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2017 will go down as one of the most significant years in the history of India with Goods and Services Tax becoming a reality from July 1, 2017. The n...
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  Creating a Unified Taxation Regime” by T N Ashok
  GST as a landmark taxation reform and a 2nd major surgical strike on tax evaders as it brings most traders into the tax net, makes movement of commodities freer in the country
  Profiteering- a GST implementation challenge by Shri Gireesh Chandra Prasad
  The government’s biggest concern is to make sure that the consumers get the benefit of reduced tax burden on goods and services that the new indirect tax code offers.
  Creating a strong IT backbone’ by Prakash Kumar
  The article discusses about simplifying the tax compliance by providing a strong Information Technology network.
  Balancing Federal Fiscal Relations by Jayanta Roy Chowdhary
  Article discusses about the balance of power between union and states in the new tax regime of GST.
 
 
  State, Democracy and Development: Institutional Perspectives
B.Chandrasekaran
August 01, 2013 | B.Chandrasekaran  , Democracy

The evolution of any civilisation depends on the formations and functioning of its institutional systems, the interplay of which allows the constituents of the society to pursue prosperity and happiness. The nature of these institutional systems and structures provide the fountainhead for ideas like democracy to germinate and flourish. However, as witnessed all over the world especially after the World War-II, preaching and eulogising about democracy as the ideal political system is much easier than practising and adopting it with all its limitations-political and otherwise. Most of the nations practise democracy in some form or the other and the differences exist only in the scale, times and methods employed. As the basic principles of democracy remain intact, the key question that emerges is which nation practices the most involved kind of democracy? In other words, in which nation has democracy attained its highest maturity? The answer would be relative and not absolute, as democracy like any other virtue would have a never-ending kind of perfection or maturity to be attained. The ingredients that make a nation democratic are so diverse and complex that the process or art of perfecting democracy would always be a work-in-progress. The nature of inclusive institutional systems, degree of economic and political freedom could always be refined and taken to the next level, where the benefits out of such evolution would be, at least, marginally higher than its previous level.

The United States of America, which attained Independence way back in 1776, is believed to be having the most-evolved form of democracy. Comparatively, the Worlds largest democracy, India has a system that is not as perfect or as evolved as the US. The U.S has a better and more inclusive democratic structure than India. This may be attributed to the high degree of political and economic freedom the US citizens enjoy compared to India, where citizens at best enjoy better political freedom than economic freedom. Nevertheless, both the nations may have to consider their respective democratic set-up as one that could still be substantially improved upon. While countries like the US could continue to work on the political, social and economic elements of democracy, nations like India would have to work on all the three main elements of democracy.

The constitution of a country is the foundation for establishing the guiding principles for its inclusive institutional framework, which determines the endeavour of its citizens. As many nations have drafted their constitution based on the basic human values and principles practiced in other nations, inclusiveness has to be a definite outcome of a constitution. However, factors like ethos, history, cultural values of each nation also substantially decide the character of a nation. It is these basic yet significant elements that determine the nature, quality and direction of the democratic system practised in a nation.

Making Democracy Work Better in India

India, like other democracies, has come a long way during the last 65 years to make its democracy more inclusive. Unlike some of other nations, India has a strongly worded, well written and longest constitution in the world. As Dr.Pratap Bhanu Mehta rightly says that the Indian constitution was self-consciously anti-revolutionary. This is manifest in all the debates in the Constituent Assembly at that time; its members knew very well that change would be slow and gradual. The political culture was one of democratic argument and decision-making based on consensus, initially embodied in the structure of the.practices of coalition politics.

Though the achievements in practising and perfecting democracy in India in the last 65 years may seem to be less satisfactory, the achievements in the three main spheres of democracy are worth cherishing. Improvements in the quality of freedom in the political and economic elements of the nation are considerable during this period. In a way, the relative success of Indian democracy is amazing considering the orderly interaction of the seemingly disorderly components of its society, polity and economy, primarily due to its cultural, linguistic and traditional complexities and diversities.

Noted Indian historian Dr. Ramachandra Guha in his famous book India After Gandhi: The History of the Worlds Largest Democracy describes at least five social forces which are of pre-eminence in the social landscape of contemporary India after Independence. All these complex elements of class, religion, language, caste and gender are highly interdependent and the interplay of these factors shapes the society and its democratic institutions.

According to Dr. Guha, contemporary India is a democracy based on adult suffrage, with a free press and a largely independent judiciary. At no other time or place in human history have social conflicts been so richly diverse, so vigorously articulated, so eloquently manifest in art and literature, or addressed with such directness by the political system and the media. Besides these social elements, there are also other economic and political elements that eventually guide the formation and functioning of the institutional structure and systems of the democracy. The differences and incompatibilities between these elements create the intricacies and shortfalls in the constitutionally created democratic institutions, which determine the quality and extent of democracy that prevails in the country. Further, Dr. Guha goes on to say that democracy in India will turn out to be more significant than comparable experiments in West. This kind of optimism and faith is based on the strength of some of the successful and independent democratic institutions like the Supreme Court, Election Commission, Comptroller and Auditor General, etc.

According to Professor Ashima Goyal, India started out with highly inclusive political institutions since it adopted democracy with universal suffrage at independence. But extractive economic institutions, inherited from the British, were made more so by economic controls. It is because of the control raj in economic domain especially during the period 1966-1977, that the Western pundits painted a gloomy picture about democracy in India. As always in the past, Indian history disproved them once again. Indeed, the experiments with democracy in India have become deeply established in the realm of society, polity and economy, especially during the last twenty years and it would only continue in this direction for few more decades, at least. The positive trend augurs well for the future of democracy in the country that would satisfy the aspirations of the emerging young and energetic India. However, caution is required on one key element, economic freedom. A multifaceted country like India could not aspire to become an ideal democracy unless the degree of political and economic freedom is high. Any mismatch between the degree of freedom in society, polity and economy would stymie the evolution and strengthening of the institutional structures and systems that support democracy.

Economic Freedom for Mature Democracy

India can take heart from the fact that the lack of relative economic freedom is only a legacy of British Raj and that many great founders of modern India like C. Rajagopalachari, who was also fondly called as Rajaji, advocated for more economic freedom commensurate with political freedom. Athenian democracy condemned Socrates to death but his words carried a truth that is immortal wrote Rajaji, who after closely working with the government and the people of this country, persistently warned that the democracy in India has a dismal future due to the economic policies followed in the aftermath of India becoming a Republic and fully functional democratic nation. He strongly argued that the political freedom cannot survive unless sustained by economic freedom by which he meant that the democracy cannot survive any process by which the citizen is enslaved in his economic life and continued that democracy cannot be justified and wealth will not increase unless the freedom of the individual citizen and his fundamental right to work, earn, keep and invest his earnings, according to his free judgment, is preserved. Otherwise, democracy would be tyranny writ anew. On the larger perspective, Rajaji was of the view that the multifaceted economies like India have to vigorously pursue both political and economic freedom hand in hand rather than one at a time, which is essentially dangerous and incompatible with the notion of democracy in Indian society. According to him democracy is to be consistent with civilization.

Another great economist, legal thinker, social emancipator and one of our founders of modern India, Dr. B.R Ambedkar warned in the same vein that in politics we will have equality and in social and economic life we will have inequality. In politics we will be recognizing the principle of one man one vote and one vote one value. In our social and economic life, we shall, by reason of our social and economic structure, continue to deny the principle of one man one value. How long shall we continue to live this life of contradictions? How long shall we continue to deny equality in our social and economic life? If we continue to deny it for long, we will do so only by putting our political democracy in peril. Therefore, the issue of recognizing the virtues of the economic freedom in a democratic country like India cannot be ignored for a very long time as argued by both Rajaji and Ambedkar. Unfortunately, despite strong warnings the governments in post- independence India continued with their economic controls in the name of inclusiveness and constrained the blossoming of a more inclusive democracy.

As mentioned earlier, the relative lack of economic freedom at present is only after the British Raj changed the structure of the economy and polity. Angus Maddisson, one of the noted economic historians, has concluded that India had the largest GDP among world nations and garnered 32 per cent share of worlds GDP from first millennium till AD 1700. After the British took full control over the Indian economy, it fell to 24 per cent and below after AD 1700. Thus the economic re-emergence of India in the 21st century is actually based on the wisdom of centuries old entrepreneurial spirit and democratic belief.

As Professor Ashutosh Varshney put it rightly India is attempting a transformation few nations in modern history have successfully managed: liberalizing the economy within an established democratic order. It is hard to escape the impression that market interests and democratic principles are uneasily aligned in India today. The two are not inherently contradictory, but there are tensions between them that India's leaders will have to manage carefully.

Conclusion

One of the most enduring questions is what makes nations have more inclusive democracy. An evolved democracy tends to be truly inclusive, offering highest possible freedom in the three main elements of democracy: society, polity and economy. Therefore, more inclusiveness means more democracy and more freedom in the economy (private property right, free enterprises, less state control, freedom of contract etc.), society (individual freedom to associate, equal opportunity to all etc.) and polity (transparency in election, accountability from elected representatives etc.). Indeed, India had the opportunity to have all these three pillars when it became a Republic in 1950, but unfortunately the economic freedom was curtailed. Fortunately due to external compulsions, Indi has a better and freer economy since 1991, though much more is required. If India makes its political, social and economic pillars strong enough by granting them the highest freedom possible, the path to attaining a mature and highly evolved democracy would be short and smooth.

The author is Consultant (Young Professional), Planning Commission, Government of India, New Delhi



 

 

 

 


 
 
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