T N Ninan: Small doses only

WEEKEND RUMINATIONS

Shakespeare talked of vaulting ambition ("...which o'erleaps itself, and falls on the other"). It is a phrase very relevant, when considering events as far apart as the nuclear deal with the US, the mega-tonne steel and aluminium projects that have been stalled in eastern India, and (going back in time) even the Dabhol power project on the west coast. In each case, it's as though the big dreams that people have cannot materialise because the underlying reality will not permit them to come to fruition. The small projects and the small policy changes can get done, and there can always be incremental progress ... for anything more than that, the gods have to intervene and you can't count on them.

Dabhol came unstuck in Maharashtra because it threatened the very survival of the Maharashtra State Electricity Board; and that in turn was a consequence of the failure to reform power tariffs in the state. Dabhol's power cost too much in the subsidised power supply framework that continued to prevail, and the resultant cutbacks in Dabhol supplies raised unit prices even further because of the pricing formula. So either Dabhol had to go bust, or the MSEB. The choice then became obvious. At the heart of the problem was the fact that Dabhol would have had a final capacity (over 2,000 Mw) that would have accounted for too big a part of Maharashtra's power supply. It is instructive that, at the same time that Dabhol was coming unstuck, smaller power projects in the 250 Mw range were being set up by private firms in states like Andhra Pradesh, and they got absorbed into the electricity grid without any problem.

History is now repeating itself in Orissa and other eastern states. Some eight or nine mega-projects ""like the 12-million-tonne steel plants that are planned by at least three groups "" are held up for want of land and/or mining leases, and the stand-offs on land have gone on for up to two years. Yet, smaller projects involving both land takeovers and mining leases have come to fruition at the same time in the same states. It is only the big ones that the system does not know how to swallow. If the Nandigram project in West Bengal had been less ambitious in terms of the amount of land that was acquired, perhaps there would have been no problem.

Turning to the nuclear deal, the problem is that even as the arcane details of nuclear policy escape most people, there is no groundswell of support for an American embrace, indeed there may well be some residual suspicion "" more in the political class, perhaps than in the larger population. So it was a bit of a leap to go from fairly new friendship to a transformational transaction, and it may therefore have been a leap too far.

Petroleum price reform is possibly another victim of vaulting reform ambition, the desire to get rid of price control in a politically sensitive set of products. Vijay Kelkar thought he had provided enough of a cushion by laying out a five-year time-table for making the change, but when the time came for change, the transition was too sharp and sudden; one minister did a half-switch, another rolled back even that, and we are back to square one and a Cabinet that cannot bring itself to raise petro-product prices. The idea might have worked if price decontrol had been tried out first in just one, less sensitive petro-product, and then followed that with another... The moral of the story, when it comes to governance and change in India, would seem to be that many small steps are more feasible than one giant leap.