Quick economic reform in India depends on quicker political reform | Business Standard Column

Clipped from: https://www.business-standard.com/article/opinion/quick-economic-reform-in-india-depends-on-quicker-political-reform-121112200397_1.html

Every political party when it is in power realises that the absence of simultaneous elections along with the presence of the Concurrent List, make reforms difficult.

T C A Srinivasa-Raghavan

Here’s a problem the proposed repeal of the farm laws poses once again: while anyone with any brains wants economic reform, meaning taking the bureaucracy–not the state–out of economic activity, no one really wants political reform, other than funding of elections.

So since 1991, there has been relentless pressure to reform the economy. But there is no such pressure to reform the political arrangements.

That’s why the two major fiascos of the Modi government — first land acquisition reform in 2015 and now the farm laws reform — point to just one thing: political reform must proceed alongside, if not indeed precede, economic reform.

The most obvious reform is that all elections should be simultaneous. The bandobast walas must be told to stop objecting and just do it. That’s how it was until 1971 when Indira Gandhi delinked them all. Result: India is permanently in election mode.

Thus we have 28 states each with a different election cycle. As a result there are 7 assembly elections coming up in 2022 and 9 in 2023. These come on top of the 7 in 2019, 2 in 2020 and 5 in 2021.

No country can have rapid real sector economic reform in this kind of permanent political competition. It’s just not possible because economic reform creates millions of losers in the short run.

Thus, had the Punjab and UP elections not come together next year, it’s possible that the government would not have decided to repeal the farm laws. It’s hard enough to fight on two fronts, let alone 26.

There are two ways out of this mess. One is to amend the constitution so that all elections are held simultaneously. There will be some hiccups initially but like so many other things, it will all settle down in two or three years.

The other is to have a system of voting where the physical presence of all voters is not needed. Those who can do it should simply vote from their phones or other devices. That is, you vote by OTP.

That will take care of the bandobast problem is a large measure.

As to our federal arrangements, the Supreme Court had said way back in 1962 that the Indian federation is a half-way house: unitary with federal features.

And as we can see now, like all halfway houses, this neither this, nor that aspect has become a serious problem.

One of the biggest problems are those three lists called the Central List that contains subjects on which only the Centre can legislate; the States list that contains subjects on which only the states can legislate; and the real zinger, the Concurrent list, on which both can legislate. And then there is Entry 97 of the Seventh Schedule which says the Centre can legislate on any matter that is not contained in the other three lists, including taxes.

Ideally, there should be only two lists and many of the matters in the Central list should be moved to the States list. The Concurrent list should be abolished. It has no place in our federation as it has evolved.

Every political party when it is in power realises that the absence of simultaneous elections along with the presence of the Concurrent List, make it very hard for it to govern effectively and to reform the economy.

Yet none of them feels motivated enough to fix the problem because it’s hard to solve both problems simultaneously. So neither gets fixed.

Hence here’s a suggestion: choose one and fix it first. Once one is fixed it will become easier to fix the other.

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