Wish list from the new Government

Dr Bharat Jhunjhunwala
The first point in my wish list from the new Government is that of establishing a proactive institution to trap corrupt government officials. Anti-corruption institutions like the police and CVC initiate action only when a complaint is made. Corruption is safe as long as both parties are consenting. Kautilya had suggested that the King must establish a spy system to proactively trap the corrupt Government officials. The spies should assess the revenue paying capacity of every region and match it with the revenue collected and act against those officials who are collecting less. Kautilya also suggested another tier-2 spy system to overlook the tier-1 spy system. It is necessary to establish such a system in the country. These spies should pose as decoy customers, for example, in trying to get a driving license made. I am sure they will be asked to pay bribes. Such a proactive system will help reduce corruption. I am not clear whether such a system should also be instituted against politicians. Reason is that politicians are accountable to the voters every five years hence there is some check even if it is remote. In any event it would be foolhardy to expect the politicians to create an institution to check their own corruption. So let us start with the corrupt government officials.
My second wish is that the Terms of Reference of the Seventh Pay Commission should be restricted to improvement of accountability and efficiency. The Government today is of the servants, by the servants, for the servants. These overpaid and corrupt  persons are bleeding the country to death. I have seen a report by the World Bank some years ago which indicated that the salaries of Government employees in India are highest in the world. The ratio of average salary of government servant to per capita GDP is in the range of 1 to 2 for most countries. It was 4.8 for India at that time. It would have increased yet more today. Therefore, the Pay Commission should not consider any increases in pay to Government servants till the ratio comes down to international average.
My third wish is to establish a collegiums consisting of non-government persons for appointing anti-corruption watchdogs. The fundamental flaw in present system of appointments to CVC, CAG, CBI, CEC and Lokpal is that these high officials are appointed by the same politicians whose corruption they are expected to control. It will not work. Leaving it to honoured citizens also does not work because some mechanism has to be found to select these honoured persons. We need to make a collegiums of person in whose selection the Government does not have a role and who are identified by an altogether different but transparent process. My suggestion is that let a collegium be made of the eldest Bishop of the country, eldest Shankaracharya, eldest Padma Vibhushan recipient, eldest Phalke and Arjuna award winners, head of the largest Trade Union, head of certain statutory organizations like Bar Council of India, Institute of Chartered Accountants, etc. All these persons can be identified transparently without any possibility of manipulation by the Government. Such a collegium will hopefully lead to the appointment of clean persons to these statutory positions.
My fourth wish list is that the economy should be segregated into ‘growth’ and ’employment’ sectors. Let the Government set a target wage rate for our people. Then let the economists work out which are the sectors in which the required number of jobs can be created with least cost. For example, the cost of creating a job in the dairy industry would be much less than creating the same job in banking or petroleum industry. Let the Government impose heavy taxes on production done by big companies on automatic machines in employment sector. This will make big industries uneconomic and jobs will be created for all our people. Most importantly, the government will collect taxes in the process unlike the huge expenditures being incurred in creating jobs under MNREGA at present.
My fifth wish list is that Goods and Services Tax must be implemented with a fundamental modification. All goods sold in the economy should be separated in three categories: pro-poor, neutral and pro-rich. Pro-poor goods would include match boxes, bicycles, Hawaii chappals, coarse cloth, bus travel, Sleeper Class Rail Travel, and the like. Pro-rich goods would include air conditioners, chocolates, pizzas, masseur services, AC Class Rail travel, etc. All the rest can be put in the neutral category. Let there be three rates of GST-nil or minimal for pro-poor goods, average of neutral goods and very high rates for pro-rich goods. This will help control inequality and provide social justice to our brothers and sisters.
My sixth wish list is that all welfare programmes must be wholly dismantled. This would include health, education, subsidized food grains to BPL households, diesel- and fertilizer subsidies, MNREGA, Indira Awas Yojana, and the like. Let this entire amount be consolidated and paid out to all the families in the county in cash. My calculation shows that each family will get about Rs 2,000 pm. It will be possible for each family to buy its basic requirements of food, education, health and housing from this money. The great saving will be that the massive amounts being paid to government servants ostensibly for reaching relief to the poor will be saved. The welfare mafia should be dismantled. Instead of paying monies to government servants let us pay it to the people. Let this amount be paid to the rich as well so that there is no dispute regarding classification.
My seventh wish is that a massive programme of investment in infrastructure should be undertaken. Private participation must be invited. But a strong regulatory framework must also be established. Much progress has been made in this direction by the establishment of regulatory institutions in electricity, insurance and telecom sectors. These must be strengthened by providing budgets for undertaking research and investigations. However, the government must step in directly wherever private interest falters.
My eighth and, perhaps, the most important wish is that environment must be given precedence over economic growth. The Environment Ministry should be ranked at par with finance, home and foreign affairs ministries. Every project-in private or public sector-in the country should be required to make an assessment of the environmental impacts of its activities. The environmental impacts should be monetized. For example, a valuation should be made of the economic value of fish that die due to the discharge of hot water in the river by thermal power plants. It must be mandatory for all projects to obtain clearance from the Environment Ministry. These clearances must be given after making a detailed evaluation of the net benefits to the economy and taking into account the damages imposed by loss to environment.
(The author was formerly Professor of Economics at IIM Bengaluru)

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