22 December 2005

Book Review: Future of India

Future of India: Politics, Economics and Governance
Bimal Jalan.
Penguin Group India, 2005, 212 pages, Rs. 350.

Bimal Jalan is a former governor of the Reserve Bank of India and a sitting member of Rajya Sabha. He also served in the ministries of finance, industry and the Planning Commission and represented India in the boards of the IMF and World Bank. The book, according to Mr. Jalan, is filled "with a fair degree of personal reflection and impressions" by someone "who had the opportunity to observe at close quarters the interplay of economics, politics and governance in determining policy outcomes and their impact on the country's (i. e. India's) economy".

The central thesis discussed in the book is that after swinging between "a country with an uncertain future" and "a land of great opportunities" since her independence, India's reputation as a democracy and as an emerging global economic power is at its peak at this time. It is the talk of the time that India will become a developed country in the next decade. According to Mr. Jalan, it is not just the economy, politics or governance of India but the interface between them and their combined effect on India's democratic system which will largely determine the future of India. He analyzes the causes of failures for India to realize its full potential in the past and argues that there is no certainty that the present euphoria about India becoming a developed nation in a decade will last for long. He goes on to suggest a number of reforms to be undertaken immediately to seize the present opportunity, such as, greater accountability among ministers; effective ways to curb corruption and enhance fiscal viability; strengthen Parliament and judiciary etc. He writes:

Ever since independence, India has been fortunate in having a string of highly reputed political leaders....,, a large number of top economists of international stature to advise the government in the process of planning and economic policy formulation... and the so-called 'steel frame' of permanent bureaucracy...And yet, after six decades sice independence, economic progress has been much slower than anticipated.....There was a substantial gap between what was considered to be economically sound and what was found to be politically feasible. Economic strategy seldom reflected our political or social realities or real political considerations. Similarly, the administrative implications of policies, launched with great convictions, were seldom considered or, when considered, these implications did not affect the actual evolution of economic policies or programs on the ground. For a better future and sustained high growth, it is essential to evolve policies that are practical and pragmatic, and can reconcile the country's economic interests with political realities within a democratic framework.

The book is divided into five chapters besides an introduction and epilogue. The first and fifth chapters deal with the evolution of Indian democracy and the changes that are required to "make the political system work for the benefit of the people as a whole, and not only in the interest of the leaders whom they elect". The second chapter deals with the process of economic policy making and the impact of colonial legacy and coalitions of special interests. The third and fourth chapters deal with aspects of governance and widespread corruption and suggest reform measures. The epilogue is titled 'resurgent India' and is a reflection of what Mr. Jalan thinks India needs to '"'revitalize country's institutions in order to realize her full potential".

Mr. Jalan recognizes that the people of India are deprived of their power by the political system and the political process and writes eloquently as follows:

The elections are truly the hour of triumph for India's democratic tradition, which have set standards for other countries to follow. At the same time, as I reflect on what Indian democracy has been able to achieve for the people, apart from the right to vote, there is an unavoidable feeling of disappointment and unease. As soon as the elections are over, and a new government takes office (of whatever complexion and colour), the government becomes a power unto itself. The people's interests tend to be overtaken by the power of special interests and, in political scientist Mancur Olson's famous phrase, 'distributional coalitions'. These coalitions are generally more interested in influencing the distribution of wealth and income in their favor, rather than in the generation of additional output for the benefit of the public.

Ministers and their bureaucrats become authoritarian, self-centered and autocratic. They are no doubt subjected to some checks and balances by the Parliament and judiciary, but, by and large, they are able to do as they wish. Their accountability to the public is also more apparent than real - until the next election.... In practice, the accountability of the government to the Parliament and legislatures is perfunctory and minimal...As long as the government and the parties represented in it have the majority support in the Parliament, they can literally get away with anything, including ministerial corruption....

Political parties, small and large, are firmly under the control of their leaders and ...therefore, the government is accountable to only a handful of leaders of the parties that are represented in the Parliament .... Parliament and legislatures generally do what the government wants them to do, rather than the other way around....

The government's real accountability to the judiciary is also minimal...A determined government can more or less do what it wants - except change the basic structure of the Constitution. It has unfettered powers to have new legislation passed as long as it has majority, and except under exceptional circumstances, these statutory provisions are binding on the judiciary. As far as economic policies are concerned, the government's powers are virtually unlimited, provided appropriate business rules and legislative procedures are followed....The actual statutory provisions, as approved by the Parliament, may provide for 'due process' and accountability. However, all Acts of Parliament generally have an ominous provision whereby the government is free to make 'rules' under the relevant Act through executive notification.

Looking for coherency in his experience of the political system being anti-people and his prejudice to see India emerge as a big power under the same political system, Mr. Jalan quotes from I. M. D. Little's 2003 book titled "Ethics, Economics and Politics: Principles of Public Policy" that discusses the difference between the State and the Government. He writes:

The State comprises all the legislative, executive and judicial institutions, and the laws governing the inhabitants of the territory to which it lays claim. It also has the monopoly of the use of force over its citizens and foreigners (as only the State can declare war). Governments, on the other hand, may be thought of as tenants of the State. They come and go in accordance with the Constitution or customs of the State. While in office, a government in power - whether elected or unelected- may change the institutions and laws of the State, but at any given moment, it is the agent of the State. While the State is expected to be permanent, the authority of the government to make policy is likely to last as long as it continues to be in office....The State is the sole and legitimate custodian of public interest and sovereign power, and not the government of the day. Public institutions are expected to be permanent, and they should not be allowed to be governed by the whims and fancies of ministers 'temporarily' in power.

Mr. Jalan describes the workings of India in such intimate detail that few can surpass it. The shortcoming of the book lies in his failure to draw the conclusion that stares him in the eye - that the people of India have to get rid of the current Indian State power and create a new power to serve their interests. He even writes in page 67 of the book, "For the poor in India, country with lowest per capita incomes in the world, the political system as it has evolved over the past few decades does not have much to offer-except the periodic satisfaction of casting their votes". Mr. Jalan's prejudice to see India emerge as a major power with the current State in tact, without some baggage, blinds him to see the poor of India as the social force that can discard this State and the political system and create a new one to serve its interests and there by make "India achieve her full potential". To answer his own question "What should India do to achieve its full potential?" he looks at the same forces who wield power today and implores them for the sake of India to implement a set of reforms.

Ultimately, the book becomes mired in the dilemma of a liberal who knows more than anyone else about the failure of the system but wants to preserve and grow that system because it has served him or her well and the alternative of a revolutionary transformation of that system scares him or her more than the unconscionable economic-political system that he or she is so disgusted with.


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