PRAGOTI

Chairperson of the Session

Esteemed Guests and Fellow Panelists

 

Dear Friends

 

I am happy to be here at Sambalpur, at the heart of Western Odisha and the land of the legendary Veer Surendra Sai, who led the uprising against the British colonizers in 1857.

 

The theme of today’s Seminar on reforming Indian democracy is apt because our democracy today is indeed at crossroads. During the formative years of our democratic republic, Dr. Ambedkar had made a prescient observation regarding the future of Indian democracy. He said:   

 

On the 26th January 1950, we are going to enter into a life of contradictions. In politics we will have equality and in social and economic life we will have inequality. In politics we will be recognizing the principle of one man one vote and one vote one value. In our social and economic life, we shall by reason of our social and economic structure, continue to deny the principle of one man one value. How long shall we continue to live this life of contradictions? How long shall we continue to deny equality in our social and economic life? If we continue to deny it for long, we will do so only by putting our political democracy in peril. We must remove this contradiction at the earliest possible moment else those who suffer from inequality will blow up the structure of democracy which this Constituent Assembly has so laboriously built up.

 

The fact that political democracy is unsustainable in the long run without the removal of socio-economic inequalities is a profound insight, whose import can be seen not only in India today but across liberal democracies under globalised capitalism.

 

Global Context

 

It has been widely acknowledged that the ongoing crisis faced by the global economy since 2008 is the biggest since the great depression of the 1930s. What has caused this crisis? The immediate cause was the bursting of the financial and real estate bubble in the United States in 2007, which led to the collapse of economic growth and burgeoning unemployment. Since the US economy provides the market for economies across the world, recession in the US has had an adverse impact on the economies of Europe, Japan and elsewhere, thus spreading the crisis.

 

If we look at the post-2008 policy developments in the US, over 1.5 trillion dollars were spent as direct bailouts for the big banks and financial corporations, who were the prime culprits behind the speculative financial bubble. Another 4.6 trillion dollars were provided as indirect insurance to financial corporations. In contrast, actual public expenditure incurred to fight the recession was only around 740 billion dollars. (These calculations are from a recent presentation “Is this Great Depression-II?” by Rohit, faculty of economics, South Asian University). Thus, those who were responsible for precipitating the crisis were bailed out using trillions of dollars worth taxpayers’ money, while the victims of the crisis have lost their jobs and homes and sunk into poverty without much help from the state. This raises fundamental questions regarding the nature of democracy in the “oldest democracy” in the world, the United States.

 

A US Congressional Budget Office study published in October 2011 showed that between 1979 and 2007, while the post-tax income of the lowest 20% of the American population grew by 18% and the income of the middle 60% by around 40%, the income of the top 20% (excluding the top 1%) grew by 65% and that of the top 1% grew by a mind boggling 275%. The share of the top 1% of income earners in the US in total market income increased from around 10% in 1979 to over 20% in 2007. The Occupy Wall Street movement which started in the US last year is in response to this conundrum. The basis for the slogan of 99% vs. 1% – which has found wide resonance – becomes quite clear. The system is being seen more as a plutocracy rather than a democracy, by large sections of the people.

 

The picture is similar in the liberal democracies of Europe too. In response to the sovereign debt crisis afflicting the European countries, which is a direct outcome of the global recession, the governments across Europe are implementing drastic austerity measures through cuts in public spending and social welfare benefits. The burden of the economic crisis, caused by the reckless activities of the big banks and financial entities, is being shifted onto the ordinary people through cuts in pay and social security and hike in student fees. People across European countries are protesting against these austerity measures, particularly in countries like Greece, Portugal, Spain and Eastern Europe.

 

The short point here is that rising income inequalities under neoliberal capitalism and the policies favouring big banks and corporations at the cost of peoples’ welfare, are posing serious challenges before the liberal democracies of the West.

 

Indian Context: Economics and Politics

 

Looking at the Indian situation in this context, we find many similarities. It is a fact that the economic crisis has not affected India to a serious extent so far. Yet, the structural causes behind the crisis, especially rising income inequalities, is as much a feature of India’s growth story in the post-liberalization period as it is in the West. Few years back the NCEUS chaired by late Prof. Arjun Sengupta published a report revealing that 77% of Indians spend less than Rs. 20 per capita per day (based on NSS 2004-05). The government later contested the figure, claiming that it is 61% and not 77%. Even if that is true, what emerges clearly is that GDP growth has bypassed the bulk of the Indian population. This is particularly the case with rural India and the socially oppressed sections of our society – the dalits, adivasis and the Muslim minority.

 

The principal beneficiaries of the Indian growth regime are the big business class and the urban elites. The wealth and assets of the Indian big business houses have sky rocketed over the past two decades. The number of Indian dollar billionaires (net worth over Rs. 5,000 crore) in the Forbes list has increased from 13 in 2003 to 55 in March 2011, whose combined net worth amounts to over $245 billion (over Rs. 12 lakh crore).

 

When economic reforms were ushered in 1991, two important claims were made by their proponents. It was argued that freeing private capital from the encumbrances of state regulations vis-à-vis its mobility, size and nature of activity – the infamous ‘license, quota, permit raj’ – would unleash entrepreneurial energies and create economic prosperity. It was also argued that market based reforms would lessen the discretionary powers of public policymaking over time, removing the scope for corruption and paving the way for increased efficiency, transparency and goodness of governance.

 

Two decades down the line, these claims sound quite hollow. Greater freedom for big capital has surely led to a manifold increase in the private wealth and power of the rich. But the overwhelming majority of Indians have remained mired in poverty, hunger, lack of decent jobs and absence of social goods. And as far as governance is concerned, the state under the neoliberal regime has increasingly become a vehicle for capital accumulation by the big corporate players.

 

Even though the state is supposed to maintain an arm’s length with private capital under the Constitutional scheme, that length has eventually disappeared in the zest for ‘facilitating’ private investment and providing a ‘business friendly environment’. The executive, the legislature and the judiciary have all been affected to various extents by the blurring of the distinction between public good and private interests, under the ideological hegemony of neoliberalism. Emboldened by the shift in the orientation of the state, big capital in India has unleashed a predatory accumulation process, throwing to winds all extant laws and regulations vis-à-vis labour, environment and taxation. Appropriation of public assets, reckless speculation on financial assets and grabbing of common resources like land, forests and minerals have all become rampant. 

 

The social consequence of this accumulation regime – concentration of wealth, rapidly increasing inequalities and credit driven hyper-consumerism of the elite – has also been accompanied by a tectonic shift in the moral landscape. In a setting where getting rich fast becomes the dominant ethos, bending of the rules to get rich does not invite much repugnance. Naturally, the moral disincentive for the abuse of public office for personal gratification also gets weakened over time. All this has combined to toxify the political process, with money power ruling the roost and democracy gradually degenerating into a bazaar of brokers and fixers. 

 

Here lie the root causes of corruption in India. The mega-scams that have occurred in the recent past – the 2G spectrum allocation scam, the Commonwealth Games scam, KG basin gas scam etc – show how thousands of crores worth of public resources have been illicitly cornered by a section of big corporates, bureaucrats and ministers. While corruption in high places has been a feature of our political system for many decades, what has emerged as a dominant trend in the post-liberalization period is a thorough distortion of the policy-making process at the highest levels of the government. A nexus of big corporates, ruling politicians and bureaucrats has matured under the neoliberal regime and made our system more vulnerable to cronyism and criminality. It is in this backdrop that we are discussing political reforms in India today.

 

Political Reforms

 

Lokpal: The Anna Hazare movement has taken up the anti-corruption cause through the demand for a strong and effective Lokpal institution. The demand for a Lokpal is a legitimate one and the Union Government has only exposed itself further through its cheap maneuvers on the issue inside parliament. The passage of an effective Lokpal Bill remains an urgent imperative.

 

The Lokpal should be a fact-finding body that receives complaints, enquires, investigates and forward cases to Special Courts, wherever prima facie there is a case of corruption, for prosecution and punishment. It should have powers to recommend an enquiry and investigation suo moto. It should oversee the entire machinery related to corruption cases at the Central level and should have the powers to recommend executive action and to approach Courts when these are not accepted. The Lokpal should be entrusted with quasi-judicial powers and autonomy to fulfill these functions in an independent, accountable, transparent and time bound manner.

 

The separation of powers between legislature, executive and judiciary is a part of the basic structure of the Constitution. The institution of Lokpal should conform to this basic structure.

 

The Prime Minister should be brought under the purview of the Lokpal with adequate safeguards. The office of Prime Minister along with all public servants was brought under the purview of Lokpal by the V.P. Singh Government in 1989 and in all subsequent draft legislations, the Prime Minister has been placed under the Lokpal. A Parliamentary Standing Committee headed by Shri Pranab Mukherjee had also made this point while examining the 2001 Lokpal Bill. All public servants of the Union Government within the definition in the Prevention of Corruption Act, which includes the Prime Minister, must fall within the purview of the Lokpal.

 

While corruption in high places has to be tackled on a priority basis, for the ordinary citizen, it is the corruption faced by them in daily life and in dealings with public authorities that also needs to be urgently taken up. Much of this sphere of corruption lies in dealings with authorities at the state-level. In the states, Lokayuktas should be set up on the model of the Central Lokpal. The Lok Ayuktas set up on the lines of the Lokpal should bring all state government employees, local bodies and the state corporations under their purview. Further, a citizen’s grievances redressal machinery should be set up separately to address all grievances regarding delivery of basic services and entitlements for citizens.

 

Whistleblowers must be protected in order to combat corruption. Monitoring and ensuring protection of whistleblowers can be a part of the mandate of Lokpal, but this needs a comprehensive statutory backing by strengthening the provisions of the Public Interest Disclosure (Protection of Information) Bill, 2010.

 

It is necessary to recognise that an important source of corruption since liberalization stems from the corrupt nexus between big business and public servants. It is necessary for the Lokpal to have the power to investigate cases which involve business entities and to recommend cancellation of licences, contracts, lease or agreements if it was obtained by corrupt means. The Lokpal should also have the power to recommend blacklisting of companies from getting government contracts and licences. Similarly, if the beneficiary of an offence is a business entity, the Lokpal should have the power to recommend concrete steps to recover the loss caused to the public exchequer.

 

Beyond Lokpal: The battle against corruption, however, cannot be won only through the institution of a Lokpal. For this a comprehensive reform of our political, legal, administrative and judicial systems is required. There has to be a National Judicial Commission to oversee the higher judiciary and act against corrupt judges. There has to be electoral reforms to check the use of money power in elections, which is a major source of corruption. Urgent steps also need to be undertaken to reform our tax system to plug loopholes and unearth black money, much of which is stashed in offshore bank accounts and tax havens. Article 105 of the Constitution needs to be amended to bring Members of Parliament under anti-corruption scrutiny.

 

The political system in India has borne the direct impact of the nexus between big business and politics. Policies made by governments openly serve the interests of big corporates and foreign capital at the expense of the people. The unprecedented use of money power in elections is also an outcome of this nexus. Big money is corrupting the entire system. Most political parties are selecting candidates on the basis of their money power and this is now percolating down even to the panchayat elections. Distribution of cash to the voters is also becoming the norm in many states.

 

In the course of the ongoing state assembly elections in five states, the Election Commission has seized over Rs. 42 crore of illegal cash, out of which Rs. 29 crore was seized from UP and Rs. 12 crore from Punjab. This of course is just the tip of the iceberg. Democracy is getting corroded by the insidious use of money power, criminality and the influence exercised by mafia groups at various levels. According to the analysis by he Association of Democratic Reforms, the number of MPs with serious criminal charges (murder, rape and dacoity) who were elected increased from 58 in 2004 to 76 in 2009. The number of crorepatis MPs (assets over one crore) has increased from 156 in 2004 to 315 in 2009. No political party enjoys a clear majority in the Loksabha today; but crorepatis are in a clear majority. Whose interests they are serving is anybody’s guess.

 

Far reaching electoral reforms have become a vital necessity, both for safeguarding the democratic system and checking political corruption. Stringent provisions need to be built into the election rules against the use of money power and illegal money in elections. These provisions can be implemented meaningfully only if there is state funding of election campaign material for all candidates and a prohibition of private expenditure in election campaign material. Equitable access for election propaganda in the media, including the private corporate media, has to be ensured and the law should be amended to prohibit paid news and make it an electoral offence. Persons chargesheeted for serious criminal offences like murder, rape, kidnapping, dacoity and extortion should also be debarred from contesting elections.  

 

For a durable solution to the problems faced by our electoral democracy, the introduction of proportional representation on a partial list system, which is followed in many democracies across the world, should be seriously considered.

 

Conclusion

 

Dr. Ambedkar’s tenet regarding the contradiction between the sustainability of political democracy and persisting socio-economic inequalities has acquired great significance, not only in India but even in the liberal democracies of the West. The basic question confronting us today is whether neoliberal capitalism – which increases inequalities and leads to the overwhelming dominance of big money on economic, social and political life – is at all compatible with political democracy?

 

Political reforms are indeed necessary to safeguard and deepen democracy. The issue is whether the current economic policy regime will allow for such democratic political reforms; and also how long the sufferers tolerate the status quo.

 

Thank You for your patience.