[The author has listed three major pillars of Indian "democracy" and
delved, in very brief though, into their current state of health, and the
crisis of credibility that has arisen.
That gives an indication of the grave threat we're right now faced with.]

http://www.livemint.com/Opinion/vvPejHxB52AVzqQBRLoIWL/Indias-elite-institutions-are-facing-a-credibility-crisis.html

India’s elite institutions are facing a credibility crisis
The events of the last 12 months suggest that we should no longer take the
health of India’s apex institutions—Election Commission, RBI, Supreme
Court—for granted

Last Published: Tue, Feb 20 2018. 04 43 AM IST

Milan Vaishnav

In October, the Election Commission broke from convention by announcing
dates for elections in Himachal Pradesh while staying mum on Gujarat.
Photo: Mint
In October, the Election Commission broke from convention by announcing
dates for elections in Himachal Pradesh while staying mum on Gujarat.
Photo: Mint
The realities of India’s institutions are captured most evocatively by Lant
Pritchett’s notion of a “flailing” state. Pritchett’s term refers to the
fact that India’s public institutions have a Jekyll and Hyde quality to
them: an exclusive set of elite agencies that are high-functioning and a
patchwork of lower-level institutions that are not. As Pritchett wrote:
“the head, that is the elite institutions at the national (and in some
states) level remain sound and functional but this head is no longer
reliably connected via nerves and sinews to its own limbs.”

If one were to ask a reasonably well-informed Indian to name which of the
country’s apex institutions—the proverbial “head”—they held in high esteem,
three would invariably appear near the top of the heap: the Election
Commission (EC), the Reserve Bank of India (RBI), and the Supreme Court.
Indeed, these federal institutions are not only well regarded by many
Indians, but are also considered by many developing democracies as models
to be emulated.

Against this backdrop, one cannot help but reflect on recent events and
wonder whether India’s elite institutions are as healthy as we had once
thought. In the last 12 months, each of the aforementioned institutions has
experienced a crisis of credibility. These events—and the systemic
infirmities they point to—suggest that we should no longer take the health
of these apex institutions for granted.

Start with EC, which is one of the world’s most respected elections
agencies. It has historically benefitted from a robust constitutional
mandate, which granted the body wide powers and significant independence
from the executive. Whereas some developed democracies struggle to
implement even rudimentary improvements to their electoral machinery, the
EC routinely executes logistically complex elections for millions of voters
while relying exclusively on electronic voting machines. But within the
past one year, the EC’s judgement has been called into question on several
occasions. Consider two examples.

In October, the EC broke from convention by announcing dates for elections
in Himachal Pradesh while staying mum on Gujarat, despite the fact that
these two states have followed nearly identical electoral calendars since
1998 (with the exception of 2002, when the assembly polls in Gujarat were
delayed on account of riots). Typically, the EC holds elections together in
states where the terms of the incumbent governments coincide. The chief
election commissioner (CEC) A.K. Joti’s stated excuse for the delay was a
desire not to disrupt flood relief work underway in the state. Several
former CECs, men not eager to speak against their former agency, swiftly
criticized the move. Former CEC T.S. Krishnamurthy called the delay an
“avoidable controversy”. The Model Conduct of Code, which prohibits the
government from announcing new public schemes on the eve of elections,
“does not stand in the way of any emergency relief work”, he reasoned.
Former CEC S.Y. Quraishi was similarly puzzled, stating that the EC’s delay
raised “serious questions”. The reason for the strong reaction had to do
with the perception that the EC was giving the Bharatiya Janata Party (BJP)
government in Gandhinagar an advantage by ceding it more time to announce
populist schemes designed to woo voters, which is precisely what transpired.

A second questionable act was the EC’s about-face on the Narendra Modi
government’s creation of a new political funding vehicle known as
“electoral bonds”. These bonds create a mechanism for private actors to
fund political parties through the banking system rather than cash (a good
thing), but without the actor or the political party having to disclose a
single rupee (a very bad thing). The EC, which has been agitating for
greater transparency in political finance for decades, told a parliamentary
panel in May 2017 that the scheme was a “retrograde step” because
transparency would be “compromised”. Former CEC Syed Nasim Ahmad Zaidi
demanded that the Indian people “have a right to know who has contributed
to political parties”. Yet, Joti proclaimed in mid-January that the scheme
was a “step in the right direction”. This was a disturbing flip-flop absent
any change in the underlying material facts.

Next, we come to RBI, an agency with a respected track record on monetary
policy, banking and finance. While the RBI has often tussled with the
executive when it comes to the central bank’s independence, it has
maintained high standards of competence and professionalism. Unfortunately,
the bank’s credibility has taken a hit in the wake of the Modi government’s
demonetisation exercise. The ruling party has maintained that notebandi was
a call taken by RBI, although the facts suggest an alternative narrative.
On 7 November 2016, the government advised the RBI Central Board that it
ought to consider withdrawing Rs500 and Rs1,000 notes to mitigate the
triple threat of counterfeiting, terror funding and black money. The very
next day, RBI accepted the advice and that same evening Modi went on
national television to announce the move.

So, either the RBI was used by the government or it genuinely backed the
half-baked measure. Either way, the institution’s stature stood
diminished—a position further supported by the foibles associated with the
policy’s sloppy implementation. To make matters worse, RBI then
prevaricated when it came to informing the public how much old currency had
come back into the system post 8 November. It was finally forced to
disclose in its August 2017 annual report that 99% of the notes that had
ceased to be legal tender wound up in Indian banks—an embarrassment to the
government. While it is true that the new Monetary Policy Committee (MPC)
has held the line on interest rates—much to the consternation of the
executive—one cannot help but wonder whether institutional lines were
crossed.

The third example of an elite institution grappling with credibility issues
is the Supreme Court, whose internal fissures have played out in
spectacularly public fashion. The Supreme Court has historically enjoyed
widespread popular support, especially when compared to the highly uneven
lower judiciary. Over time, however, a number of structural issues
affecting its operations have gone unaddressed. One of these is the
accumulation of power in the hands of the Chief Justice of India (CJI). The
CJI is the “master of the rolls”, and therefore exercises considerable
discretion both in setting up benches and in deciding what cases get heard.
In an unprecedented January press conference, four Supreme Court justices
accused CJI Dipak Misra of selectively setting up benches in order to shape
the outcomes of particular cases pending before the court.

One notable example involves the case of the Prasad Educational Trust, a
matter which the CJI had been overseeing. According to the Central Bureau
of Investigation (CBI), the trust had retained a retired Odisha high court
judge to “fix” the outcome of the Supreme Court’s decision. When an NGO
implored the apex court to set up a special investigation team (SIT) to
investigate the matter, Justice J. Chelameswar ordered the establishment of
a five-judge Constitution Bench to consider its plea. The CJI quickly
overruled his colleague, listing the matter before a bench of relatively
junior justices on which he also figured. Misra took this decision despite
the fact that he had been personally involved in the Prasad case—the very
one that required an independent investigation into its handling.

Then of course there is the enigmatic subject of Justice B.H. Loya, a judge
who presided over a case in a special CBI court in which BJP president Amit
Shah stood accused of murder. After Loya’s unexpected death, the court
cleared Shah of all wrongdoing, prompting many to speculate that Loya
himself was murdered. Given the sensitive nature of the case, the Supreme
Court was compelled to take it up, but Misra assigned it to a junior bench.
Only after Misra’s colleagues failed to persuade him to constitute a more
senior bench to hear the potentially explosive case did they decide to hold
their controversial press conference.

Sceptics might respond to these examples by claiming they are aberrations
linked to individual personalities, rather than hallmarks of institutional
malaise. Such a reaction blinds us to the multiple systemic challenges
India’s core federal institutions face. First, across the board, Indian
institutions continually struggle with managing human capital, as evidenced
by the unending morass concerning judicial appointments. Second, exogenous
actions, like the passage of the Right to Information Act, have compelled
greater accountability to the public. Yet the quality of external
accountability is in doubt, as evidenced by how all three institutions have
struggled to balance the demands of public justification with the
temptation to hold on to discretion. Third, internal accountability
mechanisms have largely foundered. In nearly all Indian institutions, power
remains far too centralized in the hands of the chief. Fourth, political
interference remains an ever-present obstacle. Much of this interference
comes down to subverting behavioural norms rather than actual violations of
the law. As US President Donald Trump has shown us, the grey area in
between offers ample room to manoeuvre.

The meta-lesson from the trials and tribulations of India’s elite
institutions is the stark divergence between the rule of law in practice
and the rule of law on paper. This should concern Indians, but also foreign
investors and governments seeking to do business with India. India’s
democracy is its most important calling card, but its governing apparatus
has failed to keep pace. For certain public functions, there is scope for
institutional regeneration from below and state-level experimentation.
Unfortunately, these remedies do not apply to India’s core federal
institutions. Either government must tackle their challenges head on or
risk facilitating greater institutional decay.

Milan Vaishnav is senior fellow and director of the South Asia Program at
the Carnegie Endowment for International Peace, and a co-editor of
Rethinking Public Institutions In India (Oxford University Press, 2017).

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