The battle against corruption should not end here

Since the 8th of November when the government declared that 500 and 1000 rupee notes were no longer legal tender, there has been much talk about the need for ordinary citizens to join the battle against corruption. Rather dramatically, Prime Minister Narendra Modi too announced from the pulpit, his resolve to continue battling corruption even if he is destroyed, or burnt alive. While failing to fathom why the Prime Minister must fan conspiracy theories about sinister enemies waiting to hurt him, I do think that we must respect the overall sentiment he has expressed, and support the government in taking forward this battle against corruption.

More importantly, now that crores of Indian citizens have borne the “minor inconveniences” towards this cause by waiting up in bank queues and rationing consumption, we need to make sure those sacrifices count for something. This battle against corruption should be a fight to the finish. Surely, no one can argue that a battle against corruption is the sole preserve of a conservative right-wing party – it is something in which we all must take part.

So here, I suggest seven steps that will irrefutably signal that India’s fight against corruption is one with serious long-term intent:

  1. Scrutinise all large transactions, including bank deposits: Tax authorities should be routinely checking all large cash transactions or bank deposits made by individuals, businesses and political parties. Since we expect large transactions to take place through inter-bank transactions, outliers must be investigated. This tax scrutiny should be prompted by a standing policy at the banks where information is shared regularly with tax authorities. Alongside, tough consumer protection laws should apply that punish any tax authority that unduly harasses an innocent citizen. As a follow-up to the current currency swap scheme (misleadingly now known in popular parlance as ‘demonetisation’), all large bank deposits in the large six months must be immediately scrutinised. We already know of the land purchases by the BJP in Bihar, and the large deposits in West Bengal. Could the Income Tax officials raid those establishments?
  2. Go after the big fish next: Starting from the biggest defaulters to our public sector banks, to tax offenders who have illegal assets stashed away abroad, the big fish are still out there, almost completely untouched by this ongoing demonetisation drive. In order to demonstrate its seriousness, Government of India must go after them, irrespective of how powerful they may be. Getting Vijay Mallya back would be a good start. The trails from those Panama papers and the HSBC accounts that seem to have gone cold need to be revived, pronto. The Prime Minister should prove that he means business.
  3. Strengthen the Right to Information (RTI) and Whistle blower Protection acts: In a fight against corruption, as was amply demonstrated during UPA 2, the RTI is absolutely critical. Prime Minister Modi must act to strengthen these acts. The RTI compels governments to be transparent, by putting responses to questions from citizens in the public domain. Whistle blowers do the same, from within government and outside, and their government must step up to protect them from the dangers they face. The Government of India should consider making a start to this with the Vyapam disclosures in Madhya Pradesh. Needless to say, political parties should not be exempt from RTI for even one more day. A midnight announcement to that effect would be best, so that culprits don’t have a chance to make amends before the deadline.
  4. Make data on natural resource deals public: Following a Supreme Court order, the new government was forced to conduct open auctions for the allocation of national resources – minerals, spectrum, etc. In order to take forward the emphasis on transparency, governments – both at the centre and the states – should make public, in an easy to understand format, all deals involving natural resources. This would also be the natural and well-intentioned follow-up to the Supreme Court’s orders to conduct open auctions for allocating natural resources that offer potential for extractive rents. These disclosures should start from the deals involving coastal lands in Gujarat, and extend to the mining contracts in Chhattisgarh and Odisha.
  5. Make election finances transparent and strictly regulated: All cash contributions to political parties should be considered contributions to the Consolidated Fund of India. Any contribution above INR 2,000 should be made by cheque, bank transfer, or a mobile wallet. If this threshold is considered acceptable for daily ATM withdrawals, and since many Indians just don’t have 500/1000 rupee notes in their possession, mass contributions of those amounts are bound to be a miniscule portion of the total contributions anyway. The BJP and Congress could do well to open up their books for independent audits of their massive election finances.
  6. Disqualify election candidates with pending corruption cases: This would be the most path-breaking step of them all. Prime Minister Modi is committed to cleaning corruption from India, and his party should be ready to embody the message. My humble suggestion is that starting with the upcoming state assembly polls, BJP should set an example and not nominate for party tickets, anyone with a pending corruption case. This might lead to some electoral setbacks, but will be widely lauded as the greatest act of self-sacrifice by a political party in seventy years of independent India.
  7. Investigate income declarations of politicians and prosecute rapidly: Extending the effort to clean up the electoral process, all pre-election affidavit declarations must be investigated by a national investigative agency. One often laments that the affidavits mean little unless the data is used beyond generating infographics for the media. Candidates must face legal consequences if they indulge in under-reporting income or assets. Any unexplained spike from one election year to the other should attract the investigator’s attention.

I am confident that Prime Minister Narendra Modi will not stop in his mission to eliminate corruption. There is another huge advantage – they will give people a chance to take genuine pride in being honest, without having to endure the public chaos and personal inconvenience caused schemes such as the ongoing currency mop-up drive. Not only will people – especially the poor – bless the government, but also the brave men guarding our borders will be proud of us.

Beyond rationalisation of Centrally Sponsored Schemes

In August this year, the Government of India approved the recommendations made by the Sub-Group of Chief Ministers on Rationalisation of Centrally Sponsored Schemes (CSS). The rationalisation plan would first prune the existing 66 CSSs to 28, and then further divide them into three categories – six ‘core of the core’ schemes, 20 core schemes, and two optional schemes. The ‘core of the core’ schemes include the pension schemes, MNREGA, and four umbrella schemes targeting “vulnerable sections” of the population. Further, the flexi-funds component of the CSSs would be increased to 25% for the state governments to programme. Another set of recommendations were made around the modalities of release of funds. For instance, the release of a tranche of funds would no longer be dependent on producing an Utilisation Certificate of the previous instalment; and instead, it would be based on the submission of the instalment preceding the last one.

This is another step in the process of improving the governance of CSS in India, with the specific rationalisation exercise being prompted by the ongoing fiscal reorganisation between the centre and state governments. Starting last year, transfers from the centre to state governments went up by approximately INR 1.8 lakh crores. This was a result of the 14th Finance Commission recommendations which increased the devolution of the centre’s tax receipts to state governments from the prevailing 32% up to 42%. This reduced the ability of the central government to continue funding CSSs at their previous levels, and at the same time, provided state governments a greater measure of flexibility in financing its own priority development schemes.

The recommendations thus far appear to have three main implications. The first one, and the one that is of minor consequence, is the categorisation of schemes into a slightly smaller set of schemes. This is of minor consequence because the schemes remaining in the pruned list actually add up to 50, if you count the items under each of the umbrella schemes.

The second implication comes from recommendations that relate to release of funds appear more significant, since there are several difficulties state governments face in ensuring a smooth flow of funds. Aiding that process is critical to the performance of these schemes. For example, the change in rule regarding the utilisation certificate may not count as a big bang reform, but has huge relevance for transfer of funds to the lower levels of government, and directly affects implementation.

The third implication is that this rationalisation process furthers the extent to which specific governments can be held accountable for delivery of services. In this column, I have previously lamented the phenomenon of ‘mutual denial of accountability’ – when faced with poor outcomes, the centre blames state governments for poor implementation, while the state governments respond by saying that they have no control over how funds are spent. With these reforms, we make a bit of progress.

But the circumstances right now are ripe for a major push forward. One option on the table should be a performance-linked financing model between the centre and the state governments.

For the schemes designated ‘core’, state governments now contribute 40%. This means that it would be possible for state governments to initiate work in the year, and secure funds on the basis of performance. Performance of public schemes should be defined as a combination of immediate results (outputs) and long-term change (outcomes) in key indicators of interest. Given the greater flexibility that state governments have in choosing which components to invest their funds in, a truly performance-linked model can be designed. In time, one expects increases in both the state’s proportional contribution to these schemes, as well as further rationalisation of schemes. Even the current arrangement that have umbrella schemes containing multiple disparate schemes, there is an opportunity to set headline sector targets while avoiding being prescriptive about the way state governments work towards achieving those targets.

There are several benefits in moving to a performance-linked financing model. It put the onus of ensuring delivery on the state governments, and downwards, on the lower tiers as applicable. It also forces state governments to work on ironing out implementation issues, including setting up stronger monitoring systems, empowering lower bureaucracy, etc. The independent monitoring by NITI Aayog could then be used in this arrangement to verify the levels of achievement reported against the said indicators.

What we have so far are a set of gradual incremental steps towards reforming the CSS architecture in India. However, with the backdrop of ‘Team India’, the promise of improvements in implementation, and the stated intent to effect concrete CSS reforms that date back to the previous government, the current extent of reforms seem not only too slow, but also far too little. The current government has tended to use technology as a means to leapfrog implementation challenges, but the basic institutional structure threatens to negate the expected benefits. Enhancing the levels of accountability for the quality of delivery, and pushing accountability down the implementation chain must take top priority in the ongoing reforms process.

A big bang attack on corruption, or is it?

ON 8th November 2016, at 8 pm, Prime Minister Narendra Modi suddenly announced to the nation, that the government intended to eliminate the 500 rupee and 1000 rupee note – dramatically, in four hours’ time. These two denominations account for about 90% of the currency in circulation in India currently. Various details have emerged since, and there are enough gaps in the argument for one to question whether this really is an attack on corruption as it is being touted?

Here are some thoughts, and questions:

On the intent behind the move:

  • Taking away currency notes of higher denominations are a step in the right direction – they are easier to hoard, easier to move, and lend themselves far easier to various nefarious cash transactions. But the 2000 rupee note confuses me. Isn’t that going to negate the point above? Why not just go with a new 1000 rupee note if you are worried about large paper currency denominations.
  • Also, exactly how big is the fake currency problem? Did RBI believe that our notes were just completely compromised, security wise? In fact, this morning, when the government announced that a new batch of 1000 rupee notes will be introduced, it does seem that the main issue is one of fake currency, and replacing which should have been a routine RBI-led operation.

Logistics to alleviate chaos and the pain:

  • Exchanging those currency notes are going to be a pain. An average urban household probably holds more than INR 4,000 – so would have to make multiple trips to the banks. Also, there is far too few 100 rupee notes in play. So expect plenty of chaos and confusion. What about people who are travelling away from home, in another city say, with cash in hand, and either have no access to ATM, or do not know how to use one? Images of people queueing up outside banks are everywhere, with people complaining bitterly of the inconvenience.
  • Even so, one could argue that the inconvenience of the urban middle class is a minor sacrifice. But clearly, that is not the case for the poor. The government needs to direct public sector banks to go out there to make the transition as smooth as possible – hold camps in every ward, every village to help exchange these 500/1000 notes; be available to allay anxieties; not harass people trying to change notes; etc. How will bank and post office staff help those without ID proof? So far, we have heard little on what the government intends to do to make it easier for the poor who are likely to be the worst hit due to this sudden hit to their immediate cash liquidity situation.
  • Far from the famed ‘efficient implementer’ image that Modi and his PR have cultivated, this has been a massive tumble in the dark. No one knows when ATMs will be back in order, no one can say if new 500 rupee notes being printed are enough, or whether there are enough 100 rupee notes to meet the demand. POS machines are crashing because servers cannot deal with the additional load. Far cry from the digital cashless society we have already become if you go by Modi/Jaitley speeches!
  • A bunch of analysts have basically responded with – “you asked for a fight against corruption”, and yet completely ignore the chaos and confusion caused by the manner in which this fight was launched. The Prime Minister in his address essentially said that the 500/1000 rupee notes were now mere pieces of paper, which no doubt, resulted in some panic amongst people and a rush to the nearest bank. At the bank (or the post office), people are now being asked to fill out forms to exchange their money (irrespective of the amount), which refuses to acknowledge not only the prevalent rates of adult illiteracy, but also those who cannot produce a proof of identity.

Use of plastic currency in India:

  • The reach and functionality of zero-balance accounts at the last mile (which in India is a HUGE population) is still suspect. Even for those using bank accounts, to what extent do they have debit cards, and how many places can they use it at? RBI data from July 2016 shows just under 70 crore cards, which on the face of it, appears quite high, even though one must remember that middle class and richer households obviously hold multiple bank cards, and so penetration is not as high as it looks.
  • The same RBI data from July 2016 shows that INR 17,092 crores worth of POS transactions and INR 2,19,165 crores of ATM withdrawals took place. The average POS transaction then is about INR 244, and the average ATM withdrawal, INR 3,130. In reality the pattern of transactions would look quite different, obviously, and just reflects the distance cards need to yet cover before they can truly be considered an alternative.
  • As has been pointed out by several people, India is by no means alone in trying to go cashless. However, India’s readiness to go cashless is in doubt. Could we have waited until the Unified Payment Interface was in place,and RuPay was firmly established? Should we not have ensured that the zero balance accounts are in use, and strengthened the network and functioning of banking business correspondents?

Politically speaking:

  • This is a bold step by the Prime Minister, because there is certainly going to be some short-term pain, especially for the poor. This then, is a bold gamble just ahead of the Punjab and UP elections.
  • The element of surprise and the big bang announcement was inevitable though, as they serve a dual purpose – that of catching those hoarders (including political parties getting ready for electioneering) off-balance; and that of generating plenty of noise around it.
  • This does skirt the bigger issues though, of election finance. Also, big crony capitalists don’t really use cash in suitcases these days to influence those in power. Their methods are far more sophisticated, and these measures will do next to nothing to hurt them. At best some of the black money that people hold in cash will have to be disposed, and by no means can that be a significant sum.
  • The political logic of appearing to be an anti-corruption crusader is a sound one, one that Narendra Modi successfully used in the 2014 general elections too. On that count, expect a mish-mash of the language of surgical strikes and kaala dhanin all upcoming election rallies and posters. It is also not too fanciful to imagine that the BJP has (once again) taken advantage of a routine operation and hyped both its scope and potential consequence.

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How does one reconcile with this kind of advertising?

The greatest tragedy is that this pain could have been avoided. Even if you didn’t believe in any of the political conspiracy theories, you can easily see the shocking levels of incompetence at the highest levels of our government and the Reserve Bank of India (RBI). For some time, lets assume that this step to discontinue the existing 500/1000 rupee notes was necessary. In that scenario, consider this: all 500/1000 rupee notes can be deposited in the bank by 30th December 2016 (and even beyond, with additional paperwork). Instead, we have reports of shops and establishments refusing to accept those notes, causing great hardship to those who primarily operate with cash. If you are a shop owner who can explain your income and cash balance, you can continue doing business as usual, and deposit your cash later.

Why is this not happening? There could be many reasons. One of them surely must be the Prime Minister’s speech on 8th November where he announced that the 500/1000 rupee notes would be worthless pieces of paper from midnight, sending people into panic, and the economic systems that the poor depend on, into a tailspin.

Finally, amidst all the columns in support, please do read Prabhat Patnaik’s stinging critique of this demonetisation plan, where among others, he argues that those who hoard ‘unaccounted money’ are bound to find ways of getting their money changed to acceptable currencies within the time-period given.

Also, read Prosenjit’s column asking questions regarding the intent behind this scheme, and Madhavan Narayanan’s column where he argues that the government has essentially created a 50-day hawala window for the old currency notes.

Judith Tendler, and learning from ‘good government’

On 24th July 2016, Judith Tendler, former Professor at the Department of Urban studies and Planning at the Massachusetts Institute of Technology (MIT), Boston, passed away. She was 77. A Ph.D from Columbia University, Judith Tendler spent several years at the United States Agency for International Development (USAID), before a long career as a Professor in MIT. A significant share of Prof. Tendler’s work focused on the Americas, but she also studied South Asia and parts of Africa over her long career.

Prof Tendler’s book: ‘Good Government in the Tropics’ (1997) is one of the most influential books in the field of international development — an essential reading for students of governance and public policy studies. In the book, Prof Tendler and her research associates studied four cases of successful government in Ceara, a relatively poor state in north-eastern Brazil. In each of the cases, the government at different levels played an effective role, facilitating and brokering relationships, and submitting itself to mechanisms which could be used to hold themselves accountable. Those were rare, but rich, examples of ‘good government’.

These cases highlighting the achievements of ‘good governments’ challenged the dominant pessimistic thinking about governance in the so-called ‘third world’. Prof Tendler argued that much of the advice from international development agencies to developing countries was based on an analysis of poor performance of the public sector and governments. This resulted in a tendency to ‘import’ good practices from the successful developed countries, as well as a resistance to looking deeply into poor countries to identify variations in performance. In many ways. Prof Tendler consistently challenged the pre-suppositions that development agencies and policy advisors nurtured and which, as a result, shaped the advice they dispensed into narrow straitjackets often unfit for the context in which they were to be applied.

One of the interesting, if surprising, conclusions of Prof Tendler’s research for the book is that local governments (or non-government organisations, for that matter) were not inherently any better at service delivery. In the 1990s, the push for decentralised governance was very strong, and several countries, including India, made significant progress in decentralising power to tiers of government closer to its citizens. At the same time, policymakers and advocates were locked in debates over whether decentralisation led to positive outcomes. In this context, a call to look beyond established models of decentralisation and look for variations in implementation in different contexts was highly valuable.

The researchers found that service delivery improved in Ceara not because the central government got out of the way and allowed the local governments and civic action a free hand, but because it involved itself in a self-interested fashion, monitoring delivery by local governments, and playing an active role in civic education. This was quite unlike the conventional thinking around decentralisation at the time, and we are better off for it. In the book, Prof Tendler does not argue that her cases represented the norm. Instead, her point was simply that the politics of implementation merit far more attention than it had so far received. More and more now, researchers studying public policy are expected to focus on ‘implementation’ — looking beyond ‘what works’ to the ‘why’ and ‘how’. The learning agenda that is fast gaining currency too has been enriched by this focus on implementation, as it takes organisations into reflecting deeper on how to make change happen.

The questions Prof Tendler posed about an uncritical belief in the merits of decentralisation, the ability of civil society as an agent to hold the government accountable, or the fatalism that prevails regarding the commitment of public sector employees, are highly relevant today in India. It has been clear for some time now that the model of decentralised governance in India will look different in each state, and rightly so. A single framework for analysis therefore, will not work. Similarly, hybrid forms of civic action continue to thrive, as there is increasing pressure to work with government, and yet retain its independence. Finally, implementation capacity of the state remains a challenge, as the state attempts to restore credibility. The experiments with technology-enabled solutions and motivational messages directed at the bureaucracy are efforts in that direction.

As we analyse public sector reforms, the work of Prof Tendler will remain a great source of insight: there is no silver bullet, other than incremental improvement, and evidence-based iteration.

‘Achhe din’ giving BJP a miss?

The excuses are running thin; The photoshop has lost novelty; The joke is on us; When will ‘Achhe din’ come? – my latest livemint column

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I watched the video clip of Union minister Nitin Gadkari’s disarmingly candid chat in mid-September, where he talks about the origins of the Bharatiya Janata Party (BJP) slogan—‘achhe din aayenge’ (good days will come). He said that Narendra Modi had once told him that at a non-resident Indian (NRI) event in Delhi, the people had asked then Prime Minister Manmohan Singh when would it be achhe din for them? Singh had apparently said: In the future,achhe din would surely come. Gadkari went on to add (chucking all the time), that since Indians are inherently aspirational, there is no such thing as an ultimate achhe din. He also said that wherever he goes, the people (and the media) ask him about the promised achhe din, and that the now-famous slogan has become something like a millstone around the neck.

As expected, this provided much mirth to all critics of the government, and probably some discomfort to the government’s supporters. I am not sure though if anyone enjoyed this more than Gadkari, who was clearly having a good laugh not only at the expense of his party for hyping that slogan, but also us (the people), for constantly demanding to know when achhe din would be delivered.

Commentators pointed out that it will not be easy for the BJP to escape from the wide-ranging promises it had made during electioneering. Gadkari obviously realizes the scale of promises made by his party. His remark, which referred to the unquenchable desire for acquiring more, is spot on. The problem then, is of having stoked unrealistic expectations, and used every trick in the book, and off it, to run down the United Progressive Alliance (UPA) government.

On this count, Modi, then as the prime challenger, led the charge. Promising the moon on every conceivable issue, he and his campaign managers successfully created an aura of invincibility, built upon the so-called Gujarat model of governance. The bubble has now well and truly burst. The list of promises not kept have mounted. A host of individuals have made a mockery of Modi’s promises to the nation—from lawmakers in the BJP who have put paid to all hopes of ‘sab ka saath, sab ka vikas’ (development for all), to people like Vijay Mallya, who represent the rot of crony capitalism. The economy, propped up by cheap oil, is also not quite humming the tune the BJP would like it to. Recent projections suggest that the rupee will fall further against the US dollar, and our gross domestic product estimates are still being met with widespread scepticism.

One can quibble about the intensity of opposition the government has faced and how it compares with previous governments, but it is undeniable that any political party that campaigns using such outlandish promises must face the music when its failings surface. Even after assuming office as prime minister, Modi went from stage to stage—at home and abroad—proudly declaring that Indians who were once ashamed of their country are now roaring with pride. That some of these statements were made within weeks of the BJP coming to power should have been a telling statement of the hubris that this government came with. But it is more important to use these occasions to disseminate a more important message to the people at large—that no government (and certainly no man) will come to rescue us with a magic wand. The goods and services tax, Aadhaar and National Rural Employment Guarantee Act clearly show that policy continuity is a fact of life in governing India.

But it is perhaps the rhetoric on national security that must be weighing most heavily around the government’s neck. Modi and associates, who seemingly possessed a perfect soundbyte-sized solution to every national security and foreign policy issue, have been forced to reflect a bit deeply for a change. The controlled ‘surgical strike’, followed by uncontrolled jingoism, suggests dangerous possibilities. For a government struggling to deliver on several other fronts, will it be able to escape the temptation for more expansive adventurism along the border? After all, war would be the perfect spectator sport for a populace fed up of India’s tepid anti-terrorism strategy. This is the constituency that cares little about growth and development, but is intensely conscious of India’s ‘atma-samman’ (self respect). Humouring it is likely to be a key priority, but the consequences could be disastrous.

For the restless India of today, this is a good time to look back at its recent past. What was it that made it kosher for an electorate to overlook the limits of reality, and cheer in chorus for a messiah? I have consistently argued in these columns that we recognise that governance is more than delivering rousing speeches; that no one man is going to transform India; and that we must not restrict our political choices so much that we settle for leaders with narrow communal and authoritarian tendencies.

So let this be a moment that tempers the triumphalism of 2014, and of the sobering realisation that an election campaign, mounted on an epic scale, pulled off one of the greatest cons in recent times. We should be thankful that sensible leaders such as Gadkari are owning up to the electoral jumlas. That will come in handy when the BJP looks within for alternative mascots to redeem its beleaguered self.

Your ‘field’ is different from mine

When I was working in Orissa, India, I was based in Mohuda, a village 10 km from a small town, Berhampur. The head office of the NGO I was working with was located in Mohuda. For any one visiting from even the state capital, Bhubaneswar, let alone New Delhi or from outside India, Mohuda was ‘field’ enough. But for those of us living in Mohuda, our field was a few hundred meters outside the campus – in the village where we had worked with the community to build toilets and houses; women who were part of the village savings groups, and the little biomass-based power plant we had installed. There was of course more of the ‘field’ further away – spread all over the state where we worked, requiring uncomfortable overnight bus journeys…

Naturally, I secretly smirked at everyone who arrived in Mohuda and proclaimed to have stepped foot on the ‘field’. I am also sure my colleagues in project offices in various parts of the state smirked every time I arrived at their offices and announced my presence in the ‘field’. So in sum, I think this game does even out from time to time. Your ‘field’ is different from mine.

In development, the ‘field’ is where the action is. Everything done from far is to support the implementation machine(s) in the ‘field’. The ‘field’ need not refer to a place that is scrappy and tough, although it could, if appropriate. How many of us really do ‘field work’? Does living in a developing country qualify as ‘field work’? Is working out of a satellite office of one’s own organisation that’s outside of the headquarters ‘field work’? Does working/visiting a partner’s office in a developing country constitute ‘field work’? Within a developing country, is visiting a project office outside of the headquarter ‘field work’? Or is it only ‘field work’ when you go meet the ultimate beneficiaries of your work – the community? How about when you go down to a different country to work with government officials?

What I find strange is the tendency to either complain or romanticise the food/culture/ transport/clothes/homes in a manner that establishes one’s outsider-ness. Many of these narratives (tweets, photographs, blogs…umm…instagram?) are evidently for the ‘non-field’ audience who can then either sympathise or appreciate our experience in the ‘field’. These stories that seek to shout out – “look at me, I am in the ‘field'” seem a bit flawed, at some level – not just because they smack of ‘developmentourism’, but also because of the not-so-subtle attempt to claim the moral high ground. Even if you are learning a lot, and all you want to do is to tell people that you are…could we find better ways to do so? I make no claims to having never done this myself.

450+ words later, I also think to ask: does this matter? Let me know!

India @ 70: time to stop being complacent about our democracy

For the seventieth time since independence, India celebrated its incredible democracy on 15th August 2016. There are several theories for why India is such an implausible democracy, and our ability to be an exception in a troubled neighbourhood evokes great nationalistic fervour. However, this celebration of our democracy sometimes distracts us from taking a hard look at the state of our democracy..

I want to contrast this with the focus on the economy. As this year coincided with 25 years of India’s liberalization project, there has been much written about how the economy needed to be unshackled from the tyranny of the licence raj, and about how much more remains to be done in our quest for economic growth. When the Goods and Services Tax (GST) legislation was in Parliament recently, reams were written about how it was a seminal piece of reform, and how this should herald a series of institutional reforms to unlock the economic potential of the country. This restlessness that one sees when it comes to the state of the economy isn’t quite visible when it comes to discussing the state of our democracy. In fact, it is fair to say that while we have strong lobbies pushing for economic reforms, we have become largely complacent about the state of our democracy. Recent actions by the government (across political parties) have exposed huge gaps that need to be addressed urgently.

Let me start with electoral reform. Two reports of the Law Commission—on Electoral Disqualifications (2014) and Electoral Reforms (2015)—lie largely ignored by political parties across the country. The latter report, especially, made strong recommendations for curbing the flow of black money into electoral financing, as well as taking action against the phenomenon of ‘paid news’ used as electoral propaganda. It is indeed a little ironical, then, that the last significant move by the government in the area of election financing was the amendment brought to retrospectively alter the definition of what counts as a ‘foreign entity’—a move that benefits the top political parties in the country that had been in potential violation of the Foreign Contributions Regulation Act (FCRA) until then. Meanwhile, official advertisements for “friendly” media has been a tremendous growth industry in recent times.

Another area of concern has been the state’s ham-handed response to dissent. From organisations such as Amnesty International to student bodies such as in JNU and private individuals airing their views on freedom of expression in India—they have been met by a state response that sought to not only crush dissent through hooliganism by affiliates and spurious legal action, but also saw fit to make light of such incidents at public forums.

The next area of concern I would like to highlight is our federal structure. While the GST was lauded by all economics commentators, the implications for federalism were left unclear. Finance minister Arun Jaitley’s insistence on ‘pooled sovereignty’ will not convince critics who see a systematic erosion of the power of state governments to govern according to their priorities. Centrally-sponsored schemes, which were openly criticized by Narendra Modi when he was the chief minister of Gujarat for their straitjacketed nature, have not seen any significant reform either. Instead, there has been plenty of rhetoric about ‘Team India’ and ‘cooperative federalism’. This leaves plenty to be desired even if you take into account the committees and task-forces run by NITI Aayog. And even the rhetoric does not seem to apply when it comes to non-BJP ruled states. Kashmir is a special case, but it blatantly exposes the limitations of a central government driven by nationalistic rhetoric and paternalistic benevolence.

A final area of concern is the neglect of the democratic decentralisation process. The reforms of the early 1990s now appear toothless; both urban and rural local governments are hamstrung by poor resources and poor leadership, and an institutional framework that has not been reformed to keep up with the mounting responsibilities entrusted to local bodies. Governments have also taken a series of steps that erode local-level democracy. For instance, states such as Rajasthan and Haryana have hurt local governance by introducing questionable eligibility criteria for contesting elections; Nitish Kumar’s Bihar Prohibition and Excise Act, 2016 empowers the District Collector to impose fines on a village/town (presumably with no involvement of the panchayat); in Maharashtra (and elsewhere), the forest department has violated the rights of tribal communities to manage their forests.

This is by no means an exhaustive list. But it points to the rapidly worsening state of our democracy at all levels—right from the centre of power in Delhi, down to our villages. Seven decades after independence, the state of our democracy should concern us all, and erase any sense of complacency that might exist regarding how great a nation we are. But we need to be careful: the incredible democratic project that India represents will not be corrected by chauvinistic nationalism. It is as important to guard against those agitating against the current state of our democracy, and in favour of reversing the progress we have made. True reform requires a partnership between a liberal state and a constantly watchful civil society. Is the current government up to this task?