It’s the politics, stupid! [ Former RBI Governor Mr. Jalan’s book ]| Business Line–11.09.2017

Ask the man on the street, or the CEO of a Sensex company what India needs to do lift itself out of sluggish growth and the answer is likely to be that over-used term — ‘reforms’. But it is in agreeing on what those reforms entail that businessmen, think-tanks, political parties and economists are divided right down the middle.

So, to kickstart job creation, should the Government woo foreigners or invite local businessmen? To help the poor, should the Centre build more toilets or open bank accounts? To ensure investment revives, do we need more government or less?

In his book India: Priorities for the Future, former RBI governor Bimal Jalan keeps away from such fruitless micro-level debates and trains his analytical prowess on recommending reforms to fix the political and governance systems that run the country.

What’s wrong?

Jalan posits quite early in the book that India has an over-abundance of plans and schemes. But what keeps the nation from attaining its always-high potential is that all of them remain on paper. Nothing about its governance framework — the electoral system, the working of Parliament, Centre-State relations, the ‘steel frame’ of civil services, the public delivery system — works as it should. The growing divide between politics and economics, where a government’s performance on growth or poverty alleviation matters little to its winning elections, is another big problem. He argues for deep-rooted reforms to fix the broken workings of these institutions.

The first seven chapters of the book are mainly devoted to diagnosing the problems that hamstring the implementation of India’s development agenda. The solutions, summarised in the final chapter, are very specific. For instance, the current anti-defection laws, the author argues, provide incentives for the fragmentation of political parties, often resulting in situations where even four-member parties join a coalition government, threaten often to leave it, and hold the entire elected government to ransom. He suggests amending the anti-defection law to ensure that elected representatives who willingly join a coalition, should not be able to switch camps without seeking re-election.

The author rues the tendency of recent governments to pass new laws without bothering about the niceties of a full parliamentary debate and the unruly behaviour which disrupts the House. He suggests a legislative cap on the number of adjournments permitted during a session.

The book is critical of the declining administrative capacity of the bureaucracy to implement the grand plans of the Government. It thus prescribes greater autonomy for the civil services from ministerial whims. But it also suggests doing away with the special legal protection to civil servants under Article 311 of the Constitution and the Official Secrets Act.

The delivery of public services could be made vastly more efficient if the Government delegated the job to private agencies. Such public-private collaboration worked fine in the case of the Public Call Offices and the Sulabh Shauchalays: two key public services delivered by the private sector, the author points out.

Overall, the book cuts a wide swathe across economics, politics and public administration. But then, Jalan has been in a unique position to observe the workings of multiple institutions by virtue of his varied stints in policymaking roles within the Government and outside of it. His prescriptions are quite specific, as a result.

Not taking sides

The author’s visible efforts to take the middle ground and be politically correct renders the language staid and official-sounding. But one does admire Jalan’s ability to coat his scathing indictments in a polished turn of phrase. Sample this on the criminalisation of politics: “An urgent political reform is to reduce the attractiveness of politics as a career of choice for persons with criminal records. There is a natural reluctance on the part of investigative agencies and ministries to speed up investigations and prosecute persons who are leaders of political parties and/or members of the Cabinet”!

A striking feature of this book, and an unusual one for one written by an economist, is its non-partisan treatment of the subject. Jalan is at pains to lean towards neither the so-called Leftist nor Right-wing ideologies in his search for solutions to reform India’s political and governance structure. He takes a similar middle road in eschewing any political affiliations while diagnosing problems. Both the NPA and UPA led regimes attract equally trenchant criticism from him for systematically undermining the working of Parliament and the lawmaking process. The NDA, however, manages to win oblique praise in the latter chapters for its success with rooting out corruption in the upper echelons of government.

One of the discomfiting features of this book is its tendency to weave back and forth in time, making it a disorienting read at times. Some of the sections could also have overlaps with the author’s five other books on the economy and governance. That some of the content for this book is drawn from the author’s edited speeches at various global forums, delivered over an extended period from 1991 to 2007, also detracts from its flow and tends to be befuddling. In reading the first few chapters, for instance, the reader has to bear in mind that some of the data points cited as well as the assertions made relate to the nineties, which is why they seem at odds with the present economic context.

Jalan resolves this problem towards the end, extracting prescriptions strewn across the book into a pithy final chapter. For those impatient folk who believe they are well-acquainted with the myriad problems plaguing India, and are keen to get to the solutions part, starting with the last chapter of this book may be a good idea. For others, this short read offers a crisp lesson on India’s political economy over 40-odd years.

MEET THE AUTHOR: Bimal Jalan, a former RBI governor, has also held positions as finance secretary and chairman of the economic advisory council to the Government of India. He was a member of the Rajya Sabha and an India representative on the boards of IMF and World Bank.

(This article was published on September 10, 2017)

via It’s the politics, stupid! | Business Line

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