COUNTERVAILING POWER
A. Decentralisation
The Central and state governments have accumulated too much
administrative power and this power must be dispersed to lower levels of
government, the Panchayti Raj institutions (PRI) and Nagar Palikas (NPs). This requires further changes in the PRI and
NP & municipal acts. The principle
of subsidiarity must be applied so that all functions that are best carried out
at the lowest level are devolved to them, and a similar allocation is done to
the next higher level and so on up the ladder.
In particular responsibility for provision of local public goods
(drinking water, primary school, PHC, irrigation water distribution, local
roads) must be devolved to PRIs & NPs along with the power over local taxes
and any additional funds required. This
is, however, only the first step. These
PRIs must also be made accountable to the local public, so that powerful caste
and other sub-groups do not hijack them.
B. Accountability: Peoples Power
1. User Groups
One way to ensure accountability for provision of particular services
is to require the setting up of specialised user groups for monitoring the
availability and quality of specific services.
Thus for instance a user group that includes parents & grand parents
of school going children along with the teacher would have a much greater
incentive to ensure proper functioning of the local primary school. The user groups for Primary health centres
must have majority representation from senior citizens, potential mothers and
mothers of pre-school age children, and disabled/ infirm/chronically sick or
their close relatives. Similarly an
oversight group for a ‘food for work
program’ must have adequate representation of the landless and marginal farmers
and a water distribution user group must have adequate representation of
farmers.
2. Non-governmental Organizations
The government must also actively support and strengthen self-help
groups and civic groups doing social work (NPOs). The existence of NGO entrepreneurs siphoning
off funds for personal use cannot be used to discredit the entire movement,
just as the existence of numerous charlatans who have made religion into a
virtual industry does not discredit all religious figures. Vested interests, whether bureaucratic or
political, will inevitably make such charges and demands to preserve their own
rents.
3. Co-operatives
The inter-state co-operative law as well as the co-operative laws of
States must be modernized to exclude ad hoc intervention by government and
increase their autonomy & accountability to members.[1] Any over sight by government must be through
transparent institutions such as an independent professional regulator, who can
ensure professional management of co-operatives and accurate audited accounts.
C. Independent Regulators
There are three sectors of the market economy that clearly need
regulatory systems for over seeing private (or government) provision and
supply. These are infrastructure service
segments that have ‘natural monopoly’, the financial sector because of its fiduciary
responsibility and two social sectors (education & health) because of
potentially large and irreversible human consequences. The modern approach to regulation is to
ensure availability of information, transparency and detection & punishment
of fraud, lying in the grey area between outright illegality and bad luck.
Honest, professional suppliers of these services therefore welcome
and support such regulation, making them the first line of administration
through self-regulatory organizations.[2] Given the deterioration in Governance in the
private sector itself, though for different reasons than in the Public sector
(e.g. the low probability of detection, prosecution and punishment for breaking
the law), this cannot be taken for granted.
Though regulation can never substitute for a deteriorated police-legal
system, there is a need for a quantum jump in the quality of regulation in the
financial sector (e.g. co-operative banks, NBFCs, Chit funds). Development of Regulatory institutions to
meet such grave challenges will inevitably take time. It follows that privatization of Public sector banks must be
done in a gradual manner (i.e. “with all deliberate speed”). It also follows that entry of foreign banks
that have a much stronger culture of corporate governance than old private
banks, will be an asset to the financial system and the economy.
There are several reasons for removing the regulatory functions from
government proper and putting them in a separate organization. First, the generalist government has neither
the expertise nor the professionalism needed to do a good job of
regulation. A professional organization
staffed with adequate specialized skills and knowledge is essential for
efficient regulation and this is best created within a separate autonomous and
independent organization. Second, such
an organization can be better insulated from the day-to-day pulls and pressures
of democratic politics as has been demonstrated in the case of the RBI. Third, it allows government to act as a
higher court of oversight in that it is available to act in the (hopefully)
rare situation in which the regulator is tempted to extract rents.
D. Civil Service Reform
Even if the government restricts itself to its basic functions, the
civil service will still be needed to perform these functions. One view is that the service is too politicized to even perform these functions effectively, unless its autonomy is
restored to levels that prevailed during the first few decades of
independence. This requires the process
of selection, appointment, posting and promotion to be distanced from politics
and made relatively autonomous. Another
view is that once the government sheds all the lucrative rent generating
functions that it has accumulated over the years, it will become less
attractive to those who view politics and government as a (privately/
personally) profitable business or occupation.
The extreme forms of deterioration can then be controlled through the
creation of countervailing power and new checks and balances. Though efforts must be made to reform the
system as proposed in the first viewpoint, in our judgement these are either
unlikely to take place or will be effectively undermined by the system. These efforts must therefore be focused on
the most critical area, namely the police.
For the rest of the bureaucratic system it would be more pragmatic to
take the latter viewpoint as the working hypothesis.
CHECKS & BALANCES
There is an urgent need to strengthen the checks and balances in the
political system. Though the framers of
our constitution paid a lot of attention to the potential for corruption in the
bureaucracy, they made the fatal mistake of assuming that all future elected
representatives would incorruptible and self less like those who fought for
independence. They could not imagine
that the judiciary could also be corrupted.
E. Criminal Legislators
There is an urgent need for electoral reform to reduce the currently
overwhelming incentive for corruption.
If the Neta-criminal nexus is not broken a time will come in the not too
distant future when it will become virtually impossible to stop the criminalization of the entire police force.
In our view the minimal elements of a solution are, (a) State funding of
elections through a matching funds approach. (b) Freedom to companies to donate
funds subject to shareholder approval.
(c) Transparent accounting and mandatory auditing of the accounts of
political parties that receive State or company funds. (d) Mandatory bar to
running for any political office by any one against whom criminal charges have
been legally framed, (e) Special courts to try politicians/potential candidates
against whom such charges have been framed so that those who are the object of
motivated/false charges can be tried and cleared quickly.[3]
F. Police
The police force has over time become an important instrument of
political power. The police are
therefore no longer an independent instrument for enforcing and upholding the
rule of law and for providing personal security to all its citizens. The misuse
of police by the political masters for personal ends as well as the use by the
police of state power vested in them, for their own personal ends, is not
merely a theoretical possibility but a frightening reality. This enormous power of the police to do harm
must be checked before it becomes uncontrollable.
A number of commissions from the Dharam Vira commission to the Law
Commission have suggested the creation of a buffer between the political bosses
and the day-to-day operation of the police.
One approach is to set up an autonomous police commission in each state
along with open and transparent process for appointing the senior officers of
the commission. There is also need for
an independent public prosecutor whose job is to take cognizance of, oversee
investigation of and prosecute major crimes (e.g. murder, armed robbery/dacoity,
kidnapping, rape, police crimes). To ensure accountability to the public, which
has become the object of police harassment, each police commission & public
prosecutor would be accountable to an oversight committee of representatives
from all walks of life (including the administration & judiciary). This would ensure that the police themselves
obey the law and the law-breakers among them are given exemplary punishment.
G. Media
A free media has a vital role to play in checking the abuse of power
by the State. One of the less remarked
benefits of economic liberalization during the nineties has been the flowering
and expansion of the media. Even
traditional media such as newspapers and magazines have been galvanized by the
entry of new private TV and other media.
A responsible and responsive media can be an invaluable protector of the
rule of law and the civil rights of its citizens. Our media has demonstrated over the past
decade that it can do so while taking due care to guard the national interest
against hostile foreign nations and the terrorists sponsored by them. This role can be further strengthened by
further decontrol and strengthening of self-regulatory media organizations.
Extract from,
"A
New Development Paradigm: Employment, Entitlement and Empowerment," Economic and Political Weekly, Vol.
XXXVII No. 22, June 1-7, 2002, pp. 2145-2154. [ NewParadigm4nf ]
[1] A few states such as Andhra Pradesh have already reformed their
law.
[2] This approach contrasts with the control approach that assumes that
the policy maker or administrator knows exactly what the producer should or
should not do in the interest of some higher purpose.
[3] Penalties could also be prescribed against those who wilfully make
false charges.
