UP industry body helps cut red tape

STATE UPDATE \ UTTAR PRADESH

It is a high-powered body the likes of which Uttar Pradesh has rarely seen. Its members include the who's who of the Indian industrial and financial firmament "" Reliance group Vice-Chairman Anil Ambani, Bajaj Hindustan Chairman Shishir Bajaj, Sahara group Chairman Subrata Roy, Godrej group head Adi Godrej, film star Amitabh Bachchan, AV Birla group Chairman Kumarmangalam Birla, Hindustan Lever Chairman MS Banga, ICICI Bank Chairman KV Kamath, Infosys Technologies Managing Director and CEO Nandan Nilekani, Apollo Hospitals Chairman Pratap Reddy, Ramdas Pai of the Manipal Education Foundation and Crisil Managing Director R Ravimohan. The chairman of this august body? Samajwadi Party General Secretary Amar Singh.

The body, of course, is the Uttar Pradesh Development Council, which is said to play a decisive role in formulating policy in the state. Its recommendations are treated as sacrosanct by the state's bureaucracy and implemented with great speed.

Set up in October 2003, it has held six meetings so far. On its agenda are policies on, among other things, infrastructure development; energy; industry and services and developing Lucknow as an infotech and business process outsourcing hub.

So far, according to information placed before the Vidhan Sabha, the state government has announced an industrial and service sector policy; an energy policy with the aim of involving private players and a township development policy. A housing policy, which will involve the private sector is being formulated, a UP health foundation is to be set up and sub-committees have been formed.

According to one member of the council, it meets once every two or two-and-a-half months. "All meetings are well organised. The state government comes to the meeting well prepared. While agenda papers are circulated well ahead of the meetings, the minutes are handed out immediately after. The regulars are Kamath, Godrej, Subrata Roy, Banga, Nandan Nilekani, Amar Singh and Mulayam Singh," he says.

However, the council's functioning has evoked a great deal of controversy in the state. The bureaucracy and local industry are split on how effective it has been.

Some bureaucrats argue that the council has cut through red tape and expedited the decision-making and implementation process. The bureaucracy, they admit, was flinching from taking decisions. According to this school of thought, it could never have accomplished what the council has been able to do.

For example, when the executive director of General Motors came to Lucknow, he was airlifted in a chopper from Lucknow airport to Sahara Shahr. In the evening, the General Motors delegation was entertained by Shiamak Davar and his dance troupe.

The next day, the executive director attended the council's meeting. The company has already committed to investing Rs 600 crore in the Daewoo plant and plans to bring in more. "Who in the state government could have done it in this style," asks the bureaucrat.

Some bureaucrats say the council is usurping the bureaucracy's decision-making powers. The proposals made at the meetings go directly to the Cabinet, without being vetted by bureaucrats and a Cabinet note being prepared. If a Cabinet note is prepared, all the secretaries give their opinion.

They also cite an instance when the revenue secretary objected to the terms for the sale of land to Reliance for a power project (among other things, 60 per cent of the cost of the land and 60 per cent of the cost of resettling project-affected families would be borne by the state). Subsequently, the policy was changed (the terms would hinge on the size of the investment) and made applicable to all.

Local businessmen too are seething with anger. As they see it, rank outsiders are getting policies that are favourable to their business interests, though some local businessmen have become members of the council's sub-committees to push policies that are of interest to them.

A council member, however, says the council is trying to be a facilitator and cut through red tape. "In the process, if there is any violation of rules. I am not aware of it. It's the state government which is the implementing authority. The council is trying to make UP competitive. A similar thing was done by Chandrababu Naidu in Andhra Pradesh."

Members were pleasantly surprised at Mulayam's role. He is a good listener and seems to be earnest. The committee discusses broad industry issues and the legislature takes care of their execution. It is trying to remove the roadblocks. For instance, UP took the lead in implementing the NK Singh Committee report on power.

With Uttaranchal being given several benefits, UP has seen a flight of businesses to the neighbouring state. The council is trying to ensure that the state does not lose out.

It is also acting as a sounding board for industry to determine what needs to be done in various areas "" services, banking, infrastructure, information technology, financial markets and so on."

"The UP development council has played a very useful role in transforming the image of UP as a state dedicated to development in general and economic development in particular. A very forward like industrial policy and power policy have already been announced. I have played an active role in the deliberations of the council. I have attended all its meetings and have played an active role in the drafting of a food processing policy for UP. It is the job of a development council, such as this one, to take quick and appropriate decisions. Changes, in my opinion, are good, provided they are transparent and applicable to all. The bureaucracy in UP has been extremely co-operative and seems determined to play its positive part in the development of UP. The council has strong credibility as its membership consists of prominent entrepreneurs from various fields and different parts of the country," Godrej says.