Saturday, February 08, 2014

In need of fundamental overhaul

The year gone by has not been a particularly exciting one. All it did was to confirm to us just how dysfunctional the United Progressive Alliance government had become. The year to come, 2014, promises better things. That is not only because we believe that things can’t be worse than they are today, but because it comes with a general election which promises to shake up things in the country as they have not been shaken for some time now. Modi’s upsetting the BJP hierarchy and Kejriwal’s defeat of Shiela Dixit could well be a forerunner of a greater churning in Indian politics in the coming year.
Cynics will no doubt argue that given the way life really works, it is more likely that after some sense of upheaval, things will be back to what they were, a country of elephantine proportions doesn’t change its ways easily. That complexity is probably most visible in our economy. Many of us hope that some miracle will somehow restore high growth and banish inflation next year. But that is easier said than done. Surely, some change will come through the better business climate within the country and abroad, but economists warn that there are problems with what is called the trend growth rate. India needs a fundamental overhaul in its governmental system if it is to see sustained economic growth in the coming decades.
So far, in its liberalisation processes, the government has always the crucial bit of residuary powers in its own hand, in other words, even the shift from government control to regulation has not been an honest one. These were manifested in the scandals of the past couple of years, relating to land, spectrum, iron ore and coal allocation, as well as the arbitrary functioning of the tax regime.
Actually, if we could venture a solution, we would say that the most important reform that any government could carry out is to dismantle the antiquated IAS-led bureaucracy and replace it with some other, more efficient and responsive form of governmental management. But none of this can be done in a matter of one year, so we may see a spurt of growth next year but for long-term sustained growth, there is need for deep, even revolutionary reform, which is next to impossible in the era of coalition governments.
In foreign and security policies, too, we are not likely to see any fundamental change in 2014. One reason for this is that change here is controlled by external factors over which we have little or no control. But another reason for this is that the key instrumentality of the government —the armed forces — are in no shape to play their role in the process. What we mean is that should India wish to take a tougher posture with regard to Pakistan and China, to the extent of being willing to go in for a localised confrontation, it will be handicapped because its three services suffer from shortages of key equipment and the higher management of security in the country is obsolete and shoddy.
The situation with Pakistan could deteriorate, but it is unlikely to go beyond pinpricks on the Line of Control. This, however, does not include any situation that may arise out of another high-profile terrorist attack from Pakistani jihadi groups. Actually the public mood is such that no government in New Delhi would find it easy to stave off pressure to take some military action in response.
In 2001, following the attack on the Parliament House and 2008 after the Mumbai attack, the government seriously examined the possibility of a retaliatory military strike, but did not give the final order because the services were simply not ready for a longer drawn out war.
That is why, there is so much concern over Chinese behaviour, generally across the world, as well as in our region and, more importantly, our borders.
The new Border Defence Cooperation Agreement seems to be working, but, to be blunt, will do so till the Chinese decide otherwise. The imbalance of power between China and India is increasing by the day and, for the present, Beijing is preoccupied with its confrontation with Japan. But things could change and we could be affected.
On top of all this, we have landed in a new mess in our relationship with the United States. Whatever be the rights and wrongs of the Devayani Khobgrade issue, what is certain is that relations between India and the US have suffered a major setback. Many in India do not realise the important indirect role that the US plays in India’s security as the global hegemony. For example, the security of the oil sea lanes, through which 70 per cent of our petroleum products come from the Persian Gulf, depends on the US. In the event of a conflict or tension, it is the US which uses its muscle to keep the sea lanes open. The same, of course, could be said about sea lanes elsewhere, for example in the South China or East China Seas where we have seen an alarming escalation of tension between China and Japan.
Clearly, year on year analyses are not too heartening. Indians need to realise that the time has come for decision-making and thinking which is multi-year, though not in the Five Year Plan kind of a way. What is needed are steps that go beyond partisan approaches and election-cycles aimed at providing the desperately needed transformation of the way India manages its governmental system. Steps that will impact across this decade and the next.
Mid Day December 24, 2013

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