Contract, what contract? PDF Print E-mail
Wednesday, 31 March 2004 00:00
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Singling out the human resource development minister, Murli Manohar Joshi, as someone intolerant of dissent, even after he’s begun singling out IIM directors (like the IIM Indore one he sacked) for treatment, is easy. But it’s not just Dr Joshi, the government as a whole has developed a low tolerance for dissent and alternative viewpoints.

Worse, it doesn’t have much respect for even written contracts. If you have a different opinion, you must be a criminal, or be protecting vested interests, or like IIM-Ahmedabad involved in accounting scandals — these are among the charges that government spokesmen have hurled at critics in recent weeks.

The no-win Dabhol contract set the trend, so much so that a special committee is now going into complaints by private power companies in general that contracts in India are neither respected nor enforced. It is of a piece with this that the government simply threw out Ten Sports’ contract for the telecasting of cricket matches (a contract that the company had signed with the Pakistan Cricket Board for exclusive telecast rights), and asked the channel to share its signal with Doordarshan —which had refused to pay Ten Sports the asking price.

And, in the case of telecom, when the telecom dispute panel gave a ruling asking the government to stop WiLL-mobile roaming services last year, the government simply refused to implement the order. Indeed, it declared the ruling un-implementable and went on to re-write policy. This list could go on.

In each case, after an initial show of defiance, the market participants have decided that discretion is the better part of valour, and that no one can fight the state beyond a point. The cellular industry filed a case in the Supreme Court but backed down when it became obvious the government had no intention of accepting anything other than its own point of view, and withdrew the case.

Ten Sports’ chief Sheikh Abdul Rehman Bukhatir flew to Delhi on the eve of the first Indo-Pak one-day match and had some harsh words to say about the government’s behaviour, but then agreed to share the signal.

And no merchant bankers have cared to respond to Disinvestment Minister Arun Shourie’s charges against them, faced as they were with threats of being blacklisted. After what happened to Shankar Sharma, Tehelka’s financier, the merchant bankers’ reticence is understandable.

In countries where legal recourse is limited, either because there is no legal system or it is tortuous as is the case with India, few really see sense in taking on a state that is bent on having its way.

With India the flavour of the season with international investors, and even local investors seeing money-making opportunities, and given also the general air of economic progress, such aberrant behaviour seems cost-less. After all, even though global players like Hutch and Singtel were directly or indirectly party to the suit against the government, foreign investors haven’t stopped investing in the telecom sector after the government changed their licence conditions — naturally, since the local market still offers unparalleled growth opportunities.

Yet, much like the straw on the camel’s back, it’s difficult to figure out just when investors, local and foreign, will start finding the government’s heavy-handedness too much to bear.


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