Events & Issues

New Delhi, 14 November 2018

Institutional Independence

BEING STEADILY ERODED?

By Dhurjati Mukherjee

Recent developments have put a big question mark on whether the government is seriously interested in retaining the institutional institutions of organisations such as the Reserve Bank of India (RBI), the Central Bureau of Investigation (CBI). The autonomy of these institutions is vital for a healthy democratic order. Not just these institutions, but autonomy of institutes of higher learning and universities too has been steadily eroded.

There is need to understand the recent controversy which has been generated over the RBI’s independence with the Government threatening to invoke Section 7(1) of the RBI Act. One may mention here that talk of invoking the Section first arose in August when the Government was trying to nudge the RBI to relax debt default recognition norms in the case of troubled power plants run by the Adanis, the Essar group and the Tatas. At that time there was serious disagreement between the Government and the Central bank over the move to relax lending restrictions on 11 State-owned banks that had run a huge stack of bad loans that severely constrained their capital requirements.

Meanwhile, the Government’s move to create a separate regulator for the payments system was seen by the RBI as a direct attempt to curtail its legitimate regulating domain and standing. In fact, the reported rift on the prompt corrective action (PCA) has been the most contentious.  

Recently, the reported rumours of a threat by RBI Governor Urijit Patel to resign from the top post as also the strongly-worded speech of the Deputy Governor Viral Acharya, alluding to Government’s interference added to the controversy. Acharya wanted to draw an analogy between the circumstances that have engulfed the RBI and the situation that erupted in Argentina way back in January 2010. These developments come in the wake of defining the Central bank’s autonomy “within the framework of the RBI Act” as opposed to unbridled autonomy that the Government has the power, under law, to interfere should it feel necessary.

However, pushed to crisis situation, the Union Finance Ministry issued a statement that stated: “Autonomy for the Central bank, within the framework of the RBI Act, is an essential and accepted governance requirement”. It added that only through consultations, the Government places its assessment on issues and suggests possible solutions. However, the statement cannot be taken at face value as the Government has not only curbed the powers of the Central bank but has also been interfering in its functioning.

The RBI controversy has been handled by an expert administrator and lawyer Arun Jaitley, but that of CBI has reached more serious proportions. It is surprising that people occupying the two top positions of the CBI were publicly voicing charges and counter charges against each other until they were directed to proceed on leave. But even after that when a junior official was given charge as interim director, several baseless transfers were made. In fact, the developments in the organisation reduced it to a laughing stock in the public eye.

The Special Director of the CBI, who is very close to the highest political bigwigs, may be responsible for the crisis situation in the organisation. How can one expect that the CBI would henceforth carry out investigations in a neutral and judicious manner in the coming years? While both the organisations have lost their credibility, the public too is left wondering about the state of governance in the country, which has been steadily declining. These organisations, which have over the years been known for their autonomy, have according to analysts, sadly lost their position and independence.

These developments are undoubtedly a very disturbing trend and clearly reveal loss of values. Not just these two top organisations but even institutes of higher learning have witnessed interference by the Government on various matters, thereby reducing the position and place of Vice Chancellors and Directors, who are well known academic scholars. During the last few years, the Vice Chancellors have lost their dignity and appointments to the coveted post, which are mostly under political considerations in most States.

Meanwhile, several universities are modifying their service rules to prevent teachers from criticising the Government and even barring their families from taking part in ‘subversive’ activities, nudged by a circular of the University Grants Commission (UGC). Most academicians have condemned this directive, specially involving their families, who are not part of the university and may have different thinking in various spheres. Already the Central University of Gujarat has adopted the new rules, pending a nod from its court, while the Jawaharlal Nehru University has passed these at its Academic Council.   

Academicians have also pointed out that financial and administrative autonomy of private universities is no defence against the minions of a “bullying State”. But though private universities are known for encouraging freedom of speech, it is feared that this may not last long as the Government machinery is trying to subtly curb their autonomy and what should be ideal functioning. 

The centralisation that is manifest in the functioning of the Government and with it the institutions that are working with it, obviously calls for some serious rethinking at this juncture. This trend is an offshoot of the political process where centralisation of power and authority is very much manifest. Obviously, this indicates a lack of plurality as a result of which governance also suffers. Thus, it is only through autonomy that institutions can carry out their work without fear and favour, like that of the higher judiciary.

One may mention here that former President Pranab Mukherjee recently emphasised the plurality of India at a time when politics of polarisation is threatening the democratic set-up of the country. “Diversity need not affect our limited action. Let us celebrate diversity, let us enjoy it, let us nurse and nourish it”, he observed at a meeting in Kolkata. But centralisation cannot ensure better governance and leaders who boast of democracy and the power of a strong civil society have to change their style of functioning.

Autonomy comes from true decentralisation, which Mahatma Gandhi had emphasised again and again but our leaders are not willing to share power with the people. It is difficult to change the system, but one has to be optimistic and make use of the intrinsic power of civil society to force the administrative machinery to involve them in the decision-making process through transparency. More importantly, the Government’s much-touted commitment of “Minimum Government but Maximum Governance” mustn’t be a mere slogan, even at this late a stage.---INFA

(Copyright, India News & Feature Alliance)