We have too many Political Parties - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 5 April 2014
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We have too many Political Parties A  A  A

- By Asad Dossani, Author, The Lucrative Derivative Report

Asad Dossani
One feature of the Indian political landscape uncommon to other democratic countries is the large number of active political parties. As of March 2014, there are 1,616 registered political parties in India. Most of these parties are very small, and individually have little influence in politics. But because there are so many of them, they became part of coalitions and are relevant to the political process.

The large number of political parties means that the major parties cannot win an outright majority. As a result, we are left with coalition governments. Unfortunately, coalition governments are inefficient. Because there are many competing views within the ruling coalition, it becomes difficult to pass legislation. This makes the government inefficient.

India is a large and diverse country. The diversity is economic, geographic, linguistic, and cultural. It may seem natural that we have a lot of political parties given the country's diversity. But this need not be the case. The large number of parties is a reflection of the nature of Indian politics.

The nature of Indian politics is that everyone acts in their own self-interest. Each political party is out to represent their small part of society, and put forward their own interest without regards to the impact on the country as a whole. The high level of corruption in politics is clear evidence that self-interest is the primary motivation for politicians.

Most political decisions require tradeoffs. This means that any policy we put in place is going to have winners and losers. Some will benefit while others will be worse off. An effective government puts in place policies that benefit the country as a whole, even if a small number of people are worse off as a result.

Because we have so many political parties, these small interests prevent policies from going ahead that would clearly benefit the country as a whole. And this is why our government is inefficient and corrupt. The small interests don't need to come from separate parties; sometimes they come from individuals within a party.

Our political mindset needs to change. Instead of everyone out for themselves, it needs to be to do what is good for the country, even if it hurts your own group in the short term. In politics we need to put the country ahead of the individual. This is easier said than done, but it is something we must work towards in order to create an efficient and effective government.

In the Equitymaster Club forum, we are asking the question: Does the large number of political parties lead to government inefficiency and corruption?

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is a financial analyst and columnist. He actively trades his own and others' funds, investing primarily in currency, commodity, and stock index derivative products. Prior to this, he worked at Deutsche Bank as an analyst in the FX derivatives team. He is a graduate of the London School of Economics. Asad is a keen observer of macroeconomic trends and their effects on global financial markets. He is deeply passionate about educating investors, and encouraging individuals to take part in and profit from financial markets. To put it colloquially, he wishes to take Wall Street products and turn them into Main Street profits!

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3 Responses to "We have too many Political Parties"

anil

Apr 9, 2014

It is true that India is suffering, because it has too many political parties, and every party is only interested in their own agenda, irrespective of national interest. In the present election no party has talked about population growth, which is offsetting all the growth India is achieving. This is a vote bank politics, we can not achieve much unless, we make national policy for the betterment of the country, irrespective of cast, creed, religion, region etc.

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Gadigi Pratapa

Apr 6, 2014

It is not fair that some people have to lose for the sake of country. The fact is the country represents all people in its territory. It is unfair that some have to lose to benefit others. Democracy means that the growth has to be fairly even so that benefit goes to all and not just to some sections. Therefore I can agree only if I lose some to gain something else in a fair way. Otherwise it gradually becomes approval of the crony capitalism of gain to few at the cost of the majority, as it is happening now.

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ajay deshpande

Apr 6, 2014

This is true . We need to benefit from collective dialog between ourselves for the common good . What is that common good has to be unfolded by understanding what is good for self , family , society , constituency , town , city , state , country .This thought process has to emerge out of the representatives of individual thought process and the acceptable leader has to emerge in a natural process which exists in the mindset of all human beings . What is important is how do we respect each other and believe in each others capacity when we begin to come together for all such dialog . The challenge is in development of the coming together process for common good . Common good has to be understood and for which more and more meetings among citizens - society / colony / constituency have to start and conclude with the right leader and the right thought process which is the state good and country good . Any other tendencies which each one develops should not be allowed by all while the common good is ascertained .this is based on the understanding that the people coming together understand what is good and bad and this is not based on any power recognition .

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