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Why India is not a prosperous first world country like Australia, and how to get there.

Australia is the world’s second most developed country, and one of the richest countries on a per-capita basis. It is one of the world’s most livable countries, and ranks highest on all measures of livability, including where-to-be-born, happiness, liberty, and material prosperity. Consequently, Australia annually draws hundreds of thousands of immigrants from India and all over the world. Indians make up the largest immigrant group in the country. Australia is the dream destination of millions all over the world. From the poorest of the poor to the richest of the rich, people from all over the world want to make Australia their home. The desire for a successful happy life in Australia with a suburban house, lawn, and high-paying job is called “The Australian Dream”.

But what is the Indian dream? Is there such a thing, or is it just to migrate to Western countries and the East (Middle East and now Singapore, Hong Kong, and even China); where millions of Indians have already fled to as economic refugees away from their homes and families? Those who leave are all skilled workers, because it is only the skilled that tend to get accepted in these countries. Many of these are our best and brightest; whose exodus is a net loss for India as a whole.

They are leaving because India’s economy simply cannot create enough well-paying jobs. Over twelve million young people enter the workforce every year, but the net jobs created number in the hundreds of thousands. This does not bode well for India’s future. With tens of millions of unemployed youth, this is bound to result in a severe backlash in the form of crime, terrorism, religious extremism, caste extremism, and widespread civil unrest. India is already a humanitarian disaster, with living standards among the lowest in the world. If Africa were a country, it would be on per capita basis richer than India. The whole country is a mess, with most Indians living in conditions little better than insects, and the poor 90% basically serving the 10% upper middle-class and rich elite as menial servants.

If you have been breathing and living in India all along, the pathetic condition of our roads, infrastructure, environment, lack of cleanliness, police, justice system, public hospitals, public schools, etc, should be obvious to you. India is a miserably poor country with the world’s largest amount of poor, highest rates of corruption, total failure of justice, sham democracy, terrible infrastructure, the highest rates of death from traffic accidents and pollution, the lowest levels of freedom (virtually no freedom based on any comparison), mass illiteracy and ignorance, world’s most polluted environment, and the country from which there an ongoing desperate exodus of anyone who can get out. India’s governance system is renowned as one of the worst in the world, with dysfunctional political leadership, inefficient bureaucracy, and a justice system that does not work. Corruption shows its ugly face at each step. Our cities and towns are a mess, and the buying power of the people is limited by their low levels of income.

India is a sorry miserable failure as a country. It is the world’s greatest tragic waste of human potential. As Lee Kuan Yew put it, India is “a land of unfulfilled greatness, with its potential lain fallow and under-used.” Indeed by all benchmarks, India is independent but definitely not free.

In a prior article, I have already delved into India’s myriad governance failures and their root causes. Before going ahead with this article, I would recommend that readers read that as a prelude. In this article, I shall only focus on the solutions to the issues I raised there. What is the way out of this sordid mess that India is in, and which Indians live in? How do we transform India from its present medieval feudal state into a modern country which is among the world’s most prosperous, advanced, and livable?

Look no further! The answers to these questions are well documented and contained in the manifesto of Swarna Bharat Party — India’s only liberal party, which I’m a proud member of. The manifesto has the remedies to fix all of India’s numerous governance issues. As per the manifesto, the governance system will need to be overhauled. The change must be systematic through a proper transition strategy. Please note that I will only be mentioning the main reforms here. For the complete set of reforms, you can refer the manifesto.

These solutions are as follows:

(1) Political reforms – In order to commence reforming India’s governance system and economy, we first need honest and competent politicians at the helm, since corruption and misgovernance in India starts from the top and then filters down to the bureaucracy, police, etc. These politicians should be men and women of integrity, and well versed in economic literacy, the role of government, classical liberal philosophy, and the causes as well as solutions to India’s various governance issues. Without such people at the helm of affairs, no reform is possible.

But the question remains — How do we get there? All of the politicians Indian democracy tends to produce are third-rate, mediocre, and hopelessly corrupt. They enter politics just to make money through graft, cronyism, and loot of public exchequer. In such a scenario, how do we ensure that India becomes a meritocracy, where only the honest and competent enter politics, while the corrupt and mediocre are weeded out?

The solutions are simple. First let’s know the cause of political corruption. Those who come to power must spend vast amounts of money during elections, for which there is no possible reimbursement except through corruption. When these people become law-makers and ministers, they get access to the opportunities for corruption that India’s socialist system generates. The resulting corruption is inevitable.

Today, honest persons from the middle or poor classes cannot contest elections since they will lose their hard-earned savings if they lose the election. To get such people to contest elections, the electoral system needs to be reformed. We need to pay candidates something for each vote they get. A reimbursement of Rs 20 per valid vote, up to a maximum of Rs 70 lakhs per parliamentary constituency, will do the trick.

We will, of course, need complementary reforms. The security deposit will need to be increased to ensure that only serious candidates contest elections. Candidates will have to fully disclose their assets, criminal background, and accounts to the Election Commission for stringent auditing. MP and MLA salaries will need to be raised and tied to performance, while eliminating perks and pensions. Even then, corrupt candidates will probably still outspend honest candidates. But as good candidates start participating, voters will get improved choice, and finally the corrupt will stop contesting. The criminal cases against elected representatives and political candidates must also be fast-tracked and disposed of within one year in order to prevent criminals from contesting elections.

(2) Bureaucratic and local government reforms – After we have ensured honest and competent liberal politicians, we can now focus on reforms to India’s bureaucracy and local government. The IAS is completely corrupt, incompetent, and unaccountable. Local government is weak and lacking. These need to be fixed, as the bureaucracy is the governance machine which implements policies and local governments are what keeps our cities, towns, and villages well-managed. We need a top-notch high quality bureaucracy and high-quality local governments for India to be governed well.

We systematically shelter our bureaucrats from accountability. Officers know that regardless of the party that forms government, their services will be needed by ministers to undertake corrupt activities. They also know that the law protects them through Article 311 of the Constitution.

The solution is to eliminate tenured services such as the IAS and IPS and replace them with contractually appointed experts at senior levels of government. Hire-and-fire contracts for senior officials will ensure total alignment with performance. These contracts will let the government terminate services of those who are found to be corrupt or inefficient, without recourse to cumbersome disciplinary processes. This is a proven and working model in many countries. Additionally, the constitutional provision for All-India Services and special protections for public servants must also be repealed.

In order to establish rule of law and law and order, the police and judiciary will have to be reformed. The main reforms entailed for the police and judiciary will resemble that of the bureaucracy. Policemen at senior levels will be recruited from the open market (some specialists could be recruited globally), with contractual appointments linked with performance. These officials would be empowered to appoint other members of the force, with significant independence in operations, but with total accountability for results. Most judicial appointments will also have to be made contractual, with the remainder being elected at the state level. Failure to meet a set of targets should lead to termination of the employment contract.

After we have ensured that the majority of bureaucrats, police, and judges are honest, we can then institute checks-and-balances such as a Lokpal, independent CBI, etc. Harsh penalties, right to recall, transparency, rewards for whistle-blowers, and anti-corruption agencies would be ineffectual in the present system where all politicians, most bureaucrats, most police, and a large proportion of judges are corrupt. The implementation of systemic reforms should take care of 95% of the corruption, following which the remaining 5% can be targeted and punished individually.

Local governments in India are a mess and completely unaccountable to residents for results. Our cities in particular are governed by over-sized municipalities run by corrupt and inept IAS officers. In the towns and villages, the panchayats have been given very little power. This broken system of local governments needs to be replaced with a strong and independent tier of local governments, who will have the power to tax residents; hire CEOs on contractual basis to deliver high quality services and infrastructure; and fire them in case of poor performance or corruption. These local governments will be monitored by residents in order to ensure that there is no corruption.

The level of policy-making in India also leaves much left to be desired. Indian policy-making is mediocre, haphazard, whimsical, and ad-hoc. As such, there is not a single good policy one can find in India. All of the policies in India are bad, barring none. The quality of policy making needs to be improved with a modern world-class regulatory policy framework based on regulatory impact assessment, cost-benefit analyses that are independently assessed, strategic gaming, and understanding of public choice theory, classical liberal philosophy, and free-market economics.

(3) Economic reforms – Economic reforms are only half the story. Without a prior reform of India’s governance system (i.e., executive, bureaucracy, judiciary, police, etc), economic reforms cannot be well implemented and will provide little benefit to the country.

Assuming that the governance system has been reformed, we can now focus on economic reforms. This involves whole-scale liberalization of the economy in order to transform it from a Fabian Socialist mixed economy into a free-market capitalist economy, with low taxes, no restrictions on production and trade, no governmental debt, no fiscal deficits, sensible but minimal regulations, unilateral free trade, and complete freedom of investment. These reforms will enhance productivity and create opportunities for entrepreneurs and investors, thus creating a surplus of jobs. The reforms would also include free banking, which means that the control over the money supply would be handled by competing private banks in accordance with market dynamics, rather than by the Reserve Bank of India (RBI). In this free-market capitalist economy, the rupee would be backed by precious metals and the RBI would serve as an independent supervisor and regulator of financial institutions. All these measures combined will put a permanent end to inflation.

The environment and natural resources will need to be managed and harvested by the private sector, although there is a clear role for government regulation to clean the environment. People best protect what belongs to them. This also applies to natural resources. There is no reason why the government should directly manage natural resources and the environment. The worst instances of environmental abuse usually occur under direct government control. The preservation of the environment is facilitated by strong economic growth. The poorest (or rather, primitive) and wealthier countries tend to have a clean environment. Rich nations have better governance systems and can pay for high quality regulation of the environment. Development will be sustainable because market-based systems preserve the diversity of our flora and fauna.

The right to acquire, hold, use, and dispose of property needs to be reinstated as a fundamental right. As of now, property rights does not exist in India, as it was abolished by the Janata Party in the 1970s. Such lack of property rights discourages work and investment; and scares away foreigners who would otherwise invest in India. The word “socialist” must also be removed from the preamble, and all socialist interventions and laws will have to be revoked.

The government must further stop dabbling in business, and privatize all public sector undertakings, including Air India, Ashok Hotel, DRDO, etc. Instead of acting as a businessman and being involved in activities it has no business in, the government must restrict itself to its core functions of security; justice; external defense; foreign policy; development of India’s human capital; and facilitating the creation of high-quality public infrastructure. The constitution must be amended to specifically limit the role of the government to these functions. Refer my article This is how a country should be run for detailed info on the proper role of the government.

(4) Development of India’s human capital – In order for our people to get high-paying jobs and for India to transition into a high-income economy, our people will need to be enormously productive and this will require them to be well-educated and highly-skilled. As such, the government has a role in developing the human capital by directly providing social insurance as well as ensuring equality of opportunity for the poor. These are not possible in India’s current run-down and broken governance system. Only an honest and competent governance system has the capacity to deliver these functions. Without governance reforms, these functions will degenerate into lucrative rackets which only serve to enrich corrupt politicians, bureaucrats, and crony businessmen.

After the political system and bureaucracy has been reformed and made accountable for performance, we can then focus on the development of India’s human capital. This entails providing access to high quality school education and vocational skills training for the poor (through privatization of the entire education system, privatization of vocational training institutes, targeted school vouchers for the poor, and interest-free loans to the poor for higher education), health cover for the poor, and the total elimination of extreme poverty through negative income tax.

National prosperity is not exactly rocket science. The various factors which result in a country becoming rich and prosperous, basically boils down to having a highly skilled and well-educated workforce, efficient and non-corrupt governance institutions that provide public goods, independent non-corrupt judiciary, impartial world-class legal system, strict rule of law, secure property rights, low taxes, sound money, free markets, free trade, and limited government. All of these factors combined generate an unprecedented amount of wealth and makes labor enormously productive, leading to high incomes and high living standards.

If Swarna Bharat Party’s manifesto were to be implemented in India, poverty would be ERADICATED within THREE YEARS, and living standards would eventually advance to the level of the most developed Western countries such as Australia, Canada, Switzerland, and United States, in over a generation. The manifesto contains world’s best policies, many of which are better than those currently implemented in the most advanced Western nations.

This is why I support Swarna Bharat Party, and recommend all Indians to join, support, and if possible, step forward to become the leaders that will lead India to prosperity and freedom. Our party will transform India into the world’s richest and best-governed country. Nothing less will do! We are looking for 1500 freedom-loving Indians who would be willing to contest Lok Sabha elections, and help form a classical liberal government at the Centre. I can assure you that without Swarna Bharat Party at the helm of affairs, India will be forever doomed to remain a perpetual basket-case — the world’s filthiest gutter where nobody is free, human life is cheap, justice and rule of law is absent, and the people are mostly wretched and poor. I doubt that this is a country you would be proud of, and wish to hand over to your children.

2 COMMENTS

  1. Thank you for telling that my country Australia is the 2nd most developed nation when that is far away from the truth. It is a top 20 nation though most developed region and countries via economic and human development would be ones from the Nordic Region of Norway, Finland, Sweden, Denmark and Iceland followed most likely by Netherlands and Switzerland

    • The United Nations Human Development Index disagrees. Australia is ranked No. 2 in overall development. At one point in the past century, Australia used to be the richest country in the world on a per capita basis. The most developed country would be Monaco, which is basically filled with millionaires and billionaires and not included in the index.

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