September 6, 2012 2:17:15 am
The most significant story of our times may not be the myopic petulance of our political class. It is rather the profound ways in which our normative order is shifting. Few things are certain in any society; and elites can sometimes determinedly ruin a good story. Just witness what this government has done to growth. But just in the last week,three central elements of Indias dirty political economy,which at first sight might seem unconnected,have arguably reached a new inflection point. Our political economy was founded on state complicity in communalism,a disregard of law and regulation by big companies,and the plunder of natural resources. But there is a distinct possibility that things may never be the same again.
The Naroda Patiya judgment was significant for several reasons. It has,for the first time,convicted senior politicians for complicity in a riot. This will send out a powerful message. As many people have pointed out,if such convictions had been achieved in the case of the1984 riots,our history would have been different. But this court judgment has widespread legitimacy. There are no significant voices questioning the integrity of the process. And the fact that the state now has to send out a credible signal that it is not a part of the process of legitimising violence is a significant achievement. This does not mean that tensions will not arise,or that groups will not deliberately try to orchestrate violence. But it is harder for politicians to hide. Thanks to the indefatigable work of activists,public debate,a critical mass of judges and investigators still doing their professional duty,Gujarat has seen an unprecedented and credible series of convictions. It is also part of a larger trend: despite recent events in Assam and the fallout,we can confidently say that Indias moderate middle has grown much larger. The question is how to prevent the state from giving succour to the smaller but more desperate extreme,through sins of omission or commission. The debate over how high the complicity goes in Gujarat will continue. But hopefully,there is now some faith that there is an adjudicatory process that can determine the facts.
Though seemingly unrelated,the Supreme Courts historic ruling in the Sahara case,ordering an unprecedented Rs 17,400 crore to be returned to investors,is also part of the maturation of our system. This is the first time a really big fish has been hauled up for what,based on the court judgments,seem egregious violations. This judgment will empower regulatory institutions like Sebi,whose effectiveness has been undercut in the past by the uncertain course of the law. Again,this judgment is a tribute to the professionalism that still exists in the system. But the Sahara judgment,it has to be said,is also a psychological liberation of sorts. At one level,this was Indias most visible company. At another level,there was such a pall of fear around it,so much so that even reporting bare facts on it was difficult. Again,the complicity of silence around big companies will remain significant; the political economy of media ensures that. There is an added complication. The debate about corruption in India has needlessly got entangled with a debate about markets versus state. In this construction of the matter,scrutiny of the practices of companies,whether by Sebi or the Competition Commission,has ipso facto been seen as anti-market,a kind of revenge by the state.
The legitimate fear of the legacy of an overbearing state became an alibi for giving companies a free pass. No one thought in the US that capitalism would collapse if Microsoft was investigated for violation of anti-trust laws. But the skittishness about asking legitimate questions of companies had become a new art form here. It was self-defeating because this lack of scrutiny was subversive of markets. The fact that we can bring a credible,high profile prosecution against a company sends a signal: we cannot do business as usual.
Despite vicious attacks on the institution of the CAG and the controversy over numbers,there is now one incontrovertible fact. No state will,any longer,be able to dispose of mines in the recklessly casual way that they did in the past. You can actually begin something of a clean-up of this sector. It will take a while: just sheer technical capacity required for modern forms of contracting and monitoring is not to be underestimated. There will be resistance from two quarters: the disreputable old guard that is complicit in creating this mess,and amongst the good a certain impatience that moving to better procedures is a recipe for slowing the economy down. But business as usual is not an option any more.
Indians transformational cusp is for real. The poison coming out is a form of cleansing,not a sign of greater disease. But the political class does not see the writing on the wall; it is not imaginative enough to transform these currents into a genuine progressive movement. The shocking thing about governments is not just that their deep complicity in corruption has been exposed. The shocking thing is that,when exposed,they are still trying the idiom of old politics to respond: use state power to silence critics,personalise the issue,avoid institutional regeneration,and hide behind a sense of injured virtue to defend the indefensible. Take random examples. Even now,the government is not clear where it stands on the framework proposed in the Chawla committee for making allocation of natural resources less arbitrary. The prosecutions in Gujarat happened despite the government,not because of it. The BJP is overdoing its blockade of Parliament. But the government went out of its way to wreck the key institutional device for public reason the committee system.
There is a new consciousness of right and wrong emerging; the system will not excuse what it excused in 1984. When was the last time thousands of people assessed governments arbitrariness in allocations on a measure like net present value? There is a new informational order emerging that is making not just government control over media,but also corporate control,increasingly feeble. Power is now spread across several institutions,and it is only a fool who can assume that he will be able to control all of them. There is a demand for greater sophistication in regulatory systems that go beyond the polemical uses of market and state. The process is messy,actors overreach,and there are stalemates. But the direction is right. If only we had politicians who do not insist on tragically swimming against the tide.
The writer is president of the Centre for Policy Research and contributing editor for The Indian Express,email@example.com
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