Last week, the Supreme Court asked the government about the status of criminal cases pending against elected ministers, underlining the importance of breaking from the history of law-breakers becoming law-makers. The court recommended setting up fast-track courts to deal with the cases, but that is unlikely to be an effective strategy, unless complemented with reforms to improve governance and bring transparency in campaign financing.
Criminalization refers to the use of criminal activities by politicians; either by direct malfeasance or by indirectly recruiting someone. It is not a new phenomenon; the first instances of “booth-capturing” were reported in 1957, and involved hired goons who would mobilize or suppress turnout, or vote on behalf of disenfranchised voters. In return for their work, politicians would protect these criminals from prosecution.
From such petty engagement with elections, goondas and gangs have come a long way to contest elections themselves. Milan Vaishnav, author of When Crime Pays: Money And Muscle In Indian Politics, calls this an example of vertical integration.
Until the late 1960s, the re-election rates of incumbents were high. Hence goons were relatively assured of political favours after they helped a politician win the election. As political competition increased, the uncertainty around re-election of incumbent candidates also increased. This led to the entry of criminals in politics in order to maximize control over their own survival and protection. Many goons who had not been involved in politics joined it as a competitive response as they feared missing out on opportunities, or a crackdown by a competing gang.
Vertical integration does not explain why political parties chose to field such ruffians; criminality of the candidates could have brought bad press.
That process began with Indira Gandhi banning corporate financing of elections in 1969. This eliminated the most important legal source of campaign finance and pushed financing underground. At the same time, the costs of contesting elections kept increasing due to a rising population, increasing political competition—the number of political parties increased from 55 in the 1952 general election to 464 in 2014—and the trend of giving freebies for votes.
This led parties to a competitive search for underground financing, and they played into the hands of criminals and racketeers who had the means to acquire and dispose of large amounts of cash without detection. Thus parties fielded tainted candidates because they could contest an election without becoming a burden on the party’s limited coffers.
Data from the last three general elections shows that the strategy was an electoral success as candidates with criminal cases were three times more likely to win than a “clean” candidate.
The root of the problem lies in the country’s poor governance capacity. On the one hand, India has excessive procedures that allow the bureaucracy to insert itself in the ordinary life of people; on the other hand, it appears woefully understaffed to perform its most crucial functions.
The density of allopathic doctors, nurses and midwives is 11.9% per 10,000 residents in India (2014), at half of the benchmark set by the World Health Organization (WHO). Furthermore, the density is ten times larger in urban areas than villages. Despite internal security concerns—from Maoist violence to religious extremism and organized crime—there is a 30% shortfall in personnel of the Intelligence Bureau.
India has the lowest number of police officers per capita—122.5 per 100,000 people—of any G20 member state, and the vacancy rate stands at 25%. Vacancy rates are 37% for high courts and 25% for local courts.
This scarcity of state capacity is the reason for the public preferring ‘strongmen’ who can employ the required pulls and triggers to get things done—someone who can enforce contracts, deal with the police when they get into trouble, handle the government babus while procuring a licence or help get admission to a government hospital for treatment. Sometimes these politicians align on communal lines as well, promising to serve the interests of a caste or religious community. Criminality, far from deterring voters, encourages them because it signals that the candidate is capable of fulfilling his promises and securing the interests of the constituency.
Fast-track courts are necessary because politicians are able to delay the judicial process and serve for decades before prosecution. But it is obvious that this will do little to break down the symbiotic relationship between politicians and criminals on the one hand, and the dependence of voters on strongmen on the other. Prosecuted politicians can field their relatives in the contest, thereby retaining power within the family.
The reform needs to change the incentives for both politicians and voters. First, bringing greater transparency in campaign financing is going to make it less attractive for political parties to involve gangsters. Thus, either the Election Commission of India (ECI) should have the power to audit the financial accounts of political parties, or political parties’ finances should be brought under the right to information (RTI) law. Second, broader governance will have to improve for voters to reduce the reliance on criminal politicians. That requires a rationalization of bureaucratic procedures and an increase in state capacity to deliver essential public goods like security of life and contracts, and access to public utilities. Standing alone, fast-track courts for politicians will be ineffective in cleansing Indian politics.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.