Elections 2019 are here. In the largest celebration of democracy, 90 crore voters will decide who comes to power for the next five years. ’Tis the time political parties launch a parade of sops and promises of prosperity.
The most effective antidote to political promises is a maxim Margaret Thatcher popularised in 1989. “The rooster,” she said “may crow but it is the hen who lays the egg”. Essentially everything the parties promise must be paid by higher taxes or borrowings, the price of political rent is borne by those wooed for votes.
India, beset with conflicting compulsions and competing crises, is poised between hope and hyper-angst. Politics cannot be an argument industry. Truly competitive politics needs to be about compelling questions and competing answers. India needs solutions to seemingly intractable problems and future challenges. Informed choice demands informed discourse on ideas.
In the next few weeks, political parties will unveil their manifestos. The central theme of progressive governance should be to liberate the citizen from the ghetto of corruption and inefficiency. Here are some ideas to enable citizen-centric policies.
Regulate The Sops Parade
The policy of opting for quick fixes bypassing structural causes is founded on electoral expediency is forcing the state away from its primary focus of economic development to economic compensation. Every election, political parties announce free laptops, gold chain etc. to lure voters. This results in the diversion of resources from public goods to private goods and income. The question is not who pays for it but what is being denied to buy votes.
It is no use expecting self-regulation and the damage done by freebies is visible across years – from free power to loan waivers.
There is hope yet – the 15th Finance Commission. The NK Singh-led commission is currently deliberating on issues of outlays and outcomes. One of the issues it must weigh in on is “Control or lack of it in incurring expenditure on populist measures”. Money for the sops comes from higher taxes or borrowings. The commission should stipulate that before rolling out a sop, governments must be obliged to explain outlays and outcomes – how the sop is being funded, if it is through tax then its implications, if it is through borrowings then the cost and an undertaking that it is not at the expense of development programmes and will not impact state capacity.
Follow The Money
This year, the centre and states will earn around Rs 40 lakh crore as revenue, borrow around Rs 12 lakh crore and spend an estimated Rs 47 lakh crore. Translated: governments earn about Rs 10,950 crore a day, borrow Rs 3,280 crore a day and spend Rs 12,850 crore a day. Where is all the money going, rather how well is it being spent?
It is true that the government puts out expenditure data across ministries and shares details with parliamentary committees. Equally true is the fact that much of it is in governmental gobbledygook.
Ministries should release a report on outlays and outcomes – data on schools, health centres, kilometres of rural roads/highways, airports, irrigation and power projects et al to be built in the year during the budget.
The progress on promises should be available on websites – like saubhagya.gov.in which gives you real-time information on household electrification. The same is possible for other big ticket projects – and when a project is complete, data on time and cost delays should be released along with jobs created and benefits. Mapping the money will enable appreciation of doers and audit of systemic efficiency.
Last Mile Liberalisation
The accounts of government spending are riveted with sordid sagas of leakage, losses, and corruption. Every fifth unit of power generated and uploaded on the power grid is defined as a technical and commercial loss. In effect, roughly over 20 percent of power distributed is classified as T&D losses of around Rs 80,000 crore annually.
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Water is both scarce and wasted. Governments struggle to raise the cost of water supply while the public is buying Rs 20/litre bottles and/or contracting tanker water. Systemic inefficiency impacts quantity, quality, and consistency.
To get out of the alley of alibis, the government must unbundle the last-mile delivery of services such as electricity and water through a competitive bidding process to private service providers.
The government will still be obliged to deliver but offshoring last-mile delivery will mitigate leakage theft and losses. With two or three providers per circle, the consumer can be offered choice and portability. Indeed, those living in urban areas, for instance, can opt for delivery of PDS-subsidised food grain by a kirana-dot-com, through e-commerce outfits. Success could enable an extension of the paradigm to primary health care, education, issue of licences, clearance of permissions and registrations.
Decentralise Development
The failures littering the political economy—whether it is health, education, urbanisation, rural development—are caused by structural dysfunction. Typically policy is crafted at the centre and states implement.
The genesis of this dysfunction is located in the Seventh Schedule of the Constitution known as the Concurrent List, aggravated by the 42nd amendment of the Constitution. The professed approach of centralising policies on education, health, environment, and investment clearances has scarcely delivered.
It is time the Stalinist shibboleths of the past are buried.
Why must people, investors, and the elected state government be subject to colonisation by the centre?
It is time the elected governments of the states—the vote for a Member of the Legislative Assembly is just as sacrosanct as the vote for the Member of Parliament—are given the freedom to design and deliver policies which suit the need and the landscape. Restoring the subjects to the states will enable both empowerment and accountability. Let grassroots democracy be the ultimate arbiter of promise and performance.
Liberate Farmers, Enable Contract
The quest of parties to offer income support pushes agriculture deeper into the quagmire of political charity. Agriculture is an enterprise like every other. Farmers want to deploy land, labour, and capital to produce what they want, sell to whoever-and-whenever, at a price that covers the cost. A product manufacturer can enter into a contract with a buyer, seek an advance, source credit using the order, access know-how, insurer output and sell his produce anywhere. The farmer is denied this freedom.
The first step towards liberating agriculture requires enabling of contract farming.
Contracts will enable access to credit, insurance, know-how, crop selection, and markets. This can be at an individual level or institutional via an agro-enterprise where farmers pool land and resources. Access to markets requires the creation of an Amul 2.0 – pole vaulting over the archaic markets and induction of e-commerce players. The economics of costs and pricing will propel alternate cropping, use of solar power, drip irrigation as the farmer and farming turn viable.
Solve Problems, Jobs Will Follow
If a study is done on the appointment of committees, commissions and task forces across sectors, job creation will surely figure in the top five. Since the beginning of the millennium, it is estimated that the problem of job creation has been “studied” over half a dozen times – beginning with the SP Gupta Committee. For decades now, political parties have promised targets for employment generation. Governments have set up missions or programmes in mission mode. Job creation and measurement of job creation continue to be problematic issues – both in government and in the larger political discourse.
The crux of the issue is the flaw in the approach to thinking about it as the objective.
Strategically and structurally, job creation is an outcome of policies. There is no dearth of problems to be solved – whether it is solid waste management, provision of water, urbanisation, extension and advisory services to agriculture, creating access to markets, digitisation of governance or expansion of health care.
Resolution of problems will deliver jobs – for instance setting up municipal bodies across 3,800 census towns could generate around 4 lakh jobs. Similarly, the expansion of Ayushman Bharat or advisory services for agriculture or setting up of water recycling and waste management projects will propel employment. Manifestos must, therefore, declare which problems will be addressed in how much time – and they have enough expertise to tag them with potential for job creation.
Decolonise Local Bodies
In 1993, an elected government and the members of parliament passed the 73rd and 74th Amendments to the Constitution to liberate local governance from the clutches of state politics. The amendments aimed to provide status and dignity, and vibrant and viable democratic units of self-governance, to towns and cities. This summer marks 26 years of a promise that was tripped by elitist political cynicism. There is no question that this cannot sustain – and is manifest in the many failures of governance. The 1993 amendments promised transfer of 29 functions to panchayats and funds and functionaries to urban local bodies. The 15th Finance Commission must deploy 2011 population data to devolve funds and functions to local bodies – and advice necessary legislation for the creation of cadres.
Political parties could insist their cadre serve in local bodies first before being nominated to the state or central legislature. India is expected to overtake China in 2021-22 in population – it has one third the land mass and its economy is one-sixth in size. China outranks India on every measure of human development and infrastructure.
There is no escaping that without the empowerment of local bodies there will be neither governance nor growth.
Blueprint To Retire Debt
The first challenge before the government which comes to power on May 23 will be to deal with the explicit and implicit deficit – estimated to be around Rs 10 lakh crore. Already this year, the government will be allocating more than a fourth of its expenditure to servicing past debt – just the bill for interest payments of the centre is Rs 6.65 lakh crore or Rs 1,822 crore a day.
The question is not just whether it is sustainable but whether India can afford to carry this huge a burden as it needs resources for economic development. The good news is that there is potential to monetise assets and retire debt. The Government of India is the largest business house in the country. Its holdings of public sector enterprises should be shifted to a sovereign trust which can be listed as an exchange-traded fund. This trust can then decide and disinvest non-strategic enterprises – Life Insurance Corporation of India itself should yield, by some estimates, over Rs 5 lakh crore if listed. India’s public sector enterprises and public utilities are sitting on hundreds of hectares of unutilised land. India needs to create a land bank to pool all the surplus land. This can be auctioned for industry, affordable homes and for townships – estates of the Indian Ordnance Factories are rotting and in disuse and can be leased/sold to raise funds. A lower debt will reduce fiscal deficit, bring down the interest rate, and allow lower taxation and propulsion of growth.
Modernise Justice Delivery
The Constitution lists justice—social, economic, and political—as the first of the divine triumvirate of democracy along with liberty, equality and of course fraternity. In 2019, there are 56,994 cases pending in the Supreme Court, 49.83 lakh in the High Courts and over 2.9 crore cases pending in the lower courts.
Then there are cases in tribunals and appellate courts – 4.12 lakh cases involving income and indirect taxes. The fulfillment of this promise demands modernisation of the justice delivery system. The causation is located in a complex matrix of issues – the confrontation between government and judiciary on appointments is just one of the factors and hopefully, statesmanship on both sides will emerge to design an acceptable system. That said, the judicial machinery cannot operate as it is today. There is a need for more courts, more judges and a modern design of devolution. The government is the biggest litigant across sectors – recognition of opportunity costs, need for better-drafted laws and lucid regulations are needed. There is a need to separate the judicial from the administrative so the judges are freed from the mundane matters. Finally, the courts cannot be immune to the adoption of digital technologies – from the issue of summons to listing of cases to video hearings to off-court online depositions to save court time to seeking artificial intelligence-driven case law mapping. This is an urgent imperative for democracy to sustain and thrive.
Redress The Address Affliction
India’s billion-plus people are far more mobile than ever before. The 2017 Economic Survey postulated that over 45.3 crore were living away from home. This heartening ability to assimilate and pursue dreams is haunted by a colonial-era rule that stipulates possession of ‘proof of address’ document as the ultimate stamp of authenticity. Migrant labour, dependent on PDS and BPL card, are the worst hit. Whether it is the passport, the EPF/PPF account, Aadhaar enrolment, the driving licence, bank account or mobile phone subscription, Indians must produce proof of residence – this in an era when the young demography is moving cities and jobs, frequently renting homes. World over, a communication address is deemed enough.
Why not do away with the need for a proof of address!
The sanctity of the requirement is suspect and seems to be designed to help the babudom tick the boxes when it should enable the citizen to authenticate his identity. Why isn’t a communication address enough if the identity can be authenticated via Aadhaar? Why does a driving licence require an address? Or for that matter the ration card – it is simply a document of identity and entitlement. In the era of digital banking and e-mail statements, banks can opt for a communication address. The bulk of mobile connections are pre-paid, and the post-paid segment is being billed by email and payments made via ECS/cards. Rules that are based on suspicion must make way for an eco-system of trust.
Over the next few weeks, political parties will present their ideas. For sure, electoral expediency dictates focus on winnability and therefore palliative sops. The problem with flyover politics is that it perpetuates the persistence of predicament. These ten ideas are aimed at expanding the discourse on solutions even as political parties vie to expand market share. The viability of representative democracy demands a shift in approach. It is not enough for representatives to win. Those represented too need to win.
Shankkar Aiyar is the author of ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’; and ‘Accidental India’. He is a political-economy analyst and Visiting Fellow at IDFC Institute.
The views expressed here are those of the author and do not necessarily represent the views of Bloomberg Quint or its editorial team.
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