IRDA questions move to add 3 more Govt nominees to Rubber Board

Written by M Sarita Varma | Thiruvananthapuram | Updated: Jul 21 2009, 06:31am hrs
All stakeholders in rubber supply chain- processing industry, tyre manufacturers, plantation owners, small holding farmers, dealers and other stakeholders are wary about Centre's move to expand the steering panel of Rubber Board with three more Government officials. Indian Rubber Growers Association (IRGA) has been the first to voice protest against what it calls "diluting the autonomy of the Board."

After the Cabinet's vetting, the proposal to add three more Government officials as directors to 26-member Rubber Board has been put forward for Parliament's clearance. Including the Chairman, there are now 10 directors to represent Government interests. If the proposal -which is part of the amendment on Rubber Act- is okayed, the strength of Board of Directors would swell to 29.

"Expanding the Board of Directors is against democratic spirit and also the recommendations made by Prabhu Committee," IRDA points out in a letter to Union Commerce Minister Anand Sharma on Monday.

Prabhu Committee, set up in 2000, to review the functioning of Commodity Boards, prescribes that the strength of Board of Directors should be tightbelted to 20. In practically all boards there are a large number of government nominees. In Clause 28, Prabhu Committee report specifically draws flak at "the system and practice of Government departments sending observers to participate in the meetings of boards, even at the expense of the Boards."

Major consumer industries like tyre makers too are also disturbed by the proposed higher regulatory interests in the Board of Directors. ATMA (Automotive Tyre Manufacturers Association) feels that consumer, producer and regulatory interests should be equally represented. "With just two directors now, the Board is overtly tilted against the consuming industry," an ATMA spokesman told FE. Tyre industry is also coming out with a detailed response on this soon.

"If country has notched phenomenal growth in rubber production in last 50 years, this has been because of the much-lauded stakeholders' say in Rubber Board. Adding more bureacratic control would clamp brakes on efficiency, tampering with optimal stakeholder participation and also go against the new development perspective of PPP (public-private participation) spirit," Sibi J Monipally (IRGA general secretary and Rubber Board Vice-Chairman) said, in New Delhi, after meeting the Union Commerce Minister.

In an issue that threatens to brew up to a regulator intervention storm, the farmers' outfit is also seeking support from senior ministers like AK Antony and Vayalar Ravi. At a critical juncture, when Rubber Board has undertaken a herculean task of rubber replantation mission, this divisive controversy is a diversion that the commodity board could do without.