The first point on my wish list for the new government is that it establishes a proactive institution to entrap corrupt government officials. Anti-corruption institutions like the police and CVC initiate action only when a complaint is made. Corruption is safe as long as it is consensual. Kautilya had suggested that the king must establish a spy system to proactively trap corrupt government officials. Spies were expected to assess the revenue yielded by every region and match it with the revenue collected and act against those officials who were collecting less. Kautilya also suggested another second tier spy system to overlook the first one. It is necessary to establish such a system in the country.
My second wish is that the terms of reference of the Seventh Pay Commission should be restricted to improvement of accountability and efficiency. The government today is of the servants, by the servants, for the servants. These overpaid and corrupt ‘servants’ are bleeding the country to death. I had seen a World Bank report some years ago, which indicated that the salaries of government employees in India were the highest in the world.
The ratio of the average salary of a government servant to per capita GDP is in the range of 1 to 2 for most countries. For India, it was 4.8 at that time and doubtless, it would have increased more since then. Therefore, the Pay Commission should not consider any increases in pay for government servants until the ratio comes down to the international average.
My third wish is to establish a collegium of non-government persons to appoint anti-corruption watchdogs. My suggestion is that the collegium comprise the country’s most venerable heads of religion, national honour recipients, the largest trade union, certain statutory organisations like the Bar Council of India, the Institute of Chartered Accountants and so on. All these persons can be identified transparently without any possibility of manipulation by the government.
The fourth on my wish list is that the economy be segregated into ‘growth’ and ‘employment’ sectors. Let the government set a target wage rate for our people. Then let the economists work out the sectors in which the required number of jobs could be created with least cost. Let the government impose heavy taxes on big companies’ automated production in the employment sector. This will make big industries uneconomic and jobs will be created for all our people. Most importantly, the government will collect taxes in the process, unlike the huge expenditures being incurred in creating jobs under MNREGA at present.
My fifth wish is that the goods and services tax must be implemented with a fundamental modification. All goods sold in the economy should be separated in three categories: pro-poor, neutral and pro-rich.
Let there be three rates of GST—nil or minimal for pro-poor goods, average for neutral goods and very high rates for pro-rich goods. This will help control inequality and provide social justice to our brothers and sisters.
My sixth wish is that all welfare programmes be wholly dismantled. This would include health, education, subsidised foodgrain to BPL households, diesel and fertiliser subsidies, MNREGA, Indira Awaas Yojana, and the like. Let this entire amount be consolidated and paid out to all the families in the country in cash. My calculation shows that each family will get about Rs 2,000 per month.
The great savings will be that the massive amounts being paid to government servants ostensibly for reaching relief to the poor will be saved. Let this amount be paid to the rich as well, so that there is no dispute regarding classification.
My seventh wish is that a massive programme of investment in infrastructure should be undertaken. Private participation must be invited. However, the government must step in directly wherever private interest falters.
My eighth and, perhaps, the most important wish is that the environment be given precedence over economic growth.Every project must make an assessment of the environmental impact of its activities. The environmental impact should be monetised.
It must be mandatory for all projects to obtain clearance from the environment ministry. These clearances must be given after making a detailed evaluation of the net benefits to the economy and taking into account the damages imposed on the environment and the losses it thereby accrues.
The author was formerly Professor of Economics at IIM Bengaluru