Transparency in Short Supply

FROM N.C.’S WRITINGS

One of the plus points claimed by democratic governments all over the world is the transparency in their functioning. To a large measure such a claim is valid when one compares it with the style of an authoritarian regime. For instance, neither the Korean public nor the world at large was told about the last hours of President Kim II-Sung, even his death was not announced until the next day. In contrast, when Indira Gandhi’s tragic end came, the whole city of Delhi and the world waited with bated breath for every piece of information that came from the hospital where her body had been kept; in fact there was a furore when the formal radio announcement of her demise was delayed presumably because of certain protocol procedures.

Even today when the visibility before the public of those in power is to a large measure constricted by the ever-growing security cordons, a leader holding an elected office in our democracy can hardly afford to disappear from the public gaze. From Jayalalithaa and Jyoti Basu right upto the Prime Minister, all of them have to face the public gaze; there is no escape from it. In fact, a leader in a democracy adds to his legitimacy when he functions openly as did Kamaraj, for instance.

At the same time, the degree of transparency is understandably reduced when it comes to the actual functioning of a government even under a democracy. This is understandably so because there are a number of issues that a government has to tackle which have to be withheld from the public for what’s called Reasons of State, which in our parliamentary politics is passed off as being in the National Interest. In a well-founded democracy, the area of secrecy is kept to the minimum—at least that’s the expectation. However, this varies in proportion to the degree of self-confidence that a government commands. The less secure a government feels, the more is the tendency to be secretive on its part; the more confident it feels about carrying the public with it, the more open it becomes.

This is true in democracies which parade as being open societies. The Watergate operation might have cost Nixon his presidency, but no one was punished for misleading the entire American democracy for the Tonkin Bay episode nor for the invasion of Cambodia by the US Air Force, leave alone all the dirty tricks played nonchalantly by the CIA and FBI. The sinking of the Agrentinian battleship, General Belgrado, during Margaret Thatcher’s Falkland war—exposed by the media including the BBC—was no doubt a scandal but it did not bring her government down. There are many such instances of total flouting of the principle of transparency by governments which claim to be democratic.

In our country, there are significant lessons to be drawn in the matter of transparency in the functioning of our elected government. One of the great assets left behind by Gandhiji for the running of our democratic government after independence has been the insistence on transparency which appeared even in those days as really daring. Those of us who are old enough to recall—and they are very few still surviving—what a shock it was to find Gandhiji openly telling the public about differences within the government between Pandit Nehru and Sardar Patel over the question of remitting to Pakistan what had been decided upon in the arrangement about division of assets between the two countries. How many leaders in any of the great democracies in the world had the courage to be so transparent as Gandhiji was? That indeed was the measure of his supreme confidence in the wisdom of the people, as also of his faith in democracy.

This tradition of transparency could not, of course, be kept up at the level to which Gandhiji took it; but still it could be discerned in the functioning of the government during the early years of our Republic. The Parliament emerged as the forum where the insistence on both accountability and transparency was very conspicuous, and more important was the government’s readiness to abide by such a mandate. One has only to recall how Nehru frankly conceded of not having immediately placed before Parliament the information about the Chinese having constructed a road through Aksai Chin. The severe drubbing that he faced in Parliament over this issue and his honest admission of this lapse brought out the efforts at ensuring transparency in government functioning both by a vigilant Opposition as well as by a candid Prime Minister and his colleagues.

Compare the swiftness with which an open enquiry was launched when the Mundhra scandal was unearthed by a member of the ruling party and the Finance Minister promptly resigned though everyone knew that he was personally no beneficiary of the deal, with the sickening tardiness with which the government moved thirty years later over the Bofors kickback scandal, discrediting itself at every step, while transparency was abandoned throughout.

The latest in the line is the pathetic stone-walling by the Finance Minister in taking action against the officers guilty in the security scam, the biggest financial scandal that the country has had to bear since independence. While a unanimous report by a Parliamentary Committee, to which the ruling party is a signatory, has indicted a whole lot of individuals and govern-ment bodies, the Union Government seemed to be holding out as long as it could, to punish the guilty. The sale of the public undertakings shares has been exposed as a major act of negligence and irresponsibility on the part of a number of senior officials and yet not one of them has been punished despite their blatant squandering of the nation’s assets. It is worth noting that in the three years of this government’s tenure so far, magnum-size corruption cases have come to light despite the government’s resistance to unearth them, and yet no action whatsoever has been taken against the marked culprits in any of these scandals. Not transparency but secrecy has become the watchword of government functioning today.

At an entirely different level, transparency has been virtually banished from the govern-ment’s relations with the public. While a high-voltage campaign advertising the economic policy changes has throughout been kept up in the last three years, one notices a marked tendency to fight shy of any transparency in the making and application of these policy changes. Leaving aside the charge once levelled that the country’s budget was being leaked out to the world Bank bosses, the government, particularly its Finance Ministry, has at no stage explained—not to speak of getting any sanction for it from Parliament—why it has accepted in toto the World Bank prescription for the Structural Adjustment of our national economy. Few had contested the taking of a big loan from the IMF to meet the balance-of-payments crisis in mid-1991, but that by no means could be construed as acceptance in toto of the World Bank’s Structural Adjustment Programme. And that was precisely what the Finance Minister did by November 1991.

In the true no-holds-barred politics of the day, the Finance Minister held the previous government wholly responsible for the balance-of-payments crisis though he had served that government without a protest at a very high level. Even intellectual transparency became a casualty as one found no mention in all the pronouncements of the Finance Minister of the havoc played on the country’s foreign-exchange reserves by the spate of short-term borrowings from the international market by the previous government which was to a very large measure responsible for the 1991 BoP crisis. Would one be wrong in concluding that the Finance Minister’s eloquent silence about the profligacy of those short-term loans has been due to the fact that those were incurred by a government which was presided over by the same party to which he belongs today? And the gentleman who was closely involved in that disastrous loan spree of the late eighties was later holding a key position manning the country’s finance thanks to the patronage of the Finance Minister himself.

In the basic approach to the question of economic reforms, there is lack of transparency which may turn counterproductive for the reforms themselves Public memory, according to politicians, is proverbially short, but not so short as to have forgotten that the fashion in the establishment circle in the autumn and winter of 1991 was to run down the public sector as a sort of unmentionable offspring of the Nehru-Mahalanobis model of economic planning. The apostles of the Finance Ministry and their NRI cohorts abroad made no bones about their allergy to the very existence of the public sector. There was a perceptible devaluation of the very concept of the mixed economy in the heady euphoria for a free-market dispensation. So much so that one of the leading characters of this crusading fraternity in his effusive exultation hailed our Finance Minister Doctor as the Gaidar of the Indian economic revolution little anticipating that Gaidar with his championing of uncontrolled free market has now become a castaway from the Russian economic scene. Not even the bitterest critics of Manmohan Singh would like him to put on the tattered mantle of an Indian Gaidar. That honour can perhaps be reserved for more deserving worthies in our Finance Ministry.

Meanwhile there has come about a visible change of seasons in our economic revolution—not a change of guards. The new winds started blowing from Devos last year. Out there in the Swis Alpes, the Prime Minister adumbrated his views on the Middle Way, which he candidly conceded as having been derived from Nehru’s mixed economy concept. From Davos to Harvard to London and finally ending up with his Red Fort peroration on July 14, the Prime Minister has now been talking as if there has been no basic shift from the economic strategy of Nehru’s times. Even our distinguished Finance Minister has been talking about his commitment to the public sector—vide his speech at the Talkatora AICC session the other day.

Why this shift in the semantics of the government? Apart from the slide-back from the free-market euphoria on the global scale—witness the change in the public mood all over Eastern Europe and Russia where emphasis towards social justice is being restored—the more perceptive elements in our ruling establishment (and this includes the Prime Minister himself) now seem to be realising the political hazards of adopting the World Bank’s Structural Adjustment Programme. The single-minded emphasis on export earnings loses much of its logic as one finds high walls of protection by the developed countries being made higher via the new GATT. While the government earned a lot of encomium by scrapping the licence-permit raj, the corporate sector can hardly be expected to be reconciled to the policy of preferential treatment to the multinational investor from abroad, even to the extent of offering guaranteed return of 16 per cent never given to anybody since the East India Company days. The excitement of inviting foreign multinationals has reached such a feverish pitch that the government itself is trying to tread cautiously in applying its own open-door policy to the area of telecommunication—which may directly impinge on the defence requirements of the country. The Finance Minister at the beginning talked recklessly about stopping all subsidies. But he could not keep his commitment to the World Bank authorities as the powerful kisan lobby, on which the very existence of the Congress party depends, has practically vetoed such a move. Similarly, he made an open commitment to the World Bank that the Exit policy would be enforced. But this has been opposed by all trade union bodies including the Congress-led INTUC.

The most bizarre has been the treatment of the public sector. More than anybody else, the Finance Minister with his fairly long innings in the government knows that one of the heaviest drawbacks for the public sector has been the transfer of the sick units of the private sector to the public sector; besides, it is the managerial inefficiency more than anything else which is largely responsible for the losses in the public sector. There are thriving public-sector units like BHEL and SAIL which are fetching adequate returns. Instead of helping these to grow faster, the Finance Minister and his team hit upon disinvestment of even these thriving units, just because the World Bank bosses want these to be dismantled to make room for the giant multi-nationals of the West which they are openly backing.

It is in this background when the Prime Minister talks about saving the public sector that creates confusion in the public mind and leaves even the votaries of the economic reforms nonplussed. The obvious contradiction between the profuse profession and actual practice within the government is due to the lack of transparency in the government’s words and deeds. It would not be unfair to draw the conclusion that the political leaders of the government are realising that the World Bank’s Structural Adjustment Programme would not fetch votes at the election ordeals ahead, and therefore this is sought to be garnished with copious expressions of allegiance to the Nehru legacy et cetera.

What seems to be missed by those in power that in the new period not only has technological advance made phenomenal strides, but the consciousness of the common people has awakened equally phenomenally. This was precisely the essence of Nehru’s Basic Approach—which sought to advance development along with social justice through democratic means. This by itself demands rigorous adherence to the principle of transparency in manning the levers of power in a society such as ours situated in a land of plenty. The economic order for such a country can hardly be achieved through the straitjacket of a global moneylender’s model, but has to be designed by our own native genius. Not through the imported eggheads but through learning from the rich and varied experience of our pluralist society.

(Mainstream, July, 30, 1994)