The Great Speeches of Modern India

by Rudrangshu Mukherjee

  As regards the sound finances of the panchayats and nagar-palikas, we propose entrusting this responsibility to the finance commissions envisaged in the constitutional amendment. Here again, some of the comments made by members opposite would appear to indicate that while they have glimpsed some of the parallel features between the Finance Commission established under Article 280 of the Constitution and the finance commissions proposed in the present amendment, they have not comprehended the essential differences between the two. Whereas the Finance Commission established under Article 280 affects the actual allocation of resources between the Centre and the states, the finance commissions referred to in this amendment would limit themselves to the principles on the basis of which allocation might be made between the states and the local bodies. The actual allocations will be made by the state governments in the light of state legislation on the subject and the principles recommended by the finance commissions.

  We at the Centre are undertaking an exercise to review nagarpalika and panchayat finances with a view to seeing what steps might be taken to augment the availability of financial resources for local self-government. We would hope, the state governments, both those run by our party and those run by the Opposition parties would undertake a similar exercise in self-enlightenment.

  The constitutional amendment entrusts to the comptroller and auditor-general the responsibility for causing the accounts of the local bodies to be prepared and audited in such manner as he deems fit. Members opposite appear to have jumped to the conclusion that this means dismantling the existing state machinery for the examination and auditing of local bodies’ accounts. In our view, unless the CAG in his wisdom deems otherwise, there would be no need to dismantle the existing state machinery, nor undertake any substantial augmentation of the staff in the CAG’s office. What the CAG is being asked, being mandated to do, is to examine existing procedures in different states for the preparation and audit of local bodies’ accounts and prescribe methods by which such accounts and auditing might be made stricter and less prone to abuse. There is no question of requiring the CAG to himself take over the direct responsibility for accounting and auditing. The state local fund auditing bodies would continue to exercise their functions but under the overall guidance and direction of the comptroller and auditor-general.

  I now turn to the dust being raised by the Opposition over the role of the Election Commission. Here again, it is a total misreading of the constitutional amendment to suggest that the existing machinery for the conduct of elections of local bodies would have to be dismantled. The Election Commissioner will conduct the elections through the state electoral officers and their staff. Also, as elections are going to be regular, and arbitrarily prolonged suspensions are to be outlawed, it would be essential to further strengthen the existing machinery. The important change we are effecting is not in centralizing the conduct of elections but in bringing the process of elections to the local bodies under the purview of the Election Commission.

  In recent months the burden of responsibility on the Election Commission has been considerably increased. Legislative amendments undertaken in respect of the Representation of the People Act and other legislations have greatly added to the workload of the commission. The responsibilities envisaged for them under the Panchayati Raj and the Nagarpalika Bills will further increase the Chief Election Commissioner’s responsibilities.

  Mr Chairman, Sir, we seek no confrontation on these Bills. In preparing these Bills we have drawn upon the experience of all Congress states as much as of non-Congress states. We have freely and repeatedly acknowledged our debt to Opposition governments like those in West Bengal and Andhra Pradesh and the earlier Janata government in Karnataka who have made innovative contributions to the improvement of Panchayati Raj in our country… Equally do we owe a debt of gratitude to the pioneering Congress stalwarts in Gujarat and Maharashtra who have the longest, unbroken and unblemished record of Panchayati Raj in the country. There are negative lessons, too, to be learnt, as we have freely and fully admitted, from inadequate or insufficient Panchayati Raj and Nagarpalika Administration in some non-Congress as well as in some Congress states. There is no partisan politics in this. Our only interest is the national interest—the interest of development, the interest of the poor, the interest of the weak. We admit also that the objectives we seek to achieve are objectives, which at various times in the past have been espoused by Opposition parties ranging all across the spectrum, from the Bharatiya Janata Party and its forebears to the two Communist parties and their forebears. We invite all the parties in the House to join hands with us in passing these Bills.

  The Bills are for the people. The Bills are for their welfare, their benefit. The Bills are to give power in the hands of the people. The Bills are to end the reign of power brokers. The Bills are to entrust responsibility to the grassroots. The Bills are to give representative administration. The Bills are to involve the people’s participation in planning and implementation in development and social justice. The Bills are designed to entrench democracy in the very foundations of our polity so that the superstructure of democracy in state capitals, and the national capital might be stable, sound, well-founded. The Bills represent the realization of Mahatma Gandhi’s vision. The Bills represent the fulfilment of Pandit Jawaharlal’s dreams. The Bills are the outgrowth of Indiraji’s endeavours. Sir, I invite the House to pass these Bills unanimously. Those who support these Bills will earn the people’s gratitude. Those who oppose these Bills will fail the people and live to rue their lapse.

  Mr Chairman, I commend to this House, the Constitution (Sixtyfourth Amendment) Bill, 1989 and the Constitution (Sixty-fifth Amendment) Bill, 1989.

  Thank you, Sir.

  Present economic situation (New Delhi, December 1991)

  MANMOHAN SINGH (1932–)

  P.V. Narasimha Rao inherited an economy in a crisis when he became Prime Minister in 1991 after the assassination of Rajiv Gandhi. India’s foreign exchange reserves were down to two weeks of imports and there was the imminent danger of defaulting on debt repayments. Rao appointed Manmohan Singh, who had previously been Finance Secretary and Governor of the Reserve Bank of India, as Finance Minister with the full freedom to carry out structural reforms to liberalize the economy. Singh began the process of dismantling the license-permit-quota raj and allowing the Indian economy to be in tune with global economic trends. Here, as a follow up to his first Budget inaugurating economic reforms he speaks of the new economic regime and the need for economic reforms. These reforms paved the way for the economic growth India enjoys today.

  Mr Deputy Speaker, I am very grateful to all the hon’ble members who have taken part in this debate. I was particularly struck by the note on which Shri Vajpayee ended his speech, that our country is faced with formidable challenges.

  Nobody has the monopoly of wisdom, of knowledge. We are faced with unprecedented perils if I may say so; and the task is something which no single individual, no single party can carry by itself. Therefore, there is a need, an urgent need to evolve a national consensus for dealing with these formidable challenges that our country faces. It is in pursuit of this, that in the very first week that our government came into power, the Prime Minister took the initiative of inviting all the hon’ble leaders of Opposition parties and I can say in all truth, that I presented to that august assembly as truthful a picture as I could; short of telling that I was going to devaluate the currency, I back all the facts of the economic life of the country as we found on the day our government came into office before the House, without saying who is responsible, without apportioning blame, we gave them an account of the situation in which our country was. If that situation was allowed to drift the way it was drifting, I can say in all truthfulness, you would have seen in this country a total breakdown of the economic system. It was not merely a foreign exchange crisis; it was a crisis of the total economic system of our country, of a country’s treasury which was nearly bankrupt, a country which
was not able to import even the most essential things of life, a country from which the non-resident Indians were taking money out at the rate of nearly 350 million dollars a week and a country which had reserves which were not equal to two weeks’ imports.

  In that situation, if we had allowed the situation to develop, you would have seen the magnitude of unemployment, the magnitude of the disruption of industrial production as well as of agricultural production, that has never been seen in this country. I do not, in any way, want to gloat over what has happened to the Soviet Union or what has happened to the countries of Eastern Europe. In many ways, it is my honest conviction that many of the political turmoils which have developed in these countries are routed in the malfunctioning of their economies. These malfunctionings were put under the carpet for some time. At one time, we had all thought that Yugoslavia was a workers’ paradise; workers also rule Yugoslavia. According to all the norms, it was a model economy that the civilized human beings ought to emulate.

  But, over a period of time, Yugoslavia developed a system where financial discipline weakened, where wages rose much faster than productivity, where the economy became totally isolated from the rest of the world; and then the seed of decay was sown. That led to the ultimate disintegration of Yugoslavia.

  I submit to you that the economic history of its disintegration will be traced back to economic mismanagement. I think the two oil price increases of the 1970s and the early 1980s saved the Soviet Union. But the problems which we are tackling today, have been there in the Soviet Union. Their inability to tackle them accumulated into a massive political crisis which has ultimately led to the disintegration of the old Soviet Union that we knew.

  I do not want to gloat. But I want to submit to this House that if we do not tackle the economic crisis effectively, I think, there is no iron law which says that this blessed Republic of ours is immune from the normal economic laws. There is, therefore, a great danger. So, I submit in all humility, without scoring debating points, that we do need a national consensus on all the major issues that our country is confronted with.

  I do not claim in my statement that we have found solutions to the problems of the country. All that I said was that we have bought some time, that we have restored a measure of international confidence. But let me tell you that this can be destroyed overnight also. Tomorrow, for example, if you do not control the budget deficit or if there is a lot of violence in the country, whether over communal issues or other issues, if there is a lot of industrial unrest, this confidence can disappear. History is full of cases. It takes years to build confidence. It takes days to destroy it. So, we are in a very fragile state of health of our country.

  I do not want to create an illusion that we have found the solution to these problems. We have begun the arduous journey. The first steps have been taken—some success in achieving a semblance of stability. But a long journey lies ahead to control fiscal deficit, to make our public sector much more vibrant, much more competitive. Let me say that in terms of our objectives, our commitment to growth with equity, our commitment to adjustment with equity or what I described in my speech as adjustment to the human phase, I think, is firm. That is irrevocable. That is the message that is contained in the letter of intent that I sent to the IMF that we will not do anything which would put disproportionate burden on those who are not able to bear them. Whether it is the organized working class or the unorganized working class, our government is fully committed to ensure social justice to see that the costs of adjustment to a more dynamic economy are not put on the weakest shoulders. That commitment is repeated in my letter of intent to the IMF. Once again, I reiterate that commitment.

  But let me say that you cannot achieve your objectives without hard sell. I think Mr George Fernandes yesterday said, ‘Are you not worried about agriculture? Are you not worried about food production? Are you not worried about unemployment?’ Some hon’ble members said, ‘Are you not worried about regional imbalances?’ We are very worried about these things. But you cannot find solutions to these problems if you do not start by correcting the fiscal and balance of payments mess that we were in in June 1991. It is only if you have a sound fiscal system, a central government, which is strong enough to have surpluses, can come to the help of a state like Bihar. I sympathize with the plight of Bihar. I think, Bihar certainly deserves a lot more attention from the country than it has. But what can a bankrupt treasury do for Bihar? Therefore, we must set our fiscal system in good shape so that the Central Government can go to the help of the weaker states of our Union.

  Mr Atal Bihari Vajpayee mentioned the state of the public sector, the way the public sector is managed, the way losses accumulate, the way corruption takes place. Now, that is not a public sector with which we can achieve the objectives that Mr Nirmal Kanti Chatterjee had in mind. That sort of public sector, let me say in all sincerity, is a drag.

  Therefore, all of us have an obligation and we are committed to supporting the public sector which is efficient. We must plug all sources of inefficiency. But to have this mantra that regardless of efficiency and social cause every public enterprise must be kept alive, I submit to you, is neither serving the cause of the public sector, nor is it serving the cause of the workers employed in those industries. Our government swears by working honestly to improve the working of the public sector. We will, for this, seek the help of the workers, the trade unions and all interested parties. But, I think you cannot solve the problems of the public sector by asking people to go on strike. I am not saying that by way of criticism. It is a right of trade unions and workers in a free society to go on strike. But that one day strike that took place, I tell you, has sent, I think, wrong signals all over the world that this country does not appreciate the value of discipline. Maybe it was our failure that we did not have time to develop an all-round consensus that there was no need for strikes. But strikes, lockouts and other events like communal violence are all barriers of progress and this country has to find ways and means to deal with these problems.

  Now, several hon’ble members raised points and one particular member said that we are heading for a third devaluation. Now, interested parties and those who do not want India’s balance of payment to be improved, have been spreading rumours from day one that this is a bankrupt country, this is only the beginning and you will see a lot more of devaluation and, therefore, they have discouraged non-residents from sending money here, etc. Now, I want to say and I have made it very clear in my letter of intent to the IMF also that we are committed to maintaining the present nominal exchange rate of the rupee, and that we have no intention to devalue further and I do not think that there is any need to do so because the rupee is becoming stronger and our foreign exchange reserves have improved. Therefore, this is a malicious propaganda that we are planning for another devaluation.