India just needs to exploit its natural strengths to live up to its potential, says Arun Jaitley.
We live in an age of both cynicism and hope. When we see the depressing environment around us, public opinion tends to become cynical. However, India has shown tremendous resilience. Hope, therefore, emerges from the sense of resilience to overtake cynicism.
Sixty percent of our population depends on agriculture for livelihood. Agriculture contributes only 16 percent to the GDP. The share of services in the GDP is touching almost 60 percent.
Services in India have grown because they are not entirely dependent on either government policy or the lack of infrastructure. It is an important challenge for us that we tackle the problem of under-employment in agriculture by transferring a very large number of people from agriculture to the manufacturing sector or the services sector.
Quality of Politics
In a parliamentary democracy politics impacts the life of the nation. Politics formulates the policy. Policy determines the direction of India. The power of politics is immense. The stature of men who man the politics must therefore be in consonance with the extent of expectation of good governance. If India's GDP can grow by 9 percent despite bad governance, what change good governance will bring to India.
Over the past two decades India has witnessed the decline of structured political parties. A large number of parties have become a crowd around families. In the case of some parties it is caste alone which determines the support base of the party. In unstructured parties there is hardly any inner party democracy.
Succession is through dynasties. We are increasingly witnessing the evolution of the world's largest democracy from meritocracy to a dynastic democracy. This has led to a sudden decline in the quality of politics. Identity politics is taking the front seat. Sound policy is forsaken for the caste populism. Despite this, there is reason for hope. The Indian middle class is expanding. The aspirational class is also expanding.
People are getting restless. Public opinion alone can alter the direction of politics. The real strength of India's democracy will emerge when surnames and castes are replaced by proven ability and integrity. This will impact on the quality of governance.
Policy paralysis and poverty eradication
Good governance needs strong leadership. It needs decisiveness to form a policy. Leadership must necessarily have credibility. The economic model for India is increasingly becoming a subject matter of larger consensus. You need 9 percent growth for the next decade or more. A continuous 9 percent growth will target investment; it will create jobs. It will generate larger revenue for the government. Enhanced revenue can be used for infrastructure creation and social spending. It will expedite poverty alleviation schemes.
Unfortunately, the past few years have witnessed a policy paralysis and declining credibility of the political leadership. This tendency has to be replaced. Our poverty alleviation schemes including income enhancing schemes must combine their social objects and asset creation. The need to eliminate manual scavenging, uplift the weakest, particularly the tribals, concentration on health care, education and rural infrastructure are the major challenges of the day.
How do you reach a 9 percent growth rate?
In order to reach a 9 percent growth rate India must have decisive policy formulation. We need to expedite and improve upon the infrastructure creation. Unfortunately success stories like the telecom sector and national highways were marred by corruption.
It is not healthy for the economy to hold up innumerable large investments in the name of a new licensing regime In the name of environment protection. Economy and ecology must co-exist. It is extremely necessary that our manufacturing sector reforms are expedited. We live in an age where consumers buy products which are cheaper. Low cost manufacturing is the key to success.
Rationalising of interest rates, improvement of infrastructure, effective implementation of power sector reforms and availability of utilities on internationally comparable prices is the need of the hour.
Our concentration on highways, ports, airports, rural roads has to be given its due importance. India has failed to exploit its tourism potential. Lower taxes on tourism related industries, improved airports, railway stations and cheaper hotels are necessary to exploit our entire potential.
We need to liberalise the movement of goods within the country. Higher taxation is a short-lived policy which will never bring long term results. Taxation rates have to be modest and internationally comparable. You can export goods, you can recover export taxes. We have seen several success stories. Expansion of the educational network, information technology, telecom, pharma sector, the auto sector, the highways, expansion of the urban housing are some of the success stories we have witnessed in recent years. One new policy and new legislation must further these successes rather than curtail them.
Coalition Governments
The age of tall leaders and tall majorities is over. No party today is in line for getting a large majority on its own. The political agenda of India has evolved.
In the initial years after Independence the political agenda involved a serious concern due to cancers of the unity and integrity of India. Sovereignty was of prime interest. Once threats to national sovereignty subsided the principal issue of concern was economic development, poverty alleviation and regional aspirations.
Federalism is an issue of prime importance today. Federalism today involves sharing of power with the regional parties in the states. The anchor of a coalition can be a national party. The anchor of a coalition can, however, be a party which has a large strength of Lok Sabha seats.
The regional parties hold the balance of power in determining who rules New Delhi. The two essential ingredients for the functioning of a successful coalition are that the national parties must display large heartedness for accommodating regional players. Regional parties similarly must evolve a national outlook. This alone can ensure good governance.
Corruption
Corruption is eating into the vitals of our governance. Corruption dissuades investors. It adds to the cost. The success story of telecom and national highways have been adversely affected by corruption. The power sector is in a deep crisis on account of corruption in allocation of coal blocks. The initial impression that de-licensing which was initiated in 1991 will eliminate corruption has been belied. The land related transactions, real estate transactions, allotment of natural resources, mining, liquor, private sector education are areas where corruption has peaked.
It is regrettable that even 65 years after Independence political funding is substantially invisible. The recent debate on the Lokpal and the need for an anti-corruption ombudsman (Lokpal) has pushed the need for stricter enforcement of anti-graft laws. Even though there is enormous public pressure for anti corruption ombudsman the government of India is equally free in the matter of an independent and effective Lokpal. One of the principal issues is that of independence of the investigating machinery which investigates offences against public servants. The CBI is the natural choice of an investigator.
However, the control of the CBI cannot be with the central government. Can the central government seriously decide the manner in which the CBI functions? To the final draft proposed by the Union Cabinet on basis of the select committee I have already proposed some significant changes. The CBI director should not be re-eligible for re-employment in the government. Only then can the CBI function without fear or favour.
The investigating officer cannot be transferred mid-way without the approval of the
Lokpal. The Lokpal should not grant an opportunity of hearing to a delinquent public servant prior to the initiation of an inquiry. This would give an opportunity to a delinquent to destroy the evidence even before the inquiry is initiated. Religion based reservations are not constitutionally permissible criteria for appointment in the Lokpal.
Creation of a Just and Fair Society
Social tensions on the basis of caste and religion need to be diluted and eliminated. There is a need for a continuous dialogue between the communities.
Comments on issues impacting inter-community relationship must be well considered
in expressing in a restraint manner. Compassion and fairness are the measure of a mature society. The recent incident of gang-rape in the national capital has shaken the conscience of independent society. Women are still considered as an instrument of exploitation. The manner in which the young lady was treated reminds one of beastality. India has failed the test of civility.
Our Scheduled castes and Scheduled Tribes are still living in under-privileged conditions. We should encourage affirmative action to make un-equals as equals.
Reservations are an anti-poverty measure. They are an attempt to undo historical injustice.
Intolerance
Intolerance against free speech is a new trend. A protest against a speech or a cinema cannot be a ground for holding a society to ransom. Similarly, those who occupy public space will have to learn to measure their words so that public utterances are not provocative. I do not agree with recent statements either blaming certain castes for greater corruption or for regarding corruption as an equalizer.
While free speech must be safeguarded the constitutionally prescribed restrictions must be borne in mind while exercising one's right to free speech.
Terrorism and Insurgency
India has faced adversity in terms of cross border and domestic insurgencies. Kashmir has been a part of unfinished agenda of Pakistan since the partition of India. Pakistan never reconciled to Kashmir as a part of India. It attempted conventional war and then for two decades cross border insurgency. It has for the last few years set up domestic modules in India and activated terrorism and insurgency within the country.
Pakistan has to realise that the age of re-drawing geographical boundaries is over. Faced with huge problems within its own country Pakistan must concentrate on resolving those issues rather than look at India with a jaundiced eye. The attack on Indian Parliament, the attack at Mumbai on 26/11, the recent beheading of Indian soldiers are all repeated acts of provocation sponsored by the state actors inside Pakistan.
Today, Pakistan has the army, the ISI, a civilian government and terrorist groups who all function on their own agenda. Engagement with Pakistan whether by the US or by India can only succeed if Pakistan stops using terror as an instrument of state policy. If Pakistan becomes more alert and less radical, if the strength of the civilian government in Pakistan increases and its reliance on terrorism both as state and non-state actor disappears, it is only then that we can develop serious and successful relationship with Pakistan.
Pakistan has to realise that Kashmir is an integral part of India. We made historical mistakes while determining the constitutional character of Kashmir and its relationship with the rest of India. However, it is now necessary that our policy is focused in a manner that in a battle against insurgency and separatism we keep the people of Kashmir on our side. There is a strong aspirational class building up in the Kashmiri youth. Our policy has to be pro-people and anti-separatist.
The Maoist insurgency is one of the biggest challenges facing India. Almost 200 districts in the country passing through the heartland in some measure are impacted by them. In the tribal areas the support to this insurgency is much higher. The first right to India's economic resources must go to the tribals.
These are admittedly the most backward and under-developed regions. However, to enter some of the Maoist inflicted areas you need to get rid of landmines and weapons. The Maoist are not social reformers. Maoism is not a poverty alleviation scheme. Maoism is an attempt to overthrow India's parliamentary democracy. Most of the arms used by the Maoist are from the Indian security forces.
We need a twin mode of development and security measures to cleanse the Maoist areas from the Maoist influence.
Population as a resource
India is a country of young population. Merely relying on a demographic dividend will not be enough. Developed countries are short of people. Their economies cannot be run by their depleting population.
With an expanding middle class and an aspirational class coupled with the expanding education and human resources in India, we are developing an extra set of trained human mind. The developed world also needs them. We are in a position to exploit our expanding population as an economic resource. The demographic differential between the developed world and India enables this to happen.
India as a soft power
India's civilization, our history, our culture, our population, our Diaspora coupled with all symbols of India's special national identity from sports, music, cinema, literature have potential of India's potential as a soft state.
I have dealt with only some of the challenges for paucity of time. I have not the least doubt if we work on this game plan and exploit our resources, time is not far off when hope shall prevail over cynicism.
Arun Jaitley, Leader of Opposition in the Rajya Sabha, delivered this speech during the K M Kundnani Memorial lecture at K C College, Mumbai recently.
