India has embarked on a daring journey in embracing universal franchise, fundamental rights and constitutionalism in the face of abject poverty, illiteracy, hierarchical society, and centuries of feudal and colonial oppression. It is a great tribute to our society and political leadership that we have remained a democracy, retained freedoms, and achieved modest levels of economic progress, despite the many hurdles. The Indian state and political process have been reasonably effective in reconciling conflicting interests in a diverse society. In particular, linguistic diversity has been handled with great foresight and wisdom, making India a uniquely harmonious, multi-lingual state. Perhaps our greatest achievement lies in the deepening of federalism over the years, while strengthening unity and integrity of India.
A comparison with China
However, relative to our opportunities, and compared to the global trends, our progress has been slow and modest. The contrast with the remarkable rise of China, which is comparable to India in size and history, over the past four decades, illustrate the point. Since 1980, Chinas’ GDP grew 62 times, compared to India’s growth of 13 times; China’s per capita income increased 27 times, contrasting with India’s increase of 6 times. It is easy to attribute China’s rise to authoritarianism and India’s difficulties to democracy; but that would be wrong. China’s breathtaking growth was a result of promoting competition, choice and investment, empowering local governments, ensuring quality education and healthcare, and building quality infrastructure. All these are the paths any mature democracy should pursue, and they are not the prerogatives of an authoritarian regime.
A lost opportunity?
The 2014 Lok Sabha election verdict provided an exciting opportunity to transform our institutions and recover lost ground. After a generation, people voted for a stable, single-party majority, and an unchallenged leader with charisma, strong will, and personal experience of disadvantages of poverty and caste inequalities imposed on millions by birth, rose to power on his own steam. At the union cabinet level there has been no major corruption scandal, and the Prime Minister’s authority has been near-total. Decision making and execution of some policies and infrastructure projects has been speeded up. And yet, on fundamental issues plaguing our governance and polity, and in promoting opportunity to all Indians, our recent record has been as disappointing as in the 67 years preceding it. In many ways, a priceless opportunity has been squandered.
In respect of six key areas, there has been practically no progress. First, service delivery to people at cutting edge level continues to be dismal. The asymmetry of power between the bulk of the citizens and even lower level bureaucrats continues uncorrected. In respect of most basic services, petty corruption, harassment, delay and inefficiency continue even as government employees are paid three to four times the market wages for comparable work. The government failed to enact a legislation to guarantee time bound services and enforce minimum accountability. Instead, an ill-thought out, obnoxious legislation providing for long (up to seven years; mandatory minimum of three years) jail term to ordinary citizens who are forced to pay small bribes to get what is due to them, while at the same time protecting all employees at all levels from even investigation for bribe taking, by making prior government approval mandatory, is now before Parliament. The absurdity of harshly punishing citizens who are victims of extortion for simple services, and protecting the bribe takers from investigation, escaped the attention of the policy makers despite repeated pleas to them!
Our school education and healthcare are in shambles, with outcomes among the worst in the world. The resultant burdens of poverty, lack of opportunity, avoidable suffering, high morbidity and mortality, and low productivity continue unabated. There has been no meaningful effort or credible road-map to improve outcomes in both these vital sectors.
The only way we can nurture new leadership, improve performance and make democracy work is by empowering local governments in a responsible way and institute local accountability mechanisms. The Fourteenth Finance Commission afforded a great opportunity to strengthen local government finances. If only a sizeable share of Union transfers to states – say 25 to 30% – went to local governments and independent local ombudsmen were created to check abuse, people’s energies would have been unleashed. Instead, only about 7% was transferred on an ad hoc basis, and we continue to have over-structured and under-powered local governments. With the vital links – between vote and public good, taxes and services, and authority and accountability – missing, centralised, inept governance continues merrily with poor outcomes.
Rule of law is the basis of democracy, and a vital prerequisite for enterprise, risk-taking and wealth creation. While we have normative rule of law, in reality there are extreme inadequacies and dysfunctionalities in crime investigation, prosecution and justice delivery. There has been no real effort to improve rule of law; money, muscle, networking and political influence continue to be major factors in dispute resolution, and dispensing justice.
Finally, agriculture and rural economy continue to descend into deeper crisis. In the last four years alone, there has been a decline in annual agri-exports to the tune of $10 billion per year, and increase of imports to a tune of $10 billion per year; a net loss of demand for domestic farmers by $ 20 billion annually. This is one of the proximate causes of the deepening rural crisis. Our hackneyed policy responses of the mostly illusory minimum support price (except for wheat and rice), and loan waiver, are both ineffective and positively harmful in the long run. On top of low agricultural incomes, the burden of out of pocket expenditure for education and healthcare and poor outcomes, the ubiquitous petty corruption for even the most basic services, and high degree of centralisation that precludes local innovation to improve living conditions, continue to worsen the agrarian crisis, driving hundreds of millions into despair.
The trajectory for India in the next decade depends substantially on our ability to address these six challenges – service delivery, education, healthcare, local governance, rule of law, agrarian crisis – effectively, with a credible road map and energetic implementation of rational, evidence-based solutions. If our public discourse and political competition continue to be focused on who is in power, instead of on what needs to be done and how, the next decade will be a repeat of the past seven, and we will continue to muddle through.
In order to fulfil our potential, we need to engineer far-reaching political and governance reform to enable recruitment of the best talent into politics and bureaucracy, allow their rise to power through ethical and rational means, and build mechanisms to dramatically improve delivery and outcomes. The practical functions of politics are recruitment of the brightest, most public-spirited citizens into public life, facilitating their rise to power through ethical and rational means, providing genuine alternatives in terms of policy, and effectively implementing people’s mandate by delivering the outcomes. On all these four basic criteria our political process has been largely ineffective, and the quest for power has been increasingly divorced from public purpose. The lost opportunity of the past four years has been very costly.
The time is now!
It is unlikely that at the national level, the unique opportunity we have had of a stable government and a strong leader enjoying public trust and confidence will be repeated for quite some time to come. Therefore we need to explore other realistic possibilities to significantly improve outcomes in the next decade, effectively address the growing challenges of underemployment and massive urban migration in the face of rising global trade barriers, and transform the lives of millions.
The debate on federalism offers a window of opportunity, if we can bury our partisan differences and focus on giving flexibility to states to improve outcomes, while strengthening national unity. The states are where real governance that affects citizens’ lives is; and the states are the real theatre of political competition. The national verdicts are largely an arithmetic aggregate of state verdicts. We created a robust federal system over the decades: States have real power, though constrained by a rigid, uniform system; devolution of finances in a complex federal structure has been significant; and by and large, there has been no discrimination of states. The much-abused Article 356 has rightly fallen into disuse, successive finance commissions have made devolution transparent and fairer, end of licence-raj reduced arbitrariness, and rise of regional parties and coalition governments brought a measure of balance between the Union and States.
One-shoe-fits-all model and rigid uniformity – electoral system, bureaucracy, local governments and rigid national laws in key areas like education and land acquisition, are not conducive to local innovation and substantially improved outcomes. Let a thousand flowers bloom, while safeguarding national unity, fundamental rights, common markets, independent judiciary and constitutional check and balances. We need to move from a system of negative power of pelf, privilege, patronage and nuisance value, to one of positive power, to improve accountability and delivery, and from a system of alibis for non-performance, to one of empowerment, participation and assuming responsibility for outcomes. That is the realistic way forward for India in the next decade.