The fabric of
democracy depends on the social and economic consequences of the amendments to
the Constitution at a critical time in India’s economic history. Agitations
have caused loss of lot of man-days and diversion of productive time. Timing of change is important for the success
of change. This article does not intend to discuss the merits or otherwise of
the latest amendments to the Constitution – either Article 370 annulment or
CAA. The focus will be on the consequences of the economics of democracy and
not so much the politics.
In democracy, it is
the voice of the people expressed through the electoral vote. We have seen that
the vote bank rarely touched even 30 percent of eligible population. People who
caste their votes have mostly been the less endowed and widely spread across
all religions and castes and this has little prospect of change.
One of the world's
largest democracies had to wait for its day to overtake china's growth rate as
consensus doesn't come about without discussion and lot of deliberation.
Centralised planning of the Maholnobis-Nehruvian model though conceived well to
usher in socialistic pattern of society let off the principles of federalism to
come up with an experiment with Niti Aayog whose results are yet to be on the
dashboard of India. Development is more than growth.
Ethnic, cultural,
and religious diversity apart multiple languages form the Indian Union. This
diversity is both its strength and weakness. States formed on linguistic basis
with some of them larger than several countries had uneven natural endowments,
and imbalances in the dispensation of resources at the hands of central
government.
Notwithstanding the
average nominal growth of 8% between 2007-12, human development indices ranked
India at 129. 12.1cr (2011) population is covered by 24.95cr households with
average habitat population of slightly less than 5 per household. Poverty
levels have gone down in rural areas from 50% in 1993-94 to 23% in 2016-17 and
in urban areas correspondingly from approximately 32% to around 13%. Rural
roads constitute 70.2% of the total length of roads across the country. Quite a
few States have made CC roads instead of metal roads. As per 71st
round of NSS, Literacy levels too have gone up significantly to 69.1% by 2014.
Goldman Sachs'
estimated an average of 8% per annum during 2016-20 notwithstanding the prevailing
global turbulence. So did all the leading predictions from KPMG and McKinsey.
Although the NDA government announced the goals of good governance and
cooperative federalism, both remain still at the goalposts.
Unless States are
taken on board in this second largest democracy of the world, prospects of
sustained growth remain elusive. As at the end of March 2018, eleven of the
twenty-nine States (now 31 and 7 Union territories) showed consistently high
growth during the period 2014-18. If the nation were to attain the lofty goal
of $5trn by 2024-25, the rest of 20 should also join the minimum 8% growth
level. Bihar (14.50%), Chattisgarh (11.20%); Goa (14%), Karnataka (12.00);
Madhya Pradesh (around 18%); Maharashtra (10.6%); Tamil Nadu (12.30%);
Telangana (14.10%); Uttarakhand (11.20); West Bengal (16.10%) and a few North
Eastern States like Assam, Meghalaya also lead the list.
Government of India
would do well to lend all support to these leading States and push the other
lagging States through sustainable interventions in infrastructure,
communications, transport and tourism without giving scope for them to feel a
partisan approach. All the Global Investment opportunities should have
equitable spread.
Vice President in a
recent Address mentioned that 479 Parliamentarians are crorepatis. The State
Legislatures also are crowded with such crorepatis. Latest Oxfam Report (Jan
20, 2020) laments “Economic inequality is out of control. In 2019, the world’s
billionaires, only 2,153 people, had more wealth than 4.6 billion people.” The
Report attributes this to gender inequality and unpaid Care work at home by
women. The richest 1% have more than twice the wealth of the
6.9bn people.
One good suggestion for the Finance Minister at the
right time: taxing 0.5% of the richer 1% for the next 10years would be equal to
investment needed for 117mn jobs in education, health and elderly care. Good
governance demands that these rich sections shall not receive subsidies of the
order currently prevailing.
Availability of
health services, supply of drinking water remains inadequate and costly.
Availability of liquor, however, has enhanced adding significantly to the State
revenues. Both are causes of concern for the future of a healthy democracy.
The World Bank
projected that India, along with Brazil, China, Indonesia, South Korea, and
Russia, will account for more than half of the global growth by 2025 with an
average annual growth rate of 4.7 per cent between 2011 and 2025. While this
prediction is likely to undergo change in the context of current slowdown not
just in India but in all the major economies in the world, there is no chance
for India to alter its growth vision.
Addressing
the resource constraints (mainly water, energy, infrastructure and investing
more in human development (mainly public health and education) is important to
realize India’s growth potential. Consensual approach is the essence of a
successful democracy. India does not have the luxury of being otherwise.
(All the
latest data is sourced from the Report of the Ministry of Statistics and
Program Implementation, Government of India, 2018: www.mospi.gov.in )
