Essays

Many believe that the economic liberalisation process initiated in 1991 would somehow find answers to our governance crisis. Economic reforms, while they are necessary, are by no means sufficient to resolve our national dilemmas. Even if the role of the state is redefined with sharper role in a narrower area, an efficient and just state in a free society is a vital precondition for economic growth and human happiness. Even in a liberalised economic environment, the state still has the duty to discharge vital responsibilities. Public order, crime investigation, speedy justice, good quality school education accessible to all children, universal primary healthcare, maintenance of minimal standards of sanitation and civic amenities, and building of vital infrastructure like roads and facilitating economic growth through other infrastructure development like power and ports - all these are the legitimate functions of the state irrespective of the economic system we choose.

This situation is further complicated as these critical sovereign areas of state function are witnessing abuse of power. In the earlier days of the license-quota-permit raj, economic patronage of state was abused for personal gain. Since 1991 the role of Indian state in licensing and other related economic activities has been on the decline. The state has a wide latitude in areas of sovereign functioning like public order, crime control, administration justice, crime investigation and related matters, in the absence of effective institutional checks against abuse of authority. No matter how much we limit the role of state, these are vital areas which will always be within the state sphere and when conditions for good governance are not fulfilled, abuse of power in these areas becomes the norm.

Over the past several years there is mounting evidence of such a phenomenon resulting in increased criminalisation of politics, greater politicisation of crime investigation, and increasing nexus between political class, state agencies and organised criminal gangs and operators. In effect, such abuse of power in the critical areas of state functioning leads to complete lawlessness and undermines the firm foundations of our society and civilisation. A rogue state whose legitimacy is in question, whose appetite for ill-gotten funds is uncontrollable, and whose actions are not accountable to the people will continue to use the limited economic decision making power under its control for private gain and personal ends at the cost of public good and economic growth.

In fact, it is this failure that explains in a large measure the limited success of economic reforms. In the absence of good governance, economic reform in itself will lead to modest growth at best for some period and the fruits of reform will be transient and self- limiting. Inadequate human development and the failure of our delivery systems have led to appallingly low levels of literacy and skills, poor health coverage and hopelessly inadequate infrastructure. The vast majority of Indians are thus left outside the pale of the productive process of the nation. Besides, even with economic liberalisation the state will continue to play an important role to ensure fair competition.

Therefore, mere economic liberalisation in itself is not a panacea to resolve our governance crisis. There is no substitute to good governance characterised by liberty to all citizens, self-governing institutions, empowerment of people and stakeholders, rule of law and institutional safeguards against abuse of authority.