Tuesday, June 12, 2012

We need a Democracy free from emotive politics and populist economy By Manohar Manoj, Editor, Economy India Nowadays, good governance is repeatedly been talking about in our political- economic circle. On one side it requires corruption free governance and on the other side it demands better balance between political and economic management of a nation. The thing is that the 'democracy' which seeks both political and economic aspiration of the public in a country, sometimes contradict each other. That is why it is said, ‘good politics is bad economics’ and ‘good economics proved to be worse politics’. But we have to accept this fact democracy does not mean to run it only through electioneering politics and all about. Democracies always need conditionalties of some basic principles. Some principles are already adopted in the countries, where democracies exist, like ‘rule of law’, ‘separation of power’, ‘3 tier of governance’ etc. But, now, when the good governance is largely being cried over, the democracy need to be filled with some more basic principles. These are, first to disqualify all kinds of politics, political parties and electioneering process which are based on caste & communities, region & religion, creed & culture and second to make the democratic economies, free from all kind of populism measure and announcements at the time of elections, like all kind of subsidies, free supply of electricity & other basic goods, loan waiver, unreasonable tax concessions etc. It is sorry to say we as a countryman are so proud of our democracy, which is filled with so many defects and shortcomings. If a democracy desist with some prerequisite basic reforms, never gives a platform for good governance, it is just good alternative to autocracy only. I think, we may have better position than country like Egypt, Syria ,Libya and our Islamic neighbor like Pakistan, Bangladesh etc otherwise our Indian democracy still gives ample impression of aristocracy, feudalism, theocracy, bureaucracy, only difference is that the process has changed. Off course we made some democratic reforms like enacting anti defection laws, adult franchise, confiscation of the size of ministry etc. but unless we make our democracy free from all kinds of emotionalism persisting in our polity and populism in our economy, we can not rate our democracy a full proof system or a better mode of governance. I think these two reforms will start a fundamental change in making our governance free from corruption and all kind of disorders. Now we try to diagnose how these two reforms will bring sea change in our attitude and second how it will strengthen our motto of social justice and welfare principle of a totalirian state. In India when we talk about election we talk about representation of different section of society, in this way we follow principle of political reservation for SC, ST, OBC, Women etc. in all three tier of governance. Since the objective of electioneering politics is solely based on competition among the contesting candidates otherwise there is no need of election, so we have made election laws and electioneering process in order to peacefully form a government at their respective level, which consume lots of money also. Not only that, this electioneering process ensure formation of government out of the clutches of muscle power, tyrannical situation, and ‘might is right’ situations. One must remember these facts that the motto of competition is to deliver different public services to the people in much better way. But the irony is that our democracy has been completely dominated by feudalistic, aristocratic, castist, communalist, and culturist forces which have made our electioneering politics beyond the ambit of competition and filled it with emotive and sentimental items. That is why all deprived section are almost at same place, once where they were. We could find only one Bhagwati devi out of millions of downtrodden, who can not ensure welfare of all people from her sections without having qualiative leadership. If a leadership does not hail from competent person, it can not ensure the well being of his own section too. Until now in India votes are persuaded on caste, community, region and religion, language and culture line. Our people's representation act says, no one can organize election meeting based on community line and caste slogan, but practically what we see all activities of political parties, all electioneering candidature, all vote casting, are held on the basis of all above mentioned items. Because the democratic forces can pick these factors from the soul of society in a very convenient way. And it has become integral part of our culture of polity for the last 60 years. It has ultimately made our polity a non competitive one, pro aristocracy and pro political elitist culture of India. We are witnessing these things in caste, community and dynasty trend of Indian politics. We do not say to make the Indian polity free from all factions, representation, partying. Off course we can not form the structure of the competitive politics without creating different players of it. But these players must be formed on the basis of rural Vs. urban, agriculture vs. Industry, blue collar job vs. white collar etc. For this we need utmost reform in the structure of our existing political parties, who are more indulged in caste surveys of different election constituency, they should be rather indulged in policy research, geo economic planning, alternative method of governance, speedy trail of cases, quick delivery of services, fast redressal of public complains etc. We need that type of system which does not allow exploiting the inherent emotive factors lying over our social strata. The way we talk about secularism, neutral to all religion, in the same way our constitution should bar the Indian polity from all kinds of attachment with the factors like caste, community, region, religion, creed and culture. These C and R factor of Indian democracy has made it a subject of sub standard governance and non progressive system, which has not even meet out the principle of social justice and welfare government. These kinds of reform and initiatives based on pure competitive kind of politics will automatically create a better and viable representation from the all oppressed section of Indian society. The second fundamental principle which our democracy is earnestly required that is to keep our democratic economy from all kinds of populism measures. We always talk about transfer of resources from haves to have nots. This is fundamental ideals for the formation of egalitarian society, but the established norms existing in our democracy are far away from this fact. The established norms of politics of populism in India will not serve the real cause of the economic interests of the common public. Some will say that one who advocates politics of non populism and subsidy free economy, they are anti common public. But the reality is that the net economic results of these kinds of public policy are zero or rather negative. Because on the one side the unproductive money is being transferred in forms of subsidies, on the other hand govt. taxes the productive money of common public. We need to raise the purchasing power of all informal lots of the country and upgrade their real standard of life. These things can be ensured by raising the daily real wages and income of the all poor, which require productive environment and non inflationary circumstances in the economy. The policy of subsidies and populist measures like loan waiver, free power just work against them. In the name of money transfer from haves to the have nots we need the policies based on broad and sound social security system which can cover each and every poor and needy citizens of the country. Still 10 crore of the above 65 ages population in India is depending upon meager 200 Rupee old age pension, whenever govt. is spoiling more than 50,000 crore rupees on unproductive scheme like MNREGA. In 2004 general election NDA did not announce any populist measure, it showed only determination to make the fundamentals of the economy more strong in upcoming years, but it lost the election. In 2009 elections the UPA announced series of populist measures ,it introduced loan waiver of farmers at the cost of 70,000 crore, it implemented 6th pay commission at the cost of 1 lakh crore, it launched unproductive and corrupt schemes like MNREGA at the cost of 40,000 crore. It resulted in huge expansion of fiscal deficit from 4.5 pc of GDP to 6.5 pc of GDP. Subsequently we have continuous higher rate of inflation and food inflation, resulted in net loss of purchasing power of informal people especially, because the formal sector are linked with dearness allowance If govt. would have taken these decisions with economic rationals, we would not have such kind of situation. If farmers’ produces are priced cost plus, there is no need of loan waiver. If govt. employee's productivity are brought under economic and social audit their pay package have no burden over economy, if MNREGA scheme has an element of creation of productive assets and would have PURA orientation, it did not have inflationary effect over economy. So it is the policy of populism which has brought our system in such an adverse situation. Now there is huge public anger over petro hike, govt. is saying it is bearing enough burden of fuel subsidy, where as this govt. has already made its plan plank for the next election in forms of food security act. When, we look at the figures of all three major subsidy of food, fuel and fertilizer. Govt. is spending about 60000 crores each on food and fertilizer subsidy and 45,000 crore on fuel subsidy. The food subsidy is maintained, just for fulfilling the inefficiencies of FCI. We are already seeing million of tones of food are rotten, in the absence of god owns. Second it is creating huge corruption through PDS. A PDS dealer gets commission of meager 20 or 30 paise over per KG of cereal, but ready to spend 100 to 160 rupee per bag as bribe to the official. Secondly the system of PDS is ruining the system of agro pricing in our country , compelling the open market to keep the prices of food grains very low, because we have dual system of food pricing in the economy. In place of providing cheaper food grains to the poor we should raise their purchasing power otherwise they would try to earn only that much amount of money by which they can purchase the PDS food grains, otherwise thet prefers to sit. We need PDS, but for the sake of natural calamities, supplying food grains in remote tribal village, for the destitute, for the handicap. Since govt. is operating PDS at the cost of incurring huge subsidy which ultimately taken from whom? From the public, by keeping the farmers' produces under priced, from the inflation etc. Now we come on the point of fertilizer subsidy. Very from the inception of subsidy on fertilizer, it has become matter of misusing of it by the fertilizer companies, in the same way subsidy provided for the exports are heavily misused. The fertilizer subsidy given in the name of farmers, but the mill owner got benefitted out of it. We say, despite the provisions of different agricultural subsidy ( Fertilizer, electricity, concessional agriculture finance), these altogether constitute negative 2 percent subsidy for the whole agriculture sector, only because farmers' produces have been kept underpriced, which ultimately compelling them to make suicide. We say,stop all the input subsidies given to the farmers, just make their produces' price cost plus, it will be a great services to the farming community of the nation. A farmer will purchase every input from the open market, whether it is seed, pesticide, insecticide, diesel, electricity, irrigation facilities. It will make agriculture a profession of profit, not a profession of subsistence. Now the third point is fuel subsidy. We know that out of four items namely petrol, diesel, kerosene and LPG, petrol consumers have been made heavily burdened and as per the latest available figure govt. is spending over 45,000 crore subsidy over 3 petroleum items. The thing is that govt. is collecting around 1.75 lakh crores of rupees out of several taxes imposed over petro items. First government should eliminate all petro subsidies and should make the petro taxes specific in place of ad valourem, thereby these prices can be stabilized even in the absence of subsidies. As far as kerosene is concerned , it provides lightening to the non electrified rural areas, but in urban area it should be banned and small size LPG should be allowed. If we provide cost plus prices to the farmers, there is no need of subsidized diesel to farmers, they will make it at their own. They it would be easier charge higher diesel prices in order to resist polluted diesel vehicle in the urban areas. Government should go heavily for things like social security, human development like education and health, PURA oriented rural infrastructure. We need to raise the political and economic efficiency which can deliver net welfare to the common masses. We should ensure all daily wage laborers to link with dearness allowances. We have witnessed that sectional style of politicking is damaging the cause of Indian polity, the same way the populist economic announcements of our politicians at the election time is damaging the cause of the Indian economy also. Both should be constitutionally banned for gaining the long term political and economic health of the county. These things give pleasure to the targeted public only in transitory manner, not in permanent manner. See, how the subsidies like food, fertilizer and fuel are damaging our economy and making our governance so inefficient, making our farmers more poor and the poor more vulnerable.