Address by Mr. Rajeev Chandrasekhar, MP
at the Special Session by FICCI Young Leaders on
“Governance, Corruption and Threat to Brand India”

March 01, 2011, New Delhi

Ladies and Gentlemen,

Thank you for having me here today and inviting me to speak with you.

I am glad that FICCI is taking the lead in this debate – especially since it was the one that took the lead in starting a debate on Governance in our country some years ago – before the country had really woken up to this new concept of “Governance Deficit” and its impact on Brand India.

I believe, and so do many of you in civil society and Business, that we are at a crossroad today as a nation. Our progress as a nation in the coming years will depend heavily on the ability of Political leaders and their Parties to forge a consensus on the vital issues impacting our growth and progress as a nation and people. This, in turn, depends on all of us in Civil Society and as citizens identifying these vital issues and making them the focus of our Debate about the future direction of our nation.

No doubt, there are many, many issues that face us as a nation – you are no doubt aware of some or most of them – including the recently more visible problems of mal-governance and corruption.

But I have been making the case for some time now, that one of THE vital issues is the issue of declining standards of Governance and Politics, and therefore, the need for reforms and restructuring in that department. Because most of our other vital issues directly flow from this. For you, the captains of the Industry, who are and will be major participants in how the story of India turns out in the coming decades, I would argue that you have the most to gain or lose from the India story unraveling !

Let me lay out my case –

While India has developed tremendously over the last decade and a half on the back of the innovation, creativity and energy of Private entrepreneurs, it is obvious that the state capacity has lagged behind significantly, and make no mistake, we require both Private Entrepreneurship and Efficient Governance as two critical elements of the Long term growth equation or challenge. Notwithstanding the rhetoric in exotic International locations like Davos, New York etc, of India becoming a superpower or an Incredible India etc, we must accept that, all of that will remain a pipe dream if the State of the Government and governance doesn’t improve dramatically and keep pace with the changes in the private side of our economy. And add to that, there has been an almost deliberate school of thought that the private sector can replace the space of the Government – ignoring the real truth that, in a vast, disparate, welfare oriented Government like ours – the state and Government will always be a huge animal in the room and therefore the last two decades of Governmental neglect is coming home to roost now!  I am not a cynic at all. I tend to see things as they are today and that’s why I see India as a cup half full and a work in progress.

The recent characterizations of the situation today as ‘Governance Deficit’ is being far too kind and timid about the problems we face. When 14% of our budget allocation is being doled out in a very dubious manner with hardly a murmur of opposition within Government – then I don’t refer to that as a deficit. I call that a gaping hole or Governance Vacuum! Let’s stop talking about Brand India – because it can’t be separated from the real India.

And while many in Government – expectedly – will represent these scams as an aberration – an exception rather than a general rule – which I for one would love to believe – but unfortunately, it isn’t the truth. Public Policy and Regulatory capture by Corporates and vested interests are very unfortunately becoming the norm, and not the exception, and fast becoming the signature theme of our economy.

The need to reinvent our Governmental model is inarguable. As someone recently said in Bangalore, if India got rid of License Raj to chart out a new path of entrepreneurship, energy and dynamism of its dreamers – it was clearly not for that to be replaced 20 years on, by a new form of patronage entrepreneurship and politics.

The decline in Government and Politics did not start yesterday. It has been a slow decline that we are all failing to catch or do not want to respond to, and therein is one of the tragedies. The focus on National Security doesn’t start till the 26/11 terrorism attack; the country doesn’t respond to Naxalism till many innocents die; we simply accept the disaster in our sports administration till the blatant CWG.  It’s our fault that we have accepted this lowering of standards and have said or done very little about it, and it’s also our fault that as a nation and people, we only react and are seemingly incapable of planning for our future and all its challenges.

The 2G scam in specific and corruption in general are a result and consequence of two issues – Unfettered Administrative discretion in dealing with Public assets with no checks and oversight, and unfettered administrative discretion in doling out Government contracts and spending with again very little oversight and almost total failure of institutions like Independent Regulators! 

 Part of the reason is that it is easier to create a free market and entrepreneurship because all it requires is for the government to get out of the way; it is harder to create state capacity and governance. That requires creation of institutions, building them, nurturing them and protecting them from politicization and ad-hocism, and, as importantly, keeping them accountable. In Weber’s memorable words, “Building public institutions is like slow boring of hard boards”. In this context, it is a much harder job for us to address this issue of arresting Government Institutional decline than the past few years of economic liberalization and unleashing of entrepreneurship. To quote Ramachandra Guha, the historian “We have to repair one by one, the institutions that we have inherited and build new ones to help us meet the challenges of the coming years”.

I hope you, the young captains, join this push for reforms in Governance and our Politics. Let me end by quoting the Guatemalen poet/Freedom fighter – “One day, the apolitical intellectuals of my country will be questioned by the simplest of our people. They will be asked what they were doing, when their nation died slowly”. Our future generations will ask us this also.

Thank you again for having me here this afternoon.

Jai Hind.