In a manner that attracted no attention, the bureaucracy has managed to reintroduce red tape into its procedures in the later phase of liberalisation.
WHEN Manmohan Singh as Finance Minister, with the strong support of Prime Minister P.V. Narasimha Rao, brought about radical reforms in the industrial sector, freeing it from the shackles of procedures that bureaucrats had created over the years, the economy responded with energy and enthusiasm.
The world began to see India as an emerging economic superpower. The dynamism that was clearly visible in different sectors of the economy, and which was harnessed by the succeeding National Democratic Alliance (NDA) government rather conveniently for their ill-fated India Shining campaign, had a ripple effect; more and more sectors of the economy were affected by it and the image of India began to alter.
India was not only a country of millions of starving, illiterate and poverty-stricken people but one that had a middle class, discovered to be fairly affluent, and growing even more so, and also growing in numbers this was a class that was reckoned to be more than 300-million strong, representing an enormous potential market and serving as the driver for even more production in varied sectors, from textiles to electronics to hospitals to hotels, cars and property.
Infrastructure was a major problem: roads and, even more vital, the terrible lack of power and good educational institutions (not good as defined in government reports but good in the sense the term is understood globally) among others. The new Prime Minister, Manmohan Singh, brought the country the historic nuclear treaty with the United States, which freed India from decades of sanctions and made it possible for nuclear power plants to be set up, providing the economy with what it needed above everything else.
But Manmohan Singh, both as Finance Minister and as Prime Minister, did not realise that with the major reforms he brought in he had created for himself a most formidable adversary; not the NDA, not the Left, in fact, no political group or party, but the bureaucracy. By freeing industry in the 1990s from the vice-like grip of bureaucratic procedures, Manmohan Singh took away from the bureaucracy its control from which it derived the power to make money, to make entrepreneurs dance to its tune.
As a former bureaucrat, I can remember passing Udyog Bhavan, which housed the then formidable Department of Industrial Development and the Commerce Ministry, every evening and noting, lined up in front of it, the large number of sleek imported cars (this was, if you recall, before liberalisation brought in first the Marutis and then all the other cars, from Korea, Germany, Japan and the United States). A colleague explained to me that they were the cars sent or brought by various middle men, or facilitators, to take various Section Officers, Under-Secretaries and others of that kind home. But once the new liberalisation removed bureaucratic control, the cars vanished.
What Manmohan Singh also did not realise was that this kind of adversary does not make fiery speeches in Parliament or reduce the two Houses to arenas of pandemonium and chaos. It retreats, in seemingly loyal acceptance of the new dispensation, and waits. It knows that time is on its side. As the years pass, and the world refers to India over and over again as an emerging economic superpower, as the world begins to talk of China and India as the two Asian economic giants, slowly, in a manner that attracts no attention, procedures are reintroduced, ostensibly to aid the growth process but actually to regain control.
Grendel's motherIt is only now that Indian and international industry has begun to recognise the fact that the monster has re-emerged, much as Grendel's mother emerged after Beowulf slew Grendel.
And his mother now,gloomy and grim, would go that quest of sorrow, the death of her son to avenge. To Heorot came she, where helmet ed Danes slept in the hall. Too soon came back old ills of the earls, when in she burst,
the mother of Grendel.(From the translation by Francis B. Gummere, 1910.)
The old ills of the earls have truly returned. It is now being increasingly said that India is no longer the wonderful destination for investment and industry that it once was: there is too much red tape. Recently, an international agency ranked the bureaucracy in India as the worst in Asia. Does it matter if upwards of $40 billion has been withdrawn from the economy by institutions who find it prudent to take their money elsewhere? Does it matter that the value of the rupee has slid from around Rs.40 to the dollar to over Rs.50? Not that Grendel's mother cares; sooner or later the sleek cars will start arriving before Udyog Bhavan again. And it will be business as usual. Ask anyone who has tried to set up a joint venture to build a part of India's much touted system of expressways, and has left in disgust.
Yes, we have two ex-telecom Ministers in jail. One, Sukh Ram, sentenced to three years' rigorous imprisonment, and another being tried. Yes, we have a former Secretary to the Ministry in jail, also being tried. Yes, we have Suresh Kalmadi in jail, to be tried for various crimes he is said to have committed while organising the 2010 Commonwealth Games.
But they do not represent the adversary Manmohan Singh has awakened. The adversary its name is Legion is to be found in the corridors of various government offices, in rooms where desks are piled high with files, in the offices of junior engineers of different municipal corporations all over the country, in the offices of the electricity boards and elsewhere.
Initially, Manmohan Singh as Prime Minister made brave statements about administrative reform. A mighty commission was set up; it laboured mightily and produced a very small mouse, and some argue it did not even do that. The devil does lie in the details; it is wonderful to catch the big offenders and lock them up. All of us need to be grateful to you for having done that. But they are not the real adversary. It is Legion.
It is to Legion, as the Devil said, that any entrepreneur must come, it is Legion who must be satisfied. It is to Legion that ordinary people must go to get the numerous permissions needed to build their own houses on their own land. Did you forget that, Manmohan Singh?
Perhaps, you did. But let me assure you Legion has not forgotten. The web of procedure has quietly been woven again when you were not looking and has now gained a dreadful reputation; Grendel's mother has come back.
