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Thursday, 03 October 2013 00:00
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Don't allow civil servants to determine the pace of change, ministers must look at the bigger picture.

While Central ministers are, possibly too late in the game, trying to get things going, they find they are being hobbled by the bureaucracy. In such a situation, ministers have no option but to seize the initiative and order their officials to do what they say. And, if the order is a reasoned one, there doesn't seem to be any danger of the usual CBI/CVC/CAG probe. Telecom is a good recent example. Trai had come up with a fairly unreasonable base price of Rs 18,000 crore for a pan-India spectrum slot of 5 MHz in the 1800 MHz bandwidth. The number looked so absurdly high that a group of ministers reduced this to Rs 14,000 crore last November and then to Rs 12,000 crore last March — the figure was still too high and the auctions were a flop. But that is missing the point, which is that there was no CBI/CVC reaction to this.

Since the reserve price needed further lowering, the matter was referred back to Trai which, under a new chairman, reduced it further to Rs 7,500 crore. While this dramatically improves the chances of a successful auction and can help the industry get back on track, a nine-member committee of bureaucrats within the telecom ministry have opposed Trai's recommendations. This is where the political class needs to take a stance, look at the larger picture in terms of what it will do for the industry and tell the bureaucracy to clear it. In any case, since it's an auction, where is the question of favouring anyone?

In the case of RIL's gas fields, the story is even more bizarre. The company has been charged of gold-plating its costs at worst and, at best, of over-building capacity at its KG Basin complex. It is also accused of producing less gas, hoarding it as it were, so that it can take advantage of the higher prices from April 1, 2014. The first case is under arbitration, so it is not clear why the political class is not instructing the bureaucracy to just move on — let this case be decided by the arbitration, but allow RIL to get the gas price for other production. As for the hoarding, it is relatively easy to figure out the truth. Just appoint global advisory firms to examine the reservoir data and see whether there is more gas out there — RIL is so fed up, it has told the government it can drill for gas and keep whatever it finds. Relatively simple you'd think, but the bureaucracy is making heavy weather of hiring the consultants. Given the falling investor interest in India, the last thing we can afford is the political class allowing the bureaucracy to run circles around it.


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