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August 9, 2013

Sleeping with the enemy

Can the Congress and the BJP get together in a grand coalition and form a national government to reset India on the path to prosperity?

NARAYAN 1

Imagine this. The Bharatiya Janata Party (BJP) and the Indian National Congress (INC) join in a coalition to run the country for the next five years. There is no better time than now. Like the proverbial slow boiling frog, India’s economic case has progressively worsened over the last few years. Employment growth is practically zero, real income growth negligible, the current account deficit at alarming levels and gold imports off the charts at 2.5 percent of the GDP. To top that, investments have completely dried up, consumption is slowing and with a large fiscal deficit the government is out of firepower to provide any growth cushion. Make no mistake; India is one oil-shock away from an old-fashioned balance of payments crisis. And as Vijay Kelkar so eloquently said a year ago, we are on the edge of a fiscal precipice as well. In other words, India’s economy is perched precariously on a knife-edge between the fiscal and current account abyss.

A common cause and a common enemy can make for strange bedfellows. In the same way that a group of freedom fighters got together to pursue independence – even though they had their differences—the two main parties of today could (maybe even should) get together in a grand coalition to arrest a potentially fatal economic decline and reset India on the road to prosperity.

Grand coalitions come in different forms. They can be power-sharing devices in countries divided deeply by religion, ethnic or linguistic groups. The government in Lebanon would be one such example. Some grand coalitions have been formed as a result of political bargaining that results from hung parliaments, such as in Israel. Others have been formed in response to crisis such as the UK government from 1931 to 1940. Ramsay MacDonald then Prime Minister of UK agreed to form a government, event though there were more members from the other party, to combat the ill effects of the Great Depression on Britain.  This latter type of coalition – a national government – is the one I suggest here.

The mechanics of this coalition could work in the following way.

In a deal akin to the Tony Blair/Gordon Brown one in the United Kingdom, Prime Minister (PM) ship would rest with one party for half the time and with the other for the remaining. The first PM would be decided by an Election Commission (EC) toss. Four other ministries would be split between the two parties — Home, Finance, Foreign affairs and Defence. The ministries would be rotated when the PM rotates. This 50/50 rotation would hold even if one of the two parties has an elected Member of Parliament count that was different from the other.

Senior bureaucrats would be appointed for the entire period of the Government. They would be chosen not on seniority but on merit. The clear signal to them should be that they work for the Government of India, not for a politician or a party. The price for being chosen on merit and allowed to function without interference is that they would forsake all claims to a post-retirement Government position. Based on the quality of their performance, they would be free to seek private sector jobs upon retirement.

The first meeting of such a newly formed government would list all pending legislations and work on clearing as many of them as possible. No new legislations would be proposed, until two-thirds of all pending bills are either passed or retired. The priority for the entire five year term of both parties together would be on getting things done that are already on the books. After such time, any new legislation can only be proposed and passed only with a clear death date.

The parties will be paid at the end of the term and the amounts would vary based on performance. The adjudication of performance and the respective payments would be coordinated by the Election Commission– Rs 5,000 crore to each party for satisfactory, Rs 2,500 crore to each party for unsatisfactory and Rs 10,000 crore for outstanding performance.  One party can earn an amount different from the other judged by a committee of ‘elders’ appointed by the EC. This implies that the parties will have only to ‘finance’ their campaigns not seek ‘donations’.  Campaign contributions would importantly move from being an irrecoverable but quid pro quo grant, to a fully returnable working capital loan.

This arrangement has other advantages. All frivolous and small regional parties at the centre would lose their ability to ‘blackmail’ their coalition partner on account of their pet peeves.  Only the fittest among them will survive, and they will have to restrict their sphere of activity to the State/region. The government will likely complete five years in office thus obviating the need for a costly mid-term election.  With such a plan, maybe, just maybe, India can return to winning ways again.

Post Script:  You and I know that the probability of this happening is near zero. What then is the purpose of discussing something like this? I think there are several.  For one, there is still some complacency about whether or not the economy is in trouble. We should put that one to rest, the economy is in trouble and there is clear and present danger that it will fall into deep, possibly irrecoverable, trouble. It is also time we put the words ‘public’ and ‘service’ back into public service. Many politicians are paying their way into office to ‘recover’ and profit from that office. It is important that the pay/recover/profiteer cycle be broken somehow.

If politicians of both parties can imagine getting together in this way, then ordinary collaboration becomes much easier. It is a thought experiment that allows politicians to stretch their mind beyond the partisan and petty.

And last, but certainly not least, you never know, stranger things have happened!

Photo: wintersweet


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