Time to drive out Satans from the temples of modern India

Chandra Shekhar

When you buy petrol, you think you are paying for the cost of fuel and taxes levied by an elected government. However, what you do not realise is that you are also contributing directly towards the furniture of ministers/secretaries, their food and liquor bills, travel and other expenses including ‘entertainment’. Each time you buy a railway or public sector airline ticket, pay telephone or electricity bill, procure goods and services produced by public sector undertakings (PSUs), you repeat the same exercise.

These are neither motivated allegations levelled by an opposition member in Parliament nor extracts from a dissertation on constructive criticism of the public sector by a Marxist scholar. These are the candid observations of the Expenditure Reforms Commission (ERC), headed by former finance secretary K P Geethakrishnan, and need not be brushed aside. Though inadvertently, the ERC has shown how willing PSUs take care of the material needs of ministers/secretaries.

Why should a PSU, set up by the government to provide goods and services to people at reasonable and affordable cost, empty its coffers to pay for food and liquor bills, travel and furniture of ministers and provide them with other goodies?

Commenting on the wicked system of PSUs obliging senior government functionaries, the ERC, in its tenth report on Rationalisation of the functions, activities and structure of the department of expenditure has observed that “the present practice of PSUs footing the bill of ministries/departments on travel, meetings, stay in hotels, entertainment and food etc. should be stopped.” A paragraph later, the report adds that “the practice of asking the public sector undertakings to ‘do up’ the ministry’s premises and rooms of ministers and secretaries should also be stopped.”

The report, however, does not say who started the shameful system of asking PSUs to foot the bills of ministers and secretaries. Also, it sheds no light on when this perverted practice began. Obviously there are no official guidelines on PSUs furnishing premises of the ministers and bureaucrats and paying their food and liquor bills.
Although the PSUs may be keeping an account of such freebies doled out to please the ministers and bureaucrats, these expenses are not shared with the shareholders or mentioned in the annual reports.

Why should a PSU, which was set up by the government to provide goods and services to people at reasonable and affordable cost, empty its coffers to pay for food and liquor bills, travel and furniture of ministers/secretaries and provide them with other goodies? The answer to this question lies in another question — what will happen if a PSU chairman refuses to pick up food and liquor bills of ministers/secretaries? The answer unfortunately is quite. An unobliging PSU chairman, irrespective of his competence, can be made to run for his life by a powerful bureaucrat sitting in some corner of a bhawan in the national capital. A PSU chief, who also has a career graph to pursue, cannot afford to rub the ministers/secretaries the wrong way. Things have come to such a pass that no one wants to disturb this system which benefits everyone expect the PSU concerned and the consumers.

The practice of taking care of the needs of one another is the main reason why ministries are going out of their way to erect roadblocks in the way of privatisation of PSUs under their administrative control. The financial leverage that a PSU provides to senior functionaries of the administrative ministry is immense, if not difficult, to quantify. What would the petroleum and natural gas ministry be worth without public sectors like Indian Oil Corporation and Oil and Natural Gas Corporation? Similarly, who would like to be a civil aviation minister without PSUs like Air-India and Indian Airlines? What a communications minister do if Bharat Sanchar Nigam Limited, Videsh Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited are not part of his ministry? Who would want to be steel minister without the Steel Authority of India Limited under his command? One can define the worth of a ministry by the weight of the PSUs under its administrative control. The more the number of PSUs, the better the lives of ministers and bureaucrats. Although it is a different matter that it is the consumer who has to pay for the legitimate and illegitimate expenses of PSUs by buying their products and services at arbitrary prices that are assumed to be correct.

The PSUs, once described as temples of modern India, have become abattoirs for sacrificing interests of people to the benefit of their representatives. What has happened is that these temples, built brick by brick by the taxpayers’ money, have been usurped by Satans who have styled themselves as presiding deities in the name of public interest. The phrase “public interest” itself has been so loosely used that it has become difficult to know where the public interest ends and personal interest begins.

The only worthwhile solution to the problem is to drive out these Satans and replace them with private entrepreneurs and permit market forces to discipline the latter. Adam Smith’s invisible hand may prove more effective than bureaucratic brains. As the politicians and bureaucrats have “proved” themselves several times, it would be futile to give them one more chance in the hope that the next lot would be better. Although disinvestment minister Arun Shourie has launched a jehad to free the government of the burden of PSUs, the war to drive out Satans from the temples of modern India requires a lot of effort and time. Till then consumers will have to continue to pay for the goods and services of monopolistic PSUs and simultaneously contribute to the goodies for elected ministers and bureaucrats.