Breaking free of Nehru
Sanjeev Sabhlok
TABLE OF CONTENTS
Acknowledgements 6
Preface 9
Chapter 1 Freedom in Indian life 22
1. Freedom in our history 23
1.1 Pre-Plassey (1757) 23
1.2 1757 to 1947 24
1.3 Post independence 32
2. Rediscovering Rajaji 40
3. What is happening today? 42
4. So what is the way out? 44
Chapter 2. What does a free society look like? 47
1. Free societies are magnets 47
2. Free societies are socially flexible and relaxed 50
Social flexibility in India 52
3. Free societies do not breed terrorists 53
4. Free societies are innovative 54
Innovation in India 56
5. Free societies are wealthy 58
6. People in free societies live longer, are taller and smarter 59
Chapter 3. Inner workings of a free society 63
1. Wealth creation through free markets 65
1.1 Wrong reasons to regulate markets 73
1.1.1 The red-herring of monopoly 73
1.1.2 The deadly lure of equality 77
1.2 Poverty elimination 81
1.3 The mechanics of the market 85
1.3.1 The price system 85
1.3.2 Risks of interfering with the price system 87
1.3.3 The role of profit 89
1.3.4 Flexible labour market 89
1.3.6 Education 92
1.3.7 Entrepreneurship 93
1.3.8 Unplanned planning 96
1.4 Summarising capitalism 100
2. Creating and sustaining good government 106
2.1 Keeping policy making (and ideology) separate from the social contract 110
2.2 Incentives for elected representatives and political parties 113
Chapter 4 Our social contract – the Indian Constitution 117
1. Inadequate understanding of freedom 118
2. Inflexible 119
3. Citizens not to engage in a business of their choice 120
4. Abolition of fundamental right to property 121
5. Forcing policy choices of the past on today 124
5.1 How a uniform civil code violates freedom 125
5.2 Constitutional meddling in religious matters 130
6. The injustice of a ‘justice of yesterday’ 132
6.1 Example 1. Land theft 134
6.2 Example 2. Reservations 137
The fast track to an excellent social contract 140
Chapter 5 An analysis of political corruption in India 145
1. No reason to be honest 148
1.1 Incentives of candidates and political representatives 149
1.1.1 Filter No. 1: Monetary losses to keep the prudent out 151
1.1.2 Filter No. 2: Low salaries to keep out the competent 156
1.1.3 Filter 3: Perjury as a qualification 159
1.2 Funding, and accounting, election expenditure 161
2. What can be done? 164
Chapter 6 Why is our bureaucracy so inefficient? 168
A short history of public services in India and England 172
Flexibility and efficiency of modern public services 175
The next generation of reforms 184
The current situation in India 185
So what can be done? 191
Chapter 7 Breaking free − a blueprint 194
What would I do if I became the Prime Minister of India today? 196
Finding the right people 196
Agreeing to a blueprint 197
Key decisions of ‘my Cabinet’ 198
1. Raising resources for public goods 198
2. Building capability to govern 201
2.1 Enabling public servants to represent people 201
2.2 Appointments of Cabinet Secretary and Ministerial staff 202
2.3 Compensation for peoples’ representatives 202
2.4 High priority electoral reform 203
2.5 Freedom Ministry and re-writing the Constitution 204
2.6 Phase 1 – Build up (first 2 ½ years) 205
2.6 Phase 2 – Breakthrough (second 2 ½ years) 217
2.7 Local government reform 218
3. Increasing transparency 220
4. Strengthening the delivery of core functions 221
5. Environmental sustainability 227
6. Eliminating subsidies and poverty 231
7. Enhancing innovation 232
Final comments 233
Appendix 1. Freedom and accountability 236
Appendix 2. Polygamy 239
Appendix 3. Salary and allowance of MPs 241
Appendix 4. Analysis of declared election expenses of a parliamentary election 243
Appendix 5. Illustrative databases available to public servants in Australia 245
Appendix 6. Local Boards 247
Appendix 7. Mixing equity with freedom: Appropriate technology 249
*Accountability is attributed to a free person for each action (or inaction)
Acknowledgements
“So long as the millions live in hunger and ignorance, I hold everyman at traitor, who having been educated at their expense, pays not the least heed to them.” - Vivekananda[1]I’d like to acknowledge the following for their influence or role in shaping my thought and work:
· Those Indians, or people of Indian origin, from across the world who have supported a range of my policy, political, and other projects since 1998. I acknowledge their support, and trust that they found at least some value in engaging with some of our common activities, even though not much of enduring substance has come out of any of them, so far. I take responsibility for that failure, largely due to my not sustaining many of my efforts after developing an extremely painful condition from typing for up to 16 hours a day without appropriate care, in late 1998; a problem that is still with me despite years of intensive treatment.
· Gokul Patnaik and Dr. Atindra Sen, civil servants, for being exemplars, and role models to me.
· Professor Michael Magill of the University of Southern California, for bringing home to me the simplicity and beauty of the price system in 1996. He also introduced me to Hayek’s paper of 1945,[2] a paper that possibly summarises, to my mind, the entire useful information in the discipline of economics.
· These eminent colleagues whose work in bringing the ideas of freedom to the people of India has been an inspiration: Gurcharan Das, Parth Shah, Bibek Debroy, Barun Mitra, Madhu Kishwar, Dr. Nirvikar Singh, Sharad Joshi, Dr. Jayaprakash Narayan, Sauvik Chakraverti, and S.V. Raju, in no particular order.
· Gurcharan Das and Parth Shah, for their constant encouragement during the writing of this book.
· Gavan O’Farrell, a dear friend in Melbourne; Manish Jaggi, a cousin living in Melbourne; and Suresh Anand, a globe-trotting cousin, for their invaluable comments on draft chapters of the book. Particularly Suresh for supporting many of my activities over the years.
· My parents and siblings who have helped form my world view, and without whom the principles of ethical liberalism would not have developed in my mind.
· My wife for suffering me in general for over 22 years and not going insane despite my temperamental excesses, and my two children for suffering (quite happily, if I may add) my neglect of their studies while writing this book.
I must also acknowledge the technical geniuses behind the development of Dragon NaturallySpeaking software, which, since early 2002, has brought a ray of hope into my life, and by now has become the mainstay of my 'writing' (dictating) at work and at home, including this book.
I must specially acknowledge my deep gratitude to my myotherapist, Peter Prskalo. His great knowledge of the human body and hard work on ‘fixing’ my muscle spasms during 150 sessions (or more) over the past four years, coupled with my practicing Yoga under the guidance of teachers of high quality like Adrianne Cook for over two years now, has finally enabled me to reach a point where I actually experience some entirely painless days, enabling me once again to savour the simple joys of living. Had someone told me during my dark days of 2000-02 that I might be able to actually write a book in a few years time, I would have not believed it, being unable at that stage even to open an e-mail or type (or write) a short paragraph, or sign my name, or lift a small bag of groceries, or walk for more than 10 minutes, without experiencing the most excruciating, burning, pain. To Peter must go all credit for reviving me from a near depressive state.
This book has been written in a very short time (about five weeks off work, and a few weekends) and suffers from all the flaws that arise from such a severe time constraint. But irrespective of this genuine excuse, I remain fully responsible for any error, whether grammatical, typographic, factual, conceptual, logical, or any other, found in this book.
Lastly, though the ideas and thoughts in this book are almost entirely unrelated to my current role in the Better Regulation Unit in Victorian government, there may be a potential overlap in some of my views with the logic of regulatory policy that applies to my current role. However, I’d like to clarify with that such views are not to be taken as, in any way, representing the views of the government in Victoria.
Sanjeev Sabhlok[3]
Melbourne, Australia
17 December 2006
Preface
“If you can learn to work within the system, you are far more likely to get things done than if you set out to pioneer and change the rules” – Edward de Bono[4]This is a book about changing India’s system.
As I could not learn to work within the system, I had to leave it, with a view to ultimately reforming it. I believe that at times, not working within the system can be the right thing to do.
Paradoxically, it was the opportunity for training and exposure to systems abroad[5] provided directly or indirectly by the Indian public service, that was instrumental in my concluding that continuing within the system would mean my supporting practices that were responsible for poverty and systematic corruption.[6] Combining a personal search for knowledge and truth, with information on how successful countries think and work, it became evident that I could not be party to India’s mis-governance.
I had to change it.
It dawned on me in February 1998 that this change had to begin through reform at the very top: political reform. Without that reform, the rest of the change would not gain coherence and momentum. Therefore I resolved to form a political party that would, if successful, implement the reform I wanted to see in India. Three failed attempts later (my failures are mine alone), I have decided to pause and write a book instead, outlining the change I’d like to see in India. Initially started in February 2005 to support my second political effort, this book now stands alone, lost somewhere in time. But that is all I can reasonably muster at this stage.
I expect this book to appear quite outdated to some readers, and it possibly is. These people have long broken free of Nehru, at least in their minds, and will wonder why a book has to be written on a historical curiosity such as this. They are partly right. Numerous changes to economic policy have taken place in India since the early 1990s, and some of these changes appear to have left Nehru’s legacy ‘in the dust’.
But if breaking free of Nehru were merely a matter of economic policy change, I would not need to bother with resigning from the civil service, or thinking of starting a political movement, or writing this book. Economic policy changes had commenced in 1991, well before I concluded, in 1998, that I could not support the system.
In fact, this book is not about economic policy at all, but freedom. Many outstanding treatises already exist on economic reforms and I will not add to an area where many knowledgeable Indian experts have far better credentials than me.
To another group of people, this book may appear to be an irreverent and even rabid attempt to undermine the good that Nehru did and represented. This book may be seen as an attempt to drive India further down the path of super-corruption that liberalisation has come to represent.[7]
But in my mind this book is neither antediluvian nor irreverent of Nehru, and is targeted at eliminating, not increasing, corruption. This book is about is building a case for change, a case for a great India, not a mediocre India. But we need a theory of change.
I believe the change we need must begin with an increase in our understanding of the concept of freedom, and by appreciating how ethics and integrity, that are both a pre-condition and a concomitant of a free society, can be strengthened through building appropriate institutional arrangements.
I know that freedom in the abstract does not sound important enough or even relevant as we spend our energies fuming over the chronic problems of mis-governance, corruption, poverty and population in our daily lives (this last one, of population, is definitely not a problem from my perspective, I must demur at the outset).
But it will be my goal in this book to show that it is freedom we need more than anything else today. There is a plane of existence, of individual accountability, that we must juxtapose at each stage while looking at our reality today, a dimension that sits just a little above the hubbub of urgency we feel when considering issues of economic policy or governance.
This subtle but very crucial dimension, not factored into our decisions and discussions as a regular requirement today, is the missing ingredient of thought that will deliver to us the elimination of poverty, drastic reduction in corruption, and the provision of equality of opportunity to our population.
It is to acquire an understanding of this critical missing ingredient that we must put on a critical (not negative) hat to first find out where we are, and then to determine where we should go next. In de Bono speak,[8] we could begin with a yellow hat, then black, then white, and finally the green hat that will show us enormous opportunities for change and improvement that present themselves today.