India is a nation in ferment. People
have taken to the streets because they no longer trust the existing political order.
The old way of doing politics is under challenge but a new way has not yet been
found. No one knows quite what the next eruption will bring. After Anna Hazare,
Kejriwal, and Nirbhaya, there will be another outrage and another protest, and this
will not stop until the political class learns to cope with the aspirations of
a new, young, self confident nation. There were hints of this realization last
week at Jaipur but no one had the courage to say so at the Congress conclave,
not even Rahul Gandhi.
The aspiring young are about
third of the country now, and in a decade or so they will be half. This is the
new aam admi and it finds it has no
one to vote for in 2014. The existing parties continue to view voters
patronizingly as poor, ignorant, grieving masses. So, they resort at election
time to the same tired populist formula of bribes and giveaways--free booze,
loan waivers, free power and TV sets, caste reservations, subsidized food,
NREGA jobs and now cash transfers. The giveaways benefit only a section of the
people. But Nirbhaya’s lesson is that people want public goods which benefit all
citizens. Everyone gains from efficient law and order, corruption free
governance, good roads and schools, whereas only a section gains from
reservations, free power, and PDS rice. Everyone benefits where the police quickly
file an FIR and the judge gives quick justice.
The
aspiring young cannot understand why their tolerant nation, which offers the
most astonishing religious and political freedom, fails to give economic
freedom. Why must amazingly free India rank 119 on the global freedom index?
Why must it reform by stealth? In a country where three out of five people are
self-employed, why should it take 42 days to start a business, and the
entrepreneur is victim to endless red tape and corrupt inspectors?
India ends up reforming furtively
because none of the political parties has explained to the people the
difference between being ‘pro-market’ and ‘pro-business’. To be ‘pro-market’ is to believe in competition in
the marketplace, which helps keep prices low, raises the quality of products,
and leads to a ‘rules based capitalism’. To be ‘pro-business’ means to turn
over the market’s authority to politicians and officials, and this leads to
‘crony capitalism’. Competition means that some businesses should be allowed to
die because they are poorly managed such as Kingfisher Airlines and Air India,
and should not be bailed out. Not making this distinction has led to the false
impression that reforms make the rich richer when they actually help the poor. The
aspiring young demand rules
based capitalism, and to get there will mean shifting our politics away from
populism towards the centre.
Protests awaken a people
but do not solve the problem. Only the hard work of politics can do that in a
democracy. It would be smart for one of the two major
national parties to recognize this opportunity and come into tune with the new
aspiring, secular aam admi. But that seems
a hopeless prospect. The DNA of the BJP is not secular; the DNA of the Congress
is statist, populist and socialist. Neither has shown the commitment to drive institutional
reform needed for good governance. The regional parties lack a national vision
and left parties do not believe in market-based
outcomes. The
Aam Admi Party could have filled this space but it has illiberal tendencies and
does not endorse economic reforms. So, while the last thing India
needs is a new party, it is the only alternative.
A
young aspiring, secular India needs a new liberal party of the 21st
century which trusts markets rather than officials for economic outcomes, and
relentlessly focuses on the reform of the institutions of governance. Only thus,
will the country begin to move away from crony capitalism and towards
rules-based capitalism. It may not win votes quickly but it will bring
governance reform to centre stage and gradually prove to voters that open
markets and rules-based government are the only civilized ways to lift living
standards
and achieve shared prosperity.
