”

 

 

 

 

 

 

1 Apr

Boys will be boys

Posted by vramani in government, irony, political economy, public affairs. Tagged: , , .

Girish Karnad essayed the role of a young, idealistic dairy technologist in Manthan, an inspiring movie on the politics of starting a dairy cooperative in Gujarat. The local overlord, played by Amrish Puri, attempts to win over Karnad by offering him choice liquor, which our young man firmly refuses. Puri then, with a sarcastic laugh, states that he is very fond of idealists, since they are bound to lose their idealism one day. I don’t know how many of the actors on the prosecution side of la affaire JNU, our recent box office hit on television, have seen this movie. Even if they haven’t, they would probably have done well to have taken a leaf from Puri’s book and treat the entire JNU episode as another case of boyish spirits which merited at most a mild rap on the knuckles and a word of reproof, with a knowing nod of the head, that “boys will be boys”. By throwing one of the more draconian sections of the Indian Penal Code at the students of the University, the government of the day unwittingly conferred a distinction on these students and willy nilly dragged itself into a controversy that led to international condemnation as well as a suspicion in the public mind that there was a political agenda behind the entire imbroglio.

My generation passed through the portals of higher education during the days of the Emergency of 1975-77. Even prior to that, there was considerable ferment in idealistic sections of the student population. The exploits of Che Guevara in Latin America, the civil rights movement and the anti-Vietnam war protests in the USA and the distant rumbling of the Naxalite uprising in Bengal were all beacons of hope for sections of youth that had come face to face with the unravelling of the post-independence Nehruvian consensus. Scores of students from the neoliberal environment of Delhi University left their studies to pursue their dreams of a classless society. Severe state repression and the vortex of violence the movement spawned led to a fairly early disillusionment with the Naxalite movement and the homecoming of the chastened prodigals. Their future careers in academia or the civil services (almost the only two job openings at that time) would have been severely jeopardised had the then Government of India not had the sagacity to overlook their youthful enthusiasm and withdraw possible prosecutions against them. Many of these potential “revolutionaries” went on to outstanding tenures in the civil services and the academic world, especially as teachers in the university that is at the centre of the present controversy (some have moved from Trotsky to the Temple, but that is another story). There was (and is) a deep humanism and liberalism informing the approach of many of them to social, political and economic issues. The Emergency represented the darkest phase of Indian democracy, but it also had one redeeming feature: it sensitised the youth of my generation to democratic values of freedom and human dignity and developed in many of us distaste for authoritarianism of all hues. Freedom to us meant freedom of thought, speech, association, profession of any religion (or no religion) and culinary choice, to name the prominent ones. Colleagues of mine in the Indian Administrative and Police Services stood up to excesses of different political formations when they attempted to trample on the constitutional rights of ordinary citizens in the name of religion, caste, ideology, ethnicity or region.

I stress this cherishing of fundamental human values, because I am aware of the educative role of the university in developing the thinking individual in each of us. It is made all the more poignant in view of the recent calls by many highly qualified persons to students to concentrate on their studies and not on politics during their stay in the university. Proponents of this school of thought seem to view the role of institutions of higher learning as producing technology zombies of the sort popularised in the Dilbert comic strip, rather than alert, aware citizens who will participate actively in the ongoing process of social transformation. Unfortunately, this betrays a highly technological view of the roles of discussion and dissent in public discourse. Any discussion on issues relating to the human condition and efforts to better it are inevitably political in nature. It would appear that significant sections of the intelligentsia still view the development of the critical faculty in individuals from an authoritarian perspective. Probably, this has its roots in the parental and social (including educational) environments which stress conformity rather than curiosity. From personal experience, I can certainly aver that independent modes of thinking and functioning evolved only when I entered college. Nor can I claim that my true education came from the classroom: rather, it was the product of hours of discussion after class on diverse issues ranging from politics to social issues and values.

V.S. Naipaul characterized India as a land of a million mutinies over forty years ago, easing somewhat the resentment of Indians over his earlier reference to the country as an area of darkness. If Naipaul was right then, we would have to term this as the land of a billion mutinies now. Assertions of identities by disadvantaged castes and communities, not to mention the struggles of the female half for their rightful place in the Indian sun and the refusal to be denied their economic opportunities, have led large sections of the population to question the traditional, patriarchal social structures. The university has served as an avenue for upward mobility and for questioning the existing power structure. Any political party which seeks to assert the monopoly of its ideology and restricted worldview over institutions of higher learning, through manipulation of teaching processes and educational curricula, is pursuing a chimera. As Reserve Bank of India Governor Raghuram Rajan affirmed in a recent speech at the Indian Institute of Technology, Mumbai “The first essential is to foster competition in the marketplace for ideas…This then leads to a second essential: Protection, not of specific ideas and traditions, but the right to question and challenge…it is by encouraging the challenge of innovative rebels that society develops.” Governments learn this lesson far too late – the Congress government in 1977 reaped the consequences of the denial of free expression to the student population in higher education institutions for twenty months.

Ultimately, the Argumentative Indian will have his say. Having had his say, he will then move on to the basic business of earning his livelihood. Governments in a democracy need to provide a pressure valve to a population, many of whose members still suffer from myriad economic and social deficiencies. Ignoring this reality can prove fatal for a government when it next goes to the hustings. The first requirement for a successful, popular politician is a keen sense of irony laced with good-humoured forbearance, a quality sadly lacking in most of the political class in India today. The first generation of Indian political leaders was jailed by the British; the second generation of political leaders was jailed by the Congress. It would be truly ironic if the third generation of leaders of independent India were to emerge from those currently being jailed by the present government. Who can tell, every cloud may have a silver lining!

 

15 Mar

Centralization – The bane of governance in India

Posted by vramani in political economy, public affairs, public policy. Tagged: , .

Any newly born nation nurses a sense of insecurity, more so since the nation state is a relatively recent phenomenon in human history. There are also enough doomsayers hovering around with their dire prophecies. The Indian nation-state has had more than its fair share of such pessimistic prophets in the early decades after independence. It also had to contend with the aftermath of the Partition and the amalgamation into the Indian Union of over five hundred princely states, not all of them exactly ecstatic about the prospect. There was, therefore, an overwhelming opinion in the then leaders of the Indian government that, given the daunting challenges faced by the nascent Indian state on the economic, social and political fronts, a strong centre was a prerequisite for not just the development of, but even the survival of India as an independent nation. Not surprisingly, the Indian republic came to be categorised as “a unitary state with federal features.”

Interesting though it is as a subject, this article is not focusing on the political aspects of centralisation but rather on the impact on governance of such centralisation of powers. It needs to be made clear that concentration of powers is a vice that affects every political formation, indeed every organisation that operates in the public and private spheres in India. It is also an accepted axiom that each level of government is in favour of devolution of administrative and financial authority only upto its own level. Thus, while state governments, especially of different political persuasions from the government at the central level, have harped, right from Tamil Nadu in the late 1960s, on greater devolution of powers to them, they have been conspicuously silent when it comes to devolving powers to local governments. The three experiments in democratic decentralization in the states of Gujarat, Maharashtra and Karnataka have been aborted over time to protect the economic and political interests of state-level politicians. The implications for governance, especially at the level of the aam aurat/aadmi, have not been exactly salubrious.

There are both charitable and uncharitable explanations for the propensity to centralize economic and political powers. The “charitable” ones include:

  • the colonial mindset, prevalent to this day, that the natives are not fit to govern themselves. Politicians and bureaucrats, at central and state levels, never tire of relating horror stories about the misdemeanours of local governments;
  • the mistaken assumption that centralisation of financial powers and procurement decisions lead to savings;
  • the continuing faith in the efficacy of a Soviet-era centralized planning system, where the know-it-all bureaucrat sitting in a cubby hole in Mumbai/Delhi hands out schemes and money to the public.

There are also some “uncharitable” reasons for this love for centralisation:

  • the realisation of the state-level politician that his continued existence depends on justifying his utility to the system. This politician is aware that the emergence of powerful grass root leaders is a threat to his future in politics. This phenomenon, observed in the Indian National Congress since the 1970s, has since percolated to every political party. Devolution of powers to local governments would also obviate the need for top-heavy governments at the central and state levels, thus rendering many politicians jobless;
  • the bureaucracy being seen as a vehicle for guaranteed, lifelong employment, without any accountability for performance. There is the rather patronising belief that bureaucratic interventions can solve all problems, hence the operation of Parkinson’s Law with a vengeance in the Indian government system: staff expands to create more work, with, in fact, a diminution in efficiency. Increasingly, public service has also become a self-service system and a foolproof mechanism for rent-seeking, the stress being on kimbalam (illegal gratification) rather than sambalam (salary), to use Tamil terminology.

Centralisation can take the form of intervention in procurement contracts, discretionary distribution of scarce resources (land, public funds, primary schools, colleges, universities, etc.) and formulation of policies from above imposed on those whom schemes are intended to benefit, as well as the imposition of rigid guidelines which the “street-level bureaucracy” is expected to follow in letter and spirit. The damage resulting from such a system can be long-term, often resulting in serious misallocation of resources, with concomitant effects on economic development. Drawing on my three decades of experience in the civil services in India, I have identified six major consequences of centralized decision-making:

  • Corruption: Lord Acton rightly observed “…absolute power corrupts absolutely”. In the Indian context, we can safely say that absolute centralization corrupts absolutely. Primary education has been one major casualty; ministers deciding where and when schools are to be run, and by whom, have spawned a multi-million rupee black market in school education. The same pattern has been emulated in the case of higher education, with even more profitable results. Influential politicians and their backers run huge education empires today, often of extremely dubious quality. Maternal and child nutrition is another area where the Supreme Court Commissioners have documented a number of instances of state governments sidestepping the Supreme Court guidelines to award food supply contracts to monopoly contractors, ignoring local self-help groups. Recent actions of the central and most state governments indicate a tendency to favour individual contractors over local groups in food supply, ostensibly on the grounds of improved nutrition, although the evidence of years of centralized monopoly supply strongly indicate otherwise (as verified personally by yours truly at anganwadis (day care centres) in rural Maharashtra). It can always be argued that no corruption has been specifically established but then Caesar’s wife must be above suspicion: the antecedents of these contractors and their political connections leave ample room for suspicion.
  • Faulty policy design: Decisions in Delhi often do not work in the gallis (streets). The examples of three major policy initiatives of the previous government which continue under the present government show how top down policy making can stymie the best of intentions. Take the Mahatma Gandhi National Rural Employment Guarantee programme (MGNREGA). Designed to provide 100 days of employment to each member of the rural population who seeks work, the scheme drew on earlier examples such as the Employment Guarantee Scheme (EGS) of Maharashtra, which was intended to provide on-demand work at times when there were no work opportunities in agriculture. The problem with the MGNREGA lies in its design. Unlike the EGS, the MGNREGA is implemented across all districts in a state regardless of whether the prevailing economic conditions warrant such a wage programme. Common sense would dictate that there would be few takers for such a programme in a district like Kolhapur in Maharashtra with its extensive irrigation facilities and well developed agriculture and ancillary activities. It takes me back to 1989 when a precursor central programme, the National Rural Employment Programme (NREP), was implemented across all districts of Maharashtra. We found it almost impossible to get labour for this programme in a district like Parbhani in Maharashtra, where rural employment was abundantly available in the irrigated agricultural areas. In such a scenario, the local bureaucracy ends up subcontracting the entire programme to local contractors, who then use machinery to carry out the work, defeating the very purpose of the programme. Food security and education are again two areas where the ambitious universal thrust of the programmes does not take into account the glaring deficiencies in the public distribution and education systems in most states. Nor does it appear that the budgetary provisions the Government of India is making and that state governments are likely to make will enable universalisation of these two programmes.
  • Inefficiency: In my days as an IAS probationer, it was drilled into us that, as District Magistrates, we should assume a proactive role in firmly tackling violence between or directed against communities. The recent judicial commission report on the Muzaffarnagar violence of 2013 has faulted the district administration and the local police for inaction in preventing and subsequently containing violence during the riots. My surmise would be that the District Magistrate and the Superintendent of Police were looking over their shoulders for directions from their higher-ups on how to deal with elements that obviously had powerful political backing, instead of moving swiftly to nip the trouble in the bud through preventive arrests and a show of force. Centralisation in times of crises deters prompt, effective action. Yet another example comes to mind from a sector I am familiar with. The Directorate General of Hydrocarbons (DGH) was set up to regulate petroleum exploration and production activities in India. Over the years, a paranoid mindset in government agencies and the “intelligentsia” has led the DGH to refer every investment decision involving private operators to the Petroleum Ministry for approval. Contractual timelines for approval of proposals were blithely ignored while the mandarins in government wrestled with the decision process. That golden mantra of centralisation, referral to a committee, ensured that natural gas prices took years to be finalised. The final solution has satisfied neither the companies nor the command economy socialists in the intelligentsia, while the chimera of market-determined gas pricing recedes further into the future.
  • Demotivated street bureaucracy: Centralized programmes lay down rigid guidelines with almost no scope for exercise of innovation by those actually responsible for ground-level implementation of these programmes. Accompanying this is the tendency to distrust the lower bureaucracy, doubt their commitment and make scapegoats of them for faulty policy design. Complex and arduous reporting requirements tie up field staff in paperwork, not giving them time to attend to their clientele. It is no wonder then that there appears to be little enthusiasm for meaningful programme implementation with a specific focus on outcomes. The sense of a larger purpose in their professional life and of engaging in a noble mission is never inculcated in grass root workers. We observe this in the large majority of teachers and health and nutrition workers. No encouragement is given to primary level workers to use their initiative to resolve local problems, nor are small amounts of money made available to them to meet their basic infrastructure requirements or to experiment with ideas that can contribute to the success of the programme.
  • Disempowered communities and individuals: Programmes handed down from above almost never draw on the problem solving abilities of local communities. It is evident in the very designation of the recipient of the scheme as a “beneficiary”, effectively ruling out her participation in the design and implementation of the scheme meant for her. An overburdened, often disinterested bureaucracy is largely concerned with delivering the inputs and completing its targets, with no emphasis on either the processes of implementation or the desired outcomes.
  • Damage to democracy: The process of centralized decision making is, in the final instance, detrimental to the development of an aware, active citizenry that can contribute to the democratic process. As passive recipients, people are deprived of the capacity to participate in decisions that significantly impact their lives. When programmes fail to deliver the desired results, the consequent disenchantment often drives the disempowered into the clutches of demagogues who promise them the earth and capitalise on their fears to undermine the democratic framework of society.

Recent trends in the pattern of budgetary transfers from the central government to the states give more cause for concern. Devolving more untied funds to states will place more unbridled discretion for patronage in the hands of unscrupulous politicians and bureaucrats. State governments have, in any case, never been enthusiastic promoters of democratic decentralization. With little accountability for the manner in which public money is spent (or rather, misspent) and with little fear of being brought to book for their misdeeds, it looks as though, in the words of the Harvard University economist Lant Pritchett, India’s “flailing” governments will continue to flail away.

 

1 Mar

Intolerance…for the rule of law

Posted by vramani in political economy, public affairs. Tagged: , .

“I disapprove of what you say, but I will defend to the death your right to say it.” (S.G. Tallentyre)

The Merriam-Webster Dictionary defines tolerance as “willingness to accept feelings, habits or beliefs that are different from your own.” A related definition is “the ability to accept, experience or survive something harmful or unpleasant.” Acceptance is the word common to both definitions: this implies accommodation by the individual of the acts or thoughts of another, even though they may conflict with his deepest convictions, indeed with his very way of life. The limits of such tolerance are set by the legal framework; the Constitution of India, while enunciating the inalienable freedoms available to every resident of India, has also circumscribed these to the extent necessary to protect the rights of other individuals and to preserve the essential social fabric of the country. All other laws are subordinate to the Constitution; over the past almost seven decades the superior courts have struck down a number of legislative enactments which were deemed to violate the basic structure of the Constitution. Implicit in this process is the recognition that a democracy is run by the rule of law and the final arbiter of any act, whether by word or deed, is the judiciary.

It is, therefore, with a sinking feeling that one observes the steadily growing tendency of different groups to ignore and often show their contempt for the rule of law. Indian society has, like any other society, displayed strains of intolerance towards socially disadvantaged sections, based on caste, religion and gender, to name just three categories. In recent times, the shabby treatment of the noted artist, M. F. Hussain, and the politically motivated attacks in Maharashtra on newspaper editors and academic institutions that were deemed to have insulted the memory of the warrior king Shivaji were instances of intolerance that made headlines. What is disturbing in India’s history over the past many decades is the resort to violence against helpless individuals and the perceived failure of the law and order machinery to protect them or bring the perpetrators of violence to book. Most recently, the mob violence in Muzaffarnagar in 2013 and the lynching of a man in Dadri, Uttar Pradesh, in 2015 for allegedly consuming beef have been followed by the execrable act of lawyers indulging in violence against a student leader accused of the crime of sedition. What these three incidents starkly bring out is the brazen disregard for the operation of the rule of law. In all three cases, apologists belonging to the currently ruling dispensation have sought to ex post facto justify the perpetration of violence. More dangerous even than the display of intolerance towards fellow human beings is the utter contempt for the rule of law that these actions reveal.

Democracy is traditionally believed to rest on four pillars: the executive, legislature, judiciary and the press. With the spread of representative democracy and the growth of the internet, many commentators add a fifth pillar in the form of civil society. The 2011 Arab Spring is a vivid reminder of the power of public opinion and social media in shaping the course of events in a country. How has India fared in terms of the performance of these pillars and what are the lessons to be learnt if the tender plant of democracy is to take firm root in Indian soil?

Organs of the government, especially the police, have often displayed distressing levels of partisanship in handling conflicts between different communities and in protecting life and property. Indira Gandhi’s “committed bureaucracy” has been a spectator to, if not a participant in, India’s worst communal conflagrations — Delhi (1984), Mumbai (1993) and Gujarat (2002). The executive arm of the state is generally intolerant of criticism and the Indian executive is certainly no exception to this rule. But what marked out the latest incident in the public eye, the JNU case, is the extraordinary interest shown by the highest levels of the government in what were statements by youth in its usual phase of excited fervour. What could have been handled as a local incident and dealt with (if at all necessary) as a disciplinary matter by the University has been allowed to blow up into a controversy which has attracted national and international attention. Having committed one error of judgment, the executive compounded its problems by failing to act firmly against those who attempted to browbeat judicial institutions and interfered with the course of justice.

The second arm, the legislature, exemplified by Parliament at the national level, has, in recent years, often generated more heat than light. It has also dragged its feet on crucial legislation over the past decade, with parliamentarians more interested in winning battles of lung power than contributing to legislation that will promote economic growth and development. Over the years, legislations on a unified indirect tax system for the entire country, rationalization of archaic land laws and establishment of anti-corruption watchdogs have languished. A colonial era sedition provision, introduced in India after the 1857 mutiny, is still extant, although the mother country, the United Kingdom, dispensed with this statute over five years ago. Although no less a person than Jawaharlal Nehru espoused the sentiment (as far back as 1950) that this obnoxious provision should vanish from the statute books, independent India still retains this pernicious law that is freely available for abuse by insecure governments. To my knowledge, no honourable Member of Parliament has made any attempt to get this section in the Indian Penal Code repealed.

The one bright spot in the firmament of democratic institutions has been the legal system, though there is, obviously, the issue of the interminable judicial delays which frustrate the delivery of justice and tend to make the ordinary citizen cynical about the rule of law. This has to be qualified by the caveat that, while the judiciary, especially the higher judiciary, has been the one beacon of hope for the common man, the fraternity of lawyers has sometimes conducted itself with an appalling lack of dignity. Jokes about lawyers’ habits are commonplace in all democracies but the legal fraternity in India has, in recent years, besmirched its reputation with behaviour that is more suited to a beer hall than to a bar association, as witnessed in recent incidents on court precincts in Chennai and Delhi. In the recent case involving the production of the student leader arrested for sedition in the magistrate’s court, the nation and the world were witness to ugly scenes of alleged assault by “lawyers” on the student leader (a matter which is still under investigation), with the police apparently standing by as mute witnesses. Surely, lawyers, if the assailants were indeed lawyers, ought to be aware that the law must take its course.

The fourth pillar, the press, has been an increasing cause of concern in recent times. The print media, under threat from the electronic media and now social media, has generally tended to focus on avenues like advertising revenue, with lesser concern for factual reporting and issues of social concern. The electronic media, with almost no exceptions, is engrossed with sensationalism and “breaking news.” Even more disturbing is the tendency for news channels to act as adjudicators of legal issues, especially cases currently under investigation by the law enforcement authorities. Judgments have virtually been passed on most news channels in the high profile case involving Indrani Mukerjea. In the JNU student leader case, unverified audiovisual evidence has been casually bandied about by certain news channels. Value judgments on the patriotism of individuals and their actions have been passed without leaving the matter to be decided by the appropriate judicial forum. If the press was felt to be compliant during the Emergency years of 1975-77, there is now reason to worry whether it is complicit today with certain segments of society that seek to impose their narrow sectarian, nationalistic view on the country.

The biggest hope for a healthy, flourishing democracy lies in a questioning, independent civil society that accommodates a diversity of views and encourages discussion and dissent. No less a person than Raghuram Rajan, the present Governor of the Reserve Bank of India (RBI) observed in a lecture in October 2015 at the Indian Institute of Technology, Mumbai that societal self-interest lies in the protection of the right to question and challenge, for only through encouraging the challenge of innovative rebels does society develop.  The growing partisan shrillness of discourse and the recourse to vituperative, often libellous language in the social media is a sad reflection on the deteriorating standards of public debate in a country that has produced outstanding thinkers like Ambedkar, Nehru and Rajaji. It should occasion no surprise when we have commentators in recent days opining that students should go to universities to study, forgetting the important role of universities and other institutions of higher learning in fostering the spirit of questioning in individuals and equipping them to contribute to political and social development in their future lives. While it has been heartening to see the large number of those who have taken a stand against the attempts to straitjacket thinking and debate, there is no denying the growing numbers who refuse to use hard facts to bolster their viewpoint, relying instead on emotion and unverified information to push their worldview as the only acceptable one. When they lose out in the battle of words, as is bound to happen when reason does not inform argument, they descend to the use of swords.

Democracy in India, like the nation state, is a concept that has been put together since 1947 and has (despite various gloomy prognostications) lasted over nearly seventy years, in contrast to most other countries that achieved independence around the middle of the twentieth century. The people of India have chosen their governments at the national level sixteen times since independence and have ushered out the incumbents on eight of these occasions. But the right to bloodlessly change governments (Karl Popper’s fundamental classification of a democracy) is hardly the only characteristic of a democracy. It is the rule of law which guides the functioning of a democracy in the interregnum between elections. Seen from this viewpoint, the “five pillars” of Indian democracy can be said to have secured barely passing grades. Nor, regretfully, do most Indians show tolerance for the words and actions of their fellow humans, whether from India or outside. The rule of law apparently applies only when one is wronged, not when one wrongs one’s fellow human. Two examples will suffice: progressive writers in Bengaluru choosing to boycott the Literature Festival because one of the organisers had differing views on the Award Wapsi controversy and the intolerance shown by Left parties to political dissent in Bengal over their 34-year rule. Respect for the individual’s right to freedom of expression, consumption and decision (three freedoms which are being questioned at various levels today) is still to be ingrained in the Indian democratic psyche. Till this tolerance becomes a matter of habit, we cannot claim that our country functions on the principle of the rule of law.

 

 

 

 

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