Government and Politicians
All that a citizen expects from his government and leadership is
- A stable environment to live and work.
- Affordable access to Food, clothing, shelter, healthcare, education and capital.
- A clean and transparent political system, which will respond to citizen’s aspirations.
- A strong and fair law-enforcement system and prompt judiciary.
- The reliable ‘safety net’ of a social security system to fall back on in times of natural calamities or other unforeseen possibilities in the future.
- When India got Independence in 1947, we adopted a democratic system of government. The real windfall however, were the Administrative systems, Stock exchanges, Reserve Bank and the banking system, the Railway network, disciplined and non-political Armed Forces and a host of other Institutions that we inherited. The Indian Constitution is considered to be one of the best in the world today.
- In keeping with the Socialistic model of Economy that was adopted, the Government spent billions of rupees and established itself as a monopoly or the largest player in almost all segments. The principle behind this was to plough back the profits by way of infrastructure development etc. and ensure the general upliftment of the weaker sections of society without excessively taxing the affluent.
- Unfortunately, the leaders who envisaged this scheme had overlooked the small possibility of the PSUs being mismanaged, making huge losses or ridiculously low profits, becoming burdens on the exchequer rather than contributing to it. That is what happened in almost all but a few cases.
- The revenue deficit refused to go away, and the government resorted increasingly to taxation as a means of generating revenue. The original socialistic dream soon got derailed. The PSUs became drains on the economy while the public suffered with the introduction of every new tax.
- Large scale tax evasion followed. This created black money, which in turn gave birth to the Parallel Economy. All citizens, taxpaying or non-tax paying, honest or dishonest are today never more than a step away from the ever- lengthening shadow of the Parallel economy.
- Thanks to the Movement for Freedom, our country got great leaders to head its government in the initial years. They were eminent people with great strength of character. There were lawyers, educationists, social workers and activists largely drawn from the educated middle class. Unfortunately, when economic power passed into the hands of the Parallel Economy, all kinds of people with very poor credentials began to get attracted to politics from the outer fringes of respectable society. These elements had the clout of black money at their disposal and gradually good citizens were left with the options of getting pushed out of the political process or sourcing funds from the parallel economy in order to survive.
- Political Leaders have today lost their credibility in the eyes of the citizen. This has a direct bearing on the public standing of the Government and its various arms. The single biggest factor that strikes terror in the heart of a citizen is the knowledge that even departments like the Police etc. which are critically important for Social security can be easily influenced by those with enough money.
- Because of the fiscal deficit, the Government has had to rely excessively on external borrowings and as is currently fashionable, FDI. It is only natural for the lender to influence our spending policies to ensure timely debt servicing. This influence is seen in the repeated attempts to curtail subsidies. This in most cases has a very painful social consequence.
- Inadvertent promotion of Anti-social businesses and industries Like Liquor, Cigarette, Tobacco, Lottery etc.: The very high Excise duties levied on these products make them guaranteed sources of revenue and therefore important for the government despite terrible social consequences.
- The lack of Government spending in infrastructure has rendered local Industry incompetent.
- The disparity between haves and have-nots grows at a frightening pace. The inability of the Government to fulfill the most basic of needs of the common man is fuelling a general feeling of insecurity like never before.
- Socio-political problems that are essentially rooted in economic backwardness eventually transform into full-blown law-and-order problems, e.g. the Naxalite movement, the insurgent movements in the North Eastern states.
- Though it seems logical to blame the leadership for all that goes wrong with society, the fact is that we still have some very good political leaders in this country. It is the mechanism of governance that has ceased to be effective for the reasons given above. No matter how good the leaders are, the flawed system leaves them with very little ability to address the concerns of the common man.
- The challenges thrown up by the process of globalization call for great foresight, astute financial management and efficient marshalling of our resources. Do we have the strong leadership, vision and necessary mechanism to face these challenges successfully?
The emotional and mental secession of honest citizens from this country is the first step to a full- scale exodus. Anarchy will no longer be something that exists in distant African or Latin American dictatorships. It is closing in on us with each passing moment and will explode in our faces when we are at our weakest.
Dr. D R Pendse: Ex Chief Economist, Tata Group
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