Amidst the political drama in Karnataka and a strike that wasn’t really a Bandh in Tamil Nadu, the Indian National Congress has revealed the underlying reason for all this unfolding of excitement. Dr Manmohan Singh has accepted “Rahul Gandhi’s suggestion” to extend the ‘The National Rural Employment Guarantee Scheme’ across all districts in the country. It certainly will be interesting to see if this signals that the young Mr. Gandhi will be the next Congress candidate for Prime Minister.
The ordinary citizen has very little control or claim over what are essentially internal dynamics in the Congress party. However, it does make me jealous that Mr. Gandhi gets to use my tax money to buy his way into possibly becoming the next Prime Minister. Democracies do have a strange way of sanctioning what would otherwise be counted for corruption – election promises. This was the reason Economists from a generation ago thought Democracies would run chronic deficit budgets – they argued, those in power will stay in it only if they provide the pleasure of public spending beyond the means that taxation allowed.
This situation is only made worse in developing countries like India. The socio-economic conditions that exist in societies such as ours make it impossible to have an electoral plank that does not indulge in competitive populism. We have seen free rice, power, TV and very many things. People, it appears, expect to sate their ‘corporate advertising fuelled hunger’ by trading their votes. A politician who promises fiscal prudence in India has to either be an idiot or be absolutely sure of his caste calculations.
In fact, a curious outcome of competitive populism has been: states that have better delivery mechanisms are caught worse in the vicious cycle. Consider Kerala and Tamil Nadu – two of the most advanced states in the country, in terms of many socio economic indicators. Perhaps because of this, or in spite of this, the indicators of governance are also relatively better evolved in these states when compared to others. And, one has a Communist government and the other is ruled by a coalition that won the elections on a promise of cheap rice and free color television sets. When was the last time anything like this was a poll plank in Bihar? I am tempted to assume, the inability of the government to deliver – even on a bribe to the electorate -- is a fiscal blessing in a casteist and chaotic disguise.
Inefficient governments do serve a purpose. They are not good enough to implement their own bad policies. This, in my opinion, has been the biggest reason for India to do reasonably well in certain restricted pockets; assuming, we overlook the vast majority of areas where India has performed miserably. Corruption, another weapon to combat bad policy, is perhaps that invisible lubricant supporting everything. For every meaningless government regulation, there is always a pliant government employee at the right price. This begins from the most trivial of things: the lane system in Mount Road, Madras that I had written about a few months ago is no longer implemented; though sign boards to that effect exist. I am not sure if we have the inefficiency or corruption of the Police to thank for this.
Yes, the states that have been mentioned here are doing much better than those in North India. Some might even argue, the reason they have been doing better is because of the very schemes dubbed populist – the mid-day meal scheme in schools comes readily to mind. While there is no doubt that some of what is being accused as a bribe eventually does what many would have desired anyway, the method leaves the taxpayer disillusioned. Not to mention, jealous too – when those born into certain families get to use the money to buy power.
A fair suggestion seems to be: make tax payments benchmarked to specific projects. The other more desirable and less likely option is – reduce the size and the appetite of the government.