A few weeks ago, Rahul Mathan’s ‘Ex Machina’ column in the Views section of this paper underlined the need to redesign the country’s pre-legislative consultation process. An important assumption in the piece was the general nature of a government that could be expected to follow an ideal consultation process. However, as Milton Friedman put it, “the world runs on individuals pursuing their different interests.” The piece proposes a system of accountability in the law-making process itself that oversees the government’s self-interested incentives.
A flurry of crises: The Seventeenth Lok Sabha has so far passed around 150 Bills. As per an estimate, 15 Bills are passed per session. But even though one may appreciate such productivity, it has come at the cost of debate and deliberation, the two core ideas of democracy that Parliament stands for. Let’s call this the ‘price of democracy’. Certain laws and conventions are the prime culprits in our parliamentary system. The executive is an integral part of the legislature, and thus, when combined with anti-defection legislation, assumes absolute control over the legislature. There was no problem with this arrangement in the era of coalition politics. But it begs us to reconsider the system in front of majority governments.
Match the problem of an over-powerful executive with this policy prescription from the realm of economics: ‘Government intervention comes at a cost.’ The marginal cost of public money captures the idea: what is the opportunity cost to the economy for the additional rupee spent by the government? Empirical estimates, based on models comparing the inefficiency of government spending with the efficiency of private spending, place this figure around In India 3. Multiplying this by the amount of government spending, this figure would be monstrous. This can be explained as ‘efficiency cost’ levied by the state.
In the realm of viable, can we create an implicit inquiry into our laws that seeks greater accountability from the executive to reduce these two costs? More importantly, can we produce a check that is politically palatable?
Fix: Pre-Legislative Cheques: The Legislation and Expenditure Accountability Bill, 2022 (bit.ly/3zDs98K), which was introduced as a private member’s bill in the Rajya Sabha on 1 April 2022, seeks a solution. It demands that the executive think about its actions before proceeding and remove those interferences which are doing more harm than good to the society. The Bill goes two steps ahead of the 2014 Legislative Consultancy Policy. First, it is a Bill, which means that if it becomes an Act, it will be legally binding on the government. Second, it adds the dimension of post-legislative scrutiny with fail-safe mechanisms.
The specifics of the bill revolve around two technical assessments: a law impact analysis or LIA (and similarly, a plan impact analysis for public schemes) and a post-implementation assessment (PIA) report. The first is a pre-legislative check and the latter is a post-legislative check. These ideas are not novel. Such scrutiny already exists in mature democracies.
The idea for the Bill of Law Impact Analysis was taken from President Ronald Reagan’s US Executive Order 12291 (bit.ly/3y81eka) and reworked for the Indian system. However, the central principles remain the same: any law or scheme should be based on the principle that its benefits outweigh the costs, and that among the various options available, the chosen one provides the maximum net benefit. Based on these principles, the executive must present an LIA (or SIA) to Parliament in order to introduce any major legislation (or plan). The report should include an assessment of the potential costs and benefits to society, analysis of stakeholders, the purpose of interventions with clear measurable outcomes, and the experience of other countries, among other things.
After legislative scrutiny: An accountability mechanism that aims to be comprehensive may not end there. Even a law acclaimed for its design and intent can see faulty implementation. Therefore, it should also be counted within the purview of the law. It warrants that all major laws (or schemes) be evaluated against the clear objectives set out in the LIA (or SIA) through a PIA report. There are three aspects to a PIA: performance measurement, which evaluates plans and laws against the objectives defined in the LIA; impact assessment, which evaluates qualitative aspects such as social, environmental and legal impacts and spillovers; And finally, perception surveys that measure people’s satisfaction. All these elements have been borrowed from the recommendations of the Organization for Economic Co-operation and Development, which were mentioned in the article ‘X Machinea’.
Lastly, the bill includes a foolproof mechanism to ensure that the accountability mechanism does much more than just submit reports. Since India cannot tolerate a plethora of outdated laws that do not improve governance outcomes, the bill must contain the expiration dates (sunset clause) of our laws and schemes. Such a provision would provide us with an opportunity to rework laws and plans, thus ensuring that our country remains up to date on the changing dynamics of the world. In addition, if a law or scheme fails its PIA test in three consecutive reviews, it will be automatically repealed.
The ideas in this bill all sound good. But we have a simple question: what about its implementation? After all, the Bill calls for a considerable effort by the executive for a proper appraisal of plans and legislative steps. Hopefully, this may at least lay the groundwork for a new institutional mechanism to ensure self-correctness in public expenditure and law making. It can also serve as a step towards enhancing our national discourse on government intervention.
Sujit Kumar, Vedanta Mongar and Vikram Vennelkanti, are Rajya Sabha members of the Biju Janata Dal and former Legislative Assistants to Members of Parliament (LAMPs), respectively.