2nd Indian Liberals Annual Lecture | The Scope for Political Liberalism in India by Dr. JP Narayan

2nd Indian Liberals Annual Lecture | The Scope for Political Liberalism in India by Dr. JP Narayan

Source: https://www.youtube.com/watch?v=vWyLdJoqDrs Duration: 4449.5s

Speaker 1 (00:00): Namaskar and welcome everyone. Thank you for joining us for the second Indian Liberals annual lecture. The IndianLiberals.in is a digital repository of the Indian liberal tradition. It is an initiative of the Centre for Civil Society in collaboration with the Frederick Norman Foundation. The website contains numerous articles, videos and podcasts in English and other regional languages covering both economic and social aspects of liberalism. I would highly encourage all listeners here to visit it after the lecture if you haven’t visited it yet. It’s the IndianLiberals.in. I shall be dropping a link in the chat for everyone soon. With that, it is my honor and pleasure to welcome a speaker for the second Indian Liberalist IEL lecture, Dr. Jayaprakash Narayan. Dr. Jayaprakash Narayan is a physician by training who went into the Indian administrative service in the aftermath of the emergency and the failure of the Janta experiment. He was a topper in the IAS exam. During the 16 years of distinguished public service in various capacities, he acquired a formidable reputation in the earth-fired state of underpredation his experience in the government convinced him that the faulty governance process was the biggest hurdle in change false apologies the faulty government process was the biggest hurdle to india and indians achieving greater success and what india needs today is a fundamental change in the rules of the game and not a periodic change of players in order to translate his vision into practical reality he resigned from the service in 1996 and worked with like-minded colleagues for the formation of the loksatta the loksatta has emerged as india’s leading civil society initiative for government’s reforms dr narayan through the foundation for democratic reforms looks at the movement and other organizations

Speaker 2 (02:10): has actively been pursuing reforms in service guarantees in government office, education, healthcare, local government empowerment, judicial and police reforms, various anti-corruption

Speaker 1 (02:22): measures and political reforms to transform governance particularly at the state and local level. With that I would invite a speaker Dr. Jeprakash Narayan for the floor. Thank you so much sir for doing this i know you’re traveling today thank you sorya uh shall i take over friends i’m delighted to be with all of you i must congratulate both the British Normal Foundation and the Center for Civil Society for pursuing this very difficult sometimes lonely path of liberalism i think to a group like this very highly committed well

Speaker 3 (03:02): informed deeply concerned citizens of India I don’t have to explain to you the need for liberalism or

Speaker 1 (03:09): even perhaps define liberals so what I propose to do is I’ll make my remarks very brief and I would like to look at in the contemporary Indian context what is the space for pursuing liberal policies particularly liberal economic policies what are the hurdles and what are the potential strategies for us in the near future in order to be able to pursue a fairly high rate of growth for the next 15-20 years we seem to be having the potential but can we realize that because that itself will spur action on the part of citizens and then make many many things possible in terms of governance reform and in terms of making liberalism real and effective the way that all of us wanted so let me just make a few points very quickly now if we mean by liberalism individual liberty political democracy property rights economic freedom choice and competition then decentralization of power limited role of the state and rule of law obviously normatively

Speaker 4 (04:20): except the economic component of it freedom of choice freedom and choice and competition most of

Speaker 1 (04:26): the elements constitutionally exist in india from the beginning we of course diluted the right to property very quickly but thanks to the course pronouncements that dilution is not complete or permanent so you all know the issue between due process of law versus procedure established by law but in reality even in terms of the political elements of governance the liberty freedom

Speaker 5 (04:56): democracy decentralization etc despite the constitutional injection we have not really

Speaker 1 (05:02): fulfilled the objectives in some respects we’ve improved for instance in the last 25 30 years at a time of considerable political decline there’s actually a huge improvement in terms of

Speaker 3 (05:14): federalism at least the union state federalism but the third year of federalism at a time when allegedly it has seen some landmark constitutional amendments like the 73rd 74th actually received a

Speaker 1 (05:27): setback in my opinion because we created an over structured underpowered constitutional framework for the third year and therefore the net result is the local government such as they exist today or even worse off than they were in 1960s and 70s. It’s one of the paradoxes. We allegedly are in favor of the third year, we gave a constitutional status, but they’re actually worse off. But otherwise, I think we have to recognize that in a broad sense, the constitutional commitment to liberty and democracy is still largely intact. Myron Weiner talked about the four postulates of functioning democracy and all four apply positively to India. For instance, he’s talked about competitive elections. Indian elections are more competitive than anything else anywhere in the world. Recently, we had a by-election in the state of the Langana, but a state assembly constituency. My god, the fierce competition and in fact a very unhealthy competition, unbelievable. Right now we have elections

Speaker 3 (06:32): going on i think that people of amasapites already went to the polls but

Speaker 1 (06:37): very soon gujarat electorate will go to the polls the intensity of competition you can only see in india the way it happens they’re obviously political freedoms nobody

Speaker 3 (06:49): is denied a right to contest or form a political party or propagate their message or campaign or so on therefore the fundamental political liberties exist we all keep complaining about this of that

Speaker 5 (06:59): but the truth is that we’re free to propagate our message the third is the elected governments are

Speaker 1 (07:08): truly in power not a military junta or some other coterie behind the scenes uh there is peaceful transfer power and elections once elections are over however flawed the electoral processes nobody disputes the electoral verdicts in a large sense you only have to see what’s happened in the united states uh in the 2020 election and which might happen in the next two three years

Speaker 5 (07:29): again compared to that india is a bastion of democracy and finally the winners do not punish

Speaker 1 (07:36): losers yes sometimes there are pin tricks sometimes there are raids and all kinds of things but winners do not get uh do not put the rules of losers in jail mainly because they lost the election nor do they hang them or behead them so in in a fundamental sense the basics of a functioning democracy exist but we all know that real democracy is much more than that

Speaker 5 (07:58): it’s about empowerment of citizens that includes genuine decentralization we don’t have it

Speaker 1 (08:04): it’s about rule of law normatively we have it but in reality we don’t have it in this country adequately we all know it’s about not only liberty and self-governance but also self-correcting institutions almost for everything you have to go onto the streets and protest and and do a dharma or a hartal, obstructive and violent means of protest are becoming endemic in our society. That’s not the way an orderly liberal society organized itself. So there are serious flaws we have to correct. Let me leave that point at that. Let me make the second broad point. We all know what happened since 1947, 15, while we gave ourselves a sound constitution, we were enamored by the Soviet model, our leaders, our rulers, Across the spectrum, barring a few honorable exceptions, they all believed in command economy of the government, commanding heads of the public sector, monopoly of the state, restricting economic freedom, sometimes extinguishing economic freedom, abridging or eliminating property rights, under license permit quota raj as we call it. We have seen the consequences of that.

Speaker 5 (09:13): But even after 1991, while some elements of the license permit code disappeared, the larger mindset and discourse, I would argue, are fundamentally still state-centric. Statism is still our default option, it’s part of our DNA. It’s not so much that a political party or a political leader wants to do it. it it’s actually part of the dna once for two or two and a half generations we have

Speaker 1 (09:41): what is the tactful word i can use we have completely perverted public discourse in the country distorted the kind of message that is required and completely eliminated a logical

Speaker 5 (09:55): faculty in our public discourse as well as an educational process some kind of a doctrinaire

Speaker 1 (10:03): approach without regarding evidence and logic or become endemic in our society. I don’t think I need to go far. Even recent examples, some of them they will serve a purpose. We all know these things but I’m just mentioning them so that we’ve reminded ourselves of the fact that in a large measure Indian society post-independence has been largely economically illiberal. It’s not really the state but Indian society. While in practice in personal life when there’s a choice they embrace market economy because they understand the goodies from telephone to a hundred other things but when it comes to public discourse or protest

Speaker 3 (10:42): the default option of the bulk of the indians is anti-market illiberal approach and state control

Speaker 1 (10:50): but the form loss a good example take away the political parties and politics out of it anybody who understands agricultural sector in india and liberal economics understands that economic freedom and competition and choice are vital for the farmers welfare let alone for economic growth of the country and yet three laws they’re not panaceous a lot more needs to be done to rejuvenate agriculture and value add value and create employment and so on and so forth but even these limited laws even after proving the complete failure of essential commodities act and the regulation of food communities production storage trade transport and so on and so forth or even after the monopoly of the state controlled or state regulated or state-owned markets has put it put it inefficient and even after we realized the importance of having a linkage with industry with an assured price in advance so that there is predictability even after that some simple laws aimed at achieving some of these objectives in a systematic manner they were resisted fiercely in part of the country though not in large parts of the country but because that part of the country happens to be around the national capital in a country whose imagination and politics are so centralized that we don’t think of the rest of India anything that happens in Delhi is national anything that happens in the rest of India is not really relevant in a public discourse that is how liberal our whole elite thinking in the country is. Net result is there’s a step back. Karnataka in the European government came up with a liberal policy in relation to property, agricultural properties. For the first time a government had the courage to say that the restrictions and purchase of agricultural land are dysfunctional, therefore remove the restrictions and double the land ceiling limits. Not very surprisingly, A, most of the people in the country were indifferent to it, including the liberal economists. They never stood by the government of Karnataka, never argued in favor of it. They stood away from that. And B, when it came to the floor of the assembly, there was the pro forma routine protest from the major political parties and the usual suspects and the NGOs. And therefore, the government is forced to withdraw the land ceiling limit being doubled. though the restrictions and purchase of land they were removed and that removal continues happily but again the one state that tried to bring some sanity to the agricultural property market

Speaker 3 (13:31): it has failed land transfer regulations are endemic in large parts of the country

Speaker 1 (13:36): much of the debate in jamao and kashmiris about land transfer regulations some form or the other that if you’re not son of the soil you cannot acquire own develop land and so on and so forth

Speaker 4 (13:46): Northeastern India, many many states in the scheduled areas, scheduled tribal areas, including

Speaker 1 (13:52): Telangana and Andhra Pradesh, we have these land transfer regulations, actually undermining the land market and undermining the people who allegedly the land transfer regulations are intended to protect.

Speaker 3 (14:05): Ultimately, economic stagnation, perpetuation of poverty as a result.

Speaker 1 (14:09): And yet, I don’t think anybody in India has the courage of the political capital to take up this issue and then allow the land markets to function in a sensible way the whole issue of freebies we haven’t figured out what the role of the state is obviously in any country let alone a poor country you have to take care of the short-term needs of the people also but if the government is only to pay the salaries and meet the short-term needs of the population then we obviously see this challenge because we don’t understand what the role of the government is the collective needs of the society rule of law infrastructure quality education quality health care accessible to people if these are ignored in the name of so-called short-term welfare measures individual welfare measures and the cost of the long-term collective good

Speaker 3 (14:59): obviously the economy will suffer the society will suffer eventually will have not only backwardness

Speaker 1 (15:04): but unlucky and yet in our country if anything state after state they’re going for freebie culture and it’s almost impossible for any political party to openly and honestly advocate that freebies are not the answer to the problem let’s take a couple of other instances um the new pension plan the watch pay government despite not having a clear one party majority in parliament it’s fed being a ramshackle coalition had the foresight and the courage to recognize it in the long term if you allow the future generations to pay the pensions for the services

Speaker 5 (15:45): rendered today it is iniquitous inter-generationary and it will be ruinous to our fiscal future and therefore came up with a pension plan whereby the commitments and the allocations are made today

Speaker 3 (16:00): by the employee and the government so that there is a finality to it and from that fund

Speaker 5 (16:06): the pension will be earned subsequently now they can be argument about the manner of deployment of the pension funds they can be an argument for flexibility but there is no really serious argument to to to burden the future generations for the services under today and yet

Speaker 3 (16:24): state after states recently some of you might have noticed rajasthan uh then i think chattisker very soon jharkhand and many other states are following suit and i think the congress

Speaker 1 (16:35): party officially publicly announced that that is their uh stated commitment after the next election if they acquire power you can see how it’s not the role of the state or the fiscal prudence which conservatives and liberals value so much that are really at the forefront of the discussion it is again yielding to the organized vocal minority sections at the cost of the rest of the people of india at the cost of the fiscal health of the country Similarly, revenue deficits are mounting in many states and FRBM law is increasingly diluted. So we can see that there is a serious problem in terms of economic liberalism, let alone the political challenges that I mentioned earlier. But I would like to say, before I come to a conclusion, there is a problem world over.

Speaker 5 (17:34): has never succeeded politically anywhere in the world. Yes, certain principles and liberal economics have been embraced by much of the world,

Speaker 1 (17:42): but there have been some turbulences, some seesaw movements. But on the whole, at least in the past 30, 35 years, there has been a recognition, an increasing recognition that the state controlling economic activity is not the best way forward. But having said that, you see many things happening in many countries. Look at Germany.

Speaker 3 (18:02): The FNS is actually a foundation sponsored by the Free Democrats, a liberal party in Germany.

Speaker 1 (18:09): The Free Democrats in Germany never acquired significant clout beyond 5 or 6 percent or 8 percent. In fact, if I’m not mistaken, in the last term, they were out of the reckoning because they did not acquire 5 percent votes. This time they got 5 percent and they are now part of the national coalition. You take U.S., the bastion of fiscal conservatism in many ways, but you see what is happening in that country, illiberalism, even among the more conservative Republican Party increasingly, and even in economic sense, fighting for protectionism, against free trade, and a whole lot of things happening in the U.S.

Speaker 5 (18:48): You take the UK from Brexit to the current day, there are so many distortions in the United Kingdom. The Conservative Party is now tying itself in knots.

Speaker 1 (18:59): You take a country like France. Now France is among all the large economies of Europe, an outlier. A country with only 62 years of age as retirement age in a culture and in a society, European society, society where demographically is an aging population. And as time progresses, fewer and fewer people are working and more and people are deriving benefits in the form of pension. All that Macron wanted is to extend the pension, a pensionable age or retirement age. The resistance that he is encountering is what resulted in his failure to get a parliamentary majority despite getting a second time as president. So country after country, you can see a certain pattern. True liberalism is only a philosophy, elements of which are embraced and they work, they are accepted. But overall, very few countries have consistently advocated liberal principles in their political articulation. And in India, to expect a very poor country, largely illiterate country, where the power of the free markets has been unleashed only recently, and that too in some segments,

Speaker 3 (20:05): Where for two generations or more, the Soviet model and the socialist model and the state control, it was so deciduously in academic institutions, in schools and colleges, public discourse, media, or legislative chambers, almost everywhere. When there’s a default option to talk about socialism or state control as an acceptable, honorable default option, it’s going to be much more complicated.

Speaker 1 (20:28): Therefore, my appeal is we must leave this whole idea of economic liberalism around the notion of economic growth. Because happily in the last 25-30 years, there’s an increasing recognition among all political parties and the general public of all segments that growth is important for all. It’s not sufficient. We all recognize it, but growth is important. The growth encompasses so many things that are good for all of us individually and collectively. As the other day, Arvind Panagarya and his colleague, they demonstrated a 7% growth rate versus 8% growth rate over a period of 10 years in India means a $600 billion difference. That means instead of 8% if you sustain only 7% growth, you are losing in terms of GDP annually $600 billion after 10 years. I think we have to persuade people that even to promote welfare, you require this higher GDP so that if the government takes away 18, 19 or 20% of the GDP as taxes, that’s a tax GDP ratio of India, about 10 lakh crores, 10 trillion rupees available as additional revenue for the government. Therefore, you can actually promote more welfare, not less welfare. It’s not the question of welfare versus growth. Growth promotes welfare. Growth ends poverty.

Speaker 5 (21:51): growth gives incomes growth gives employment

Speaker 1 (21:54): growth gives you a chance to come out of discrimination if that message is not sold, if merely fight on liberal principles of individual liberty and free choice and so on and so forth, the chances are it will be

Speaker 5 (22:07): much harder to fight the battle but if we fight for growth as a measure to improve welfare, as a measure to

Speaker 1 (22:15): reduce poverty, eliminate discrimination and give opportunity I think there’s a greater chance If that is the perspective, I think our focus should be more on the role of the state rather than what is liberal, what is illiberal.

Speaker 5 (22:28): What should the state be doing in a modern society? I would argue, and I know some liberals would disagree with me vehemently, but I would argue with good reason, I believe, and with genuine commitment,

Speaker 1 (22:41): that the obvious things like national defense, national security, rule of law, etc. law etc these are self-evident there’s no question about it and we have failed in rule of law etc

Speaker 5 (22:52): and infrastructure and basic communities like water supplies of rage the storm water drainage and so on and so forth even if the services are provided by the state you can collect the fee

Speaker 1 (23:03): that’s not a problem but the state and state alone can be can be the agency that either provides

Speaker 5 (23:08): those services or creates a framework to provide those services effectively then the question comes

Speaker 1 (23:14): education and healthcare. I would urge all liberals in the country to really think very carefully in a caste-treated society, in an inequitous society, when there’s a lot of anger, a lot of hierarchical culture over the centuries. If you do not accept the notion that quality school education must be accessible to every single child without out-of-pocket expenditure, then you are condemning the bulk of the people of India, future generations to perpetual poverty. Because without educational skills, you cannot be a participant in a modern economy. You can neither promote growth nor can you come out of poverty and discrimination. I know there are many people who argue, why can’t you take care of your education? and health care annually about 60 million people are descending into poverty on account of inadequate access to health care because of health care costs or because of the indebtedness or the lost income on account of lost working days and so on and so forth. 60 million people annually descending into poverty because of health care failure. Therefore, unless you provide a framework for quality health care at an affordable cost, and luckily India can provide health care at a relatively low cost, I don’t want to go into details now, it will only cost about 0.5 to 0.6 percent GDP over and above what the state is spending. Today we are spending 1 percent GDP, one of the absolutely lowest in the world.

Speaker 4 (24:54): It’s ridiculous by any standard.

Speaker 1 (24:57): There are some well-meaning liberals who actually argue that the government should not take any more burden in healthcare. It’s absurd. There is not a sensible country on earth, not a civilized country on earth where the government spends 1% GDP on healthcare.

Speaker 5 (25:12): Obviously, we cannot reach 4% or 5%. We can certainly reach 1.5% to 2%.

Speaker 1 (25:16): But judiciously spent, leveraging our strengths, we can give productivity to people, eliminate avoidable suffering and opportunity to people. and eliminate this descent into poverty. So if we focus on these, then I think a redefined liberalism to suit the context of India and a story woven around economic growth and elimination of poverty, enhancing incomes and giving opportunity, I think it will have traction politically, socially and economically. The last point. So what are the hurdles for a reasonably rapid economic growth? we should all agree that notwithstanding certain distortions here and there the government the union government in recent years has taken special steps to to ensure fiscal products

Speaker 3 (26:10): for instance the management of the fisc during covid pandemic has been much better in india than

Speaker 1 (26:15): almost any other major country in the world so today despite the travels in the global economy the potential recession uh upon uh the the inflation and of course the disruption on account of the ukraine war etc india is reasonably well placed to achieve moderately higher high growth rates of about seven percent of their part maybe if you do a few things right we can even attain an eight percent growth rate once the world economy recovers from the current sloth but to sustain that there are certain specific serious hurdles proximate hurdles some are medium-term hurdles i think any serious liberal economist must focus on these issues systematically one is the state’s finances and the union finances for that matter well union has been largely prudent there’s a structural deficit in the union finances i don’t know how many of you are aware even if union does nothing except paying salaries pensions interest payments and transfers to states there is a deficit of 5.6 trillion rupees in the union budget without spending a single repair anything else there’s a structural deficit but eventually we have to grapple with that and make sure that there’s no revenue deficit and you do not borrow in order to meet the current cost that was the minimum requirement of fiscal conservators i cannot borrow and burden the next generation without creating the compensated assets and in india recklessly at all levels we are borrowing without creating assets and building the future and we have to figure out a mechanism in a politically acceptable way there are ways of doing it there’s no time for me to go into that maybe in the discussion we can talk a little about it and later on we can continue the dialogue but i believe we must take it above parties above union and states and our argument must be that we must combine growth with meaningful welfare but we cannot undermine growth and in any case you cannot borrow to maintain the current

Speaker 5 (28:15): expenditure that must be the minimum standard because that’s what the standard most indian

Speaker 1 (28:19): families follow with respect to caste religion religion in india every family lives for its children i think it’s something that that would be acceptable as long as you create an independent framework to assess this so that it’s not politicized and there is also a mechanism to permanently give the data to us so something like the office of budget responsibility in britain or congressional budget office in the us and so on and so forth something equivalent to that the second is at least some elements of rule of law because rule of reform is the vast one i don’t expect the governments to suddenly wake up and say all right we don’t have rule of law might is not right in the might is right in the country let’s change it but at least to the extent that the growth is

Speaker 5 (29:01): It is impeded by the absence of rule of law, property rights, enforcement of contracts, and rapid disposal of civil disputes, cases and so on and so forth. I think it’s possible to achieve that.

Speaker 1 (29:14): The third is education. We are spending a lot of money. I believe we don’t need to spend more money. In many states like Anwar Pradesh, we are spending 90,000 rupees per child at school per year. I am not misspeaking. 90,000 rupees per year at school. Many other states are spending 60 to 70,000 rupees. Some of the poorer states are spending 35 to 40,000 rupees. It’s not chicken feed, but the outcomes are appallingly bad. And it’s not government or private. Private sector is slightly better, but the whole framework is terrible. education policy initiated by the government recently gives us a chance because it addressed the child problem very honestly there are ways of addressing this problem because the demand side is very strong in the country the parents want good education the sacrifice a great deal for the

Speaker 5 (30:11): children the children are bright and they work hard the society values education the educational enterprises and the teaching community and the management they have an incentive to improve

Speaker 1 (30:21): education so we have all the ingredients for sound demand in place we just don’t define success sensibly we don’t measure it honestly if we alter that framework and do a few things without adding to the economic burden of the Indian state we can significantly improve the outcomes right now we stand at the rank bottom in global surveys in terms of educational outcomes at the age of 15. we can do better we need to do much better you cannot sustain long-term growth without skilled population reasonably skilled reasonably literate population our demographic dividend is ending up as a demographic nightmare we have the potential we never harnessed it at the current rate we cannot harness it unless education improves at the school level healthcare has already made the case uh i would not like to repeat the point but at a relatively low cost we can significantly improve health care and this also eliminates the takes away the high moral ground of the socials if quality is good education health care we own them in case of education no additional burden in case of health care slight additional burden but significantly improved

Speaker 5 (31:38): outcomes by public private partnership competition choice and the whole lot of measures then the moral

Speaker 1 (31:43): high ground occupied by the traditional socialist will be taken away by us you see there’s no reason why we should allow them that high ground in india the socialists they failed spectacularly even in these respects because elsewhere in the world where socialists buggered the economic management of the countries respectively they have done a reasonably good job of having educational

Speaker 4 (32:01): healthcare framework in india they failed in both so we need to grab that the education health care own that rather than allow them to have the high ground.

Speaker 1 (32:14): Urbanization one last point in this massive urbanization is inevitable in India in fact we are one of the lowest urbanized countries among large economies growing economies in the world but distant urbanization of unskilled people to big cities is going to spell a disaster.

Speaker 5 (32:33): These people don’t have enough skills to be able to contribute significantly to the big city economy They’re going there out of desperation to own a precarious livelihood without housing, without proper commute, without even knowing where their next day’s meal is going to be.

Speaker 1 (32:50): And eventually that’s going to lead to lawlessness, anarchy, violence and crime in big cities. What we require is a reimagination of our country and the urbanization. While the skilled people who can find employment only in big cities, that will continue and there’ll be no checks and migration. We’re a free country, we’re a democratic country, we have constitutional liberties, but we must create local magnets to encourage in situ urbanization, local migration to small towns in the neighborhood, so that they’re not disconnected from the rural milieu. So that the agriculture and industrial economy are linked. So that they can take care of both the interests and culturally they are not alienated. Socially they are not alienated. They have support network systems. Once the government makes an effort to build infrastructure and the basic communities and

Speaker 5 (33:43): some of the potential small towns, the private sector will come in with vast investment in housing and development and so on and so forth. We just have to reimagine urbanization instead of creating large ghettos and big cities and creating potential mind fields with a bit of imagination without too much

Speaker 1 (34:02): expenditure in fact hardly any new expenditure except a bit in case of healthcare we can radically reorient the these conditions and facilitate rapid economic growth however at the same time giving a tremendous boost to genuine economic and political liberalism liberty is not really a question of definitions and doctrine it has to be interpreted innovated and reinterpreted redefined in the context of a country from time to time i think that time has come we should see this opportunity and if we do that in the next 25 years realistically about a seven percent average

Speaker 5 (34:42): growth seems to be well within our reach that’s a miracle that’s waiting to happen but the miracle will not happen of its own accord we have to do the necessary things to ensure the sustenance

Speaker 1 (34:53): of that growth. Somehow many Indians are so optimistic that they think that it’s their birthright to get economic growth without creating the conditions for such growth. I think that’s a very dangerous delusion. We should not lose this opportunity. Let’s seize this moment and make liberalism truly successful. Make India a proud example of successful liberalism. And more important, make sure that the trials that we face in this country, the abject poverty, the lack of literacy and skills the abysmally low health care poor living conditions all these will be a thing of the past i hope this will generate some kind of a meaningful discussion now and later and i hope we’ll evolve some kind of a strategy and work with some degree of cohesion in pursuing this path for the coming years in this country i wish you all the very best i leave it open to questions Thank you so much. I was taking notes continuously and while I see that we have at least 13 to 15

Speaker 2 (35:56): questions already here from the audience. There’s a quick question I had of my own that I want to put forward first. Economist Darren Esmaoglu had once stated that for good economic incentives

Speaker 1 (36:07): to be there, you need good economic institutions and for good economic institutions to be there, you need good political institutions first. Considering how we see that India’s political system is such that it at times attracts the worst kind of talent how do you recommend we go about refining that first i i agree with the broad presumption i have been i coined the expression i repeatedly keep saying the 19th century politics and 21st century economy cannot coexist for long having said that a near 40 year pursuit of political reform in the country taught me that significant political reform of the kind that you and I want, that the finest talent with the right kind of incentive centers the political process and is promoted in politics through ethical and rational means, is able to provide viable alternatives, rational alternatives in public policy. And once given the mandate, is capable of delivering. These are the four conditions that we want in sensible politics. my experience taught me that it will happen in due course but it’s not going to happen in a hurry

Speaker 5 (37:19): right now there’s no serious appetite for political reform in the country therefore if that is the case can we do things even if quality is not improved significantly

Speaker 1 (37:30): can we do things to accelerate economic growth season the moment today because there are some opportunities which will in turn create opportunities politically because each has an impact another improved polity makes economic change possible improved economy makes political change possible sometimes circumstances compare no in 1991 there was no grand political change it was just the force of circumstances very often the force of circumstances is the greatest force of change so while obviously my first preference in the country is political and governance reform i would argue that if that is going to be delayed in some respects let’s not worry too much about

Speaker 5 (38:09): that because the power of the context is the most important thing i have been i have privileged in

Speaker 1 (38:15): getting some significant changes uh in the country you know 91st amendment 97th amendment 99th amendment to the constitution several changes in law at the national level a few major policy victories etc experience taught me that it’s the power of the context more than anything else it’s not merely because you and i decided that we’ll get it done the power of the context particularly in a large and complex country like ours with such degree of polarization where there’s

Speaker 5 (38:44): almost no possibility of consensus almost anything in the country if somebody says the sun rises in the east another fellow is going to say it rises actually in the west so when we are so contentious don’t worry too much about it if it’s possible we’ll pursue the elements of political reform

Speaker 1 (38:59): that are feasible at a point of time but we should not hold india’s economic growth a ransom to our political failings.

Speaker 2 (39:08): Thank you so much sir. With respect to your point on the center inherently structurally being on deficit and the freebie culture, Lewis had a question for you. He says given the pressure from various political parties for freebies and poor financial prudence, how would you grade PM Modi on his track record of financial prudence, not on any other aspect or agenda, just on financial

Speaker 1 (39:31): prudence without being party political i think there has been significant effort to improve the fiscal situation in the country against heavy odds the covet for instance is a good example despite kovit on the one hand the government did a credible job of taking care of the poor the vaccines the covet protection measures and free food to about 800 million people for about two and a half years these are not insignificant for india country with india’s poverty and the current fiscal situation so while taking care of that i think they have not gone overboard despite very heavy pressures from the global community from international agencies from well-meaning scholars and economists of indian origin from across the world the kind of pressure if you and i remember it was unbearable but i think the prime minister and his government must be complemented

Speaker 5 (40:27): This is about party politics. The problem of India is you say anything on any issue, immediately it’s made a partisan debate.

Speaker 1 (40:34): There is much that the Modi government should account for in my judgment. Rule of law has not included. In fact, there is perhaps a decline in the rule of law. There is no decentralization of power. And I can go on and on. But when something is happening right, irrespective of the party, we must acknowledge that.

Speaker 5 (40:49): And also surprisingly, the state governments run by BJP and in the case of Orissa run by BJD, they have been pretty good in terms of fiscal management.

Speaker 1 (41:01): So I think there is some commitment in the part of the political executive of the country in terms of the national level, in terms of fiscal management. Many states are falling short. and even though union government is trying there is a structural deficit of the union level finances

Speaker 5 (41:17): i mentioned to the 5.61 trillion rupees of deficit uh revenue deficit or i wouldn’t call revenue deficit but deficit even with the committed expenditure at this point of time which should

Speaker 1 (41:29): be cause of concern long term but because they have been fiscally relatively prudent they have given us a chance to achieve reasonably good growth in the next few years if only we set a few things right but as i said some of the states are in difficulties union structure

Speaker 3 (41:44): deficit is a problem but if we make some take some steps in a non-partisan way don’t make it

Speaker 1 (41:51): impossible for states to uh to run their governments because after all they have to go and face the people and don’t make it a fight between freebies versus growth that’s a dangerous thing politically that kind of articulation it has to be a balanced approach to short-term individual welfare measures and economic growth and eventually growth actually gives you greater room for welfare that’s the argument and you must have the framework built around that and my belief is zero revenue there should be should be a target which they met at the union and the states within a few years time

Speaker 3 (42:28): and with a growing economy and with some moderate inflation if you freeze the current expenditure

Speaker 1 (42:35): on the short-term uh individual welfare measures it’s sure the total expenditure will come down significantly in very very short while you know for those i’m sure all of you recognize the importance of the compound interest rate and growth rate how it has an impact if it is reasonably

Speaker 5 (42:52): happened you know in 1996 at the end of the summer or regime the total indian budget was 2 lakh 9000 crores

Speaker 1 (43:02): 2 lakh 9000 crores 2.09 trillion rupees this year the current year the budget is 39 trillion

Speaker 5 (43:11): rupees 39.3 or so trillion rupees almost 19 fold no it’s not a in no time if only you freeze something

Speaker 3 (43:22): like say some restraint will grow our way out of problems happily we are a growing economy

Speaker 1 (43:29): and therefore even the fiscal problems in states if some restraint a bit of consensus are there

Speaker 4 (43:35): i think we can overcome that and we should particularly appreciate the modi government for exercising that restraint and giving ourselves an opportunity

Speaker 1 (43:44): thank you so much so on that point something you mentioned right there leads into another question

Speaker 2 (43:49): that i have from the audience from here it’s about how you said the public discourse is such has been corrupted so the question also how public discourse is corrupted across the world how do you think india fears on the same given the frequency of elections we have and the continuous bombardment of election related message and government-related message that we have because in india a lot of

Speaker 1 (44:09): the times advertisement for government schemes ends up being advertisement for the party party itself compared to other countries do you think we are doing worse in the public discourse of politics and political ideology and are we doing worse um sorry paradoxically i actually think we are a little better maybe the optimist in me is sort of you know is coming to the fore while

Speaker 3 (44:34): there is a lot of lack of financial literacy in the country the public sector private set obvious issues no-brainers also we’re still debating whether you should privatize some operator units which are useless the white elephant should go or not no the evidence is compelling and conclusive and yet there’s a debate because the knee-jerk reaction but if you take that

Speaker 5 (44:52): out as a general rule indian quality and even the indian political class not only society

Speaker 1 (45:01): is far more sensible and balanced while the indulgence of rhetoric here and there there is no serious resistance to common sense steps we are amenable to leadership in this country so there is a problem because of economic literacy and general literacy and low level of education

Speaker 5 (45:18): and very inadequate quality of think tanks and our media being utterly short-sighted tutu mayme culture but our society i think is in some respects surprisingly far more mature if only the elected governments at the state and union level can give some degree of confidence

Speaker 1 (45:36): to the people that they’re looking for for the future that credibility is the most important thing so i am actually a little more optimistic for instance the elections who won who lost i mean

Speaker 3 (45:46): in a country as poor as india was there ever a serious debate about that of course the process

Speaker 5 (45:52): is ugly votes are bought across the spectrum in many states money spent is outrageous in one by-election in antipradi in telangana recently one assembly by-election in telangana state one small state in a poor country won assembly by election which has no consequence politically speaking

Speaker 1 (46:08): it spent more money than all of britain in the parliamentary election 650 constituencies by both the major parties and all their candidates put together it’s a shocking statement i’m making it’s insanity but despite that insanity that that’s a serious political challenge there’s no question i do not want to minimize the magnitude of the political crisis envelope in this country but despite that well that has to be addressed and all my life has been about that and i believe hopefully we will address it in the coming years despite that polarization while it is there

Speaker 3 (46:43): in real policy there’s actually greater unity possible in india than is recognized easily

Speaker 1 (46:49): so i’m a little more optimistic thank you so much sir like i’ll tell you some of a lot of the questions in the possibility of time. Uh, one of the media ones that we’ve got here is also regarding, if you look at the freebie culture that we have, and there’s a question based on some of the works of James Buchanan that when people want state to make some auditions for them, whether it’s freebies or something else, it might also be because they don’t want the responsibility, which comes with their individual liberty. In your personal experience, do you think that the, if you, the girl starts doing too much for people, people might start seeding their individual liberty to begin with. Sorry, I’m a little, I didn’t get it fully. Could you just in a sentence? Sure, because individual liberty also comes with responsibility. Right? So since a lot of people might want the state to do things for themselves, because they do not want to take the responsibility

Speaker 2 (47:47): which comes with individual liberty. So have you come across instances where people are happy with

Speaker 1 (47:53): the more statist policy because they don’t want to be personally responsible?

Speaker 5 (47:57): No, it’s a great question. You know, Soviet Union is a great example where many scholars have commented once you have denied the individual liberty and also allowed the people to abdicate personal

Speaker 1 (48:11): responsibility for a period of no uh how many years from 1917 to 1991 was 74 years three generations it’s very difficult to come back that’s why one of the reasons why soviet union could not come out of that mess as opposed to eastern european countries which faced this problem essentially post second world war is this too long a period and people are no longer used to taking personal responsibility therefore if for long periods you have a state-centric system where low level of functioning the equilibrium is a low level while people complain they don’t have to make decisions there’s somebody else making decisions for them they simply follow orders it obviously does enormous damage to the soul and to society and the economy but eastern european example shows that if it is not that long,

Speaker 5 (49:08): say 30, 40 years,

Speaker 1 (49:09): 1945 to 1991, 40, 45 years they faced it, they could come out of it. Take Poland, for instance, very vibrant economy or many other countries. India is a bit like Eastern Europe. Unquestionably, we are making it worse in political terms. But in economic management terms, the fact that with economic reform, 1991, even with the limited liberalization, the entrepreneurial class came to the fore and wherever the opportunity is given they are flourishing it shows that it is not dead yet it is not dead yet but unfortunately the high degree of centralization of the party the complete emasculation of local governments even worse than what they were in 1970s and 80s and the increasing culture of freebies nowadays

Speaker 5 (49:50): in some states the governments are doing only two things and i mean it i’m not exaggerating at all

Speaker 1 (49:55): just pay salaries and pensions and give the freebies nothing else they’re actually making the virtue out of that kind of governance if you call it governance now if that continues for long in those pockets there is a real danger that a significant section of the population not all population but a significant section of the population will completely abdicate until you much harder to come out of that hole but as a society at large i don’t think we’re there yet but there are dangers Thank you so much. Just again, clubbing a few more questions here. There’s a question

Speaker 2 (50:31): from Risha Pagucha. In today’s India, there is no strict ideological demarcation among party lines anymore. In this post-ideological era where we are seeing a lot of strong populism,

Speaker 1 (50:44): how important do you think different political philosophies still are? Do people even vote for political philosophies anymore or just for the party i think it’s a very insightful observation there’s no ideology left in it it’s all make-believe ideology you know even the so-called hindutva

Speaker 5 (51:05): versus secularism is more market segmentation than substantive my own sense is that

Speaker 1 (51:13): the problem that the current ruling party is facing not today but over the past two decades or so is we don’t have experience in building a conservative right-wing political party. World over the right-wing political parties have essentially the core base comes from the cultural conservatives. Whereas the winning strength comes from the economic and political liberals who want a better country. They want individual liberty, decentralization, so on and so forth.

Speaker 5 (51:44): and many countries have learned how to bring them together in a seamless manner but even there you

Speaker 1 (51:51): are seeing what’s happening to republicans in the united states india because it has no experience there are some travails but fundamentally i think it’s being managed reasonably well

Speaker 3 (52:00): i don’t see any real dangers in the country in terms of communal strife on account of the rise of

Speaker 1 (52:06): of a certain economic philosophy or liberal philosophy. But obviously that is used as a calling card, as some kind of market segmentation device by the political parties, both sides. So in reality, there’s no real ideological divide and the parties behave the same way. All I can say with certainty is Mr. Narendra Modi or Mr. JP Nadda, Ramit Shabin, now become Congress president. and probably Mr Sunina Gandhi or Mr Rahul Gandhi will never become BJP president. Having said that 95% of the rest are interchangeable. So in that sense ideology is dead in the country but market segmentation therefore the rhetoric to in pursuit of that market segmentation is very strong and therefore populism is going to be the dominant credo therefore the fundamental fault line of indian democracy in the coming years the election battles are going to be fought in states in some states very definitely it could well be also in the union if it’s not managed well is the freebies versus growth and i would argue very passionately i’ve been a lot of thought to it in recent months and years if you allow the election to be shaped by freebies versus growth debate it will be a disaster for the country Even rich countries cannot say we give up freebies.

Speaker 5 (53:28): A poor country like India is impossible, particularly in a centralized milieu, when most people don’t understand what an election word it actually means to them in their personal lives.

Speaker 1 (53:38): That’s the reason why they are accepting money as a bride for voting. It is a short term response, short term interest maximization, when there is no long term that they can perceive. We are a very highly centralized, opaque system. In such a situation, in the long term, you have to decentralize power in a manner that the link between the vote and the consequences to my life and my family, between the taxes I pay and the services I receive, that is manifest in the minds of every citizen. We are far, far from that ideal because we created a messed up, highly centralized government where power is increasingly focused on only two functionaries, the Prime Minister and chief minister and even if you do it today it will take another 25 30 years for that to take roots

Speaker 3 (54:28): therefore in the short term we have to politically manage in a way that it is short-term individual welfare measures plus economic growth in a sustainable manner a reasonable balance in order not to hurt the next generation we don’t burden the next generation

Speaker 1 (54:46): for the current expenditure so that kind of a rhetoric that kind of a conscience is the only thing that is feasible i agree that short-term freebies and the populism of this kind is is the greatest danger approximate danger to india’s economic growth and perhaps political stability in the coming years thank you so much sir for the next questions refers to a recent news incident

Speaker 2 (55:12): where a company which was supposed to be set up in Maharashtra moved to Gujarat because uh that’s what the question because of the central government’s intervention of where the company should be set up so the question doesn’t ask why we not see any kind of protest in this policy and that also allows me to segue into another more important question so do you think a we actually have two bigger

Speaker 1 (55:34): central government than we actually knew and if yes then what could we do to make a smaller center maybe more effective state governments is there a way we can go that side thank you

Speaker 3 (55:44): uh frankly i do not know the circumstances i also read the news reports i don’t give them too much of credence because you know this is a normal rough and tumble of politics no our state should

Speaker 1 (55:55): have got it tamil not about it cannot have got it no why are you not getting it government is failing this is a normal thing it’s also a healthy sign that means there is not only cooperative but also competitive federalism but in reality when the states are fighting for investment

Speaker 3 (56:10): opportunities then obviously there is competition which is a good thing we should encourage that

Speaker 1 (56:15): competition and given the political context of elections in gujarat on the one hand and the change of government in maharashtra on the other obviously these will be used as weapons but otherwise i don’t think that union government is really playing a significant role in deciding which state should be favored but there’ll be five ten percent in the margin so whoever the prime minister will certainly try to favor his state or something they should resist the temptation to the extent possible it’s not easy uh and your constituency are in your state but i don’t believe that there is a significant distortion on account of that and tomorrow there’ll be something else going to maharashtra and some other state will complain tomorrow but having said that There certainly is a perception in recent years that certain groups, certain houses are specially

Speaker 5 (57:06): favored by the government even in private transactions. For instance, I’ll give you the perspective from Andhra Pradesh and Telangana. I understand these states well.

Speaker 1 (57:18): At least three significant infrastructure investments, Gangawaram port, the north coastal near Visakhapatna, the Krishnapatnam port in the south coast of Lansha, between, I mean closer to north of Chennai, and the Mumbai airport, all three developed by entrepreneurs from this part of the country, they are all taken over by an industrial house.

Speaker 3 (57:42): Now it’s possible that it all happened through normal private sector transactions, but it’s also possible that the government of India is tipping the scale by showing some degree

Speaker 1 (57:53): favoritism and twisting the arms fundamentally unless we have a framework of rule of law in the

Speaker 5 (57:59): country at least to that extent that the economic fortunes of an enterprise and individual do not depend on political vagaries i’m choosing my words very carefully unless that confidence is given

Speaker 3 (58:13): not only is it wrong from rule of law point of view but more important it is going to be detrimental

Speaker 1 (58:18): to us because the whole world is noticing us whatever we say if they feel that the government

Speaker 5 (58:23): of india or the political executive of this country is going to tip the scales it’s not the

Speaker 1 (58:28): market competition and the innovation that are going to succeed but the government’s patronage ultimately that will hurt india and i hope the prime minister and the government are alive to that and if there is a misperception spreading they must correct it if there are some mistakes committed they must correct them thank you so much sir um considering that you use like we were such a socially and culturally diverse country and yet over the years we saw that how we

Speaker 2 (58:58): moved with socialism uh one of the attendees here has a question of even though a diverse country like us which it’s not like we inherently didn’t have ideas of liberalism we still got driven with

Speaker 1 (59:10): socialism do you see any recent democratic emergence or trends in support of liberalism now Do you see the new generation being more liberal as such?

Speaker 5 (59:20): I think so. I think so. Not the whole generation because our education is so flawed.

Speaker 3 (59:26): Ideally it should have been. But in my estimate, and people may be surprised,

Speaker 1 (59:32): no more than 20% of our younger generation are getting any kind of meaningful education. About 80% are getting hardly any education. Maybe at best some smattering of literacy. Even that is mattering. Real education of some sorts is available in 20% people. Among those 20% people, I think most of them are capable of independent thinking. They are not falling for knee-jerk reactions and sloganeering. They are, at least from their own life’s experience, they are able to marshal evidence and apply some logic and come to rational conclusions. Partly because of the thinking faculties, partly because they are productive members of society. They are part of the economic growth wagon of India. And therefore, they understand their own self-interest.

Speaker 3 (01:00:17): For both reasons, they are capable of it. I suspect the rest of them, unless they are self-employed, unless they understand the market, the way it’s operating, those people quickly understand how wealth is created,

Speaker 1 (01:00:32): what has actually happened to life. The rest of them, I suspect, don’t have the ability to really understand it. For no fault of theirs. But to the extent that people get some educational exposure to economic activity, I think more and more people today are aware of the realities of the market versus state, liberalism, socialism and so on and so forth.

Speaker (01:00:51): Thank you so much.

Speaker 1 (01:00:52): I know we are almost out of time, but if time permits, I would like to have two more questions for you.

Speaker 4 (01:01:00): No problem. For a few minutes, I have no problem.

Speaker 1 (01:01:02): Sure. Thanks.

Speaker 2 (01:01:04): So I have two questions from Dian and Maishwari, which I’ll combine. both of which on the state and the central government’s lack of financial prudence and how money is spent on even health care education when it’s adequate does not actually go into

Speaker 1 (01:01:17): delivery of those services so how do we ensure that we actually have the quality service for the money which the government’s spending is there any way we can encourage or incentivize that financial prudence so there are two things here the first is how do you ensure fiscal prudence the other is how do you ensure that the money is wisely spent even in the desired sectors the second one is a harder question because there are no legal or constitutional instruments nobody can impose wisdom on a political executive we can only appeal we can only mobilize public opinion we can

Speaker 5 (01:01:53): have collective informed assertion and hope for the best sometimes all else fails then let’s

Speaker 1 (01:01:59): hope that the electorate will ultimately wake up and then realize what’s in their best interest and all these we must attempt in each state and i would like to argue that without spending one rupee more at the current level of educational expenditure you can improve the outcomes dramatically provide you to restructure the expenditure and go into certain key areas healthcare as i said some amount of expenditure is required but wisely spent with public private partnership and competition and choice will bring future results but to make the case and make the governments understand the political value of it not only the economic value in terms of services rendered therefore enhanced productivity but the political value in terms of the worst they might receive we must be able to persuade those comments it’s a very long hard struggle those of us who

Speaker 5 (01:02:47): argue that also must have credibility and access and and so on and so forth and skill but the first

Speaker 1 (01:02:53): the other one namely how do you ensure that the governments reorient their expenditure the constitution gave us instruments luckily ambetkar and his colleagues covers article 293 of the constitution whereby if a state incurs any debt it must obtain the prior consent of government of india now as long as the conditions are rational reasonably acceptable and non-political seem to be non-partisan three issues rational that is a pundits can decide acceptable that’s where the crafting is that’s why i’m arguing that don’t talk too much about jargon but talk about next generation not being burdened with the services rendered today the cost of services rendered today that’s a very simple formulation that we will not burden our children debt without wealth

Speaker 3 (01:03:45): and that and nothing else within that you do whatever you like after the electric government is free to do decide whatever it wants you may give any amount of advice but the sovereign power

Speaker 5 (01:03:54): of the legislature to decide on spending cannot be taken away that is the nature essence of politics and government and democracy ultimately the political competition will decide what is the

Speaker 1 (01:04:05): best course but the condition is there shall not be any revenue deficit and create an independent agency credible agency maybe the finance commission uh make it a permanent body it has the wherewithal

Speaker 5 (01:04:18): maybe CAG can do part of the job because they have the knowledge base and they can create a body like officer budget responsibility just to give projections about the current expenditure

Speaker 1 (01:04:28): and viability of the programs not making a judgment of the policies it’s none of their business not talking about what is right what is wrong just simply giving projections and the numbers so that the country can make a determination on the base of those numbers i think if some some such framework is available. I believe realistically, fiscal prudence in states and the union

Speaker 3 (01:04:49): are very much on the courts.

Speaker 1 (01:04:51): When Vajpayee government could do it without a majority in parliament, the FRBM Act and the new pension scheme,

Speaker 3 (01:04:58): both are remarkable accomplishments. All states fell in line except West Bengal in case of pension. It was a miracle. We didn’t realize it at the time. It happened so quietly, so efficiently.

Speaker 1 (01:05:08): In retrospect, it was a miracle. So this is not impossible. This takes some doing, but we can do it. But how they spend in a particular sector, it has to be statewide some kind of persuasion. And if some states do well and if succeeds, then I think other states will follow as long as they see electoral limits in that. Thank you so much sir.

Speaker 2 (01:05:31): There’s a question which I know goes a bit beyond the scope of this one,

Speaker 1 (01:05:36): but I feel it’s still related considering

Speaker 2 (01:05:38): the question is about how do we solve

Speaker 1 (01:05:40): there is an incentive problem for bureaucracy and how do you solve the same it’s a great question though it’s not directly linked to this i think it’s important service delivery is a disaster in the country and that actually imposed enormous burden on the political parties in many states the political party machine is operating around the clock 365 days a year

Speaker 3 (01:06:05): not during election time alone only for the intermediation they’re not improving the quality of delivery but they are trying to improve the access and therefore some satisfaction and that is a very costly and ineffective operation so the political crisis of india is in a substantial

Speaker 1 (01:06:20): measure a result of the bureaucratic failure and service delivery failure therefore it’s a very germane question we can do many things but let me limit it to the senior civil services there are three fundamental things that wrong recruitment is not a real problem Actually, it’s a miracle that the Union Public Service Commission is doing a remarkable job in a country as complex as India. There are no serious allegations of either non-partisanship or corruption or influence-pandaling in recruitment of senior civil servants. In a country where there is so much of glamour for these services, I think they’ve done a great job at the national level. In states, there are many questions, many doubts, etc. But unfortunately, after entering the services, the senior bureaucrats have in a large measure not really lived up to expectations. A very significant number actually have become pretty dysfunctional. What are the problems? There are three fundamental challenges.

Speaker 5 (01:07:20): One, India is alone, along with other countries of South Asia, in having a generalist, all purpose, premier civil service. In this day and age, to think that you can be a banking secretary one day and a defense secretary next day and a finance secretary, education secretary third day is nonsensical.

Speaker 1 (01:07:43): There has to be domain expertise. And we have to make sure we have a system whereby after some years of field service, every civil servant actually specializes in a basket of areas. And is broadly posted only in those areas where the specialized training is available. The second is there is a monopoly of the key government offices available only to certain select services. That is the point of entry is determining the point of destination. It’s like a caste system. It’s not your merit. It’s not what you do. It’s where you are born that’s determining your future. Civil services exactly embrace that culture. It’s a disaster. You have to make sure that all the key public offices are open to competition from within all the services within the government, but from also from academia and the market. If we care for ourselves as a country, we deserve the best people to hold these executive offices in key positions. Just because somebody entered the civil service at an age, might be competent, maybe intelligent, maybe well-read at the time. time but what matters is at a point in time when you’re occupying that position are you the best qualified in the country we cannot have some mediocre people we must have a mechanism by which the best go for that and then there is a mechanism called executive agency model once you appoint

Speaker 3 (01:09:09): them there you give them complete autonomy you give them the inputs you expect this defined

Speaker 1 (01:09:15): outcomes and then hold them to account for that don’t do micromanagement from outside that’s how ISLA functions that’s why every successful organization functions that’s why every successful operation in otherwise messy government they function for instance election

Speaker 5 (01:09:31): management disaster relief these are areas where indian government are vip visits indian government

Speaker 1 (01:09:37): excels in them why in that specific context you created a a select situation in which authority and accountability views. You have created a temporary executive agency model. We have to learn from that. So that is the second big change. And the third big change is you cannot have a system where if I enter at 23 or 24 I’ll return at 60 and no matter what happens I’ll get my promotions and that no. You must do something like the armed forces. A thousand may enter but

Speaker 3 (01:10:11): there’s place at the top only for a hundred there must be a progressive weeding out without any

Speaker 5 (01:10:15): odium attached after 15 or 20 years you screen them another five years screen them and if they’re not

Speaker 1 (01:10:23): that that number cannot be going cannot go to the next level because they’re not up in the slots let them go to the market and let them take whatever is available as a retirement benefit etc so we must have that kind of a model if you do these three things i’m certain that our

Speaker 3 (01:10:37): of premier civil services, which actually deliver very well. And once they are set right, they set the standard and they are given the autonomy

Speaker 1 (01:10:47): and they become executive agencies to make the rest of the bureaucracy respond is not going to be difficult. Thank you, Samshan. Now I have this one last closing question for you

Speaker 2 (01:10:59): if you’re taking your time. On a broad team of the topic we’re discussing today, I know you have already put your views forward there,

Speaker 1 (01:11:06): But do you think that at the situation we are now, is there an importance for us to do something like have a revival of the Swatantra Party,

Speaker 2 (01:11:13): which was maybe the only classical liberal party India had? Or would you suggest the same thing which Economist FA Hayek had suggested to Sir Anthony Fisher,

Speaker 1 (01:11:23): that if you want to bring about change in ideas and all, go through the method of a think tank as such, instead of entering into politics. What would you suggest would be the appropriate way to take forward liberals?

Speaker 5 (01:11:35): Given the first past the post system compulsions, understand first the systemic compulsion.

Speaker 1 (01:11:41): We have unwise chosen the British model. Only Britain and today Canada and India and those in the subcontinent were the only ones

Speaker 5 (01:11:50): following that model. Even New Zealand has given up, it has no proportional representation. Australia has alternative voting system.

Speaker 1 (01:11:58): Even Britain, the regional parliaments of Northern Ireland, Scotland and Wales, they They have proportional representation in some form or the other. London City has a direct election to the mayor. India is the lone country following the model of force of commons. And in that model, there is no space for a third party in most cases. So instead of being a distant third party, and each time people feel that the vote for them is wasted on the Bruce’s credibility, it’s better to leverage our strengths and do two things.

Speaker 5 (01:12:29): One, as you said, some think tank model, understand the issues, develop some models of governance changes or economic policy, and when the opportunity is right, utilize that skillfully to leverage. The second, when something right happens in pursuit of liberal agenda, or what they do for their own reasons is actually in consensus of liberal agenda,

Speaker 1 (01:12:50): and that limited issue without having any partisan color, you support it systematically. and with logic, with evidence, without using doctrinaire language. Talk about the consequences in terms of our lives. These are the two approaches that are right. Forming a party is everybody’s right constitutionally, but I don’t think that it will really have any kind of traction at this point of time. Thank you so much, sir. Thank you for taking your time. As I stated in the beginning, before I know you’re traveling today,

Speaker 2 (01:13:26): and taking your time and doing this delightful lectures taking notes continuously and now i have a lot of data points and i’m sure even the audience has a lot of data points they would like to go and revisit again so with that thank you so much our audience members who are continuously

Speaker 1 (01:13:40): keeping questions and keeping me on my toes away and apart from dr jeffrakash nara and i’d also like to thank the federic newman foundation for freedom which uh is collaborating with us on this the swatantata center and students for liberty south asia which also helped us with this program thank you so much everyone have a great evening thank you shawdhya and thank you everybody have a great evening