The GST is a burning example how each reform in our country is prolonged in its implementation till it loses its very relevance. The subject, however, is not the GST here. This writing intends to talk about bigger challenges before us regarding reforming the economic attitude of this nation. Like any process, reforms too, are time-bound concepts. If they are not implemented within its right time, there remains very little to gain from them.The GST is not the only example, almost every reform in our country has got more or less same destiny. Even in early 90’s- which is considered as a golden era in terms of reforms, we could not go for a “full-fledged” one. It was only for two & half years that we could go through our course of reforms. Even today many infamous facets of old license system haunt us. Many important reforms could never take place, like labour reforms. So was the “Company Rules”. It is still impossible to shut down a company in India. Our taxation system too, is in no better shape- considered one of the worst in the world. Some even go to call it “Tax-terrorism”.
Some attempts were done to reform our taxation system from time to time, though they were lacking in compositeness in their approach and nowhere in a match with rest of the world; and so expectedly could not take us much ahead. Leave whole world, even Asian countries like Singapore, Vietnam, South Korea, China, who once were equal (or in fact below) to us in economic and social parameters, proved to be quick and wise enough to identify true significance of the reform and wholeheartedly accepted it and established a type of “synchro” with respect to rest of world. In India we did not only identify the importance of the reform lately, we moved on the road of reforms at much slow pace with great reluctance. Most importantly we failed to reform two sectors of great opportunity: Education & Health.
But it is not the greatest failure of our reformers. Their biggest failure lies in the fact that they could not sell reforms to the public. The greatest disservice to the reform as an economic attitude has not been done by its opponents or distractors, but by those reformers who failed to comprehend it in a language that a voter can understand. Reforms mostly bring their fruit in long term, while in short term, like any transition, they bring the pain. And pain if not explained as a price for a future fruit- is most likely to be resisted by the pain-bearer, common man in this case. And here our reformers missed the bus. Some vested interests catalysed their anger, influenced their understanding and almost blocked the road to reforms. What if a pregnant lady bearing dire pain-who otherwise would bring a new dawn of life to this earth; gets convinced by some old malevolent lady that pain is not worth for ?? This is what happened with reforms in India. Before it could deliver results, in mid of the way it got aborted. Some vested interests with powerful lobby delivered this task quite successfully. In order to understand challenges before us to revive reforms, it is very important to identify these vested interests and their modus operandi.
Before the introduction of our new economic policy in 1990, we had an economic model where commanding heights of the economy were controlled by the state. This system was such that it favoured non-performers more than performers. Reforms were meant to introduce a new system favourable to performers and fatal to non-performers. It alarmed non-performers in form of govt. employees, trade unions, public sector employees and bureaucrats. The new economic system was to facilitate a model which was uncomfortable to all above of these. But they could not oppose reforms citing these reasons straight. So they dressed up their vested interests with a “human-face” i.e. possibilities of exploit of poor. Some politicians also joined the gang as the new economic model was also meant to reduce their stature from the previous glorious status of controllers to just facilitators!! Apart from ego issues, this new system was also meant to limit their control on the economy- less control means less opportunity to misuse it, less chance of corruption!! So together they decided to block this initiative.
In their drive to prevent reforms to take place, they attacked it from two sides. Firstly they attacked psychic of innocent mass, who was the prime receiver of the pain of change, these reforms had bought. As cited earlier reformers could not comprehend reforms in a language mass could understand and could get motivated enough to bear that pain, the pain blurred their vision to see the fruits of these reforms waiting ahead.
This was augmented by misinformation propagated by the nexus of Politicians, Babus and trade unions. Apart from this, they tried to block reforms by sending wrong feedback to top brass about the reaction to their initiative of the reform. They misled their masters and policy-makers at the top. The public was indeed uncomfortable but certainly would tolerate it if would not had been misinformed. An exaggerated version of this discomfort was reported at the top. This cautioned especially political class. A largely fictional narrative of wide public anger against reforms had been perfectly set in New Delhi. This made pro-reform policymakers defensive in their attitude and soon they started to find their initiative for more reforms lesser space in policy draft. The Nexus had succeeded in its plan. Reformers soon got marginalised in policymaking.
Experiences from GST and Gujarat Election suggests that situation has not altered much since then. Vested reforms are still powerful and able to mislead mass by their time-tested strategy of “Double-attack” explained above. It is important to note that collective conscious of mass in India, has always been welcoming the reform, all they need is a little psychic support, clarity about objectives & benefits from it for them, insulation from misinformation and motivation to bear some pain for it !!
Let us not be in the euphoria that once fruits of reform will get passed to the public they will not come under influence of such propaganda. Reforms are long-term concepts and it takes time to gain from them. Vested interests disturb the “momentum” in between and spoil them mid-way. So every time a reform is introduced, the public must be communicated in clear terms that what betterment it would bring to an “Aam Admi” and what pain it would cost. Let us be sure that once educated about the price and the gain, a common man is wise enough to co-operate with policymakers. Demonetisation has ably demonstrated it.
– Abhinav Shankar