Let’s say news breaks of a decision that you think helps the wrong people, or seems obviously unjust. Even if that decision also violates principles you value, nobody believes you if you try at that point to insist that it’s the principles you’re worried about. Ergo it’s when you think a decision is right – but may still be based on problematic principles – that you should sound the warning.
That was a preamble. Preambles always sound a bit pompous, but they are sometimes necessary. The reason for preambling was this: like most people, I am happy that the Supreme Court has cancelled the 2G licences that were handed out in 2008 following an extremely dubious rigging of rules. That the government should begin – should already have begun – the process to recover lost revenue, restore control over and reassign spectrum, and help the telecom sector mature seems painfully obvious to most people.
And the SC’s decision on Thursday helpfully shoves the government down a road it would have been taking anyway if it had the slightest sense of self-preservation. But at the same time, aspects of the judgment could deeply worry those who care about the most crucial principle on which modern government and policy-making rest: the separation of powers.
The judgment makes instructive, if worrying reading. Natural resources like spectrum, the SC pointed out, are held in trust by the state; and “although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles [sic] including the doctrine of equality and larger public good.”
The SC said equality, on this occasion, meant two things. First, that citizens either be granted equitable access to natural resources, or that they be “adequately compensated for the transfer of the resource to the private domain”; and second, that “the procedure adopted for distribution is just, non-arbitrary and transparent and... does not discriminate between similarly placed private parties.”
The SC goes on to take a somewhat limited view: that “adequate compensation” is reflected solely in the profit-and-loss ledgers of the finance ministry. Others could claim, with considerable force to their argument, that adequate compensation to citizens is a telecom industry with overcapacity, competition and the lowest call rates in the known universe.
The decision as to which form of compensation is preferable is one that is the domain of the executive. Why? Because the executive can adapt quicker. It can learn from errors. And it is accountable to the citizens whose “compensation” is being decided. The reason for the separation of powers in modern governments, instead of simply entrusting such decisions to an incorruptible and upright judiciary, is precisely because these are essential components of policy-making.
Furthermore, there’s a possible conflict between these two objectives. It is entirely possible that “adequate compensation” may require a procedure for distribution that is arbitrary. Suppose you are a decision-maker, facing a choice between two possible licencees. One of them, you suspect, is more likely to push for rewriting the terms later, or might delay the rollout of the service he’s offering to provide. You should pick the other, in the public interest. But, from the outside, doesn’t that sort of decision seem arbitrary? And yet, it is critical.
We make decisions like these, exercise our human judgment, every day of our lives about more mundane matters; and, at the level of the state, we elect a government to make these decisions for us. This principle is the basis of representative democracy, and the 300 years of accomplishment and progress that that system has delivered. Yet some of us – coincidentally, unelected – have begun to assume that this system of government can work entirely on the basis of rules before the fact, instead of accountability afterwards.
Every state functionary, when making decisions impacting the distribution of natural resources, can hardly tell herself to keep sound constitutional principles in mind. Yes, that’s unrealistic; but, even more, it reveals why policy-making and constitutional jurisprudence don’t mix too well. As I said to start off with, auctions are usually a good idea; they can discover real prices like nothing else. But auctions can be manipulated; contracts can be challenged. Bids can be unrealistically low; if high, the high up-front costs may dissuade the most efficient operators from entering — or delay the work they’re promising. These are all judgment calls. They need an informed, competent, accountable executive. It is questionable as to whether a judicial decision telling us that auctions are always the way to go will make future policy-making better, or worse.
These are points that should be made by the executive. Unfortunately, the executive in question is the United Progressive Alliance, which is instead occupying itself by pointing desperately to precedent and predecessors. If the UPA thinks it can best judges by babbling of precedent, it needs to think again. It is paying, now, for its lack of oversight of the telecom sector. It is also paying for its inability to articulate why it, as an executive, exists — instead falling back on contrived explanations and claimed facts nobody really believes. (On the internet, they’re calling them Sibaleths.)
But of all the failures of the UPA, its failure to articulate why an executive needs discretion, and control of policy-making, will perhaps hurt India the most.
