Why has the Sonia Congress done something that the Congress under Nehru-Indira-Rajiv would not have done, namely, exaggerate the power of the Rajya Sabha and diminish the power of the Lok Sabha?

We in India did not invent the idea of Parliament, the British did.  Even the British did not invent the idea of a “Premier Ministre”, the French did that, though the British came to develop its meaning most.  Because these are not our own inventions, when something unusual happens in contemporary India to political entities and offices known as “Parliament”, “Prime Minister” etc, contrast and comparison is inevitable with standards and practices that have prevailed around the world in other parliamentary democracies.

Indeed we in India did not even fully invent the idea of our own Parliament though the national struggle led by the original Indian National Congress caused it to come to be invented.  The Lok Sabha is the outcome of a long and distinguished constitutional and political history from the Morley-Minto reforms a century ago to the Montagu-Chelmsford reforms and Government of India Act of 1919 to the Government of India Act of 1935 and the first general elections of British India in 1937 (when Jawaharlal Nehru briefly became PM for the first time) and in due course the 1946 Constituent Assembly.   Out of all this emerged the 1950 Constitution of India, drafted by that brilliant jurist BR Ambedkar as well as other sober intelligent well-educated and dedicated men and women of his time, and thence arose our first Lok Sabha following the 1951 General Elections.

About the Lok Sabha’s duties, I said in my March 30 2006 article “Logic of Democracy” in The Statesman

“What are Lok Sabha Members and State MLAs legitimately required to be doing in caring for their constituents? First of all, as a body as a whole, they need to elect the Government, i.e. the Executive Branch, and to hold it accountable in Parliament or Assembly. For example, the Comptroller and Auditor General submits his reports directly to the House, and it is the duty of individual legislators to put these to good use in controlling the Government’s waste, fraud or abuse of public resources.   Secondly, MPs and MLAs are obviously supposed to literally represent their individual constituencies in the House, i.e. to bring the Government and the House’s attention to specific problems or contingencies affecting their constituents as a whole, and call for the help, funds and sympathy of the whole community on their behalf.  Thirdly, MPs and MLAs are supposed to respond to pleas and petitions of individual constituents, who may need the influence associated with the dignity of their office to get things rightly done. For example, an impoverished orphan lad once needed surgery to remove a brain tumour; a family helping him was promised the free services of a top brain surgeon if a hospital bed and operating theatre could be arranged. It was only by turning to the local MLA that the family were able to get such arrangements made, and the lad had his tumour taken out at a public hospital. MPs and MLAs are supposed to vote for and create public goods and services, and to use their moral suasion to see that existing public services actually do get to reach the public.”

What about the Rajya Sabha?  I said in the same article:

“Rajya Sabha Members are a different species altogether. Most if not all State Legislative Councils have been abolished, and sadly the present nature of the Rajya Sabha causes similar doubts to arise about its utility. The very idea of a Rajya Sabha was first mooted in embryo form in an 1888 book A History of the Native States of India, Vol I. Gwalior, whose author also advocated popular constitutions for the “Indian India” of the “Native States” since “where there are no popular constitutions, the personal character of the ruler becomes a most important factor in the government… evils are inherent in every government where autocracy is not tempered by a free constitution.”  When Victoria was declared India’s “Empress” in 1877, a “Council of the Empire” was mooted but had remained a non-starter even until the 1887 Jubilee. An “Imperial Council” was now designed of the so-called “Native Princes”, which came to evolve into the “Chamber of Princes” which became the “Council of the States” and the Rajya Sabha.  It was patterned mostly on the British and not the American upper house except in being not liable to dissolution, and compelling periodic retirement of a third of members. The American upper house is an equal if not the senior partner of the lower house. Our Rajya Sabha follows the British upper house in being a chamber which is duty-bound to oversee any exuberance in the Lok Sabha but which must ultimately yield to it if there is any dispute.  Parliament in India’s democracy effectively means the Lok Sabha — where every member has contested and won a direct vote in his/her constituency. The British upper house used to have an aristocratic hereditary component which Tony Blair’s New Labour Government has now removed, so it has now been becoming more like what the Rajya Sabha was supposed to have been like.”

The Canadian upper house is similar to ours in intent: a place for “sober second thought” intended to curb the “democratic excesses” of the lower house.   In the Canadian, British, Australian, Irish and our own cases, the Prime Minister, as the chief executive of the lower house has immense indirect power over the upper house, whether in appointing members or even, in the Australian case, dissolving the entire upper house if he/she wishes.

Now yesterday apparently Shrimati Sonia Gandhi, as the duly elected leader of the largest political party in the 15th Lok Sabha, accompanied by Dr Manmohan Singh, as her party’s choice for the position of Prime Minister, went to see the President of India where the Hon’ble President apparently appointed Dr Singh to be the Prime Minister of India – meaning the Prime Minister of the 15th Lok Sabha, except that Dr Singh is not a member of the Lok Sabha and apparently has had no intent of becoming one.

In 2004 Shrimati Gandhi had declined to accept an invitation to become PM and instead effectively recommended Dr Singh to be PM despite his not being a member of the Lok Sabha nor intending to be so.   This exploited a constitutional loophole to the extent that the drafters of our 1950 Constitution happened not to have explicitly stated that the PM must be from the Lok Sabha.  But the reason the founders of our democratic polity such as BR Ambedkar and Jawaharlal Nehru did not specify that the PM must be from the Lok Sabha was quite simply that it was a matter of complete obviousness to them and to their entire generation that this must be so — it would have been  appalling to them and something beyond their wildest imagination that a later generation, namely our own, would exploit such a loophole and allow a PM to be appointed who is not a member of the Lok Sabha and intends not to be so.

Ambedkar, Nehru and all others of their time knew fully well that the history and intended purpose of the Lok Sabha was completely different from the history and intended purpose of the Rajya Sabha.  They knew too fully well that Lord Curzon had been explicitly denied the leadership of Britain’s Tory Party in 1922 because that would have made him a potential PM  when he was not prepared to be a member of the House of Commons.  That specific precedent culminated a centuries’-old  democratic trend of  political power flowing from monarchs to lords to commoners, and has governed all parliamentary democracies  worldwide ever since — until Dr Singh’s appointment in 2004.

When such an anomalous situation once arose in Britain, Lord Home resigned his membership of the House of Lords to contest a House of Commons seat as Sir Alec Douglas Home so that he could be PM in a manner consistent with parliamentary law.

Dr Singh instead for five years remained PM of India while not being a member of the Lok Sabha.  Even if reasons and exigencies of State could have been cited for such an anomalous situation during his first term, there was really no such reason for him not to contest the 2009 General Election if he wished to be the Congress Party’s prime ministerial candidate a second time.  Numerous Rajya Sabha members alongside him have contested Lok Sabha seats this time, and several have won.

As of today, Dr Singh is due to be sworn in tomorrow as Prime Minister for a second term while still having no declared intention of resigning from the Rajya Sabha and contesting a Lok Sabha seat instead.   What the present-day Congress has done is elect him the leader of the “Congress Parliamentary Party” and claim that it is in such a capacity that he received the invitation to be Prime Minister of India.   But surely if the question had been asked to the Congress Party under Nehru or Indira or Rajiv: “Can you foresee a circumstance ever in which the PM of India is not a member of the Lok Sabha?” their answer in each case would have been a categorical and resounding  “no”.

So the question does arise why the Congress under Sonia Gandhi has with deliberation allowed such an anomalous situation to develop.  Its effect is to completely distort the trends of relative political power between the Lok Sabha and Rajya Sabha.  On the one hand, the Lok Sabha’s power is deliberately made to diminish as the chief executive of the Government of India shall not be from the Lok Sabha but from “the other place” despite the Lok Sabha having greater political legitimacy by having been directly elected by India’s people.   This sets a precedent that  might  get repeated in India  in the future but which contradicts the worldwide trend in parliamentary democracies over decades and centuries in precisely the opposite direction –  of power flowing in the direction of the people not away from them.   On the other hand, the fact this anomalous idea has been pioneered by the elected leader of the largest political party in the Lok Sabha while her PM is in the Rajya Sabha causes a member of the lower house to have unexpected control over the upper house when the latter is supposed to be something of an independent check on the former!

It all really seems an unnecessary muddle and a jumbling up of normal constitutional law and parliamentary procedure.  The Sonia-Manmohan Government at the outset of its second term should hardly want to be seen by history as having set a poor precedent using brute force.  The situation can be corrected with the utmost ease by following the Alec Douglas Home example, with Dr Singh being given a relatively safe seat to contest as soon as possible, if necessary by some newly elected Congress MP resigning and allowing a bye-election to be called.

Subroto Roy

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Letter to the GoI’s seniormost technical economist, May 21

“May 21 2009    It is wonderful to hear from you and I am honoured to find myself, perhaps accidentally, on the same list as so many of your distinguished colleagues among Government economists.

Your essay is most engaging. I am afraid I disagree with your assessment that the current problems “did not originate in the real sector of the economy” but were “triggered by the excesses of the financial system”. I have said to the contrary There is no clear path to solving the great (alleged) economic and financial crisis because no one wants to admit its roots were the overvaluation (over decades) of American real-estate, and hence American assets in general.”

There is no more real sector than real-estate itself and American real-estate has tended to be overvalued as a result of government policy since the Carter Administration; the accumulated dangers along that path came to explode in the sub-prime crisis. Here as elsewhere in economics, the financial tail has not wagged the non-financial dog but vice versa.

I have also said “(i) foreign central banks might have been left holding more bad US debt than might be remembered, and dollar depreciation and an American inflation seem to be inevitable over the next several years; (ii) all those bad mortgages and foreclosures could vanish within a year or two by playing the demographic card and inviting in a few million new immigrants into the United States; restoring a worldwide idea of an American dream fueled by mass immigration may be the surest way for the American economy to restore itself.”

Re the comparison with the Great Depression, I believe

“there are overriding differences. Most important, the American economy and the world economy are both incomparably larger today in the value of their capital stock, and there has also been enormous technological progress over eight decades. Accordingly, it would take a much vaster event than the present turbulence — say, something like an exchange of multiple nuclear warheads with Russia causing Manhattan and the City of London to be destroyed — before there was a return to something comparable to the 1929 Crash and the Great Depression that followed. Besides, the roots of the crises are different. What happened back then? In 1922, the Genoa Currency Conference wanted to correct the main defect of the pre-1914 gold standard, which was freezing the price of gold while failing to stabilise the purchasing power of money. From 1922 until about 1927, Benjamin Strong of the Federal Reserve Bank of New York adopted price-stabilisation as the new American policy-objective. Britain was off the gold standard and the USA remained on it. The USA, as a major creditor nation, saw massive gold inflows which, by traditional gold standard principles, would have caused a massive inflation. Governor Strong invented the process of “sterilisation” of those gold inflows instead and thwarted the rise in domestic dollar prices of goods and services. Strong’s death in 1928 threw the Federal Reserve System into conflict and intellectual confusion. Dollar stabilisation ended as a policy. Surplus bank money was created on the release of gold that had been previously sterilised. The traditional balance between bulls and bears in the stock-market was upset. Normally, every seller of stock is a bear and every buyer a bull. Now, amateur investors appeared as bulls attracted by the sudden stock price rises, while bears, who sold securities, failed to place their money into deposit and were instead lured into lending it as call money to brokerages who then fuelled these speculative bulls. As of October 22, 1929 about $4 billion was the extent of such speculative lending when Chase National Bank’s customers called in their money. Chase National had to follow their instructions, as did other New York banks. New York’s Stock Exchange could hardly respond to a demand for $4 billion at a short notice and collapsed. Within a year, production had fallen by 26 per cent, prices by 14 per cent, personal income by 14 per cent, and the Greatest Depression of recorded history was in progress — involuntary unemployment levels in America reaching 25 per cent. That is not, by any reading, what we have today. Yes, there has been plenty of bad lending, plenty of duping shareholders and workers and plenty of excessive managerial payoffs. It will all take a large toll, and affect markets across the world. But it will be a toll relative to our plush comfortable modern standards, not those of 1929-1933. In fact, modern decision-makers have the obvious advantage that they can look back at history and know what is not to be done. The US and the world economy are resilient enough to ride over even the extra uncertainty arising from the ongoing presidential campaign, and then some.”

These quotes are from recent publications and may be found most easily under “America’s financial crises” at my site http://www.independentindian.com.

What may be of interest to the Government of India’s economists also may be a sample of my recent short articles on India’s monetary and fiscal economics based on my research beginning with my doctoral work under Frank Hahn at Cambridge in the 1970s and followed by my work with James Buchanan and Milton Friedman in America in the 1980s and 1990s and later. One of these is even named “The Rangarajan Effect” which I first defined at a seminar invited by Dr Jadav at the RBI in May 2005!

https://independentindian.com/2008/08/24/rangarajan-effect/

https://independentindian.com/2008/09/28/monetary-integrity-and-the-rupee/

https://independentindian.com/2007/01/20/indias-macroeconomics/

https://independentindian.com/2007/02/04/fiscal-instability/

https://independentindian.com/2008/07/16/india-in-world-trade-payments/

https://independentindian.com/2007/03/05/fallacious-finance-the-congress-bjp-cpi-m-et-al-may-be-leading-india-to-hyperinflation/

https://independentindian.com/2007/02/20/our-policy-process-self-styled-planners-have-controlled-indias-paper-money-for-decades/

https://independentindian.com/2008/07/28/growth-of-real-income-money-prices-in-india-1869-2004/

https://independentindian.com/2008/07/17/growth-government-delusion/

https://independentindian.com/2008/07/09/indian-inflation-upside-down-economics-from-new-delhis-establishment/

https://independentindian.com/2008/02/26/how-to-budget-thrift-not-theft-should-guide-our-public-finances/

https://independentindian.com/2008/02/21/a-note-on-the-indian-policy-process/

With warm regards,

Cordially,

Subroto Roy, PhD (Cantab.), BScEcon(London)

Sometime Adviser to the Late Rajiv Gandhi, 1990-1991