S N Roy hears from Lytton: A 1922 case of British imperial racism in Indian governance (with lessons for today) [Draft text 12 August 2018]

Surendranath Roy (1860-1929) helped pioneer Indian constitutionalism under several British governments: Carmichael, Ronaldshay, Lytton, the Simon Commission too.

Victor Bulwer Lytton (1876-1947) arrived as Governor in February 1922

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then in May wrote to SN Roy from Darjeeling.

Lytton’s letter below dated 1 May 1922  denied SN Roy appointment as President of the Bengal Legislative Council; Lytton imported HEA (Evan) Cotton (1868-1939) from England instead.

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The purported reason Lytton gave was specious.

SN Roy had vastly more experience of Indian constitutionalism than Cotton. He had been the pioneering first President of  an inchoate Bengal Legislative Council after the first 1912 elections, supported by the eminent British civil servant  Sir Henry Cotton (1845-1915), who was Evan Cotton’s father!

The elder Cotton is seated to S N Roy’s left in this 1913 photograph of the newly elected members.
https://independentindian.com/2008/10/12/origins-of-indias-constitutional-politics-bengal-1913/

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The younger Cotton, like S N Roy, had practised for some years as a lawyer in the Calcutta High Court, but then  became a journalist and returned to England. There he apparently had a very minor political career, losing as a Liberal to Bonar Law in the 1910 General Election, being elected a London City Councillor as a Progressive until 1918, obtaining a parliamentary seat as a Liberal momentarily in a bye-election, then losing it again in a General Election.

During the same time, S N Roy had become the most influential officially recognised Indian statesman in Bengal, receiving as Deputy President the visit at home in 1916 of Carmichael, first Governor of Bengal after the 1912 reunification of Bengal,

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https://independentindian.com/2009/03/01/carmichael-visits-surendranath-1916/

and later officiating for years as President of the Council under the next Governor, Ronaldshay (later a Secretary of State for India as the Marquess of Zetland).

https://independentindian.com/2009/02/28/bengal-legislative-council-1921/

 

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SN Roy was what future historians would call a “Moderate” not a “Radical”: he pioneered primary education for the masses, became a legislative expert on local and general public finance as well as the federal politics of his time, authored books on the “Princely” States of Gwalior and Kashmir, and proposed the origins of what later became the Council of Princes and then the Council of States and then the Rajya Sabha.  As early as 1888 in his book on Gwalior, SN Roy recommended popular Constitutions for India’s States on the grounds “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.”**

He protested the Salt Tax as early as 1918 in a speech to the Bengal Legislative Council; a decade later his idea may have been taken by his colleague KS Ray of Orissa to MK Gandhi in Gujarat.

In March 1919 Indian politics had been extremely tense over the draconian “anti-terrorist” law known as the Rowlatt Act.  On 23 March, MK Gandhi called for the general strike or hartal on 6 April that later came to be known as the Rowlatt Satyagraha (and was soon to be followed by the Jallianwalla Bagh massacre in Amritsar on 13 April).  On 28 March, MA Jinnah resigned his membership of the Viceroy’s Imperial Council in protest  that  the Rowlatt Act had not been amended as demanded by the Indian members of the Council.   In midst of such tumultuous events, SN Roy on 27 March 1919 quietly managed to get his  “Bengal Primary Education Bill” passed in the Bengal Legislative Council.

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Evan Cotton like his father was a great friend of India — had Lytton not been prejudiced in his favour and against SN Roy as President, Cotton, the younger man by eight years and the less experienced of both constitutional politics and Bengal, may well have been happy to return from England to become SN Roy’s Deputy President.  But that was not something Lytton’s racial consciousness could imagine: an Indian as Legislative Council President with a British Deputy President! There are analogies that may be easily found today in more recent cases of foreign rule.

Bengal politics and Indian politics from 1922 were marked by the rise of the Swaraj party of CR Das.

CR Das  adopted obstructionism as a technique, much to Lytton’s displeasure, against the Montagu-Chelmsford reforms. SN Roy by contrast had in 1919 introduced with approbation in the Bengal Legislative Council the Montagu-Chelmsford reforms.

Cotton’s legislative tenure as President came to be rendered ineffective and dysfunctional by the Swarajists, as Lytton himself reported in *Pundits and Elephants* published in 1942, years after both SN Roy and Evan Cotton had died.

SN Roy had been a close political friend of CR Das, and may well have been able to find middle ground and guide Indian constitutionalism better after the Montagu-Chelmsford reforms in that tumultuous period.

The British aristocracy, like any other, was generally pompous but and incompetent.  Lytton’s pompous incompetence as a governor in India was soon matched or surpassed by Linlithgow and of course Mountbatten.

 

 

Draft text 12 August 2018

 

** In a lecture to the Conference of State Finance Secretaries, Reserve Bank of India,  Mumbai, 29 April 2000, I quoted SN Roy on the need for State Constitutions “We could ask if a better institutional arrangement may occur by each State of India electing its own Constitutional Convention subject naturally to the supervision of the National Parliament and the obvious provision that all State Constitutions be inferior in authority to the Constitution of the Union of India. These documents would then furnish the major sets of rules to govern intra-State political and fiscal decision-making more efficiently. An additional modern reason can be given… namely, that fiscal constitutionalism, and perhaps only fiscal constitutionalism, allows over-riding to take place of the interests of competing power-groups…” https://independentindian.com/2000/04/29/towards-a-highly-transparent-fiscal-monetary-framework-for-indias-union-state-governments/

 

 

 

 

 

 

“I’m on my way out”: Siddhartha Shankar Ray (1920-2010)

I  am grieved to hear of the death of Siddhartha Shankar Ray last night.

I was introduced to him by an uncle who had been his college-buddy, and he took up a grave personal matter of mine in the Supreme Court of India in 1990 with great kindness, charging me not a penny, being impressed by a little explicit “civil disobedience” I had had to show at the time towards Judge Evelyn Lance.

He also told me he and his wife had been in London on May 29 1984 and had seen *The Times*’s leader that day about my critique of Indian economic policy. He invited me to his Delhi home where I told him about the perestroika-for-India project I had led at the University of Hawaii since 1986, at which he, of his own accord, declared

“You must meet Rajiv Gandhi.  I will arrange a meeting”.

That led to my meeting with Rajiv Gandhi, then Congress President & Leader of the Opposition, on September 18 1990, which contributed to the origins of India’s 1991 economic reform as has been told elsewhere. https://independentindian.com/thoughts-words-deeds-my-work-1973-2010/rajiv-gandhi-and-the-origins-of-indias-1991-economic-reform/

Rajiv’s assistant George told me Rajiv had said he had not heard more fulsome praise.

In Bengal, he took me as a guest to visit the Legislative Assembly in session when he was Leader of the Opposition; it was the legislature of which my great grandfather, Surendranath Roy, had been a founder, being the first Deputy President and acting President too; Surendranath had been friends with his maternal grandfather, CR Das, leader of the Congress Party before MK Gandhi, and he said to me in the car heading to the legislature about that relationship in Bengal’s politics some seven decades earlier “They were friends”.

He introduced me to all the main leaders of the Bengal Congress at the time (except Mamata Banerjee who could not come) and I was tasked by him to write the manifesto for the State elections that year, which I did (in English, translated into Bangla by Professor Manjula Bose); the Communists won handily again but one of their leaders (Sailen Dasgupta) declared there had never been a State Congress manifesto of the sort before, being as it was an Orwell-like critique of Bengal’s Stalinism.

In a later conversation, I said to him I wished he be appointed envoy to Britain, he instead came to be appointed envoy to the USA.

In Washington in September 1993, he said “You must meet Manmohan Singh”, and invited me to a luncheon at the Ambassador’s Residence where, to Manmohan Singh and all his aides, he declared pointing at me

“The Congress manifesto (of 1991) was written on his (laptop) computer”.

In later years I kept him informed of developments and gave him my publications.   We last met in July last year where I gave him a copy, much to his delight, of *Margaret Thatcher’s Revolution: How it Happened and What it Meant*.

I said to him Bengal’s public finances were in abysmal condition, calling for emergency measures financially, and that Mamata Banerjee seemed to me to be someone who knew how to and would dislodge the Communists from their entrenched misgovernance of decades but not quite aware that dislodging a bad government politically was not the same thing as knowing how to govern properly oneself.

He,  again of his own accord, said immediately,

“I will call her and her main people to a meeting here so you can meet them and tell them that directly”.

It never transpired.

He and I were supposed to meet a few months ago but could not due to his poor health; on the phone in our last conversation I mentioned to him my plans of creating a Public Policy Institute — an idea he immediately and fully endorsed as being essential though adding

“I can’t be part of it,  I’m on my way out”.

“I’m on my way out”.   🙂

That was Siddhartha Shankar Ray — always intelligent, always good-humoured, always public-spirited, always a great Indian.

I shall miss a good friend, indeed my only friend among politicians other than the late Rajiv Gandhi himself.

 

Two scientific Boses who should have but never won Nobels

Einstein’s young collaborator Satyendra Nath Bose (1894-1974) should have been a winner, and has the Boson particle and Bose-Einstein statistics named after him.

Much before him, Sir Jagadish Chandra Bose (1858-1937) deserved to win in two fields: physics and medicine. Marconi and Braun shared the 1909 Physics Prize “for development of wireless telegraphy” – but this was an achievement in which Bose shared more than equally though he was deprived of due honour and recognition, his work coming to light only in the last decade. In Physiology/Medicine, Bose’s work was so far ahead of his time it seemed controversial to lesser men. He introduced new delicate instruments, one of which, the crescograph magnified small movements in plant growth 10 million times. Among his numerous other contributions were demonstration of a parallelism between plant and animal tissues. I should declare an interest as JC Bose was a friend of my great grandfather’s, and his visits to our home are still remembered by my father, now in his 90s. I said in 2007 about him “had Bose been less of a great scientific soul and even slightly more of a businessman than he was by temperament and character, he should have been a winner too”.

Carmichael visits Surendranath, 1916

The first Governor of Bengal after the 1912 reunification of Bengal and East Bengal was the Scottish Liberal politician Thomas-Gibson Carmichael, the first (and apparently last) Baron Carmichael. This is a photograph of a 1916 visit he paid to Surendranath Roy’s home at Behala,  Surendranath then being the Deputy President of the Bengal Legislative Council and  probably the most influential officially recognised political statesman in Bengal at the time.

Surendranath’s younger son, Manindranath, is the bespecaled and moustachioed young man in the middle holding the child. If the child is a two or three year old, it would be my father’s elder brother; if the date of the photograph is late in 1916 and the child is a one year old, it would be my father.

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Bengal Legislative Council 1921

This is a 1921 photograph of the Bengal Legislative Council with the Governor of Bengal, the Earl of Ronaldshay (later Secretary of State for India and  known as the Marquess of Zetland) at the centre. To his immediate right is Surendranath Roy, then President of the Council. Seated second to the left of the Governor is Surendranath Banerjee, the eminent leader of the Indian National Congress (and mentor of GK Gokhale and other “moderates” in the national movement); he and Surendranath Roy were friends and political colleagues.

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Jaladhar Sen writes to Manindranath at Surendranath’s death, c. Nov-Dec 1929

In the days before radio, Bengali society had literature and the arts to keep itself company (besides politics). Writing and reading poetry was a common hobby.  Three principal literary journals were Bharatvarsha, Probasi and Bichitra. The long-standing editor of Bharatvarsha was Jaladhar Sen, and it was he who had introduced Sarat Chandra Chattopadhyaya to Manindranath when Sarat had returned (in impecunious circumstances) to Bengal from Burma, probably with a request that Sarat be supported and sponsored.

This was a letter received by Manindranath from Jaladhar Sen expressing condolences at the passing of his father, Surendranath, who died on November 11, 1929. (Surendranath likely died from his injury sustained along with Ardeshir Dalal from Bhagat Singh’s bomb on 8 April 1929.  https://independentindian.com/2008/06/17/surendranath-roy-1860-1929/)

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“Brother Manindra,
I have just returned to Kolkata and cannot express how heart-rending is the news of your father’s demise. You know what a genuine well-wisher he had been for me. God alone knows how shocked I am to lose such a friend who stood by me though thick and thin. May you be strong at such an hour and may the departed noble soul be blessed.  An article by the late Surendranath had been printed already in ‘Bharatvarsha’ before he passed away. But that edition has not been published yet. It is going to be published next month. So please send me a photograph of him before that. I shall be visiting you soon.   Your well-wisher,  Jaladhar Sen.”  (Translation by KM.)

Pre-Partition Indian Secularism Case-Study: Fuzlul Huq and Manindranath Roy

The 1940 Lahore Resolution of the Muslim League did not mention the word “Pakistan” but is considered its political blueprint.  MA Jinnah’s political support lay among  the Muslim elite in Muslim-minority areas of India — he needed a show of support from the Muslim-majority provinces of Punjab and Bengal too, and indeed Sikandar Hyat Khan and AK Fuzlul Huq  came to draft and present the Lahore Resolution.

Fuzlul Huq was Prime Minister of undivided Bengal from 1937-1943.  On 11 May 1942, he led the bridegroom’s procession when my father went to wed my mother.  Here is Fuzlul Huq entering the car to do so, with my grandfather Manindranath Roy helping him into the car.  My mother’s family were surprised; they were Bengali Brahmins from Jamshedpur and did not quite know what to make of all this.  My mother, aged 16  at the time,  remembers she was non-plussed to find Fuzlul Huq ‘s bulky frame  seated for some reason between her and her new husband in the car on the return journey too!

Fuzlul Huq, having been a young colleague of Surendranath Roy in the Bengal Legislative Council, was a family friend and treated my grandfather, Manindranath Roy, with affection.  (Manindranath was a Justice of the Peace, but unlike his father was not political.)

Fuzlul Huq would apparently make requests of my grandmother for delivered meals during political confabulations; my grandfather’s family had been forced to leave Behala as the family home had been requisitioned by the military to be a hospital during the war, and they lived instead  in Ballygunge.  My father recalls cycling from there with the requested food to the political confabulations in the middle of the wartime blackout (Japanese aeroplanes had apparently reached Calcutta on their bombing missions).

Here too is a note dated 9 August 1945 from Fuzlul Huq to my grandfather thanking him for food and sending his “best blessings” to my grandmother — a Muslim, one of the founders of Pakistan, sends  his blessings to an orthodox Hindu Brahmin family and everyone remains completely cheerful and apolitical: such was normal Indian secularism in practice at the time.   Partition between India and Pakistan and the ghastliness that accompanied it, and the hatred and bloodshed that has followed, were all quite beyond anyone’s imagination at the time.

see also https://independentindian.com/life-of-mk-roy-19152012-indian-aristocrat-diplomat-birth-centenary-concludes-7-nov-2016/

Origins of India’s Constitutional Politics: Bengal 1913

This is a 1913 photograph of the Indian members of the  first Bengal Legislative Council elected (in 1912)  after the 1909 Morley-Minto reforms; the members apparently were being greeted by gentlemen of the sub-urban areas south of Calcutta.  The Englishman sitting at the centre  seems to be Sir Henry Cotton (1845-1915), the 1904 President of the Indian National Congress and a  great political friend of India.   To his right sits Surendranath Roy, who may have been the Council’s first President.

 

Academic studies include notably those by JH Broomfield, “The Vote and the Transfer of Power: A Study of the Bengal Election 1912-1913” Journal of Asian Studies, Feb 1962, his book Elite Conflict in a   Plural Society: 20th Century Bengal (Berkeley 1968); and Rajat Kanta Ray, Social Conflict and Political Unrest in Bengal 1875-1927 (Oxford 1984).  Professor Ray writes about the 1912 election: “Only  a few candidates of the “Popular Party” — Surendranath Banerjea, Abul Kasim, Byomkesh Chakravarti and Surendranath Ray — scraped through…. (A) sympathetic moderate wrote in 1919: ‘The Popular Party is a bundle of disjoined units which cannot resist the slightest pressure from without.’  This charge was eventually disproved by the stand taken by (the Popular Party) in the Bengal Legislative Council.  It showed no sign of wilting under the pressure exerted by the European group…”

 

Other studies of the period include John R McLane, Indian Nationalism and the Early Congress (Princeton 1977), Anil Seal, The Emergence of Indian Nationalism (Cambridge 1971),  Gordon Johnson, Provincial Politics and Indian Nationalism (Cambridge 1973) etc.

By way of incidental reference, the young Jawaharlal Nehru had returned from his studies in England in 1912; MK Gandhi was still in South Africa and would not be returning until 1915.  The Tilak-Gokhale clash though had been in full swing since 1907.

 

 

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Nota Bene: The text and photograph in this post may be considered in the public domain and may be freely used for purposes of a Wikipedia article or any other publication in the common interest.

MK Gandhi, SN Roy, MA Jinnah in March 1919: Primary education legislation in a time of protest

In March 1919, Indian politics were extremely tense over the draconian “anti-terrorist” law known as the Rowlatt Act.  On March 23, MK Gandhi called for the general strike or hartal on April 6 that came to be known as the Rowlatt Satyagraha (and was soon to be followed by the Jallianwalla Bagh massacre in Amritsar on April 13).  On March 28, MA Jinnah resigned his membership of the Viceroy’s Imperial Council  in protest  that  the Rowlatt Act had not been amended as demanded by the Indian members of the Council.   In midst of such tumultuous events, my great grandfather Surendranath Roy, on March 27 1919, seems to have quietly managed to get his  “Bengal Primary Education Bill” passed in the Bengal Legislative Council.

From India in 1918: A Chronological Record of the Phases of Developments in Indian Polity During 1918, HN Mitra (ed),  Annual Register Office, Sibpur, 1921.

Sarat Chandra visits Surendranath Roy 1927

Sarat Chandra Chattopadhyaya (1876-1938) was one of India’s greatest literary geniuses and a marvellous novelist. This is a 1927 photograph of his visit to my great grandfather Surendranath Roy. There will be more about him here in due course.

Oddly enough, the sofa on which they sit has survived and is one of a set of four (much re-upholseterd) that we use daily today more than 80 years later!

https://independentindian.com/2008/10/12/sarat-writes-to-manindranath-1931/

The Roys of Behala 1928

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This is a 1928 photo of the male members of the Roy Family of Behala, south of Calcutta, along with the children. Adult women would have been behind an effective “purdah”. The bearded patriarch in the middle is my great grandfather, the Hon’ble Surendranath Roy (1860-1929), an eminent statesman of Bengal of his time  https://independentindian.com/2008/06/17/surendranath-roy-1860-1929/ (We did not know until recently he was present and badly injured, along with Ardeshir Dalal, by Bhagat Singh’s bomb thrown in the Central Legislative Assembly on 8 April 1929 during the Simon Commission deliberations. He died seven months later.)

Surendranath was the eldest son of Rai Bahadur Umbik Churn Rai (1827-1902). The Golden Book of India published at the time of the Victoria Jubilee said Umbik was the twelfth descendant of one Raja Gajendra Narayan Rai, Rai-Raian, a finance official under the Great Mughal Jahangir.

Surendranath’s second son, my grandfather, Manindranath Roy, is seated second from the right in the second row with spectacles and moustache.

The bright lad fourth from the left in the last row, with his hand on his knee, would grow up to be my father.

 

 

Surendranath Roy (1860-1929)


Surendranath Roy was my paternal great grandfather. He was an eminent statesman of his time, sometime President of the Bengal Legislative Council, and close political friend of CR Das who led the Indian National Congress before MK Gandhi.  SN Roy helped pioneer Indian constitutionalism under several British governments: Carmichael, Ronaldshay, Lytton, the Simon Commission too.

Lytton’s letter dated 1 May 1922  denied SN Roy appointment as President of the Bengal Legislative Council; instead, Lytton imported HEA (Evan) Cotton (1868-1939) from England in a classic case of British imperial racism in Indian governance.

SN Roy was a pioneer of primary education, and a legislative expert on local and general public finance as well as the federal politics of his time, authoring books on the “Princely” States of Gwalior and Kashmir, and proposing the origins of what became the Rajya Sabha. He also protested the Salt Tax as early as 1918. SN Roy Road in Kolkata is named after him.  The first photograph is of him as a newly graduated advocate-at-law, the second may have been after his book on Gwalior was published in 1888.   He also gave the Tagore Law Lectures in 1905, on the subject of customary law; these are available at India’s National Library.  His friends included the academician Ashutosh Mukherjee and the scientist Jagdish Chandra Bose. His role in the development of the legislative process in Bengal after the Morley-Minto reforms will be described further here in due course, as will be his role as a pioneer of primary education.

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Postscript: We did not know until recently he was present and badly injured, along with Ardeshir Dalal, by Bhagat Singh’s bomb thrown in the Central Legislative Assembly on 8 April 1929 during the Simon Commission deliberations. He died seven months later.

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see also

S N Roy hears from Lytton: A 1922 case of British imperial racism in Indian governance (with lessons for today) [Draft text 10 Feb 2018]

 

Origins of India’s Constitutional Politics: Bengal 1913

Carmichael visits Surendranath, 1916

MK Gandhi, SN Roy, MA Jinnah in March 1919: Primary education legislation in a time of protest

Bengal Legislative Council 1921

Jaladhar Sen writes to Manindranath at Surendranath’s death, c. Nov-Dec 1929

Sarat Chandra visits Surendranath Roy 1927

The Roys of Behala 1928

Manindranath Roy 1891-1958

Two scientific Boses who should have but never won Nobels

Pre-Partition Indian Secularism Case-Study: Fuzlul Huq and Manindranath Roy

Life of my father, 1915-2012

“I’m on my way out”: Siddhartha Shankar Ray (1920-2010)

Manindranath Roy 1891-1958

Manindranath Roy (1891-1958) was a quiet enigmatic literary figure and artistic benefactor in Calcutta; he wrote very well and had excellent taste and manners (though was of foolish judgement in money and friends). This photograph is from about 1922 at Allahabad where he used to take his family on annual holiday. (The little boy to the left behind his mother would grow up to become my father.)

My grandfather is dressed in fine post-Edwardian fashion; at the time, his father, Surendranath Rai, was at the peak of his political career as first Deputy President and then President of the new Bengal Legislative Council. Surendranath was an orthodox Brahmin and chose never to wear Western-style suits and neck-ties, and he was thoroughly averse to the idea of dining with Europeans. Manindranath was the first to wear Western clothes, as well as to dine in Calcutta’s Western restaurants. There was tension between father and son due to such matters.

Manindranath’s notebook of poetry Mandakini (found in 2008) contains some 51 poems and poetic songs composed between 1914 and 1936,  from when he was  aged about 23 to when he was 45.  Between about 1933 and 1943  Manindranath had found himself facing trials and tribulations  of such gravity and magnitude (caused in part by his own foolish squandering of his inheritance from his father) that he may have wished to  forget, ignore or even regret his creative  period. Many of the poems are recorded  as having been published in literary journals of the time, like Bharatbarsha and Bichitra, and some are recorded as having been sung or performed  on the new radio service of the time, especially around 1931. Here is poem number 48 titled “Saratchandra” in honour of his friend, the novelist Sarat Chandra Chattopadhyaya.   Manindranath as a poet would have been certainly inspired  in his modernity by his association with Sarat  — while Sarat benefitted economically by the association and also may have found characters and plots for his novels (he apparently dedicated one at least to Manindranath’s wife, my grandmother). When all of Mandakini is published in due course, it is not impossible Manindranath  will come to  be recognised  as among the finest modern   poets of his era in Bengal.

Buju was my parents’ firstborn, Manindranath’s first grandchild and the apple of his eyes.  MK Roy tho’ the second son of Manindranath had wed before his older brother: Buju brought new life to everyone around her. SN Roy’s death in 1929, six months after being injured by Bhagat Singh’s bomb, left a vast personal estate inherited from his father but with unclear succession.  His brothers took control.  His younger son Manindranath, a poet keen only to broadcast his poetry on the newly created radio and win the love of his beautiful angry wife, came to be  quickly and foolishly entangled in the grip of unscrupulous relatives and vicious business acquaintances; incredibly, the vast inherited fortune was purloined or dissipated through egregious frauds within a handful of years, leaving Manindranath broke and broken.  A decade went to discharge him from insolvency, a police team travelling from Calcutta to Singapore to bring him back under arrest. My parents’ wedding in the blackout of Calcutta under Japanese aerial bombardment in May 1942 coincided with the end of Manindranath’s pathetic ordeal.  Manindranath a broken man when Buju, his first grandchild, brought him joy:

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My grandfather came to visit us in Ottawa in May 1958, and here we are on a day’s outing to show him the sights. I recall it well though I was three years old. My mother had stayed home to arrange our meal.

Manindranath in Ottawa would come back from his walks and see me his grandson being pummeled into the lawn by my bigger neighbour Richard Landis…. Becoming very cross he would tap his walking stick loudly on the ground and say loudly, “Dadu… tumi o mere dao, tumi o okey mere dao…” “Grandson! You fight back too, you hit him back too”…

Manindranath Roy died in Ottawa on September 3 1958, the first Hindu gentleman known to have done so, it was said; he had to be cremated in Montreal as no one was cremated in Ottawa back then.

There will be more of his eventful and interesting life here in due course. For example, he was a benefactor of Sarat Chandra Chattopadhyaya and many others including Uday Shankar, and he was a close friend and colleague at Grace and Co of Rabindranath Tagore’s son-in-law, Nagen Gangulee. Rabindranath apparently visited the Swaraj Party’s political meetings where Surendranath was an old friend of CR Das. Another close and respected friend of Surendranath’s was Jagdish Chandra Bose.

See too

https://independentindian.com/2008/10/06/a-literary-find-modern-poetry-in-bengali-1914-1936/

https://independentindian.com/life-of-mk-roy-19152012-indian-aristocrat-diplomat-birth-centenary-concludes-7-nov-2016/

Justice & Afzal

Justice & Afzal

first published in The Sunday Statesman Editorial Page October 14 2006

There is a difference between law and equity (or natural justice). The power of pardon is an equitable power. Commuting a death-sentence is a partial pardon
By SUBROTO ROY

“Fiat justitia pereat mundus” ~let justice be done even if the world shall perish ~ is a maxim only Immanuel Kant among the great philosophers may have wished to maintain. Yet it serves to remind us that there exist wrong reasons for carrying out as well as wrong reasons for not carrying out the death-sentence on Afzal Guru. Wrong reasons for carrying out the death-sentence include saying that only by his death will families of the victims of the Parliament attack receive satisfaction (justice is hardly the same thing as revenge) or that only thereby can the Indian Republic show itself to be standing up to terrorism. Wrong reasons for not carrying out the death-sentence include saying Afzal’s death would be seen as unjust by many people in J&K and result in further civil or political turmoil there or elsewhere, or that more terrorism will result.

Justice should be done and be seen to be done to Afzal by the Indian Republic ~ here as elsewhere, justice is a matter between an individual and the State. The question remains open whether such justice involves his death or his imprisonment for life or even his being paroled in due course. Unlike Praveen Mahajan for example, Afzal has not committed premeditated first-degree murder or parricide. He is from an Indian State where there has existed some separatist sentiment for decades, and evidently he has been an accomplice to an act of war against India involving attempted kidnapping or mass murder. If he is an Indian national, he may have been treasonous and seditious; if he is a Pakistani national or wishes to be treated as such, he may have been some kind of spy, agent provocateur or saboteur, or an accomplice of such people. The moral question before India today has to do with what precisely is the nature and quality of justice to be dispensed in this particular case, in these particular factual circumstances as far as presently known, given all the principles, precedents, rules and laws available.

Someone may fairly wonder how or why it is possible the President of India has any discretion at all left to commute a sentence of death once the judiciary up until the Supreme Court of India has spoken. The answer has to do with the subtle distinction that is still made in common law countries like Britain, the USA and India between law and equity or “natural justice”. Britain ever since the 13th Century has had an institution known as “Lord Chancellor” in whose person came to be combined the highest judicial and executive roles (Tony Blair’s New Labour Government is due to abolish it). “Chancery” or courts of equity traditionally were parallel to courts of law, recognising that normal legal processes may cause justice to sometimes fail (especially in corrupt times) and hence require direct executive intervention. In the United States today, equity is embodied in Rule 60(b) of the Federal Rules, and federal courts are empowered to oversee all other courts including themselves for violations of natural justice.

By way of example having nothing necessarily to do with capital punishment, “solicitation of counsel, clerks or judges” is embracery curialis, recognized as extrinsic fraud and subversion of justice since Jepps 72 E R 924 (1611), “firmly established in English practice long before the foundation” of the USA, Hazel Atlas, 322 US 238 (1943). “Embracery is an offense striking at the very foundation of civil society” says Corpus Juris 20, 496. A court of equity has inherent power to investigate if a judgement has been obtained by fraud, and that is a power to unearth it effectively, since no fraud is more odious than one to subvert justice. Cases include when “by reason of something done by the successful party… there was in fact no adversary trial or decision of the issue in the case. Where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practised on him by his opponent, as … where an attorney fraudulently or without authority assumes to represent a party and connives at his defeat; or where the attorney regularly employed corruptly sells out his client’s interest to the other side ~ these, and similar cases which show that there has never been a real contest in the trial or hearing of the case, are reasons for which a new suit may be sustained to set aside and annul the former judgment or decree, and open the case for a new and a fair hearing….” Hazel Atlas. Fraud on the court includes that “perpetrated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases that are presented for adjudication” Moore’s Federal Practice 60-360.

Equitable action under Rule 60(b) can vacate judgment whenever such action is appropriate to accomplish justice. (In contemporary American federal judicial processes at least in the present author’s experience over two decades, this rather subtle branch of jurisprudence may have become known, however, more in its breach than fulfilment).

The power of pardon is one such supra-legal equitable power of the executive authority. For a state’s chief executive to pardon a crime is to release someone of guilt or to remit punishment. In Britain, the power is with the Government’s Home Office and in the old Commonwealth it was delegated to the Governor-General. In the USA it is a power of the President or State Governors to pardon crimes, and the most famous case was that of President Gerald Ford pardoning his predecessor Richard M. Nixon. Pervez Musharraf recently pardoned A Q Khan. Both highlight the fact the power of granting a full pardon is to be exercised rarely, and may be justifiable only on grounds of “Reasons of State” where someone has done something unlawful which the State is willing to condone for sake of some greater good in the national interest. But a pardon also can be partial, requiring the offender fulfil a condition such as serving a lesser substituted punishment. Commuting a death sentence by requiring the offender to serve life in prison is this sort of conditional pardon.

In India today, the President under Article 72 of the Constitution is empowered “to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute” a sentence of death and also intervene in other cases. Article 161 gives a lesser power to State Governors. These are singular examples of the acknowledged presence of equity in modern Indian jurisprudence, though our customary laws remain a vast untapped source of natural justice, (viz. Tagore Law Lectures 1905-1906 by SN Roy). Just last week, a Supreme Court bench of Justice Arijit Pasayat and Justice SH Kapadia ruled the power of reprieve, pardon or remission of sentence may not be exercised for “political considerations or on the basis of religion, caste or other extraneous factors”. There must be bona fide valid reasons. The bench set aside an Andhra Pradesh order passed by a Governor from the Congress Party remitting the sentence of imprisonment awarded to a Congress leader in a murder case involving a Telegu Desam Party victim. In an egregious violation of his discretion, the Governor had said the sentence already undergone was sufficient and directed release, but the Supreme Court in November 2005 admitted a petition challenging the order and stayed it. The Court has now held that exercise of the power is subject to judicial review and it may not be exercised for extraneous, political or mala fide reasons. The Court has thereby enlarged its role in equity (or natural justice) similar to that which American federal courts have had under Rule 60(b). There is also an argument for abolishing Article 161.

In cases of equitable treatment of capital punishment in India today like that of Afzal (or Dhananjay before him), the fact the Executive has notoriously starved our Judiciary of adequate resources ever since Independence (The Statesman, 26 February 2006) also may not be something irrelevant to evaluating the likelihood of a mistake having been made. All things considered, if justice is to be done and seen to be done in Afzal’s case, the Indian Republic should be in no hurry whatsoever in deciding to either execute him or to even release him.

From Facebook 31 March 2014

Why was Afzal hanged in such a hurry and almost in secret? Why did the BJP bay for his death so loudly every day, getting the Congress scared they would lose an election if they did not? Competitive foolishness just as over Telengana. Afzal had not pulled any trigger. That it was an avoidable injustice is made apparent by the Supreme Court commuting the death sentences of other political murderers, including Rajiv Gandhi’s killers and now Bhullar…


From Facebook 24 November 2012

I did not think Kasab should have been hanged principally as it was on the basis of his evidence that India cracked the case and he deserved some jurisprudential credit for that. He was the star witness for the prosecution against the terrorist masterminds who had sent him. Separately, I also do not believe, all things considered, that Afzal should be hanged, though there may be nothing defective in law against his conviction and sentence and he has had some legal bad luck. The law of pardon or commutation is of an equitable nature, beyond the normal law itself…His cooperation with the police would be the reason for his life to be spared — besides the fact that he pulled no trigger to kill anyone himself nor caused anyone else to do so.

From Facebook August 12 2011:

Subroto Roy has now for the first time been able to read the Supreme Court judgement affirming Afzal Guru’s death sentence, commuting Shaukat’s, and affirming the acquittal of Gillani. It does not seem defective in law. Afzal Guru was perhaps misrepresented by lawyers or misled himself into confessing his crimes very early on. But hand-in-glove with the murderous terrorists he certainly appears to have been. The fact he helped the police with his confession may be the only equitable reason for the President to commute the sentence.

Logic of Democracy

LOGIC OF DEMOCRACY

by

SUBROTO ROY

First published in The Statesman,

Editorial Page Special Article, March 30 2006

Parliament may unanimously vote for a bill on the “Office of Profit” issue but this will have to be consistent with the spirit and letter of the Constitution and with natural law if it is not to be struck down by the Supreme Court. It is thus important to get the logic right.

India is a representative and not a direct democracy. We the people constitute the Electorate who send our representatives periodically to legislative institutions at national, state and local levels. These representatives, namely, Lok Sabha and Legislative Assembly Members and municipal councilors, have a paid job to do on behalf of all their constituents, not merely those who voted for them. They are supposed to represent everyone including those who voted against them or did not vote at all.

In view of this, if the question is asked: “Was India’s interest served by Sonia Gandhi peremptorily resigning as the Lok Sabha Member from Rae Bareli and then immediately declaring she will fight a fresh election from there?”, the answer must be of course that it was not. Mrs Gandhi had been elected after an expensive process of voting and she had a duty to continue to represent all of Rae Bareli’s people (not just her party-supporters) for the duration of the 14th Lok Sabha. Instead she has given the impression that Rae Bareili is her personal fiefdom from where she must prove again how popular she is as its Maharani.

What needed to be done instead was to abolish the so-called “National Advisory Council” which, like the “Planning Commission” is yet another expensive extra-constitutional body populated by delusional self-styled New Delhi worthies. The NAC has been functioning as Mrs Gandhi’s personal Planning Commission, and she lacked the courage to scrap it altogether — just as Manmohan Singh lacks the courage to tell Montek Ahluwalia to close down the Planning Commission (and make it a minor R&D wing of the Ministry of Finance).

Lok Sabha’s duties

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.

Rajya Sabha different species

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 corruption of our body-politic originated with the politicisation of the bureaucracy thirty five years ago by Indira Gandhi and PN Haksar. The Rajya Sabha came to be ruined with the “courtier culture” and “durbar politics” that resulted. This bad model which the Congress Party created and followed was imitated by the Congress’s political opponents too. Our Rajya Sabha has now tended to become a place for party worthies who have lost normal elections, superannuated cinematic personalities, perpetual bureaucrats still seeking office, and similar others. The healthiest course of action for Indian democracy may be to close it down completely for a few years, then recreate it ab initio based on its original purposes and intent (but this may not be constitutionally possible to do).

Holding Executive accountable

It is a forgotten platitude that in a representative democracy what elected legislators are supposed to be doing is represent the interests of the Electorate. Along with the Judiciary, the Legislative Branch is supposed to control the Executive Government, which is the natural oppressor of the Electorate. That is why the Legislature must be independent of the Executive — which is the precise intent behind Article 102 (a) of the Constitution of India: “A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament… if he holds any office of profit under the Government of India or the Government of any State…”

In other words, if you are a Lok Sabha MP or State MLA who is supposed to be a part of the august House which has elected the Executive Government and by whom that Government is supposed to be held accountable, then it is a clear conflict of interest if you are yourself in the pay of that Government. As a legislator, you are either in the Executive or you are not. If you are in the Executive, you are liable to be held accountable by the House. If you are not in the Executive, you are duty-bound as an ordinary Member of the House to hold the Executive accountable. The logic is ultimately as clear and simple as that.

It is inevitable that the delineation of the appropriate boundaries between Legislature and Executive will have to be pronounced upon by the Judiciary. The “Office of Profit” issue has opened an opportunity for a Constitution Bench of the Supreme Court to speak on the rights and duties of the Legislative and Executive Branches of Government. And no Constitution Bench has ever spoken unwisely.

Towards a Highly Transparent Fiscal & Monetary Framework for India’s Union & State Governments (29 April 2000)

Towards a Highly Transparent Fiscal & Monetary Framework for India’s Union & State Governments

An address by Dr Subroto Roy to

the Conference of State Finance Secretaries, Reserve Bank of India,  Mumbai, 29 April 2000.

It is a great privilege to speak to this distinguished gathering of Finance Secretaries and economic policy-makers here at the Reserve Bank today. I should like to begin by thanking the Hon’ble Governor Dr Bimal Jalan and the Hon’ble Deputy Governor Dr YV Reddy for their kind invitation for me to do so. I should also like to record here my gratitude to their eminent predecessor, the Hon’ble Governor of Andhra Pradesh, Dr C Rangarajan, for his encouragement of my thinking on these subjects over several years.

My aim will be to share with you and seek your help with my continuing and very incomplete efforts at trying to comprehend as clearly as possible the major public financial flows taking place between the Union of India and each of its constituent States. I plan to show you by the end of this discussion how all the information presently contained in the budgets of the Union and State Governments of India, may be usefully transformed one-to-one into a fresh modern format consistent with the best international practices of government accounting and public budgeting.

I do not use the term “Central Government”, because it is a somewhat sinister anachronism left over from British times. When we were not a free nation, there was indeed a Central Government in New Delhi which took its orders from London and gave orders to its peripheral Provinces as well as to the British “Residents” parked beside the thrones of those who were called “Indian Princes”.

Free India has been a Union of States. There is a Government of the whole Union and there is a Government of each State. The Union is the sovereign and the sole international power, while the States, as political subdivisions of the Union, also possess certain sub-sovereign powers; as indeed do their own subdivisions like zilla parishads, municipalities and other local bodies in smaller measure.

Our 15 large States, which account for 97% of the population of the country, have an average of something like 61 million citizens each, which is vastly more than most countries of the world. In size of population at least, we are like 15 Frances or 15 Britains put together. The Indian Republic is unique or sui generis in that there has never been in history any attempt at federalism or democracy with such sheer large numbers of people involved.

In such a framework the citizen is supposed to feel a voter and a taxpayer at different levels, owing loyalty and taxes to both the national unit and the subdivisions in which he or she resides. In exchange, government at different levels is expected to provide citizens with public goods and services in appropriate measure. The problem of optimal fiscal decentralisation in India as elsewhere is one of allocating to each level of government the power to tax and responsibility to provide, public goods and services most appropriate to that level of government given the availability of information of resources and citizens’ preferences.

In parallel, a problem of optimal monetary decentralisation may be identified as that of allocating between an autonomous Central Bank and its regional or even State-level affiliates or subsidiaries, the power to finance through money-creation the deficits, if any, of the Union and State Governments respectively. It is not impossible to imagine a world in which individual State deficits did not flow into the Union deficit as a matter of course, but instead were intended to be financed more or less independently of the Union budget from a single-window source. There would be a clear conceptual independence between the Union and State levels of public action in the country. In such a world, the Union Government might approach a constitutionally autonomous national-level Central Bank to finance its deficit, while individual State Governments did something analogous with respect to autonomous regional or even State-level Central Banks which would be affiliates or subsidiaries of the national Central Bank.

This is similar to the intended model of the United States Federal Reserve System when it started 90 years ago, though it has not worked like that, in part because of the rapid rise to domination by the New York Federal Reserve relative to the other 11 regional Federal Reserve Banks.

A more radical monetary step would be to contemplate a “Reverse Euro” model by which a national currency issued by the national-level Central Bank acts in parallel with a number of regional or State-level currencies with full convertibility and floating exchange-rates guaranteed between all of them in a world of unhindered mobility of goods and factors.

However, these are very incomplete and theoretical thoughts which perhaps deserve to be shelved for the time being.[1] What necessitates this kind of discussion is after all not something theoretical but rather the practical ground realities of our country’s fiscal and monetary position, something of which this audience will be far better aware than am I.

Economic and political analysis suggests that managing a process of public financial decision-making requires a coincidence of the people who have the best information with the people who have the authority to act. In other words, decision-makers need to have relevant, reliable and timely information made available to them, and then they need to be considered accountable for the decisions made on that basis.

In a democracy like ours, the locus of economic policy decision-making must be Parliament and the State legislatures. Academics, civil servants, journalists, special interest groups, this or that business or industrial lobbyist or foreign management consultant can all have their say — but consensus on the direction and nature of economic policy, if it is to be genuine, has to ultimately emerge out of the legislative process on the basis of reasonable, well-informed discussion and debate, given full relevant timely information. The proper source of all economic policy decisions and initiatives is Parliament, the State legislatures and local government bodies — not this or that lobby or interest-group which may be vocal or powerful enough to be heard at a given time in New Delhi or some State capital-city.

Our 1950 Constitution was a marvellous document in its time and it has worked tolerably well. It defined the functions of government in India in accordance with the main parameters of normative public finance.

Economics ascribed a quite extensive traditional role to Government, the most important functions being collective and individual security, followed by all activities which in the words of Adam Smith,

 “though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expence to any individual or small number of individuals, and which it, therefore, cannot be expected that any individual or small number of individuals should erect or maintain.” (Wealth of Nations, V.i.c., 1776)

Our 1950 Constitution defined the Union’s responsibilities to be

External Security;

Foreign Relations & Trade;

Supreme Court & Domestic Security;

Debt Service, Foreign & Domestic;

National Infrastructure;

Communications & Broadcasting;

Atomic Energy;

Public Sector Industries;

Banking; Currency & Finance;

Archives; Surveys & National Institutions;

National Universities;

National Civil Services & Administration.

Each State’s responsibilities were

High Courts & Lower Judiciary;

Police; Civil Order; Prisons;

Water; Sanitation; Health;

State Debt Service;

Intra-State Infrastructure & Communications;

Local Government;

Liquor & Other Public Sector Industries; Trade; Local Banking & Finance;

Land; Agriculture; Animal Husbandry;

Libraries, Museums, Monuments;

State Civil Service & Administration.

Some duties were supposed to be shared by the Union with each State, including

Criminal Law;

Civil & Family Law, Contracts & Torts;

Forests & Environmental Protection;

Unemployment & Refugee Relief;

Electricity;

Education.

But the authors of the 1950 Constitution could not have envisaged the nature of present problems, or foreseen in those early years what we would have become like today. Our fiscal system has become such that a few clauses may have led to an impossibly complex centralization of fiscal power and information. Not only did the 1950 Constitution identify agendas of the Union and State Governments, it also dictated the procedure of decision-making and it is this which may have become intractable over 50 years. Under Article 280, a Finance Commission is appointed every five years whose task is to try to efficiently and equitably allot tax revenues collected by the Union downwards to the States and laterally between the States. Members of Finance Commissions have been elder statesmen of high reputation and integrity, yet the practical impossibility of their task has made their actions seem to all observers to be clouded in mystery and perhaps muddle. As one recent member, Justice Qureshi, has candidly stated

 “it is humanly impossible for a person to understand the problems of the Centre and the 25 States and take a decision thereon within such a short time” (Ninth Finance Commission, Issues and Recommendations, p.350).

No matter how competent or well-meaning a Finance Commission’s members may be, their purpose may be stymied by the overload of information and overcentralisation of authority that has come to take place. As a result, it may have been inevitable that Government has ended up doing what it need not have done at the expense concomitantly of failing to do what only Government could or must have done.

The present situation is such that, despite the best efforts of the Reserve Bank and other Government agencies, there may be a gross lack of timely, relevant and reliable information reaching all decision-makers including the ordinary citizen, who as voter and taxpayer is the cornerstone of the fiscal system. My own inquiry started when Mr. Hubert Neiss, then Central Asia Director at the IMF, hired me as a consultant in December 1992. He told me the IMF was naturally concerned about India’s national budget deficit, but no one seemed to quite know how this related precisely to the budgets of the different States whose deficits seemed to be flowing into it. By its terms of reference, the IMF could not inquire into India’s States’ budgets and I did not do so in my work with them, but the import of his question remained in my thinking. Later I found similar questions being asked at the World Bank. I do not think it a great secret to state that there may be a great deal of simple puzzlement about the workings of our fiscal and monetary system on the part of observers and decision-makers who may be concerned about India’s fiscal position.

Among both public decision-makers and ordinary citizens right across the length and breadth of our country, a severe and widespread lack of information about and comprehension of India’s basic fiscal and monetary facts seems to exist. This in itself may be a cause of fiscal problems as citizens may not be adequately aware of the link between making their demands for public goods and services on the one hand, and the necessity of finding the resources to fund these goods and services on the other.

In any ultimate analysis, resources for public goods and services in an economy can be found only by diverting the real resources of individual citizens towards public uses. Other than printing fiat money, a national Government can only either tax those citizens who are present today in the population, or, borrow from the capital stock on behalf of unborn generations of future citizens.

West Europe and America are heirs to a long history of political development; yet even there, as Professor James Buchanan has often observed, the idea until has not been grasped until recently that benefits from use of public goods and services are supposed to accrue to citizens from whom resources have been raised. Until the 19th Century,

 “government outlay was frequently considered “unproductive”, and there was, by implicit assumption, no return of services to the citizens who were taxed. In a political regime that devotes the bulk of government outlay to the maintenance expenses of a single sovereign, or even of an elite, there is no demonstrable return flow of services to the taxpayers…. Tax principles were discussed as if, once collected, revenues were removed forever from the economy; taxpayers, both individually and in the aggregate, were held to suffer real income loss” (James M. Buchanan, The Demand and Supply of Public Goods, Rand 1968, p. 167).

According to Buchanan, such an undemocratic fiscal model was transformed in the work of the great Swedish economist Knut Wicksell and others by introducing the key assumption of fiscal democracy, namely, that

 “those who bear the costs of public services are also the beneficiaries in democratic structures”

Conversely, we may say those who demand public goods and services in a fiscal democracy should also expect to pay for them in real resources. If citizens are aware of taxes only as a burden and come to feel they receive little or nothing from Governments in return, there is a loss of incentive to pay taxes or to stand up and be counted as proud citizens of the country. There is an incentive instead to evade taxes or to flee the country or to cynically believe everything to be corrupt. On the other hand, if citizens demand public goods and services without expecting to contribute resources for their production, this amounts to being no more than a demand to be a free-rider on the general budget.

In our country, we may have been seeing both phenomena. On one hand, there is, rightly or wrongly, a tremendous public cynicism present almost everywhere with respect to expecting effective provision of public goods and services. On the other hand, the idea that the beneficiaries of public goods and services must also, sooner or later, come to bear the costs in terms of taxed resources is far from established so our politics come to often be unreasonable and irresponsible.

Reliable and comprehensible information about the system as a whole and about the contents of public budgets is thus vital for a fiscal democracy to function. In ancient Athens it was said:

 “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 has no interest in politics is a man who minds his own business; we say that he has no business here at all.” Pericles (Funeral Oration, Thucydides, The Pelopennesian War)

That was the criterion that Pericles defined for ancient Athenian democracy, and I see no reason why in the 21st Century it cannot be met in modern India’s democracy.

This finally brings me to the positive contribution I have promised to make. The aim my attempt to redesign the Union and State’s budgets utilising precisely the same data as available has been to make the fiscal position of all public entities accessible to any interested citizen.

We do not have to say that every Indian citizen, or even every literate and numerate citizen of our country, has to be able to understand the intricacies of the public budgets of his or her State and the Union. But if information is available such that anyone who understands the finances of his own family or his own business enterprise is also reasonably able to understand the public budget then a standard of maximum feasible transparency would have been defined and met.

I have relied on the international normative model developed by our own countryman, Mr. A. Premchand, who retired from the IMF a few years ago, as described in his outstanding book Effective Government Accounting (IMF 1995), where he showed applications for e.g. the USA, New Zealand and Switzerland. What I have done – or rather did in 1997/1998, with the help of a research assistant and a student – is apply that to all of our States and the Union too.[2] What will be seen by way of differences with the present methodology is that there is essentially an Operating Statement, a Financial Statement and a Cash Flow Statement offered for each State and the Union. The financial position and gross fiscal deficit definition emerge rather neatly from this – while there the rather confusing “Development/Non-development” and “Planning/Non-Planning” distinctions have been done away with.

The exercise points to the foundations of a new and fresh federal framework for our Republic. A central new fact of modern India is that many, perhaps most, of our States have developed what is effectively a bipolar division in their legislatures. Voters have also increasingly started to judge Governments not by the personalities they contain but rather by their performance on the job, and, at election-time, have begun to frequently enough shown one side the door in the hope the other side may do better. In such circumstances, there seems no reason in principle why an entity as large as the average State of modern India today cannot be entrusted to legislate and administer a modern tax-system, based especially on the income-tax, and especially taxing income from all sources including agriculture. In a fresh and modern federalism, an elected State Government would have appropriate economic powers to run its own affairs, and be mainly accountable to the legislature whose confidence it requires, and ultimately to voters below.

From an efficiency standpoint, we should want a framework in which repercussions of political turmoil or bad financial management by a State Government to not spill into other States or flow into the Union Government’s own problems of deficit financing. With free mobility of goods and factors throughout the Union, citizens faced with a poorly performing State Government could seek to vote it out of office, or may of course “vote with their feet” by moving their capital or resources to another part of the country. In short, State Governments will be held responsible by their electorates for their expenditures on public goods and services, while having the main powers of domestic taxation in the economy, especially taxes on income from all sources including agriculture.

At the same time, diverse as India is, we are not 15 or 25 separate republics federated together but rather one country all of whose peoples are united by a common geography and a common experience of history. From an equity and indeed national standpoint, we may also want a system which also firmly established that the National Parliament would have to determine how much each citizen should be taxed for the Union to provide public goods and services for the country as a whole, as well as what transfers ought to be made between the States via the Union in the interests of equity given differences in initial resource-endowments between them.

Here again an American example may be useful. As is well-known, the 50 United States each have their own Constitutions governing most intra-State political matters, yet all being inferior in authority to the 1789 Constitution of the United States as duly amended. In India, an author as early as 1888 recommended popular Constitutions for India’s States on the grounds

“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.”[3]

We could ask if a better institutional arrangement may occur by each State of India electing its own Constitutional Convention subject naturally to the supervision of the National Parliament and the obvious provision that all State Constitutions be inferior in authority to the Constitution of the Union of India.[4] These documents would then furnish the major sets of rules to govern intra-State political and fiscal decision-making more efficiently. An additional modern reason can be given from the work of Professor James M. Buchanan, namely, that fiscal constitutionalism, and perhaps only fiscal constitutionalism, allows over-riding to take place of the interests of competing power-groups.[5]

State-level Constitutional Conventions in India would provide an opportunity for a realistic assessment to be made by State-level legislators and citizens of the fiscal positions of their own States. Greater recognition and understanding of the plain facts and the desired relationships between income and expenditures, public benefits and public costs, would likely improve the quality of public decision-making at State-levels, sending public resources from destinations which are socially worthless towards destinations which are socially worthwhile. It bears repeating the average size of a large State of India is 61 million people, and almost all existing political Constitutions around the globe furnish rules for far smaller populations than that.

Thank you for your patience. Jai Hind.

[1] Monetary Federalism at Work: F. A. Hayek more than anyone else taught us that relative prices are signals or guides to economic activity — summarizing in a single statistic information about the resources, constraints, expectations and ambitions of market participants. An exchange-rate between two currencies is also a relative price, conveying information about relative market opinions regarding the issuers of the two currencies. Suppose we had two States of India in the fresh kind of federal framework outlined above, which were identical in all respects except one had a larger deficit and so a larger nominal money supply growth. Would that mean the first currency must depreciate relative to the second? Not necessarily; it is not the size of indebtedness that matters but rather the quality of public investment decisions, to which borrowed money has been put. Thus we come to the crux: Suppose we have two States which are identical in all respects except one: State X is found to have an efficient Government, i.e. one which has made relatively good quality public investment decisions, and State Y is found to have one which has made relatively bad quality public investment decisions. In the present amalgamated model of Indian federal finance, no objective distinction can be made between the two, and efficient State Governments are surreptitiously compelled to end up subsidising inefficient ones. In a differentiated federal framework for India, as the different information about the two State Governments comes to be discovered, the X currency will tend to appreciate as resources move towards it while the Y will tend to depreciate as resources move away from it. In an amalgamated model, efficient State Governments lose incentives to remain efficient, while in a differentiated model, inefficient State Governments will gain an incentive not to be inefficient. The present amalgamated situation is such that inefficient States – and this may include not only the State Government but also the State Legislature and the State electorate itself – receive no fiscal incentive to improve themselves. In a differentiated framework, the same inefficient State would face a tangible, visible loss of reserves or depreciation of its currency relative to other States on account of its inefficiency, and thereby have some incentive to mend its ways. I call the proposal given here a “Reverse Euro” model because Europe appears to be moving from differentiated currencies and money supplies to an amalgamated currency and money supply, while the argument given here for India is in the opposite direction. Professor Milton Friedman of the Hoover Institution at Stanford, has had the kindness, at the age of 88, to send me a brilliant and forceful critique of my Reverse Euro idea for India when I requested his comment. Since he is the founder of the flexible exchange-rate system and he has found it too radical, I have shelved it for the time being.

[2] The assistance of Dola Dasgupta and K. Shanmugam is recorded with gratitude.

[3] Surendranath Roy, A History of the Native States of India, Vol I. Gwalior, Calcutta & London: Thacker 1888.

[4] Large amounts of legal and constitutional precedent have built up on issues of a regional or local nature: whether a State legislature should be unicameral or bicameral, what should be its procedures, what days should be State holidays but need not be national holidays, on tenancy, rent control, school standards, health standards and so on ad infinitum. All this body of explicit and implicit local rules and conventions may be duly collected and placed in State-level Constitutions.

[5] James M. Buchanan, Limits to Liberty, Texas, 1978.

A major expansion and reorganization of the judiciary would have to accompany the sort of basic constitutional reform outlined above. Union and State judiciaries would need to be more clearly demarcated, and rules established for review of State-level decisions by Union courts of law. It is common knowledge the judiciary in India is in a state of organizational overload at the point of collapse and dysfunction. An expansion and reorganization of the judiciary to match new Union-State constitutional relations will likely improve efficiency, and therefore welfare levels of citizens.

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Bengal Legislative Council 1923


Bengal Legislative Council 1923

SN Roy, then President of the Bengal Legislative Council 1923, is seated to the left of the Governor of Bengal, Lord Lytton, who has the Chief Justice on his right.  At Surendranath Roy’s left sits his friend and colleague, Surendranath Banerjee.