Page 59 - Nuvama | IC Report 2023

INDIA: THE 5D ADVANTAGE

• The Election Commission of India is entrusted with the Himalayan task of holding fair and
free elections in the world’s largest democracy with more than 900 million registered voters.
The Economist Intelligence Unit attributes the bulk of uptick in India’s ranking in the Index from
53rd in 2020 to 46 in 2021 to quality of the country’s electoral processes.
• India’s independent judiciary is known to safeguard civil liberties and, at times, order course
correction to executive on matters of pressing national interest. The Supreme Court of India’s
ruling in favour of Vodafone (for alleged tax evasion in 2012) worked as a sentiment booster.
The government had slapped a demand of INR200 billion on Vodafone. The verdict in favour of
the company sent a strong signal to international investor community that Indian judiciary is Too much
independent of the executive. In other words, should the government and a business lock horns, authoritarian
Indian judiciary would hold a fair trial. In a notable development reinforcing its transparency, the planning over a
Supreme Court of India recently permitted a live webcast of the proceedings of important cases. sustained period
of time could lead
• Freedom of speech is a civil liberty enshrined in India’s constitution. The Indian press is free, and to unforeseen
citizens are allowed to voice opinions freely on social media or otherwise. Add to this the Right to and unpalatable
Information Act, 2005, which is a unique legislation that empowers citizens to obtain information consequences—
from government departments on matters of larger public interest. misallocation of capital,
loss of productivity,
Similarly, public interest litigations (PILs) empower citizens to take up matters of larger interest accumulation of debt,
in a court of law. That the first PIL was filed in 1979 and PILs to date have totalled close to a uneven development
million show the strong ballasts of freedom of speech in India. and, at times, even
More recently, the government was compelled to roll back Farm Bills following a wave of farmers’ political upheaval
protests. In its essence, the rollback shines light on civil liberties embedded in the institutional
framework that empower citizens to protest against the executive (Farm Bills).

Democracy and development: Friends, not foes

It has been long argued that authoritarian regimes facilitate economic development, whereas
democracies hinder it. The argument hinges on authoritarian regimes’ ability to allow the state to
mobilise national resources far more purposefully and effectively in promoting rapid industrialisation.
In contrast, policymaking in democracies is seen as wavering and rambling. To be sure, at one level, the
weight of evidence does tilt in the direction of authoritarian regimes when it comes to rapid economic
growth. The Asian Tigers of 1990s and subsequently China have been largely authoritarian regimes,
and their track records of economic growth have been superior to that of India’s so far. The issue calls
for a much closer look though.

At the outset, it can be argued that different growth trajectories of China, or East Asia, versus
India may not necessarily be the result of the nature of polity, but outcomes of their respective
development strategies. On more theoretical grounds, it can be argued that democracy and economic
development stand on the common foundation of liberty, which is not the case with authoritarian
regimes. In the long run, economic freedom promotes an open polity, and it is the open polity that
ultimately underwrites economic freedom. Open political and economic systems promote free flow of
information, specialisation, competition, innovation and entrepreneurship, which ultimately undergird
productivity and growth.

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