Privatization and misuse of politics has created controversy

Published : 05 May 2022 08:02 PM | Updated : 05 May 2022 08:02 PM

World attention has been drawn to a research report prepared by Srishty Anand, an analyst associated with responsible and accountable financial usage has recently drawn attention to Oxfam’s report “Inequality Kills 2022” and its reference to India. It has exposed the growing gap between the rich and poor in India.

In this context attention has been drawn to the fact that India, the second most populated country in the world, despite being severely affected because of the COVID pandemic and the mandatory lockdowns since 2020, still has the third highest number of billionaires in the world. It has also been noted that the top 10 percent of India own ‘close to 45 percent of the country’s total national wealth’ and that currently, the number of billionaires in India has risen from 102 to 142. On the other hand the bottom 50 percent of the population holds a 6 percent share in the nation’s wealth. Apparently, the richest 98 Indians own the same wealth as the bottom 552 million Indian citizens. This gap has increased over the last decade, as the bottom 50 percent, that held 8 percent of the wealth in 2012, held a mere 6 percent in 2021

Such a scenario of increasing disparity, most unfortunately, also comparatively exists in some other parts of the world.

Interestingly, it has been suggested that one of the reasons for such economic growth favoring a few as opposed to many is because of the factor of privatization related to basic services and state-owned utilities- particularly education and healthcare. This measure relates to policies which “reduce state ownership and control by selling central public sector enterprises to private sector businesses”. Srishty Anand has mentioned that though the incentive for such measures is shown as rising from the motivation to increase efficiency “this results in the state relinquishing decision-making roles (as it no longer holds majority share), abandoning price control, the social mandate of employing the masses, and operating in areas and sectors in which the private sector is unwilling”.

It has also been remarked that the Indian healthcare sector has particularly suffered because of anomalies during the second wave of the Pandemic. India’s public health system as in some other countries in South Asia fell short due to issues of governance and regulatory failure, such as shutdown of elective and outpatient services or indefinite deferring of routine check-ups. In fact, the public hospital systems in many states were overrun during COVID-19. On the other hand, those who turned to private hospitals faced problems ranging from non-treatment to unnecessary expenditure incurred in carrying out tests and also purchasing expensive drugs. The private health market carried “the risk of over prescription and unchecked selling of drugs, which promotes unnecessary drug use”.

The Indian government has apparently tried enforced price capping in certain parts of the country including allotment of beds but it has still left many people untreated because costs and lack of health insurance unfortunately rendered both private and public healthcare inaccessible. The principle of “out-of-pocket expenditure (OOPE)” according to Anand “left its mark”. Comparatively, the situation has been slightly better in Bangladesh because necessary measures were taken by the relevant authorities to activate the rural community health clinics not only for providing required vaccinations but to help out in the availability of emergency medicines.

The Report under reference has also referred to the quandary that has been created in India because of the gradual rise of private education institutions as opposed to public education providers. Private school education has continued to grow as income levels have go up. However, the pandemic has also seen many Indian private schools imposing arbitrary fee increases. The report has noted that “in tertiary education, private institutions are almost twice that of government institutions, and in higher education, public-funded education sees only 32 percent enrolment whereas its private counterparts see 68 percent enrolment”. Such a scenario is creating difficulties for students from the lower income sector to continue their education.

It has also clearly emerged in India that privatization is also resulting in the exclusion of marginalized communities- Dalit, Adivasis, and girls because private schools are generally established in places that have good public infrastructure. When society is fractured along different social identities of caste, gender, geography, and religion, marketization of education widens these gaps.

Preference for private education providers is also growing in Bangladesh but the relevant authorities have been trying to bring forth a degree of equal opportunity for students in the public sector by facilitating the process of education. Girl children get free education and all studying up to High School are provided with free textbooks at the beginning of the school year. In some public schools, students also get food support- especially in the rural areas.

The controversies arising from the different emerging scenarios has led to analytical suggestions that the way forward for a more equitable development needs to avoid supporting increasing privatization of state enterprises.

It has been observed that with privatization, the state eventually loses ownership and control, making the question of public interest considerably less. In this context, it has been mentioned that given the current disparities, the State needs to strengthen its control and simultaneously recalibrate its relation with the private players to integrate social goals. This can be achieved by introducing more regulations so that these services are not delivered for profits alone.

Such a more balanced private–public role in service provision could be particularly useful with regard to universal and mass literacy state-funded educational facilities. The private sector could complement the public school system as is being done in Bangladesh, Chile and Colombia in different ways to not just attain literacy but also to impart education relating to enhanced skill development and digitalization. This will assist in the improvement of employability needed for sustainable development.

The next factor that has received attention is the question of ensuring progressive taxation. It has been mentioned that the government needs to change the tax regime in a manner that will ensure that those growing richer within the country, because of privatization, pay taxes progressively. Progressive taxation will then ensure that the tax burden is higher for the wealthy. In this age of digitalization, such provisioning by the State will guarantee further accountability. Norway and Sweden are factual examples of such a scenario.

One needs to turn the page and then refer to some interesting observations made by Vani S. Kulkarni and Raghav Gaiha, teachers of sociology and research analysts affiliated with the University of Pennsylvania, USA. They have referred to criminality in politics and how this is creating declining trust in governments and a wide range of politicians. We have seen this taking place throughout the world due to lack of transparency in decision making and subsequent absence of accountability and culpability.

In this regard they have quoted the emphatic and out of the ordinary comment of John Adams, an astute political philosopher and second President of the US- “Remember, democracy never lasts long. It soon wastes, exhausts and murders itself.”

The key issue that has surfaced is whether loss of political trust (in governments and politicians) is a threat to democracy. We have already seen how this has recently created a furor in Pakistan and Sri Lanka. We have observed how lack of tax compliance has affected political trust

Kulkarni and Gaiha have indicated correctly that when citizens believe the government is acting for their common good, they consider government decisions as legitimate and are consequently more willing to comply with them. Consequently, they do not have to be persuaded to pay taxes and obey laws, as they consider such action as the ‘right’ thing to do. Conversely, the analysts have noted that “when citizens distrust the government, their willingness to obey its decisions is limited and they are less willing to pay taxes. Given the importance of taxes, a general lack of trust tends to destabilize the system.”

Political trust, according to the analysts, also impacts the ability of government systems to fulfill their basic tasks for people. They have correctly observed that –“low levels of political trust pose a challenge for the governability of contemporary liberal societies. Indeed, in the worst-case scenario, a vicious cycle emerges for governments and political trust”. Such a dimension has been casting long shadows in many countries, not only in Latin America, Africa, Europe but also in Asia- both in South and South East Asia.

Vaishnav has been carefully monitoring the several dimensions of the ‘electoral market place’ in India since 2017.  He has been carefully analyzing data on politicians- including Members of State Legislative Assemblies (MLAs) and Parliament (MPs), winners and losers in elections, their criminal background, assets, ethnicity, re-election prospects and implications for the sustenance of democracy. He has done so because he noted the presence of an important element- chance of winning an election, re-election and associated huge financial gains.

Incidentally, a recent analysis by Kulkarni in 2022 has raised some interesting points about Indian politicians. Over the period 2004 to 2019, the share of alleged criminal 

politicians in Lok Sabha elections has apparently risen, especially after 2014. It has been remarked that 24% of the winners in the 2004 polls had a supposed criminal background. This share rose to 30% in the 2009 

general elections, 34% in 2014 and 43% in 2019.

Other analysts have observed that not only in India but also in other countries both national and lower tier elections have become more competitive, with a rise in the number of political parties in the fray. As such, it is difficult to rule out the possibility that politicians with huge resources will continue to be attractive to dominant parties across any political divide.

One needs to, at this point, consider a factor that should be made obligatory. Anyone desiring to be a candidate in any election must reveal through a wealth statement in the Election Commission web portal details of the candidate’s wealth details and also that of other close family members and whether they are paying income tax. This is being done in Norway and has helped to reduce corruption and enhance trust in the electoral process. We need to remember that growth of political trust is slow, but distrust can be a real risk of the demise of 


Muhammad Zamir, a former Ambassador, is an analyst specialized in foreign affairs, right to information and good governance