1. Editorial: Atal reformer

Editorial: Atal reformer

A statesman, and India’s most under-rated reformer

By: | Updated: December 25, 2014 1:50 AM

Statesman, gracious, charming, witty, great repartee … the kind of adjectives that come to mind immediately while talking of former prime minister Atal Bihari Vajpayee, the latest entrant to the list of Bharat Ratnas. Vajpayee is best known for the Pokhran blast that catapulted India to the nuclear-haves club, his peace efforts with Pakistan and, for the Modi-baiters, his famous raj dharma comment after the Gujarat riots. Few realise, however, that Vajpayee is India’s most instinctive reformer, ahead of even the late PV Narasimha Rao who opened up the Indian economy, but with an IMF gun to his head. If Vajpayee managed all his reform without any huge outcry, it probably had to do with his quick wit, natural charm and ability to be self-deprecating at the same time, best symbolised by his retort to an ardent fan asking him to remain atal (firm)—“Atal toh hoon, lekin na bhooliye ki saath saath Bihari bhi hoon!” It was only a Vajpayee that could get away with such a politically incorrect remark. Nothing was more politically incorrect, of course, than his famous retort to Ram Vilas Paswan who said the BJP had no Ram in it while his (Paswan’s) name had Ram in it … “Paswanji”, Vajpayee was quick to retort, “haram mein bhi Ram hota hai !”

It is difficult to say which was Vajpayee’s biggest reform, and though the India Shining campaign backfired on him, as did the decision to change allies in Tamil Nadu in 2004, most of India’s recent economic success can be traced back to measures taken by Vajpayee. If the government today is considering raising public investment to kickstart growth, it just has to look back at Vajpayee’s ambitious Golden Quadrilateral programme—R1.9 lakh crore has been spent on this since—that has continued to be imaginatively financed since through a road cess; under Vajpayee, a tiny government department (NHAI) began functioning like a super-efficient private sector firm. Vajpayee paved the way for introducing VAT across the country and rationalised VAT rates around a CENVAT. He enacted the fiscal responsibility Act which, by adding tremendously to India’s savings pool, was responsible for the stunning growth turnaround seen in the NDA years—from -0.8% of GDP in FY00, public sector savings rose to 2.3% of GDP in FY05 when the NDA demitted office and to 5% of GDP in FY08.

And many years before the US Fed realised the importance of saving financial institutions to ensure public faith was not eroded, Vajpayee incurred the wrath of free-market fundamentalists by deciding to bail out Unit Trust of India’s failing US-64—ironically, it is UTI’s shareholdings in L&T, ITC and Axis Bank that are likely to save Modi’s budget. Insurance FDI, touted by successive governments including Modi’s as a great reform, was also a Vajpayee initiative. It was Vajpayee’s sagacity that allowed India to move from fixed licence fees that telecom firms struggled to pay, to a more rational revenue-sharing arrangement. If this historic deal is what pushed India’s telecom revolution, it was similar savvy in the face of collapsing crude oil prices—this is when the government decided to free up prices subject to a partial subsidy in LPG and kerosene—that resulted in private sector firms like Reliance and Essar lining up to invest in petrol pumps; ironic that, in the face of a similar collapse in oil prices, the Modi government is dithering over decontrol. Unlike the Congress party that never honoured Narasimha Rao, however, the Modi government has done well to honour India’s foremost reformer.

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  1. H
    Harry Potter
    Dec 30, 2014 at 11:25 am
    Dear Investors/Analysts/Advisers - Watch Out! L&T top-bres were on selling spree March-2014, leading the pack Chairman Mr Naik sold his L&T shares (Rs 1200 apiece) worth 70 crores in 20 days - March 2014. Post Q1-2014 results L&T share has seen biggest intraday decline of 8 % since July 2009, Citi Group had raised multiple red flags on earnings. Hydrocarbon subsidiary suffered losses of 900 crores, sans stake at Dhamra Port (2500 crores) L&T would have posted losses. Modi Euphoria and upbeat in market saved L&T going below Rs 1300 during q2, a striking closed range of 1200 of March 2014. Part stakes at L&T Inra sold to Canadian FII - (2000 crores). Expecting VGF - Viability Gap Funding) of 3000 crores to complete Hyderabad Metro project. Stake or post losses, Deep Sea or devil? Post Q2 results L&T share plummeted from high of 1673 to low of 1450 (17 Dec, 2014). Before Q3 results it will reach range of 1200 a piece, the rate L&T top bres has made a kill. Post Q3 results another big intra-day fall of 8-10 %, decline to 52 week low of 900. By Feb (end)-2015 no wonder, 5 year low of Rs 600 a piece? -----------------------------------------------------Expensive CXO Maha-Kumbh-Mela at L&T - what is the number of CEOs at L&T and all its subsidiaries (138), their CTC? How far higher, this is to manage L&T group revenues of $a4 bln than Mr Sikka (aged 46) of Infosys highest paid professional CEO (Rs 30 cr) in India, entrusted with business $ 8 bln in revenues and 1.6 lakhs employees. At L&T, just Chairman Mr Naik (aged 72) and group CEO Mr Vankatramanan are pegged at 21 and 14 crores. L&T Infotech - 2 CEOs (left Oct-2014, now looking for two new), 1 COO (Infy CEO Contender. 1 CEO for L&T Tech Services. Infotech is claiming to touch $1 bln revenues since 2010, still not there. Information Age leaders, top-man of TATA, Infosys, Microsoft are in their 40s, why this super 70s at L&T? Chairman Mr Naik’s jaw-dropping musings on succession – “You find a man in the world who will kill himself four times a day, has worked for more than a hundred years-- There is no such person.-- None of us here (at senior level) are working for money”. ----------------------------------------------------------------Infosys BPO entire top-deck got sacked for failing to comply with the company’s code of conduct. Any CXO/MD level official ever got fired in last 5/10 years or resigned on morals grounds? Please refer TOI article – “whistleblower was right: CBI”. Excerpts – “Golden Quadrilateral Project -- M/s L&T had misrepresented the facts”. BS Article – “Rajya Sabha nods for whistle blowers bill” – excerpts – “Prasad recalled the sacrifice of Satyendra Dubey, an Indian Engineering Service officer who was killed after he tried to reveal corruption in the Golden Quadrilateral”. Please GOOGLE – white collar criminal equivalent of rape and murder- “Cl Action Suit Seeks $100 Million for Pregnancy Discrimination, Other Violations”. Please refer International Business Times article – “$100 Million Sought as New Discrimination, Immigration Violations Complaint Filed against L&T”. Got slapped with ban by World Bank – please refer ET article – “World Bank bars L&T for 6 months over forgery”. ----------------------------------------------------------------------------------------------------------------------------Biggest shareholders at L&T are state owned LIC/UTI. Ministry of Corporate Affairs, PM Mr Modi, LIC/UTI should intervene to fix retirement age at L&T to 60!!

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