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Updated: October 18, 2012 00:25 IST

Make the right diagnosis

Jaswant Singh
Comment (21)   ·   print   ·   T  T  

‘Reform’ is not a synonym for unbridled consumerism. There are values beyond money and markets too

I read with mounting concern the Prime Minister’s statement lamenting this “mindless atmosphere of negativity and pessimism that is sought to be created over … corruption” which, he holds “can do us no good”.

My worry, though, is different. For one, this is not our good PM’s style. ‘Off target’ he is often; but acerbic? No, not that. If he has changed his style then our worry is limited. If, on the other hand, some able (sic) speech writer gave him this tautological hyperbole to declaim, and the PM simply did so, then our concern takes altogether a different hue and that shrill epitaph — “mindless” — boomerangs to the declaimer, which is not at all a happy consequence.

Political atmosphere

Our country’s polity, Mr. Prime Minister, is comatose and has taken the economy with it. I urge you, therefore, to get Raghuram Rajan, (who features in the same issue of Foreign Affairs) to do an executive brief of Why Nations Fail: The Origins of Power, Prosperity and Poverty by Daron Acemoglu and Jame Robinson. The former is an economist like you; his co-author Robinson, a political scientist. They believe that “economic development hinges on a single factor: a country’s political institutions”, in other words the ‘political atmosphere’.

In the context of the prevailing “atmosphere”, therefore, I invite the PM to reflect on my theory of “reverse jurisprudence.” Unlike our inherited philosophy of “innocent until proven guilty”, in public life, unfortunately, “if accused, you will be treated as guilty until you prove yourself as innocent.” Decades ago, I had shared this very thought when Bofors had invaded our polity; I am greatly saddened that I have to do so again.

Amongst several I now choose three factors as the prime contributors to our political travails generating this “atmosphere”, about which the PM complains. But first, Mr. Prime Minister, who has fouled our political “atmosphere”? The “corrupters” or the complainants? Then this novel “political experiment” inflicted by you and your “mentor”, which is really a “mindless diarchy” of shallow convenience. It is this that today pushes the country towards “negativity and pessimism”. As for that rather despairing conclusion it “can do us no good”, I agree. But the cure, too, is not so difficult, provided you diagnose as I do.

The other factor wounding our polity is your disconnect with the people of India. Why try and deceive us by these claims of being a resident of Assam? Such prestidigitations rob the head of the government of moral authority, without which you cannot govern.

And equally critical is your neglect of Parliament, as also the institutions that it spawns. Of course, as advocated, “the government must have its way, but the opposition, too must have its say”. Find an equilibrium. It is your duty, not the opposition’s. You are the head of the government.

Which takes us to our second great concern of the day: “the state of our economy.” There, above all, I make one request. Please, do not mislead us, the economically uneducated, about what constitutes ‘reform’. It is not administrative correctives that can ape the real.

I share, therefore, four concerns on the economic front.

Firstly, the economic philosophy of the Congress party: to what do you now really subscribe? At the 1931 Karachi session of the Indian National Congress, the ‘socialist pattern of development’ was declared as the goal for India. This lay at the core of Jawaharlal Nehru’s economic philosophy. Then, after independence came the 1955 Avadi meet of the Congress and a reiteration of the ‘socialistic pattern of development’. A year later, the Indian Parliament too adopted this as official policy. Thereafter, we skip many decades, also many intervening events until the word ‘socialist’ got adhesived to the Preamble of the Indian Constitution, in 1976. This was a by-product of that fraudulent Emergency of 1975.

But I move too fast because in between, as the swan-song of our first Prime Minister, Jawaharlal Nehru, came the amendment of the Congress party’s constitution, in 1964, in Bhubhaneswar. This is where Nehru suffered a stroke and within four months, his life was over. I was then a soldier, on a tank gunnery training course in the U.K. and learnt of his death, with great sadness, from an Englishman. But this dip into memory is not central to our enquiry. The amended Congress constitution stated: “The object of the Indian National Congress is the … establishment of a socialist state…” This is now but memory, despite the addition, at Panditji’s suggestion, of a footnote: “The (above) amendments demand a more vigorous party organisation at every level for achieving socialistic state,” etc.

We come then to 1991, and late Premier Narasimha Rao’s coalition government. He fathered the ‘reform’ process, of which Dr. Manmohan Singh has now become the stepfather claiming sole credit for it. The wags were right, after all: paternity can always be disputed.

Of these ‘reforms’, fiscal management of our economy was the obvious and correct priority. No marks for guessing whose profligacy caused it in the first instance. But it was in 1991 that the country moved away from the Congress party’s “socialistic pattern” to a “free market” economy. Of this transition I am reminded of two aspects. The first was the then Finance Minister Dr. Manmohan Singh’s justification amongst others, on the grounds that the economy then had developed “structural faults” (which it had); and had become a ‘rentier’ economy (or words to that effect), generating unacceptable levels of “crony capitalism”. The other was the great scandal of the ‘Banking and Securities Fraud’. I remember, as a member of that parliamentary enquiry, having then commented that “freer the markets the stronger must be our regulatory mechanisms; and that free markets are not any excuse for a free for all”.

Therefore what, after years of reform, is our state now? No more ‘crony capitalism’? Or an abundance of it? You now say “reforms have increased corruption.” Why? Also please concede that central to this “reform process” was a moving away of the government from its stranglehold on the economic vitality of the country.

Other aspects of getting the state off the citizen’s back and vacating space for releasing the citizens’ energies mandated freedom from the thraldom of petty bureaucracy; drastically reducing discretionary powers of the political and other executives; of sane and non-expropriatory tax policy administered with patent honesty; of encouraging domestic savings, thus domestic investment; and freeing our banking from the States’ mismanagement; plus attending to our farmers. If we do this, money will flood India as investible foreign direct investment, not hot funds chasing short-term gains. Getting the “state out of the business it has no business to be in” is true reform; selling assets of the state, for correcting consequences of fiscal profligacy, through misdirected disinvestment is not.

Nazi policy

In any event, as commented upon by Sydney Merlin in the ‘Quarterly Journal of Economics’, the word ‘privatisation’ first entered academic literature to describe the Nazi party’s policy at “facilitating the accumulation of private fortunes … by its members…” This has disturbing similarity with UPA-II policies; witness the proliferation: 2G, Commonwealth G, Coal G and so on. This amounts to stripping the assets of the state, not a healthy moving away of the state from superfluous and inefficient non-activity.

One more caution about ‘reform’. This is not a synonym for unbridled consumerism of a variety which is alien to our cultural ethos. It is distressing in the extreme to witness today, as Avishek Parin has observed, that “we purchase to consume incessantly, even as (what we purchase) consumes us back with its spectacular superfluity”. We must not become a consumerist society; Walmart, Sears-Roebuck and their ilk are not our yardstick of economic progress. There are values beyond “money and markets,” too.

I conclude with a request. Do please heed our cautions, dear Prime Minister; a government, any government, based on this variety of diarchical ‘concentration of power’; unchecked privilege and usurpation (destruction?) of our Republic can simply not do good, or survive. I pray that in the process, it would not inflict such wounds on dear India as would take long to heal. For, surely, you recognise that India, despite venerating daridra narayan suffers a wide chasm separating our poor from the rich.

(The writer is a Member of Parliament.)

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Two decades of reforms have no doubt improved India,s GDP growth and added the wealth of the rich. but this has not made much
significant change in the income of the poor. While celebrating
india,s consistent growth of 12%, the poor man is least cared lot. We
could have taken one or two points from neighboring Singapore who
launched economic reforms 25 years ago and achieved what they wanted.
The prime minister of the time was a dictator who guided the country
to the reform path and achieved its objective. India was not only late
in entering the highway of reform but was not able to control the
development . Reform made the people fell free for all. this has led
to number of scams which has eaten away the fruits of reforms. As
rightly pointed out by Jaswant Singh that it is high time we diagnose
the malady and take corrective action.

from:  E.Sivasankaran
Posted on: Oct 19, 2012 at 14:58 IST

>>‘Reform’ is not a synonym for unbridled consumerism. <<

Nobel laureate economist Joseph Stiglitz said this long ago. The market economy and privatization are touted as the cure for all ill effects of a public sector driven economy. But those who champion these are the VERY SAME POLITICIANS AND BUREAUCRATS who made ill gotten wealth out of public sector illegal meddling. Now if the same corrupt people champion market economy what would bee the reason.

Of course, they saw bigger gains out of privatization in the name of market economy.

The above words are proven true by the experience of past 20 years.

Scale of corruption registered quantum jump post liberalization.

from:  Madhu
Posted on: Oct 19, 2012 at 12:31 IST

One may differ with the views but MUST NOT doubt otherwise at least
likes of J Singh. If its so process of understanding views and openness
is stalled

from:  kundtank
Posted on: Oct 18, 2012 at 18:28 IST

A brilliant article by Jaswant Singh opening eyes of the readers. Especially, the comment about the PM belonging to Assam was witty.

Thanks to the Hindu newspaper for giving space to opinions not belonging to your core communist ideology in the editorial.

Posted on: Oct 18, 2012 at 11:44 IST

Baikadi Suryanarayana Rao , i would be pleased if Mr. Jaswant Singh
reads your comment. "People who live in a glass house shouldn't throw
stones? and throw stones at people's houses". What Mr. Singh referred
is a long process which will evolve eventually, even we know there is
no doing away with the rising fiscal deficit , market
uncertainties,with India`s rating going down any further the economy
will be impacted indirectly with high rate loans from the FII`s for
development. Moreover its evolution we require , its in human nature.
Once the supply chain, competition is improved we will evolve
ourselves.I agree with Mr. Singh`s reference that with marketisation
we need even stronger regulatory mechanisms.

from:  Ganshyam Meena
Posted on: Oct 18, 2012 at 01:33 IST

I as an upright citizen of India , ask BJP or IAC party members to work to repeal draconian laws which are promoting 'Legal terrorism' according to Supreme Court of India. Some of the laws being misused hugely are section 498A and other dowry laws,Domestic Violence Act Of India 2005,cheating a lady in the name of 'LOVE' .It is sad that even rape laws are being misused.It is time that these laws be made gender neutral and ammended to stop their misuse with proper safeguards for the accused.

from:  Shaik Rizwan Ahmed
Posted on: Oct 18, 2012 at 00:21 IST

Reforms in any form in the Indian context must necessarily mean implement policies and programs that sharply focus on optimizing the use of resources, deploying cost-efficient technology, minimizing incidence of taxes in terms of their numbers, types and amount, judicious use of tax payers' hard earned moneys, no wastage of tax payers' moneys in any form and amount, all policies and programs must necessarily improve productivity, output, GDP and equitable distribution of generated income etc. Reform process must start from minimum number of ministers, say only 30 in any case, no elected representative should be ministeron on lines of the USA; CBI, CVC, CAG and CEC should be totally independent like judiciary.

from:  Dr Amrit Patel
Posted on: Oct 17, 2012 at 20:41 IST

Excellent prose written by a natural. Completely agree with the view that consumerism is incommensurate with the Indian psyche. I also concur that the path taken by the PM and the UPA will lead to ruin. But all is not lost. We have not crossed the point of no return to nourish to health our dear India, that is Bharat. Prerequisite? The system must be de-wormed of corruption.

from:  Samir Mody
Posted on: Oct 17, 2012 at 20:04 IST

A candid assessment of the calamitous situation prevalent in the
Indian politics and the consequent economy's downward spiral has been
very ably summarized by Jaswant Singh. The open market consumerism has
opened the flood gates of opportunistic market dimensions that would
increasingly erode the indigenous interests pushing further the divide
between the rich and the poor. It was not without thought that pre
Narasimha Rao's Nehruvian socialistic policies shelved the open market
temptations. India is not a rich country and its roots are still in
agriculture and in villages. It cannot afford experimentation in the
FDI in retail or pension, for that matter anything that would relate
to 'aam admi' as 'aam admi' is the real India. The policies should be
selective in the FDIs, may be in the areas of infrastructure
developments like Roads,Power,Transport etc and those industries that
cater to the more affordable like Hotels, pleasure Resorts and high
end consumerism. Well; who cares?

from:  M.R.Sampath
Posted on: Oct 17, 2012 at 19:09 IST

we indians bought evrything what has been marketed without even giving a ephermal thought for its need .it starts from-religion ,social status, one job profile, GDP , growth our society really need this these reforms having such a huge gap in wealth distribution among the residents..the type of REFORMS what we need now is to educate the people and stop marketing for anything be it DEVELOPED COUNTRY marketing..

from:  ashish
Posted on: Oct 17, 2012 at 14:09 IST

Dr.Manmohan Singh,is an economist, former FM and ex-governor of RBI and as such, citizens of this country expect him to realize that he belongs to the peolple of india and not just one family;such a thought would empower him to make the right diagnosis and take correct decisions in regard to growth ,inflation,corruption and major reforms.

from:  subramania dikshitar thiagarajan
Posted on: Oct 17, 2012 at 12:59 IST

The Hon'ble Member of Parliament has a penchant for exaggerating things and he needs to be told that both the political parties, Cong and the one to which he belongs, are corrupt. The Prime Minister is non corrupt and a man of integrity. The reform process though started in 1991 was also in continuation during 1998 to 2004 under NDA regime. The spate of recent reforms announced by the Government were started by the NDA Government and based on the recommendations of the Standing Committee of Parliament headed by Shri. Yashwant Sinha, a former FM himself, the reforms in pension and Insurance were given a go ahead by the Cabinet. The writer must also know a Chinese Proverb, we live in interesting times. There was no need to go to the resolutions adopted at the Karachi or Bhuvaneshwar Session since the population of India in both the sessions were 1/3rd and 1/2 respectively to what it is today.

from:  P.S. Srinivas
Posted on: Oct 17, 2012 at 12:22 IST

Mr.Singh leaders of your party found fault with Prof Amarathya Sen for
highlighting India’s poverty and deprivation and went to the extent of
doubting his patriotism. Your leaders also do not like untouchability
and manual scavenging discussed in international forums and those who
do that are dubbed Anti-India. By the same yardstick what sin our
learned Prime Minister committed when he made the statement that
unverified corruption charges do not do good to anybody. I am also in
favour of your brilliant theory of “reverse jurisprudence”. How about
pronouncing Mr.L.K.Advani guilty of demolition of “Babri Masjid” and
Narendra Modi of abetting communal riots among others and let them
prove their innocence. You seem to suggest that it is the prerogative
of your party to shut down parliament and the Prime Minister should
take responsibility for the non-functioning of parliament. Anyone with
a modicum of commonsense can understand your newfound love for Nehru’s
socialism or your opposition to crony capitalism given your stellar
role as finance minister in the NDA government. It is really amusing
to see your opposition to mindless disinvestment in the background of
handing over of NALCO and Centaur Hotel at dirt cheap prices to
private interests.

from:  Baikadi Suryanarayana Rao
Posted on: Oct 17, 2012 at 12:01 IST

Eye opener and thought provoking article, depth of knowledge and lucidity of language is commendable. Politicians with this much genuine concern for country are becoming a rare species these days.

from:  Vibhor Kaushik
Posted on: Oct 17, 2012 at 10:39 IST

Just one word "Brilliant"... real eye opener, a very lucid and thought provoking argument !!!

from:  Vibhor Kaushik
Posted on: Oct 17, 2012 at 10:34 IST

this is extremely disgusting that we don't have even a single privatisation plan or program without the shadow curruption. but the initial silence of our pm is the big threat to the stability of our democracy. i also doubt about iac activities because they always come with different problems and allegations when govt fails to explain the existing one.

from:  salahuddeen.p
Posted on: Oct 17, 2012 at 08:33 IST

(1) Basic question is why such an urgent need for reforms has arisen at all. Answer is that all governments implement populist policies, do not make efforts to increase revenue and cut wasteful expenditure. Through reforms, which are essentially corrective actions, fresh and renewed efforts are made so that economy is placed on a sounder footing. (2) Why are there so many different views about which way the reforms should proceed? One can understand if the leftist parties oppose the UPA reforms as they have an economic philosophy, right or wrong, of their own. But if Mr. Jaswant Singh is claiming that economic philosophies his own party and that of the Congress are so different that BJP should oppose the UPA’s reforms, no thinking citizen would agree with him. (3) Hence the right approach is to think beyond party politics and ensure that all reforms like reducing wasteful subsidies are implemented at the earliest. Am I am right Mr. Singh?

from:  Narendra M Apte
Posted on: Oct 17, 2012 at 08:29 IST

A fine article that traces the roots of all our to-day's problems. Accustomed to slogans and
catch-phrases which distort the real import and meanings and running our business,our
polity is "comatose" as the author observes. The word "reform" is widely used to mean
mindless privatization, by fair means or foul. Way out is to bring quality in our democratic
functioning and economic reforms. Corruption denudes values and jeopardizes human
relations. The poltical atmosphere must change to bring back basic values. We have
enough--material and human-- to take up the challenge.

from:  G. Narayanaswamy
Posted on: Oct 17, 2012 at 08:14 IST

WHY NATIONS FAIL came out in March - it is a must read; I quoted from
it in The Hindu, a few times, soon after.
I doubt the PM/PMO/Cabinet do not know. I feel they do not give a
toss, because they are sure that they can buy the required
votes/MPs, and the other political parties being partners-in-crime
will keep silent/can be bought or will be ineffective in mustering
public trust. This is why the ruling classes disdainfully refer to the
citizens as "Mango People"

from:  D Mahapatra
Posted on: Oct 17, 2012 at 06:54 IST

Jaswant Singh makes several observations that the governing party will be well
advised to think about carefully. The future of our nation is at stake and our polity
better focus on competent governance instead of constantly spinning new public
relations canards. While much of Jaswant Singh's analysis and conclusions seem
right, it is not clear how he would create or implement public policy that
incorporates " there are values beyond money and markets". This last bit in his
essay feels more like a political slogan that sounds good and has mass appeal but
means little in practice. Recent events make it difficult to feel good about the
country's direction.

from:  V Gupta
Posted on: Oct 17, 2012 at 05:36 IST

The most important for present government would be to call for an
administrative reforms, to stop the leakages from various government
funds and schemes. That alone can do wonders for the economy.Vouching
for mindless consumerism in the name of scehems such as FDI in retail,
will do no good. It will only facilitate the access to huge markets to
foreign corporate houses. The argument that it will lead to
infrastructure investment in agri sectors e.g., cold storage, supply
chain etc. sound superficial. Why government does not introspect to
see why corporation such as Food Corporation of India could not
develop those capabilities, may be that wasn't government's priority.
Expecting someone else (read foreign MNCs) to do our work will not
work out in the long run.

from:  Sandeep Jha
Posted on: Oct 17, 2012 at 05:14 IST
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