Wednesday, April 05, 2006

An argument for decentralization

I firmly believe that one of the reasons India continues to under perform is the undesirable concentration of power.

First, this socialist practice of letting few wise men decide what is good for each individual is most pernicious.

Few mandarins however clever can not decide the optimum path by planning, ultimately economics is a dynamic territory and optimum path can only be decided by actions of all the participants.
More often than not however, such decisions distort the market creating artificial demand and supply which is not sustainable at all.

The other aspect is that it is impossible for a person sitting in air conditioned office in Delhi to micro manage decisions of a villager in Amethi, much less a farmer in TamilNadu or North East.

Therefore the power should be gradually transferred from Delhi to States.

At present States are nothing more than puppets of Central government, this has to change. States should have a larger share of political power.

However India remains a union of states, not a federation of states. This means states have no independent existence; their existence is subject to existence of India. This also means that first someone is Indian and then Bengali, Tamil, Marathi, or Bihari.

This also means that any Indian is free to travel and live anywhere in India (and that includes J&K).*

But this argument can be expanded further. Even Indian states are big entity.

UP by population constitutes fifth largest nation. To resolve this power should be devalued further. For me ideal situation will be maximum power to individual, then local community and so forth. Central government should be dealing with few subjects (Defense, Monetary Policy throw something more).

The precondition to this is that Indian citizen should be responsible to use the power. But if Indians can not be responsible for themselves and their country, we may as well call British back.

*This is meant for those Mumbai dwellers, who keep cribbing.

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