Imminent breakdown of social contract

y the time this issue of EducationWorld is in your
hands, the Union budget for fiscal 2006-07 will have been presented to Parliament and politicians, academics and pundits will be earnestly arguing its implications and merits. The indications are that it will be essentially a status quo budget, bereft of any significant additional revenue mobilisation effort. Which is as it should be because with the economy growing at 8 percent per year, a huge windfall in terms of greater tax revenues will accrue naturally to the Union and state governments.

Although much media attention is focused upon the issue of massive tax evasion which is a defining characteristic of the Indian economy, the reality is that all said and done and despite widespread poverty and want, the people of India do contribute a huge swell of income, excise, customs and sundry other taxes and cesses to the national exchequer every year. In fiscal 2005-06 the inflow into the central treasury by way of taxes was budgeted at a massive Rs.368,425 crore. This year it will be substantially greater.

The implicit social contract between citizens and the state is that in exchange for the payment of legislated taxes, government will provide numerous administrative and social services to enable the public to peacefully go about their business and tend and rear their families. In particular the primary obligation of government under the social contract is maintenance of law and order and providing justice to citizens. Unfortunately there is a growing volume of evidence indicating this implicit social contract between citizen and the state is on the verge of breakdown.

The acquittal on February 20 of all nine accused in Delhi’s Jessica Lall murder case is flagrant evidence of the breaking down of the vitally important law, order and justice machinery of the Indian state. That the state was unable to successfully prosecute the main (politically well-connected) accused in the case, who shot the victim at point blank range in full view of dozens of witnesses despite seven years of investigative effort, is conclusive proof of the rot which has seeped into its police, crime detection and justice delivery system. Now it is clear beyond reasonable doubt that within contemporary India’s justice system, the rich and powerful can get away with murder, while the poor and defenceless — as indicated by the recently unearthed case of an Assamese under-trial who was confined in jail for 56 years without being charged — crowd India’s courts and penal institutions.

The critically important law, order and justice system apart, there is other evidence suggesting that the social contract between citizens and state is on the verge of breakdown — the logical outcome of which is anarchy. Despite almost the entire tax receipts of government being consumed by way of official establishment expenses (‘revenue deficit’), all citizens suffer double taxation because of unchecked corruption within government. Moreover public education and medical services are grudging and grossly substandard.

In short minimal, malfunctioning infrastructure and services apart, there is very little that citizens receive for the numerous taxes that they pay into the national and state government exchequers. Little wonder that anarchic maoist and naxalite insurgencies are active in 173 of the country’s 603 districts.

Soft targets of the demolition derby

he Central government committee constituted under the chairmanship of former lieutenant governor of Delhi, Tejinder Khanna to recommend a considered methodology to unravel the Gordian knot of the national capital’s illegally constructed buildings and encroachments, has to tread very carefully. On the one hand, it will have to respect the Delhi high court’s order of February 19 directing the Municipal Corporation of Delhi (MCD) to demolish illegally constructed buildings. On the other it will have to recommend ways and means to protect the rights and interests of tens of thousands of bona fide purchasers of commercial and residential property who have been sold defective titles by contemporary India’s powerful builder-politician mafia.

As any forthright legal practitioner of minimal competence will readily admit, given post-independence socialist India’s plethora of ill-drafted, interventionist property legislation and indifferent maintenance of land records by state and local governments, acquisition of land and/ or property with a fully secure title is well nigh impossible. Indeed as the well-known Peruvian economist Hernando De Soto has forcefully argued, complex and opaque property laws and excessive paperwork deliberately mandated by venal bureaucracies, contribute heavily to the impoverishment of the overwhelming majority of the poor and socially disadvantaged, who are effectively prevented from selling or mortgaging landed property. Shockingly, in some states of the Indian Union the rural poor are prevented by law from selling or leasing their land except to farmers, thus artificially depressing rural property prices.

Against this backdrop of uninterrupted bureaucratic corruption and faulty land titles being the rule rather than exception, it was irresponsible of the Delhi high court to have ordered mass demolition of unauthorised buildings. By definition, all constructions/ buildings are long-gestation projects which should have been detected by municipal vigilance squads at the foundation stage. If they were not, the apex court should have ruled that MCD is estopped or vicariously liable for the calculated neglect of its employees. Hence in visiting its wrath upon citizens who purchased tainted property in good faith, the high court has chosen the wrong — and soft — target. Ironically it has chosen MCD goons guilty of the original sin of sanctioning construction on government land, as the sword arm of justice.

Quite clearly a distinction needs to be made between the builder-politician-bureaucracy mafia which has knowingly permitted unauthorised construction on government land and bona fide purchasers for value, of tainted property. If the public interest demands the demolition of falsely authorised property, government officials who aided and abetted illegal constructions for profit, should be compelled to compensate bona fide purchasers of falsely titled property.

The task of separating sheep from goats, and making the latter pay for their calculated sins of omission and neglect is the real challenge before the Tejinder Khanna Committee.