India Together: Less government, by default

EDITORIAL - INDEPENDENCE DAY
Less government, by default
While endless rounds of complaint and criticism have been seen in every arena, this has not led the public to demand that the size of government be reduced. How long will this last? The India Together editorial.

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15 August 2008 - "Government is not a solution to our problem, government is the problem." In has been 27 years since former US President Ronald Reagan spoke these words during his first inaugural address. And in that time, large parts of the democratic world have undergone a great transformation in how citizens view government. So much so that in many countries, even left-leaning political parties today articulate a less state-led view of the world than in the past. And, despite a few hiccups, this streak appears set to continue for a while.

What about India? Certainly, here too we have been marking, for almost two decades now, the 'post-liberalisation' years. But the idea of 'less government' in India has neither had the same starting point nor the same journey as in the West.

In most of the US, and the West in general, the questions and the debate about limited government have stemmed organically from the political right, where the theory has always been that in order to advance individual liberty and enterprise, we must restrain the role of government to a minimum. But this debate has also had a dialectic credibility because it has happened over a foundation of successful delivery of public goods and services by governments, most of which is by now taken for granted.

Our trajectory during the post-liberalisation years has not informed by a debate about the rights of individuals, the role of government, and the social contract between citizens.

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In India, on the other hand, 'less government' is not really about 'more freedom'; that equation doesn't have rational roots in Indian realities. Instead, the articulation here feeds off public despair at governments that haven't delivered even in critical and essential areas such as 'equality before law' and 'public goods'. The resulting angst has almost always led people to seek alternative ways of provisioning public goods and services, for everything except the legislature and the justice system itself.

Still, let's roll back to what is popularly perceived as the starting point of the Indian journey on questioning the role of 'big' government - 1991 and after.

Our 'liberalisation' was not motivated by any great desire to re-structure the economy or government, but instead by a simple matter of not having enough money to pay our international debtors. So, we did what was required of us to keep our economic heads afloat. But, having done so, we - with the media largely in consensus - decided it would be better if we re-told this history more favourably. Therefore, we latched on to various leaders - especially in the Congress party - as 'architects' of our 'liberalisation'. In fact, our delusion about the liberalisation 'era' is so thorough that four years of re-licensing by the UPA has not worn the sheen off.

In any event, the limited 'new freedoms' of our post-1991 years have all been institutional. What we've focused on are things like freeing companies from the license raj, freeing customers from monopoly services by public sector companies, and so on. None of this is motivated by a particular view of personal liberty that demands liberalisation, except in hindsight. Our trajectory during these years has not informed by a debate about the rights of individuals, the role of government, and the social contract between citizens. Instead, we have simply traveled some distance along an unfamiliar course, groping towards higher economic freedoms, and still unsure of our social freedoms.

This has had some predictable results. Our economy, while we like to think of it as 'pro-market' in its liberal avatar, is actually nothing of that sort. In the public sector, the parallel economy of rent-seeking public officials and politicians in still firmly entrenched. And countless services that have nothing to do with governance are performed by the state, even as many others that are clearly the responsibility of the government - justice, and public service delivery, to name only two - are neglected.

In the private sector too, it is quite straightforward to predict which of our large companies, or even the small, well-connected ones will be successful, simply based on the political calculus behind their operations. And while nearly every business claims to resent favouritism by the government towards its competitors, its response has not been to call for greater autonomy for free enterprise. Instead, companies work to steer government favours towards themselves. This 'competition for un-governance' is the real 'market' in India.

While endless rounds of complaint and criticism have been seen in every arena, this has not led the public to demand that the size of government be reduced. How long will this last? There's no way to tell when things will change, but it seems increasingly certain that they will, even if later than sooner.

For one, the better-off classes are already finding various ways of seceding from the commons. The less better-off - whose aspirations are bench-marked by the conduct of the haves - are bound to recognise a pattern: less government, more freedom. In the meantime, unless substantial reforms happen, governments will continue to under-deliver for the poor. Public services may then end up being created and provisioned by private players, whether business models exist to reach the millions or not. And if this were even a little successful, it would convince even more people to throw in their lot with the idea that less government is the only way forward.

The real shake-up will come when a political party - not necessarily a new one - decides it is opportune to question the very size and role of government, and make that challenge the core of its quest for power. Certainly, if the right conditions for a 'small government' party were to emerge, there will be someone to wear that mantle politically, a la-Reagan or Thatcher for our reality. Such a party might even do quite well at the hustings. The inability of the larger political parties to break with their traditional ways of gaining power and governing has left voids to be occupied. A small party with a focus on, say, urban government only, could easily claim a clear position for itself intent on limiting the size of government in specific ways for specific goals.

Cities - or a small, high-literacy state like Goa - are the likeliest arenas for this change. The lack of adequate devolution of political and fiscal power at the city level has so far prevented the emergence of new political outfits in tier-1 cities with a stricter local focus, similar to how state-level/regional parties have diminished the political domination of the national parties at the Centre. But that could change, if constitutional requirements on devolution are pushed through. Or, if any of our mega-cities were to turn into a city-state, then too the politics of limited government might emerge.

Would that be a good thing for India? We'll leave that question to you, for the moment. ⊕

India Together
15 Aug 2008

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Comments (6)

Posted by Cupid,
Interesting editorial and well written. I have been thinking along the same lines for a while now. Why is there not enough decentralization of power so that more things that can be done locally are allowed to be done locally?

This power-aspirations mismatch is visible all the time. The most recent instance that has been in the news is the recent agitation over extending bar/pub/disco hours past the 11:30 PM curfew. If the city had the right to govern local matters of that kind not unlike most European and American cities, it is quite likely that Bangaloreans would have voted in considerable numbers to extend the hours. The local corporation could have settled the question through a vote. Instead, the State government makes that decision and being much less dependent on or considerate of the city's sentiment, it is dismissive of any suggestions to change things.

The row over SEZs as in the recent Nandigram controversy is another classic example - why do local bodies have no role in deciding whether they want SEZs are not? After all, since they are the most affected lot, should they not have a say in whether they approve of the desired 'development'? With most other districts not concerned with individual projects, it is easy for the state government to push through unpopular ideas through authoritarian means. Is it much of a surprise then that with democratic methods unlikely to yield results (the peaceful protests of a single district is unlikely to matter much for a government in charge of all the districts) violence crops up every now and then?

Your point here about the lack of debate about fundamental political questions regarding the relationship between individual rights, role of society and the state is absolutely right. And as you point out, without greater devolution, it will be very difficult in a country like ours, for coherent political ideologies to emerge. In recent times, under the UPA government, the Centre's moves have however been in the opposite direction. Critics of devolution claim the lack of expertise at the local level to make good informed decisions as well as the greater attrition of scarce owing to the simultaneous emergence of multiple points of corruption. These contrasting claims need to be probed and debated as a first step towards building a better political system based on meaningful and coherent ideas.

Posted by R.Sajan,
It is not realistic to say that we have any constitutional government - except on paper!

Muscle or money power is what rules us. We are blissfully back to the good old times of provincial warlords and chieftains.

Having to pay for all government services in advance or immediately is making things easier, especially after Liberalisation. All government officials are thus compensated by the 'citizen'. This is the most significant gain of our sustaining democracy.

What we now need is to perfect graft in States like Kerala, because we frequently hold that State up as a model. In Kerala, you have to pay bribes even after all the other requirements are meticulously met with. This is okay. The problem is that the officials there lack in integrity unlike in other parts of India in that you cannot be sure of getting your job done despite payment of the bribes demanded in full.

Kerala is the most literate and model State of the country. It is therefore, essential that standards of integrity of the administration as are available in other States should be inculcated there also; lest our models themselves be deemed imperfect.

Posted by Srinivas S,
For all the talk of smaller government, at least in the US we know that the very proponents of small governments have created additional bureaucracies. Yet, it is a very interesting point that you bring up - parties contesting on the platform of smaller and/or local governance. If it can deliver the goods while simultaneously reducing corruption, it could capture the imagination of many others and a demand for replication of the same. Certainly worth a try.

Posted by Vispi Jokhi,
Small is beautiful and smaller states smaller units local self-governing bodies is the way forward. We are far from the same. India is very vast and complex and inspite of your exhaustive attempt of analyzing this issue, the rights of tribal, dalit and minorities is hardly addressed by you. Sacrifice of the poor for the greater common good, big dams, malls skyscrapers etc coming by dispossessing the poor are examples of centralised governance. Even the nuclear deal is an example of PM's highhandedness.

Posted by CV Madhukar,
The issue is less of BIG or SMALL government. The larger question is EFFECTIVE government. Before we decide on the size of government, there needs to be an informed discussion on where we might need more government, where we need less government, and where we need NO government.

Posted by Muralidhar Rao,
Mr Benjamin Disraeli, a former British Prime Minister, had very correctly stated that "there can be economy where there is efficiency".

Even as the Karnataka government seems to have made up its mind on getting totally out of manufacturing activities, it is seen to be doing very little by way of reducing its own gargantuan size. As of today, the entire government work can be done far more efficiently and effectively by less than a tenth of the existing work force if it withdraws from areas it doesn't need to be in, and by going in for large-scale out-sourcing, retaining the services of a select few who can then be paid well.

In fact, the government would do well to target totally vacating the MS buildings, the Vikas Soudha, and even half the Vidhan Soudha itself, and in the process, generate revenue for itself by renting out these premises.

The employees rendered surplus can be given the Golden handshake or even a Platinum one. If they don't accept it, daily attendance melas can be organised in four different corners of the city and salaries paid to them at the end of the month. As long as they are kept away from office, their potential for harm reduces considerably, and the state will be the overall gainer even with having to pay for no work done at all. With the loaves of office no longer available, they will eventually tire out and quit.

Though such a step can be viewed as harsh, it should be realised that every non-productive government job is today coming in the way of creation of at least ten times as many jobs in the private sector in newer and newer areas. As such, nobody need shed tears for the government babu any more.

The politicians should realise that privatisation, outsourcing, etc are no longer dirty words in the minds of the public. On the contrary, they have gained considerable acceptance since they are clearly seen to improve efficiency, and are in fact becoming very populist concepts.

The slogan for the states now may as well be 'privatise, outsource and prosper'.

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