Kick-the-can syndrome PDF Print E-mail
Friday, 13 September 2013 00:00
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Kapil Sibal has a plan to get his babus to work

If Bharti Airtel, its CEO asked telecom minister Kapil Sibal on Wednesday, earned just R8 lakh of revenues through an alleged infringement 8 years ago, how does he justify the R650 crore penalty levied on it? Since the law allows a maximum fine of R50 crore per telecom circle, obviously the telecom babus figured it was best to levy the maximum penalty—let Bharti Airtel fight it out in court and get the penalty reversed. It’s not just Bharti Airtel, all told, the telecom industry has got fines of R38,000 crore, including the R25,000 crore it has been asked to pay for the so-called ‘extra’ spectrum it holds. Sibal’s solution, to transfer powers of penalty to the telecom regulator if his bureaucrats are unable to take rational decisions, is a great one but, sadly, cannot be used in all ministries.

But if the government is serious about getting rid of its anti-industry tag, it needs to figure out ways to prevent bureaucrats from habitually kicking the can down the road instead of taking decisions that they need to take. In something as simple as approving a new bidding document for the power sector, something that should have been decided by the power ministry, the matter was sent to the Cabinet. Collective responsibility is all very well, but it cannot be used for even routine decisions—all this does is to simply paralyse decision-making. There are no uniform solutions, but in the case of the taxman where, for instance, direct tax arrears have nearly doubled from R2.5 lakh crore in FY11 to R4.8 lakh crore in FY13 thanks to a rash of tax demands made, the obvious answer is to put penalties on taxmen for making frivolous demands. If the taxman loses, on average, 60% of all appeals filed in various courts, it does suggest a lot of the demands made make little sense. In other cases, the solution lies in more reforms, to simply remove many of the powers bureaucrats have—and where the powers remain, there has to be, wherever possible, a quick appeals process.


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