In this column in The Telegraph of 15 July 2003, I summed up the performance of the BJP government - the first time the BJP lasted for five years.
VAT, CAS, MSP, ETC
It seems ages ago, but it is only five years since the BJP won enough seats to capture power. It did so by attracting new voters; it won especially strong support amongst literate, middle-class, politically conscious voters. They were tired of the cynical hypocrisy of the Congress; they wanted to give the BJP a chance because it was untried. The vote for the BJP was not so much a vote for communalism, the atom bomb or Paki-bashing; it was, before all these things, a vote for change, for something different from Nehru-Gandhi-worship.
These first-time supporters of the BJP should not be disappointed, for the party has made many new departures and taken initiatives. Its attempts to raise India’s profile on the international chessboard need not detain us here; international power games are always unpredictable and slow. But the sheer level of its activity in the economic field is impressive. Whether it is oil, telecommunications, disinvestment, taxation, sugar, or broadcasting, no one can accuse this government of having slumbered.
And remarkably, the more active it has been, the bigger the mess it seems to have got into. The allocation of petrol pumps has long been a political sleaze game. The allocations made under Captain Satish Sharma blew up into a scandal; although no one was convicted, the judicial process they were subjected to brought considerable publicity to the sordid details. Ram Naik put in place a system of district allocation boards, manned by judges and other worthy local citizens, to clean up the system. The supposedly sound procedures led to equally questionable allocations; although the petroleum minister was hardly responsible for them, the mud stuck. The Prime Minister turned on a high-pressure jet to wash it off; he asked that all the allocations since 2000 be cancelled. But mud has a particular affinity for this government; the Supreme Court castigated it for a mindless cancellation of all allocations regardless of merit.
In telecommunications, competition was introduced without any attempt to offset newcomers’ handicap; so the new entrants spent much time whining and lobbying. The lobbying naturally went over TRAI’s head, to its detriment, and concentrated on the power centers in the government. In the government too, the minister in charge favoured and disfavoured, or at any rate pleased and displeased one lobby or the other; the disfavoured one played the Prime Minister’s Office against him. It was clear from the beginning that in a seamlessly interconnected network, WLL was no more local than mobile telephony and should have been allowed to all players. But the ministry favoured a few for WLL licences. Even such a straight and upright minister like Arun Shourie is not prepared to let the files bearing on this act of patronage be seen by the courts. The suspicion is difficult to avoid that they tell a damning story.
Shourie, as minister of disinvestment, brought vigour as well as rigour to the process; he achieved more in two years than his predecessors had in ten. But he invited the wrath of Shiv Sena for not favouring its favourite bidder for a hotel; this thirst for patronage within the ruling alliance finally aborted the privatization of the airlines, and has held up the sale of the oil companies. These high-profile reverses cost far more in public goodwill than Shourie’s many successes.
To spruce up fiscal policy which had been erratic under Sinha, the Prime Minister brought in Jaswant Singh, who seemed to have brought along a new broom. He inducted Vijay Kelkar and asked him to prepare a fiscal bullet. But when the bullet was ready, he hesitated to fire it. The repeated postponement of the introduction of state-level value added tax is probably a blessing, since its design is so defective; but it illustrates the point, that this government has great ideas but is hamhanded in their implementation.
Rationing was a hangover from World War II. Food shortages disappeared thirty years ago, and with it the need for rationing. But it has been kept alive because it involves sale of food below market prices, and the margin can be captured by corrupt politicians, their relatives, friends and clients. Narasimha Rao doubled the release of subsidized foodgrains, and thereby politicians’ and traders’ profits. The BJP did not have the guts to tackle this mega-racket; but it did decide to abolish sugar rationing. It brought down the government’s compulsory purchases of sugar from 40 to 15 per cent of output. But now the horse has reared before the last hurdle. There is such a huge sugar surplus that the government could bring down sugar price to any level, and thus benefit the entire population. But if it abolished the levy, it would have to abolish the minimum support price (MSP) for cane that it calculates from the levy price and which all sugar mills must pay cane growers. If it abolishes its own minimum price, the states will also have to give up fixing even higher cane prices. And if they cannot fix confiscatory cane prices, if cane prices become aligned to the market price of sugar, if sugar mills are allowed to pay for cane what they can afford, they may begin to pay cane farmers in time. If the incessant disputes between cane growers and sugar mills cease, how will Mayawati collect money from sugar mills? And she is too valuable an ally for the BJP to displease.
In broadcasting, the government allowed foreign companies to beam in programmes for years. Then suddenly one day it announced that to be able to uplink from India they had to issue 74 per cent of their equity to Indians. So Rupert Murdoch sold equity in a shell company to a small group of Indian friends, but that company will have to buy content from another company on which he retains full hold. Other companies have used similar stratagems before. But no one in the BJP asks himself: why is it laying down these silly percentages? And many outside are asking, whom are they trying to kid?
But none of these proceedings has brought the government as much ignominy as the conditional access system. Here was a simple, clear, cut-and-dried idea – that every television set must have a box to control which channels the viewer can access. What he paid would depend on what he chose to view. It should have been eminently implementable. But the government went in with an obsession – that the total cost to the viewer must be less than Rs 200. Why? The answer must be, that it would be politically popular. This mindless quest for popularity led the BJP into a quagmire.
Soon the party will come up with another manifesto; because of the manifesto or in spite of it, it may win the general election. But if its record of implementation remains so poor, at some point the people will wake up and say, the Emperor has no clothes. Not even a saffron loincloth. It would pay the BJP to invest some effort in understanding governance.