In India, it is not very often that one hears those in high public office go beyond their remit to speak candidly on issues like governance, democracy and accountability. This is because all three are fraught with the danger of multiple interpretations which then could be seen as the speaker’s take on the government of the day.
So it was refreshing to hear Reserve Bank of India (RBI) Raghuram Rajan speak at the DD Kosambi Ideas Festival on February 20 in Goa on these issues and the connection that exists between democracy, inclusion, and prosperity.
In an extraordinary and elegant speech, Mr Rajan also spoke on how “economic inclusion” is important for sustainable growth, but interestingly, his definition of “economic inclusion” is not limited to access of citizens to finance and markets — but also includes access to “quality” education, nutrition and healthcare.
Despite the speech being rich in ideas and thoughts, the only part that has been highlighted in the Press is his comment that “strong governments may not move in the right direction”. However, focusing on one particular aspect (“strong governments”) and not on the larger theme would not do justice to his speech.
Mr Rajan reflected on political scientist Francis Fukuyama’s “magisterial” two-volume analysis of the emergence of political systems around the world to argue that the four important pillars of liberal democracies— a strong government, rule of law, and democratic accountability and free markets — are weakening in industrial countries because of rising inequality of opportunity, and that in this are some lessons for India.
Inequality again surfaces in the last part of the speech where he explains how governments can get the public on board for its reforms agenda, a challenge that many governments — past and present — have faced in India.
Mr Rajan said that so long as “we modulate the pace of liberalisation to the pace at which we broaden economic capabilities it is likely that the public will be supportive of reform”. In other words, equitable distribution would be the key. And for, India, that is still continues to be a mega hurdle.