Remember 16 May 2009, when we heaved
a sigh of relief as the Lok Sabha results were
announced? The Indian National Congress returned
with 206 seats — 61 more than the previous general
election. The CPI(M) and the CPI, which had
ruinously hobbled Manmohan Singh’s government from
2004 to 2009, together won only 20 seats, versus 53
in the previous election. The United Progressive
Alliance was back with a mandate of 262 seats,
making it easy to secure marginal support from
‘outside’ and rule the land with greater focus and
purpose. Didn’t we say, “Thank God! At last, reforms
and progress will be back on track”?
Two years and a month have passed. Very little, if
anything, has happened to justify our faith in this
government’s ability to reform. I don’t mean only
the reforms that entrepreneurs, managers and the
so-called-much-abused elite supposedly looked
forward to. The last twenty-five months has seen
governance failure across the spectrum of the kind
that we haven’t witnessed for a long time. If at
all.
Despite difficult conditions, Indian entrepreneurs,
farmers and working people have done more than their
bit to achieve 8 per cent GDP growth in 2009-10 and
8.5 per cent in 2010-11 — the second highest growth
rates among large global economies. Surely, this
should have set the stage for reforms to spur
further growth? But in the scam-ridden world of the
times, little has occurred. Indeed, we are looking
at a situation where the leitmotif of most ministers
and the bureaucracy is to minimise all risks by
either doing nothing or passing the buck.
Thus, two curiously funny sounding creatures have
taken centre stage: the GoM and the EGoM, which
stand for the Group of Ministers and, if that wasn’t
good enough, then the Empowered Group of Ministers,
with a capital E to boot! Decisions that should be
normally taken by the administrative ministry at the
level of the secretary are now passed on to the
minister; who invariably passes them to one of many
Cabinet Committees; which then escalates it to the
GoM, or for matters of Serious Substance to the EGoM.
All this forces the over-worked bespectacled hare of
Raisina Hill, Mr. Pranab Mukherjee, to hop from one
GoM meeting to another EGoM, having long lost count
of how many of these silly committees he chairs.
This is “I don’t want to caught on the wrong foot so
I’ll push it to the next in command” governance.
Take no decisions and you may still retain your
gaddi. Be proactive, and you run the risk of being
hauled up by God knows whom. So let the country
drift. Nothing is worth craning my neck too much.
Let me give you two instances of such drift. We
agree that roads and highways are critical to
progress. Now consider the progress. As of 30 April
2011, 22 per cent of the 7,300 km North-South,
East-West corridor that is incomplete, i.e. work in
progress, or contract awarded, or not even awarded;
ditto for 69 per cent of 50,405 km under the
National Highways Authority of India, an
organisation which hasn’t had a full time chairman
for a long time. Projects under Phase 3 of the
National Highway Development Programme (NHDP) have
added only 657 km in 2010-11, at a completion rate
of 1.8 km per day; while the NHDP Phase 5 programme
has added 327 km at 0.9 km per day. Remember Kamal
Nath speaking of 20 km per day?
My second example relates to Cairn India Limited,
where I serve as an independent director. The
Rajasthan crude oil project at Barmer produces
125,000 barrels of oil per day (bopd), and is
capable of producing over 205,000 bopd — if not more
— subject to approvals from the Ministry of
Petroleum and Natural Gas (MoPNG) and other
authorities. It ships the oil through the world’s
longest continuously heated and insulated pipeline
of 590 km from Barmer right up to Salaya in Gujarat.
These assets produce a fifth of India’s domestic
crude oil.
On 16 August 2010, Vedanta Resources plc and Cairn
Energy plc announced a deal where the Vedanta Group
would acquire 51% to 60% of the shares of Cairn
India for around US$8.5 billion to US$9.6 billion in
cash. The MoPNG stepped in, insisting that its
approval was needed. No questions could be
entertained. Period. Thereafter, it passed
decision-making on to the Cabinet Committee on
Economic Affairs, which passed it on to a GoM. At
the time of writing this piece, no official letter
has yet come from the MoPNG about the deal, while
debilitating rumours abound. The time taken: ten
months and counting. Without any operating decision
being agreed to by the powers that be.
Yes, the national government is led by a man who is
more honest than Caesar’s wife. But what of its
governance?
Published: Business World, July 2011