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Time for renewal PDF Print E-mail
Saturday, 27 October 2012 01:30
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Cabinet rejig must focus on economic ministries

Cabinet reshuffles, over the years, have tended to be non-events, and the evidence of this is the continued charge of policy paralysis that has dogged the government through its tenure. The difference between those in the past, and that tomorrow, however, is that this time around, the government wants to be on overdrive. Whether it’s due to the fear of India being downgraded or the knowledge that you can’t go to elections with 10% inflation and 5% GDP growth, the government has made a series of announcements promising to end the policy paralysis. While the finance ministry has spearheaded most of these—such as the ones on GAAR and the Vodafone-type retrospective tax—it badly needs support from other ministries. The proposed National Investment Board (NIB) is aimed at cutting through a lot of ministerial delays, particularly environmental ones, but the environment minister has already put up a spirited defence, even arguing NIB may be against the constitutional scheme of things—if this situation endures, it knocks a big hole in the government’s promise to move along project clearances.

The fact that several ministers hold more than one critical portfolio, similarly, helps no one. Railways are a good example of this. Here’s a ministry that, for years, has been steadily been driven into the sick bay, but has the potential to be a great source of investment growth under an efficient minister—this includes the large tracts of land it controls, the modern railway stations and urban growth it can help catalyse. In the case of the coal ministry, not only did Coal India’s production not rise to the levels required, there was no attempt to either bring in transparent auctions or to bring in genuine private players. The petroleum ministry, to its discredit, got stuck in a fight with Reliance; it couldn’t, it is true, have done much about runaway oil subsidies since that was a political decision, but the ministry didn’t even get important clearances for the oil/gas blocks it was auctioning—73 of 249 blocks couldn’t even be accessed by firms that won bids for want of army/navy clearances. The most hilarious fact was the ministry gives more weight to CSR activities than it does to exploration activity when it assesses ONGC’s performance. In the case of the power sector, it speaks volumes for how it’s run that no action got taken when state regulators never hiked tariffs for years, which allowed losses to cross R2 lakh crore or when rampant grid indiscipline was the norm—with things reaching a boil, some action is now being taken. Most important, of course, is the need for a strong PMO—in the two governments that are spoken of as being economically active, PV Narasimha Rao’s and Atal Bihari Vajpayee’s, the PMO played a vital part.

 
 

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