Need for India to have a sound policy regime: Role of advisers is crucial

When the first COVID-19 case came to public notice in India in January this year, questions in concerned quarters have been raised as to why did it take almost two months to prepare for lockdown and that too with a notice of a few hours to leave many citizens unprepared and more so the migrant and the poor, writes Partha Pratim Mitra for South Asia Monitor

Partha Pratim Mitra Apr 17, 2020
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The Indian policy context and the policy response is perhaps no different from the rest of the world but what is interesting is that India is one of the largest composite cultural democracies in the world and, more importantly,  among the emerging countries, which makes the issue important. 

The context in India - and that determines policy response - is often a crisis situation and the policy response to the crisis depends very much on the leadership and the connect between the leadership and its advisers who determine policy formulation. The better is this connect between the two, the better is the policy formulation and legitimacy of the policy response in the polity by the ruling combine.

India's response to the food crisis in the 1960s has been quite well documented with the policy intervention in the agriculture sector bringing about the 'green revolution' in India that made the country self-reliant in food. Similarly, the foreign exchange crisis in the mid1960s resulted in a policy response in the form of the devaluation of the Indian rupee and a holiday from economic planning between 1966 and 1969. Again, a crisis on the balance of payment front in 1990 brought about a sea change in the policy environment in the form of economic liberalisation and dismantling of the license-quota raj in trade and industry. Now we have a COVID-19 crisis that is once again likely to bring policy changes in keeping with the emerging situation.

In every crisis mentioned above the connect between the leadership and the policy advisers have been important. The connect depends to a large extent on the ground situation of the crisis and the solutions that are found to be politically acceptable. For instance, on the foreign exchange front during the crisis of the mid1960s and again in 1990, India approached the international lending bodies such as the IMF and the World Bank and the policy response has been very much in tune with the Fund-Bank prescriptions led by advisers who also believed in similar policy prescriptions. Similarly, during  the food crisis of the 1960s, the role of international agencies working in the field of agriculture and food have been important apart from policy advisers and scientists who were close to these organisations or have worked in them and could influence the leadership and policy formulation.

The connect between leadership and their advisers through a consultative mechanism is always important in any form of government and political system. The citizens should perceive that the consultative mechanism is robust and no policy is brought about in a manner that they could construe as a knee-jerk reaction or brought without much preparation.

For instance, after the first COVID-19 case came to public notice in India in January this year, questions in concerned quarters have been raised as to why did it take almost two months to prepare for the lockdown, and that too with a notice of a few hours to leave many citizens unprepared, and more so the migrant and the poor. Why don’t we learn lessons from Singapore? A decision was announced with adequate notice for a lockdown for a month with public transport, grocery stores and eateries with take-away distribution arrangements working. Our approach to demonetisation, known as DEMON in common parlance, also pretty much happened suddenly without much preparation, leaving the citizens to suffer. 

Denial of the crisis is also an instance of a lack of proper connect and consultation between the leadership and its top advisers. The Labour Bureau of the Government of India, based at Shimla and Chandigarh, in its annual Employment/Unemployment Surveys(EUS) done for a few years ending 2014-15,  gave consistently higher numbers of unemployment rates as compared to the Central Statistical Office(CSO), which is the authority as far as government statistics are concerned. The numbers of the Labour Bureau were questioned on the ostensible ground of lack of core competence, the crudeness of the statistical methods and lack of comparability with CSO figures. Now the Periodic Labour Force Survey (PLFS) of the CSO has given figures much higher than what the Labour Bureau in its surveys found and the Centre for Monitoring Indian Economy(CMIE), a private body, gives figures higher than the CSO, in its surveys.

The policy context and the ability of the policy response to tide over a crisis depends to a large extent on the recognition of the crisis and the connect between the leadership and its advisers through a consultative mechanism at the institutional level. The role, therefore, of these institutions is extremely important in establishing a sound policy regime in the country. If, nothing else, these institutions can come up with policy responses which may not always be what the official line prescribes but certainly enrich the policy environment and alternative thinking that only strengthens a democracy.

(The writer is a retired Indian Economic Service officer who worked in the labour ministry. He can be contacted at ppmitra56@gmail.com) 

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