India's Administrative System: An Unresponsive Frontier

Book Review, Politics Trumps Economics: The Interface of Economics and Politics in Contemporary India by Bimal Jalan and Pulapre Balakrishnan (edited), Rainlight/ Rupa, 2014; pp 211, Rs 500

It was felt and highlighted that the ‘policy paralysis’ and lack of reform impetus in macroeconomic policies led to the downward spiral in the business and mass sentiments, eventually led to an alarming level of deceleration in economic growth. The UPA-II regime was blamed for that, which was justified to an extent too, but somewhere there is a need is to see the real stumbling blocks.

Foremostly, it has to be admitted that India’s administrative system has become largely non-functional and unresponsive to the interest of the masses. The book under review precisely focuses on this crux of the problem through twelve essays from some of India’s leading policy practitioners. Moreover, the central mandate of the anthology exudes at patches and in full, the well-meaning vision of its editors.

Bimal Jalan in his different administrative capacities has seen the administrative structure of this country from close quarters, and Balakrishnan – with long affiliations with policy matters is equally capable to comment on what ails the delivery mechanism through the administrative routes and where the two other arms, ‘legislature’ and ‘judiciary’ are faltering.

As the purview of governance is no longer limited with the government alone, the essays in the book put forth a deserved emphasis on ‘corporate governance’ and infer that various practices in big business are in urgent need of correction too.

T.T Ram Mohan’s piece Corporate Governance: Issues and Challenges is one that gives topical insights on the theme. He writes, “A certaincynicism has crept into the debate on corporate governance. There is a sense that, as with corruption, it is something that people will keep talking about without anything substantive happening on the ground” – this captures the views of an average citizen vis-à-vis the interventions of the government. Seemingly, it is harrowing.

The “Overview” in the beginning of the book by Bimal Jalan brings to the fore his suggestions for ‘political reforms’, besides economic and administrative reforms – to reduce corruption, the power of small parties to destabilise multi-party coalitions and attractiveness of politics as a career for persons with questionable antecedents. Indeed, without a reformed culture of politics, it is naïve dreaming for the fruits of economic reforms and that too with equity.

Pulapre Balakrishnan’s Governing for an Inclusive Growth is about addressing the challenges of delivering social justice in India today and it rightly argues for governing policies towards that end.

The other essays by Meghnad Desai, Dipankar Gupta, Poonam Gupta, Ashima Goel, Samuel Paul, Ravi Kanbur, Sunil Mani, M. Govinda Rao and Deepak Mohanty – though with varied level of interpretations, fit enough to be catogarised into three broader sections of the book: politics, governance and policy.

Their focus is on the interface between politics and economics in India, which actually determines the path of progress for the country. This book should be of interest for anyone, who has enthusiasm for the policy matters and knowing about the fast changing form of politics, governance and economic processes in India.

The flurry of activities on the land is unprecedented and hence intriguing too, with keeping the challenges upfront for the policymakers and those who are getting governed to reach a consensus. Albeit that part is tough and probably difficult to come in terms with – this book certainly makes our understanding better on the whole issue.

The essays more than modestly also offer impressionable solutions to end the menace of corruption and for achieving inclusive growth – this comes while discussing among others, the pressing issues related to the coalition government, the rise of new politics (through civic activism), the growing inequality, alienation, the contradiction between identity politics and development.

There is so much happening in India on the policy front, and a single book can have only restricted overtures with those churnings. Given this backdrop, Politics Trumps Economics is a valuable addition to the policy studies and has comprehensive prescriptions for the general readers, who are equally in need of knowing their country’s ongoing tryst with destiny.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

India's industrial lobbies are crumbling

The return of these institutions to the fold of big business houses and the consequent weakening of executive control in these chambers have damaged their credibility and are detrimental to their sustenance

On hindsight, it is safe to say that India Inc no longer runs through legitimate lobbies. Recent years have witnessed a sharp fall in the quality of leadership at India’s premier business chambers — the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry, the Associated Chambers of Commerce and Industry of India and the National Association of Software and Services Companies. This has led to sagging morale in business circles, with furious voices emerging from the inside.

The return of these institutions to the fold of big business houses and the consequent weakening of executive control in these chambers are detrimental to their credibility and sustenance. These institutions are more the victims of inner strife than the economic slowdown that has plagued Indian industry in recent months.

It is worthwhile to recall that ‘lobbyism’ is itself a hyper-materialistic term which is often used to refer to the clout of the old boys’ network that uses the backdoor approach to get things done. Lobbying is an established phenomenon in the US, but clearly what may be fine in an alien land is not acceptable in India. Still, some people like a former CII chief (whose untainted reputation lost much of its sheen after the

Radia tapes came into the public domain) have sought to push the culture of lobbyism. UPA2, with its propensity to plunder public resources, has ensured that such systemic ills happily flourish. It is unlikely that the Government’s insensible use of the carrot-and-stick policy which pampered business tycoons, will lead to any improvements. It will only encourage sleaze in business and accelerate the downward spiral in trade.

The crucial issue here is that the Government rarely does anything that is notionally wrong, but routinely falters at the implementation level. The converging of politicians’ business interests with those of the industrialists can only fudge the lines between politics and business.

A recent case in point is the FIR lodged by the CCenttral Bureau of Investigation against Kumar Mangalam Birla. The Government sought to spin the news in its favour but the Supreme Court and a former Coal Secretary did not allow it to hide the Prime Minister’s Office’s explicit mishandling of coal block allocations. Moreover, the UPA’s own Ministers, including Mr Anand Sharma, spoke their mind and expressed displeasure over the Government’s risky adventure against Mr Birla.

The Ministers fear slowing growth in such circumstances — already, India’s corporate entities are turning incompetent. There is also a disconnect between intention and action, making it highly unlikely that the Indian economy will return to its lost growth trajectory soon. There is not much for trade bodies to look into at this point, as the current mess has happened at a high level, leaving no space for third parties to intervene.

The fight is on to save the face of the Government. And, except for the Supreme Court and the Election Commission, no other institution has effective authority to challenge the regime. Through indecisiveness and preferential treatment, the Government is doing its best to damage the entrepreneurial spirit in the country. Unfortunately, no voice can be heard against such moves from the industrial community, instead, it only whines on specific issues wherein its immediate interests come into play. The trade representatives are now pantomime actors.

Besides, these institutions had ceased to be the knowledge institutions long time ago, when motley groups of tainted management consultants begun supplying second-hand wisdom from within the various chambers’ crumbling blocks. Clearly, it is tough to be either on the side of the Government or the industry.

China has controlled its economy and implemented progressive reforms for over three decades, yet, it hasn’t been able to join the league of high-income nations. It is impossible to see India walking a smooth path in the coming years. If the country’s economic performance has to improve, steps must be taken renew faith in institutional frameworks.

Industry is a vital component of the nation’s growth and ‘profit’ is really not a dirty term, if it has some redistributive bearing. Economic growth and redistribution of wealth can happen simultaneously, if the Government and trade and industry learn to work together.Finally, industry chambers too need to wake up and get their act together, if they wish to remain relevant. Or else, they will soon have no role to play at all.
-Atul K Thakur
Email:summertickets@gmail.com
(Published in The Pioneer on October28,2013)