Monday, December 27, 2010

The Color Of Money

The Union cabinet cleared the proposal for public funding of elections around this time in 2005.Everyone wants India to initiate a thorough reform of its election processes. The Election Commission is the place to begin that process. Urban India often forgets that the panchayat election is the most contested of all elections and has more money spent per voter than in any other. Public funds should remain for public good, writes Manvendra Singh in The Indian Express.

As if on cue, India periodically begins the debate on public funding for elections. A memory recall reminds me that the Union cabinet cleared the proposal for public funding of elections around this time in 2005. And as far as memory serves, the proposal was sent to the law ministry for approval/processing. Now that sounds exactly like the Afzal Guru file, which is precisely the motive behind the periodical references to this route for electoral reforms.It is everybody’s case that India initiates a thorough reform of its election processes. The Election Commission is the place to begin that process.


They are also the elections that have the highest polling percentages. In its obsession with the Parliament and legislature, urban India forgets that the panchayat election is the most contested of all elections. Per voter there is more money spent in a panchayat election than any other. And in fact the Parliament election becomes the cheapest in that sense. And that matches the polling figures too, with panchayats leading the race, and Parliament bringing up the rear. There are various reasons why the panchayat election is the most contested of all, ranging from prestige in the village to the fact of influencing more development funds than any other elected post. All of this stays under the radar, for it doesn’t make good daily conversation in urban India. This is the reality that the country will have to face before it can begin an honest debate on electoral funding reforms.

So where do the panchayat funds come from, when many states don’t have party symbols for those elections? Obviously the money is coming from somewhere, and in proportionately bigger quantities than it does for Parliament elections. Election funding reforms, therefore, must cover the entire gambit of the Indian scenario. It would be discriminatory and snobby if the attention to reform were aimed only at the Parliament or legislature levels. After all, the democratic process covers the entire gamut from panchayat to the Parliament levels.


The general Indian attitude towards anything that carries a public fund label is that some of it is for the take. It is taken for granted that a portion can be diverted for other ends, and through other means. And with an impossible implementation procedure, it makes little sense to have public funds for elections. There are various proposals doing the rounds, but none that encompasses the sheer diversity and dynamism of Indian elections. Better let public funds remain for public good. The simplest solution, and one that encourages probity and honesty, is for a transparent and private, corporate, business or any other funding that is tracked by sourcing of monies. Let the funding be from any source, by cheques, and through a monitored bank account. There may be an individual bank account for each candidate, party etc. The sourcing for each constituency can be monitored, as also the vested interests that may exist. The vested interests can then be barred from benefiting financially or otherwise. It will then be known that for a particular panchayat election, the local PWD contractors contributed for a particular candidate. That is how it all begins. Let’s get the picture clear first.

Wednesday, December 22, 2010

Hyderabad, 26 Dec 2010: Workshop on land and property rights

You are cordially invited to a "Symposium on Land Rights & Development" Organised by Liberty Institute, New Delhi, in association with Forum for Good Governance, Hyderabad

Venue: Hyderabad Study Circle, Near Indira Park `X’ Roads, Domalguda, Hyd

On December 26, 2010, Sunday, from 10.30 AM to 4.30 PM

Inaugural Session
Launch of International Property Rights Index 2010 by Dr Y Shivaji, Ex MP

Chief Guest: Justice A Lakshmana Rao, Ex Chief Justice, Allahabad High Court

Keynote address by Dr Barun Mitra, Director, Liberty Institute
President : Sri K Ashok Reddy, Senior Advocate, High Court

Resource Persons:
- Dr B Yerram Raju,
- Prof P Narayana Reddy, CBIT,
- N Saida Rao,
- Ambrish Mehta, ARCH, Gujarat,
- P Sivarama Krishna, Shakti
- P Trinadha Rao, Laya

The discussions will cover urban and rural land related issues. There
will also be a demonstration of a system of mapping land, which may
enable the tribal population document and authenticate their private
agricultural land and village common land, under the Forest Rights

RSVP : Ch. Narendra, Coordinator, Mobile : 98495 69050,
email :

Sunday, December 19, 2010

Push development to kick corruption

The Radia tapes have exposed the business-politics-media nexus. There are scandals in loans for real estate companies in which PSU banks are implicated, housing allocation, and IPL. One reason for corruption is that there are economic goods—contracts, land deals, permits—available at an administered price that understates their true value. The agent in charge of allocating such goods is in a pivotal position. Corruption is embedded in the democratic political process and the prevailing ideology shared by all parties (conveniently and profitably) that the state must play a large role in economic life, writes Meghnad Desai in The Financial Express.

We have all known about corruption in Indian political and business life. Many of us have had to give bribes to municipal officers, electricity or water suppliers, for telephone connections in the old days or for getting a gas cylinder. Few of us get the chance to take bribes. This is the side of the bargain we only hear about.


The Radia tapes have exposed the business-politics-media nexus, which oozes corruption. Along with these, there has been a minor scandal of underhand loans for real estate companies in which PSU banks are implicated. The Maharashtra chief minister resigned for a housing allocation scandal and the Karnataka chief minister refused to resign despite a land scandal. Meanwhile, the IPL continues to speed along its own dubious trajectory. Business tycoons, normally reticent, have begun to speak up about the corruption they encounter. And, all this in a space of four weeks.


Why is there so much corruption? One way to see it is that there are economic goods—contracts, land deals, permits—available at an administered price that understates their true value. The agent in charge of allocating such goods is in a pivotal position. He can grant it to you or deny you; he can delay you if you have a right to it and in the ultimate analysis, he can frustrate you be granting something, but in such a way that you can't use it. Jean Jacques Laffont, a brilliant French economic theorist, who died far too young, advanced the hypothesis that corruption is a principal agent problem.


Corruption as rent seeking is a familiar idea. The opportunity to exploit the gap between the list price and the market price of controlled goods is obvious. But the need to keep goods under control for allocative purposes also needs to be endogenised. In India, the fashionable argument is that markets cannot be trusted to allocate goods fairly because of market failure. Hence the state has to allocate these goods. But the state is not a person. Its agent is the government, which is represented by politicians in office and their party apparatus. Where governments are honest, there is no need to worry about the gap between the actual and the market price of goods, like the NHS in the UK. I don’t need to bribe my MP to get admitted to a NHS ward for an expensive operation. I don’t need to bribe my local councillor to get planning permission to extend my patio.

So why are governments corrupt in India? They were not always so. In the 1950s, it was known that while there was corruption at lower levels of administration, the top echelons were uncorrupt. The black market, which had begun in the war years, had lasted for a while in the post-war years. Regulations such as prohibition encouraged more such black market, as did custom regulations and tariffs. Black money provided much of the finance for the film industry because the law forbade banks from loaning money to film producers (an anomaly corrected by the NDA government when Sushma Swaraj was the I&B minister). Thus black money did not lie idle; it recycled itself profitably in alcohol, films and often real estate. House purchase remains a black-plus-white payment activity still.


Political parties are closed private firms in which outsiders cannot easily enter. They also restrict competition since it costs a lot to start a new party. Since independence, many national parties have folded—PSP, Swatantra, and apart from Jan Sangh renaming itself as BJP, there has been a stable number of parties. Congress, BJP and the Left (itself a divided house) are the only three stable actors at the national level. The Left has never been in power at the Centre (except the brief period of 1996-1998 in a coalition), and, even so, it is probably not very corrupt. The two national parties collude in making a show of fighting corruption, but never harm each other. It also does not benefit them to have an effective and independent anti-corruption agency. There are, indeed, no agencies in India—the top judiciary apart—that are independent of political parties in power, neither civil service nor the police. Even the Army has begun to enjoy the fruits of corruption.


I am sceptical of the notion that corruption in India has a cure. It is too embedded in the democratic political process and the prevailing ideology shared by all parties (conveniently and profitably) that the state must play a large role in economic life. Jean Jacques Laffont in his article showed that corruption has U-curve if plotted against per capita income; development is thus a long-term cure for corruption, but his curve turns a corner very late in the development process. The only exception to this U-curve is the group of Scandinavian countries which are not corrupt at all. But that has to do with their religion, the Lutheran Church, and the discipline of their civic life. Religion does not seem to offer any lesson for non-corruption in India; just read the Mahabharat and you see why. So, the only cure is to wait for development .

Wednesday, December 8, 2010

Prospect of liberal politics in India today

The verdict, in the recent assembly election in the state of Bihar, has attracted a lot of interest across India. The ruling coalition of JD(U) and BJP won a record 206 seats in a house of 243. Did this huge margin of victory, signify a major shift in Indian politics? What does this election really tell us about the future political direction in India? In this the second half, the aim is to identify the various strands that dominated Indian politics over the past six decades - language, region, religion, caste, poverty. Is there a diminising political dividend from identity politics, could political ideology find a legitimate space in India, asks Barun Mitra

Wednesday, December 1, 2010

'I don’t give a damn' attitude

Stalling of Parliament is a manifestation of growing intolerance in the country. The UPA has behaved in a disgraceful way and the opposition has a point. However, they don't allows the Government to function properly. The ruling Congress, at the same time blames the Opposition for not letting Parliament function. It gives out the impression that cheap stunts matter than performance, writes Ravi Shanker Kapoor .

The Opposition, including the Bharatiya Janata Party (BJP) and the Left parties, continue to stall Parliament to press their demand that a probe by a Joint Parliamentary Committee (JPC) be instituted to look into the controversial allocation of 2G spectrum. While the anger of the Opposition is justified over the loot of public money, not allowing Parliament to function is tantamount to undermining the very concepts of democracy, individual liberty, and tolerance.

There is no denying the fact that the United Progressive Alliance (UPA) Government has behaved in a disgraceful manner, in not only letting A. Raja continue as telecom minister in the face of growing evidence about his less than proper conduct but also in thwarting his prosecution.

The Comptroller and Auditor General (CAG) said, “The entire process of allocation of 2G spectrum raises serious concern about the systems of governance in the Department of Telecommunications which need to be thoroughly reviewed and revamped. The fact that there has been loss to the national exchequer in the allocation of 2G spectrum cannot be denied.”

The Opposition clearly has a point. It has every right to take the Government to task for its sins of omission and commission; for this purpose, it can use the country’s biggest forum, Parliament. But, ironically, BJP and other Opposition leaders do not allow it to function. BJP spokesperson Prakash Javadekar said, “Congress is running away from the JPC and we have decided to stick to our demand. It has been three weeks now that Parliament is not functioning.” Earlier, he had said, “Congress is fully responsible for the impasse in Parliament.”

The ruling Congress, on its part, blames the Opposition for not letting Parliament function.

The most important feature of this blame-game is that all parties are convinced stalling Parliament is not wrong if they deem an issue to be big enough to doing that. In the wake of the Tehelka row when the BJP was in office, the Congress also did not allow Parliament to function; and now, the BJP and other parties think that the 2G scam, the Adarsh housing scandal, and the irregularities in Commonwealth Games warrant their disruptions in both Houses.

But the point is that there will always be issues which one party or the other would find of overwhelming consequence; there would always be something or other that, the Opposition would claim, proves the moral turpitude of those sitting on the Treasury benches. In fact, anything can be construed or misconstrued as great betrayal by the government of the day. Would that always justify the stalling of Parliament?

At the heart of the controversy is our politicians’ belief that good oration and cogent arguments do not matter in our democracy, while cheap stunts like rushing to the well and loud sloganeering do.

I do not argue because I am convinced that my stand is correct and righteous—and that of my opponents is incorrect and willful. It also means that I need not listen to them.

I am convinced that I know all the facts—and my opponents are hopelessly in error. I am convinced that I know everything that is worth knowing—and my opponents are groping in the dark. And since my position is impeccable and infallible, I have a right (even duty) to enlighten the world about my views—which are actually statements of facts, if not gospel truths. It is in my exercise of this right that I don’t allow others to speak. There cannot be any dialogue among the self-righteous.

Further, politicians seem to believe that the people of India do not care about good arguments and articulate speeches; so, in order to impress the electorate, they indulge in theatrics.

Their cantankerousness reminds me of German Chancellor Otto von Bismarck’s famous 1862 speech: “Not through speeches and majority decisions will the great questions of the day be decided… but by iron and blood.”

Thankfully, our political masters are not yet talking about a policy of “iron and blood.” But are they far from it? In the absence of speeches, debates, and discussions, don’t we stand to become an unthinking society?

Intolerance is a natural product in this milieu, and we find it grow in every walk of life. Unsurprisingly, it is often promoted by politicians and their front organizations. Somebody feels that the works of Salman Rushdie and Taslima Nasreen may offend the Muslims, so they are banned or curtailed. Somebody else feels that the paintings of M.F. Hussain blaspheme the Hindu pantheon, so the artist is in the line of fire. A nanny-like minister tries to ban smoking in cinema and on television. The scion of the Thackeray family seeks a high-visibility launch, and a university is forced to withdraw a book from the syllabus. Many more instances can be quoted showing how politicians are bulldozing others in not only the political arena but also in literature, arts, cinema, culture, etc.

The politician of India doesn’t care two hoots for others; his attitude reminds me of Rhett Butler’s famous line in Gone With The Wind, “I don’t give a damn.” Paralyzing Parliament is just the most conspicuous manifestation of the political class’ mindset.