The Times of India, 21 January 2016 Sagarika Ghose in Bloody Mary | India | TOI
Interview with Pranab Bardhan
22 January 2016
Economist Pranab Bardhan, Professor at Berkeley coined the phrase “Bhagwat vs Bhagwati” for the growth vs Hindutva challenge facing the BJP government. He has recently published a collection of his popular essays entitled, ‘Globalisation, Democracy and Corruption: an Indian perspective.’ He tells TOI’s Sagarika Ghose that today Bhagwat co-exists with Bhagwati.
One of the campaign promises of the BJP was to end the scams of the UPA. Has corruption significantly declined since the BJP government came to power?
Even ignoring the current scams in Madhya Pradesh, Chhattisgarh and elsewhere, it’s a little superficial to think that corruption has decreased since this government came to power, because the structural reasons for corruption remain. A few years back we used to hear about the mining mafia, we don’t hear about it that much now. This is largely because the prices of minerals have gone down globally and political allocation of mineral and other natural resources doesn’t make much money anymore. So the decline of the resource-related scams has little to do with the Modi government. Election expenses are an important structural source of corruption. The ruling party spent a staggeringly large amount of money (collected one presumes from the corporate sector) in the last national election and there must be a payback some time. Also, a lot depends on what we call ‘corruption’. Cronyism is also a form of corruption. This government, like the previous one, gives huge tax concessions and other favours to the corporate sector, a sort of corporate dole, often to politically-connected business groups.
Also when the main monitoring agency for corruption, the CBI, is subject to political manipulation, how can corruption be checked? In China local officials are promoted on the basis of how well the local economies under them perform. There’s thus an in-built check against stealing too much because if the local economy suffers, officials don’t get promoted. In India officials are promoted according to seniority, so there’s no check on looting. Structural reform in administration is important if you want to end corruption.
Co-operative federalism is a buzz word of this government, is it working well?
Co-operative federalism is a catchy slogan but there’s not yet enough to go by. The last Finance Commission moved in the right direction providing for more of tax proceeds going to states. However, earnings from central cesses like the Swach Bharat cess and the education cess are not shared with the states. Also, schemes which were earlier sponsored by the Centre have been pushed to the states so their expenditure liabilities have gone up. In the midst of talk of devolution of power, there seems to be more centralisation of authority in the PMO than ever before. Before the Bihar elections when Modi announced in a public meeting a large special package for Bihar with an auction-style drama, without consulting the state officials, that is cooperative federalism Modi-style.
There was a feeling that the Planning Commission was distributing money arbitrarily but its replacement the Niti Aayog has no power to distribute such money. Such monies are now allocated by the Finance Ministry. How is this federalism? Niti Aayog is just another think tank; its financial allocation powers have been taken away, which is why many chief ministers don’t take it too seriously. Also, most decisions about the so-called smart cities are being taken centrally, states are hardly involved.
Your overall assessment of the economic policies of the Modi government?
Lots of catchy slogans, the PM is an excellent spin master but follow-ups do not match the dramatic initial gestures. Some schemes with new names are simply continuations of earlier programmes, as in streamlining of subsidies, direct benefit schemes, Aadhar and coal auctions. Swach Bharat is a continuation of Nirmal Bharat and the unexamined issue is, why many toilets built under the earlier programme were not used. There are several questions here, including the important one of Hindu cultural taboos about toilet cleaning.
The biggest problem to me is that this government came to power on the promise of creating jobs, which has hardly been kept so far. You see, the so called `Gujarat model’ is a high growth model but it’s not a job-creating model. Much of growth in Gujarat was in petrochemicals, petroleum refineries and pharmaceuticals; those are highly capital-intensive or skill-intensive. They do not give jobs to the relatively uneducated unskilled vast numbers of India’s youth.There’s not been much follow through on the jobs front, despite Make in India, Skill India, etc.
So, who is winning Bhagwat or Bhagwati?
There is a kind of division of labour in the new regime between RSS and its ex-pracharak PM. Incremental economic reform (some of it a continuation of the policies of the UPA regime) will not be objected to by the populist-nationalists in the RSS, as long as the latter are given a free hand in controlling the agenda of education, culture and history.The Dinanath Batraisation of textbooks (in effect distorting history and poisoning the minds of young people) continues, which is the long-lasting damage. In India there’s always been an unhealthy amount of state control over education and culture, but the current regime has mobilised an unusually large number of bigots and charlatans for this job. In general the average competence level of ministers in this government is quite low (compared, say, even to Vajpayee’s government). Bhagwat and Bhagwati exist in tandem. If the economy doesn’t do well, and young people get frustrated, they can always ratchet up the cultural stuff–cows, love jihad, beef, and the rest of it.
There was a surge in the creation of bank accounts for the poor a few years back when NREGA wages started being paid into bank accounts. The Jan Dhan yojana is more vigorous, but will not mean much as long as the accounts remain dormant. Budget cutting and inordinate delay in wage payments are slowly smothering NREGA