A continuing failure of India’s electoral democracy as well as China’s one-party rule is the tolerance of rising levels of political and administrative corruption at all levels, rues T. N. Srinivasan in ‘Growth, Sustainability, and India’s Economic Reforms’ (www.oup.com).
The scams in India being currently investigated with respect to the allocation of spectrum, and the diversion of publicly-owned land of the armed forces for private luxury housing development in Mumbai, reveal a very disturbing pattern, he notes. “Unfortunately the assumption of a supervisory role by the highest court, the Supreme Court of India, in the investigations is not desirable from a long-run perspective of the democratic system. The failures are of the politico-administrative and social system and the corrections also have to come from the same system.”
As for China, the author observes that the dismissals of corrupt officials and even executions of some without a modicum of a fair trial with opportunities for the accused to defend themselves are part of its authoritarian system. He reminds also that the authoritarian control over all branches has not been enough to prevent corruption on a large scale.
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Among the many suggestions offered in the book is the need for a credible commitment to completing the reform agenda; such as, in the form of a special budget abolishing non-merit subsidies and changing other subsidies. Far larger than the explicit major subsidies as a share of GDP are tax expenditures, that is exemptions from, and/or lower rates relative to normal rates generated for particular purposes as tax incentives, Srinivasan cautions. “The revenue foregone from corporate and personal income taxes, estate, and customs duties amounted to 6.55 per cent of GDP in 2009-10, and 6.5 per cent in 2010-11. As a share of revenue realised, the foregone revenue accounted for 85 and 72 per cent, respectively, in 2009-10 and 2010-11.”
Persuasive arguments presented in a concise manner.
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