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Friday, 06 June 2014 00:29
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Reassurances are fine, they also need to deliver

Given how even the best-intentioned policies can get grounded if the bureaucracy decides to put a spoke in the wheels, prime minister Narendra Modi has done well to open a direct line of communication with all the secretaries to his government in a 3-hour meeting on Wednesday. This is important, not just from the point of view of gaining their trust and letting them know what their deliverables are, it is critical given the large number of relatively inexperienced people in the council of ministers —if the bureaucrats don’t give the right advice, many first-time ministers can be left floundering. In the 2G case, were such support from the prime minister to have been available, it is unlikely the scam would ever have taken place—then telecom secretary DS Mathur is on record saying he had informally sounded out the principal and cabinet secretaries on the matter, but to no avail. And, in the case of Coalgate, the correspondence of the then secretary PC Parakh make it clear that, had his recommendations been accepted over several years, auctioning of mines would have replaced the discretionary allotment scheme that led to the scam. Both these secretaries would have done well with a direct line to an assertive prime minister.

But for every babu who wants to do a good job, there are those that revel in either not taking decisions or in taking perverse ones. Even when the UPA was keen on allowing FDI in retail, industry ministry babus came up with such complicated rules, no FDI came in. The oil ministry story of delaying even the gas price hike decision cleared by the Cabinet are well known and, in the case of telecom, the appellate tribunal has come down strongly on the ministry bureaucrats for coming up with misleading interpretations of the law—things were so bad that, at one time, then telecom minister Kapil Sibal said that he would take away penalty powers from his bureaucrats if they didn’t apply their minds while doing their job; in one case, they put a R650 crore fine on a firm for what was akin to a traffic violation. So, having assured babus that he would stand up for them, Modi would do well to make it equally clear the secretaries will be shown the door if they don’t perform.

Now that the prime minister has put together his Cabinet, albeit with some big holes and with some curious mergers of misaligned ministries, and established a direct line of communication with bureaucrats, he would do well to put together a seasoned panel of advisors. How a budget can be formulated without a chief economic advisor in place, for instance, has to be a mystery. The Prime Minister’s Economic Advisory Council (PMEAC) was a good addition that the UPA came up with, and the prime minister would do well to reconstitute it with persons who can come up with new ideas. Doing a good job on delivery is very important, but coming up with new ideas is critical if India is to move to a new phase of doing business.


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