The problem of governmentality: its distrust of actors of change
Indeed, it is not just decrees or directives that determine the balance of power between a state and its citizens, but also attitudes, tactics and persistent ways of thinking. Allow me to give two examples, one personal, the other institutional, both drawn from true stories. First the staff. I spent three years in Shimla as the director of the Indian Institute of Advanced Study (IIAS). During this period, I was on deputation from Jawaharlal Nehru University, where I continued to hold my substantive post. During my deputation, I kept, according to university rules, my residency at JNU, paying license fees and other dues. I was also offered rent-free accommodation in accordance with IIAS rules.
Almost a year after the end of my mandate, the current administration of the IIAS brought to my attention a “para audit” on the “non-recovery” of ₹1.65 crore from me for “unauthorized occupation of general pool residential housing” from central government. The escalating punitive damages started at 50 times my JNU residency license fee, going up to 250 times that fee after the eighth month. The rule cited was from a September 2016 notification by the Estates Directorate, Ministry of Housing and Urban Affairs, against the withholding of two dwellings by government agents. The fundamental flaw in the audit paragraph should have been obvious. As autonomous organizations, neither the IIAS nor the JNU were considered residential housing from the central government. The cited rule therefore simply did not apply. In addition, JNU professors on deputation to senior posts, both in India and abroad, were permitted to retain their accommodation in accordance with Rule 10.2 of the Probate Office Rules. the Vice-Chancellor, now Chairman of the University Grants Commission, and former and current Directors of IIAS for an additional fee, retained their parent department’s accommodation. Despite the provision of these facts, the issue is not yet resolved. Suppose, for a moment, that this is a central government official covered by the rule quoted. Even so, retroactive punitive damages without prior warnings or notice of eviction would violate the principle of natural justice.
Now the institutional example. A leading Indian Institute of Technology (IIT), one of the top five, with the first startup incubator, also faces a unique problem. I heard about it when I visited its premises during a selection committee meeting as a candidate for the President of India. This incubator has helped start more than 200 successful businesses, including a few unicorns, since its inception in 2004, long before startups became a buzzword in India. It gave birth to more than 800 entrepreneurs, who provided jobs for more than 8,000 people. Not only does it have a low attrition or closure rate, but it has increased by almost ₹4,500 crore through his businesses.
As in any startup incubator linked to an academic institution, this organization, led by a current IIT professor and a team of professionals, receives most of its grants from various government departments. These grants are, in turn, transferred to the startups it incubates after a rigorous selection process. Subsidies are mainly in the order of ₹15,000,000 ₹50 lakh, as per various government programs and guidelines. Naturally, until disbursements take place, the books will reflect the amounts received from the government, with a rotation from year to year.
Imagine the surprise and discomfiture of this organization when it received an income tax claim of several crores. The tax authorities had calculated contributions on the basis of the subsidies received, which were treated as income, and had affixed a tax notice to this IIT incubator. Repeated representations have been made emphasizing that it was a non-profit organization on an ITI campus, fully part of the latter’s larger institutional framework. Also, that the money on the books was not income but grants received from the government for later payments to selected incubators.
Treating government grants as income defied all logic, to say the least. The incubator in question took the matter to court to protect its interests, which in this case are fully aligned with government policies and objectives. If the matter is not resolved quickly and amicably, one wing of the government, using government resources and manpower, will sue another wing of the same government. All this at the expense of taxpayers and the nation. This certainly seems like a case of the left arm of government not knowing what the right arm is doing.
In both cases cited, the heads of the bureaucracy are apparently acting to protect the interests of the government, ostensibly to safeguard the greater common good of the country. But, indeed, their actions seem, prima facie, unjustified, even vindictive. Worse still, they engage non-offenders as well as sections of the government apparatus in enormous, unnecessary and time-consuming energy, effort and expense.
There would seem to be no simple solutions to the larger problem of obstacles to India’s overall growth. Along with the specific regulations, laws, rules, guidelines, etc., that hamper and stifle entrepreneurs, business leaders, and even ordinary citizens, there is the deeper malaise of governmentality. An attitude of mistrust, even hostility, towards those who wish to serve and strengthen the nation.
This is the second installment of “Obstacles to Growth”, a series highlighting the laws and regulations that are holding India back. These are the personal opinions of the author.
Makarand R. Paranjape is an author and scholar.