A BMW called governance

It is difficult to disagree with someone of the calibre of Bimal Jalan, who has manned so many of India's top economic jobs and is generally acknowledged to be the country's most successful RBI Governor for a long time, even though it is true he did blot his copy book by delaying going to the IMF for help when he was finance secretary. There can also be no doubt that the subject of his latest book""India's acute crisis of governance""is very topical. As you wake up in the morning and find there is no water when you turn on the taps in even posh south Delhi colonies, or read the papers to find that an ex-don's wife is going to be sworn into the Union Council of Ministers and the announcement is not even being made by the Prime Minister's Office, it is obvious there is a serious crisis in the country's governance. Jalan, of course, goes beyond this and gives far more serious examples""if, as he says, a Budget is passed without even the standing committees of parliament examining it, it is obvious what passes for governance and the fancy parliamentary structure is a huge farce.

Jalan is also right in identifying the latest reason for the crisis""the inevitability of coalition governments and the almost choking grip that smaller parties increasingly have on the government. His prescription is to come up with a bill similar to the one used to prevent defections from one party to another""defectors are disqualified from continuing as members or from holding any other public office""be used to discipline small parties also. So, if a small party decides to leave a coalition, it should also be mandatory for its members to seek re-election. Sounds a sensible solution. Similarly, given the kind of discretionary power politicians have, Jalan suggests""he has ten such commandments, oops suggestions""that there should be more autonomous regulatory bodies in charge of various sectors and that their heads be chosen by specialised bodies and that the government have no option but to accept these recommendations (as it does with the UPSC).

This sounds nice, but there are two problems with it. One, it appears naïve since it is being hoped the government will put in legislation/rules to circumscribe its own powers""sure, this has happened before, as in 1991, but there is nothing to prevent the government from rescinding these rules later, or simply coming up with new ones. But more than that, Jalan's faith in so-called autonomous regulators is touching. He has only to see the record of the telecom regulator, from the way it legalised the mobile telephone services of firms like Reliance to the way it tried to protect the cosy oligopolies of the long-distance telephone market, to realise so-called autonomous regulators are not an automatic solution. And any one who's had any dealings with bodies like the Public Enterprises Selection Board, for instance, knows that, by and large, these autonomous bodies select people the government itself wants.

There's a similar problem when it comes to his recommendations on state funding of elections""Jalan cites data to show the amounts required can easily be borne by the Budget. But even if you get over the ticklish issue of how you fund parties whose accounts are not audited, surely Jalan's not arguing that it is election funding that drives the country's corruption?

The other big thing that strikes you about the book is that it is too black""our politicians are corrupt, income disparities are rising, poverty's hardly being tackled, bureaucrats don't have security of tenure, and so on. Much of this is true, but surely something good must be happening for India to be growing the way it is? Jalan explains this by saying (correctly) that the current growth we're seeing is the result of the previous round of reforms""so, the argument goes, India needs another set of reforms (Jalan's book is about the governance ones) if it is to carry on the growth momentum.

But how do you explain the fact that in the golden age of governance, when there was only one party ruling the country and bureaucrats got transferred less frequently, India had no growth to speak of and no great poverty reduction either? Perhaps, as economist Surjit Bhalla argues, governance is like a BMW""you buy one only when you can afford one!

That said, the book is an absorbing read because it gets you thinking on important issues on which there cannot be any one solution and any solution you arrive at throws up its own set of problems.

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India's Politics
A view from the Backbench

Bimal Jalan
Penguin
Price: Rs 350; Pages: 244