An optimistic view of the country’s economy, but not so much on the polity
Bimal Jalan, a well known economist, central banker and politician (former member of Rajya Sabha), will always have a well-rounded view of the way in which the Indian system works. In his latest book, From Dependence to Self-reliance, he achieves this on several aspects of the changing face of the Indian economy in both the economic and political fields.
In the author’s view, there have been two defining moments that have helped to bring about transformation in the economy. The first dates back to 1991 when we went in for economic reforms and moved out of the socialist model of growth and development. This brought in the vibrancy required for making the economy self-reliant, as can be seen by various economic indicators today where India stands tall.
The other is 2014 when the NDA government came to power with a strong majority. Having a strong majority party in power helps to accelerate the pace of reforms, which is what we have witnessed in the past few years. This also helps to enhance federalism where there is more harmony between the Centre and states. More importantly, this also helps to push through political reforms without dependence on the opposition, and hence provides opportunity to bring in change.
While speaking on the economy, Jalan also traces the rise of the services sector in the economy and the difference here is that the ascent has been of skill-based services that provide a comparative advantage to any economy. There has hence been a very blurred distinction between goods and services. This revolution has been brought about by unprecedented and unforeseen advances in computer and communication technology in the past four decades.
A lot of what is written on the economy will be familiar to the reader as these are issues that are debated regularly in the media and discussions in conferences. Jalan is particularly critical of the public sector because of the inefficiencies that have come into the system. This may not have been that important, but for the fact that the onus falls finally on the government and it finally affects the budgets and its spending. His argument is that as these enterprises keep making losses, they have to be financed by the government either through outright subsidies or indirect support. This weakens the budget as the government has less to spend on the poor, which, in turn, hampers their development. Therefore, the comparatively well-off people may not be affected, but it affects the future of the poor. He believes that the steps taken by the present government in privatisation are progressive, and he substantiates this with several global instances.
An area that he talks of in some detail is the political system. He looks at various anomalies that exist in the present system and discusses the pros and cons of the alternative presidential structure. In balance, he feels that the existing system is better, though admittedly, the governments that have ruled have never come close to having 50% of the votes. He does lament the persistence of the feature of having a large number of people with criminal records as members of Parliament. Here one can be helpless, for it is these people who actually garner votes for their parties and claim power subsequently. It is not a happy situation to be in where such people with serious criminal cases, which are yet to be proved, occupy positions of power. An argument often given is that since these members have been elected by the people so there cannot be anything amiss. The author, however, is cautious in not naming any person or party, which has been his trademark non-controversial style.
An interesting turn is taken when he brings in the concept of scarcity, which is an economic subject, into the structure of our political system. He looks at the system with a pyramid-like structure where the government is vast at the bottom but narrow as we move upward. At the panchayat level there are lots of representatives of the people and hence the system is more democratic. However, these so-called leaders have little power and it is more in the area of implementation of schemes where the funds come from the Centre or states. Therefore, there is relatively more cleanliness here.
But as one goes up the echelon to the states and Centre, there are fewer seats, which brings in the scarcity concept and a premium that is attached to every seat that is fought during the elections. No wonder there is substantial muscle clout which comes in the running of parties and governments. The power that is exercised is tremendous as the Centre and states have the right to set of organisations, committees, taxes, expenses, etc, within the realm of what is provided by the Constitution. This is why there is a craze to be in power, as it gives people the right over these critical decisions that are taken by the government. The author has hinted that often all the ministers are selected by the leader and hence when all ministers normally tend to be appointed by a single person who is charismatic, the system may not really be truly democratic.
This is a fairly well balanced view taken on the progress made by our country and the author steers clear of any controversy either directly or by innuendo, especially when commenting on the polity. On the economic front there is a lot of promise according to the author. We do lag, however, when it comes to social uplift, which is highlighted early in the book. We need to work harder on provision of education and health, especially to the poor. Changing the quality of polity, however, one can surmise is a tough nut to crack given the intricacies that have been inbuilt in the system to preserve status quo. Hence while there is optimism on the future of the economy, the same has not been expressed on the polity.
From Dependence to Self-Reliance: Mapping India’s Rise as a Global Superpower
Bimal Jalan
Rupa Publications
Pp 184, Rs 695
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