Unanswered questions, forgotten middle path

After our independence some sixty years ago, the overwhelming majority of people seemed to have a pathological distrust of private enterprise. That was a time of nationalising private companies such as Air India, and large scale public investment in the years that followed. We now have a situation, where an increasing number of people in the country are so distrustful of government, that they are seem willing to swear by the private sector.

Clearly, times have changed! We live in a time when the country's GDP growth rate is pushing double digits. Poverty rates have declined, and youth are facing an unprecedented set of opportunities ahead of them. Just two decades ago, when I graduated with a degree in engineering, there were a number of graduates who took up jobs that were not commensurate with their educational qualifications, and were paid very small sums of money. Contrast that with the fact that now engineering graduates in many colleges across the country are being recruited even before they enter the final year of their course.

This generation in urban India is growing up with little direct dependence on government. They are not looking for government jobs, are not dependent on government schemes, do not have to wait for telephone connections to be rationed by government, do not go to government hospitals or schools, and have no need to meet with the civil servants or the elected representatives to get anything done. The only manifestation of government for many urbanites of this generation is when they get on to a road - the quality of roads and traffic; when they need a driver's license - the painful process of having to pay a bribe for the license or 'outsourcing' that part to the local driving school wala; getting adequate water in their house; keeping their cities clean, etc. And most often these images of government are not very pretty.

This lack of dependence on government is also manifesting itself in some very dangerous trends. Statistics point that the educated amongst our population are less likely to vote -- voter turn outs in urban areas are almost always lower than that in rural areas. These numbers hold true even after adjusting for any problems that urban voter lists might have. Many voters - even the 'educated' ones -- are either blissfully unaware or don't care about the major choices that our country is in the process of making or needs to make. There somehow seems to be a false notion gaining ground amongst a certain section of the population that the government does not matter to their lives. That the government is something that they may need to deal with once in a while, but need not engage with.

It is one thing to be less dependent on government, but it is a whole different thing to be completely disengaged from what the government is doing or needs to be doing. As we go about living our daily lives the government is making decisions on a daily basis that have huge implications for all our lives.

Let us look at some examples. Systematic under-investment in building up a world class police force can mean that it may not be safe for us to walk about freely in our own neighbourhoods. A direct consequence of the decisions that the government is taking in the higher education space is that tens of thousands of our youngsters are fleeing to other countries to get good quality education. This simply means that tens of thousands of families are spending significant personal resources or are incurring loans simply because the government seems to be unable to decide on what it wants to do in this sector.

Chronic under-investment in infrastructure in some cities is already beginning to have an impact on the decision of companies to locate in certain cities, and in India itself at a broader macro level. This has direct implications for job growth and for our overall economic well-being as a nation. We have all seen ambulances in our cities carrying a patient with perhaps a life threatening situation, the ambulance alarm blaring, but the traffic is so dense and disorganised that the chances that the patient in a dire emergency will survive till the hospital is extremely low.

Commenting on the under-investment by government, Subir Gokarn, a noted economist, writing in the Business Standard in August 2005, had said:

"I've often been asked for my opinion on what the country's sunrise sectors are. My response, at first tongue-in-cheek, but becoming more and more serious over the years, is that anybody who decides to compete against the government has a great chance of succeeding. Four activities come easily to mind.

Equipment for private supply of electricity--generators, inverters, and so on--are needed to compensate for the inadequacies of the larger system. Private security makes up for the perceived failure of the state security apparatus.

Private education at every level continues to surge, while public institutions sink. And, while access to publicly-provided drinking water eludes an increasingly large proportion of the population, the number of brands and the sales volumes of bottled water continue to climb."

Under-investment by government in pure monetary terms is just one part of the problem. What makes things worse is the leakage that happens throughout the system. This is a lethal combination. There are a number of studies that have recorded leakages in our government apparatus. The Comptroller and Auditor General of India continually raises issues that merit close examination. So many times we have heard from those in power: good plan, bad implementation!

But a closer look shows that the leakages are not impossible to plug to a large extent if the design of the programmes has been thought through well enough. Let me explain what I mean by "design" by taking two contrasting examples.

In 2006, the government passed a Food Safety Act which is aimed at making the food we consume safer. The Act requires that all vendors of food to register before they can sell food. There are a large number of food vendors on the streets of our urban areas. Assuming that they somehow become aware of the law and decide to register, one of the important questions that the registration form will have is 'address'. If the street vendor wants to comply with the new law, he is violating some other existing law which prevents him from selling food on the street corner. He is "illegal" at the place where he runs his operation from.

A little thinking before passing the central law would have made this glaring problem obvious. But because this problem exists, street vendors of food will continue to violate the law one way or another and the food that we consume will not be any safer. This is where better design could have helped in preventing the violation of law and the whole set of incentives that this creates for a range of actors to find a way around it.

Not too long before that, in 2005, the same government passed the landmark Right to Information Act. Many see this as one of the most effectively implemented Acts in recent times. A good reason why government officers mostly comply with RTI requests in a timely manner is that there is a 30-day time limit that is stipulated for the response to be provided for RTI queries. If the concerned government officer fails to comply with this requirement, then the officer will have to pay a penalty to the applicant from his personal pocket for each extra day taken to respond to the RTI query.

The incentive structures in both the above laws are clear - one, where there is little hope that it will be complied with, and the other, where the compliance rates have been far better than most other laws. The difference: Design.

We know that purely technocratic approaches will not work, if we do not take into account the overall political economy in which our systems operate. Politics has a central role in how we choose to be governed, and the costs of ignoring the role of politics are here to see.

This is not an attempt to undercut the role of the private sector where it can and needs to play a central role in service provision. The focus is rather on thinking about the role of the state. What services can be provided effectively by the private sector? What tasks should the government delegate to the private sector? Are there roles that the government should continue to perform? What should be the conditions under which private participation needs to be considered or rejected? Should there be any sectors of the economy where there should be a dominant government role?

These are just some of the questions we have not asked or answered as a nation.

There are two arguments that are possible. One argument is that the government is not doing enough thinking on the question of the role of the government sector and that of the private sector. The private sector is gaining ground because the citizens are tired of waiting to expect the government to deliver. The growth of the private security agencies is one of the several examples that can be quoted as an example of a sector which grew because of latent demand. In this case, a combination of under-investment in law enforcement capabilities and the state provided law enforcement being perceived as inadequate by citizens, seems to be the way in which 'creeping' privatisation has occurred.

The other argument is that it would be incorrect to assume that the government has not thought about the role of the private sector, even in cases such as private security agencies. The government - read 'the intellectual elite' - has seen the chronic inefficiency in the government department, and the kind of investment that the government has been willing to make in law enforcement. And given the dismal record on both counts, the government has consciously allowed/encouraged the growth of private security agencies.

I take the example of law enforcement because it can be argued that effective law enforcement for all citizens ought to be the role of the state. The growth of private security agencies which can assure the well-off a higher level of security will only make the well-off (often the decision makers) less concerned about additional investments that need to be made in law enforcement or to make it more effective to the general society. This can have disastrous consequences for the larger citizenry, with the well-off living in gated communities and secure, privately guarded neighbourhoods and ordinary citizens facing the problems of increasing crime rates.

That such a scenario of the well off living in gated communities and feeling secure is not sustainable is well known - there are so many countries in South America and Africa which are seeing the painful consequences of the failure of basic law and order for all citizens. We are already seeing strong evidence of such a trend in every major Indian city.

It may seem from much of what I have discussed so far, that I seem to be oblivious of the fact that there is an India outside of the urban mass. Rural areas are plagued by government indifference in more ways than the urban elite seems to understand or care. The majority of people in our country are still very dependent on government - from education to healthcare, from access to food grains to livelihoods, and so on.

This is the group that seems to be more engaged in the electoral process, cares to vote, and struggles with the government at various levels - because they have few alternatives but to petition the government. Even in urban areas, voting records show that people living in poorer slum communities tend to vote in larger numbers as compared to the educated elite.

For the urban elite, struggling with government is not often necessary. There are several reasons for this, but a couple of reasons would be worth mentioning. One reason is that the urban elite has the ability to find an alternative solution to anything the government might be expected to do. The second reason is that it is this urban elite that is making the rules - so, to the extent possible, they will frame the rules to ensure that government actions are not against their interests.

Between the extreme lack of engagement of the urban elite who seem to not care about government, and the protests that we seem to be seeing from those who depend on government, there is a middle path that is increasingly forgotten. That is one of public engagement and open deliberation on issues that affect all of our lives and those of our children and grand children.

In a series of articles, we will examine specific sectors where there are important stakes for us as a nation. Yet, there is no visible public debate on most of these issues, and the government is taking a number of decisions which will have serious implications on our lives. Through this series, we will examine ways in which we as citizens can reclaim our government.