By Nantoo Banerjee
The government of India did not shrink in keeping with a promise by Bharatiya Janata Party (BJP) during the last Lok Sabha election which it won with a thumping majority, in the 18 months that the party along with its allies is in power. Instead, the government is expanding. Departments have increased. With around 65 ministers and 100 departments, the size of the Narendra Modi government is among the largest in democratic India. Functions of many departments have vastly increased or spread in recent times without much impact on economic growth though they may have improved financial inclusion and social environment. Barring the old Planning Commission, which is given a new name, NITI Aayog, and new identity, nothing much has changed in the government. The 2014 Lok Sabha election verdict provided the prime minister a great opportunity to cut the ministry and government to size and improve governance through better performance of the five Raisina Hills ministries and their adjuncts.
The huge size of the government will soon become a matter of some concern as it gears up to implement the awards of the new pay commission that vastly raised the basic earnings of union government employees – from Rs. 18,000 per month at the bottom to Rs.2,50,000 at the top. In more well managed economies, the wage disparity between the bottom and the top is nowhere near India. The pay commission may have overlooked the aspect. The award will put the government into more hardship leaving less investible funds on economic and social development. The government could have handled the wage or salary payout burden better by cutting its size.
Nearly, 24 years ago, the Narasimha Rao government did make an attempt by abolishing a few government departments, but failed to sustain the effort under pressure from the bureaucracy and colleagues in the Congress party. It seems Narendra Modi too has lost the initial enthusiasm about reducing the size of the government. As a result, the pledge of better governance continues to suffocate under a large, unwieldy government. The Modi government has done little to improve the lot of the country’s majority poor who continue to suffer under severe rise in the prices of food articles and daily dire necessities. But, it has done a lot to meet the never ending desire of the rich to hoard gold and precious metals by repeatedly reducing the import levies to help India wear the crown as the world’s largest gold importer. Gold and the government shine on.
Ironically, the ‘more’ of the Modi government had forced ban on Maggie instant noodles, manufactured by Swiss global leader Nestle’, on health grounds while junk noodles prepared on the makeshift dirty footpath food stalls to feed the poor and the labour class go unchecked, unabated. After several months of legal battle, the Maggie ban has been vacated by the Bombay High Court following clearance by government accredited labs. But, food inspectors are not convinced. They have the scope of action now against Nestle’s pasta. The Modi government seems to stay a helpless spectator of the spectacle of his government inspectors going after the generally-believed best and sparing the worst.
On the contrary, governance is increasingly becoming a victim of an unpleasant, if not unnecessary, political dogfight between the government and its opposition even on issues that are entirely economic or, at best, little political. The case of the GST Bill, already passed by Lok Sabha, is the best case in question. A comprehensive indirect tax regime on manufacture, sale and consumption of goods and services, replacing the multi-point taxes levied by central and state government, should have been part of the country’s first major economic agenda initiated by the Narasimha Rao-Manmohan Singh government in 1991-92. Instead, India allowed itself to lose 24 years to reform one of its most important tax structures for the benefit of its people and economy. The economic think tank of the Congress party under the leadership of Manmohan Singh did prepare the ground for introduction of such a national value-added tax in the form of goods and services tax (GST). But, it could not be done in a hurry since it could be achieved only through the amendment of the Constitution.
Had the Congress party return to power in 2014 Lok Sabha election, the GST would have hopefully been in place by now or by the next financial year. Unfortunately, the country’s economic interest has always been the first victim of its petty party politics. The original authors of GST now want to have it fractured and factored to suit their political agenda at the cost of the national economy and the public who they ostensively pledge to serve. This also explains why a less industrialized China in 1950, than India, is now the world’s second largest economy and India holding on to a 10th position behind some of the countries which are smaller than some of its states with its political parties hell bent to stop or delay economic and social reforms. The reports are that the government is willing to accommodate by the principal opposition in Rajya Sabha, Congress, and AIADMK in Tamil Nadu, a BJP ally in NDA, by reshaping the GST bill to meet their demands. So much for the governance! If India has lived and grown without GST for so many years, it can probably continue for some more years with the historically imperfect taxation system until political parties agree on a comprehensive system. (IPA Service)