At the recent India Meeting in Switzerland organised by Horasis, a question was asked whether India can achieve 10 per cent growth given the wide range of reforms underway, such as GST, bankruptcy laws, privatization, and digitisation impelled by demonetisation.
Ms. Shobana Kamineni, the President of the Confederation of Indian Industry, made back-of-the-envelope calculations and suggested that 10 per cent may now well become a reality.
But maybe we should ask an entirely different question – what will it take for India to become a First World nation? Such a question is about matters more important than mere economic growth. It is about freedom, rule of law, justice, separation of religion and the state. Such a question can reset our expectations and start a meaningful conversation about what we want to be as a nation.
Our party, Swarna Bharat Party, was the only political party other than BJP and Congress invited to this conference. Perhaps our fledgling party’s reform fervour has caught the fancy of Frank Richter, the chairman of Horasis. More likely, though, Frank is merely responding to the demands of international investors who are getting tired of endless bouts of fantasy and want some plain talk.
I joined with others in congratulating the Modi government on reforms. However, some Indian and foreign business leaders told me in private that they have experienced no real change on the ground. Despite that, I asked international businesses to continue to invest in India, but with a large pinch of patience.
I think it is time for us as a nation to step back and look at the big picture. The facts that face us are not pleasant. Transparency International has ranked Indian governments as the most corrupt in the Asia-Pacific region. Our businesses, despite being one of the world’s best, continue to be let down by our governance system. We continue to rank close to the bottom on ease of doing business. We remain one of the least free countries in the world. We do not protect private property. We do not have credible rule of law. The concept of justice is largely fictitious. There is very little infrastructure. Our primary and secondary school systems are dysfunctional. Vocational training is non-existent or of very low quality. And we continue to be one of the world’s poorest countries.
Our party wants to raise our expectations significantly. We believe that strategic interventions can fix India’s poor governance system and entirely re-write India’s future.
What should the Modi government do? In a nutshell, it should make our policy and governance systems incentive compatible.
Policies in India are not transparently designed and do not consider unintended consequences, implementation issues including strategic behaviour, or costs and benefits. We need legislation to embed a world-class policy-making process into every policy decision. Never again should a decision like demonetisation be taken without a supporting cost-benefit analysis to be followed by a full (and transparent) evaluation of the results.
Second, we need to redesign our governance system. Today, neither ministers nor bureaucrats are accountable. They see themselves as rulers. We need to invert this mindset and hold our servant (the government) to account.
No First World country has the kind of antediluvian, super-centralised IAS-type tenured service to govern everything. There were good reasons to continue the British colonial model just after independence. But by now the IAS and similar tenured services have long outlived their utility. Mr Modi should replace all such services with a contractual modern bureaucracy in which the best talent is hired from the open market for specific roles, paid well, and terminated without notice for failure to deliver. Our manifesto provides the detailed transitional path to achieve this reform.
Even more urgently needed is electoral reform. All candidates should get a certain cash reimbursement (subject to an upper limit per constituency) per valid vote received. Under the current model, candidates spend crores of rupees during elections and since they get back nothing, they inevitably become corrupt as ministers. State funding of elections is the incentive-compatible remedy to our systemic generation of large scale corruption. It will need to be complemented by paying our MPs and MLAs very well, while abolishing perquisites and pensions. Only after such reforms can we expect to attract competent, honest people into politics.
Next, we need to reform local government. Elected councillors must be empowered to hire the chief executive officer of their municipality from the open market on conditions similar to those outlined above for the general bureaucracy.
Our manifesto thereafter outlines a myriad other reforms – such as in urban planning, labour market regulation and comprehensive redesign of our education system. The Modi government should implement all these, on a priority basis. Our party will be happy to support the government in the detailed design of these reforms.
But there remains a matter on which only Mr Modi can directly respond. Our party is gravely concerned about Mr Modi’s chronic failure to defend liberty, the most cherished human value. A government has no business to interfere in what Indians eat, wear or speak. I eat beef and so do many other Indians. A government should assure humane slaughter of large animals and assure the safety of the food chain, but there can be absolutely no public policy ground in a free country for any government to arrogate to itself the right to tell citizens (who are its masters) what they shall eat.
Mr Modi must come down harshly on violent gau rakshaks. These people are emboldened by anti-cow slaughter laws which are the root of the problem. Such laws are destroying the fabric of India. Governance and religion must be kept separate at all times. Likewise, we ask Mr Modi to modernise all laws, including decriminalising gay sex and abolishing all restrictions on speech.
I know this is a tall order given BJP’s foundational ideology that is grounded in swadeshi, Hindutva, Ram janmabhoomi and gau raksha. But the fact is that the whole world is becoming wary of BJP’s agenda. This is not how we will become a great nation.
Fortunately, our party understands precisely what needs to be done to reform India’s governance and policy systems, and to liberate Indians. We offer a ray of hope rarely seen in India’s political space.
All Indians have experienced enormous benefits from economic liberalisation that started in 1991. It is now time to ratchet up our expectations and demand accountable governance, personal liberty, and the separation of state and religion – things that the First World takes for granted.
# Author Sanjeev Sabhlok is a senior leader of Swarna Bharat Party