| Perhaps the worst example was the sacking of R K Talwar, the then Chairman of the State Bank of India (SBI), who had refused to lend money to some of her younger son's cronies. |
| This happened during the Emergency and the incident speaks volumes for the commitment of the Congress to the autonomy of public sector banks, or, indeed, democracy. |
| Not that the commitment of the party currently in power is any better. Indeed, for the neta-babu combine, the public sector is a convenient and handy instrument of obtaining comforts and luxuries, patronage distribution and satisfying other, baser objectives. |
| As for the first, to quote only the two latest incidents, remember the bill sent by Taj Goa to the Airports Authority of India for the tourism minister and his family's stay? |
| Or the taxi and hotel bills of the food minister and his deputy, totaling Rs 30-odd lakh, which were charged to the Food Corporation of India? What a contrast it was to read that President Musharraf paid for his tickets when he attended the recent Indo-Pak cricket match! |
| But the reason for remembering Talwar now was not really last week's publication of the Congress Party's manifesto and its commitment to the autonomy of public sector banks. |
| The incident that provokes the memory is the resignations of the brass of the Infrastructure Development Finance Company Limited (IDFC) in protest against moves to alter its character. |
| It seems that the ministry of finance (MoF) is serious about either merging IDFC with SBI, or, alternatively, converting it into a subsidiary, inter alia, through transfer of shareholdings of the government and the Reserve Bank of India (RBI) to SBI. |
| The ostensible reason seems to be that the government is not satisfied with the pace of disbursement of funds by the IDFC for financing infrastructure projects. A ministry source has been quoted as claiming that, "We feel the IDFC has not done its job well". |
| Vinod Rai of the MoF has been quoted as saying: "We want IDFC to operate as a secretariat for major infrastructure projects". (Given the record of efficiency of our various secretariats, this is a frightening prospect.) |
| As a major shareholder, the government has a right and duty to influence IDFC's working. It has a board representation and the correct course of action would have been to communicate to the board its unhappiness at the way the company is functioning. |
| If persuaded, it would be the board's duty to change the management if it is incompetent and if a change is needed to achieve corporate objectives. The way the issue has been handled, however, raises serious questions about the government's commitment to institutional autonomy. |
| Is it that disbursements have not picked up because the managers want to avoid taking decisions? Or, is it because the regulatory and legal framework, over which they have no control, is not keeping pace with the needs of private investment in infrastructure? |
| But the IDFC is by no means the only case of the present government's unwillingness to tolerate autonomy. Despite the abolition of the administered price mechanism, the petroleum minister continues to control petro-product prices. |
| The human resource development minister insists on reducing the IIMs' fees and increasing their dependence on the ministry for hand-outs. Surely, the ministry has other demands on its limited resources "" primary education, for instance. |
| The minister knows that even the reduced fee is barely affordable for the average Indian whose per capita income is less than that. And IIM graduates are getting employments at up to $ 100,000 a year. |
| Surely, in these days of consumer loans, banks would be more than happy to lend money to IIM students for paying fees? It is worth noting that the ministry has pointedly refused to give an undertaking about institutional autonomy to the Supreme Court. |
| The reason for the whole fracas as also the earlier ban on Indian Institutes of Technology/ IIMs getting monies directly from donors is obvious "" the lesser their financial independence, the greater the power of the neta-babus in Delhi. The signs are unmistakable, and dangerous. |
| Do we have the worst of both the worlds "" neither the quickness of decision-making of authoritarian regimes, nor a modern, liberal democracy? What we have is a feudal, often corrupt and increasingly illiberal democracy. (Remember Tehelka? The controversy over the book on Shivaji?) |
| What a contrast between the prime minister's gutsy decision to send the cricket team across the border, and the pettiness and power hunger of too many of his neta-babus! |
| But to come back to the attempt to convert IDFC into a secretariat, I can do no better than quote from Arun Shourie at the recent India Today conclave in New Delhi: "I am here to reassure you that there are several files in government on the subject of files. And I can assure you that the matter having been under consideration for long has now come into active consideration. And that a formal announcement may soon be expected once a final view has been taken. And for that purpose the government has set up a sub-group to codify, assess and tabulate all recommendations......" India shining? |
| E-mail: avrco@vsnl.com |
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