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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

How To Make Democracy Deliver In India


Democracy is just the beginning and not the end, as is widely believed by the elite in India. Democracy is just an instrument

The other day, I was abroad at a conference on India. Every Indian speaker was eloquent about the biggest accomplishment of India-democracy, and just stopped there. This is not an isolated incident. Almost every where I speak abroad, Indian politicians, bureaucrats and even many corporate leaders talk about democracy in India as the only accomplishment that matters. They dismiss the economic progress of China-without a democratic model-as not worthy of India's emulation. Most of them even use our democracy to justify our slow economic progress and our poor record in human development index-literacy, healthcare, nutrition-and, of course, in solving the problem of poverty.

It is time we realised that there is no justification for such a posture-for several reasons. First of all, obtaining freedom and setting up the democratic model of governance was the achievement of Gandhi, Nehru, Patel, Azad and others who sacrificed so much for our freedom. There is hardly any contemporary Indian who played a significant role in our freedom struggle. Secondly, Nehru and his team achieved so much during their term in office in creating a sound infrastructure for economic progress. They demonstrated vision, commitment, honesty and hard work to achieve tremendous progress. Unfortunately, there are very few leaders in our generation who have shown the mettle required for such progress. Thirdly, our using democracy as an excuse and a liability generally impresses none. We look very defensive most of the times, and even apologetic sometimes in front of international audiences.

Democracy is just the beginning and not the end, as is widely believed by the elite in India. Democracy is just an instrument. Let us remember that all developed nations are democracies. In fact, barring a few exceptions, most countries accelerated their growth after they became democracies. It is, now, widely accepted that compassionate capitalism is the most appropriate and enduring instrument for progress. History tells us that such capitalism flourishes only in a democracy. After all, democracy enables openness for discussion and debate, and generally brings out the best idea. Democracies provide the best platform for addressing the basic needs of every citizen-education, healthcare and nutrition. Democracies create equal opportunities for every one to better his or her life. Democracies also avert disasters, as very well argued by the Nobel laureate economist, Amartya Sen. Thus, there is no reason for us to use democracy to justify our inaction.

It is, then, a good question to ask why India has been one of the poorest performers amongst all democracies in the world. We are among the slowest performing countries in almost every area-human development index, performance of our universities or even in sports, to name just a few. Over 250 million people do not have access to safe drinking water. We have the largest illiterate population in the world. Over 750 million people do not have access to decent sanitation. Over 300 million people live below the poverty line, as defined by India herself, and not by any international agency. A nation of 19 million people beat us, a nation of a billion people, hollow in cricket; a nation of 40 million people produces 30 times the number of patents that we produce. A nation of 5 million people exports twice what we do. We are ranked #1 in business corruption abroad. The betting scandal in cricket took place only in India. I can go on and on. It is time we asked ourselves why our experiment in democracy has been such a painful experience for the poor.

It is time we asked ourselves why our experiment in democracy has been such a painful experience for the poor

What is the solution to make our democracy succeed? The best solution is to minimise the role of government to a few essential areas and leave the rest to entrepreneurs. Wherever subsidies have to be provided in essential areas like education and healthcare for the poor, it can be in the form of vouchers so that the money goes directly to the cause, and the middlemen do not pocket most of it.

Second, we must control our population as if there is no tomorrow. Unfortunately, ever since Indira Gandhi lost election in 1977 on the nasbandi issue, every political party that has come in to power has behaved as if this is not a problem. In my opinion, this is the most important problem even before basic literacy and healthcare. All our economic progress will not better the lives of our people if we do not solve this problem.

Third, we must focus on the quality of leaders. The success of any system depends on the quality of leaders, on systems, on hard work and on discipline. Leaders raise the aspirations of people, lead by example and get things done. Systems ensure fairness, transparency and accountability in our institutions, raise the confidence of people and help measure progress. Hard work ensures that we provide the required attention to solve the problem. Discipline ensures that we comply with agreed principles and protocol, no matter how tough they are.

It is universally agreed that the quality of our political leaders, bureaucrats and our corporate leaders, with a few notable exceptions, is at a nadir today. On any scale of performance, we do not measure up to the task when benchmarked on a global level, even among developing countries. Building a nation requires some smartness, lots of energy, enthusiasm and confidence to handle the most difficult problems that confront us, and to deal with the best in the world. Such qualities are available only with the young people who have an open mind, who are competent, and are willing to engage with and learn from similar people in the best performing countries in the world. Let us remember that the freedom was won by leaders whose average age was less than 50. Today, we have too many people who are so old that they cannot even walk properly. How can they work 20 hours a day for the betterment of the country? I have also realised in my own case that old age results in rigidity of mind, making me more and more closed to good ideas from others. Hence, we will have to create a rule that people should retire from politics at 60. We must also limit the term of minister to a maximum of 10 years or two terms whichever is lower. It is worthwhile to ban the relatives-children, sons-in-law and daughters-in-law, nephews and nieces-of a politician from contesting any election till 10 years after the exit from politics of that politician.

Competence has been completely discarded in India in selecting political leadership. No other country needs competent politicians as much as we do since we have lots of problems and very little time to solve them. How do you measure competency? One simple way is to look for people who, when out of government, can earn much more by legitimate means than they earn while in government. In other words, we need competent people with specific skill sets that are valued in the marketplace. Or, these people must have been hailed as highly-respected people if they have been in professions where the salaries are low. Such people will not become "professional politicians", and should enter the government making big sacrifice because they want to make a difference to the society. Today, there are very few such people in Indian politics. Hence, make it compulsory that any candidate, who wants to stand for elections, must have been in the top 10 per cent of his degree class, must have put in a certain number of years as a professional, and must have been adjudged as a highly-respected performer in the top 10 per cent of his or her group for the previous three years at least. This is what Singapore does. No wonder, they get the best politicians in the world.

Elections should be fought on the performance record of the politicians rather than on their caste affiliations.Caste affiliations have dented the value of merit, performance and good ethics in politics. Hence, ban any public mention of a politician's caste in an election as well as in any public meeting.

Elections should be fought on the record of the politicians rather than on their caste affiliations

Another major reason for our slow progress is our bureaucracy with no accountability and no incentive to perform. Almost all our delays in execution have very little to do with our political systems. It is the lack of attention to speed and excellence in execution of our bureaucracy. There is very little training, planning and preparedness in the bureaucracy to handle growth. There is no linkage between performance and promotion in government. The mindset is administrative-that is maintaining status quo. It should become managerial, which is all about completing tasks on time, within budgeted cost, and to the satisfaction of the customers. The days of generalist-revenue-collector type of administrators is over. You need specialists who will have to spend all their time in one function, learning and constantly upgrading their skills. They should be trained to become and act as managers. If there is one skill that all our bureaucrats must be taught immediately, it is project management. We have to get to a higher level of project performance. This can be done if, at the start of each new government, about 50 major projects in each department are identified with budgets for time, quality and cost. The senior officers must be given a contract of five years in the secretarial position, based on yearly performance review, no matter which government is in power. Continuation of the bureaucrat every year must depend only on how well he or she has performed. It must become compulsory for every TV channel and newspaper to publish the progress of each of the projects with the names of the minister and senior bureaucrats. The progress must be certified by a citizen committee consisting of highly-respected people from various walks of life. The bureaucrats must have a small fixed salary and a large variable pay, which will depend on the progress of the projects the bureaucrat is handling. This is the best way to bring accountability to bureaucracy and politicians. The Right to Information Act is a wonderful instrument to bring transparency to government. The government must strengthen this Act and not allow vested interests to weaken it.

Talking about transparency, I must say that technology and systems must play a mandatory role in governance if we want to improve accountability and transparency. First, every activity in the government, including routine ones, should be designed as projects and project management software must be used to monitor the progress. Second, it is necessary to use a workflow software for every decision-making process. Such a software will ensure that every decision-making process is divided into steps. Each step can be assigned a completion time target and the person responsible to complete the step can be assigned. Thus, any delay in the progress of a project or a decision can be pinpointed to the individual who is sitting on the decision. Also, all the papers regarding that step and the previous steps can be seen by anybody on the net! Thus, for every decision, there will be full transparency and accountability since the person, time taken for decision-making and reason for the delay will be known to every citizen.

Finally, any progress requires discipline. I do not know of any developed country or a country which aims to become developed that has not adhered to strict discipline. Unfortunately, in our country, discipline is given least importance. This has to change if we want our democracy to work.

All these are doable. None of these is rocket science. However, it requires courage, which is the first attribute of a great leader. It requires a mindset that is ready to sacrifice personal interest and the interest of this generation so that our future generations are better off. I do see several people amongst us who can pull it off. They just have to make tough decisions. That is all.




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