Forget economic dictatorship, try democracy instead

Forget economic dictatorship, try democracy instead

By M.D. Nalapat | 29 June, 2013
Mamata Banerjee and JD(U) general secretary K.C. Tyagi address media on the Federal Front in Kolkata on 12 June. PTI
The current Chief Ministers of Orissa, Bengal and Tamil Nadu, are planning a “federal front”. Why not an “economic democracy” front?

Great minds across the globe celebrate India as a democracy, despite the reality of the British colonial system of law and administration continuing in the country to this date. It was their refusal to cede even a modicum of control of institutions other than those controlled by themselves, that saw Jawaharlal Nehru and Indira Gandhi presiding over a country that grew by less than 3% annually at a time when even Pakistan was developing twice as fast, and only Mao's China was comparable in its sluggish path.

Since the Great Helmsman passed on to his creator, Beijing has changed considerably, in the process ensuring that at least in the field of business, there is far greater scope for innovation and decentralisation in the Chinese economy than in our own. In India, almost every key decision needs to get prior approval by Central authorities, leaving very little discretion to other levels of governance. The potential of such a top-down system for generating bribes is what has prevented successive regimes from creating a more democratic framework for governance, one that would devolve power to levels lower than Delhi.

Indeed, so stifling is the domination of the national capital over the country's life that it could well be said that India is a colony of Delhi, or at least that part of it with well-manicured lawns, uninterrupted power and water supplies, and bungalows vacated by the British that were occupied in a trice by their native inheritors. If China has developed so rapidly since Deng Xiaoping got full control of the Chinese Communist Party by 1981, the reason is that he ensured that even a city mayor could take decisions relating to economic and business matters in a way that even a state Chief Minister cannot in India.

This columnist has had several meetings — in the 1980s and mostly at the Bangalore home of Ramakrishna Hegde — with Biju Patnaik but has yet to meet his son Naveen. However, newspapers say that the current Chief Minister of Orissa, in tandem with his counterparts in Bengal and Tamil Nadu, are exploring the formation of a "federal front". Why not an "economic democracy" front, that calls for devolving authority not just to state capitals but even lower down, to cities and panchayats? Why not allow each such unit substantial latitude in what it offers to business and individuals to locate there, so that competition may get engendered?

Manmohan Singh made the correct call in leaving to the state governments the decision on whether to welcome foreign retail chains or not. The BJP was wrong in going against Atal Behari Vajpayee and seeking a blockade on all such investment everywhere in India, thereby moving closer to the Left parties, who are still in the era of Mao Zedong rather than having moved to that of Deng Xiaoping. This "economic democracy front" (or "democracy front" in brief, seeing that economics plays such a huge role in our lives) could demand devolution of financial and other powers down the administrative chain, until the lowest level. After the polls, it could align with that party, whether Congress or BJP, that was most likely to implement the reforms needed to ensure that mayors in India get the same powers as their counterparts in China.

This columnist has for close to two years argued that there are two attractive leaders who have emerged in India, and that these are Narendra Modi and Rahul Gandhi. He has met the Gujarat CM a few times but the Congress party vice-president has this far remained elusive, possibly owing to a natural — and fetching — shyness. Both need to work on a model of economic governance that is far removed from the overcentralised version that has been in vogue in India since the Mughal period. Over the course of the next six months, both Narendra Modi as well as Rahul Gandhi ought to articulate their New Economic Policy over the coming months, so that those political parties eager for a break from a Delhi-centric regimen will know just who among the pair will be the better partner in order to actualise their vision.

The country needs full democracy, not simply a chance to cast one's ballot every few years to elect a candidate from within a listless list of durbari politicians chosen for reasons of personal loyalty rather than

administrative ability, and it is time for Naveen Patnaik, Jayalalithaa and Mamata to work out a blueprint for change that would become the precondition for a future alliance with that party or alliance that shows the better promise about being sincere about change.

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