Stinging recipe of political, administrative reforms from former RBI chief

CHENNAI: Distinguished economists by profession have a sharper eye on the goings-on in politics and their fiscal austerity seems to naturally gun for the excesses in the political system at any point of time. Such critical perceptions are even more reinforced if one has been in the thick of a wide range of policy making and implementation at various levels and also a ‘backbencher’ in Parliament.

This intersection between economics and politics appears to have come to a full bloom in the former Reserve Bank of India (RBI) Governor, Dr Bimal Jalan’s latest book under review, ‘India Ahead- 2025 and Beyond’. It is a firmer extension of perspectives and ideas ever since Dr Jalan became a hit as an author with his very first masterpiece, ‘India’s Economic Crisis: The Way Ahead (1991)’.

This was followed by several other books by Dr Jalan, who has occupied key positions in the government including as Chairman of the Economic Advisory Council to the Prime Minister (January 1991-September 1992), Member-Secretary, Planning Commission, before he headed India’s prestigious central bank for close to six years. He was also member of the Rajya Sabha (2003-09) and more recently, Chairman of the Expenditure Management Commission (2014-16). All these go to show that a scholar-administrator’s critique is no piecemeal stuff.

While his latest book-offering is shot through with optimism that over the long-term, “India has tremendous opportunities to alleviate poverty and to become one of the strongest global powers by 2025,” Dr Jalan has analysed the challenges without mincing words. He is convinced that “some political reforms” will have to be initiated urgently, both in respect of certain macro issues like state funding of elections and at the legislative level in reworking Parliament and Assembly rules.

Though Dr Jalan appears to be sympathetic to the daring new BJP leadership, post-2014 under the Prime Minister, Mr. Narendra Modi on key governance issues, yet for him this factum seems more a contemporary anchor in the larger pro-right shift in the Indian polity, where regional parties are as much competing for the political space than the national parties, to compare and gauge policies of the past. It is there Dr Jalan comes out as a thorough-going scholar and administrator who, as one having seen how things actually work both in the field and in the portals of power, wises to flag further reforms for the future.

Dr Jalan’s ‘agenda for political reforms’ is clinical and unsentimental, much as a well-meaning doctor would want to prescribe a bitter medicine for the health of the patient. He disapproves of the amendment made in August 2003 in particular wherein persons elected to the Rajya Sabha “do not have to be residents of the States that elect them.” This to Dr Jalan strikes at the very root of the concept of ‘Rajya Sabha’ as the ‘Council of States’ as originally envisaged in the Constitution.

“The Rajya Sabha, over a period of time, is also likely to become a safe haven for leaders who fail to get elected to the Lok Sabha…..eventually, the composition of the Rajya Sabha would become vastly different from what was envisaged in the original Constitution,” the author writes. Though a suppressed critique of Dr Manmohan Singh getting elected to the Upper House from Assam can be read between the lines, Dr Jalan goes on to suggest something even more radical.

The author writes, “a reform of the present system for elections to the Rajya Sabha is now urgent.’ “In case it is not politically feasible to reform the electoral process, it would be much better for the functioning of our democracy to have a unicameral Parliament, as is already the case in some States. This will not only save time and budgetary resources, but will also prevent further erosion in the federal character of the Indian Union,” writes Dr Jalan. However, this advocacy to do away with the Upper House itself, has larger serious implications for Indian democracy in future, for the road from a ‘unicameral Parliament’ to a Presidential form of government might not be far off.

Dr Jalan also feels “it is desirable to discontinue the MLPADS (member of Parliament Local Area Development Scheme)-type schemes (a brainchild of late Prime Minister P V Narasimha Rao), both at the Centre and in the States in view of “significant misuse of such allocations.” The author who dwells extensively on State funding of elections, to root out one key avenue of collection of huge sums of money by various political parties and consequently corruption, argues that State funding to recognised political parties should be restricted to “reimbursing certain categories of identified election expenditure.” He welcomes the proposal in Mr. Arun Jaitley’s 2017-18 Budget to allow for transparent donations to political parties, but adds that this step is not sufficient.

With coalition era in politics having come to stay, Dr Jalan is seriously concerned with “small parties with less than five per cent of the national votes (in a Lok Sabha poll) commanding disproportionate influence as partners in a coalition government.” As a consequence, political instability particularly at the Centre has increased, even if “they are sometimes unavoidable in a parliamentary democracy.” To remedy this ill, Dr Jalan suggests further amendment to the Anti-defection Law to enable to “disqualify members of a party (with say, less than 10 or 15 per cent of the seats in the Lok Sabha as may be decided by Parliament), who opt to join a coalition and then decide to defect it. It should be made mandatory for all members of such a party to seek re-election.”

There are a range of other issues impinging on the social, political and economic spheres, from diminishing role of Parliament over the years, political power getting increasingly vested with one individual in a party, the need for Parliament’s functioning to be beyond the whims and fancies of the powers-of-the-day-that-be (Dr Jalan recalls an entire episode in Parliament when the controversy over MPs’ occupying office of profit came up was handled arbitrarily), corruption levels going up in administration despite the economic reforms post-1991 and abolition of the license-quota-raj and how bribery is sought to be rationalised as an unofficial service charge, which the author candidly discusses.

Undoubtedly, as an ex-RBI Chief, Dr Jalan’s chapter on a ‘New Paradigm for the Financial Sector’ is the most brilliant part of this work, even as he sets out a list of priorities in the economic and governance fronts that can be implemented in the next few years. They include the Central government withdrawing altogether from monitoring and implementation of economic programmes “in all spheres”, which he says should be left to the States and placing some restrictions on FDI.

Dr Jalan also prefers applying the proverbial Occam’s razor if pursuance of policies promoting “special interest groups”- be consumers, farmers or traders-, undermines overall “public welfare”. That would truly be a radical reform, but surprisingly Dr Jalan has not spoken a word on demonetization, even while affirming GST Law needs to be reformed further. A thought-provoking book indeed!