A K Bhattacharya: Broadbasing governance

RAISINA HILL

After several weeks of internal debate, the commerce ministry has decided to change the composition of the Board of Trade that advises the government on trade policy matters.

The big change is the appointment of an industrialist of the stature of Kumarmangalam Birla as the chairman of the Board of Trade. The Board of Trade has all along been headed by the commerce minister since its inception in 1989.

It has had private sector representatives as members. So, appointing Birla as its chairman was indeed a big change.

In many ways, the United Progressive Alliance (UPA) government has shown a marked preference for non-government people to head its committees.

The much-hyped Investment Commission is now headed by the Tata group head, Ratan Tata. Other members of this powerful body are Deepak Parikh of HDFC and Ashok Ganguly, formerly of Hindustan Lever.

Then, there is the Board for Reconstruction of Public Sector Enterprises (BRPSE). This is not headed by a private sector industry representative. But no one from the government "" either a minister or a secretary "" is heading it.

This body, entrusted with the responsibility of advising the government on how to restructure sick public sector undertakings, is headed by Former Mines Secretary Prahlad K Basu.

The Planning Commission, too, wanted to have the benefit of private sector advice on how it should undertake the mid-term appraisal of the Tenth Plan, currently under way.

But it went a step further. Instead of just having private sector representatives on committees to undertake the appraisal, it also invited experts and economists associated with the World Bank, foreign consultancies and other such multilateral financial organisations. A major controversy ensued.

The Left parties raised their banner of protest against what they feared was the World Bank's interference in the country's planning process. They alleged that the country's economic sovereignty was being compromised.

There was no substance in the Left parties' fears, though. But there was enough substance in the Left's lobbying power. It was a major embarrassment for the Planning Commission deputy chairman, who had initiated the move to involve the World Bank experts.

He was bailed out as these experts volunteered to withdraw from the consultation process.

What this incident brought out was the Left's sensitivity on the World Bank. Industry leaders like Ratan Tata and Kumarmangalam Birla can head the Investment Commission and the Board of Trade, respectively.

The Left has no problem with that. But if the World Bank or the IMF representatives are used to appraise the Tenth Plan, the Left fears that the country's economic sovereignty may be compromised.

Never mind that these World Bank experts and economists may well be Indians by birth and continue to hold Indian passports.

This also brings out how the Left parties have evolved particularly with regard to what they feel is acceptable and what is not. As prime minister in the latter half of the 1980s, Rajiv Gandhi had experimented with the induction of private sector managers to run public sector undertakings.

He had invited Rahul Bajaj and Ratan Tata to head the boards of Indian Airlines and Air India. Now these were wholly-owned public sector undertakings.

The Left parties, and even many leaders within the Congress party, had raised objections to this experiment. The argument was that the board of a public sector undertaking should always be headed by either a public sector employee or a government representative.

Things have changed since then as important advisory bodies like the Investment Commission and the Board of Trade are now being headed by private industry leaders.

It is clear that there are many advantages of inducting private sector representatives into these consultative bodies. If the government is serious about seeking the involvement of the private sector and drawing the benefit from the private sector's experience in business and trade, nothing could be better than this.

Looking forward, the government could even toy with the idea of throwing open more committees and task forces to be headed by eminent industry leaders from the private sector.

The Investment Commission and the Board of Trade get serviced by secretariats provided by the government. All that the government should ensure is that these committees hold meetings frequently and make periodic recommendations.

The problem with the Board of Trade in the past has been that in spite of its being headed by the commerce minister, it never managed to hold more than one meeting a year.

But such meetings should be held more frequently. And the government should now insist that Birla hold the meetings of the Board of Trade at least once a quarter to take stock of the trade developments and make relevant recommendations.

Similarly, the Investment Commission should also be asked to hold its consultations more frequently and provide the government with its recommendations on different sectors.

Once these recommendations are made public for an open debate, the government should not face any difficulty in moving ahead to implement the recommendations.