Sins of commission

Given the rapid pace at which the government has been setting up expert groups, committees and commissions, it is becoming difficult to keep up with what’s going on.

Committees may help bring issues into sharper focus, but in India the politico-bureaucratic establishment typically tends to tick off an issue as taken care of once there’s a committee looking into it.

By the time the committee or expert group actually submits its report, the focus would have shifted, and the report is consigned to some overcrowded shelf of a joint secretary in one of Delhi’s various bhavans.

Forming committees to examine issues makes sense only if there is some official willingness to take the advice. This has often not been the case.

In the case of the expert committee set up on VAT, for instance, several suggestions were made to ensure that the state governments had a real stake in increasing collections. But these were simply ignored and the states given a virtual blank cheque to lower tax rates on various commodities.

They can now claim a revenue shortfall which will have to be made good by the Centre. The complete ease with which the Kelkar Task Force’s recommendations on ending various unwarranted tax exemptions has been given the go-by over the past two Budgets is another good example of why committees don’t really work.

In the case of the Investment Commission, which is supposed to help boost FDI, the fundamental issue is whether it has any real power to make a difference.

Does it, for instance, have the power to hike FDI limits in telecom, if this is what investors are clamouring for? Clearly it doesn’t. If the investors’ complaint is that policy is being stood on its head to accommodate certain players, as one saw in telecom, there is precious little the Commission can do to rectify matters.

Nor does the body have any power to intervene in problems of implementation at the state level.

The promoters of the Bangalore-Mysore corridor are allegedly being subjected to various kinds of harassment by the state government, but it is not clear if even the central government can do anything about this, leave alone the Investment Commission. Once again, one can only wonder what the Infrastructure Development Board, reportedly under consideration, will manage to achieve.

The basic problem in most sectors, for both domestic as well as foreign investors, remains that of getting the system to respond. The problems do not relate to policy per se.

The Electricity Act, for instance, talks of allowing genuine competition through “open access”, but the problem is that when companies are allowed to bypass the state electricity boards and go to private suppliers for their power, they have to pay such huge charges that it negates the whole purpose of the exercise.

When industries go bankrupt, the law allows them to close down and exit the country. But it takes upwards of 10 years to be able to complete all the formalities involved in closing down a business.

Such issues cannot possibly be resolved through powerless commissions or boards. They can be sorted out only if there is political will backed by effective response at the bureaucratic level. It’s time to stop the charade of appointing more committees and commissions without the requisite will to follow it through.