Friday, July 1, 2005

The Missing Base

The Missing Base
By Narendra Luther

A group of citizens rampaged the office of the Electricity Board in Maharashtra protesting against prolonged power cuts in rural areas.

Irate residents of a government colony came out in the capital of India for non-supply of water for five days.

A man was killed in Hyderabad over a dispute over filling his pot with water.

Women in Rajasthan trudge for miles for getting a bucket of water.

You pay for a tanker of water and it takes five days of chase to get it.

A TV image shows you a part of a stretch of 30 miles of the national highway in Bihar. It takes four hours to cover the distance because the road is in an utter state of disrepair.

In Bangalore the industries go on a one- day token strike to underline the state of disrepair of a road leading to an industrial estate

A young engineer in Bihar is killed because he complains to the Prime Minister about corruption in the implementation of the scheme for the national highway project.

Early in June 2005, the special train of the Railway Minister, Lalu Prasad was stopped by hundreds of people of Brauni and adjoining areas agitating against acute shortage of power and water.

Three persons died in Tonk in Rajasthan in mid-June when the Police fired on farmers agitating for water.

The traffic police boss in a metro explains that our roads are not able to take the increased number of vehicles. Hence the traffic jams.


I could fill up pages with such authentic news items but that is not necessary to bring home the point that there is an acute lack of infrastructure in our country. Infrastructure or ‘social overhead outlay’ covers roads, railways, transport and communication system electricity, water supply and other public services. It is also generally widened to include the health, skills, education and other qualities of the population – resources necessary for any development to take place. Let us forget about the second category of the list above and talk about the hard part of infrastructure.

As ordinary individual consumers of utilities you and I know this - and to retain our sanity, have reconciled ourselves to the situation. We utter the serenity prayer: ‘God grant us the serenity to accept the things we cannot change; courage to change the things we can, and wisdom to know the difference’. Only the philosophy of acceptance and retreat flourishes in such an atmosphere.

The importance of building infrastructure was fully appreciated by our early leaders. Considerable accretions to it were made under the leadership of Nehru in that respect. It entailed sacrifices on the consumption front and we have lived through a regime of restrictive imports for building a better future. But after him, in the hands of smaller netas, investment on infrastructure became a casualty of populistic politics. Short-term sops to people took precedence over long-term investments. Communal and casteist politics too had an adverse impact on the building of infrastructure. Subsidies were given, in some cases with justification. But it became difficult to withdraw them later. They became part of the system and every attempt to remove or even reduce them has been vigorously opposed by the Left parties.

Dog in the manger

They impact adversely on the building of infrastructure. That, in turn, affects the entry of foreign capital and enterprise. Today we are not in a position to undertake investments of the magnitude required for improving our infrastructure. Yet there are people and parties that oppose the entry of foreign capital to enable us to do that. They invoke the ghost of the East India Company and they warn us that history will repeat itself. They ignore the fact that we are living not in the 17th but in the 21st century. In an era of globalization they want us to remain wrapped up in the slip of isolationism. We have seen the advantages of globalization accruing to us through BPO and increased immigration. Yet many amongst us oppose it.

Our present situation is such that we should welcome direct foreign investment in many fields like road building, power generation, surface transportation, airports and civil aviation. They will trigger growth of ancillary industries and small business. Exposure to competition will also improve the quality of our products and services as has been witnessed in certain fields like telephony and the automobiles. Phone calls are becoming cheaper every day. The prices of electronic gadgets and white goods are also falling instead of increasing. But poor infrastructure is the main hurdle to growth. We don’t have road lengths to drive on; we don’t have enough planes to fly people. We don’t have adequate capacity at airport lounges and tarmacs to bring in tourists. Our services at all levels are poor by international standards. And it is the service sector that has played a crucial role in the growth of all advanced economies.

At your Service!

Our service sector is marked by inefficiency and corruption. Corruption is of course the all-pervasive factor in our life. The late India expert, Prof. Hanson once invited me to speak to his class on Indian administration. In his introductory remarks, he said that in India it was either influence or money which made things happen. I felt hurt at that observation but on return to India, I have seen time and again how perceptive his observation was. In corruption the tone is set by the politicians and is eagerly adopted by the bureaucracy at all levels. That however is a subject by itself. We saw how corruption affected the Dhabol Power Project in Maharashtra. When the Congress Government sanctioned it, the Shiv Sena cried ‘corruption’. However, when the Shiv Sena came to power, it sanctioned the self-same project. It was then the turn of the Congress Party in the opposition to cry ‘corruption’. As was shown by what happened to the Enron Company later back home, we found that both were right in their accusation.

Attention: Election Commission

We are deficit in power. Yet party after party in politics has won election on the basis of a promise to give free power to farmers. After winning the elections, some of them had to scrap or modify the scheme. The latest is the Congress Party in Andhra Pradesh. It is now trying to refine the scheme of free power to the farmers by applying some sort of means test. The point is why is such a promise is allowed to be made by any political party. The Prime Minister, a distinguished practising economist himself, has spoken against it. The Union Power Minister has expressed himself against it. Yet their Party made this promise in its election campaign and formed government in two states. The Election Commission should prohibit the inclusion of such inducements in the election manifestoes of political party by making it a corrupt practice. Let the election manifestoes be realistic and not promise moon to the voter. The fraud has to be stopped.


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