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Welcome climbdown Hooda’s turn |
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AAP provides an alternative
Oh, the lure of Lou-si-aana
Need to corporatise BBMB
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Welcome climbdown THE Aam Aadmi Party dharna in Delhi is over and life in the national capital returned to normal swiftly. Indeed, the idea of Delhi Chief Minister Arvind Kejriwal and his Cabinet leading the protest was as novel as it was controversial. The climbdown is welcome since there were no winners in this brinkmanship. The CM wanted certain officers suspended because they did not carry out a raid on an alleged drug and prostitution racket in South Delhi. This is something his counterparts could have done in the blink of an eye. But given Delhi's special status, the police reports to the Union Home Minister rather than the CM. Ultimately, two policemen were sent on leave. At the core is an old issue. The Chief Minister also wants that the Delhi Police be brought under the state government. Kejriwal is not the first Delhi Chief Minister to demand that the police be answerable to him. During her 15-year tenure, his predecessor Sheila Dikshit too had a few run-ins with the police and had made a similar demand. Much of the criticism about the AAP protest is not about the issue, but the manner in which the CM came out in the streets. The people of Delhi have reposed their faith in Kejriwal. They expect his government to deliver on its election promises, to govern effectively and sort out the many problems they face. Confrontations, agitations and brinkmanship are not the way to do that. In a democracy, good governance depends on following due process and ensuring the cooperation of various agencies of the state. On its part, the Centre, too, will have to work out a system in which both the state and Central governments have a role in handling the police, as is done in various national capitals in many parts of the world. The lack of a federal police force in India has led to some peculiar situations. Perhaps it is time to think of such a force and how it would interact with its counterparts in various states.
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Hooda’s turn THE Haryana Government failed in its duty when it did not take any action on its own on the complaints of corruption against a minister, chief parliamentary secretaries and
MLAs, backed by CDs of sting operations. The state Lokayukta's recommendation now that an FIR be registered against CPS Ram Kishan Fauji - as there was prima facie evidence that he had sought money in a CLU case - cannot be ignored. First, the CPS has to resign. Second, an FIR needs to be registered promptly. Chief Minister Hooda can only hope to cut losses for the Congress by taking visibly tough action. The bigger fear for Hooda, of course, would be what recommendation the Lokayukta makes in the similar complaints against the seven other party leaders. Former high court Judge Pritam Pal would have already shocked Hooda and surprised the Chautalas by his observations on Fauji. After all, the government had handed the matter to the Lokayukta when it could have pursued the case on its own. Obviously it expected a quiet burial to the complaint. The complainant, INLD, had said it did not have any faith in the Lokayukta as it had no power to act. Indeed, the Lokayukta in Haryana has little powers or investigation infrastructure. Ironically, it was the Chautala government that had stripped the institution of the significant powers that it had been accorded by Bansi
Lal. Yet, the case shows what even an emaciated authority can do if it sets its mind to it. Corruption being the biggest charge levelled against the Hooda government by the Opposition, the development is nothing less that shattering for the Congress. The INLD would probably now be forthcoming in offering evidence in the remaining cases. On its part, the Congress government can either show the door to the tainted leaders, pending inquiry, or have the matter regularly flogged in public till the elections. The tide against corruption is high in any case; those in power can either ride it or be engulfed by it.
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Thought for the Day
First love is only a little foolishness and a lot of curiosity.
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School hygiene AN interesting suggestion was made at the All-India Sanitary Conference held on Monday on the subject of medical inspection of schools and the teaching of hygiene to the boys. No doubt this was useful and funds were necessary before medical inspection could be introduced. But if the authorities were more earnest to provide for physical training of boys and play grounds for them, the object would be sooner gained. It was felt that the headmaster of schools should have some knowledge of school hygiene and that the education department should, from a hygienic point of view, expend money on building schools in towns rather than in villages. The provision of play grounds in schools and the bestowal of greater attention by headmasters to the physical training of boys and school hygiene would obviate the necessity for medical inspection of boys which may be confined to colleges and high schools for the present. The jurisdictional value of land suits THE official report of the proceedings of the recent meeting of the Punjab Legislative Council contains a reference to the old question of the jurisdictional value of land suits. Towards the close of the debate on the Punjab Courts Bill, it would be recollected, the Hon'ble Mr. Shadi Lal raised the question of Court fees in land suits. By repealing the Punjab Courts Amendment Act of 1912, the enhancement of Court fees from five times the land revenue to ten times the land revenue for purpose of court fees no longer existed. Mr. Shadi Lal asked whether the Government intentionally reverted to the former rule. If it was intentional he welcomed the reversion to mamool which he had upheld on a former occasion. But if it was the result of an oversight then he proposed yet another amendment that in Section 7 (v), (b), Indian Court-fees Act, 1870, for the word “five” substitute the word “ten.”
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AAP provides an alternative THE Indian political scene, even though fractured and patchy, is acquiring a shape of sorts. The emergence of the Aam Admi Party (AAP), founded by NGOs, sneeringly called the “johlawalas”, has changed the scene. It has provided the much-needed alternative to the Congress and the Bharatiya Janata Party (BJP), which are the same wine in two different old bottles. When both Congress and the BJP admit that they have to learn from the way AAP has come up, they should transform themselves. Yet they remain the citadels of the status quo. Whether AAP has the Marxists and Naxalites within its ranks does not matter as long as they are in tune with the people's aspirations. Ultimately, the test is how soon AAP eliminates poverty which encompasses half of India’s population even after 67 years of Independence. One thing sure is that the Left has been trampled upon mercilessly. It is a loss, no doubt. But the communists and the nascent Socialist Party have to blame themselves because they are no more tethered to the grassroots. Espousing the cause of progress and egalitarianism cannot be confined to slogans or rhetoric. AAP has come out with an agenda and a time frame for uplifting the lower half. When the communists could not improve the quality of life in West Bengal in their 35-year-old rule, they have proved that the Marxism of their type is only a veneer of progress. Scratch their skin, they are found part of the establishment. What they could not do-arouse the poor to have their say-for decades, AAP promised to do in about 12 months. The two main parties, the Congress and the BJP, are like "mahants" in temples. They have learnt nothing, forgotten nothing. Instead of correcting their policies, they consider AAP an aberration or a bubble which will burst by the time the Lok Sabha elections are held this April. They are mistaken because the party has caught the imagination of the people and it has spread like a wild fire. Lakhs of people who have joined AAP show that. The manner in which the wave of Narendra Modi, the BJP's prime ministerial candidate, has waned indicates that he does not command the crowd he once did although the media continues to play him up. That is the reason why the RSS is frantically telling the BJP to stop AAP, not the Congress, which has been its opponent for years. The attack by the leaders on every step AAP takes in governing Delhi confirms the perception that the Congress has slipped to the third position. The Congress has reportedly come to the conclusion that it should unofficially support AAP to stall Modi. It also means that the Congress has realised that it cannot come back to power. In fact, it may try to marshal the different parties in the states along with its own strength in support of AAP to form a government at the Centre. The Congress will leave no stone unturned to keep Modi out of power. The most disturbing aspect of the political scene is corruption. Both the Congress and the BJP, the latter especially, have no hesitation in getting the support of tainted leaders. The Congress refuses to take action against Himachal Pradesh Chief Minister Virbhadra Singh, who allegedly favoured a company in which his relations have a large number of shares. Modi, otherwise talking about cleanliness in public life, retains in his Cabinet a minister who has been convicted by the court. Both Bihar's Lalu Yadav and Rashid Masood of the Congress ceased to be members of Parliament as soon as they were convicted. Why is the BJP shielding the convicted members in Modi's government in Gujarat? Another disturbing feature visible is the personality cult. The democratic polity is sought to be changed to the presidential form. Modi is to blame the most because he has raised the slogan of a strong man and a strong government. A ruler, who presided over the massacre of his own citizens some 12 years ago, can be dangerous to the dissent that the Constitution guarantees. It is not surprising, however shocking it is, that the police refused to register a First Information Report (FIR) against Modi at Ahmedabad. The snooping scandal, which implicates Modi in having a girl under surveillance, raises many questions. An FIR is in order to determine the truth. A Centre-appointed commission may be able to dig it out. But the state machinery is not willing to cooperate, as is obvious from the attitude of the local police. The Congress should have seen through Modi's game to convert the 2014 elections into a clash of personalities, not of issues. But the party is guilty of projecting Rahul Gandhi as if the contest is between the two. Rahul Gandhi is too often speaking on important policy matters and having the government's decision reversed. One example is that of the ordinance to save politicians from the Supreme Court judgment that a legislator would cease to be member once he is convicted. Yet another issue is that of the housing scandal in Maharashtra. Rahul Gandhi has partly retrieved the Adarsh housing report which was rejected by the Congress-led government in the state. Still the politicians have gone scot-free. Only bureaucrats will have to bear the brunt. Delhi Chief Minister Arvind Kejriwal should realise that the AAP government is not coterminous with him. Strange, he retains 16 departments. The Janata Party in the wake of a movement by Gandhian Jayaprakash Narayan did not last. But it saw to it that there would be no Emergency. Democracy was deeply entrenched. If AAP could clean the system and make sure that it stays that way, this will be a great contribution even if AAP does not last.
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Oh, the lure of Lou-si-aana Apparently, nothing can be more loyal than the love for shopping. A firm believer, I planned a visit to Indian 'Lou-si-aana' (read Ludhiana) earlier this month. Lou-si-aana — a city acclaimed for its swanky lifestyle, small industries and finely meshed structures of gigantic shopping malls and what not! Resultantly, I had huge expectations. While basking in the sun and sipping a hot cuppa, we jotted down our must-visits.
The city’s ‘Euphoria’ knocked me down the moment I stepped down from the taxi. The chilling dawn rubbed our noses red. The well-knitted web of shops, kiosks, stores, nukkars and dhabas portrayed the in-built spirit of Ludhiana which is to 'shop till you drop’. The city was celebrating “Gurpurab”, the 10th Guru's birth anniversary, the same day. After a gratifying treat of hot alloo-da, methi-da, mooli-da pranthas with sugar-loaded cups of tea, we ventured out. Owing to the crippling breakfast, we opted for a rickshaw ride to commute and experience the city’s original liveliness and vigour. Amidst the chaos of autos and taxis, these rickshaw-pullers were moving easily. Often they would get down and maneuver their ways through the narrow lanes. Finally, we landed in (not so) Chaura Bazaar and started our shopping-bargaining-debating drive. The local shopkeepers amazed me by offering juice as I appeared to be a potential buyer, an NRI, a spoilt brat or whatever to them! For others, the categories were conveniently defined — Bhenji edhar vekho, Didi ah lo, Bibiji chakko ji, andar aao ji, Aunty ji gall tan suno, vekh tan lao —vekhan da mull ni lagda! Soon, we realised that spending money also isn't a cakewalk, provided you wish to spend it wisely. By the time I bought three jackets, two suits and a blue teddy bear, I had relished three cups of coffee, two samosas and ½ kg jalebi. My mother, who intended to do only sight-seeing and window-shopping also fell prey to three Pashmina shawls and an oversized (and overpriced) overcoat! After quickly satisfying our taste-buds at a sweets shop, we headed towards the ‘Dal market’ for further indulgence. As we passed by the inbuilt coil of narrow streets, we also caught sight of century-old huts that had iron gates and miniature windows. A local resident mentioned that almost every house had a small-scale manufacturing unit. We moved on. Nearing dusk, we started to head back. The city’s hustle-bustle had grown manifold owing to the celebration of Gurpurab. A huge orchestra band, a pair of bejewelled elephants tailed a large number of devotees. The chariot carrying the holy Guru Granth Sahib radiated the light of immortality. Sitting in the taxi with hands full of kraah-parshaad, we waved a cheery goodbye to the city. We ensured a quick flashback of the day before leaving the “Manchester of India”. I hope it summons us back soon, since it will be badly missed.
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Need to corporatise BBMB AS the Financial Adviser to the Bhakra Beas Management Board (BBMB) between 1996 and 2001, this writer had first suggested corporatisation of the organisation. For various reasons the issue did not gather the critical attention needed to begin a serious debate. In the interregnum, however, several developments have taken place, which make the multivalent, departmental character of the board even more of an oddity and an aberration, calling for an urgent redress by way of organisational reform, as seen through the golden standard of public interest rather than the perpetuation of established claims, always resistant to change and desiring the status quo. Since the actual owners of the BBMB projects are the successor states of the erstwhile state of Punjab and the state of Rajasthan, the BBMB, de facto, functions as a managing agency for and on behalf of these states and discharges the role of an inter-state mother board for the distribution of power and irrigation benefits amongst them. Owing to its overarching and strategic importance in the region, the control of this entity could naturally not have been left to any or all of the state governments and the Punjab Reorganisation Act 1966, understandably, brought it under the aegis of the Central government. The Bhakra Beas Management Board, as a pioneering organisation in large multipurpose projects, is a repository of enormous experience, expertise and a remarkable work ethic which have all helped in improving the socio-economic conditions in the region. However, despite the façade of running smoothly, the BBMB, from an organisational standpoint, suffers from several infirmities, limitations and internal contradictions. Though born out of a Central statute, the BBMB does not have all the features of an independent legal existence. It is really neither a statutory corporation nor a government company. It does not even have the status of the erstwhile state electricity boards. It is also not an autonomous body since it depends on its constituents for practically everything.
Problems and inadequacies
A corporate body usually enjoys perpetual succession, limits the liability of its share holders, separates ownership from management, thereby enabling autonomy with regard to the raising and deployment of human and financial resources for measurable results; and adheres to a prescribed template for good governance that promotes transparency and comparability with other organisations. None of these features are present in the BBMB. At the core of inadequacies in the BBMB are the finance, accounts and HR systems which do not promote efficiency, cost control and long-term health of its vast assets. Since the BBMB, straight away, distributes water and power to the owner states, it functions on a ‘no-profit, no-loss’ basis. It has no concern with the value of its output and receives from the owner states exactly the amount of money that it takes to run the organisation, estimated every year through an annual budget, which currently is about Rs. 1,000 crore. Under the PWD system that it follows, there is no account which summarises its results for a specific time period, bringing out the net financial results of its operations by listing out matching and chargeable costs against the value of its throughput. As a matter of fact, all kinds of expenditure are clubbed together without appropriate cost classifications, making inter-unit cost control and accountability impossible. The PWD system is not suitable for an entity where there ought to be a clear relationship between costs and output over a given time frame. This system has become particularly irrelevant with the onset of the Electricity Act 2003, which calls for rationalisation, competitiveness and transparency in tariff fixation for greater consumer protection. How such an important organisation is allowed to run on a cash-based mercantile system as against a modern accrual-based system of accounts is itself quixotic. The biggest drawback under the present methodology is that the capital of the BBMB is not being preserved in accordance with the accepted principles as there is no concept of providing for depreciation, renewal and replacements. Depreciation of assets is a certain and huge cost which must be factored in the costing of output of any entity since it represents eroded value that must be created within the system. Even if the state power utilities, which, technically, now own the BBMB power wing assets, do provide for depreciation in their accounts, it is doubtful if they have the financial capacity to create actual renewal and reserve funds which are readily available for modernisation. For the ageing irrigation wing assets, which are colossal and could be in sudden need of massive recapitalisation, even such a semblance of security does not exist. To confound matters further, the BBMB cannot raise any finances directly, and has to go through a tedious process of providing state government guarantees for each loan, making the exercise slow and uneconomical. Owing to historical legacies, there is a multiplicity of rules followed in the irrigation and power wings of the BBMB, leading to several distortions. At present, except for some very junior level posts, the BBMB does not have a cadre of its own for catering to its requirements of engineering, finance, medical, teaching, administration and security. All officers and most of the other staff are drawn from diverse sources consisting of various departments of different state and Central governments , state PSUs, in a complicated share quota ratio which has resulted in vexatious pay, pension and seniority anomalies, contributing to the rising costs. The BBMB really functions like an enormous expense account without feeling the need to leverage its assets, control costs and create a value surplus. It sometimes finds it hard to enforce discipline since most officers are on deputation. As the state governments, otherwise obliged to provide requisite personnel to run the BBMB, generally remain unable to do so, a system of ad-hoc promotions has come into being, not always resulting in best practices.
Benefits of corporatisation
To safeguard the interest of the BBMB and its stake-holders, it is imperative that it is given a corporate status with all concomitant benefits and responsibilities. A corporate structure will transfuse speed, flexibility and autonomy into managerial decision-making, bringing in efficiency, transparency and accountability at all levels. Following the prescribed accounting standards will lead to the preparation of proper final accounts so that a true and fair view of its state of affairs is known. Bottlenecks will be removed from the process of taking loans, resulting in matching the use and availability of resources. The BBMB can then employ modern techniques of cash and financial management in order to minimise the cost of funds and idle inventory, benefiting the owner states. Working on a cost reimbursement basis is unhealthy for any organisation. Archaic work procedures will come into focus the moment there are accountability centres, providing incentives for efficiency and productivity. With emphasis on generating a surplus, the BBMB will channel its huge real estate for the generation of income. This organisation, which has become heavy, slow and bureaucratic, lacking in the cohesive and binding force of a corporate, will also benefit greatly when it will have to adhere to an external economic and legislative regulatory frame work. Several formats can be considered for the new entity. Since the BBMB comprises many projects with different ownership ratios, there could be a single holding company with several subsidiaries or a single company only. The ownership of the partner states in the projects and benefits shared will continue exactly as now and the new entity will be 100 per cent government owned. Inasmuch as the original capital contributions have come from various states through a series of cash flows over time, discounted cash flow techniques can be used for determining the share holding of each government at any time by using compounding or discounting methods. By suitable revaluation of assets, a proper capital structure can be created. Questions of extent of revaluation reserves, capital and loan components will need to be decided. Since the principle of proportional representation is the cardinal principle in corporate governance, the Board of Directors will be composed accordingly, reflecting the strength of equity holdings. Provisions could be incorporated in the Articles of Association to enable the Government of India to appoint the Chairman and Managing Director and Director (Finance) etc. The new entity could be registered under the Companies Act as a government company or could have a statutory corporation format.
Recent judicial decisions
That the precise legal status of the BBMB is quirky is manifest in a comparison of the opposing conclusions drawn in two very important recent judicial pronouncements. While dismissing an appeal by the BBMB, challenging the regulatory powers of the Central Electricity Regulatory Commission over it, the Appellate Tribunal for Electricity in December 2012 concluded that the BBMB was in the nature of a Central government company or corporation with a juridical status distinct from the states and that it did not matter, as the BBMB argued, that it was the partner states and not the BBMB, which actually owned the assets. On the other hand, the Income Tax Appellate Tribunal in July 2013, while dismissing the action of the Income Tax authorities, valuing the perquisite of subsidised residential accommodation provided to some BBMB employees as if the BBMB was a corporate employer, held that the BBMB could not be considered a separate legal entity as ‘an association of persons’ since the residential accommodation was owned by the partner states, and that the BBMB virtually had the status of government. With great respect to the judgements which are both exhaustive and sound in arguments and in harmony with the intention of the respective statutes that they operate under, the chasm between the letter and spirit of law is apparent. While the ATE follows a reductionist logic to analyse the legal status of the BBMB and concludes that it is in the nature of a government company, the reality is that the math on the ground does not add up. It is high time that the chasm was bridged.
A look back
* The Bhakra Management Board (BMB) was created on 1.10.1967 under the Punjab Reorganisation Act 1966. *
It was christened the Bhakra Beas Management Board (BBMB) on 15.5.1976, to which all the completed works of the Beas Construction Board (BCB) were eventually transferred. *
The BBMB manages the Bhakra Nangal Project, the Beas Project I (Pandoh dam, the Beas Satluj link and the Dehar Power House) and the Beas Project II (Beas Dam and Pong power houses). *
It has over 3,700 circuit km of an inter-state power transmission system along with an elaborate canal network for evacuation of water and power. *
Its installed capacity is nearly 3,000 mw and it generates about 12,500 million units of power annually
The writer is the Principal Accountant General, Himachal
Pradesh. The views expressed are personal.
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Regional parties, which have a sway in the states, look like the biggest losers. Their appeal in the name of language, area or religion has lessened in effect. The success of AAP in the Delhi assembly elections has hit the polarisation the most that the party has transcended caste, creed and such other considerations.
