Markets and Governance

The history of planetary civilisation attests to the worldwide phenomena that natural markets may emerge from trade incentives within and across communities. Standards, weights and measures, and media of exchange are devices that enable institutionally shared capacities to account for production and distribution of value created and transacted, besides enabling wealth to be stored and transferred. Without moral solidaristic sentiments that communities may modulate, the accumulation of wealth and resource flows beyond a certain geographic scale and scope require an overarching authority to maintain stable boundary conditions for people to live as families and exercise some modicum of rights and freedoms. In such cases, the peaceful resolution of conflicts, disputes, claims, grievances makes prosperity through trade, profession, business or calling possible only if there is an overarching authority administering justice in a second-tier institution so authorised. The integration of second tier overarching territories and markets to enable free flows of goods, services, people and capital between them requires further authorities and rule of law to enmesh the second tier into a third tier like the Union of India or the United States (US) or the United Kingdom (UK). Thus, “long live the king/queen” or “Jai Hind” are more than mere slogans. They embody wishes for continued stability of the sovereignty and integrity that provides the context for markets and for interventions in cases of expected, anticipated and unforeseen market failures.

An overarching second-tier or third-tier authority may assume governance responsibility for the well-being of a territorially demarcated population in an area only if it can resolve what political scientists refer to as “a state of Hobbesian anarchy” by establishing and sustaining five necessary conditions (Mathur 2003).1

Any departure from the Hobbesian state of anarchy requires what one may call a Hobbesian contract of allegiance incorporating the first four elements of conditionalities before the fifth condition with Lockean elements of rights and freedoms is guaranteed as part of a political contract. There is no known exception to this sequence (for example, in the US, the Bill of Rights came long after the Constitution; and, rights flowing from Magna Carta, the Fifth Republic in France, or the Swiss Confederation were all sequels to territorial conquest and consolidation). The discovery or invention of strategy for stakeholders of a territorial unit is inconceivable until and unless this five-way test of governance is minimally met.

Yet, if and when and where democratic governance requires listening to the vox populi before a Hobbesian contract of allegiance has stabilised, there is too little capacity to guarantee Lockean rights and freedoms. The inescapable tension between voids and vacuums of legitimate representative autho rity and the “picture-of-authority” in the minds of stakeholders

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Democratic Governance

The status of Manipur at the time of India’s Independence in 1947 left some questions unresolved. It acceded to the union by the initiative of maharaja Srijut Bodh Chandra Singh under its own constitution, the Manipur State Constitution Act, 1947 (drafted by a committee consisting of representatives of Meitis, Nagas and Kukis). The Manipur Constitution was promulgated on 11 August 1947 preceding Indian Independence on 15 August 1947. Manipur’s merger agreement with the dominion of India on 21 September 1949 as a Part “C” state predated the Indian Constitution and was never ratified or approved through referendum or by elected representatives of the Manipur assembly. On 1 November 1956, Manipur was declared a union territory and later became a full-fledged state on 21 January 1972.

The issue of Naga identity and nationalism was raised by the Naga National Council in the Naga hill districts of Assam and Nagaland but not in Manipur. I am not persuaded by the suggestion made by some journalists and miscreants (am carefully placing these two in separate categories although there could be some overlap!) that a greater Naga identity was fractured by the post-Independence administrative reorganisation of lands populated in India and Burma by the Naga tribes. At no time in history did such an imagined nationhood have claim to any overarching governance system that covered all Naga territories or all Naga populations. Given the authority vacuum, the resulting power play between interest groups proliferated pressure groups. Many of these have since transformed into extortion groups with an enormous vested interest in preserving the status quo.

Strangely, the opposition in India to the participation of people in planning their own future had first arisen during the constitution-making process itself. Several of the founding fathers of India’s Constitution like B R Ambedkar did not believe that Gandhiji’s idea of gram swaraj was feasible or desirable. Rajendra Prasad, independent India’s first president who presided over the Constituent Assembly favoured making village republics the basis of the whole constitution. He raised the importance of recognising grass-roots authority flowing from the people towards more aggregated forms of political delegation and centralisation during the Constituent Assembly debates. The matter was hushed up on a technicality during the Santhanam amendment motion on 22 November 1948 concerning units of local self-government on grounds that it was too late to begin the drafting process again (Lok Sabha Secretariat 2003: 520-27).

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T Prakasam had valiantly questioned the construction of an edifice that did not start from its foundations but went top down and welcomed the Santhanam amendment “because this gives opportunity to the people of every province and the whole of India to go on this basis and work up the whole thing, without interrupting the progress of the Constitution at this stage” (Lok Sabha Secretariat 2003: 522). It is noteworthy that the discussion on local self-governance units, although conducted, with frequent reference to panchayats in the Constituent Assembly, intended local self-government to be available to the people of every province (which term included chief commissioner’s provinces like Manipur at the time). In the final draft adopted, there was a brief mention of local self-government in an advisory provision in Article 40 (the Santhanam amendment Article 31A at the drafting stage) under Directive Principles and “local government” as a subject was exclusively kept on the State list in the Indian Constitution.

A discussion of governance in Manipur cannot be meaningfully undertaken without explicitly recognising that people’s own chosen representatives at all levels of disaggregation, including the local district and village level need to be involved in that process. This was consistent with the customs, traditions and wishes of local communities in Manipur. There could be a few pockets where clan-based unelected fiefdoms may be acceptable to local people or where local leaders would not easily make way for expression of popular will. However, that was not the only reason to enable local communities to elect district council leaders. Whatever be the verdict of historians, Manipur is one of the 28 states of the union. In 1993, the 73rd and 74th Amendments of the Constitution incorporated Parts IX and IX A into the Constitution of India and grafted the 11th and 12th schedules listing schemes entrusted to local authorities. While the new three-tier system did not automatically apply to hill areas in Manipur, under Article 243 of the Constitution, Manipur became committed to the constitution of district planning committees with special provision to do so through district councils in the hill districts. Yet, none of the 29 functions were transferred to rural local bodies in Manipur.

The schism between the toothless arrangements for “panchayati raj” in many states and the “councils” of north-east India with variations across north-eastern states depended on whether these councils were to be elected or nominated and whether the arrangements fall within the purview of the Fifth Schedule or the Sixth Schedule under Part X of the Constitution. Manipur became a state with the North-Eastern Areas (Reorganisation) Act, 1971. Under the 73rd and 74th amendments in 1993, Article 243 (d) explicitly defined “panchayat” as ‘an institution (by whatever name called) of self-governance” and Article 243M explicitly noted the existence of district councils in the hill areas of Manipur as the applicable alternative under the law. The mandatory constitution of a district planning committee (with 80% from amongst elected representatives) under Article 243ZD was impossible to fulfil in Manipur without elections also for the district councils in the hill areas.

The commitment to strengthen rural local government in India is not a limited Manipuri concern. Grass-roots planning

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initiatives in decentralised planning by entrusting elected local bodies with the entire resource package of all schemes in a single envelope were initiated in 2007-08 by the Planning Commission together with the ministries of panchayati raj, rural development and agriculture as a nationwide initiative. It was only appropriate that districts in north-eastern India also be included among the first set of districts where this was to be facilitated. The most backward districts were identified first. Tamenglong (a hill district) was the only district in Manipur so identified and it was among the first 10 districts assigned for facilitating capacity building in district planning by locally elected bodies to Institute of Applied Manpower Research (IAMR), the think tank of the Government of India in the Planning Commission.2

Planning and Development

There are two ways of describing Manipur’s economy and its planning and development challenges – by providing observations of experts experiencing Manipur or analysing its economic statistics in technical terms. Let me begin with the former. Kaushik Basu, travelling in the region when he was still a professor at Cornell University (and not in his current role as chief economic advisor in the Ministry of Finance) wrote:

Of all the states of this region, the most troubled is Manipur… there are few signs of the famous Indian economic boom here. This is a region of a collapsing economy, huge unemployment, and interrupted power supply. I was assured that at most times it was safe to touch those exposed wires. The people of the north-east have high human capital. At various institutes and universities I speak, the discussion is lively and engaged. But beneath this, the region is simmering. Insurgent groups routinely extort money from bureaucrats, shopkeepers, and professors. Kidnappings are frequent. Trucks on highways are often stopped by competing local powers and either have their cargo confiscated or are allowed to pass after paying a “tax”. Hardly any new industry worth its name is moving into the region. There are three immediate measures the Indian Government needs to take: Improve Law and Order, Invest in Infrastructure, Improve Interaction (Basu 2008).

Under the Gadgil formula and the Eleventh Finance Commission’s devolution to Manipur, the ratio of central grants to loans was 90:10 in contrast with 70:30 for the general category states. Manipur’s share in central taxes brought Rs 3,166 crore to Manipur during the Tenth Plan period 2002-07. Chattopadhyay (2006) noted that Manipur was the last in outcomes from plan outlay rankings of north-eastern states, that the state fiscal deficits were mounting, and that state government expenditures were high at 40% of the state gross domestic product (SGDP) with a poor record in implementation of government programmes. In 2006-07, Manipur’s GDP was Rs 6,438 crore. The state budget in 2007-08 estimated Rs 8,175 crore in aggregate receipts made up of Rs 2,762 of revenue receipts and Rs 5,413 of capital receipts. The Plan Outlay during the Eleventh Five-Year Plan (2007-12) was projected to be Rs 8,154 crore. With a population of just over 2.3 million, the per capita availability of resources is not small. Manipur has a rich tradition of village communities and good village level governance and there is scope to improve transparency, accountability and performance on development and planning outcomes with increased community participation.

Democratic Deficit or Anarchic Excess?

In 2010, Manipur received a lot of media attention due to the blockading of the national highway, NH 39, from 11 April 2010 which affected supplies for 68 days. I was amused to read that reports of a blockade of NH 53 passing through Tamenglong could not be verified! When I visited this region in 2008

and undertook padayatras there, fewer than 5% of salaried government officials were actually to be found at their posts in Tamenglong. Unless the situation has improved dramatically, there may not even have been enough officials there to check the veracity of such a rumour. I wonder if the media persons reporting on the situation actually went there.3 Only certain routes are used for entry into Manipur because extortion racketeers have prescribed entry points and collect informal border levies at such points so that the availability or non-availability of non-blockaded routes (such as NH 150) is just statistics.

Much of what has since been reported about Manipur is in the form of opinions and propaganda, rather than news or facts. According to the Indian Express editorial “SOS from Manipur” (1 June 2010) “the trouble had begun with the state government’s decision to hold district council polls, including in the Naga-dominated districts”. This editorial called upon the centre to resolve “the political basis of the trouble” (the prescription was not elaborated upon leaving it to the guesswork of readers to puzzle that out). However, the same sentence ends with “...and that cannot happen unless the Centre settles with the NSCN and brings them into the mainstream” (from which the sources and motivations of this newspaper become clearer) as if the home ministry in the central government and the Manipur government have not tried to find a peaceful solution. It is also not clear if the newspaper favours compromise on rule of law or use of force to protect boundary conditions for rule of law to prevail.

Decades of failure in Manipur to resolve “the political basis of the trouble” point to the need to diagnose and understand what exactly is the basis of the trouble? To what extent is the problem political? Who gains, who loses from the status quo? Why is it so difficult to resolve? The editorial in the Economic & Political Weekly (5 June 2010) titled “Manipur: Squaring the Circle?” attributes the political basis of the trouble to aspirations for a “Greater Nagalim” jostling with Manipuri determination to maintain current boundaries. While this explanation may satisfy those still struggling with class or ethnic

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dialectics to explain conflict, such an overarching simplification conceals more than it reveals. It glosses over the crux of the problem, that people living in the hills and the people living in the plains both have equal right to representation for their political, economic, and social well-being within Manipur as a territory of jurisdiction as a state in the Union of India.

It is worth examining why the decision of the state government to hold elections to the autonomous district councils in the hill districts (which are Naga majority) would provoke a Naga backlash from forces outside the state in neighbouring Nagaland? Is it because of the demand for a “Greater Nagalim” or because emergence of de jure and de facto authority of grass-roots democracy in the hill districts would counter the de facto legitimacy of illicit extortion rackets at Manipur’s border with Nagaland?

Those who raise questions about the legitimacy of holding district council elections have much to answer for themselves. They must explain why they are against empowerment of people through elected representatives in the hill districts; and, why they continue to play on the Kuki-Naga divides (reminiscent of the artificial Hutu-Tutsi divides created by colonial administrators in Rwanda) to rule the hill districts when the Constitution requires and provides for people’s representatives to serve in bodies that govern and determine their economic, political and social well-being. Such sceptics need to explain why they claim a dichotomy between the “people of Manipur” and the “Manipuri people”. Every multi-ethnic and multicultural group in the world has cultural and spiritual inheritances beyond its inhabited geographical area. That is not a reason why Nagaland must now be expanded or Nagaland’s issues brought into Manipur. Rather, if the people from the plains concede to the people from the hills their rights to interpret their well-being and plan their development differently due to the diversity in economic geography, Meitei aspirations and the hill people’s aspirations may be reconcilable within Manipur rather than being posed in Meitei-Naga antagonistic terms with the Kuki factor brought in as a counterweight to “divide and rule” for extortion rackets disguised as separatism, belligerency, militancy, etc, to continue.

Writing in the Economic & Political Weekly (26 June-9 July 2010), Pradip Phanjoubam of the Imphal Free Press (Phanjoubam 2010: 10-13) noted that the conflict in Manipur hardened after the Naga nationalist leader Thuingaleng Muviah of NSCN-IM (National Socialist Council of Nagalim, Isak-Muivah faction) was not allowed to visit his original home village, Somdal in Ukhrul district of Manipur. Muivah had not been in Somdal for 44 years. It seems the state government did not want to take any chances with the possibility that he could stir people’s imaginations about a returning Naga hero from exile. Yet, the government’s stance made a hero out of him and brought to surface subliminal anxieties about Greater Nagalim in some quarters. Phanjoubam (2010) concedes that both geographies (the plains and the hills) have to be addressed adequately for any lasting solution.

The Manipur (Hill Area) Autonomous District Council (ADC) Act, 1971 precedes the demand for hill district councils under

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the Sixth Schedule of the Constitution which would give legislative and judicial powers underpinning self-governance mechanisms. The 2008 amendment to the ADC Act transferring some of the traditional powers of village chieftainship to the elected district council of tribal leaders was a step in this direction without amending the Constitution. This came about at a time when hill districts were getting ready to take on responsibilities for self-governance through participatory planning and development. The Planning Commission’s initiative of grass-roots district planning putting into a single envelope all developmental finances in selected districts of the country covered Tamenglong in Manipur. When I negotiated and concluded the Tamenglong Accord for Peace and Development in 2008, the creation of an elected body in the district was a necessity if people’s aspirations were to be further expressed, mobilised and channelled through their own elected representatives. In other parts of India, similar processes were implemented through panchayati raj institutions (Mathur 2007) in a manner different from the traditions in the north-east.

Need for District Council Elections

The autonomous district councils in Manipur had been defunct since 1989. That is the reason I had personally called on governor Sidhu (then Governor of Manipur in April 2008) immediately after signing the Tamenglong Accord and discussed with him the need for hastening autonomous district council elections in all districts, including hill districts. The IAMR of the Planning Commission accepted the task of capacity building in the Tamenglong district council for facilitation of autonomous self-governance, planning and development. IAMR was involved with numerous action research studies covering all the northeastern states at that time. My understanding of the situation is that the main problem of Manipur is an economic problem of organised extortion rackets trying to throttle social and political expression of popular will. It may well be that more people in Manipuri officialdom have blessed the extortion racket than one would like to believe.

Multiple levels of representation create representative bodies that compete unless their arenas of functioning are demarcated. In the absence of elected ADCs, there was a Hill Affairs Committee (HAC) of all 20 hill constituency MLAs of the Manipur assembly which functioned like a mini-assembly. The recreation of hill district councils surely opens up to contestation as to what should belong to the ADC and what to the HAC. An oft heard argument (also from Phanjoubam 2010, p 11) is that the hill ADCs have no representation from the valley communities. One may also ask how truly representative is the HAC in terms of people actually living in the geographical areas which they are supposed to represent. Why should grass-roots democracy be denied to locally elected representatives on grounds that the demarcation of arenas of responsibility is either incomplete or usurped? And, if statutory land tenure systems of the valley differ from contractual or customary land tenure systems of the hills, why should either the valley or the hills have to force their way on the other? This is something that can be determined by the authority of jurisdiction to the extent that the

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Notes

1 This five-part test of governance was originally formulated by the author at the height of the Khalistan crisis in the Punjab of the 1980s when invited by the home ministry, Government of India to spell out criteria for testing whether a de jure government at any given point in time is still capable of de facto governance or not! At that time, the Khalistani secessionists had established parallel courts to which public servants of the Government of India and the State Government of Punjab had begun appearing in response to summons; there was a parallel tax regime being administered; and, there was a serious challenge to the government’s monopoly of organised violence because the Khalistani Militias were well organised and armed to resist police forces in the Punjab.

2 This author headed the IAMR as its director and chief executive officer with the rank of secretary to the Government of India in the Planning Commission and travelled to Manipur to lead this initiative in April 2008.

3 The Survey of India official responsible for map-making certainly has not been there because the Survey of India Map shows the Irang River bridge at Awangkhul about 8 kilometres away from where the bridge actually was when it existed. The bridge has since been blown up and crossing the Irang River to reach Tamenglong required the author to use a Bailey’s bridge constructed by army engineers.

References

Anderson, Benedict (1991): “Imagined Communities: Reflections on the Origin and Spread of Nationalism”, Verso, London.

Basu, Kaushik (2008): “How to Fix India’s Troubled North-East”, http://newsvote.bbc.co.uk/mpapps/ pagetools/print/news.bbc.co.uk, accessed on 13 February 2008.

Bohra, O P (2006): “Fiscal Decentralisation and Local Governments in the North-East States”, Manpower Journal, Vol XXXXI, No 2, April-June, 189-224.

Chattopadhyay, Saumen (2006): “An Analytical Study of Fiscal Reforms in Manipur”, Manpower Journal, Vol XXXXI, No 2, April-June, 107-30.

Lok Sabha Secretariat (2003): Constituent Assembly Debates, Book 2, Volume VII, 520-27.

Phanjoubam, Pradip (2010): “The Homeland and the State: The Meitis and the Nagas in Manipur”, Economic & Political Weekly, 26 June9 July.

Scitovsky, Tibor (1954): “Two Concepts of External Economies”, Journal of Political Economy, Vol 62, 143-51.

Van Hulle, Cynthia and Ajeet Mathur (1994): “Managing a Nation: Who Is In Charge? The Market for Political Control”, ASCI Journal of Management, Vol 24(1), 1-13 September.

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