Big Ideas for India Contest: Winners – 5

Winner 10: Anshuman Goenka, in response to Question 1 – “What should the government’s role be in India?”: 

To answer this question in the context of India 2011, and avoiding the temptation to venture into political theory, one can think of two main areas into which specifics can be built in – the political role, the provision of essential public goods, and, the economic role. While public goods are sometimes placed within the economic role, it may be argued that public goods are in fact wider.

First, the political role – this is a set of issues under the broader umbrella of nation building. A country like India requires thought leadership from the government, in addition to whatever other arms of civil society (eg, academics, media and business) offer. Government needs to delicately balance – on the one hand, the need to be not intrusive, and on the other, firmly implement the agenda it has agreed. In the first place, this agenda should mean an implementation of law and order. However, more than most other societies, a changing country like India needs the law to constantly evolve and reflect the needs of the society. Often, implementation of the law will place the Government in a tricky position when it is seen to be in conflict with either the conservative elements (eg in enforcing laws against child marriage, dowry or less commonly pre-natal sex selection, in Hindu Code Bill or Muslim Personal Law) or their liberal counterparts (eg in laws against homosexuality). In both cases however, it is the business of Government to have laws that reflect and interpret the demands of society in the context of time, and once made have them clearly enforced.

In the India of 2011, this also involves the critical issue of civil service and judicial delivery, of addressing the related issues of corruption. In addition, for example, the issues raised by anti-corruption NGOs, by activists close to the tribal people displaced by mines, SEZs & dams and by regional platforms in states as distant as J&K and Nagaland – all these are important and the business of the Government, within its political role. On all these, and similar issues, the Government should be seen as aware of & sensitive to shades of society on raise issues of interest only to a segment and not the whole population – and where, issue by issue, a political balance needs to be established, between the demands of the segment and the needs of whole, based on the merit of the case.

Of course, the political role also involves the areas of foreign affairs and defense – both critically important to a country of India’s global and geographic standing. Less clear is the even broader business of nation building. In a country where large masses have been precluded from formal education or work, the agenda of nation-building must include, at a minimum, offering awareness and hope, to bring those precluded into the mainstream. But how does a Government offer awareness & hope, and at the same time not get into an ever spiraling compound of entitlements for education / work / food / healthcare? Again, in a task of balancing, the Government has to pick and prioritize areas which should be the domain of the state.

This brings us to the second area of public goods. There is both a political and an economic argument (market failure & externalities) for public goods. In some areas the case for entitlement and the role of the Government is widely agreed, eg in disaster management, in primary education & primary healthcare, in protecting the environment and in ensuring large scale public infrastructure. However, in almost all these areas, it is now widely agreed the private enterprises are better for service provision. Then, the role of Government, as a regulator or administrator, is to ensure that private provision is fair & efficient. It is important for the Government to define the boundaries of public goods – based on a democratic, parliamentary process. If stretched to include airlines and textile companies, this argument can lead to the unmitigated disaster of state capitalism.

Thirdly, and finally, an important role for the Government is economic. When economic activity largely lies outside the business of Government, and when the need for economic growth is widely agreed, the Government’s role is limited to an enabler, catalyst and umpire. Some areas such as central banking and revenue administration must be in the realm of Government. India has achieved a rate of marginal tax that is among the lowest in tax-levying countries, but now needs to ensure that tax administration is fair & efficient, encompasses a larger number of citizens. India’s financial administration must balance inflation and growth, must ensure low and high-compliance taxes and yet pay for public goods.

All of this is again about balancing. In some senses therefore, this is similar to the answer to the question of what should be the Government’s role in India. It should be, and seen to be, responsive to society, dynamic over time, and above all fair & efficient. Sadly, that sounds very general and hazy. But perhaps this haze itself has a merit – for it requires genuine stewardship through the haze that is human and humane, and is not reduced to a narrow, algorithmic implementation of clearly defined agenda.

Continued tomorrow.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.