Where Raghuram Rajan bats for a strong government

Much of the media coverage of Reserve Bank of India Governor Raghuram Rajan’s recent speech in Goa focused on his use of the Hitler example to illustrate how a strong government does not always work in the interests of the country. On the contrary, Rajan’s speech really was about why we urgently need a strong government.

See this passage from his speech:

An important difference from the historical experience of other countries is that elsewhere typically strong government has emerged there first, and it is then restrained by rule of law and democratic accountability. In India, we have the opposite situation today, with strong institutions like the judiciary, opposition parties, the free press, and NGOs, whose aim is to check government excess. However, necessary government function is sometimes hard to distinguish from excess. We will have to strengthen government (and regulatory) capability resisting the temptation to implant layers and layers of checks and balances even before capacity has taken root. We must choose a happy medium between giving the administration unchecked power and creating complete paralysis, recognizing that our task is different from the one that confronted the West when it developed, or even the task faced by other Asian economies.

The current union government under Narendra Modi has a great opportunity to succeed – by enhancing its democratic legitimacy and strengthening administrative capability. A government that can ensure rule of law, protect democratic rights of its citizens, deliver services efficiently and equitably, and ensure a level playing field for the private sector, would be a successful one. However, in order to do so, there are plenty of challenges that the union government has to overcome – many of them familial that are more peculiar to this government and may also be hard to shrug off, and then some that are external economic pressures that every government typically faces. How it comes to terms with these challenges will largely determine where we get to by 2019.


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