Silver Jubilee of “Pricing, Planning & Politics: A Study of Economic Distortions in India”

May 29 2009:

It is a quarter century precisely today since my monograph Pricing, Planning and Politics: A Study of Economic Distortions in India was first published in London by the Institute of Economic Affairs.

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Its text is now available (in slightly rough form) at this site here.

Now in May 1984, Indira Gandhi ruled in Delhi, and the ghost of Brezhnev was still fresh in Moscow.   The era of Margaret Thatcher in Britain and Ronald Reagan in America was at its height.   Pricing, Planning & Politics emerged from my 1976-1982 doctoral thesis at Cambridge though it came to be written in Blacksburg and Ithaca in 1982-1983.   It was the first critique after BR Shenoy of India’s Sovietesque economics since Jawaharlal Nehru’s time.

The Times, London’s most eminent paper at the time, wrote its lead editorial comment about it on the day it was published, May 29 1984.

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It used to take several days for the library at Virginia Tech in Blacksburg to receive its copy of The Times of London and other British newspapers.    I had not been told of the date of publication and did not know of what had happened in London on May 29 until perhaps June 2 — when a friend, Vasant Dave of a children’s charity, who was on campus, phoned me and congratulated me for being featured in The Times which he had just read in the University Library.  “You mean they’ve reviewed it?”  I asked him, “No, it’s the lead editorial.” “What?” I exclaimed.  There was worse.  Vasant was very soft-spoken and said “Yes, it’s titled ‘India’s Bad Example'” — which I misheard on the phone as “India’s Mad Example”  😀

Drat! I thought (or words to that effect), they must have lambasted me, as I rushed down to the Library to take a look.

The Times had said

“When Mr. Dennis Healey in the Commons recently stated that Hongkong, with one per cent of the population of India has twice India’s trade, he was making an important point about Hongkong but an equally important point about India.   If Hongkong with one per cent of its population and less than 0.03 per cert of India’s land area (without even water as a natural resource) can so outpace India, there must be something terribly wrong with the way Indian governments have managed their affairs, and there is.   A paper by an Indian economist published today (Pricing, Planning and Politics: A Study of Economic Distortions in India by Subroto Roy, IEA £1.80) shows how Asia’s largest democracy is gradually being stifled by the imposition of economic policies whose woeful effect and rhetorical unreality find their echo all over the Third World.   As with many of Britain’s former imperial possessions, the rot set in long before independence.  But as with most of the other former dependencies, the instrument of economic regulation and bureaucratic control set up by the British has been used decisively and expansively to consolidate a statist regime which inhibits free enterprise, minimizes economic success and consolidates the power of government in all spheres of the economy.  We hear little of this side of things when India rattles the borrowing bowl or denigrates her creditors for want of further munificence.  How could Indian officials explain their poor performance relative to Hongkong?  Dr Roy has the answers for them.   He lists the causes as a large and heavily subsidized public sector, labyrinthine control over private enterprise, forcibly depressed agricultural prices, massive import substitution, government monopoly of foreign exchange transactions, artificially overvalued currency and the extensive politicization of the labour market, not to mention the corruption which is an inevitable side effect of an economy which depends on the arbitrament of bureaucrats.  The first Indian government under Nehru took its cue from Nehru’s admiration of the Soviet economy, which led him to believe that the only policy for India was socialism in which there would be “no private property except in a restricted sense and the replacement of the private profit system by a higher ideal of cooperative service.”  Consequently, the Indian government has now either a full monopoly or is one of a few oligipolists in banking, insurance, railways, airlines, cement, steel, chemicals, fertilizers, ship-building, breweries, telephones and wrist-watches.   No businessman can expand his operation while there is any surplus capacity anywhere in that sector.  He needs government approval to modernize, alter his price-structure, or change his labour shift.  It is not surprising that a recent study of those developing countries which account for most manufactured exports from the Third World shows that India’s share fell from 65 percent in 1953 to 10 per cent in 1973; nor, with the numerous restrictions on inter-state movement of grains, that India has over the years suffered more from an inability to cope with famine than during the Raj when famine drill was centrally organized and skillfully executed without restriction. Nehru’s attraction for the Soviet model has been inherited by his daughter, Mrs. Gandhi.  Her policies have clearly positioned India more towards the Soviet Union than the West.  The consequences of this, as Dr Roy states, is that a bias can be seen in “the antipathy and pessimism towards market institutions found among the urban public, and sympathy and optimism to be found for collectivist or statist ones.”  All that India has to show for it is the delivery of thousands of tanks in exchange for bartered goods, and the erection of steel mills and other heavy industry which help to perpetuate the unfortunate obsession with industrial performance at the expense of agricultural growth and the relief of rural poverty.”…..

I felt this may have been intended to be laudatory but it was also inaccurate and had to be corrected.  I replied dated June 4 which The Times published in their edition of  June 16 1984:

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I was 29 when Pricing, Planning and Politics was published, I am 54 now. I do not agree with everything I said in it and find the tone a little puffed up as young men tend to be; it was also five years before my main “theoretical” work Philosophy of Economics would be published. My experience of life in the years since has also made me far less sanguine both about human nature and about America than I was then. But I am glad to find I am not embarrassed by what I said then, indeed I am pleased I said what I did in favour of classical liberalism and against statism and totalitarianism well before it became popular to do so after the Berlin Wall fell. (In India as elsewhere, former communist apparatchiks and fellow-travellers became pseudo-liberals overnight.)

The editorial itself may have been due to a conversation between Peter Bauer and William Rees-Mogg, so I later heard. The work sold 700 copies in its first month, a record for the publisher. The wife of one prominent Indian bureaucrat told me in Delhi in December 1988 it had affected her husband’s thinking drastically. A senior public finance economist told me he had been deputed at the Finance Ministry when the editorial appeared, and the Indian High Commission in London had urgently sent a copy of the editorial to the Ministry where it caused a stir. An IMF official told me years later that he saw the editorial on board a flight to India from the USA on the same day, and stopped in London to make a trip to the LSE’s bookshop to purchase a copy. Professor Jagdish Bhagwati of Columbia University had been a critic of aspects of Indian policy; he received a copy  in draft just before it was published and was kind enough to write I had “done an excellent job of setting out the problems afflicting our economic policies, unfortunately government-made problems!”

Siddhartha Shankar Ray told me when  we first met that he had been in London when the editorial appeared and had seen it there; it affected his decision to introduce me to Rajiv Gandhi as warmly as he came to do a half dozen years later.

Within a few months though, by the Fall of 1984, I was under attack by the “gang of inert game theorists”  who had come to  Blacksburg following the departure of James Buchanan.  By mid 1985 I had moved to Provo, Utah, really rather wishing, as I recall,  to have left my India-work behind me.  But by late 1986, I was at the University of Hawaii, Manoa, where the perestroika-for-India and Pakistan projects that I and WE James led, had come to be sponsored by the University and the East West Center.

The unpublished results of the India-project reached Rajiv Gandhi by my hand on September 18 1990 as has been told elsewhere.  A week later, on September 25 1990,  Rajiv appointed a small group that included myself, to advise him.  It was that encounter with Rajiv Gandhi that sparked the origins of the 1991 economic reform.  Yet in 2007 one member of the group, declaring himself close to Sonia Gandhi, brazenly lied in public saying it was Manmohan Singh and not I who had been part of the group — a group of which I had been in fact the first member!  Manmohan Singh himself has never claimed to have been present and in fact was not even in India at the time it was formed.

I have explained elsewhere here why I believe this specific  lie  came to be told by this specific liar who shared membership with me in the group that Rajiv had formed:  because I had also pleaded with  many and especially within this group that Rajiv had seemed, to my layman’s eyes, very vulnerable to assassination, and none of them had lifted a finger to  do anything about it!  Such is how duplicity, envy and greed for power make people mendacious and venal in politics!

As for Pricing, Planning and Politics, Dr Manmohan Singh received a personal copy from my father whom he had long known through the Kaul brothers, Brahma and Madan, both of whom were dear friends of my father since the War and Independence.   From a letter Dr Singh wrote to my father,  he would have received his copy in late 1986 when he was heading the Planning Commission in his penultimate appointment before retirement from the bureaucracy.

Readers of Pricing, Planning and Politics today, 25 years after it was published, may judge for themselves what if any  part of it may be still relevant to the new government that Dr Singh is now prime minister of.   The work was mostly one of applied microeconomics or the theory of value; in recent years I have written much also of applied macroeconomics or the theory of money as it relates to India.  My great professor at Cambridge, Frank Hahn, was kind enough to say in 1985 that he thought my “critique of Development Economics was powerful not only on methodological but also on economic theory grounds”; that to me has been a special source of delight.

Subroto Roy, Kolkata

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Thoughts on Indian Governance

From Facebook:

Subroto Roy believes the great optimism about the Indian Republic that he had felt as a 7-year old boy upon meeting Jawaharlal Nehru at Colombo Airport on Oct 13 1962 (the first days of the surprise Communist Chinese attack on India), has now dissipated, and apart from Nehru’s immediate successor (Lal Bahadur Shastri) all Indian Prime Ministers since then have been gravely, perhaps catastrophically, disappointing.

Subroto Roy thinks President Obama’s informed lawyerly academic approach to the Afghanistan decision, whether or not it has its intended good consequences, has a positive demonstration effect for other capital cities, e.g. New Delhi, where public policy decisions are too often made to appease special interest groups inside a cloud of meaningless rhetoric.

Subroto Roy says of India and China in summary discussion at Edward Hugh’s Wall: “Well, both have massive and energetic populations, each with relatively little capital per head; raising the capital per head with new production and exchange processes leads to growth. (But the nominal economies are weak, public finances are absymal and paper money is out of control.)”

Subroto Roy recalls again Pericles of Athens: “Here each individual is interested not only in his own affairs but in the affairs of the state as well; even those who are mostly occupied with their own business are extremely well-informed on general politics- this is a peculiarity of ours:we do not say that a man who takes no inter…est in politics is a man who minds his own business;we say that he has no business here at all.”

My Ten Articles on China, Tibet, Xinjiang, Taiwan in relation to India

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I have had a close interest in China ever  since the “Peking Spring” more than thirty years ago (if not from when I gave all my saved pocket money to Nehru in 1962 to fight the Chinese aggression) but I had not published anything relating to China until 2007-2008 when I published the ten articles listed below:

“Understanding China”, The Statesman Oct 22 2007

“India-US interests: Elements of a serious Indian foreign policy”, The Statesman Oct 30 2007

“China’s India Aggression”, The Statesman, Nov 5 2007,

“Surrender or Fight? War is not a cricket match or Bollywood movie. Can India fight China if it must? “ The Statesman, Dec 4 2007

“China’s Commonwealth: Freedom is the Road to Resolving Taiwan, Tibet, Sinkiang” The Statesman, December 17, 2007

“Nixon & Mao vs India: How American foreign policy did a U-turn about Communist China’s India aggression”. The Statesman, January 7 2008.

“Lessons from the 1962 War: there are distinct Tibetan, Chinese and Indian points of view that need to be mutually comprehended,” The Statesman, January 15, 2008

“China’s India Example: Tibet, Xinjiang May Not Be Assimilated Like Inner Mongolia, Manchuria”, The Statesman, March 25, 2008

“China’s force and diplomacy: The need for realism in India”, The Statesman, May 31, 2008

“Transparency and history” (with Claude Arpi), Business Standard, Dec 31 2008

With new tensions on the Tibet-India border apparently being caused by the Chinese military, these may be helpful for India to determine a Plan B, or even a Plan A, in its dealings with Communist China.

See also https://independentindian.com/1990/09/18/my-meeting-jawaharlal-nehru-2/

https://independentindian.com/2009/11/25/on-the-zenith-and-nadir-of-us-india-relations/

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Seventy Years Today Since the British Government Politically Empowered MA Jinnah

Seventy Years Today Since the British Government Politically Empowered MA Jinnah

by

Subroto Roy

The bloated armies of Indian and Pakistani historians and pseudo-historians have failed to recognize the significance of the precise start of the Second World War upon the fortunes of the subcontinent.  Yet, twenty years ago, in the book I and WE James created at an American university, Foundations of Pakistan’s Political Economy: Towards an Agenda for the 1990s, one of our authors, Professor Francis Robinson of the University of London, had set out the principal facts most clearly as to what flowed from the September 4 1939 empowerment of MA Jinnah by the British Government.

Germany invaded Poland on September 1 1939 and Britain declared war on Germany on September 3. The next day, Linlithgow, the British Viceroy in India, started to treat MA Jinnah’s Muslim League on par with the Congress’s nationalist movement led by MK Gandhi. Until September 4 1939, the British “had had little time for Jinnah and his League. The Government’s declaration of war on Germany on 3 September, however, transformed the situation. A large part of the army was Muslim, much of the war effort was likely to rest on the two Muslim majority provinces of Punjab and Bengal. The following day, the Viceroy invited Jinnah for talks on an equal footing with Gandhi” (Robinson, in James & Roy (eds) Foundations of Pakistan’s Political Economy 1989, 1992).

Jinnah himself was amazed by the new British attitude towards him: “suddenly there was a change in the attitude towards me. I was treated on the same basis as Mr Gandhi. I was wonderstruck why all of a sudden I was promoted and given a place side by side with Mr Gandhi.”

Jinnah’s political weakness had been made obvious by the electoral defeats the Muslim League had suffered in the 1937 elections in the very provinces which more or less came to constitute West Pakistan and today constitute modern Pakistan. Britain, at war with Germany and soon Japan, was faced with the intransigence of the Congress leadership.  It was unsurprising this would contribute to the British tilt empowering Congress’s declared adversary, Jinnah and the Muslim League, and hence make credible the possibility of the Pakistan that they had demanded:

“As the Congress began to demand immediate independence, the Viceroy took to reassuring Jinnah that Muslim interests would be safeguarded in any constitutional change. Within a few months, he was urging the League to declare a constructive policy for the future, which was of course presented in the Lahore Resolution. In their August 1940 offer, the British confirmed for the benefit of Muslims that power would not be transferred against the will of any significant element in Indian life. And much the same confirmation was given in the Cripps offer nearly two years later…. Throughout the years 1940 to 1945, the British made no attempt to tease out the contradictions between the League’s two-nation theory, which asserted that Hindus and Muslims came from two different civilisations and therefore were two different nations, and the Lahore Resolution, which demanded that ‘Independent States’ should be constituted from the Muslim majority provinces of the NE and NW, thereby suggesting that Indian Muslims formed not just one nation but two. When in 1944 the governors of Punjab and Bengal urged such a move on the Viceroy, Wavell ignored them, pressing ahead instead with his own plan for an all-India conference at Simla. The result was to confirm, as never before in the eyes of leading Muslims in the majority provinces, the standing of Jinnah and the League. Thus, because the British found it convenient to take the League seriously, everyone had to as well—Congressmen, Unionists, Bengalis, and so on….”(Robinson in James & Roy (eds) Foundations of Pakistan’s Political Economy,  pp. 43-44).

Even British socialists who were sympathetic to Indian aspirations, would grow cold when the Congress seemed to abjectly fail to appreciate Britain’s predicament during war with Germany and Japan (Gandhi, for example, dismissing the 1942 Cripps offer as a “post-dated cheque on a failing bank”).

By the 1946 elections, Muslim mass opinion had changed drastically to seem to be strongly in favour of the creation of a Pakistan. The intervening years were the ones when urban mobs all over India could be found shouting the League’s slogans: “Larke lenge Pakistan; Marke lenge Pakistan, Khun se lenge Pakistan; Dena hoga Pakistan; Leke rahenge Pakistan” (We will spill blood to take Pakistan, you will have to yield a Pakistan.)

Events remote from India’s history and geography, namely, the rise of Hitler and the Second World War, had contributed between 1937 and 1947 to the change of fortunes of the Muslim League and hence of all the people of the subcontinent.

The British had long discovered that the mutual antipathy between Muslims and Hindus could be utilised in fashioning their rule; specifically that the organisation and mobilisation of Muslim communal opinion in the subcontinent was a useful counterweight to any pan-Indian nationalism which might emerge to compete with British authority. As early as 1874, well before Allan Octavian Hume, ICS, had conceived the Indian National Congress, John Strachey, ICS, was to observe “The existence side by side of these (Hindu and Muslim) hostile creeds is one of the strong points in our political position in India. The better classes of Mohammedans are a source of strength to us and not of weakness. They constitute a comparatively small but an energetic minority of the population whose political interests are identical with ours.” By 1906, when a deputation of Muslims headed by the Aga Khan first approached the British pleading for communal representation, Minto the Viceroy replied: “I am as firmly convinced as I believe you to be that any electoral representation in India would be doomed to mischievous failure which aimed at granting a personal enfranchisement, regardless of the beliefs and traditions of the communities composing the population of this Continent.” Minto’s wife wrote in her diary that the effect was “nothing less than the pulling back of sixty two millions of (Muslims) from joining the ranks of the seditious opposition.” (The true significance of MAK Azad may have been that he, precisely at the same time, did indeed feel within himself the nationalist’s desire for freedom strongly enough to want to join the ranks of that seditious opposition.)

If a pattern emerges as to the nature of the behaviour of the British political state with respect to the peoples of this or similar regions, it is precisely the economic one of rewarding those loyal to them who had protected or advanced their interests, and penalising those perceived to be acting against their will. It is wishful to think  of members of the British political state as benevolent paternalists, who met with matching deeds their often philanthropic words about promoting the general welfare of their colonial wards or subordinate allies. The slogan “If you are not with us you are against us” that has come to be used by many from the Shining Path Maoists of Peru to President George W. Bush, had been widely applied already by the British in India, especially in the form “If you dare not to be with us, we will be certainly with your adversaries”. It came to be used with greatest impact on the subcontinent’s fortunes in 1939 when Britain found itself reluctantly at war with Hitler’s Germany.

British loyalties lay with those who had been loyal to them.

Hence in the “Indian India” of the puppet princes, Hari Singh and other “Native Princes” who had sent troops to fight as part of the British armies would be treated with a pusillanimity and grandeur so as to flatter their vanities, Sheikh Abdullah’s rebellion representing the Muslim masses of the Kashmir Valley would be ignored. And in British India, Jinnah the conservative Anglophile and his elitist Muslim League would be backed, while the radicalised masses of the Gandhi-Bose-Nehru Congress would have to be suppressed as a nuisance.

(Similarly, much later, Pakistan’s bemedalled army generals would be backed by the United States against Mujibur Rehman’s impoverished student-rebels, and India’s support frowned upon regardless of how just the Bangladeshi cause.)

Altruism is a limited quality in all human affairs, never more scarce than in relations between nations. In “Pakistan’s Allies”, I showed how the strategic interests of Britain, and later Britain’s American ally, came to evolve in the Northwest of the subcontinent ever since the 1846 Treaty of Amritsar as long as a Russian and later a Soviet empire had existed. A similar evolution of British domestic interests in India is distinctly observable in British support for the Pakistan Movement itself, leading on August 14 1947 to the creation of the new Dominion of Pakistan.

Sheikh Abdullah’s democratic urges or  Nehru’s Indian nationalism or the general welfare of the subcontinent’s people had no appeal as such to the small and brittle administrative machinery in charge of Britain’s Indian Empire — even though individual Britons had come to love, understand and explain India for the permanent benefit of her people. This may help to explain how Britain’s own long democratic traditions at home could often be found so wonderful by Indians yet the actions of the British state abroad so incongruent with them.

 

Finally, a dozen years late, the Sonia-Manmohan Congress takes a small Rajivist step: Yes Prime Minister, our Judiciary is indeed a premier public good (or example of “infrastructure” to use that dreadful bureaucratic term)

I was very harsh and did not beat about the bush in my Sep 23-24 2007 article  in The Statesman “Against Quackery” when I said in its subtitle

“Manmohan and Sonia have violated Rajiv Gandhi’s intended reforms”.

I said inter alia

“WASTE, fraud and abuse are inevitable in the use and allocation of public property and resources in India as elsewhere, but Government is supposed to fight and resist such tendencies. The Sonia-Manmohan Government have done the opposite, aiding and abetting a wasteful anti-economics ~ i.e., an economic quackery. Vajpayee-Advani and other Governments, including Narasimha-Manmohan in 1991-1996, were just as complicit in the perverse policy-making. So have been State Governments of all regional parties like the CPI-M in West Bengal, DMK/ AIADMK in Tamil Nadu, Congress/NCP/ BJP/Sena in Maharashtra, TDP /Congress in Andhra Pradesh, SP/BJP/BSP in Uttar Pradesh etc. Our dismal politics merely has the pot calling the kettle black while national self-delusion and superstition reign in the absence of reason. The general pattern is one of well-informed, moneyed, mostly city-based special interest groups (especially including organised capital and organised labour) dominating government agendas at the cost of ill-informed, diffused anonymous individual citizens ~ peasants, small businessmen, non-unionized workers, old people, housewives, medical students etc….Rajiv Gandhi had a sense of noblesse oblige out of remembrance of his father and maternal grandfather. After his assassination, the comprador business press credited Narasimha Rao and Manmohan Singh with having originated the 1991 economic reform. In May 2002, however, the Congress Party itself passed a resolution proposed by Digvijay Singh explicitly stating Rajiv and not either of them was to be so credited. The resolution was intended to flatter Sonia Gandhi but there was truth in it too. Rajiv, a pilot who knew no political economy, was a quick learner with intelligence to know a good idea when he saw one and enough grace to acknowledge it. …Rajiv was entirely convinced when the suggestion was made to him in September 1990 that an enormous infusion of public resources was needed into the judicial system for promotion and improvement of the Rule of Law in the country, a pre-requisite almost for a new market orientation. Capitalism without the Rule of Law can quickly degenerate into an illiberal hell of cronyism and anarchy which is what has tended to happen since 1991. The resources put since Independence to the proper working of our judiciary from the Supreme Court and High Courts downwards have been abysmal, while the state of prisons, borstals, mental asylums and other institutions of involuntary detention is nothing short of pathetic. Only police forces, like the military, paramilitary and bureaucracies, have bloated in size….Neither Sonia-Manmohan nor the BJP or Communists have thought promotion of the Rule of Law in India to be worth much serious thought ~ certainly less important than attending bogus international conclaves and summits to sign expensive deals for arms, aircraft, reactors etc. Yet Rajiv Gandhi, at a 10 Janpath meeting on 23 March 1991 when he received the liberalisation proposals he had authorized, explicitly avowed the importance of greater resources towards the Judiciary. Dr Singh and his acolytes were not in that loop, indeed they precisely represented the bureaucratic ancien regime intended to be changed, and hence have seemed quite uncomprehending of the roots of the intended reforms ever since 1991.”

Days after the article appeared there were press reports Dr Singh was murmuring about quitting, and then came a fierce speech in Hindi from the Congress President saying “enemies” would receive their dues or whatever – only to be retracted a few days later saying that no more had been meant than a local critique of the BJP in Haryana politics!  (Phew! I said to myself in relief…)

Today I am very happy to learn that Dr Manmohan Singh spoke on Sunday of the importance of the Rule of Law and an effective and efficient judiciary. The new Law Minister in the second Sonia-Manmohan Government has been eagerly saying the same.

All this is constructive and positive, late as it is since Sonia Gandhi and Manmohan Singh both became heavy-duty Congress Party politicians for the first time a dozen years ago.

I was privileged to advise a previous Congress President in his last months from September 1990 as has been told elsewhere. And six years before that I had  said:

“….….The most serious examples of the malfunctioning of civil government in India are probably the failure to take feasible public precautions against the monsoons and the disarray of the judicial system. …The Statesman lamented in July 1980:`The simplest matter takes an inordinate amount of time, remedies seldom being available to those without means or influence. Of the more than 16,000 cases pending in the Supreme Court, about 5,000 were introduced more than five years ago; while nearly 16,000 of the backlog of more than 600,000 cases in our high courts have been hanging fire for over a decade. Allahabad is the worst offender but there are about 75,000 uncleared cases in the Calcutta High Court in addition to well over a million in West Bengal’s lower courts.” Such a state of affairs has been caused not only by lazy and corrupt policemen, court clerks and lawyers, but also by the paucity of judges and magistrates. . . . a vast volume of laws provokes endless litigation as much because of poor drafting which leads to disputes over interpretation as because they appear to violate particular rights and privileges…. When governments determinedly do what they need not or should not do, it may be expected that they will fail to do what civil government positively should be doing.” A few months ago was the 25th anniversary of this statement… ! 🙂

Yes Prime Minister, having an effective and efficient judiciary is indeed a premier public good and one that has failed to be provided to India’s people from Nehru’s time and through Indira’s. I managed to persuade Rajiv about it completely. Might I next be so bold as to draw attention as well to the paragraphs of the 2007 article that followed?

“Similarly, Rajiv comprehended when it was said to him that the primary fiscal problem faced by India is the vast and uncontrolled public debt, interest payments on which suck dry all public budgets leaving no room for provision of public goods.  Government accounts: Government has been routinely “rolling over” its domestic debt in the asset-portfolios of the nationalised banks while displaying and highlighting only its new additional borrowing in a year as the “Fiscal Deficit”. More than two dozen States have been doing the same and their liabilities ultimately accrue to the Union too. The stock of public debt in India is Rs 30 trillion (Rs 30 lakh crore) at least, and portends a hyperinflation in the future. There has been no serious recognition of this since it is political and bureaucratic actions that have been causing the problem. Proper recognition would entail systematically cleaning up the budgets and accounts of every single governmental entity in the country: the Union, every State, every district and municipality, every publicly funded entity or organisation, and at the same time improving public decision-making capacity so that once budgets and accounts recover from grave sickness over decades, functioning institutions exist for their proper future management. All this would also stop corruption in its tracks, and release resources for valuable public goods and services like the Judiciary, School Education and Basic Health. Institutions for improved political and administrative decision-making are needed throughout the country if public preferences with respect to raising and allocating common resources are to be elicited and then translated into actual delivery of public goods and services. Our dysfunctional legislatures will have to do at least a little of what they are supposed to. When public budgets and accounts are healthy and we have functioning public goods and services, macroeconomic conditions would have been created for the paper-rupee to once more become a money as good as gold ~ a convertible world currency for all of India’s people, not merely the metropolitan special interest groups that have been controlling our governments and their agendas.”

Subroto Roy

Kolkata


Eleven days and counting after the 15th Lok Sabha was elected and still no Parliament of India! (But we do have 79 Ministers — might that be a world record?)

A lawyer friend tells me she thinks it a “technicality” that there is no Lok Sabha or Parliament in India today despite eleven long days and nights having passed since the 15th Lok Sabha came to be elected by the people of India.  “At least we did not get Advani and Modi to rule”, is how she sought to justify the current circumstance.   I am afraid I think she has produced a non sequitur, and also forgotten the constitutional law she would have read as a student.

The best argument that I think the Government of India shall be able to give justifying their legal error in not having the 15th Lok Sabha up and running yet 11 days after India’s people have spoken would run something like this:

(1) The President of India invites a Council of Ministers led by a PM to form the government and has done so.

(2) The President must be satisfied that the PM commands a majority in the Lok Sabha, and the President has been satisfied by the 322  “letters of support” that the PM produced.

(3) The Government of the day calls parliamentary sessions and does so at its discretion, and the Government of the day headed by this PM has announced when it shall call the 15th Lok Sabha which will be in a few days yet.

Any such argument, I am afraid, would be specious because it simply puts the cart before the horse.

Parliament is sovereign in India, to repeat what I have said several times before.

Parliament is sovereign in India — not even the President who is the symbol of that sovereignty.  We do not follow the British quite exactly in this because we are a republic and not a monarchy.  In Britain sovereignty rests with “The King in Parliament”.  With us, Parliament is sovereign and the President is the symbol of that sovereignty.  In all matters of state, our President must act in a manner that Parliament and parliamentary law says.

Parliament is sovereign in India — not the Executive Government, certainly not its largest political party or its leader.

Parliament is sovereign in India because the people of India have chosen it to be so within the Constitution of India.

Parliament is sovereign in India and the people of India have elected the 15th Lok Sabha which has still not been allowed to meet eleven days later.

To the contrary, as noted days ago, the purported “Cabinet” of the 14th Lok Sabha, a dead institution, met on May 18 2009, some 48 hours after the 15th Lok Sabha had already been declared!   The 14th Lok Sabha in fact stood automatically dissolved in law when General Elections came to be announced.

Is all this merely a “technicality” as my friend believes?  I think not.

Executive Government in India derives its political legitimacy from being elected  by Parliament,  i.e., from holding the confidence of Parliament, and that means the Lok Sabha.

The Government of the day might  for sake of convenience have a prerogative of calling sessions of the 15th Lok Sabha once it has been constituted but the Government of the day cannot logically constitute a Lok Sabha after a General Election because it itself receives legitimacy from such a Lok Sabha.

If the 15th Lok Sabha has not met, confidence in any Executive has yet to be recorded, and hence any such Government has yet to receive legitimacy.

Do “322 letters of support” suffice?  Hardly.  They are signed after all by persons who have yet to take their seats in the Lok Sabha!  (Let us leave aside the fact that the PM, not being a member of the Lok Sabha, is in this case unable to be one of those 322 himself!)

Yet we have 79 “Ministers” of this new “Government” holding press-conferences and giving out free-bees and favours etc already.  As I have said before, Ambedkar, Nehru and others of their generation, plus Indira and Rajiv too, would all have been appalled.

Because the incompetence of the fascists and communists in the Opposition may continue to  be expected, it will be up to ordinary citizens and voters of India to point out such  simple truths whenever the Emperor is found to be naked.  (Our docile juvenile ingratiating media may well remain mostly hopeless.)

Subroto Roy

Why does India not have a Parliament ten days after the 15th Lok Sabha was elected? Nehru and Rajiv would both have been appalled

There are at least three Supreme Court lawyers, all highly voluble, among the higher echelons of Congress Party politicians; it is surprising that not one of them has been able to get the top Party leadership of Sonia Gandhi and Manmohan Singh to see the apparent breach of normal constitutional law in Parliament not having met more than 10 days after it was elected.

A Government has been formed, Ministers have entered their offices and have been holding press-conferences and taking executive decisions,  wannabe-Ministers continue to be wrangling night-and-day for the plums of office — BUT THERE IS NO PARLIAMENT!

Today is the death-anniversary of Jawaharlal Nehru and last week was the death anniversary of  Rajiv Gandhi.

Nehru, whatever his faults and infirmities, was an outstanding parliamentarian and a believer in the Westminster model in particular.  He was intimately familiar with its  unpoken customs and unwritten laws.   He would have been completely appalled by the situation today where luminaries of the party that goes by the  same name as the one he had led are paying obeisance to his memory 45 years after his death but have failed to see the absurdity in having a Government in office with no new Parliament ten days after a month-long General Election was over!  (Incidentally, had he not left explicit instructions against any hero-worship  taking place of himself too?)

Rajiv knew his grandfather and had acquired a sense of noblesse oblige from him.  He too would have been appalled that the procedural business of government  had been simply  procrastinated over like this.

It surprises me that Dr Manmohan Singh, having been a post-graduate of Cambridge, having earned a doctorate from Oxford, and more recently having been awarded honorary doctorates from both Ancient Universities, should seem so unaware of the elements of the Westminster model of  constitutional jurisprudence which guides our polity too.

It is too late now and the mistakes have been made.   I hope his  new Government will  come to realise at some point and then keep in mind that our Executive receives political legitimacy from Parliament, not vice versa.   An Executive can hardly be legitimately in office until the  Parliament that is supposed to elect it has been sworn in.

As for our putative Opposition in the Parliament-yet-to-meet, it seems to have drawn a blank too, and eo ipso revealed its own constitutional backwardness and lethargy.

Subroto Roy