What the next government must do

By the end of this month a new government will have been formed. Regardless of which political combination forms it, it will have to deal with three very basic questions because by the time its term ends, a quarter of the 21st century will already have gone by.

The first is what the nature and shape of the Indian state will be in the 21st century. How much more coercive will it be — or have to be to survive as a viable entity?

The second is about the nature and form of the Indian economy. How free will it be of the state? As we shall see, this is closely related to the first question.

The third question is about the overall political arrangement. On the principle that it is better to hang together than to hang separately, will the BJP and the Congress come together in order to prevent power from passing permanently into the hands of the regional and small parties who are emerging as alternatives to the two national parties? This is not fat-fetched and let’s therefore start with the political parties.

The BJP is contesting 437 seats and the Congress 423. This means that by their own reckoning they don’t exist as a political force in 120-125 seats. In reality, this number is probably around 220 because remember that in 2004 the BJP and the Congress won only 282 seats between them, leaving the rest for the other parties.

In 2009 the BJP and the Congress won 322, leaving the rest for the others. In 2014 these two parties won 326, leaving the remaining seats to the rest. That’s roughly how the cookie has been crumbling.

The question now is whether the anti-BJP and anti-Congress mood has gained more momentum. If it has, the BJP and the Congress may need to come together. This ought to be the biggest political development to watch out for in the next decade. For this to happen, the BJP will have to give up Hindutva and the Congress will have to mothball the Gandhi family.

The economy

But a mere readjustment of the political parties will not help the country. The economy will also have to grow really strong.

Recently a Harvard-trained Indian economist asked why, despite the complete absence of democracy, China has done well economically while India, with its all its democratic credentials, has done so poorly. He attributed the difference to the strong Chinese state and the weak Indian state.

This has been known since 1967. Gunnar Myrdal, the Nobel laureate, politely said India had a “soft” state. Since then we have fatalistically taken it for granted. But the time has come to ask the extent of coercive power the state must arrogate to itself to achieve economic ends. Clearly, what it has is insufficient.

If anything, the state’s coercive powers have been hugely reduced, as a result of which all factors of production are either very costly or unavailable or both. To make them cheaper we need to debate if the state has to become more coercive as in other countries, including those of the Western hemisphere.

Given the structural, constitutional and political opposition to this, striking a balance is going to be a very tough challenge. One way of doing it would be to allow far greater autonomy to the states by deleting the concurrent list of the Constitution and moving many of the items from the Central List to the States List. The states should then pay a fixed amount, revisable upwards every five years to the Centre.

This will not be easy but, then, the 21st century has only just begun. The next decade should be spent addressing these very basic problems.

The state

Reforming the state, as so many other countries have found, is the hardest thing to do because the principle of independence means that only those who need to reform the most can reform themselves. This is the old turf problem between parliament, executive and judiciary. 

To abridge this self-defeating interpretation of independence, the other two must reform the third. Without this no reform will be possible.

That is why the next government should figure out a way by which any two of the three can propose reforms for the third. These must be made binding. If this requires an amendment to the Constitution, that is what the next government should work towards. After all it has been amended over a 100 times for far less.