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Tuesday, July 19, 2011

Governance and Hunger Strikes: Strange Bedfellows

Sixty years may not be long enough for India to mature democratically and make its government behave responsibly. Although the nation has adopted a constitution of its own, it does not appear to be sufficient enough to handle the perspirations/aspirations of the people. At least that is what one feels looking at the kind of civil disobedience that the country has been perpetually witnessing for long.

The root of all incivility that is being increasingly seen in society today, perhaps, rests on the rampant corruption going on all around the country, no matter, which political party is in power. And much of this unrest is owing to the fact that politicians and their kith and kin have suddenly become rich, that too, with no known sources of income of their own. That aside, the stashing of huge chunk of money overseas by the business houses and all those that actively engaged in corrupt practices, including people in the power centers, depriving the country the benefit of its ‘productive-value’ and thereby ‘increased employability’, has made the nation sick of its laws and the law-enforcing agencies. Rather, it has made people furious of their helplessness, perhaps.

It is to epitomize the people’s fury against the mounting corruption in the country that Anna Hazare fasted for four days in April compelling the government to promise enactment of antigraft legislation. This was followed by Baba Ramdev’s hunger strike in Delhi. Obviously, their call enjoyed the massive support of the growing middle-class that is impatient with growing corruption among the distrustful elite of the society and the lower middle-class who are suffering from rising food prices and unemployment. Ironically, even the government treated Baba Ramdev initially “as if he was the Sultan of Brunei”—four ministers rushed to Indira Gandhi International Airport to meet his corporate jet—and of course, a few days later was “given a thrashing at midnight” which forced Baba to flee the capital disguised in a woman’s dress to his ashram in Haridwar.

Said that, let us now take a critical look at the corruption that has drawn the nation to the streets. Corruption, paradoxically, is fanned by successes—success of economy that the nation has witnessed during the last two decades. It however, doesn’t mean corruption was not there earlier—but it was then not a big deal for there was nothing much in the economy itself till reforms were launched. It is indeed the same mechanism—the ‘discretionary power’ of the government agencies—that the Wanchoo Committee pointed out in its 1971 report which today has given rise to ‘speed money’ first and then to ‘hush money’ to hush up the violations, but involving far, far greater sums, as in the case of 2G scam, than earlier thought of. Ironically, the reforms that were launched to move towards an open market system had itself created a politico-corporate-bureaucratic nexus that only speeded up the looting of the exchequer, that too, by outlandish sums, for it enjoyed far more ‘discretionary power’. This may surprise many, but theoretically, this is but inevitable in transition economies unless you have had a leadership of impeachable integrity at the decision making centers.

It is this phenomenon of political weakness to ‘make money while the Sun is shining’ so as to cling to power for eternity that enabled all the concerned to create ‘black money’, and stash it in overseas bank accounts as also to route it back into the country as investment via tax havens. According to the international money-laundering watchdog, Global Financial Integrity, the unreported overseas funds stashed by Indians in the overseas banks amounts to a whopping 35% of the country’s total gross domestic product. And the inaction of the government over it is what is today rocking the nation.

The fury of the public against this inaction of the government is well-understood. But amidst the ongoing moralistic cacophony, what is escaping the attention of the nation is: the task of getting back the ill-gotten money stashed overseas is far from easy. As a civil servant commented, “there are many people who legitimately hold money overseas. You first need to prove the criminality of the generation of illicit funds”. He goes on to raise another pertinent question: Instead of pursuing the “idea of criminalization of tax evasion”, isn’t it better to lower tax rates and put in place a simple and clean tax system that can stem black money flow? There are many silent well-wishers of the nation as this civil servant who believes that “a neat tax structure with the DTC” will improve compliance, but unsurprisingly no activist supported by corporates or yogis pursue this simple logic which Milton Friedman, the noted monetarist from Chicago School of Economics enunciated as early as in the 1950s.

Now moving on to the ultimate in importance, we have a simple question to answer: How to establish an ombudsman who will have powers to prosecute any public official, including the Prime Minister but would neither be elected by the citizens nor appointed by the elected Parliament of the nation, but selected by a committee of academic nobles? Are we to let ‘mobocracy’ supersede democracy? One simple truth the nation must bear in mind: Activists die but not the democracy and the institutions created by it. So, let the nation stick to its constitution and let its elected government enforce it while the active society keeps an eagle eye on it. No short cuts please.
GRK Murty


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