Surviving self-serving politicians

Perhaps the most telling sign of things to come as a result of the farce being enacted in Parliament right now, was a fax from the Confed...

Perhaps the most telling sign of things to come as a result of the farce being enacted in Parliament right now, was a fax from the Confederation of Indian Industry to all newspaper offices just yesterday, on the National Seminar on Economic Reforms 8212; The Second Phase, being organised by them. With the date of the seminar, April 17, coinciding with the voting on the trust motion on Prime Minister Vajpayee8217;s government, the CII wrote The above meeting has been postponed8217;. They8217;ve given no new dates and, understandably, no one has called them up asking for when the seminar will be held. Just as, I suspect, no one has called the hapless Enron asking when the launch of its 740 MW Dabhol power plant will now take place 8212; Enron had signed up Vajpayee to inaugurate its controversial Maharashtra project on, when else, the 17th.

This, of course, is nothing compared to the plight of lakhs of investors who8217;ve seen the political crises deplete their collective wealth by well over Rs 50,000 crore in the space of alittle under a fortnight, on the country8217;s volatile stock markets. Or the millions of manufacturing firms, trading and retail outlets who are dreading the increasing possibility that in the event of the Vajpayee government losing the confidence vote, its budget will go for a toss. So, along with it, will all the proposals to rationalise indirect taxes. So, it8217;ll be back to the calculating board, to do complex calculations to see if consumer prices have to be increased or decreased once the budget proposals lapse, as they will, on May 12.

The process will, of course, have to be repeated, a few months down the line when the new government, comes up with its budget proposals. For no matter what people like Tarun Das at CII or Amit Mitra at FICCI may wish will happen, there8217;s no way India8217;s self-serving politicians will ever get together to pass the budget proposals if the Vajpayee government falls, even though by all accounts the Lok Sabha appears to be broadly for it.

Nor is it just the Congress which canbe blamed for acting selfish all the time. The BJP8217;s as much a part of this, though the boot8217;s on the other leg right now. If in recent times, the Congress did its best to delay the BJP8217;s insurance legislation by splitting hair over irrelevant details and got it referred to a parliamentary standing committee, the BJP did much the same with P. Chidambaram when he was moving the same Insurance Bill. Both the Congress, and then the BJP, will argue that they had substantive objections to the proposed legislation. This is nothing but humbug, the objections could have been made through moving independent motions on the legislation. And if you think that the insurance objections were still serious ones, how do you explain the fact that it took over four years to get the amended Companies Bill passed 8212; urgent political considerations have always prevented this fairly routine Bill from getting passed. So how do we minimise the role of government in our life? There8217;s nothing we can do to avoid the turmoil of a budgetnot being passed, and generating our own electricity through gensets, pumping water through tubewells or hiring private security agencies to bypass governmental agencies is an expensive solution, however appealing it may be. The Republic of Sainik Farms in New Delhi, where they do much of this, is clearly not for everyone.

What is viable though, and what we need to push for urgently, is increased powers for, and an increased number of, statutory regulatory bodies for major sectors. These are bodies such as, say, the Central Electricity Regulatory Commission CERC which, once it starts functioning fully, will practically ensure that political interference in the sector is kept to a minimum. The way this happens is as follows: if a state electricity board SEB or a private generating company wishes to raise tariffs, it will have to approach the CERC for clearance. The CERC will hear its case, listen to consumer groups, perhaps ask the SEB to cut its theft and transmission losses, and then approve ordisapprove the hike. This is normally the process where, to protect votes, politicians ensure there is no hike in electricity tariffs for decades. Never mind if, eventually this makes the SEBs so broke, and the sector so unviable, that there is no fresh investment in power generation which actually hits the consumers though with a lag.

Similarly, the Telecom Regulatory Authority of India TRAI is supposed to ensure that there is a level-playing field for all operators in the country, and the Central Vigilance Commission CVC is meant to actually ensure that investigating agencies such as the CBI and the Enforcement Directorate are allowed to function freely. Theoretically, therefore, if you have such independent regulators in place, between them and the bureaucracy, it is possible to keep things going, and investments flowing, in several important areas of the economy. The problem, of course, is that even after these regulators are in place, the government may still try to muscle in, with politiciansunwilling to let any power pass out of their hands. A recent and telling example, of course, is the way in which the government is currently trying to curtail the powers of the TRAI, to restrict its jurisdiction to less important areas. Similarly, as in the case of the CVC, even after it was in place, Parliament just refused to ratify it and the CVC8217;s statutory status is now in question. So to get politicians out of your lives, it appears, you have to get them to approve the necessary legislation. The delicious irony of our times.