"Public spending, private gain", 'The Hindu', December 17, 2015

Public spending, private gain

By Pulapre Balakrishnan

The nation heaved a sigh of relief as the waters receded in Chennai but grieves at the demoralisation on the faces of her compatriots beamed into homes across the country. It realises that we must now reflect deeply on how Indian democracy can be made to restore to us a sense of confidence in the future. On this issue, while some things are clear not everything that matters is. In Tamilnadu natural forces may have succeeded where the democratic process by itself has not so far. The flooding in Chennai is likely to set back the political fortunes of Chief Minister J. Jayalalithaa, who has barely managed to stay ahead of the law of the land anyway. But it yet remains to be seen whether it will serve as a game changer to a politics that has been shaped by the two Dravida Kazhagams that have ruled the state for close to half a century. What is at stake is nothing less than the well-being of its people. While it needs be acknowledged that the rains this year have been unprecedented, there is a body of opinion based on evidence that at least a part of the flooding could have been avoided had greater initiative been shown by the government and the necessary infrastructure been in place. It is possible to see that it is the logic of governance that ensures whether these potentially ameliorating factors are present in any polity. Also that as governance is related to politics, it is politics and not resources that will determine the degree of well-being that can be experienced by a people. It hardly needs to be mentioned that in terms of human capital, entrepreneurial talent and natural resources Tamilnadu is second to none. Therefore, for the devastation caused by the flooding its political class must be held accountable.

          One or the other of the two Dravida Kazhagams have ruled Tamilnadu since the mid-60s. Nothing really separates them in terms of their political ideology. An important element of the public policy of these parties has been a form of distributivism. It is important to be clear about what is being identified here. A distinction needs to be made between social protection and distributivism. While there have been important social interventions in the state such as the mid-day-meal scheme for schoolchildren initiated by M. G. Ramachandran – one that has served as a torch bearer across the country – the rationale of governance adopted of late has been to distribute private goods.   Under the current chief minister this has been taken to the next level, with the distribution extending to consumer durables such as fans, television sets and mixer-blenders.

          The distributivism practiced by the political parties of Tamilnadu is with clear strategic intent and has definite economic consequences. It is a part of a political project to lull the populace into quietude and enmesh the electorate in a patron-client relationship. The objective is to strip the populace of any consciousness of citizenship, with which comes an awareness of the politics of governance. The giveaway is the tendentious use in the discourse of the political parties of the expression makkal for the mass of the people. Literally meaning children it signifies that the government is the maa-i-baap or the benefactor. The slightest criticism of the government’s policies is dealt with a heavy hand. A recent instance of this is the use of the despicable colonial sedition law against the folk singer S. Kovan who had objected to the policy of the state selling liquor. The lyrics of the song Moodu TASMAC Moodu or “Close TASMAC!” and the visuals from the video must be studied by anyone interested in contemporary India. They indict the regime for encouraging alcoholism which unleashes violence against women and induces substance dependence among young men. But what clearly got the regime was the allegation that individuals close to its leadership were direct beneficiaries of the sale of liquor through a state monopoly, for they owned the source of supply. Kovan had had the courage to actually name the company and conclude that if the present arrangement for the sale of liquor were to be discontinued it would affect the future of the ruling dispensation. While not all forms of distributivism in Tamilnadu are a source of private enrichment to its rulers, the case of the provision of liquor robs the policy of distribution of its democratic credentials. It also points to the wafer-thin divide between public policy and private gain of the political class. With both the Dravida Kazhagams engaged in competitive populism, and the possible private enrichment it can give rise to, self-correction cannot be expected of the situation. Only something akin to a popular anti-corruption movement germinated within civil society leading to the rise of the Aam Aadmi Party in Delhi can mount a serious challenge to this state of affairs.

          The economic fallout of the distributivism is there to be seen everywhere in the state but nowhere more than in Chennai. As monies are fungible, the emptying of the treasury on private goods leads inevitably to reduced public spending on merit goods and public goods. In public economics, the typical allusion to merit goods is to education and health. The government is expected to spend on these goods as the private sector, it is believed, will very likely produce too little of them in relation to need. We must to turn to Kovan’s song once again to appreciate the irony that in Tamilnadu today it is possible to buy an idli for one rupee but one would have to pay “lakhs” for a decent education. This goes to the crux of the matter. Essential public services that only the government can providehave not expanded for several reasons, but they are all related to the objectives of the political parties. These comprise the calculation of political parties that they stand to gain more from distributing private goods to all and, as in the case of the provision of liquor, that state power can be leveraged to yield financial gains to those who control the party. The free distribution of electricity to farmers is another policy that has had major economic consequences. A cash-strapped electricity board has not been able to invest in capacity creation and maintenance leading to severe power shortages. Ironically, it has also compromised the future of agriculture itself. Free power has encouraged over-exploitation of ground water by farmers selling what they draw costlessly. With this the water table in a relatively dry state has fallen further.

           Recognising the logic of governance of the Dravida Kazhagams it is not too difficult to make sense of the tragic events in Chennai. Distributivism has constricted the space for public goods provision. While these goods are likely to be provided only by the government, in the Westminster model that we have chosen for ourselves, political parties that are elected to govern have little incentive to do so. Precisely because a public good is consumed jointly its provision does not have the cachet of a gift precluding the munificence that it bestows upon the provider. Roads, bridges, sewers and drains are our quintessential public goods. The floods revealed a woeful lack of the latter in Chennai. Nothing could have been more demoralising for the poor than to find whatever little of their possessions was left after the waters withdrew was smeared with sewage. Lack of urban infrastructure and the violation of building norms may well have acted as a force multiplier to nature’s fury. The lack of sanitation has a long presence in the city though. As a wag had put it when we were students over four decades ago in the once–iconic Madras University “Of the Cooum the old odour only changeth, yielding place to new!” This sounds witty so long as you do not have to live beside the river as the makkal do. Nothing is more emblemmatic of the failure of the Dravidian parties than their inability to divert underground the sewage flowing in the rivers of Chennai. This has directly contributed to the misery of her citizens in the recent floods. While Tamilnadu may not be very different from the rest of India in facing a shortage of public goods nowhere is the coexistence of private wealth and public squalor more visible. It stems from the objectives of the parties that have ruled the state and the families that control them. The people of the State deserve better.