Dr. Bimal Jalan - Governor, Reserve Bank of India     


Postal Staff College India Off Campus Talks VIII
- Our Polity- A Case for Reforms, Delhi, June 7, 2007

Mr Khan, Mr Gopinath, thank you very much for having me here. It is a great privilege for me to visit this building. And I must confess to you that the reason why I accepted this very kind invitation was one that, although I was not in government service as part of regular cadre like yours, I happened to hold several positions in government and had the opportunity to participate in policy making. When I got this invitation from Mr Gopinath, I was delighted because there are two or three institutions in India that I regard very highly. One of them is certainly the postal services. The reason is that if we look at the diversity of our country, the length and breadth of our country, the unifying factors are some of these institutions like the Indian Railways and the Post Office. If you were living in Manipur and coming to Delhi say, thirty or thirty five years ago or even from Kanyakumari, and wanted to go to Kashmir the only wa y to get there was by train. Similarly your post cards—what unique pieces of paper they are in that they can reach India’s any corner from anywhere. The money orders are socially so useful. Anybody, even the most ordinary person, if he or she has to send money, they won’t go to a bank. I was the RBI Governor, Banking Secretary, Finance Secretary and I know that if anyone needed to send money to a village he would have to go to the post office. So it is against this particular scenario that I feel privileged to be amidst people like Mr Khan and all of you who have contributed to this institution, low key but a tremendously powerful institution, which to my mind has also contributed to making India what it is.

And the second reason was the subject that Mr Gopinath gave me, it was not chosen by me, “Our Polity – A case for Reforms”. It was quite out-of-box thinking for the postal department. Most of the talks that I am invited to deliver relate to India’s Economy, India’s Present, Resurgent India and so on and so forth. But I was quite surprised that you have a programme of talks in which you are discussing issues with much wider dimensions, much greater importance to our country than say either the economy or the particular institution or issues in which you are engaged. So I was most interested and I do not think I have come across a programme of lectures like this. I have spoken to most services like the IAS, the premier service, the revenue service, the audit and accounts service, but I have not come across something like this. I am not saying this just because I am here but you can go through the curriculum and you will never f ind this kind of a programme and I must thank Mr Gopinath for having introduced this. Some of my colleagues, Dr Karan Singh and Dr Alexander have already spoken to you on subjects that have nothing to do with the Post but which are of interest to all citizens. Therefore, I was most interested and that is why I wanted to be here.

Now on polity, by polity I believe you mean politics. Two or three speeches that I saw of the previous speakers have expressed concerns about politics. I am sure that most of us can’t escape India’s politics. We follow it closely on television, the electronic media or in the parliament during the session through the channels of the Houses and many of us, our fellow citizens, our families feel quite disgusted when we see what is going on. All of us are proud of our democracy, freedom, services, government. That is beside the point. But when you see the day to day working of our system there is a sense of despair, disappointment and although we are concerned, we move on.

Our polity is a very broad subject and we do not have the time to discuss all aspects. So I would like to concentrate on a few key issues, key aspects and then hopefully we will have a little time to exchange views on any other issues which are of interest to you.

First, I will start on a positive note. In India’s polity, what is it that we ought to be proud of, what is it that we should try and preserve? I do not belong to a party, I am a nominated Member of Parliament by the President and so I am without a party. I watch the proceedings and my latest book as was mentioned by Mr Gopinath is on the working of India’s politics- “India’s Politics- A View From the Backbench” because I am a backbencher. I used to be on the front benches in administrative services or in the financial world but not in Parliament. So I have watched the proceedings of our parliament.

Now, one point I want to make to you is that parliamentary democracy or a democracy of the parliamentary type has stood us well, all said and done. Those of you who have studied history know that in 1950’s or soon after India’s independence, nobody gave India a chance because it was a diverse country. We have multiple languages, different castes and other vast regional differences and nobody gave India a real chance. Now if India has survived as a democracy, I think a part of the reason is Parliament which is representative of India. It gives everybody a voice. Inside that house everybody is equal. Ministers do not have lights, security guards, caravans, SPG; they are just equal. They can be shouted down as they often are, they can be disrupted as they often are, they sound unconvincing as they often do. But that is the representativeness of India’s democracy; you can come from Manipur or Kanyakumari: everywhere. And everybod y is equal, whether he is a farmer or industrialist or whatever he is or she is.

There have been a lot of Constitutional Commissions and discussions about whether Parliamentary democracy can work, whether we can have a Presidential form or something else. But my judgement is that the simple fact that parliamentary democracy has been with us for sixty years is a good thing. When talking of political reforms, I am not in favour of shifting away from Parliamentary democracy. The Presidential form of Government does not necessarily give you greater executive capacity. It gives the President greater power, but you can get into a deadlock, like in most Latin American countries if the legislature is ruled by another party and the President or Chief Executive is from another party. This has also happened in some European countries; Italy is a good example. It has happened in some other countries also. So Parliamentary form of Government should continue. And when we come to the reform part, I will raise this part icular issue.

The second important point which I believe all of us should take cognizance of is that democracy by its very nature is a messy business everywhere because it is not authoritarian. So if you have different groups of people with different professional backgrounds, with different levels of living, with different types of political agenda, regional, national, casteist, then obviously by its very nature the running of a democratic country is more messy than will be the case in running a country like China. And that is why a large number of developing countries did not have democracy. Fortunately, democracy has now become the pattern. Even in Pakistan, the President calls himself a democrat. Even in Bangladesh. Everywhere. But it is a messy business. Now what distinguishes a successful democracy from a non- successful one is really a respect for conventions, a respect for constitutional precedence and a respect for the Rule of Law at the highest level. And we are very fortunate in all these respects. We may have parliament disrupted, we may have differences of views between judiciary, executive and legislature but all said and done the Rule of Law, the conventions and past precedents are honoured.

And the second connected ingredient is free elections. So, while messiness of a democracy is unavoidable, we also have been extremely fortunate in having an Election Commission, an institution of the country which has given us free and fair elections. Now free elections do not mean that you will have a stable government. We have had six general elections since 1989, an average of three years. We have had seven or eight governments during the same period, with an average period of two years or so, not five years. But elections have been free and fair. Now what that does is that it gives a confidence in the rights and duties of those who are elected by us or those who are elected by whoever, for whatever reason and everybody is equal. Members of Lok Sabha, Members of Rajya Sabha, they are all equal irrespective of where they come from or what their standing is and that can only happen because of free elections. I start with the se two or three overarching points that we can all take great comfort from - that we are democratic, we have freedom of speech, that we have freedom of the press, that our electronic media is free, although we try to interfere with it from time to time, but we have freedom. You have freedom of profession. Nobody forces us to be a postal service person, or an economist. Our children have freedom. They do not have to succeed us and can do what they like. So these are the great strengths.

Now let me come to the question that I have been asked to speak on “Our polity—A Case For Reforms”. Is there a case for reform of polity?

I think there is. And let me say why I think so. I believe, rightly or wrongly, and I have written about it at some length in my book, is that within the framework of parliamentary democracy, free elections, freedoms and rights which are perpetual and have been preserved, the practice of democracy in India, the political behavior, the shape of democracy has changed since 1989. During 1977-79, we had different coalitions but after 1989, we all remember the frequent changes in government and the short average life of governments. The issue that we need to contend with is coalitions. Have they become a regular form of Government? Did the Constitution of India, when it was formed in 1950, provide for the practice of parliamentary democracy, the conventions of parliamentary democracy, and the rules of business as it were which take into account that you are not being run by one or the other single party? You are going to be run by a coalition of regional parties with national parties, sixteen, seventeen or eighteen parties. So the first issue that I will ask you to deliberate on is whether coalitions are a regular form of government. I think they are. Coalitions are here to stay. And what has changed in our country? I do not have the time to go into it in great length; but there is a fundamental change in the working of the party system of the recent "anti defection" law. If you are a leader, you will rather be the leader of a small party than be a member of a large party. Now if you are a leader or a member of a small party then within that small party you have the power to join the government or to switch parties. Your six or eight members of Lok Sabha, out of more than five hundred, have the power to change a government. If there are three independent members in a State Assembly, they can switch and form a government. If new elections are coming, if you are in a smaller party you are being sought after, but if you are part of a bi gger party who will be talking to you? Who is your choice for President?

So one fundamental change that has taken place is because of our own doing, anti defection law, that if those three members are of larger parties, they could not have switched from government. Similarly, you are seeing in a number of States that if you are a small party, you can decide whether to stay in government or go out. If NCP was a part of the Congress it could not have demanded a Deputy Chief Minister in a State. So the fundamental change is that we are going to have a coalition of small parties, where the leaders are going to be heads of small parties rather than parts of larger parties, as was the case after independence. This is one big change that has taken place.

Another fundamental change that I find is in some of the principles of governance, which are integral part of our constitution. You take the principle of collective responsibility of Cabinet to Parliament. Now, do we have that collective responsibility? Most of our Ministers are heads of different party or political formations. They are part of a larger conglomeration but they do their own thing. If you read the Constitution of India, you will note that the President invites a person who is likely to have a majority in Parliament, in Lok Sabha, to form the Government, which is collectively responsible to Parliament. Now there is an erosion of this collective responsibility. Everyday you can read, now I do not want to name anybody, but somebody will say this is not the government of the “aam aadmi”, somebody will say this is not a government for “reservation” and I am going to fight. Today itself, one minister has said that I am going to fight for reservations as the Government is not with me. So where is the collective responsibility of the Government? So if you accept that there is erosion of basic principles of the Constitution, not because people are bad but because people are thinking of their own parties. One, there are small parties. Two, there is no collective responsibility. I can switch sides, I can form the part of any Government and I am playing the game of politics in a different way than was envisaged in my Constitution.

Then you take the role of Parliament. I still regard Parliament as a representative body, as I said, as an instrument of our democracy of which we can all be proud. Yes, but the last three budgets, without any external emergency, without any domestic crisis or external crisis have been passed without discussions in Parliament by the Executive. So the Parliament has become responsible to the Executive, formed by sixteen parties, rather than the other way round. The convention of Parliament was that you need a majority. Earlier there were rules of business which said that the budget must be discussed. Standing Committees were there. Present practice is different; government is able to do anything and pass anything in Parliament without any discussion. Most bills today are passed by "voice vote" in a few minutes.

Now let us say, for argument’s sake, that we wanted to abolish postal services in India. The Minister can bring a bill this afternoon. Everybody is opposed to it, they rise, and the Parliament is disrupted. But, the bill can be passed by the Chairperson by voice vote. And you would not even know that it has been passed. You see the Bulletin of Parliament in the last session. Most of the Bills have been passed by a voice vote. Voice votes in the midst of disruption, not voice vote after discussions. Eleven o’ clock it is adjourned, Twelve o’ clock it is adjourned, Two o’ clock it is adjourned and Five o’ clock it meets and at five minutes past five they pass a bill by voice vote.

Then, you take the politicization of government service because of frequent, transfers. If there are coalition governments here, coalition governments there - today there may be a DMK Minister, tomorrow there may be an RJD Minister, and the day after tomorrow there may be another person. And if he is not collectively responsible, if he does not obey the rules of convention he can do anything that he wants.

So, we have to apply our mind about what is going on in our democracy, in regard to Parliament, collective responsibility of the government and in respect of politicization of bureaucracy. The system itself has become different than what we had visualized. And I think, if you put it all together, you will find that it is a system, it is a survival in office of a multi- party coalition government with short expectancy of life at birth and this is a very important point - that if you have an infant, which at birth is not expected to live for more than two years or three years, then the whole behaviour changes. You will be drawing up a will, doing something to keep the child in hospital and education is not important. So although the government may survive, the life expectancy is short as it is an amalgam of different coalitions with no central policy, no central leadership. Everybody is a leader. If that is so, then necessaril y there seems to be a strong case for reform of politics.

Now, what kind of reform? I just mentioned earlier that in any case democracy is messy everywhere, so what is wrong? The difference between India’s democracy and democratic practices elsewhere is the power that we have given to the central government and the power given to the state government. If you look at successful democracies elsewhere, they do no not have so much of economic power. For example, power to allocate land, except for well defined public purposes in a very restrictive way. But our governments have that power. Fix prices, open branches, offices in your constituency. The whole public sector enterprises - I am not talking here of the postal services or the railway services - but take commercial enterprises. They belong to the Steel Ministry, Mines Ministry or other ministries. We can open a steel plant here or there. So the amount of power that we have entrusted to the government is disproportionate in a democr atic sense.

Another major difference in our democracy, apart from the concentration of so much power is that 60% of the people are dependent on agriculture. 70 to 75% are from the rural areas. Now all this great growth that you are seeing in the corporate sector and in the Sensex prompts me to say, show me one corporate which is working in that 70% of the country? They may be working in terms of buying raw materials or something but what do they do if there is no sanitation, what do they do if there is no public school, what do they do if there is no health centre. As you know, there are no doctors in the health centre. The government is vital for the progress of that area. Unless we take care, we will continue to see problems of the kind that we are now witnessing - lawlessness, naxalite movements, short term view of things while in office, different views, different policies where nobody can trust what the long term policy is going to be. So I feel, that if coalitions of disparate parties are now the regular form of government, then what is it that we should do?

I have suggested a ten point programme for taking care of some of the issues that I have talked about. The birth of small parties seems unavoidable in a country like ours. Regional parties, casteist parties, are an expression of the democratic values. That is not the issue. The issue is that if several parties form a government after election and if any party chooses to become part of that government, then the same anti defection law that applies to the member of a large party should also apply to all parties that join a coalition. Now you have amended the Constitution in the 1980’s providing that anti defection law will apply to members of a large party, which has led to the birth of these small parties. People do not think about it, but it is a fact. Three independents can join a State Government. They can switch sides and form another Government. Why can’t you apply the anti defection law also to anybody, any party that jo ins a Government? That will give you a semblance of stability.

Similarly, why don’t we enforce the principle of collective responsibility of the Government? Ministers can certainly hold different views. For example, the United Kingdom on foreign affairs and Iraq issue, there were differences of views between Blair and the foreign affairs minister. What did that foreign affairs minister have to do? He had to resign. You can have different views but you have to leave the government. This is the meaning of ministerial collective responsibility.

Now, in terms of delivery of services, policy and everything else is decided by the Central Government. Every time you say as to why the rural employment scheme is not working, public health service is not working; the response is “because the implementation is with the state”. So why don’t you give the state the power to decide as to what kind of schemes they want to have? We have the Planning Commission at the Centre, of which I was also a Member and Secretary and so on. It decides on grants and other aspects of the plan. But when the plan is cleared, execution is the responsibility of the state. So why don’t you simply have a Federal Commission to give money to the states? And leave it to them to decide what kind of employment guarantee scheme they want to have? Maharashtra has a scheme, UP and Bihar can have different schemes and so on, but let us hold them responsible. Our Ministers have to take responsibility. Let them ask states or whatever to fix targets so that they can be held responsible. Right now they are not responsible, take it from me. No responsibility at all!

Similarly, the Rules of Business in Parliament. You can pass a simple rule that no bill will be passed by voice vote. No budget will be passed by voice vote unless there is an external or internal emergency, certified by the President of India. A simple change. I have been witness to legislation where I did not know that they were actually passing a Bill. I thought they were asking the Minister to lay a paper on the table of the house. But the Minister was placing a Bill for approval by voice vote!

Similarly, state funding of elections is, I think, essential so that corruption can be reduced. You know, the argument for corruption is that I need money for elections. Not that state funding will eliminate corruption. But we can find a formula that is equitable for all which will provide institutional money for you at least to be incorruptible in case you so decide! Why is it that you have ministers who are corrupt, going to jail and yet continue to be ministers? Why don’t you simply say that if there is a charge sheet filed by a responsible authority in the court, and if you are a minister or your name is included in the list of ministers, you cannot be sworn in unless your name is cleared. The Supreme Court should listen to your case first just as in a writ, and if the Supreme Court clears your name then you can be sworn in and you can be a Minister.

Similarly, about bureaucracy. The relationship between bureaucracy and Ministers or politicians. Mr Khan was in UPSC. All of you have come through UPSC. Ministers did not decide it. All your colleagues in the IAS, IPS and in other services have come into service similarly. Ministers did not decide it. Why can’t you have a similar mechanism for transfers and postings? Or you could say that the new government can appoint whoever they want but they can’t change except through a fair process.

It does not matter whether we all agree with what I have said in my recent book. But what matters is whether you are of the view that we are facing new "systemic" problems due to the emergence of a new type of government than was initially visualized in our Constitution. There is nothing wrong this development. I have said that democracy is messy. I am also proud of our democracy.

But the rules of the game have to change. I mean you had your postmen earlier, walking. Now you give them cycles or scooters. If you have post offices covering further distances, then you need to give them transport. So what I am saying is that the rules of the game and behaviour have changed and it is our responsibility to look at it within the framework of parliamentary democracy, accepting that it is a messy business, accepting that we cannot have the best of everything. However, we have a polity which delivers what it tells us that it will? Ministers are accountable and responsible to the institutions to which they are supposed to be responsible and accountable? Where we can have, at least at birth, some expectation that it will become an adult and be responsible? Could we have a Parliament which does not just take pride in passing laws but is accountable for performance? Could we have a bureaucracy which can become sel f assured in power and then be accountable also for its performance or non-performance? Could we insist on Ministers being responsible for what they say and what they do because they represent us at the highest levels of the Government and not just themselves?

Well, thank you very much! I have said a lot and now you can form your own views on this subject.

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