Pragati April 2009: Ideas for the honeymoon

What the new government should do in its first 100 days

India goes to the polls in a few weeks’ time. A new government will be in place in a couple of months.

The ‘honeymoon’ period of the first hundred days offers a new government the opportunity to implement important reforms that might otherwise face the greatest resistance. Of course, follow-through is important, but setting the momentum early is crucial. Most importantly, the honeymoon comes but once in a government’s life: so it is important to have a plan of action to make the most of it. Plan ahead, as they say, to avoid disappointment. This issue outlines a honeymoon agenda for the new government in three vital areas: economic reforms, national security and education.

Some of you are involved in preparing policy agendas for political parties. A few of you are even contesting the elections. We hope reading this issue will help you make a difference.

Our proposals are ambitious. How can they not be? But we are also realistic about how much a government can accomplish. Our recommendations, at the least, will allow readers to see how far the actual performance falls below our benchmarks.

This leads us to the other theme in this issue: the importance of voting. At an individual level you will make a difference when you vote. Don’t wait for the perfect candidate to come along—please vote for the best of the existing lot, and encourage your friends to do so. The articles in our perspective section make the case for voting as the necessary condition to effect change.

In addition to the other regular features, we present the results of our reader survey in this month’s issue: we had asked you if you’d subscribe to a print edition of Pragati. Two-thirds of the respondents said “Yes”, but those who said “No” gave some good reasons. Your feedback was extremely useful: we’re acting on it. More on this later.

[Download PDF] Read & Share as usual. And for our readers in India: don’t forget to vote!

Contents
PERSPECTIVE
Vote!
Because ‘No Vote’ is no solution
Barun Mitra

Institutions and votebanks
Where’s the new politics going to come from?
Aadisht & Ravikiran Rao

READER SURVEY
Would you subscribe to our print edition?

FILTER
Essential readings of the month
Ravi Gopalan

IN DEPTH
Reforms during the time of crisis
Selected priorities for the next government
Mukul G Asher & V Anantha Nageswaran

Start by burying Lord Ismay
Defence and internal security initiatives for the first 100 days
Nitin Pai

Liberalise education
More than additional funds, education policy needs structural reform
Atanu Dey

ROUNDUP
Asking the right question
Free and compulsory education cannot happen by fiat
Naveen Mandava & Gautam Bastian

Kashmir pending
Lift the AFSPA in a calibrated manner
Rohit Pradhan & Sushant K Singh

Reconnecting with Iran

India must reassess its drift away from Iran
Rohan Joshi

BOOKS
Readings in foreign policy
On contemporary debates and the future with China
M Rajkumar

Fourteen centuries later
Two journeys from China to India
Samanth Subramanian

5 thoughts on “Pragati April 2009: Ideas for the honeymoon”

  1. Here’s my wish list. One is rather easy to implement, one will face considerable political friction, and the other is well wishful thinking.

    Problem #1: The current global recession has greatly reduced the availability of capital to India Inc. This is exacerbated by the Indian government’s penchant for running large deficits funded to through forced bond purchases by domestic banks.

    Solution: GOLD. Indians are estimated to have approximately 30,000 tons of gold. This amounts to almost the 1 trillion dollars at todays rates. Yes thats right, close to 100% of GDP. Banks should be allowed (and state banks directed) to purchase government bonds with gold/silver stored by their depositors. Issues to deal with include: cost of testing jewelry to determine quantity and quality of gold, and allaying fears of depositors with regards to ownership. However this policy initiative should face minimal political friction if any. If we could gotten just 10%-20% of our gold reserves into the system, India would not have been affected by the global contagion.

    Problem #2: Public services are poorly run/funded.

    Solution: Government should focus on redistribution of resources rather than provision of services. How? All citizens should be given bank accounts. These bank accounts should be funded directly. Funds within accounts should be utilized as follows: u% mandatory school voucher, v% mandatory health insurance premium, w% mandatory retirement fund, x% mandatory life insurance, y% discretionary (food, clothes, alcohol, whatever), z% bonus discretionary (which you get if you have a girl, or a child who passed 12th grade, or less than 2 kids…). It is important that all citizens get this, even the billionaires. It should be black and white so as to prevent vote bank politics from rearing its ugly head. Now, I’m not expecting politicians to become saints. The government can still remain corrupt and demand bribes from companies providing services. However, this will still drastically change the system. It will handsomely reward those at the top of the political pyramid (making implementation more possible), but it will remove corruption in the rest of the system. Would you rather give $10m to the education minister, or $10K each to the million or so school principals? More crucially, even if overall corruption remains the same, which is unlikely, this model will foster competition. Also, as in the previous example, this reform will take currently under utilized capital (in this case black money) and put it in the system. Just imagine the infrastructure fund this could created from the retirement fund! I’d say this will reform would face considerable headwinds. However, since those at the very top of the pyramid, politicians, and those at the very bottom, citizens, both immediately profit it remains doable.

    Problem #3: Poor governance.

    Solution: India has shown that it can create good institutions, such as The Election Commission and SEBI. More institutions such as this should be created and their powers increased. Ultimately, India should be a limited democracy, at least for the foreseeable future. Those voted into office by the public should have veto rights, but should not be responsible for forming or implementing policy. This is a complete wish, and it will never happen. I only mentioned this because Indian democracy, in its current form, is not a strength something many people tend to argue.

    I have many more but I’ll stop here. I’d would be happy to hear inputs, but what would really make me happy is if I could read a copy of Pragati while I’m sitting on the John.

    Patel

  2. Patel, one has to be careful and distinguish between money and wealth. Of course, if one has lots of money, one is wealthy. Sort of. But only if one has lots of it relative to others. If everyone has lots of money, then it is not entirely clear if one is wealthy or not.

    To be clear, what matters is stuff, the kind that you can touch, eat, kick, wear, build with, etc. That is, real stuff. Money is not real. It is only a way of keeping track of who gets how much of the real stuff. If you give someone money, you give them the right to get more of the real stuff in their hands — but it does not magically increase the total amount of real stuff available. Giving everyone more money does not do anything other than increase “prices” and perhaps change the distribution of stuff among the people.

    I think you need to re-examine your proposals.

  3. Atanu,

    I understand what you are saying, but I disagree with you. The government already taxes and redistributes wealth. You’re argument implies that its efficiency in this regard does not matter. Because if tax dollars actually reach a poor person, the money will simply stoke inflation. And this inflation will cancel out the effects of the tax refund/gift. But look at say the discretionary spending portion of “my budget”, say it amounts to… I don’t know 250 rupees a person. Now a middle class Indian is likely to spend at least a portion of this 250 rupees on something other than food. A poor Indian is not. Therefore, while the poor man will experience inflation in his food purchases it will not amount to 250 rupees. Additionally, companies in all industries will be given an additional incentive to cater to 700 million Indians who are now 250 rupees richer. I’m not trying to sound like a commie, but when a large part of our population has trouble with feeding, clothing, housing, shitting… then it seems obvious that redistributing wealth will better allow these people to create wealth. And with regards to the educational vouchers, it has as much to do with providing the funding as it is with increasing competition.

    Right now we are seeing artificial inflation in luxury cars and bungalos due to corruption, I would much rather see that inflation show up in the price of an onion.

  4. Patel,

    I have no idea what you are talking about. Perhaps yours is a stroke of genius so far above my level of comprehension that I must concede that though it makes absolutely no sense whatever, it must be what India is waiting for. Too bad that those who have spent decades trying to find a solution to India’s problems, have missed what you propose.

    In other words, I concede defeat. Had I been smarter, no doubt I would have understood your brilliant reasoning right away.

    Kind regards.

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