Thursday, March 29, 2012

Coalgate needs to be brushed away…..

The CAG created a sensation recently by stating that by not auctioning coal blocks since 2004, after having first mooted the idea itself in that year, the Government of India had caused a loss of Rs 10.67 lac crores to the country. It mattered little to the CAG that the policy of “allocations” was being followed since time immemorial….right till 2004 when the government first considered “auctions”. It was unable to adopt auctions for various reasons. Does the mere fact that the government considered changing the policy but could not do so constitute a scam?

The revelations in the TOI today show how the then Minister Of State for coal – Dasani Narayan Rao – and the PMO had had elaborate discussions on auctioning the coal blocks since 2004. But for one reason or the other, the auctions were not done. Rather, the “extant” policy of “allocating” coal blocks through a “screening committee” was continued. It wasn’t a slip-up or a goof-up or something done surreptitiously to make money on the side. It was merely continuation of an older policy till the time the new policy could be implemented. The delay itself was necessitated by special circumstances that existed then.

At worst, this could be a case of poor governance. Having mentally decided to auction the coal blocks, the bureaucracy and the political establishment should have been able to move quickly to make it happen. However, the many constraints the UPA-1 government faced must no doubt have played a role in making the implementation difficult. Remember, the Left was supporting the UPA government from the outside. A cabinet decision which did not have the Left’s backing could never be implemented. This is what appears to have stalled the auction process in 2004. The CAG report, as mentioned in the TOI says “it (the new policy) would invite further delay in the allocation of blocks considering that the Coal Mines (nationalization) amendment bill 2000 envisaging competitive bidding as a selection process for allocation of blocks for commercial purposes was pending in the Rajya Sabha with stiff opposition from trade unions and others concerned”. With the trade unions opposing it, there was no way the Left would have supported the auctions. This was in 2004-5. Again in 2006, it appears that the problem persisted and the PMO had allowed the department to proceed with the extant (existing) mechanism (through the selection committee).

Again in 2007, the PMO felt that it would be more appropriate to make an amendment in the Mines and Mineral (Development and Regulation) Act, 1957, so that the system of competitive bidding could be made applicable to all minerals covered under the said act. There was thus a further delay in the auctions for coal mines. So again, there was a re-think, rather than a “goof up” or “intentional scam”.

Like I mentioned in an earlier post on the same subject, coal blocks were never auctioned in this country. Auctioning everything has never been government policy. India is a socialist country and making money is not the sole priority of the government. Even during the 6 years of NDA rule, coal blocks were not auctioned. Maybe the NDA government thought of auctions as an appropriate mechanism and moved the amendments bill in 2000. But it could not get it approved on account of its own compulsions. The UPA-1 government could also not get it approved for reasons explained above.

There is one thing that is well known about India. Decision making is an extremely slow process; an attempt at generating adequate support for any piece of legislation takes too much time. Passing new laws takes years. Implementation of laws also takes time. But then no one really cares for governance in our country. If a minister, or an entire bureaucracy, delays decisions, no one asks them any questions. But if in the process of decision making, some mistakes – even innocent ones – are made, then the same are projected by bodies like the CAG as scams. We have created an environment in the country where sitting on one’s back-side is acceptable; but moving quickly is not. Not so long back, Praful Patel was hauled up because he took the decision to order the planes too soon; in just 17 months of discussions!

When the Government refuted the charges made by the CAG in its draft report, the CAG went on the defensive saying that they were very good accountants; of course they are. But good accountants can make big mistakes when they fail to understand their mandate. The CAG may be mathematically right – just about “maybe”. But that’s a silly way to approach a policy matter. The Government has been thinking of freeing up diesel pricing for a long time. Let’s say the first “thought” was ten years back. So if the CAG were to do an audit today, they would probably say that the country has lost many lacs of crores again because they did not implement what they thought! This is plain ludicrosity!

The real truth is that there is nothing called Coalgate. The media has branded it as such so as to generate more eyeballs for its content. The truth is that just one uses the venerable Colgate to brush the muck out of the teeth, it is time to brush the muck that is itself being called Coalgate…..

Tuesday, March 27, 2012

C’mon General…..give us the juice

General Singh has teased us the way TV channels tease us in their promos about the content following an ad break! But why is he only teasing us? When will he give us the real juice? Or will he suddenly start acting coy, remembering that he was a senior government official after all? Whatever he does… a drama-focused media and country….it is hardly fair that the General should stop short of a full disclosure now.

I am not quite sure which way this story is headed. The General himself has been accused by a few journalists on TV of wreaking vengeance on the Defence Minister, Antony. This is apparently, his way of getting even with the government after the age-row bombed in his face (he probably holds a grudge). But if this were true, why would he himself indicate that the minister was shocked, and held his head in his hands in surprise? Why would he then also say that it was not like a direct “ghoos” had been paid to him….it was only an indirect offer; hence he didn’t take it too seriously. Is this why he didn’t file an FIR? It’s strange – I wrote yesterday that any of Anna’s team members or the general public could file FIRs against any minister… is a case where the General failed to file an FIR also. What’s it with FIRs these days?!

The media (at least some sections of TV news media) have spun an interesting theory – full of drama. The story goes that the beneficiary of the General’s generosity (that rhymes well!) would be Bharat Earth Movers – a government owned PSU. And since the Defence Minister is the ultimate head of all Defence PSUs, he must be the one who bribed(!) or at least induced the bribe to happen. Truly fascinating. But these are times when anything goes.

This is as ridiculous as many of the CAG’s recent reports. In fact, one of the readers of my blog – Zephyrine Goveas – wrote on how ridiculous CAG can be: “Next the CAG may say that there has not been a war for quite some years and therefore all the expenditure on Armed Forces is a colossal scam and this scam will be bigger than any one can imagine!” And again, Antony may be held responsible for this scam! Ridiculous. The spin that some TV channels have given this is something similar. If there is one thing Antony has never been accused of, it is of corruption.

In the past, I have written that this country assigns no priority to decision making and action orientation. In my post of June 9th, last year (We need efficiency, risk taking, quick decision making and big thinking in governance. Not just freedom from corruption......and a solution to the Lokpal logjam), I wrote: Who would you rather prefer? AK Antony – known as one of the cleanest ministers – but who hardly takes any decisions? Or Praful Patel – action oriented; functioning like a CEO; one who changed the look of the Indian aviation sector – but who has been unable to survive the charge of nepotism and perhaps corruption?” The context of that post was the charge made against Praful Patel for “speedy” decision making with respect to ordering planes for Air India.

AK Antony is clean; but inefficient. Under his watch, decision making has come to a standstill. Antony prefers not to take decisions since decisions can be controversial and he can be accused of playing god, indulging in corruption and many such things. How can a man like Antony be responsible for bribing the General?

And besides, at some level, I feel that if Antony wanted the General to take a particular decision, he would find other ways of getting his work done. At the end of the day, the Executive knows of ways known to all, but told officially to none, to get its work done.

In any case, now that the General has shed his coyness and broken the bribe offer made to him, why is he holding back? Why not go the whole hog and make the ultimate revelation? Will he open his heart up to the CBI, now that an enquiry has been ordered? We’ll need to wait and watch. Hopefully, he’ll decide something while still serving in the army, rather than when he’s become a retired General!

The real truth is that the story has more layers to it than anyone understands right now. If it had been any other minister, I would have believed what the General claimed. Considering that it is Antony (whose personal credibility is similar to the PM’s), I am very circumspect….

Monday, March 26, 2012

Anna’s bark is worse than his bite….

I am not even sure if another post is required on this very tired movement…..a movement that got wrecked by a bad team and wrongful leadership. Coming after a 3 month hiatus, the one-day fast by Anna at Jantar Mantar was more of the same stale fare that this country has got fed up with and discarded.

From media reports, one learns that there were not even 4000 people at the fast; this on a balmy spring day in a very politically aware and savvy capital. Of these, it can be safely assumed that a thousand odd would be media people; another thousand odd would be the show organizers, event managers, security personnel and the like. Where does that leave the actual crowd support? Less than what Anna got in Mumbai? Is this real bite??

And what was the issue that was being raised this time? The demand for a “strong” whistleblower bill? A “strong” Lokpal bill also perhaps? And while we are making demands, why not demand the resignation of the UPA government also? Ooops, would that be going too far? Let the BJP do that. Anna will limit himself to asking for some FIRs to be registered against some politicians – not surprisingly most of them part of the anti-BJP brigade.

Register FIRs? Why should the government register FIRs against its own ministers? Anyone can do that. Why can’t the common public file an FIR? Why can’t Prashant Bhushan – the hot shot PIL expert and leading anti-Congress light – file an FIR? But then, this is not the only ludicrous part of the demands that was made yesterday. How come there were no BJP leaders named against whom FIRs should be filed, except Yeddy, who everyone knows has become a thorn in the flesh of the BJP? Why not against the MP CM Shivraj Chauhan against whom enough and more accusations have been made of late with respect to illegal mining? Why not against Modi against whom the CAG has made several accusations over the years? Why only against Congress leaders, and other anti-BJP crusaders like Mayawati?

If Anna’s fight is against corruption, then why not against Baba Ramdev, who has enough to account for in terms of hawala transactions and illegal assets held abroad? If we are going by mere accusations (and I have no idea if the accusations are right or wrong), then surely an FIR against Baba Ramdev is justified? In fact, not only did Anna not demand an FIR against Baba Ramdev; he exhorted his supporters (who were where?) to support his movement. Great.

In case Anna forgot, the Whistleblower bill has already been introduced in Parliament and is with the Standing Committee where his favority party will have the chance to add value if it deems fit. Hopefully, it will not do a “Lok Ayukta” kind of trick with this bill. Even if it does, it needn’t worry about attacks from Anna. Anna was most understanding of the BJP’s volte face on the Lok Ayukta issue after all. Not once has Anna demanded that the BJP explain this volte face. Not once has Anna taken the BJP to task. But then, the Lok Ayukta turnaround is not the only point where Anna has been kind to the BJP. When the Bihar legislature adopted a Lok Ayukta Act which was way below Anna’s expectations, there was nothing more than a mere whimper of a protest. When Modi sat on the appointment of a Lok Ayukta in Gujarat for so long and when the Governor finally chose one, Anna never criticized Modi.

Nor has Anna demanded answersfrom the Left parties on the weak Lok Ayukta Act that they introduced in WB and Tripura when they were ruling. If one thought that Anna had learnt a lesson and had changed tracks, yesterday’s event shows that that was not true.

Frankly I had written about this earlier; and I will write this again. The only party that is pushing for the Lokpal is the Congress. Maybe it’s because it’s been hit black and blue and wants to prevent any more damage. Maybe because it sees an opportunity to gain some lost ground. People may disagree with how strong the bill passed in the Lok Sabha is – and there will always be differing viewpoints in a democracy – but at least something has been passed. After waiting for 42 years, I think it is important to first secure some law. It can always be amended in due course of time. There can be no denying that that bill was passed only because of the Congress’s push; and in spite of the BJP’s resistance. Had the BJP had its way, it would have blocked it in the Lok Sabha also.

The real truth is that much of Anna’s threats are just that…..threats. There is hardly anything new; and hardly anything that lifts the movement from the mess it got into. The people of this country are horrified with the corruption; and they want action; but they are equally disillusioned with the movement that promised the earth and the moon but could not even deliver the most rudimentary form of the requisite legislation. Anna’s movement doesn’t deserve the front pages of the newspapers or the prime slot on the 9 pm news bulletins any longer….

Saturday, March 24, 2012

The Lok Ayukta clause exposes the true colors of all political parties…..

The meeting called by the PM yesterday brings out the truth about the status of the Lokpal Bill and the positions of various parties vis-à-vis the bill and Anna Hazare. Today’s papers are worth a read. None of the issues matters to the political class except one: The prescription of a Lok Ayukta law under the central Lok Pal bill. One would have thought that that clause was at the heart of the understanding the Parliament had given Anna late last year. What happened to that commitment? And why is Anna still not attacking the duplicity of certain political parties on this key aspect of the Bill?

In the heated moments of the last stretch of Anna’s fast, every political party strained itself to be seen on his side. In a ridiculous display of political opportunism and desperation, several top leaders of these parties even shared a public platform with Anna in Delhi. And when each of them spoke, the only points they touched upon were the points on which they agreed with Anna. Not one of them raised the issues where they disagreed with Anna. After all, who wanted to get booed out by the crowds there? But as soon as the tempers cooled down, the real colors of the parties have started to show.

The sense of the House resolution passed “unanimously” by Parliament read as under: "This House agrees 'in principle' on following issues -- (i) citizens' charter, (ii) lower bureaucracy under Lokpal through an appropriate mechanism, and (iii) establishment of Lokayukta in the states."

The Central government in December introduced the “Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011” to cover the first commitment of the Sense of the House resolution. The only point of disagreement with Anna on this is on whether it should be an independent act (as proposed by the Government) or a part of the Lokpal Act (as Anna would like it to be). While some people may keep debating it, the fact is that the subject is largely getting addressed. Likewise, the lower bureaucracy has been brought under the Lokpal through an “appropriate mechanism” – via an indirect mechanism through the CVC. That leaves only the 3rd point open.

The 3rd point was introduced by the Central government as part of the Lokpal Bill – the bill that was passed by the Lok Sabha. The same bill that got jammed in the Rajya Sabha. The Rajya Sabha is where the opposition gets to play its cards the best – since it’s a house that the ruling dispensation doesn’t control. And just see what’s emerging from the Rajya Sabha.

The BJP, the Left, and virtually all regional parties are opposed to the Lok Ayukta clause being there in the Lokpal Bill. Weren’t these the same parties that had resolutely supported Anna and the Sense of the House Resolution? Wasn’t the Congress supposedly the only party that was opposed to Anna and the Lokpal construct? What’s going on here? Are we reading the reports wrong or what? Is it the BJP that is opposing the Lok Ayukta clause? Never before had the party said this. Jaitley never mentioned it on the public platform he shared with Anna. In Parliament, when the Sense of the House Resolution was being passed, it was the BJP that wanted the resolution to include these three specific points. Wasn’t it Sharad Yadav of the JD(U) who had said that “every word, every comma, every full stop” of the resolution will be included in the Bill?

Political parties are known to be turncoats. And the Congress is no exception either. But for the people of this country, it is important to be able to dissect issues and put the blame appropriately on those who deserve it. The Congress deserved the blame for the way it initially tried to steamroll the movement. But now the BJP and the opposition need to be blamed for their complete U-turn on the Lok Ayukta issue.

But has Anna put the blame on the BJP? No. Not once has Anna or his team squarely blamed the BJP or the Left. If this was political smartness (befriending the opposition to put pressure on the ruling dispensation), that would be understandable to a point. But if the befriending is causing the entire objective to get diluted, then why continue with it any further? In fact, by blindly supporting the BJP and opposing the Congress, Anna is responsible for having derailed the movement. Had it been a citizens v/s politicians battle, there would have been far more support for the movement. It would also have been more sustainable. I doubt now if the movement can ever be resuscitated. Timing is everything in politics. And being smart about making the right compromises is part of every successful struggle. Gandhiji made several compromises with the British – but he moved towards the ultimate goal with patience and determination. The Anna movement on the other hand wanted it all in one step. Now the country may get nothing at all.

The moot question is: Why is Anna not making a frontal attack on the BJP and the Left? Is it to do with the kind of team he has? Isn’t there more to the attack on the Congress than just a keen desire to put pressure on the ruling dispensation? Are Arvind Kejriwal, Kiran Bedi and Prashant Bhushan more anti-Congress than pro-Lokpal? Is there a clash of objectives taking place here? Is Anna not savvy enough to see through this? Or is he trapped in an organization structure that he is unable to break?

It’s only been in bits and pieces that Anna has moved on from his acute anti-Congress stance. After fighting the Congress in Hisar, he directed his workers not to make the fight party specific in UP. He does appear to be a lot less vitriolic compared to six months back, but is that because of his own personal health reasons? Or does he realize all political parties are alike? But till date, Anna hasn’t been able to reclaim the high ground that being apolitical make available.

Will the Lokpal Bill ever get passed or will it become a long lasting political issue between parties? Going by the goings-on, I doubt it will ever become a reality. And if it doesn’t, the political class (all parties included) would have outsmarted Anna. The next crucader may want to learn from this entire episode.

The real truth is that Anna made a fatal mistake by making his movement political. By doing so, he lost the opportunity to give the country a Lokpal Bill – no matter how weak or strong. Acts can be amended. But getting the first one in place takes a lot of effort. That important first move has been missed…..

Thursday, March 22, 2012

CAG at its ridiculous best again…..

The story in TOI and the drama that followed – with the CAG denying the story through a letter to the PMO, the PMO releasing a part of it and then a subsequent publication of the full letter by TOI – shows the bizarre way constitutional authorities have started to think and function these days. At the end of all this, it is not clear whether the CAG is standing by this alleged report or denying it. It appears to be denying it. But if there is even an iota of truth in this report, the CAG needs to pause and think where it is going with all this.

Even in the most generous defence of the CAG, one would still have to agree that if the CAG had its way India would have to become a totally capitalistic country. Where everything is sold at the highest price – the poor who cannot pay high prices be damned. Maybe the CAG has forgotten that India is a “welfare state”. The word “socialism” is built into the preamble to the Constitution. No political party can be set up if it does not agree to be a socialistic party. The allocation of coal fields without auctions is just another example of such a welfare practice. If the CAG wants to take a capitalistic approach, there are thousands of other areas that it will find that “have led to a loss to the exchequer”. By that token, the entire $2 trillion economy is a scam! Or maybe perhaps the CAG needs a lesson in the basic polity of the country.

I can imagine a day when the CAG brings out a report that says that the GOI loses lacs of crores of rupees every single year because of “over employment”. In making this observation, the CAG would be entirely right. But it would also be “clerical”, as has been its method recently. The CAG could compare every Government department with a similar private sector company – and bring out a startling report of this type. Take two examples that come to mind immediately. Prasar Bharati employs some 18000 engineers in its total staff of some 45000 odd. It generates revenues of some Rs 1200 crores or so per annum. These engineers take care of the technical requirements of AIR and DD. The number of such engineers in any private sector broadcaster – either in TV or radio – despite being bigger in revenues than DD and AIR respectively – would perhaps be less than 25. Even considering the outsourcing that private companies do, the number of engineers employed would be less than 100. Technology is a commodity and its upkeep simply does not require so many people. Yet Prasar Bharati has 18000 engineers on its rolls. Take the example of Air India. Its employee strength is many times of a private airline of similar size.

The moot question is: Does this make a “scam”? Does this constitute a loss to the exchequer? In one way – the way the CAG has started looking – sure it does. If only 100 engineers were employed in Prasar Bharati, then surely Prasar Bharati would be a profitable company. So would Air India. But is that the way the polity of this country is designed? Can the Prasar Bharati afford to run with just 100 engineers, when another part of the Government’s mandate is to run like a “welfare state”? Isn’t employment generation – with all its consequent ill effects – almost mandated by the Constitution?

Just look at the CAG’s claims. Apparently, the GOI should have auctioned all the 155 coal blocks that it audited. Sure it could have. Then the price of coal would have shot up. Electricity costs would have shot up. The poor would not have been able to afford it. And since that would be politically unwise, the government would have had to heavily subsidize power. There are enough problems the power sector is facing –had the blocks been auctioned, the problems would have been even more. If the CAG had its way, that would be ok. It’s better to have no power at all (with all of us living in the dark ages) than to have a welfare state. Ridiculous at its best.

As one political commentator said on TV “Even if half this amount is correct” (meaning if the “scam” is just Rs 5 lac crores), it is shocking. But where is the “scam”? It’s all out in the open. The government has not surreptitiously avoided auctions. It has done so openly. We would like to hear from the CAG what the real scams are. Has someone made money on the side in implementing this welfare policy (very likely someone would have)? Obviously, the CAG is silent on that.

Besides, more than half the so called scam is towards helping PSUs. So is it the CAG’s point that the GOI lost, even though its 100% owned companies made “windfall profits”? (The CAG has apparently now stopped using this word in its report).

Sure, there may be a case today to charge taxes on windfall profits. And sure that would be a healthy public debate to start off. But to say that there was a loss to the exchequer is bizarre.

The exact same thing had happened in the 2G “scam”. The real scam was in what Raja allegedly did. There is an allegation that his party – the DMK – got Rs 200 crores in “deposits” from DB Realty. The CAG didn’t bring this out. The CBI did. The CAG preferred to bring out a sensational report accusing the government of having lost money. The CAG forgot that the 2G spectrum was no auctioned as a specific and thought-through policy decision. The same policy had been followed in this country since the beginning of the telecom revolution. Even the Supreme Court went overboard on this subject when it ordered against FCFS in totality. Thankfully, the Government has appealed that order.

It would be bizarre if the CAG and the Supreme Court were to start making policies. Neither of them is an elected body. Neither represents the people of the country. The SC can easily overturn the Government’s appeal with no explanation owed to anyone. Likewise, the fine balance between institutions is being challenged here by the CAG.

The CAG similarly put a sensationalized number of Rs 2 lac crores in the S-band Antrix “scam”. It had to beat a hasty retreat when it was clarified that the S-band spectrum cannot be compared with 3G spectrum. Did the CAG issue an apology? No way. What about the whole estimate of Rs 1.76 lac crores lost because auctions were not carried out in 2G spectrum? Wait and see….bankers and analysts are wondering if the government will realize even 10% of that number. And that entire 10% will be passed on to consumers. Telecom prices will go up. And we’ll all be forced to pay more to “enjoy” the fruits of the CAG’s labors.

This disastrous working of the CAG should not be made into a political battle. The CAG will devour whoever comes in its way – whether the NDA or the UPA or the Regional parties. The CAG needs to be tamed. It has a huge role to play. It cannot be let to malfunction in this manner.

The real truth is that the CAG has gone overboard yet again. It has forgotten that it has no role to play in policy making. It cannot say whether “no auctions” is good or bad. It can say that in the “no auctions” regime, there was violation of systems and procedures and some people made money or the exchequer lost money. In an environment of hyper-competitive media, the CAG’s callousness can be multiplied many times over. And the country can come to a grinding halt……

Monday, March 19, 2012

Weak national parties; weak national leaders….

The last few days have seen the two national parties – the Congress and the BJP – face acute embarassment. The Congress faced a revolt from within its ranks in Uttarakhand. The BJP is facing the same situation in Karnataka. A few weeks back, the two parties both suffered a drubbing in the state elections (ok….they can keep squabbling on who got a bigger drubbing!) while the regional parties surged ahead. So we now have a situation where not only have the national parties become relatively weaker, they are struggling even to keep their flock together.

So what’s going on here? Why is Yeddy revolting so openly and unashamedly against his party in Karnataka? Why is Harish Rawat doing the same against the Congress in Uttarakhand? Let’s first look at why the regional parties are doing better than the national parties.

Clearly, the SP and the BSP are more rooted in the politics of UP than the BJP and Congress are. They have nothing but UP to fight for. All their leaders are from the state; all of them have ambitions restricted largely to the state. They speak the language of the people; resonate with their complaints; and in short represent them much better than the national parties do. The national parties on the other hand look at the states as being the gateways to power at the center. UP is important because it represents 80 seats; not because of what it is per se. Each national party is happy to do (perfunctorily) whatever it takes to get those seats. Once the state is won, the focus shifts back to the Center.

Take the case of Maharashtra where Prithviraj Chavan (a good CM by any standards) failed to read the political opportunity afforded by 17 years of Shiv Sena – BJP rule in Mumbai. As far as he was concerned, the political opportunity was a mathematical one. Get into an alliance with the NCP and the battle is won! Maybe the Congress made the mistake of not fielding the right candidates; those who represented the people better. Maybe they forgot to get more of their supporters to vote; the Shiv Sena on the other hand is a strong cadre based party. Maybe the issues raised were wrong; the people were more focused on local issues. Whatever the reasons, the fact is that the drubbing in Mumbai highlighted the fact that Prithviraj Chavan was an “outsider”.

Take the debacle of both the Congress and the BJP in UP. Neither party had strong local leaders. Rita Bahuguna Joshi is a political lightweight and Uma Bharati an outsider. Both were guided by policies framed by their masters in Delhi.

The only exception to this general trend is seen in states where the national parties have propped up strong local leaders; Modi for the BJP and YSR in AP being two such examples. Now that YSR has gone and the Congress has anointed a lightweight as the CM, the Congress’s fortunes are bound to decline there. By this logic, the BJP would be better served by re-instating Yeddy as the CM – the general feeling of corruption against him notwithstanding. All said and done, the issue of corruption is a national issue – which engages people at an intellectual level; not really a local issue at all. At the level of the states, the issues are more related to “aata daal” – concerning the daily grind of life. In Karnataka’s state elections, Yeddy is a towering personality and he could win the BJP the state yet again. The problem that central leaders face is that such strong local leaders are seen as a threat.

So regional parties are having a field day in the states. And strong regional leaders of national parties are also having a field day. Now look at the Central leaders that we have today.

The seniormost leaders of the Congress are Sonia, Manmohan and Pranab Mukherjee. None of them is a “traditional” politician; a mass leader which can handle the politics. None of them have the gravitas of a Vajpayee or a Narasimha Rao or an Indira Gandhi. Remember the days when we had such PMs as Inder Gujral (a fine man otherwise, but a political lightweight). Look at the BJP. Two of their top three leaders are lightweight politically (Nitin Gadkari and Arun Jaitley). On their own, they couldn’t lead a small district unit of their party; and yet they are playing big roles at the Center. Only Sushma Swaraj is a true blooded politician and a charismatic person at that. The BJP has also muted out other political heavyweights like Murli Manohar Joshi and Rajnath Singh.

Why do central political parties feel compelled to mute out their regional leaders? The reason is not difficult to understand. In a coalition era, the regional parties are able to exert more than proportionate pressure on the central parties. Just look at Mamata and DMK under the UPA-2 rule and Mamata and Jayalalitha under NDA rule. If such allies have to be “adjusted”, then the central leadership necessarily has to be “flexible” (a euphemism for weak in politics). A Vajpayee is more suitable than an Advani; a Manmohan Singh than anyone else in the Congress. Pliable central leaders are part of the coalition regime it would appear.

There is one other reason why traditional politicians are not emerging at the center. The people of the country perhaps want to see more sophisticated leaders representing their country. Most of these (Arun Jaitley, Manmohan Singh, even Pranab Mukherjee for most of his life) are elected from the Rajya Sabha where political astuteness and dirty aggression is not a pre-requisite. State politics is dirty – and almost all regional leaders have to indulge in the dirty aspects. Some are accused of corruption; some of fanning religious sentiments; others of caste politics and yet others of parochial opposition to everything. At the center, this doesn’t work. So we have a situation where central leaders are intellectuals; while the state leaders are the real politicians. These politicians make the central intellectuals dance to their tunes! They often dictate policy; but have no concurrent responsibility for the same. The DMK can make India vote against Sri Lanka. It has a limited objective of catering to local sentiments. It’s not the DMK’s problem that a vote against Sri Lanka could give China an easy entry into that country; something that could have devastating consequences for the country.

Forget what state leaders claim. The truth is that we have far too much federalism in this country. We need less, not more federalism.

The real truth is that both the BJP and the Congress need to introspect. They need to think about who takes on the positions of power within their organizations. The much touted intra-party elections may be one solution. But more than that, it is the genuine conviction that only strong political leaders (and not intellectuals) can lead political parties that is needed. Till that happens, the center will keep getting weaker (even if it has a majority) and the states will keep getting stronger (even if ruled by a central party)…..

Nothing great about the budget…..except maybe the support for Aadhar

Most political commentators have been disappointed by the financial budget presented by Pranab Mukherjee on the 16th. There were nothing “visionary” of the budget they said. However, most financial-world experts have praised the budget for being realistic, not too lofty, and making a sincere attempt to address the problems that the country (and the world) is facing.

There are hundreds of things that a budget tries to cover. However, for me the most important aspects of the budget relate to addressing the GDP slow-down, curtailing the fiscal deficit, controlling inflation and providing an impetus to the growth of infrastructure. Obviously, all of these are inter-linked and the Finance Minister has to decide what the relationships between them are likely to be. Beyond these important goals, the rest tends to be a little tinkering here, a little there.

Let’s look at how Pranab Mukherjee has handled the GDP slow-down issue. On the one hand, the government has increased the excise duties by 2% in most cases. If a reduction of 2% had had a positive impact on GDP growth, a 2% increase is bound to have the reverse effect. Growth could get cramped further in the industrial sector. Further, by increasing the scope of the Service Tax regime, there is a possibility (although this has not happened in the past even though the tax has been progressively applied to more and more service) that the Services sector could slow also down at least partially as well. The government had no options really – as the reduction in excise duty was only intended to be a temporary measure in the first place. While the excise and service tax will reduce GDP growth, there is nothing in the budget proposal really which is aimed directly at increasing the growth. The Finance Minister does however hope to increase GDP growth rates through indirectly.

Quite rightly, the Finance Minister appears to think that the growth rates in the industrial sector can be revived by a reduction in the interest rates. However, the RBI has clearly indicated that it would lower rates only if it saw sincere efforts by the government in reducing its own borrowing – or reducing the fiscal deficit in other words. The Finance Minister has made a plan for a lower fiscal deficit at 5.1% of GDP compared to the 5.9% that FY12 eventually saw. A reduction to 5.1% is hardly sensational; hence the disappointment in some sections of analysts. However, because of the same reason (that the reduction is hardly sensational), the budget has got applause from other sections – who believe that the goal is realistic given the many constraints the FM faces. So what Pranab Mukherjee hopes is that the RBI will see this as a sincere effort, and will oblige by reducing rates. Should that happen, the sentiment will lift, investments will increase and a higher GDP growth regime could kick in.

So again, GDP growth has been pegged to an easing of the monetary policy; there is hardly anything in the fiscal policy that the government directly controls.

What about the efforts at reducing fiscal deficit? I feel that the budget relies more on off-budget action than anything else. It is clear that the government wants to increase diesel prices. Will it have the political room to do so – in the face of a rampant and destructive ally Mamata? The government also wants to increase fertilizer prices, but again it will face major opposition. Will it be able to generate the Rs 58000 odd crores from 2G auctions? Most analysts think this is highly exaggerated; as the whole premise of the CAG in estimating the value of 2G licenses was flawed in the first place (all those who believe that the 2G scam was worth Rs 1.76 lac crores will be badly disappointed when the bidding finally happens). And yet, Pranab Mukherjee has budgeted for all of this to happen. That’s what makes the budget numbers wishy washy. Considering he suffers from a credibility issue after last year’s pompous claims, he could have been more forthright in addressing these issues within the budget itself.

Further, if diesel and fertilizer prices are indeed increased, then what about the effect on inflation? If inflation rises again (fuels have a 15% weightage in the inflation calculator and agriculture another 15% or so), then the RBI could refuse to reduce rates. The entire growth story would then come unstuck.

For me, the single most important aspect of the budget was the emphasis (for the first time) on the Aadhar scheme. Since very few people understand the revolutionary potential of this scheme, it didn’t find much mention in the media. Some Rs 14000 crores has been provided for extending the scheme from its present coverage of some 200 million people to more than double that number. The Aadhar scheme is a very ambitious one. Not only is it the biggest biometrics scheme anywhere in the world, it is also the one scheme that can have a seriously positive impact on curbing corruption (in the PDS system) and hence the subsidies budget (upwards of Rs 1 lac crores per annum; and set to go up further). If the targeted beneficiaries could be clearly and indisputably identified by an Aadhar number, then the subsidies that are being grabbed by ineligible people could be conserved. There are many other advantages of the Aadhar scheme. The Aadhar number can be used to open bank accounts; bringing much of the subsidies into the “white” measurable domain. The beneficiary wouldn’t have to take whatever trash the ration shops throw at him (selling the better quality in the market for high profits) – and would be able to use the cash in the bank to buy whatever he wants. And most importantly, financial benefits could be linked to other social goals as has been done in many Latin Americal countries – like forcing beneficiaries to enroll their children in schools, restricting the size of the family etc. This is the first budget that has made such an extensive allocation to the Aadhar scheme. This one measure alone can transform the way our economy works. This one measure alone can curb corruption like no Lokpal can.

The GDP growth can also get an impetus through some efforts made to grow the infrastructure in the country. The increase in the size of the tax-free infrastructure bond schemes from Rs 30000 crores to double that size should help plough more resources into this crucial sector. The import duty on coal has also been temporarily reduced to zero to tide over the crisis in the thermal power sector. Customs duties have been left intact in an effort to provide more resources (commodities) without raising their prices. So all this is good. But no where is there any effort to improve core “governance”. In the case of infrastructure, governance could simply mean implementing projects on time. If just this much could be ensured, the country would grow much faster. Resources wasted on delayed projects would be saved; and the gains from a faster developing infrastructure would propel the overall growth of the GDP much faster. Unfortunately, the PM’s much touted “formal appraisal” idea (appraisal of his ministers every six months) has been a non-starter. A budget is not the place for this discussion; but I do hope the government can show some will in improving the implementation of its plans.

The real truth is that the budget doesn’t address the GDP growth issue directly. It relies on an easier monetary policy for its growth. I would have liked to see more ambitious proposals on the fiscal side. Proposals that would spur growth directly. Like reforms in the FDI regime; stronger commitments on the infrastructure sector etc. But given the political scenario, we should be happy with what we got……

Friday, March 16, 2012

The beast of burden (Railways) demolished by the burden of the …..

Mamata Banerjee is making a complete joke out of governance. Unable to run her own government with any degree of sanity, her burden on the nation is now becoming a matter of concern. What otherwise would explain the drama that followed after Dinesh Trivedi presented the Railway budget a couple of days back? Mamata is now behaving like a man-eater – ready to devour anyone who comes in the way of her blinded vision….

The Railway fares haven’t been increased for 9 years or more. In the meantime, the people who the Railways are supposed to serve have seen their incomes rise by an average of nearly four times (15% per annum on average – doubling in five years). This is “nominal” income – unadjusted for inflation. But then we are also talking about Railway fares on an unadjusted basis. After all we pay for Railway prices on “current market prices” basis rather on “fixed prices” basis. All that Mamata has protested about is the fare hike. She’s not asked one question; not made on comment on the other aspects of the budget. Is pricing all that she is concerned about?

Mamata lives in a world of make-believe. In her world, any increase in cost of utilities is anti-people. However, having more people die due to accidents; having horrible toilets that stink more than even our politics; having crowds worse than anywhere else in the world....these are all acceptable to Mamata. She may want to ask herself what the people want. Would they be willing to pay a little more for a little more comfort? If she did a survey, she would find that most people would say a resounding “yes”.

Since ticket prices haven’t been rising, there has been no addition to Railway capacity. Hardly any new tracks are being laid. Hardly any new railway stock being added. More and more people are getting stuffed into existing coaches. In the meanwhile, the population has increased some 20% or more in the last decade; but there is no corresponding increase in the Railways’ carrying capacity. Not surprising then the boom that is being seen in the private tourist buses business. What about prices in that sector? Obviously, they’ve soared as prices of fuel, the tolls, and the cost of maintenance and spares have increased. This particular sector has managed to continuously upgrading too. The latest story yesterday about the Tatas launching new upgraded and upscale Volvo-like buses suggests a consumer preference for comfortable AC travel. Everyone has got the message – but Mamata hasn’t.

There was some cynical speculation yesterday that all this drama was pre-scripted. That Dinesh Trivedi wouldn’t have had the guts to present a budget without at least a hint of an approval from his boss. That Mamata has taken the high ground by protesting the price hike, but she will allow most of it to eventually go through. This is a very cynical view – and if it is true, then it shows just how little Mamata cares for the business of governance. Sacrificing a minister as part of a political strategy of drama – with the insouciant attitude that she dons – must be a low point even for Indian politics.

Recent developments on the political side really point to a growing crisis in India. We have the clear spectre of the states becoming stronger – UP, Goa and Manipur being the most recent cases – and at the same time the Center becoming weaker. This is not to do with a UPA or an NDA rule at the Center. Just as much as the Congress has been shaken to its bones in the recent polls, so has the BJP. If there were an NDA government at the center, it too would face a similar situation. With ever more powerful regional parties, the coalition at the Center becomes vulnerable to every tug and pull that the regional fiefs exert. What option does the Congress have in the present situation? Sacrifice the government for what has to be seen as just another day in its life or make the compromise – one more time?

The Railways budget is just one more incident of what has been going on for long. FDI in multi-brand retail, NCTC, the Lokpal fiasco, the reforms in the banking and insurance sector…..all of these have been victims of the stone-age attitudes of some of the UPA’s allies. The main opposition – the BJP – needs to play no role at the Center at all. It just needs to sit with folded hands and enjoy the action unfold! But the BJP needs to read the writing on the wall. Why was it not rewarded by the voters in the recent polls? Maybe voters expect it to be more pro-development and support the Center on the basis of its own principles on the economy – rather than oppose for the sake of opposing? The BJP has every right to oppose the communal violence bill for it is at the core of its political ideology – and its opposition would be a principled stand on the subject. But its opposition to economic reforms – a subject it believes in as much as the Congress does – is not something that is acceptable to the voters. The BJP learnt this lesson first in 2009, when the party’s opposition to the Indo-US nuclear deal ran afoul with voter expectations. Is the party not doing the same now?

We forget one important thing in this whole debate. The National Income of this country rises some 15-17% every single year in nominal terms. Farmer incomes have been rising regularly because of serial increases in MSPs for various goods. The subsidies on farm inputs continue to rise too. Both together give much more money in the hands of the farmers. Non-farm incomes have also been rising in the rural areas thanks to NREGA and the overall economic growth in states like UP, Bihar and Orissa. Urban salaried workers are protected by annual increments. Businessmen see their profits increasing in the same manner. The only segment squeezed out of the economic growth is the urban un-organized sector workers – the lacs of drivers, maids, watchmen, dhobis etc – who are unable to extract any real increases in their earnings from their ever-more-stingy customers. The bulk of the Indians can afford an annual price increase in rail prices. Provided they are given a more comfortable ride and a safer one at that.

The real truth is that the UPA has to see Mamata in her eyes and challenge her. It has to find another formula for itself. If that means sealing a formal or informal arrangement with the SP and the BSP, then so be it. If that means sacrificing its own plans for UP in the short term, so be it. The Congress has to decide – does it want to run the government at the center or develop its party in UP. At this juncture, both are simply not possible…..

Friday, March 9, 2012

Trinamool’s mid-term threat is nothing but baloney…..

I can understand the SP making a noise about mid-term polls. After all, the party has a clear chance of increasing its MP count in Parliament. But the TMC? Honestly, if General Elections were held today, the TMC would see a reduction in its MP count from the 19 it has at present. In the best of scenarios, it may stay flat. Under no circumstance can I imagine it increasing its count. If TMC’s threat wasn’t baloney, what else was it?

They say anti-incumbacny kicks in within a year. The first six months are a honeymoon period, but people start getting restless soon thereafter. Mamata has nothing but incompetence, arrogance and ignorance about her responsibilities to show. Her handling of the several crises that have hit her state has been insensitive and careless. Women voters must feel particularly upset with the way she saw a CPM-plot in the rape cases even before she could analyze the situation. Even before she took steps to catch the culprit(s). Her handling of the infant deaths problem – again preferring to blame the state of affairs on the Left (which undoubtedly was true at the beginning of her term) – has left many of those who voted for her rattled. After all, how many months does it take for a Government to start making corrections in systems that have supposedly gone into disarray and disrepair?

How long can Mamata keep giving excuses? Much of her opposition to the Central government also appears to be whimsical, rather than principled. After all, why would she oppose the Lok Ayuktas clause in the Central Lokpal Act? She had accused the Left of being highly corrupt – why then should she oppose the mandatory imposition of a central Lok Ayukta statute on her state? If she was so concerned about the state’s autonomy, why has she not come out with her own “strong” Lok Ayukta proposal? It now appears that she has no capability of introducing her own law. Again, on NCTC, her arguments against supporting it looked arbitrary. If she was so much for state autonomy, why did she propose the changes to the RPF Act – only to hastily withdraw it on realizing how her double standards would get caught?

Brings us to the question – who really wants the mid-term elections apart from the SP. Frankly, I cannot think of anyone at all. Least of all, the BJP. The BJP has got a pretty strong drubbing in the recent state polls. They have lost 8 MLAs and more importantly, their tally in UP has shrunk. Yes, if they had done well in UP – as the initial poll trends indicated – they would have gained from mid-term polls. But all that the BJP has to show for success is Goa; the smallest of all the states – even smaller than Manipur and Uttarakhand – that went to the polls. The BJP lost in UP, Punjab and Uttarakhand; and it isn’t even present in Manipur. On what grounds would it press for mid-terms? Sushma Swaraj was perhaps being unduly adventurous – but good sense soon prevailed on the party when it clarified that it wasn’t in favor of mid-terms. The BJP also has several other worries – its unit in Karnataka is in shambles; the temporary acquittal of Yeddy notwithstanding. Yeddy freed of charges can only mean trouble for the BJP, as his involvement in many other issues comes out. Further, the fast developing story in MP about mining, the deteriorating law and order situation (first the murder of the RTI activist Shehla Masood, and now the IPS officer) and the several cases of corruption coming out of the state are all pointers that the BJP could be in trouble in the state.

The state elections have again proved that though the Congress may lose (and it may indeed), the BJP is unlikely to benefit. The BJP must consider itself lucky that the Congress didn’t emerge stronger. And likewise, the Congress that the BJP didn’t either. Both parties are missing the bigger point – that they are both being shrunk in size by the regional parties. That real benefit of any mid-term may actually goto the regional parties; who may then feel emboldened to form a viable third front.

So no one is going to be happy if a mid-term election is held. Least of all, the Congress and the BJP. But in the hectic and heightened political scenario in Delhi at the moment, when all knives are out for the Congress, and when the BJP is in a delusional state of having acquired more strength, anything goes. Even a light weight minister like Dinesh Trivedi’s un-thought-through statement makes the headlines. The media is happy to latch on to anything sensational. The Presidential polls provide some juice too – but the fact again is that nothing has changed after the polls. The UPA hasn’t become any weaker; the NDA hasn’t become any stronger. But somehow, an attempt has been made to sensationalize the Presidential poll. It was always going to be difficult for the UPA to get its candidate through unchallenged; it will continue remaining difficult.

The smart thing for the BJP to do – and I think it realizes it – is to let the UPA stumble along till the end of its term. The anit-incumbancy will be stronger in 2014 than it is now. Maybe the Congress will continue to goof up; maybe it won’t learn any lessons. One thing is clear – if it doesn’t clean up its act, it is unlikely to return to power. Even if corrects itself, it is going to be an uphill task to hold on to its 207 odd strength in the Lok Sabha. It’s bound to suffer in states like AP and Maharashtra. Either way, the BJP’s best shot at ruling the Center would come in 2014, not now. Maybe a thumping victory in Gujarat may give the party renewed enthusiasm and vigor.

The real truth is that there will be no mid-term polls. No one wants them. The talk is all bravado; very little thinking. The next two years and a bit are an opportunity for the BJP to press home the infirmities of the Congress. They are also an opportunity for the Congress to recover at least some space for itself. What happens remains to be seen; but in politics, it’s never too late till the last day!

Wednesday, March 7, 2012

Cannot understand why the UPA should become weaker after state elections…..

I can understand the UPA hasn’t been able to take advantage of the state elections held recently. Yes, the Congress was expecting a lot from UP and if it had done well there, it would have become stronger in Delhi. Likewise, if it had won Punjab, it would have been a strong push back to its opponents. But that didn’t happen and the Congress didn’t become stronger. But why should the UPA be considered weaker now than before the elections? Unless of course, “not becoming stronger” is taken to be the same as “becoming weak”!

The strength of a political party is contextual and comparative. The context at this point in time is that the state elections took place after a tumultuous period of more than 18 months for the Congress. During this period, various so called scams were unearthed. I say “so called” because the scams were vastly exaggerated and sensationalized by the CAG and media. For eg., the CWG scam that started it all off was called a Rs 70,000 crore scam. Really? What has Kalmadi been charged for even now… many months after the scam erupted? A Rs 200 crore rupee TSR order. How much could he have swindled in this order? 20%? 50% even? How much does that make it? The 2G scam soon followed with the CAG putting a highly sensationalized figure of Rs 1.76 lac crore. Now this is more of a political scam than a financial one. Should the Congress have allowed Raja to continue with the FCFS scheme? The SC has blasted the FCFS scheme – although I feel that is unfair. I am happy that the Center is challenging the SC’s order on FCFS in a review bench. But the indictment of FCFS is egg on both the Congress’s and the BJP’s faces. Then the Antrix scam, which according to the CAG was a Rs 2 lac crore scam. But a better understanding of the subject has now revealed that for the CAG to compare the S-band spectrum with 3G spectrum is downright childish and stupid. But for the CAG, big numbers have been its claim to fame. Somewhere down the line, I feel the CAG forgot where to put the decimal point at the right place! Be that as it may, the Congress failed to defend itself. It acted too slowly; and it put out the wrong people to build its defence (Kapil Sibal for one). One also has to keep the huge Anna movement that targeted the Congress singularly. One would have thought that the Congress would actually lose seats in these elections….

Given this context, the fact that the Congress actually gained 24 MLAs in the state elections must be seen as almost “heartening” by the party. Of course, it could have been a much better number – that’s what everyone was expecting it to be, but even if that didn’t happen, the fact that the Congress actually gained itself is a positive for the party.

The other way to assess the situation is to look at it in a comparative way. The arch rival of the Congress, the BJP, has actually lost 8 MLAs in the recent round. How did this happen? What happened to all the support they extended to Anna opportunistically? Did the fact that they stabbed Anna in the back (by doing a volte face on the Lok Ayukta clause) hurt them politically? Whatever the reasons, the BJP has emerged only weaker now than before. Even their so called win in Punjab is actually a win of the Akali Dal. The BJP itself lost one third of its seat in the state. For the party now to attack the Congress and the UPA and say that it has become “weaker” is a bit of a travesty of intelligence, logic and facts.

There are various things that are now supposed to become “worse” for the UPA. The first is the President’s election. People who have been overcome by the supposedly poor performance of the Congress have made us all believe that the UPA’s strength has been “eroded”. Really? Like I mentioned, the Congress’s own strength has increased by 24 MLAs. Its count of MPs hasn’t changed. If anything, the Rajya Sabha strength could go up a bit thanks to its slightly better MLA strength. Either way, its number hasn’t reduced. The Congress had about 30% strength in the Electoral College for electing the President; with its allies, that number was 40%. That hasn’t changed one bit after the elections. So why are we discussing the impact of the election results on the Presidential elections at all?

What about the opposition’s numbers? Clearly, the BJP’s strength has come down (marginally). The NDA also has managed no better. Yes, the BJP won Goa, but it lost Uttarakhand. Yes, the NDA won Punjab, but their MLA-count remained intact. There has been absolutely no improvement for the NDA at all. If anything, there has only been a slight drop in its strength.

The real change that has come about has been between the two regional parties in UP. The SP has turned the tables on the BSP. Now is this good or bad for the UPA? Of course it is good. The SP went to the polls in UP stating loudly and clearly that it will continue to support the Congress (even when the Congress kept denying the possibility). It did this all through its campaigning. Even after the last phase of polls, and before the results were out, the party stated that it would continue supporting the Congress at the Center. Will it now pull out support? No way. Will it exert more pressure on the UPA? Of course it will! But can the SP ever align with the BJP? No chance! The SP courted near-death by bringing in Kalyan Singh, a poster boy of Hindu policies of the BJP. It has learnt its lessons. Now it won’t touch the BJP with a bargepole! Would BSP have aligned with the BJP if it had had to? Yes it would have like it had done in the past. The BSP cares only for the dalits, and they don’t mind making an alliance with a Hindu party that caters primarily to Brahmins. So if the BSP weakens, who loses? The NDA!

The ideal situation for the Congress would of course have been if the SP hadn’t emerged so strong. And if it itself had come out stronger. Ideally, SP at 170 and Congress at 50 would have been better. Since this didn’t happen, there is disappointment. There is disappointment that things did not improve for the UPA. But that does not mean that the UPA has become weaker!

What happens to reforms now? Well, nothing has changed really. What could have become better, probably won’t. The SP will continue supporting the Congress – now with larger numbers (in the RS soon). However, the SP will not support FDI in retail; it won’t support the Lokpal; What however gives me hope is the statements that Akhilesh Yadav has made since winning the elections. He has been modest in his victory; has taken the first baby steps in controlling the post-results violence; importantly he has spoken kindly of Rahul (he worked very hard; sometimes you win, sometimes you lose etc). I think this augurs well for the UPA in a very general sort of way. The SP will not create problems for the Congress. The SP will keep the BJP at bay. Will that help reforms? It’s entirely possible as two young people (Akhilesh and Rahul Gandhi) may find it much easier to tango than either Akhilesh and Nitin Gadkari or Mayawati and Gadkari or Mayawati and Rahul Gandhi could have. To that extent, SP’s win adds strength to the UPA.

The real truth is that the UPA has not become weaker by even one ounce. Yes, it hasn’t become stronger. So yes, the policy paralysis may continue. The ability to take tough decisions will be impacted. There will be more populism. Also, the Congress will have to mend its ways. It will have to become more “democratic” in handling its allies. But none of this means that the alliance has become weaker. For the life of me, I cannot understand why media has gone into such frenzy…..

Tuesday, March 6, 2012

Congress routed…..BJP equally so

It was on August 10th last year that I wrote a post titled “CNN-IBN’s poll shows Congress suffering; but BJP not gaining”. The background to this post was a CNN-IBN poll conducted on the eve of the Independence Day… a surcharged environment created by Anna’s anti-corruption movement. At that time, it appeared that the BJP was a party on the rise; capable of thrashing the Congress if elections took place then. After I wrote this post, Anna’s second major hunger strike took place – which the Congress royally bungled. After this, everyone expected the BJP to emerge even stronger – having sided with Anna throughout this tumultuous phase. However, my post had taken a contrarion line – and analyzed why the BJP could not gain even if the Congress lost.

What I had written specifically was “While the Congress is losing the corruption perception battle, the BJP is not gaining from it.”…..and “My big worry is that if the Congress suffers and the BJP doesn’t gain, then the Lok Sabha is going to be an even more divided house the next time around. The Left is hardly likely to gain unless Mamata messes up in WB. It’s the smaller regional parties who could gain – that means an even more weak central coalition government than we have seen during the NDA and UPA times.” If anything, the results announced yesterday are an endorsement of this.

Both the national parties were in deep pain yesterday. For the Congress, not being able to budge significantly beyond its 2007 tally hurt hugely – especially since the battle was led by none other than Rahul Gandhi himself. What must have felt like salt in a wound was the unexpected loss of Punjab. But what must have hurt the BJP equally badly was the story that has been repeating itself nationally. The BJP itself does poorly, even as its allies do better. The BJP’s performance in UP was atrocious to say the least – losing 4 seats over its poor-enough performance in 2007. And though it claims to have won Punjab, it’s actually not true. The BJP lost massively in Punjab, losing 37% of its seats. What the Congress had to salvage its pride was Manipur; the BJP Goa. Both parties proved unable to convince the voters of Uttarakhand to support them. It remains to be seen who forms the government there (Will Mayawati support Cong or BJP?).

What must have hurt both parties was the way the counting progressed yesterday. For the first couple of hours (till about 10 am or so), the picture that was emerging was very different from what happened at the end. In UP, there appeared to be a “BJP wave”. The party appeared to be doubling its seat count compared to 2007. The BJP appeared to be emerging as the 2nd largest party after the SP. In fact, TV anchors started propounding theories of why the BJP was doing so well. One theory that particularly gained currency was that it was Salman Khursheed’s 9% reservation fiasco that had gifted the BJP a huge poll victory in UP! In fact, some BJP leaders were so impatient to expand on the party’s superelative performance that they couldn’t hold themselves back. They must have felt totally embarrassed when the tide changed! Far from doubling its count, the BJP actually lost seats. The same was the scene for the Congress in Punjab. The first ten odd leads indicated a “sweep” for the Congress. Again, there were big statements made about Punjab continuing with the tradition of tossing out the incumbent government every five years. Just as the Congress was getting smug about its victory in Punjab, the tide turned! If many political leaders looked like fools in the end, so did many TV anchors!

So what are the big messages emerging from the state elections?

1)      That the regional parties are here to rule: It’s a regional party that continues to rule UP and it’s another one that continues to rule in Punjab. Not only do they continue to rule, they have both managed to increase their seat counts. The Akali Dal has gained 7 seats in Punjab; and the SP stands at 224 compared to the BSP’s 206. Last year, the only other national party – the Left, was routed by the TMC in WB. Clearly, regional parties are doing a better job of representing their people’s wishes than the national parties are at the state level.
2)      Both the Congress and the BJP have been decimated. But like I mentioned, the Congress’s loss is almost never the BJP’s gain (this time only in Goa) – it is a regional party that gains. But when the BJP loses, it is usually the Congress that gains (this time in Uttarakhand, but just look at states like Gujarat, MP, Chhatisgarh and even Karnataka partly…..). For the BJP, what this means is that it has peaked – they simply cannot grow beyond their current size.
3)      For the BJP, it’s a strange problem. The party continues to become weaker and weaker. But their allies continue to do better and better. In Punjab, the BJP actually lost 7 seats even while their partner the Akali Dal managed to gain those many. In both UP and Uttarakhand, the party lost 4 seats each. It’s only in Goa where the party captured an additional 7 seats. Overall, the BJP’s seat count went down by 8 seats in these elections (the Congress gained 24 seats). Today, the clear picture that is emerging is that the BJP is yielding ground to its allies. Is this the meaning of coalition dharma? Is this the price that a national party has to pay to keep its coalition going? The BJP already doesn’t matter in most of the politically important states – in Bihar, it’s really a JD(U) government; in UP, it is in a poor position. In Maharashtra, it’s already a weak party (in Mumbai, it’s a weak ally) and in WB and AP (the other larger states), it almost doesn’t exist. Even in Punjab, it’s in an unequal alliance. The BJP seriously needs to introspect on its political strategy. In contrast, the Congress is not in an alliance where it is a minority partner except in WB – but we already know that it has no voice in that state. The BJP likewise has no voice in states in which it is the minor alliance partner.
4)      There was absolutely zero influence of Anna’s movement. How many months has it been since the movement bombed? Three months? If Anna’s movement had any impact, the BJP should have been the biggest beneficiary. The party was parroting every demand of Team Anna – almost looking like its B team; but the party that won was the Samajwadi Party which was never a supporter of Anna. The BJP needs to ask itself if its belief that hogging prime time on TV with eloquent spokespeople is enough to wrest political power. It has to think about whether backtracking on the Lok Ayuktas clause in the Lokpal Bill was the right thing to do. It also needs to introspect on its stand on various economic policies – remember the Akali Dal was a big supporter of FDI in multi-brand retail but the BJP opposed it? Basically, the BJP needs to understand where it stands – as an opportunistic, disruptive party, or one that stands for something principled and constructive?
5)      Narendra Modi is a smart politician. He probably read the writing on the wall better than most other BJP leaders! No wonder then that he decided not to campaign in UP. Had he done so, he would have been compromised. Today, he stands out taller in the BJP.
6)      What about Rahul Gandhi? Well, I think the consensus is that the people of UP thought him to be hard working and sincere. Yes, he failed and he has taken responsibility for it. But in my mind, he’s made a lasting impression on UP’s electorate. The Congress may have lost UP, but they are in a position to increase their Lok Sabha strength in the next General Elections. One thing is clear – if the BJP fears anyone the most, it is Rahul Gandhi. No wonder then that more than analyzing her own party’s dismal performance, Sushma Swaraj was at pains to explain (almost urge viewers) that Rahul Gandhi is a failure!
7)      Dynasties work in India and how! Both the men of the match yesterday were Akhilesh and Sukhbir. When TV anchors asked both this question…..their attitude said it all “Who cares?”!!

The real truth is that the state elections come as a warning to both the BJP and the Congress. Both need to reinvent themselves. Rather than fighting each other in a battle of mutual attrition, both parties need to grow their clout. Both parties are losing relevance in an India – there is a growing preference for regional parties – at least at the state government level. Even in the Lok Sabha, the last time the ruling party had a clear majority of its own was perhaps when Narasimha Rao was PM. Both parties need to introspect……and yet, both of them prefer to attack each other….

Thursday, March 1, 2012

Cops set to get big raise in incomes….

With the Union Cabinet clearing a major increase in penalties under the Motor Vehicles Act (MVA), the largest beneficiary is perhaps likely to be the local cop……he, who administers the law on a daily basis. Much more than the government, it will be the local cop who will see his pockets start to bulge with this new initiative.

But let me be honest here. The amendments to the MVA were badly needed. Penalties were stuck in the old ages when the Rupee was worth a lot more. A Rs 100 penalty for talking on the phone or speeding was an easy getaway for most erring motorists. The penalties certainly needed to be overhauled and the government has done the right thing by doing so.

However, overhauling penalties is not even one fifth of the job done. The problem with raising penalties is that it affords the cops a much bigger opportunity to fill their own pockets. If a motorist is expected to pay Rs 1000 for a speeding ticket, he is going to have to pay Rs 300-500 as bribe to escape the official tab. The canny cop knows this. He is bound to demand his pound of flesh. In the earlier days, the cop could perhaps ask for Rs 50. And many motorists actually paid up the official tab because the gains from bribing were so small. Now, the incentive to bribe is back. So cops will surely see a rise in incomes. I am careful to use the word “income” rather than salary. In the government, salaries are low, but incomes can be very high!

What is needed before these higher penalties are put into play is a system that makes sure that bribes cannot be taken or given. But how can one do that? Well, usage of technology is one of the best ways to ensure that corruption does not occur at this low level. Major cities are today installing cameras at important points so as to be able to nab petty and major criminals as well as terrorists. One of my friends had a very encouraging experience when he visited the Bandra Police Station recently. On the wall inside the police station were several TV sets continuously monitoring several important streets in the area. When a woman came in complaining about her car window being smashed and her computer being stolen from inside the car, the cops instantly located the right camera and zoomed on the car to see it actually getting jacked. They couldn’t identify the cultprit, but they found a nearby shopkeeper who was looking on. Pronto – they sent a team to meet the shopkeeper. Very CSI style indeed!

If cops can use cameras to nab criminals and terrorists, the same technology can be used to prevent petty traffic-cop corruption. If cameras were used to control traffic-cop corruption, naka bandis would only be allowed at points which are backed up by a camera set-up. This will no doubt limit the element of surprise that the cops like to have in catching speeding motorists and those who talk on mobile phones. But I believe it’s important to prevent corruption first; expanding the effort can happen later. Besides, the camera set-up can be portable and can be moved around from one “surprise location” to another. Camera feeds should be stored and reviewed by a separate authority than the police on a random but regular basis. The fear of being caught should help curb corruption if not eliminating it totally.

There is one other step that needs to be taken alongside the above two steps (raising penalties and curbing corruption). That is to communicate effectively with motorists on the road. Communication is top notch in any developed country. A motorist gets all information and warnings through effective street signs and posters mounted on arches built on the roads. If the speed limit is 50 kmph, it should be communicated loudly. If lane cutting is not permitted, it should be flagged off repeatedly. If using hands-free for making a mobile call is not allowed, then it should be clarified amply. Communicating helps warning people; and it takes away the lame excuse they would probably be giving themselves for not obeying the law.

Another important step that is required to be taken is to make the traffic rules realistic. There is no point in having a speed limit of 50 on the Bandra-Worli sea link. 99% of the motorists break the law every single day. The 1%, who don’t, get honked at by those whose path they supposedly “block”. If the speed needs to be regulated, use road signs effectively. Other speed control devices can also be used like speed breakers etc. But keeping artificial restrictions will not help the cause. Likewise, parking rules need to be effective. There is no point is writing “no parking” in a lane, without offering a suggestion on where parking may be found.

Finally, nothing will work unless the RTO makes the process of granting licenses stricter. All kinds of rule breakers can be found driving on the streets. They have no idea of what the rules are…..they probably cannot even read the signs that are put up on the road. Canceling driving licenses for repeat violations is a must. Today, no one loses his license. First, the rules are lax. Second, there is always the age-old corruption to fall back on!

Once all the other steps are taken, we can increase the penalties. It’s only when all these steps are taken together will we get an effective control over the mess that we find on our streets.

The real truth is that without the implementation of these other steps, merely raising the penalties will serve no purpose. Determined traffic violators will still get away – only their pay-outs will increase. The real beneficiary will neither be the society (better road sense; lesser accidents) nor the government (lesser accidents; better fine collections). It will be the cops (higher incomes)!