Sunday, February 20, 2011

The JPC must discuss 2G policy.....not petty operational procedures

The setting up of the JPC on the 2G "scam" has been a bit of a anti-climax really. Now that its been set up, the fizz is off; no one actually knows what's going to change and what to expect. Yes, Parliament will start to function again, but what should one expect on the 2G matter (I refuse to call it a scam) itself?

I think the JPC should focus on only two things:

1) Is the Government right in its assertion that all policies are not about maximizing revenues? That policies can have other objectives. Does the 2G policy qualify to be one of those where "other objectives" should be rated higher than revenue maximization.
2) Secondly, it must look at this peculiar pattern in Indian politics.....of questioning past policies based on the knowledge that we have in the present. So many people feel that 2G spectrum was given away cheap. They say this because they have seen 3G spectrum go for a far higher amount. But is it likely that 10 years later, when maybe 4G spectrum is auctioned and the government realizes 10 times more value....the 3G auction itself may be called a scam? Would that be fair? Maybe the JPC should investigate this and suggest ways of preventing this.

Let me come to the first objective I have suggested above. In my mind, 2G policy could and should never have been about maximizing revenues. Today, after we have seen the telecom revolution first hand, we can say comfortably that telecom is a "basic need" of people. Its as basic as the need for education, food and freedom of speech. I am not talking only about affluent people like you and me; actually I am talking mostly about the dis-empowered lot. Those who have used mobile phones to gain a modicum of economic strength. Take the example of the neighbourhood "mochi" or plumber or electrician or a locksmith or countless other such people.....none of them could afford to have a pucca "dukan" where we could go to seek their services. Today, they dont need one. A mobile number suffices. Or think of the farmers who are now well informed about crop pricing; so that they dont sell their produce to the nearest mandi. The mobile revolution has brought economic gain to so many would you sacrifice all this and suggest instead that the government should have instead chosen to take in much higher license fees.....something that would have raised telecom prices dramatically and prevented its roll-out the way it did?

There is a fundamental difference between 2G and 3G. 2G is a "plain vanilla" service. Its a basic service. The purpose of government is to provide basic services to people without first thinking of its own interests. It was right in not maximizing revenues on 2G......and it was right in maximizing on 3G.....because of the huge differences between the two. Let me elaborate on this with an example. Suppose there is an highway built from Delhi to Jaipur. And suppose this is the ONLY road between the two cities. It then becomes a basic service. It's the government's job to give this road to the public. Can the government charge Rs 1000 for every trip made between the two cities? After all, if it auctioned off the rights to build the highway and charged a stiff upfront fee, the highway operator would have to charge that much. The government would maximize its revenues this way. What about the damange done to the economy overall? Suppose however that the government built another expressway.....much wider with much lesser traffic; hence much faster.....maybe with other premium services as well......this road was clearly a "premium" service and "optional" for those users who wanted more and were willing to pay for it. Suppose the government charged Rs 1000 toll for this. Would this be OK? I think it would be because the government has first met the needs of the common folks and then has launched a premium service for which its charging a premium.

Take another example. The government charges premium pricing for petrol; less for diesel and actually subsidizes kerosene and cooking gas. Now isnt this policy of the exact same nature as the 2G-3G one? Why should the government charge so less for kerosene and cooking gas? Isnt this also a scam? No, because they are both "basic needs" of people; its great policy to make them available cheap to the masses in their own interest. In fact, even asking the government to maximize revenues on kerosene and cooking gas appears criminal. But the government can surely charge premium prices for petrol. Nothing wrong with that. Those who consume petrol are the well-off. They can pay more. The excess revenues collected would cross-subsidize the subsidies on kerosene and cooking gas. There is just one flaw in premium petrol prices. And that is that the government has not provided a viable alternative to people who dont want to pay premium prices for petrol. They havent built the "basic road" between Delhi and Jaipur when it comes to city transport. Once they provide an efficient metro service, or a BRTS, then the government can surely lift the lid on petrol pricing.

The JPC should discuss such issues. Actually Parliament should. But given the raucous nature of our Parliament, I think the JPC may be a better forum to discuss this. I am convinced the government's policy on 2G was right. What was wrong was the corruption that Raja brought in. By advancing dates and by favoring a few, he made his cuts. Haul his ass into the jail for this. No problem with that. But that's really not what the JPC should focus on. Let the CBI and others do that. I suspect however that the JPC will want to focus more on "attention grabbing headlines" which the grilling of Raja would provide; rather than on policy matters.

The other point was about retrospective criticism of government policies. Its well known that in hindsight, vision is 20:20. There must a rule introduced in Parliament that policies which are more than 5 years old.....cannot be re-opened unless there are exceptional circumstances. A similar rule already exists in the legal system. A case becomes "time bound" after a few years. I think this is a correct policy. We need that with respect to government policies as well. We need this rule so that we focus on the future and not on the past. Within the first 5 years....any policy can be debated openly in Parliament and in media. If any legal or political action needs to be taken against a policy by anyone, it should be done within the first five years. Once this period lapses, it shouldnt be permitted.

The real truth is that the JPC will not discuss the points I have raised. It's merely a political exercise. The BJP has no concern of the country in its mind; only its own. It wants to make sure that it can prevent its own record under Shourie and co from coming out. It wants a leverage on the Congress for the 2014 elections. With this in mind, the BJP will aim to have the JPC submit its report only around 2013 December or so. Mark this date. Because that's when it will be able to use the JPC findings (if any) to good political advantage in 2014. The biggest regret of the BJP currently surely is that the next elections are only in May 2014. How they wished the elections were happening now!

1 comment:

  1. Good view. Yes we desperately need stability and longevity for policies.We are really suffering being self critical. For eg. The bofors scandal was scandal the agencies spent huge amounts to uncover. they could not get to anything. The guns helped the BJP win the Kargil war.Yet they want to know who got the 40 odd crores.Even I would want to know the truth . But not by spending 80 crores. BJP is the only truly democratic party in the country. They have a good future if they get serious and recognise their strengths.

    Like you I wish the JPC brings a long term vision to the parliament.