Arms-length relationships: Why ministers mustn’t rush in where experts have already gone

Too often these days,everybody who has little understanding — and sometimes great enthusiasm — gets into the act,and a competitive media with less understanding and more enthusiasm takes up in the cause in two-minute,loud sound bytes.

There was a time when,for example,the courts would never take up for “scrutiny” the decisions of a regulator. I have been both Chairman of the Agricultural Prices Commission,now Commission of Agricultural Costs and Prices,and the Bureau of Industrial Costs and Prices,at a time both those bodies went through important changes. Their reports were contested. But the courts always took the view that once an autonomous technical body was seized of the matter,they would not intervene.

In the case of an industry where a planned transition from a price-controlled to a market economy was worked out,an Hon’ble Justice of the highest court wanted to understand the logic of long-range marginal cost pricing. But he was kind enough to call me and say he would send a subordinate to understand the argument. I told him I would regard it a privilege to come down and explain it myself.

In the early Nineties,I was taken aback when on the hydrology of a major river,a court set up a group of advisers to give a report which included a very eminent Gandhian gentleman,a friend of mine who was a great guy but statistics wasn’t quite his cup of tea. He wanted my advice but I politely stayed away since the thought of explaining to him the work of the Central Water Commission and the Pune Centre on Flood Forecasting was very daunting to me,even though I was a former President of the Indian Econometric Society. Eventually,the project went on regardless,since it was a very well planned one — only many of the questions raised by many well-meaning persons led to a cost overrun of thousands of crores paid from a tax system which is not very progressive and so very poor people can end up taking the burden.

Many years ago,the late Krishna Menon had written a parliamentary committee report on managing the public sector,and developed a theme which some of us cherish and stick to,and reinvent ever so often. It was called an ‘arms-length relation’ between the highest political executive and the running of the public sector. The political process sets the objectives in non-trivial measurable terms,but the executive runs the details. If they fail,they should be punished. If they succeed,they should be rewarded. In India,ministers like to implement details and leave the policies to their officers and regulatory bodies. It is not good.