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Journalism of Courage
Prime Minister Manmohan Singh’s emphasis on reform of the government is well placed. The provision of public services in this country is a sad commentary on the government and public institutions. The most important role of the state is to fulfil those functions that only the government can perform. The provision of public services such as the enforcement of contracts, judiciary and law and order are on the top of this list. Even the classical minimalist state would be expected to provide these services. The second tier of public goods are those that benefit not merely the person who consumes them, but society as a whole. These include health, education, drinking water and roads. As the PM accepted in his first address to the nation on Thursday, the Indian government is failing on both counts.
Reforming government is, however, easier said than done. Not only is there a need to rethink mechanisms and effect institutional changes, the Constitution and the federal structure place limits on how much can be done by the Central government. The Central government has a legitimate role in areas such as financial regulation, monetary policy, foreign policy and national highways. But these are not the areas that impact the people’s daily lives. What people want are local services such as good hospitals that are accessible, good schools, clean drinking water, usable roads and a safe neighbourhood. Reforms restricted to the central level will achieve little. This makes the PM’s job more difficult. Further, the Constitution empowers the Central government to collect taxes which have to be devolved to lower levels of government. The transfer of money from the Centre to the states is decided by the finance commissions, but further decentralisation is still dysfunctional. The initiatives taken by Rajiv Gandhi resulted in amendments to the Constitution giving a constitutional status to local governments. Unfortunately, the amendments did not adequately address the fiscal aspects involved. There is no clear system of generation, transfer and accountability of resources for local governments.
The issues involved in providing better public services by reforming government are challenging. They also indicate one critical thing. What is needed, as emphasised in the PM’s speech, is a change in institutions and mechanisms, not shoving more money into a system that does not work. Increasing Central government expenditure on health and education may achieve little. The budget should reflect this ground reality. It should not increase allocations to health and education merely for the sake of keeping election promises.
