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BW Businessworld

A Suprisingly Pertinent CM

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I was recently invited to listen to Narendra Modi. I did not take it seriously since I am not favourably disposed towards him. But then I got repeated calls, and I thought that it was important to listen to dissenting voices, so I went along. Modi said there were too many elections; they held up potentially unpopular administrative decisions. He is right; with three levels of administration — centre, state and panchayat — there is at least one election every 20 months. Politicians who are keen to win elections are apt to be paralysed. Modi could choose not to paralyse himself; but not many will. So we must reduce the frequency of elections. One way would be to have fewer direct elections: let panchayat members elect assembly members, and let assembly members elect parliament members. Another would be to hold simultaneous elections to all three. That would be possible only if there were no mid-term elections. If a government is defeated in the legislature, the governor must rule for the rest of the term. It will happen seldom; politicians will soon learn to make coalition governments in order to keep the governor out.
 
Modi said buses ran all over the country, but there was no route rationalisation; I would add, there is no coordination of timetables either. The British and European tradition is that buses are run by some government authority or other. We started with that, but since public bus services were bad, most states have introduced or allowed private services. If they are freely permitted, they will emerge where there is demand. The only problem with this is that there will be few buses on routes or at times when there are few passengers. The solution is to auction routes and times, and allow negative bids. Then private operators will make positive bids for profitable routes and times, and negative bids for unprofitable ones. That way, unprofitable routes and times will get bus services with the minimum subsidy.
 
Modi said that most rich men’s houses had private guards; it is an index of public insecurity. He is right. In British times, private security was unknown. It is very much a product of Indian rule. India has 2.6 million personnel in the army and paramilitary forces, and 1.5 million in the police. CAPSI, the industry association of guard suppliers, estimates that there are 7 million private guards — almost twice as many as public ones. What is to be done? Modi did not say. 
 
He also said that people listened to the BBC because they did not trust the media, government or private. People left things to God because they had no faith in humans. Traffic lights were necessary because drivers did not regulate themselves. People did not trust the government because there was no transparency. He did not say it in so many words, but there is also no public conscience: people treat their own scooter much better than they treat a public bus.
 
He found that municipalities in Gujarat had too many clerks and two few specialists; corporators filled the offices with favourites, but did not bother to get things done. Modi made it a requirement for engineering students to be interned in municipalities, and gave them Rs 7,000 crore to pay stipends to the students.
 
He said that he had introduced one-day governance: anyone could go to a municipal office and enter a complaint and demand in a computer; it was the job of the municipal workers to resolve the issue within 24 hours.
 
Modi said that Gujarat produced gas; he wanted to give piped 24-hour gas supply to the entire population, but was told that gas was a central subject. This is worth thinking about. The centre protects its constitutional power to control minerals such as coal and gas because it wants these to be supplied equitably across the country. But it allows Gujarat NRE to import coal from Australia. A private party can import coal to produce something else with it, but not for his own consumption or for sale to consumers; surely this is illogical? So I came away with the impression that Modi can think, and can teach us something.  

The author is Consultant Editor of Businessworld.

ashok(dot)desai(at)gmail(dot)com

(This story was published in BW | Businessworld Issue Dated 20-05-2013)