The mandate of 2009 has given India a stable government, with a political leadership that is talking about bringing some real change to the country. For the most part of almost two decades of economic reforms in India, the focus has been on the private sector. This has worked, with private capital and entrepreneurship playing an increasing role in making the economy more efficient and creating jobs and wealth. The State and its institutions like the bureaucracy, judiciary and executive have not kept pace with the progress in the rest of the country. This is where the real reforms need to focus on.
In the 1930s, Franklin D. Roosevelt, President of the US, introduced a New Deal for the country and its people. The various measures included support for, and reform of, the collapsing banking industry, a new stock market regulatory agency, moves to boost wages and prices, the creation of massive public works projects and — perhaps most important of all — the launch of social security. Taken together, they not only constituted a New Deal to help ordinary Americans, they also initiated a new era of government activism, in terms of both intervention and regulation of the economy. Many New Deal programmes still exist, part of a safety net that even today’s most laissez faire right-wingers in the US would not dare to touch.
India needs a New Deal and the ideas proposed here could be part of it. The institutions of the government for the most part have been corroded by political interference and influence. These institutions must be made more accountable, responsive, transparent and outcome-oriented. National security and law and order institutions need to be removed from political interference and influence of any kind, including transfers, appointments and promotions. Independent regulators must be made accountable only to Parliament and independent from the executive. They must depose to parliamentary committees which, in turn, are available for public viewing.
The judicial capacity must be raised by hiring 80,000-100,000 new judges. A judicial review commission should be responsible for checking corruption in the judiciary.
Public spending is notoriously leaky. Fundamental reforms in this area are necessary and are long overdue. All spending must be outcome-driven. New and more effective subsidy delivery models such as smart cards need to be adopted. More central programmes must be handed over to states and audited by independent auditors . Besides this, we need a new social security framework that covers unemployment, health and education and a comprehensive policy to address urban poverty. Also, the JNNURM must be reoriented to fund a full city’s development rather than individual projects.
Our constitution has not factored in two modern phenomena: coalition politics and the opportunistic politician. To address these we need fixed terms for the legislature; concurrent state and central elections to ensure that polls don’t come in the way of governance; the power to recall elected representatives if they are found lacking; a ban on inducements for religious conversions; and devolution of power to the states to improve effectiveness of governance.
All sectors of the economy, except those of strategic importance, must be subjected to intense competition. A significant nationwide infrastructure building programme using a combination of private and public capital should be launched while financial sector reforms must focus on deepening and widening the debt and equity markets, and at the same time ensuring good regulation of markets and market participants. Strategic foreign capital flows must also increase in all sectors.
On national security, we need to turn our attention to a few key areas. Appoint a retired general as head of a new department of veterans’ affairs to ensure that their long-standing demands on welfare and resettlement are addressed. Implement a national identity card for all citizens. Create a clear policy towards illegal immigration and migrants. Fast-track anti-terror courts and audit/review commissions to oversee application and use of these laws. Align all security forces and agencies to our principal threat of terrorism and evolve a new structure that ensures full, seamless co-ordination.
These are some of the ideas that can go into India’s New Deal. This kind of a New Deal will change the face of India and the lives of Indians. Given the overwhelming majority in Parliament and the feelers of consensus politics from the Opposition, this New Deal can be a reality.
However in all this triumphalism and celebrations let’s remember that this kind of euphoria and increased expectations are not a new phenomenon. We saw and experienced this in 2004 after the Dream Team came into government. They disappointed then and I hope they don’t again. This time around, it is a mandate for a government with no excuses!
(Rajeev Chandrasekhar is a Member of Parliament (Independent) and Immediate Past President of FICCI)