Re-inforce people’s trust trust to restore growth

Economic Times, February 25, 2013

By Pradeep S Mehta

A new leader, a growth panel, and judicial, electoral and governance reforms are the steps to restore people’s trust

“We have met the enemy and he is us.” This famous Pogo quote symbolises the state of our current governance melee. Among a menu of discordant happenings and noises, one arm of the government says that we can expect 5% growth, while another says it is a mistake, and we can expect higher growth. Consequently, and also due to variety of other factors, people are losing their faith and confidence, and worse, do not trust the polity or the bureaucracy or business

It is inter se also, and worsening the policy stasis. Indeed, poor leadership is the root cause of our problems. Can we salvage the situation? Yes, we can, if only the government decides to reinforce trust and confidence, and takes action rather than indulge in silly narrative and find fault with credible institutions such as the national auditor and courts.

Even a semi-literate taxi driver says that if there is trust, we are capable of increasing our productivity hugely. To do so, the government needs to do many things, other than the budgetary measures that the finance minister will speak about in a few days. In terms of a prioritised action agenda, can the government take a few urgent steps? First and foremost, the ruling coalition should find a new skipper who can command respect and confidence of people and Parliament. Even our small neighbouring countries are cocking a snook at us.

The party in power has to rise above petty politics and appoint a seasoned and tested leader as the skipper, and not some acolyte. The second is to establish a Growth Compact co-chaired by finance minister P Chidambaram and the shadow finance minister Yashwant Sinha that can agree on a national consensus to look at growth issues only, detached from other issues.

Such a compact should include key ministers and opposition leaders, and stakeholders such as businessmen, labour, civil society, media and academia, and select state chief ministers. While the main compact will be necessarily big to avoid any illfeelings, it can work through smaller working groups in a non-partisan manner.

If we can have the Committee on GST headed by an opposition leader, why can we not have a committee on growth? Most of them also suffer from the committee syndrome, except rare ones that actually do good work. Quite often, when one does not want to take a decision, a committee is established, and then another committee is set up to review what the earlier panel has done.

For example, a process of easing the business regulatory framework in the country has been going on for long. The last one was set up by the Planning Commission that did a fairly good job. Now, the corporate affairs ministry has set up another committee, and one does not know whether it can really implement the recommendations of the work already done. The third agenda is to speed up regulatory reforms.

There is an infrastructure regulatory reform Bill pending, which needs to be adopted, so as to improve our regulatory architecture that is neither attractive to investors nor satisfies consumers. One of the proposed National Competition Policy’s recommendations is to carry out regulatory impact assessment vigorously so that transaction costs and competition distortions come down steadily. Among various spin-offs, corruption will also shrink. Fourth, a difficult task, yet to take real action on corruption issues head on.

There are two critical issues that need an honest approach: the Lokpal Bill with the appointment of a credible head and assured independence to the CBI. The other is to implement the Ashok Chawla Committee report on natural resource allocation. The Lokpal Bill will restore the trust of people that the government is serious about curbing corruption, and proper implementation of the Chawla report will address the issue of crony capitalism and resource raj. Closely related to this is my fifth point, of government funding of elections.

This can easily bring down corruption to a large extent, because the polity will be less prone to making a fast buck by breaking all norms of propriety. These two recommendations will also send a new wave in the country, where corruption has entered every nook and corner of our system. The common man is quite disgusted, and such moves will restore some sanity.

Sixthly, judicial reforms, so that delays in our justice system are curbed. Often, corrupt politicians get away from being convicted, while innocent people, particularly women, face the violence of a criminal society with little hope of swift punishment, except in rare cases. Delays also breed corruption in the judiciary itself, other than causing huge discomfort to the law-abiding citizen.

Last but not the least, is administrative reforms, on which topic much water has flown but little action taken. Considering the continuing policy paralysis and actions against civil servants in various scams, even good civil servants are averse to taking decisions.

The system needs an overhaul. Many of these steps need to be taken up by the government in a proactive fashion, and with the active involvement of states. Only then can we destroy the enemy, who is among us.

The author is Secretary General of CUTS International.

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