Is India Too Big To Succeed?

J U S T G R A F F I T I Washington: This was India's week in Washington DC. Or so it might seem if you would like to hear only the cheerful public remarks in the talks between Indian and American businessmen, hosted by the US-India Business Council, and the third US-India Strategic Dialogue, hosted by the State Department, which covered a range of issues of mutual interest including education andhealth.      US secretary of state Hillary Clinton spoke once again about the crucial importance given by the US to its growing partnership with India. External affairs minister S M Krishna said India would soon restore investor confidence and resume rapid economic growth. Ashwini Kumar, minister of state for planning and development, declared India would grow at 7% in this fiscal year and at 8.5% for five years after.      All the stars sparkled when chatting up whoever would listen. Kapil Sibal, Montek Singh Ahluwalia, Ghulam Nabi Azad, foreign secretary Ranjan Mathai and ambassador Nirupama Rao engaged in several conversations. Sam Pitroda, exuding confidence in a speech about India's future, urged those waiting for this huge democracy to deliver on its promise to be a little patient.      Interest in India's ability to live up to its potential may be wearing thin. For all the optimism expressed officially this week, there was near-zero coverage of the talks, or of India, in the media here. An op-ed by former US ambassador to India Tim Roemer on June 10 in the Washington Post was a notable exception. He worded it carefully, making the tone upbeat while outlining damp spots in business relations.      Not just in the US, India's global image has been taking a severe battering. With the threat hanging of an impending downgrade of the economy by Standard & Poor's to below investible grade, with a sharp decline in foreign investment, with slowing growth and rising inflation, with policymaking, particularly the reform process, at a nearstandstill, it should not surprise anyone that The Economist magazine carried a scathing leader last week under the heading 'Farewell to Incredible India'.      The magazine says: "India's feeble politics are now ushering in several years of feebler economic growth." It points out that the state machine is in urgent need of modernisation while the bureaucracy has degenerated and politics has fragmented.      Which raises questions that we have raised before in this column: Is India too big to govern in the manner it has been accustomed to since it became a republic? And, is its economic ambition out of whack with its current system of political governance?      Since 1989 we have seen a succession of coalitions trying to govern from New Delhi while desperately holding a ragtag bunch of partners in line, making stable governance a precarious prospect. Meanwhile, the influence of regional parties has been steadily rising. Given its many cultural and linguistic sub-nations, the spread of regional parties reflecting local aspirations may in fact be an overdue outcome that can be in harmony with the original national aspiration of a federally structured union of semi-autonomous units. It reflects today's reality but calls for systemic adjustments.      Here are two thoughts for debate. One, we could ask the Finance Commission, in a final exercise before shutting itself down for good, to redraw Centre-state relations radically, giving states far more powers than they have, such as raising income taxes like states can in the US, while reducing the federal tax as well as the size and responsibilities of the federal bureaucracy. Expand the bureaucracy where necessary, as for instance in the number of diplomats and IFS officers, while drastically reducing the power and numbers of the IAS and other central services.      Two, re-establish a states reorganisation commission. The New York Times recently carried an article on a 20th century Austrian academician, Leopold Kohr, who advocated small units of governance that would be "too small to fail". He, like Gandhi, was a fan of Henry David Thoreau, an anarchist who believed "that government is best which governs least". While we'll surely have our differences with his more extreme views, we could think of slashing the size of our central government while dividing the nation into 50 states, if not more, in a far more decentralised arrangement than we have.      Perhaps governing India could then become a manageable task.