India's Reforms, Achievements and Arrears

When India’s economic reforms began in 1991, the immediate crisis and by the Fund-Bank conditionalities that accompanied their assistance defined them. The limited reforms succeeded so well that they have receded into obscurity. Almost all the political groups that opposed them have now embraced a reform agenda. As a result, reforms have lost focus, and acquired a range of often contradictory meanings. This paper defines a set of reforms still required if the gains made hitherto are to be consolidated and India’s economic performance is to be decisively improved. The reforms must begin with the administration. The present first-past-the-post system of election has favoured parochial and sectarian forces, and failed to ensure governments with a decisive majority; it needs to be replaced by proportional representation with a high cut-off point which would eliminate minor parties from the legislatures. They should be elected partly on universal adult suffrage as now and partly by income tax payers with votes in proportion to tax paid; budgets and financial legislation should require the approval of taxpayers’ representatives. The gazetted officers of the civil service at present are appointed for life; they should instead get ten-year contracts, so that their numbers can be matched with the work to be done. The present free-for-all civil service examination should be replaced by an examination in a small number of practically useful subjects. The junior bureaucracy should be appointed on short-term contracts that should not extend beyond the age of thirty. All government salaries should be comparable to those obtaining in the private sector; judges’ salaries should be comparable to those of the lawyers who argue before them. The present patchwork of states should be replaced by a larger number of states centred on the major cities; within the states, communities should have considerable freedom to set up their own local authorities.