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      Decision-Making Paralysis         

Omkar Goswami


In its 14th first information report (FIR) related to the alleged coal block allocation scam, the Central Bureau of Investigation (CBI) has named industrialist Kumar Mangalam Birla of the Aditya Birla Group and non-executive promoter chairman of Hindalco, along with an ex-coal secretary, P.C. Parakh. The decision has provoked strong protests across industry, the civil service as well as ministers and politicians.

I haven’t read the FIR. According to newspaper reports that had access to it, a coal block called Talabira II in Odisha was allocated to Neyveli Lignite, a public sector enterprise, for a power project — at the expense of others, including Hindalco. Parakh was apparently chairman of the committee which recommended this allocation. Thereafter, the FIR alleges that Birla wrote to Parakh in May 2005 and met him in July 2005 to re-emphasise Hindalco’s claim.

This time, Parakh was persuaded by Birla, and recommended that the block be treated as a joint venture between Hindalco and Neyveli Lignite. In a newspaper interview, Parakh said, “Birla made a representation. I made a recommendation. The prime minister [as minister of coal and mines] examined it and took a decision.” He also said, “If CBI feels that there is something wrong and we hatched a conspiracy in doing so, the investigation should be made against everybody who has been party to this… which should include, apart from Birla and me, the prime minister.”

I know Birla reasonably well. Prima facie, I find it well within his rights to make a case to government to reconsider a decision. It also seems unlikely that there might be something wrong in what Birla did, and that Hindalco secured the allocation though unfair means. Birla is too important a corporate figure in India to play such a game; and, by all accounts of his seniors, juniors and peers, Parakh was an honest and upright IAS officer.

This piece is not about Birla or Parakh. It is about systematic judicial over-reach that is resulting in the death of executive decision-making. Ever since the Comptroller and Accountant General published its reports on 2G spectrum and licences followed by coal block allocations, the Supreme Court has taken upon itself to direct ministries, regulatory bodies and the CBI in an increasingly quasi-executive role. While it gets kudos from the press and the urban middle class who think of it as the only morally upright institution in a morass of corruption and inefficiency, it is an emphatically dangerous incursion and extension of roles that bodes ill for the nation. Let me suggest why.

Three critical resources that will determine India’s pace of growth over the next three to four decades are zamin, zamin key neechey aur aasman key upar. Land to create infrastructure and build factories; mining to unlock huge mineral and hydrocarbon resources of the country; and spectrum for telecoms as well as rights to fly passengers and cargo. All else being equal, using these resources can raise GDP growth by 1.5 percentage point per year.

These are very much in the domain of the State. Therefore, getting permissions to use such resources depends upon the decision-making remit of India’s iron frame — the civil service. In today’s witch hunting milieu, I’ll bet that no joint secretary, additional secretary or secretary in any key ministry will take any decision worth the name. It is not worth the while. In the best of times, the civil service was not sufficiently rewarded for expeditiously taking the right decisions. Today, the cadre faces the real fear of inquisition. Since nobody gets sacked for elongating the life of a file, that is exactly what you will see. Even the best administrators will opt for safety over duty for the nation. Especially the senior ones as they approach retirement.

All this while the judiciary loves its new found role as an executive. And the CBI, until yesterday the pet poodle of the ruling government, acts as the Supreme Court’s Righteous Rottweiler. Such is the pathos of our nation.

Published: Business World, November 2013


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