Commentary/Dilip Thakore
Insulate the economy from petty politics
The Indian economy has had yet another narrow escape. The relatively
smooth exit of mannina maga prime minister Deve Gowda and
the induction into centre-stage position in New Delhi of the more
tactful, urbane and sophisticated Inder Kumar Gujral bodes well
for the nation's faltering economic liberalisation and deregulation
initiative. Even if it means the end of the special Bangalore-Delhi
relationship of the past 10 months.
This is because with his scholarly background the new prime minister
is likely to have a better understanding of the importance of
the economic reforms programme. Though the relatively rough-hewn
Deve Gowda surprised the nation with his commitment to economic
liberalisation, his patent bias towards the agriculture sector
and subsidies for it created infrastructure development imbalances
which could have torpedoed the economic reforms programme. Reassuringly
Gujral has promised continuity of the economic liberalisation
and deregulation drive while "broadening and deepening"
the reforms programme and introducing "transparency"
into the central government's decision-making processes.
But as any seasoned monitor of post-independence Indian politics
and economics will vouch, there is usually a long shadow between
politicians' declarations of intent and actual performance at
ground level.
Smooth as the transfer of power proved to be at the end of three weeks of intense speculation and parleying within the constituents of the 13 disparate political parties which constitute the United Front government in New Delhi, there's
already a shadow over the Gujral administration. The Tamil Maanila
Party which had contributed the services of former Union finance
minister P Chidambaram who presented the Deve Gowda government's
path-breaking "dream budget" for fiscal 1997-98 two
months ago, has opted out of the Gujral government promising (like
the Congress) "outside support." And though the new
prime minister has resolved to pilot the Chidambaram budget in
tacta through Parliament, the economic reforms programme is
likely to suffer without Chidambaram presiding over the finance
ministry.
Be that as it may, the dawn of the era of coalition governments in New Delhi and the astonishingly personality-driven (rather than policy) petty politicking it has engendered, has created a national groundswell in favour of insulating the economic development process from the influences and machinations of the new genre of self-centred and economics-illiterate politicians who dominate the political
process.
The pundits who monitor the national economic scene are fairly
evenly divided between those who believe that such insulation
of the economy from political turbulence is possible and those
who believe it isn't. The latter somewhat more dominant school
believes that the Indian state has so comprehensively scaled the
"commanding heights of the economy" by promoting thousands
of central and state government owned enterprises and by establishing
a comprehensive "licence-permit-quota raj" which refuses
to release the economy from its politico-bureaucratic coils, that
insulating the economy from political interference is impossible.
Therefore argues this dominant school, a cleansing and restructuring
of the political system is a prerequisite of meaningful economic
reform.
However the growing power of the media and the judiciary -- institutions
dominated by this nation's influential educated middle class --
offer some hope of insulating the economic development process
from India's new genre of declasse politicians even within the
current political dispensation. The growth and development of
these two institutions which have withstood the levelling-down
efforts of the increasingly down-market political class, offer
some hope of Italian-style insulation of the economic growth process
from political turbulence. Despite having suffered over 50 governments
in Rome since 1945, the Italian economy has experienced sustained
growth and the nation is among the top 10 economies of the world
measured in terms of gross domestic product.
Nevertheless it needs to be borne in mind that India's media and
the judiciary are institutions under siege. Politicians still
control Doordarshan, the government-owned television channel which
through its monopoly terrestrial broadcasting network reaches
an estimated 80 million households. And the Indian judicial system
is grossly under-staffed and abysmally managed. Against the international
norm of one judge per 30,000 people the ratio in contemporary
India is 1:600,000! Little wonder the law's delay has become legendary.
Yet even against the backdrop of the petty, unprincipled manoeuvring
which characterises the Delhi durbar it is possible to begin the
process of insulating the economy from political upheavals. But
initiating and sustaining this process requires constant pressure
from the educated middle class to strengthen and autonomise institutions
such as the media, the judiciary, the bureaucracy and the police.
Contrary to Marxist propaganda the bourgeoisie has a constructive
-- and vital -- role to play in the national development process.
Dilip Thakore is the founder-editor of Business India and Business World and former editor of Debonair.
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