Bihar is an economic black hole, into which all Plan and ‘private investment disappears without producing any worthwhile output. In the 1950s, it was an industrial powerhouse, home of the coal and steel industries. Today it is a stagnant backwater. Why? Because governance has collapsed. There is no law and order or provision of public services. Both politics and business are criminalised. The distinction between law-breakers in law-makers has disappeared, and the most profitable businessmen are the mafia. There is no security of investment, no redress against pillage. Economic progress is impossible, so Bihar remains poor.
Danger signals are flashing that many other parts of India are beginning to go the Bihar way. The criminalisation of political and business life has spread even to the country’s commercial capital, Mumbai. Last week the head of Raghuvanshi Mills, Mr VK Thakur, was gunned down, allegedly by the Arun Gawli gang. A few months earlier, Dr Datta Samant, Mumbai’s most prominent trade union leader, was shot by ‘supari’ hitmen. Earlier, a member of the Khatau family was shot.
This is very like Bihar, yet Mumbai does not seem too alarmed. One company executive told me that violence is normal in the mafia-ridden building business, and the Thakur murder is seen as one more fatality in construction. He does not think it affects business overall.
This is a myopic attitude. If construction is criminalised today, surely the virus will spread to other areas too. Has the government issued a list of industries reserved for the mafia? Or a list of industries to which the mafia is restricted?
The mafia operate with impunity in the building industry because they get political protection. And once you get protection for killing a builder, why not threaten an industrialist, trade unionist, film producer or trader? That is the road to Bihar.
Some cynics say I am too alarmist. Organised crime is. part of life in many successful countries, they say. The Yakuza operate in Japan, the Chinese triads flourish in Hong Kong and Shanghai, Al Capone used to run Chicago and Carlo Gambino ran New York. Yet organised crime did not inhibit an economic boom in these places.
I would advise them to look at southern Italy. Northern Italy is an economic powerhouse, richer than most countries’ of Europe. But southern Italy remains poor and backward because it is prime mafia territory; Sociologist Robert Putnam. Has demonstrated brilliantly the ill-effects of mafia rule in the south.
Why does organised crime hit southern Italy but not Japan? Because any businessmen can tolerate a modest amount of mafia extortion as a sort of tax. But when the mafia are strong enough to affect basic decision-making, and begin to run politics as well, then all property rights and returns to investment become insecure. At that point business flees, the economy stagnates, and poverty deepens.
Bihar reached that stage long ago. Mumbai is still a long way off, but is exhibiting danger signals. In a recent article in this newspaper, former Home secretary Madhav Godbole has given startling figures about the criminalisation contested the polls in Mumbai, 72 in Nagpur and 50 in Pune. So the police will no longer lock up criminals but take orders from them.
Mr Bal Thackeray gave a new twist to mafia politics when he said gangster Arun Gawli should not be arrested when so many Muslim mobsters were out of jail. The remote-controller of Maharashtra politics was asserting that that criminality is now a religion-political matter, and that Hindu gangsters can be viewed as political saviours. The two biggest mobsters in Mumbai, Arun Gawli and Chhota Rajan, are now lining up with the two major political combinations, and the former has floated hs own political party. We are marching in the direction of Sicily, not of Japan or Hong Kong.
Do not view the nexus between politicians and criminals as just a political or social problem. It is also a huge economic problem. Mafia rule will impoverish India no less than southern Italy or Bihar. Getting crime out of politics is an urgently- needed form of liberalisation, as important as reducing controls. It is not enough for our people to liberated from the bureaucratic controls, they must also be liberated from the mafia-politician nexus.
How can we quell the mafia protected by the very politicians who are supposed to prosecute them? One solution is to have a Special Prosecutor, with a five-year term and removable only by Parliamentary impeachment. Such a prosecutor will be able independent, and able to pursue cases without fear.
Unfortunately, not even an independent prosecutor can do much, without police co-operation. As long as the police dance to the tune of politicians, both politicians and the mafiosi will remain above the law.
The answer, clearly, is to make the police independent of the state government. This is less revolutionary than it sounds, as was suggested by Mr BK Nehru years ago. The police perform two functions, maintenance of order and tackling crime. Maintaining order is inherently political, and must stay with the Home Minister. But why should the tracking and prosecution of criminals be done under the aegis of a politician? The government can lay down the law, but its implementation can be’ done by an independent police agency. Japan already has such an independent authority. Why not India too?
Cynics will ask, how can you expect politicians to ever enact a constitutional amendment which takes away their powers? This is a good point, but I see hope in a public interest suit filed some time ago by Mr Prakash Singh, former DG of the UP police, and Mr NK Singh, former joint director of the CBI. Their suit asks for the creation of an independent police authority. I do not know if the courts can pass orders on such a request, but certainly the courts can create an atmosphere where the political class feels obliged to create an independent authority for tracking down criminals, regardless of their status, and putting them in jail.
This is a vital economic reform, not just a political reform. We need it to prevent the whole economy from gradually going the Bihar way. We need it for economic freedom no less than political freedom. The police need to be liberalised from the clutches of venal politicians no less than businessmen. A country can prosper only if criminals are in jail rather than in legislatures.