India Becoming a Failed State – Mohan Guruswamy


Mohan Guruswamy is a senior Indian economist who has worked in the 1998 Vajpayee Government under
Finance Minister Yashwant Sinha. He regularly writes in the top newspapers of India on issues of India. He
belongs to Hyderabad, his daughter Menaka Guruswamy is a lawyer at Supreme Court of India. He delivered a
lecture “India- A Failed State?” at Vidyaranya School, Hyderabad organised by Manthan Foundation to a jam
packed audience, followed by a short Q and A session on 23 Nov 2018.

The talk was dry and academic. Using slides, he talked about various problems plaguing India. He travels a lot
especially to China from a long period of time and has seen great changes in that country and discusses how India is lagging behind it in various sectors. Judiciary is in a big mess, where 3.3 crore cases are pending in the Indian Courts. Talking about abysmal delays in legal cases, he cited his pending 20 year old defamation case filed against someone who accused him of not possessing a Harvard degree.

He talked about Government failing in many of its promises, also how he could not find any bullock carts outside
Delhi and Nizamabad, which are replaced by tractors. Government is not providing Primary Health Centers and
instead giving insurance cards. He questioned whether anyone can file an FIR easily today.

Kings like Ashoka, Babur, Harshavardhana never came south, India is the biggest state created after 1947 and
necessarily needs bigger resources & administration to properly govern it. He discussed various governing
systems, India being an extractive state. He elaborated on levels of officers during the British period, mostly on the Indian Civil Services (ICS) who enjoyed great perks. After Independence Nehru disliked the ICS and wanted to disband it, where as Patel wanted it to stay. As land was the main source of money, administration mainly dealt with land records, collection of taxes. The collection of tax was enforceable. This modern extractive system started after 1857 in India, where there were 400 highest officers called Collectors and District Magistrates. The second rung were about 2000 officers mostly Indians, whose number went to 4000 max.

Politics decides what kind of system we can have. Bureaucracy is the main administrative force in India. It enjoys
a lot of perks and is being paid a lot. Governments come and go, but these officers work till they retire. Latest figures show about 1.75 Lakh crore per financial year is paid as salaries to Central Government employees which is about 10.50% of overall expenditure. It has been constantly increasing year after year, where it was 1 Lakh crore in 2011/12 financial year. There are very less persons working in the Government per lakh people compared to the USA Government. We are paying a lot and getting too less service. Another side of the coin is these IAS officers get transferred regularly, where an IAS is moved out of his posting on an average of 7 months. Long time ago a ‘Board of Commissioners’ regulated the transfer of such officers but was removed later.

Regarding control on various things by the Indian Government, Mohan brings example of latest techno gadgets
‘Drones’ being allowed to limited persons only by following lots of rules, where as in China it is allowed for use to
public at large, by which this business raises $18 Billion revenue each year.

Non collection of taxes due to black money is a big problem of India. About $63 Billion was sent outside the
country by Indians by illegal methods. About 55% Indians still fall under poor category. A big chunk of foreign remittance comes from Gulf workers which helps Indian economy. India’s GDP in 2016 was $2.30 Trillion, still we dont have money to spend.

According to Mohan, ideal governance is highly decentralised local governance or district governance, where he
compared the Indian system with the USA system where the local Government takes all important decisions for
its region.

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