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JANUARY 14, 2007
 Letter From
 Message From
The Prime Minister
 Editor's Letter
 The Great Indian
M iddle Class
 India'S Poor
 The Next 15 Years

Flying High
The Indian aviation industry is growing at a rapid pace, thanks to air transport deregulation, emergence of new operators, lower fares and large untapped demand for air travel. The numbers tell an interesting story: India will require an estimated 1,100 aircraft. The average annual passenger traffic growth in India through 2025 is estimated at 7.7 per cent, well above the world average of 4.8 per cent and China's 7.2 per cent.

Bars Of Gold
The global gold industry is flourishing, largely fuelled by Asian demand and a weak US dollar. The boom is probably only halfway through since prices bottomed out in 2000. Since 1800, the boom and bust cycles have averaged about 10 years. While production is down, the value of gold purchased today is up 47 per cent from a year ago. The super-cycle of high metal prices is seen to be spurred largely by demand from China and India. An analysis.
More Net Specials
Business Today,  December 31, 2006
Are Indians Really Empowered?

India is a democracy by the people, for the people and of the people only in name. A fragmented polity and a sclerotic political class mean that real governance doesn't exist for Indians. But there's cause for optimism.

Interestingly, the era of fractured electoral mandates coincides with the era of economic liberalisation

India has been described as a functioning anarchy, a flawed democracy and the world's largest democracy at different times and in different contexts. The common thread running through these descriptions is the implicit admiration of the order underpinning the superstructure of (apparent) chaos. And there's a lot of the latter. The polity is fragmented-the last time a single party won a majority of the seats in the Lok Sabha was in 1984; the last time a single party formed the government at the Centre was in 1991. Since then, we've had five (six, if you count the short-lived 13-day government headed by Atal Behari Vajpayee) successive coalition governments. Interestingly, the era of fractured electoral mandates coincides with the era of economic liberalisation. Is there a connection? Does good economics necessarily make for bad politics? And how can democracy deliver what it promises to India at large?

The answer to that obviously will depend on the political orientation of the person you talk to. Says Aruna Roy, winner of the Ramon Magsaysay Award, founder of the Mazdoor Kisan Shakti Sangathan (mkss), and civil society activist: "The disenfranchised are getting more marginalised. The government is washing its hands completely off its responsibilities. It is privatising healthcare, education, sanitation and other essential services. What will happen to the millions of people who cannot buy these services?" The implicit logic: governments that cannot provide for their constituents must be prepared to face the wrath of the voter. "Economic reforms have done nothing for governance in this country," she asserts.

Robust e-governance modules: It will definitely help deliver good governance to the common man

Maybe. But major political reforms have taken place over the last 15 years. "There has been significant movement forward over this period (see The Situation is a Lot Better Now)," says Dr Jayaprakash Narayan, former IAS officer, civil society activist and National Coordinator of Lok Satta, a political party that is campaigning for changing the rules of the political game in India (more on that a little later). "The growth of the media, the induction of younger, forward-looking leaders in most political parties, the enactment of some very enlightened laws and so-called judicial activism have all played their part. The end result: democracy is much more deep-rooted today than it was 15 years ago." Adds Abhishek M. Singhvi, Congress spokesman: "Good and better governance is now clearly a more established paradigm than was the case 15 years ago. The challenge is to duplicate and replicate the successes witnessed at the central level in the states."

RTI Act can Change the Game

RTI Act: Giving the people a foothold in governance

Both Roy and Narayan agree that the Right to Information (RTI) Act (one among several enlightened laws) can dramatically alter the game and usher in much-needed transparency into the system. "It will give the common people a foothold in governance," says Roy, adding: "the colonial, feudal administration of free India is totally unaccountable. Government servants lack a public service mindset; they think they're the bosses. Many government servants don't work at all. RTI will expose them." It will, for example, empower a tea stall owner to inspect the motor vehicle logbook of a district collector; it will at once become clear to what extent the car is being used for official purposes and how much for personal use, she adds.

Voter registration: This important first step towards exercising one's franchise is a lot easier now

Adds Wajahat Habibullah, Chief Information Commissioner (CIC) under the RTI Act: "Access to information is the prerequisite to solving most of India's pressing problems. Without information, one doesn't know where the crux of the problem lies. And it is democracy that has opened this information floodgate for the common man."

"But democracy cannot thrive on poverty, deprivation and exploitation. You have to empower the people both politically and economically," says Basudeb Acharia, mp and Leader of the CPI(M) Parliamentary Party in the Lok Sabha. And many people are hoping the National Rural Employment Guarantee Scheme (NREGS) will do for employment generation what RTI is doing for information dissemination. MKSS's Roy is convinced that it will live up to its promise. "The Act is already making a difference on the ground in Andhra Pradesh, Rajasthan, Madhya Pradesh and parts of Maharashtra," she says. "It's early days yet-it has been in force for only about a year-but the early signs are encouraging."

Power to the People

Not everyone is convinced. Says R.K. Pachauri, Director General, The Energy and Resources Institute (TERI): "Schemes like NREGS won't work as they don't create permanent assets; they simply throw good money after bad. One size cannot fit everyone. When you strengthen democratic institutions, you must be prepared to accept thousands of models of sustainable development. Participatory politics demands that people themselves have to decide what kind of development they want. Let a thousand flowers bloom."

The last 15 years have seen more democratic reforms in the country than in any comparable period in history. The following are the major milestones in India's march towards becoming a more inclusive democracy:
Voter Registration: It is now easier to register as a voter than at any other time in the past. Post offices have been made the nodal agency in this regard

Disclosure Norms: Every candidate standing for elections now has to file a statement on his financial status and criminal antecedents (if any)

Political Funding: Laws have been amended, giving India one of the world's most progressive and liberal legislations in this regard

Anti-defection Law: The law in this regard has been strengthened, making political horse-trading a lot more difficult proposition

Limiting the Number of Ministers: The 91st Amendment to the Constitution has limited the size of the Council of Ministers to 15 per cent of the Legislature. This is expected to result in better governance and provide fewer incentives to politicians to destabilise marginal governments

Right to Information Act: This legislation is already proving to be a game changer. It has, in a short span of time, curbed the opportunities of information arbitrage that politicians and bureaucrats enjoyed over the common man

"India needs strong Panchayati Raj institutions," says George Mathew, Director, Institute of Social Sciences, a Delhi-based NGO working in the area of local self-government. "Right now, they don't have the power to take development-related decisions, which remain under the control of the central and state bureaucracies. It is the only way to reach the fruits of economic reforms to the neglected 70 per cent of the country." Adds Arun Shourie, BJP MP and former Union Minister: "The government should also call in experts from various fields and seek their advice. This is not happening now."

Fractured Polity

But that still leaves us with a situation where the two leading political parties in the country (the Congress and the BJP) together win barely more than half the total seats in the Lok Sabha. Interestingly, neither of these parties is a big force in four of the six major states-Uttar Pradesh, West Bengal, Tamil Nadu, Bihar, Maharashtra and Andhra Pradesh-that account for about half of all mps; the Congress is back in power in Andhra Pradesh after a long spell in the wilderness and rules Maharashtra in alliance with the NCP. At one level, this is not such a bad idea; it implies that local parties are connecting better with their constituents and so, are gaining greater traction in their areas of influence. At another level, this can make for a weaker Centre, that, beyond a point, can become a cause for concern. "The fragmented polity obviously retards the process of democratic reforms," says BJP leader Arun Jaitley.

"The major political parties will soon realise-in their own self interest-the need for political reforms," says Lok Satta's Narayan, "and just as the underlying logic of liberalisation has driven the country's economic agenda over the last decade-and-a-half, political reforms, which look difficult now, will also gather steam and take on a life of their own."

"The government is washing its hands completely off its responsibilities"
Aruna Roy
Civil Society
"Democracy is much more deep rooted today than it was 15 years ago"
Jayaprakash Narayan
Civil Society Activist

His remedy has three strands: democratise political parties; transform the political culture; and reform the electoral system. "Right now, most political parties are run like zamindaris," he says. "We must break up this culture of 'high commands' and hold primaries (as in the us) to select candidates. This will immediately clean up a lot of the sleaze and the culture of patronage now prevalent across parties," he says.

Then, Narayan asks, why, in this era of instant communications, do we need election rallies with 1 lakh-plus attendees? "This creates a demand for people who can mobilise such crowds; thus, musclemen and other local riff-raff suddenly become political stars in their local areas, and politics degenerates into a game of mobilisation." Result: even a respected figure like Manmohan Singh loses a parliamentary election.

And finally, he says, the first past the post system must give way to a proportional representation system. "The current system encourages parties to choose candidates who can win them the marginal vote, by muscle power, blackmail and illegal inducements, if necessary. Also, parties below a threshold of 15-20 per cent of the popular vote have no voice in this system. Asks Shourie: "Why can't we directly elect the Chief Executive? This will immediately clean up the polity." The prescription is ready, but is anyone listening?

Election rallies: Lakh-plus mobilisations are mere examples of muscle power


Technology will play a big role in reducing corruption and delivering good governance to the common man. Already, several state governments have developed robust e-governance modules. Andhra Pradesh, for example, has so far floated tenders worth Rs 39,420 crore through the e-procurement route. In 2005-06 alone, it floated 9,981 tenders worth Rs 15,808 crore. The range: a Rs 2,300-crore irrigation project and a Rs 60,000 drain. States like West Bengal, Karnataka and Gujarat, among other, also have such systems in place.

In Andhra Pradesh, land records have been computerised and anyone can access them from anywhere ( Work on computerisation of land records began about 10 years ago and records are now available online. This is a huge improvement over the earlier manual system as the inherent transparency removed any scope for manipulation. "Records were not available for public viewing earlier. Changing that system has empowered the common man, who now has a stake in the system and can suggest changes or challenge incorrect data," says M. Padma, Joint Commissioner, Rural Development Department, who was earlier involved with the project relating to land records and is today focussed on the employment guarantee scheme.

"Why can't we directly elect the Chief Executive? This will immediately clean up the polity"
Arun Shourie

Says Singhvi: "Whenever we compare India to China or other South American or African economies, we frequently forget to factor in the additional price we have to pay and additional costs we have to bear. An open society, a vibrant democracy, a fiercely independent media and judiciary, the compulsion of a coalition government and the inherently argumentative Indian are all virtues to be cherished and should not be treated as vices to be tolerated. It may make our growth slow, but in the long run, it will be solid and surefooted." Adds Nilotpal Basu, CPI(M) MP: "True, there have been follies. It's also true that our democracy hasn't given everybody everything they need or everything that 'democracy' promises. But then, you cannot have a utopian, made to order regime, which is made of only colour, white."

"Indian democracy has helped a great deal in solving some of biggest problems, faced by the common man. And it is through this process that India will emerge as not only the world's largest but also the world's most intense democracy over the next 10-15 years-and I have no doubt whatsoever in this regard," Habibullah sums up.




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