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October 6, 2001
Rational Expectations

After the word, what?

Read various newspaper reports of how the government got egg all over its face in the hijack that never was, and one of the things that strikes you immediately is that of the unlocked cockpit door. In the weeks after the September 11 attacks in the US, newly-inducted aviation minister Shahnawaz Hussain said that in future pilots would keep their cockpit doors locked, to prevent any would-be hijackers from getting control of the plane. Well, guess what, while conveying news of the ‘hijack’ on Thursday morning, one of the first things the air traffic controllers told the pilot to do — and that he did — was to lock the cockpit door to ensure the hijackers never entered the plane’s cockpit! In other words, despite the government announcing its decision on cockpits, someone forgot to tell the pilots.


The recent ‘hijack’ showed that cockpits remain unlocked despite being mandatory post-WTC

And if you think that’s typical of government decisions, today’s papers have yet another kind of example — that of indecision over a decision. As one of the preconditions of its entry into the country some years ago, Coca Cola had agreed that it would sell a large part of its equity to the Indian public by July 2002. But since Coke has made accumulated losses of Rs 2,178 crore and wiped out two-thirds of its original investment, it wants this condition to be postponed by another five years. Any extension has been opposed by both the food processing and the finance ministries who’ve argued that Coke was obligated to dilute its equity holding and any relaxation for one firm would encourage other firms to follow suit on different grounds.

Yet, the Foreign Investment Promotion Board (FIPB) which has to decide on the matter, has postponed its decision. Why, surely it can give a decision one way or the other right now? The last big case where the FIPB deferred a decision — for close to a full year! — was the case relating to ICI buying the stake of one of the Asian Paints promoters and the issue was whether this was legal. At that time, very high-stakes lobbying went on for a year — one hopes this is not the reason for the FIPB deferring the Coke decision.

The ultimate in indecision, of course, as this column reported last week, is what happens when a file moves from one government department to another, for not just months on end, but even years. In one case, chronicled by disinvestment minister Arun Shourie in a recent book, an IAS officer, in Maharashtra is to be suspended for corruption, and permission to prosecute him is sought from the central government in June 1985. The file then does the rounds between various departments of the Union government, and 15 years later, the additional secretary in charge of security and vigilance puts an end to the case. On February 14, 2000, he writes to the chief secretary of Maharashtra, requesting him to modify the penalty from dismissal from service to compulsory retirement, with a 10 per cent cut in his monthly pension. This order, he clarifies, is in compliance with the September 7, 1998 judgement of the Central Administrative Tribunal’s Mumbai bench (!)

After reading last week’s column, a friend called up to ask what the relevance of the Shourie extracts was. Somewhat upset, but patiently (after all, the regular reader’s a near-extinct species) I explained that this was the first time that a file’s movement had been tracked so extensively, and that too by a union minister. So what, my friend persevered, besides, isn’t Shourie’s job to put an end to all this instead of just reporting it with a somewhat peculiar sense of glee? Touche!

Well, Shourie’s got his chance now. Some years ago, for instance, this paper’s ex-editor got all of us to sit up and take notice while propounding his Northeast aid-charade story. He said that if you took all the money the government spent on various aid programmes for the Northeast and threw it down from a helicopter, the chances of a resident getting at least a part of the money was higher, many times higher, than getting any benefit from the current lot of development programmes. Close to one hundred per cent of all foodgrain meant for ration shops, for instance, in several Northeastern states gets diverted to those it is not meant for.

The question now is whether, as minister in charge of development of the Northeast, Shourie will be able to change all this, or whether this stint will just result in a series of great journalist-type exposes. If it does result in the latter, and the system triumphs, will it be because the NDA lacks the political muscle to be able to ram through the much-needed bureaucratic and legislative changes? And does that mean we need to have the Rajiv Gandhi kind of brute majority (405 seats in the Lok Sabha) to be able to really change things? Because one thing’s certain, there’s no way any political party will get anywhere near this for a long time. Unless, of course, some major political leader dies and, in the process, gets a major sympathy vote for his/her party, the way that Indira and Rajiv did for the Congress. Under the circumstances, each successive government could just be more of the same. Great copy, poor governance.

 

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