In the next 100 days, a fierce contest will take place to determine who forms the next government. The contest will take place at many levels, including in the world of ideas. The country has a massive stake in good ideas winning over bad ones. It would help if political parties declared their adherence to some principles and methods for serving core economic objectives, as in what follows:
The government's role in the economy will be to provide public goods and essential infrastructure, and set rules for private players. We will ensure economic stability by following well-recognised fiscal and monetary policies that facilitate this. We will introduce a tax system that minimises distortions in incentive structures, through a combination of moderate rates and broad coverage that together facilitate revenue buoyancy.
We will restructure the government to separate policy from programme implementation; the latter will be done by autonomous agencies specially mandated, and judged on performance criteria. Those who don't perform will have their mandate withdrawn. What the government cannot execute efficiently on its own, it will farm out to the private sector with appropriate supervision. What the government need not do, it will shed. This will mean shrinking government in some areas, and expanding it in others.
To facilitate economic growth, we will tackle market rigidities so as to free up factors of production, including land and labour. We will focus on providing an educated, healthy and properly trained workforce, and on ensuring livelihood protection for farmers. Recognising that the engine of growth is driven primarily by the private sector, we will make it easier to start new businesses, to run businesses and, when necessary, to close down businesses that have failed. This means reducing start-up times and costs, and simplifying regulatory approvals. It means making credit more easily available to small and medium enterprises. It means speeding up judicial processes to enforce contracts and property rights. It means a flexible labour market. All this will make India a land of opportunity.
We will facilitate the creation rather than the capturing of wealth, and therefore the creation of jobs. This means helping innovators. It means providing a level playing field, and reducing the scope for lobbying and rent-seeking by interest groups. It therefore means transparency and openness in government decision-making, and sharply reduced discretionary action on the part of ministers. Finally, it means preventing oligarchies and crony capitalism, by running a more open economy for both trade and investment, and strengthening competition rules and their enforcement. All of this will help attack the corruption of government and its processes by business.
We will focus on sustainable growth, by protecting from damage the country's land, water and air - especially since damage to these affects the poor disproportionately. Environmental accounting will be an annual exercise, along with the calculation of GDP. We will provide a social safety net with a constitutionally mandated budget ceiling of, say, three per cent of GDP (Rs 3.5 lakh crore currently) - to be given to the most needy in a least-cost manner, or for specific agreed objectives. This should raise everyone above the official poverty line, ending absolute poverty. For such a programme to be affordable, any subsidy that does not fit into this framework will be phased out quickly. Essential government services, as for education and health care, will be separately funded so as to universalise access.
We will raise the costs for wrongdoing, by improving supervision and evidence gathering, and through effective prosecution under all important economic laws and for all regulated sectors. As a concomitant, we will demonstrate transparency in political funding. We will improve the terms on which people are hired at decision-making levels of government, so as to attract the best to public service - with the best intentions. We believe that this comprehensive approach will ensure rapid and sustained economic growth, and a fairer share for those on the bottom rungs of the economic ladder.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
