Legislative paralysis spells RIP for UPA

governancenow.com, dec 14, 2011
Governance on auto-pilot
On November 21, Montek Singh Ahluwalia, deputy chairman of planning commission and a key policymaker of the UPA, made a confession: "By February (2012), you will have the January data and if it turns out that inflation is not coming down by then, then we really don't know what we are doing."

This came after three years of consistently predicting that inflation would come down after the next rabi or kharif harvest. Harvests have been consistently good too, but inflation shows no abating, barring a marginal dip so typical at this time of the year. He may still be hoping for a miracle but few would wait until February to endorse that he and his mentor prime minister Manmohan Singh, or anybody else in the UPA for that matter, really know what they are doing.

Look at some recent developments:

* Last week, the government rolled back its FDI policy after the cabinet endorsed it;

* Two bills – Copyright (Amendment) Bill and Commercial Divisions in High Court Bill – were withdrawn in Rajya Sabha on Tuesday. The first one because of conflict of interest: Kapil Sibal  was piloting the bill, but his son is counsel for a music company which stood to benefit from it. And the second one because even Salman Khurshid piloting the bill, which had already been passed by Lok Sabha, acknowledged that it had far too many flaws.

* Tuesday saw the cabinet holding back the Food Security Bill because of strong protest from the allies - NCP and Trinamool Congress.

* Lokpal Bill is stuck because not only the opposition but even the ruling Congress members disagree to some of its key formulations through their dissent notes to the standing committee report. Everyone agrees, and that includes the Congress, the bill is flawed. Anna is waiting to start his next round of fasting from December 27.

* Parliamentary standing committees have shot down three bills relating to UID and higher FDI in insurance and pension, saying these are flawed, directionless or simply, bad policies to adopt.

* Two key economic reforms – (i) Direct Tax Code (DTC), proposed in the budget a couple of years ago, is yet to be notified or implemented and (ii) Goods and Services Tax (GST) is stuck because of strong political opposition.

* Cabinet cleared three bills on Tuesday – Judicial Standards and Accountability Bill, Public Interest Disclosure and Protection to Persons Making the Disclosures Bill and Right to Grievance Redress Bill.

All the three are flawed and fail to address the issues they seek to address. Their passage, which looks highly unlikely in this parliament session at least, will in no way make a material difference to the existing arrangement.

There are other worries.

*Apart from these, the Index of Industrial Production (IIP) for October 2011 reflects a recessionary trend. It shows a minus 5.1 percent growth. Manufacturing, mining and capital goods are all showing negative growth. And this has a lot to do with 13 hikes in interest rate that the RBI has affected in the past two years.

The RBI wanted to check inflation by interest hikes but such hikes have ended up spiking industrial growth as investment has dried up. Economists have been crying hoarse that inflation is a supply side issue while interest hikes are meant to address the demand side issues and would prove counter-productive. It has.

*Revenue collection is way below the expectation and deficit is growing. Money has weakened considerably – a dollar now costs close to Rs 54, from Rs 45 or less in August this year.

The UPA II began its innings in 2009 with confidence. There was no Left Front to arm-twist it and hence there was no CMP (common minimum programme) – the policy framework that guided UPA I. Confidence seemingly turned to over-confidence and policy paralysis set in. A series of scams followed - 2G, CWG, Adarsh, IPLA, Isro spectrum etc. Simultaneously, a runaway inflation struck. Then came Anna Hazare and now, a legislative paralysis.

Nobody is talking about the mid-term polls yet. Polls are expensive business. The opposition is not yet ready to throw its hat in the ring. So the government survives, but only technically, like a brain dead man. Unable and seemingly incapable of doing anything.

Anna ko gussa kyon aata hai

governancenow.com, dec 15, 2011
And why our politicians do not get angry when they should
Something extraordinary happened on November 25. Our democratically elected representatives actually conducted some parliamentary business, only for a little while though, without bringing the houses down – something that hadn’t happened before and wouldn’t for the next five days of the winter session.

That day the presiding officers began the day’s proceedings by ‘condemning’ the assault on agriculture minister Sharad Pawar. This was followed by more of the same from leading members of the houses who were livid at the development. The prime minister, his cabinet colleagues and all major political parties had expressed their anguish the previous day itself, minutes after a youth slapped Pawar at a public function not far away from the parliament house saying, “This is my answer to corrupt politicians.” One veteran minister wondered aloud: “Don’t know where this country is going.”

For once, politicians of all hues buried their differences and united in venting their anger. This done, they proceeded to bring the houses down, that is, until December 7 when the government managed to cool the frayed tempers on FDI in retail.

One man is angry at this. He was then too when he was told about Pawar being slapped and asked his informants, the TV reporters: “Just one slap?” That was Anna Hazare. He did subsequently express remorse at his ‘non-Gandhian’ comment and does so again in his latest blog posting but this time he asks the politicians to think why Pawar was slapped.

Here is the link to Anna's blog: annahazaresays.indiaagainstcorruption.org

Why was Pawar slapped? Because there is public anger against unbridled corruption and runaway inflation, he writes. Then he proceeds to list some of Pawar’s contributions to public life. He says Pawar and his ministerial colleagues never bothered to redress Maharashtra farmers’ problems he has been raising for the past 22 years. As agriculture minister, Pawar imported wheat worth several crore of rupees, which was found unfit for human consumption and dumped. Pawar promoted corrupt ministers, and corrupt officials, against whom Anna had provided evidence and which led to the sacking of some of them but never prosecuted for their crimes. On the other hand, he and his colleagues have been hounded for years through inane inquiries and false cases for exposing the corrupt around Pawar.

Why a slap to Pawar evokes so much anger in our politicians who are perfectly at peace with Pawar’s many misdemeanours? Why they never lose cool when distressed farmers commit suicide across the country and for several years in running? Or when the farmers are killed in police firing for peacefully demanding their rights?

“Ek thappad ka gussa kai logon ko aaya, lekin pura jeevan samaj or desh ke liye arpan karte hue itni takleef di jati hai uska gussa kisi ko nahin aata. Yeh durbhagya ki baat hai.” (One slap evokes so much anger in so many but no one is angry when somebody who has dedicated his entire life to people’s welfare is being constantly persecuted.) The last reference is to Anna himself.

Quite a bit of food for thought.

Lokpal panel shortchanges parliament, opposition

governancenow.com, dec 12, 2011
Retains govt control on Lokpal, CBI; keeps PM, MPs, junior babus out
When Anna Hazare sat on a fast demanding a strong Lokpal in August this year, a big fuss was made about the ‘sanctity’ of parliament and its procedures by the parliamentarians, especially in view of the fact that the matter was pending with the parliamentary standing  committee then. Now that the standing committee has submitted its report we are wiser about that sentiment.

For one, it has shortchanged parliament itself by ignoring two of the three key elements of its ‘unanimous’ resolution adopted on August 27 envisioning the shape of Lokpal. The resolution read: “This House agrees ‘in principle’ on the following issues – (i) Citizen’s Charter, (ii) lower bureaucracy under Lokpal through an appropriate mechanism, and (iii) establishment of Lokayukta in the States”.

Also see:

Shouldn't the PM come within the ambit of Lokpal?
Team Anna explains the government's vision of Lokpal
Government's spin minister throws a no-ball at Lokpal

The standing committee report adopts the third - establishment of Lokayukta in States - but dumps the other two. Its report says, there should be separate mechanisms for the Citizen’s Charter and that the lower bureaucracy (Group C and D officers). Even ruling party members, Meenakshi Natrajan, PT Thomas and Deepa Dasmunshi, disagree on exclusion of the lower bureaucracy and give a dissenting note saying that Group C officers should be included. Interestingly, the panel changed its views after initially including lower bureaucracy in Lokpal’s ambit.

There are other key issues that render the Lokpal being envisaged by the standing committee ineffective. The selection panel for the Lokpal consists of nine members – prime minister, speaker of Lok Sabha, leaders of oppositions of two houses, a union minister nominated by the prime minister, a jurist nominated by government, a prominent public figure nominated by government, a sitting judge of supreme court and a chief justice of high court. As it is clear, the government has a majority say in the selection – five out nine members are controlled by it. This makes Lokpal a puppet in the hands of the government of the day.

Independence of the CBI, the premier investigating agency, has been compromised by retaining the current arrangement as per which the government retains administrative control over it, making it toothless and prone to political manipulation.

The standing committee is non-committal on inclusion of the prime minister in Lokpal’s ambit in spite of popular sentiments and contrarian views of the person occupying the august office himself and the members of the panel belonging to the opposition parties. The panel merely lists various options without taking a position. This evoked a maximum of five dissenting notes from the members belonging to the opposition parties.

On the other contentious issue, jurisdiction over the MPs themselves, the panel is in favour of maintaining existing arrangement which provides them immunity for anything they do inside parliament, notwithstanding two cash-for-votes scams and a cash-for-question scam. This attracts two dissenting notes.

With such a blatant act of sabotaging public sentiments, parliament’s unanimous resolution in some aspects and without empowering the toothless anti-corruption mechanism that exist today, the standing committee fails to do justice with the onerous task that it was dealing with. In fact, it is quite in keeping with parliament’s inglorious track record of the past 43 years - the period over which parliament has been deliberating the Lokpal issue without making any headway.

For how long will we have to live with such lazy policymaking?

governancenow.com, dec 7, 2011

For FDI in retail, simple things like more roads and power and direct buying from farmers will yield better results
The logjam over FDI in retail, and its eventual ‘holdback’, was neither unexpected nor probably unforeseen. Pause for a moment and revisit the circumstances under which this policy (51 percent in multi-brand and 100 percent in single-brand) was announced. The matter has been in public domain for years but the union government sprang a surprise on November 24, a couple of days into the winter session of parliament. By then, the opposition had paralysed parliament over several issues – home minister P Chidambaram’s alleged involvement in the 2G scam, statehood for Telangana, safety of Mullaperiyar dam, corruption, black money, runaway inflation, economic slowdown and so on. On top of it, Anna Hazare was threatening to fast again if the Lokpal bill was not passed in this very session. The FDI policy didn’t bring normalcy to parliament but it certainly diverted focus from more pressing issues. That probably was the intent anyway, given the slapdash manner in which the move was made.

Read update on all-party meet: Par logjam ends, govt puts FDI decision backburner

One doesn’t really need an ESP to foresee the holdup that followed. Those who pushed through the decision in the cabinet were very much part of the party (the Congress) that created a ruckus when the NDA made the first move to bring FDI in retail in 2002. They may blame the BJP (which led the NDA then) for changing its stand but the Congress (which leads the UPA) is equally guilty of the vice. What made them suddenly find the panacea to all our economic woes in FDI? Commerce and industry minister Anand Sharma is claiming that FDI in retail will add 10 million jobs in three years, the opposite of which his party was arguing with equal conviction in 2002.  His government also sees many other benefits – improved back-end infrastructure facility, new technologies and better marketing facilities leading to better prices to both the producers and consumers. In short, it will be good for growth and bring inflation down.

Had Sharma and his colleagues taken a closer look at the ground realities, they would have realized their folly. Poor infrastructure does lead to a huge loss of fruits, vegetables and food grains. Middlemen do corner a larger pie of the price consumers pay. The mandis, even those run by the government, do work through touts who rig prices to deprive farmers their dues. Fresh investment and new technologies would do a world of good to the sector, true. But do we need FDI to solve most of these problems? Even Sharma, who is championing the cause, is not sure. He is asking the states to amend their respective Agriculture Produce Marketing Committee (APMC) Act so as to ensure ‘direct’ purchase from farmers. But he never explains why in spite of this law in existence since 1960s, the state agencies continue to buy through touts. He never explains if Walmarts and Tescos will lay our roads and generate electric power – the two major hurdles in movement of farm produce, from the farm to the cold stores, mandis and markets. He won’t talk of inter-state tax barriers that shoot up price and lead to a bizarre phenomenon - surplus in one state co-exists with scarcity in another.

Visit Punjab and you will find potatoes rotting with no buyers while a kilo costs more than Rs 10 in Delhi. Let us not forget how prices come crashing down and neighbourhood markets get flooded with agriculture produce every time the government raids the mandis. So, what are we looking at Walmarts for? To bring us some trucks and carts and set up a few cold stores? And how is Sharma so sure of a FDI flood when the international scenario is so bleak and our FDI outflow is more than the inflow at present?

It is not our case that FDI is bad or useless. The point is we can and must do a few things to change our fate. It is a lazy government that thinks of and banks on FDI to solve all our problems.

What we need is something here and now

governancenow.com November 25 2011
 
FDI in retail will take years to be useful
At a time when a minister gets slapped for high inflation and the government faces daily flaks for doing nothing to bring the prices down for three years in running comes the hoopla over FDI in multi-brand retail. The cabinet, in a late night decision on Thursday, cleared 51 percent FDI in multi-brand retail and raised the bar in single-brand retail to 100 percent. This step, the government tells us, is being taken to help both the small farmers and the consumers on the plea that more FDI in retail will mean more investment in retail infrastructure, like cold store chains, new technologies and better marketing facilities for agriculture produce.

All of this may be true. Let’s hope it is. But even in the best case scenario, it will take years before the actual FDI flows in and several more years for the promised infrastructure and marketing facilities to materialize. A general business practice of playing it safe and taking immediate advantage of the market ( in this case by going in for packed food and readymade garments) before actually getting down to developing new infrastructure would suggest that the hopes being generated around the FDI in retail may not be something to look forward to in the short term. The inflation would, therefore, have no reason to pull back in the interim.

What would seem logical for the government then is to attempt something that would bring respites in the short term, say a couple of months or more, but decidedly not a 5 or 10-year plan that the FDI promises to be.

Moreover, the ham-handed manner in which the cabinet has gone about clearing the FDI policy points to an uncertain future. Though the issue has been pending for a long time and has decidedly been in the public domain, see how seriously it was taken up for a meaningful dialogue or debate in the country. Two of the Congress allies in the government, the DMK and Trinamool Congress, not only opposed it in the cabinet, they paralysed parliament the next day. The opposition parties of both left and right persuasions too lend their support to the DMK and Trinamool Congress.

Meanwhile, the media may not have taken up a strident posture either way, but provides a general feel-good picture that would please the policy makers and the corporate entities that stand to benefit. Phrases like “retail revolution”, “coming soon: world’s top retailers” and narratives like “you will soon be able to walk into a mega deep discount store run by global retailers…” to describe FDI in retail would make it seem something better is happening and should be lapped by the rest of the country.

Politicians are good at selling dreams that often don’t materialize. Look at the nuclear pact with the US on which our prime minister bet his office in 2008. Not one single unit of nuclear power has been generated three years down the line. Can we really afford to wait for 5, 10 or 15 years before the retail revolution takes shape?

Now you know: biz details of RS members

governancenow.com, nov 17, 2011

‘Register of interest’ finally goes public after ADR’s RTI plea
The Rajya Sabha secretariat has, for the first time, made public the 'register of interest' of the Rajya Sabha members – two years after an RTI application demanded the same.

The register contains ‘pecuniary’ details (that is, financial details) of 232 out of 242 members of the upper house, according to information released by the Association for Democratic Reforms (ADR), which had made the RTI plea.

According to the information in the register of interest, as many as 140 Rajya Sabha members have declared having no pecuniary interests – though 58 of them happen to be crorepatis, Jagdeep Chhokar, a founder of ADR, told the media here on Thursday.

Subba Reddy, a Congress MP from Andhra Pradesh, information and broadcasting minister Ambika Soni and Rajya Sabha ethics committee chairman Karan Singh fall in this category.

Pecuniary details in the register of interest are submitted under five major heads: remunerative directorship, regular remunerated activity, shareholding of controlling nature, paid consultancy and professional engagements.

As per the RTI response, 28 Rajya Sabha members have remunerative directorship in various companies.

Vijaya Mallya of Kingfisher holds remunerative directorship in 19 companies which gets him Rs 39.5 crore annually.

Naresh Gujral of Shiromani Akali Dal and Y P Trivedi of NCP have remunerative directorships in four and 11 companies respectively.

Anil Lad and Vijay Darda, both Congress MPs, have shareholdings of controlling nature in 27 companies and 21 companies respectively.

Total 43 members of the upper house have such shareholdings.

As many as 28 Rajya Sabha MPs are involved in regular remunerated activities in different firms. The members include Shobhana Bhartia of Hindustan Times group.

Seven Rajya Sabha members including Amar Singh and Ravi Shankar Prasad declared pecuniary details under the head ‘paid consultancy’. Singh, currently out on bail in the cash- for- vote scam, has made Rs 54 lakh as a paid consultant.  Prasad, a BJP MP made Rs 37 lakh as a paid consultant.

Singh also figures in the list of MPs who declared details in the form of ‘professional engagement’.

Singh earned Rs 50 crore through professional engagements.

Ram Jethmalani and Arun Jaitely, both BJP MPs and lawyers by profession, earned Rs 8.5 crore and Rs 10 crore via professional engagements.

Anil Bairwal of the Association for Democratic Reforms (ADR) had filed RTI application with the Rajya Sabha secretariat asking for the register of interest.

On June 3rd, the central information commission (CIC) directed the RS central public information officer (CPIO) to provide the information to the applicant within ten days.

However, the CPIO said that the RS ethics committee was considering the matter.

On October 3rd, the CIC issued a compliance notice to the Rajya Sabha CPIO after which Bairwal got the information.

The second report of the RS ethics committee, presented in December 1999 recommended the formation of the register of interest.

The fourth report of the ethic committee, in 2005, identified the five pecuniary interests and recommended that members declare their interests in the prescribed form for registration in the
‘Register of Members’ Interests’.

The report was adopted unanimously by the council and recommendations enforced from the May, 2005.

Here are highlights of the report prepared by ADR on the basis of information available in the register of interest:

Based on the declarations of Register of Member’s Interest made by 232 MPs of Rajya Sabha, 140 MPs have declared on the form that they have no business/financial interest whatsoever in any of the mentioned heads and 92 MPs have declared that they have financial interest in the mentioned heads.

Remunerative Directorship-

- 28 MPs have declared that they have some financial interest in the form of remunerative directorship of a company and 204 MPs have declared that they have no financial interest under this head.

- The highest amount received from remunerative directorship has been declared by Vijay Mallya (IND, Karnataka) (Rs 39.45 crore) followed by Naresh Gujral (SAD,Punjab) (Rs. 4.54 crore) and Vijay Darda (INC,Maharashtra) (Rs. 4.54 crore).

- The maximum number of directorships have been declared by Vijay Mallya (IND, Karnataka) (19) followed by Y.P. Trivedi (NCP, Maharashtra) (11) and Naresh Gujral  (SAD, Punjab) (4).

Shareholding of controlling nature-

- 33 MPs have declared that they have financial interest in the form of Shareholding of controlling nature and 199 MPs have declared that they have no financial interest under this head.

- The highest number of shareholdings in companies have been declared by Anil Lad (INC, Karnataka) (27 companies) followed by Vijay Darda (INC, Maharashtra) (21 companies) and Vijay Mallya (IND, Karnataka) (12 companies).

Regular Remunerated Activity

- 28 MPs have declared that they have financial interest in the form of Regular Remunerated Activity and 204 MPs have no declared financial interest under this head.

- The highest amount received from Regular Remunerated Activity has been declared by Shobhana Bhartia (Nominated)(Rs 2.67 crore) followed by Vijay Mallya (IND, Karnataka) (Rs 1.85 crore) and Satyanarayana Chowdry (TDP, AP) (Rs 1.68 crore).

Paid Consultancy-

- 7 MPs have declared that they have financial interest in the form of Paid Consultancy and 224 MPs have no declared financial interest under this head.

- The highest amount received from Paid Consultancy has been declared by Parimal Nathwani (Rs 1.29 crore) followed by Amar Singh (Rs 54 lac) and Ravi Shankar Prasad (Rs 37.73 lac).

Professional Engagement-

- 43 MPs have declared that they have financial interest in the form of Paid Consultancy and 189 MPs have no declared financial interest under this head.

- The highest amount received from Professional Engagements has been declared by Abhishek Manu Singhvi (INC,Rajasthan)(Rs 50 crore) followed by Arun Jaitley (BJP,Gujarat) (Rs 10 crore) and Ram Jethmalani (BJP,Rajasthan)(Rs 8.41 crore).

- MPs with high assets and  no declaration of pecuniary interest

- A total of 140 MPs out of the total 232 MPs have declared that they have no pecuniary interest.

- The top 3 MPs who have high assets with no declaration of pecuniary interest are Subbarami Reddy (INC,AP)(Rs 258.25 crore) followed by Karan Singh (INC,Delhi)(Rs 57.89 crore) and Rajkumar Dhoot (SS,Maharashtra)(Rs 29.53 crore).

- ADR demands the following steps should be taken:

- Details of spouse and dependent should also be disclosed in the form.

- There should be a thorough scrutiny of the declarations of the pecuniary interest.

- Issue of conflict of interest must be addressed  comprehensively in terms  of ministry/panel/committee that the MPs are part of and related financial interests.

Addtional details are in the attached report.

 

Montek is innocent...

governancenow.com, oct 11, 2011

Problem lies with policy rethink on poverty
Trust the government to introduce an element of ambiguity when it formulates welfare policies so that it has enough space to play around and play foul as and when it pleases with such policies, notwithstanding the grandstanding about its benevolence.

When planning commission deputy chairman Montek Singh Ahluwalia and rural development minister Jairam Ramesh made that grand declaration on October 3 – which junked the existing poverty line and removed caps on the number of beneficiaries of any welfare scheme – few noticed such an ambiguity cleverly introduced.

Para 4 of their joint statement read: “This methodology will seek to ensure that no poor or deprived household will be excluded from coverage under different government programmes and schemes. An expert committee will be appointed to ensure that this methodology is consistent with the provisions of the Food Security Bill as it finally emerges.”

Note the second sentence for ambiguity. At first glance, the ambiguity is not clear. On the contrary, it sounds perfectly logical and reasonable.

But that seemingly logical and reasonable stand is exposed only when you read Ahluwalia making that contradictory statement in his latest letter to attorney general Goolam Vahanvati, who would be appearing on behalf of the commission in the next hearing of the supreme court on food entitlement issue. It was during this litigation (PUCL vs Union of India and Others case) that the brouhaha over poverty line erupted in the first place and the planning commission was ridiculed for its affidavit that merely inflation-proofed the Tendulkar committee’s poverty line to say that anyone spending over Rs 32 in urban areas and Rs 26 in rural areas was not poor.

Ahluwalia wrote to Vahanvati saying two things: One, the planning commission is sticking to its poverty line and two, beneficiaries of subsidized food grains will be capped to fit the food security law being contemplated. This is the stand then for Vahanvati to take in the next hearing in the apex court.

This stand is now being questioned and Ahluwalia is being accused of changing his stand and sticking to the old policy of poverty line and capping the beneficiaries. The October 3 joint statement had clearly said that the existing poverty line had been junked, there would be no capping and that all the entitlements would be decided on the basis of the Socio-economic and Caste Census 2011 being carried out.

But Para 4 of the same statement had negated that in so far as food entitlement goes.

That is because, the Food Security Bill currently pending for passage says: In urban areas, a maximum of 50 percent of population will be given subsidized food, of which 28 percent will constitute “priority households” (read BPL families). In rural areas, a maximum of 75 percent of population will be given subsidized food, of which 46 percent will constitute “priority households” (read BPL families). The rest will be treated as APL families (that is 50 percent minus 28 percent and 75 percent minus 46 percent).

So, the capping is in the Food Security Bill.

And the logical thing for Ahluwalia and Ramesh would have been to say that this capping in the bill will be removed. They didn’t, let the contradiction remain and then, in Para 4, linked the contradiction to the new formulation to introduce the ambiguity.

Blame Ahluwalia and scream at him for changing his stand.

The truth is, he has not changed his stand. It was there. We failed to notice and scream at the right time.

The way out? Remove the capping in the bill. That is the essence of the October 3 policy rethinking. Isn’t it?

Trust the government again. This will not happen in a hurry, if at all.