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Home / Books / Excerpt: The Gated Republic by Shankkar Aiyar

Excerpt: The Gated Republic by Shankkar Aiyar

A new book shows how failures of public policy are forcing many Indians to invest in the pay-and-plug economy for the most basic services

books Updated: Jun 01, 2020 10:14 IST
Shankkar Aiyar
Shankkar Aiyar
Outsourcing law and order: Security guards inspect a vehicle after warnings of a possible terrorist attack in Mumbai in August 2006.
Outsourcing law and order: Security guards inspect a vehicle after warnings of a possible terrorist attack in Mumbai in August 2006.(Ritesh Uttamchandani/HT Photo)

The truism about India is that for everything that you see, that you hear, frequently the opposite is equally true.

India’s scientists successfully launched the Mars Orbiter Mission, executed a perfect slingshot to place it in orbit and left the world in awe – at a price less than what it cost Hollywood to produce the Oscar-winning movie Gravity. Lunar explorations continue apace with Mission Chandrayan 3 to be launched in November 2020. India’s engineers are designing and executing the world’s highest railway bridge over the river Chenab in Kashmir. India’s Election Commission manages the exercise of franchise in the world’s largest democracy, enabling over 910 million citizens to vote, whether at 15,000 feet above sea level in Anlay Phu in Ladakh or 35 kilometres deep into the Gir forests.

304pp, Rs 699; HarperCollins
304pp, Rs 699; HarperCollins

And yet, the above maxim about the multiple truths that are India is unfortunately proven by the sordid state of affairs in the delivery of public goods and services. The country’s ability in dealing with complexities and scale, alas, has not resulted in creation of capacity for transformative change. Truth be told, our many governments – central, state and local – have flailed and failed in delivering basic governance.

The promise of piped drinking water continues to be a pipe dream. Households and businesses spend hours cursing power outages despite the claims of surplus power. The inadequacies of preventive and primary health care systems render the poorest the most vulnerable. The millions coming out of India’s broken school education system lack the rudimentary comprehension of the basic three ‘R’s – reading, writing and arithmetic. And the security of homes/ businesses depends on outsourced private security contractors.

It used to be said that India is a nation of many nations. Fact is, India is morphing into a nation of gated republics. Slowly, these gated republics are spreading across the landscape and their tell-tale signs are evident in anecdotal snapshots. The empirical picture is changing at a glacial pace and the scale is momentous. Year after year, governments launch new avatars of old promises to deliver public goods and services and taxpayer money is poured into these avatars, but at every milestone of per capita income and affordability, there are public policy failures.

The many failures of public policy are propelling a ceaseless secession. The term ‘secession’ owes its Latin origins to plebeians withdrawing from ancient Rome to force patricians to address their grievances. Early settlers, said Jean Jacques Rousseau, resolved disagreeable conditions within groups by withdrawing from one and seeking another.

The choice before India’s denizen is to grieve, grate and grimace, or get out. In his seminal tome Exit, Voice, and Loyalty, Albert O Hirschman points out, ‘Once this avoidance mechanism for dealing with disputes or venting dissatisfaction is readily available, the contribution of voice – that is, of the political process – to such matters is likely to be and remain limited.’ The voice of the average Indian is not heard and the wait has been too long. And so Indians are desperately seceding, as soon as their income allows, from dependence on government for the most basic of services – water, health, education, security, power – and are investing in the pay-and-plug economy.

In the last decade, total government expenditure, both central and state, has shot up from Rs 18.52 trillion in 2009 to Rs 53.6 trillion in 2018–19. That is Rs 6,120 million of taxpayer monies per hour, every day. Over one-fourth, or 26 per cent, of this money is devoted to what the government defines as allocation for delivery of social services. The expenditure on education has shot up from Rs 1.62 trillion to Rs 4.41 trillion in 10 years, yet more parents are pulling their children out of government schools and sending them to private ones. Allocations for health have more than trebled from Rs 742.73 billion to Rs 2.25 trillion between 2009 and 2018. Despite this, nearly 70 per cent of people prefer being treated by private health care service providers. This pushes millions below the poverty line as they borrow to pay for health care, triggering catastrophic costs for families. That there is this continuing exodus even as the government is allocating more and more money has led public-policy pundit and economist Lant Pritchett to ask in the context of delivery of public services if ‘India is a flailing state?’

Shankkar Ayar
Shankkar Ayar ( Courtesy HarperCollins )

The system is wracked by a curious dysfunction – there is too much government and too little governance. There are the passive government failures resulting in inferior outcomes as well as active policy failure, where the design and implementation of policy results in outcomes that worsen the situation.

During the research for this book, what has been intriguing to learn is how taxpayers and other citizens have internalized the incapacity of the state to deliver public goods and services. Millions are opting out mentally from holding governments accountable and are turning to private service providers, despite the double whammy of costs.

Central and state governments harvest revenue by taxing income and consumption. Overall tax collections between 2009–10 and 2018–19 have more than trebled from Rs 9.84 trillion to Rs 34.94 trillion. The primary imperative and obligation of the state is to deliver education, health care, water supply, electricity and security.

In reality, parents of over 75 million children in private schools are dealing with the cost economics of education, millions are choosing to seek health care from private providers, and households are dependent on inverters. They are paying for services they have already been taxed for. The secession is not by choice but by compulsion and in sectors which form the crucible of economic development.

The normalization of failure is accompanied by misplaced notions of what constitutes a big government. A fallacious and gratuitous explanation often used is that it is better that these services are offered against payment by private providers. The popular Thatcherism, ‘Government has no business being in business’, is being distorted in perverse persuasion. True, government must not run commercial enterprises such as airlines and hotels. But when did the moral obligations of government – providing basic amenities to taxpayers and citizens – get defined as business?

South Korea, Japan and Finland have good education systems and these are run by their governments. Canada has a good health care system and it is run by the government. Singapore and Israel are innovative in water management and their governments are at the forefront of it. Top power companies – SGC China, Enel Italy, EDF France, Tepco Japan and Kepco Korea – are owned by national governments. Policing and security is an essential public service provided by governments across the globe.

A lucid construct of the role of the state is drawn up by Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations. Smith says the sovereign or the government has three duties of ‘great importance’ to attend to. ‘First, the duty of protecting the society from violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.’ Essentially, the obligation of providing education, health, security, water and electricity squarely rests on the state.

The history behind the idea of a nation state has gone through evolutionary and revolutionary iterations where the role of the state has been emphasized and re-emphasized. The idea of the state dates back 10,000 years to Mesopotamia and has evolved since. It was Thomas Hobbes, founder of the concept of the Leviathan, who argued that society without order of a state would descend into ‘bellum omnium contra omnes’ or ‘the war of all against all’. John Locke, who propounded the social contract theory, believed the role of government was to protect its citizens’ unalienable rights of life, liberty and property. Thomas Paine, in the treatise Rights of Man, declared that welfare is not charity but an irrevocable right. And Beatrice Webb, the patron saint, so to speak, of the welfare states visible across the world, crafted the blueprint that called on governments to provide for an ‘enforced minimum for a civilized life’.

There are good reasons why Victor Hugo evangelized the value of education in Les Misérables; why the US and Europe went for universal education; or why a primary focus of Meiji Restoration was on education. Towards the end of the nineteenth century, elementary education was not just free, it was also made compulsory. The School Medical Service was the early avatar of the National Health Service in Britain.

Every modern-day, global economic power focused on education and health during their rise in power and status. ‘The legitimate object of government,’ Abraham Lincoln said, ‘is to do for a community of people whatever they need to have done but cannot do.’ These imperatives, among others, were addressed through political agency. The US had three successive programmes – the New Deal of Franklin D Roosevelt, the Fair Deal by Harry Truman and the Great Society agenda, under which Lyndon B Johnson expanded education and health care as a strategy to reduce poverty.

The Gated Republic is an enquiry into the history and politics of public policy and the anatomy of failure. Part IV of the Constitution of India, the Directive Principles of State Policy, in Article 38 (1) states: ‘The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.’

Seven decades after Independence, the piety of the promises made by the founding fathers has paled. Latter-day politicians and governments are blithely ignoring their responsibilities and Indians are paying the price, literally.

Can India... develop and progress without a healthy and educated workforce, all without clean water, reliable power and security?

The Gated Republic by Shankkar Aiyar releases on June 1, 2020.

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