08 June, 2009
Hon’ble Deputy Chairman Sir,
Thank you for this opportunity to speak on the Presidential Address. I rise to support the motion of thanks to Her Excellency the President’s speech, moved in our House.
Sir, the Presidential address at the beginning of the term of a government is an important statement – because it reflects in many ways the goals and objectives that the government has set for itself in its new term. It reflects the goals and the general architecture of its policies to reach these goals, and given that it occurs once in 5 years, this is a good opportunity for those of us who are not in government to comment and contribute to the shaping of the governance and public policy for the next five years.
Sir, the country and indeed all of us have become used to grandiose political speeches that constantly promise the moon to our people. Its also known that in almost all cases, the governments underdeliver, and therefore, cynicism prevails when such a list of promises are made, as they have been in the Presidential address. With the greatest respect to the Prime Minister, his last term also started with a large number of promises of structural reform in areas like Regulation, Governance and public policy – precious little of them became reality. This has been explained away as the limitations of the complex coalition that had to depend on political support from those who did not like these reforms.
Be that as it may, this mandate is widely seen a far wider mandate for this government with less political pulls and pushes and there should be therefore no reasons for some real changes to occur.
The defining statement in the address is the statement “The dreary sand of dead habit must be left behind”. This is especially true in the critical aspects of Governance reform. Sir, Shri Arun Shourie said in his speech earlier, the challenge facing is not just about new ideas and specifically new spending programs – which seems to dominate the President’s address. Economic growth is not about fiscal profligacy and spending alone! There’s a need for new economic architecture, the centerpiece of which is a more transparent and responsive governance model – that focuses on outcomes as its deliverables.
Given that we are all agreed that sustained Economic growth is the panacea for the ills of deprivation and poverty in large part of our population, addressing the declining or dysfunctional or compromised governance model that we have today should be Priority No 1 – because the biggest risk factor to seeking long term FDI and capital into our economy remains this issue of Governance and the connected Political and Execution risk that’s linked to India. Recent reports characterizing India’s bureaucratic and administrative machinery as amongst the worst performing does not add confidence to the Investors – whose capital is critical to ensure we develop a sustainable economic model of growth.
This is not the first time that a reference to Governance has found place in a speech by the President. In June 2005, President’s address said the following “My government is committed to the reform of Government and to making it more transparent, responsive and efficient. A model code of good governance is being drawn up”..etc.
So while it seems like the idea of good governance has been tossed around and discussed for the last many years, it seems that precious little real action at addressing this has been implemented. That, therefore, is the crux of what Government should be focusing on urgently. As a recent Editorial in a leading paper commented, if the Govt is to show it means business it must focus on governance reforms first and foremost.
Governance is not about abstract notions of people with high integrity and reputation. The focus must move to strengthening the institutions of governance. The administrative machinery, the regulators, the judicial capacity and efficiency. Over the last few decades, while India has developed tremendously on the back of energy and innovation of private entrepreneurs, it is obvious that the state capacity has lagged significantly – We need both private entepreneurship and Efficient governance as two critical elements of the long term equation of growth. The rheoteric of India becoming an Economic superpower will remain a dream if the state of Institutions of Governance doesn’t improve dramatically.
While the Presidential address addresses governance in broad terms as has been in the past, let me suggest the following ideas for inclusion in its planning :
The time has come for reform of subsidy delivery – my friend Mysura Reddy has spoken about this.
The entire area of Independent regulators – a concept that’s about a decade and a half old in our country – needs review and strengthening. Regulators currently are becoming parking spots for retired bureaucrats leading to numerous cases of conflict of Interest. The quality of Independent regulation has declined over the last many years with no signs or initiative of strengthening. For example almost 2 decades after Telecom liberalization, our Telecom regulator is unable to establish a transparent model of auctioning licenses/spectrum. There’s clearly something quite wrong in this picture. I strongly urge a comprehensive review – including amendments of Laws and creating more independence and development of a new cadre of regulators – that are distinguished by their independence, integrity and competence. The vision of Independent regulators was to create independent administrative/judicial bodies – instead they are beginning to increasingly look and sound like parallel bureaucracies. These regulators must be made to depose compulsorily before the Parliament and these depositions be made public to the media and civil society.
The Administrative Reforms Commission under Shri Veerappa Moily have also made far reaching recommendations to make Governance and bureaucrats more accountable and responsive. I would urge that the government not consign this one to the dustbin like most reports, and instead seriously start a time bound program of implementing these recommendations and transforming Governance.
Sir, let me briefly touch on a few more issues that are missing from the President’s address. First, the issue of monetization of public assets like Mines, Spectrum, Oil Blocks, land etc. Sir, a comprehensive policy relating to monetization of assets like Iron ore Mines or spectrum for Telecom or Oil blocks, or infrastructure projects should transparently and clearly benefit the exchequer and citizens of India in particular and in general Private Public partnerships should not imply that the public side of the equation loses and private gains. In recent times, PPP partnerships have resulted in less than equitable deal. For example, I know of one Private-Public project where the private sector had to make an investment of only 300 Crores and state had to invest over 6000 Crores and in return to get control of asset and monopoly status. There are many examples of lopsided deals in Mines, Petroleum, Telecom, Airports – a fresh look at PPPs where there is equitable benefit to the public side as well is required. I sometimes am compelled to say in some cases, the deals are so lopsidedly in favour of the private investor that these are fit cases for nationalization!
Sir, in the area of National security, I wish to point out one glaring chink in our preparedness. This is in the area of Cyber security and Cyber threats. This is a chink because no department of the Government is tasked with this responsibility and it falls in the grey bureaucratic twilight zone of responsibilities between Home, Telecom and Defence Ministries. I would urge that this responbility be squarely assigned to the Home Ministry which in turn can have arrangements with other ministries.
Lastly sir, the address is silent about the crying need for introducing a new Tax code that will spur compliance and widen the tax net. Widening the tax net is critical to bring about fiscal stability in Government. We also need improvements in the Government’s economic Monitoring methodologies. We all know that over the last 12 months, the Government had to respond belatedly to the economic crisis, because it missed the signs of the coming crisis, even when it was obvious to many. There is a need for the Government to invest in and develop a new set of Economic indicators both leading and lag – which can be in the public domain that will allow all of us invested in the economy to plan, respond and march the same set of data and assumptions.
Sir, in summary, what we need is a New Deal for all of India – similar to what President Franklin Roosevelt unveiled in 1939 in the US – resulting in a long period of unprecedented growth, progress and transformation.
Sir, let me end by quoting from the Presidential address -“Our young people are tearing down the narrow walls of religion, region, caste, language and gender. The nation must invest in their hope”. The only way the Parliament and Government can do this is to work on this recent green shoot phenomenon of political consensus around the critical issues that face our nation and people. I am sure we are all happy to see this new spirit of co-operation in our polity. I would urge the Government to nurture this and grow this and let this spirit of consensus bloom – because the goals they have to meet are significant and the expectations of the people of India are high. This time around, the Government has a mandate with no excuses.