12 february 2018 http://www.openthemagazine.com 21
from my own translation, but from Kisari mohan Ganguli’s.
that explains the slightly archaic english. there is a simi-
lar incident in the Valmiki Ramayana too, where Bharata is
asked such questions by Rama, who has left on his exile. the
king’s responsibility in that day and age is the Government’s
responsibility today and that overall goal of governance
hasn’t changed. Narada or Rama may not have used the ex-
pressions ‘inclusive growth’ or ‘sabka saath, sabka Vikas’,
but the developmental goal of governance was precisely that.
so too in the present. It will be no different in the future.
every once in a while, in India or abroad, someone will
wake up and discover that Gross Domestic product (GDp)
is an imperfect measure. Why is the Government equat-
ing success of reforms with GDp growth? What does GDp
mean for citizens? It is only a number. Does it capture well-
being and happiness? Does it cap-
ture environmental costs? Does
it include contributions made
by housewives or house-hus-
bands? If an infant is born, every-
thing else remaining the same,
GDp per head declines. But if a
goat is born, everything else re-
maining the same, it increas-
es. there must be something
wrong with this strange mea-
sure. Accordingly, critiques will
be written in the form of news-
paper articles, academic papers
and even books. the father of
modern national income mea-
surement is simon Kuznets, who
won the Nobel memorial prize
in economic sciences in 1971.
Numbers like GDp and GDp
growth emanate from national
income accounts. In the Indian
case, this work is undertaken by
the central statistics office. Kuznets wasn’t the first per-
son to try and measure national income. However, he is
the one who made the work systematic. Hence, he has ev-
ery right to be called the father of national income measure-
ment. After this exercise had been done for the us econo-
my, Kuznets wrote a report for the us senate. the year was
1938 and every criticism now voiced against GDp was antic-
ipated in that report. It is not that economists don’t know
about the problems with GDp as a measure. However, it is
the best aggregate measure that exists, and I emphasise the
use of the word ‘aggregate’. therefore, GDp is supplemented
by other indicators and measures, like the uNDp’s Human
Development Index (HDI). GDp, which measures income
after a fashion, is a means to an end, not the end in itself. the
end is a better quality of life for every citizen of the coun-
try, of the kind Narada and Rama had in mind. the end is a
better environment for entrepreneurship to flourish. But it
is also true that these ends tend to be correlated with GDp.
tracking its growth also ensures the Government has the
resources needed for it to do whatever we expect it to.
If we are going to use the expression ‘reforms’, presum-
ably we are not happy with the way the present formation
is delivering on that objective. several years ago, in the for-
mer soviet union under mikhail Gorbachev, terms like ‘per-
estroika’ and ‘glasnost’ were in currency. perestroika means
reconstruction and was used for reconstruction of the po-
litical and economic system. Glasnost means openness and
was used for the rights of soviet citizens. I have brought
these in because I find a lot of facile generalisations about
reforms. If chapter V-B of the Industrial Disputes Act has
been repealed, there have been ‘big bang’ reforms. If not, re-
forms have been a damp squib.
this is a blinkered view of re-
forms; reforms are much more
than that. If government has be-
come ‘smaller’, there have been
‘big bang’ reforms. If not, re-
forms have failed. Government
becoming smaller—what does
that mean? there are villages
in India where, seven decades
after Independence, govern-
ment hasn’t existed. If that vil-
lage now has electricity, courte-
sy the Government, it may have
become ‘bigger’, but in my defi-
nition, that constitutes reforms.
expressions like perestroika and
glasnost, though Russian in or-
igin, have that broader nuance.
the three organs of government,
as laid down in the constitution,
are the executive, the legislature
and the judiciary. Reforms are
about examining these and their functioning. Indeed, re-
forms are also about questioning the constitution. Reforms
are about generating a consensus on what we expect the
Government to do and what we don’t. Reforms are about
deciding which level of government (union, state, local)
should perform a specific task. Reforms are about agreeing
on how that level of government generates resources to ac-
complish that task. perestroika was about structures of par-
ty and government, glasnost was about citizens. our re-
forms should also be about responsibilities of citizens, not
just their demands.
there is a very broad canvas. nBibek Debroy is chairman of the Prime Minister’s Economic
Advisory Council. This is the first of a fortnightly column on the
idea of reforms in governanceSaurabh Singh