Bureaucratic reform is the answer

This Welcome to the year of the elections! In this issue, we have endeavoured to examine what the year holds for the infrastructure industry. There seems to be optimism in the air.

Recently, the industry unequivocally hailed Congress Vice President Rahul Gandhi´s speech at the Confederation of Indian Industry (CII) last month. Gripping, pointed and purposeful, Gandhi´s oratory skills looked transformed. Unlike most politicians´ and most industrialists´, his vision is a mix of short- and long-term. That makes him realistic in the vision: while the urgent need for growth, transparency and job creation is evident, making India the largest economy in the world ´by the time the country turns 100ö is not something we normally hear from a politician.

Long-term projects need visionary leadership, encompassing the vicissitudes of the journey ahead. This publication has repeatedly questioned why the industry did not provide for lower growth possibilities while making projects. The private practitioners´ contention that the government is always to be blamed for the slowdown obfuscates the industry´s own accountability in the matter.

With the Lokpal becoming a law, this lopsided blamegame will worsen. Vigilance is already a mandatory auditing mechanism among public organisations, so Lokpal is likely to peter out after a few years into a less menacing checks-and-balances mechanism.

In 2013, bureaucrats perceptibly slowed down the pace of clearing and largely started implementing only by the book. Newfound transparency and fear of prosecution have had that domino effect. This, unfortunately, may not be a transient phase, but the beginning of a more permanent desirable, even phenomenon.

Much of the condemnation for bureaucrats from movements such as those by Anna Hazare and from political rhetoric has been directed towards ´crony capitalism´, which has reportedly led to discrepant governance and corruption. But as in the case of coal block allocations, the discrepancy was often triggered by the anxiety to speed up business. The current gridlock, a result of reality and demagoguery, has exemplified the current leadership´s inability to put forth that valid point effectively. That is why it will have a cascading effect it cannot go beyond the confines of the ´L1 culture´.

In the circumstances, renegotiation of contracts will remain a distant dream. Procurement practices are therefore in the peril of continued inaction. The Public Procurement Bill, in the works for more than two years, may also trigger similar pain-points. One of the clauses a standard practice to allow for legally acceptable but documentable exceptions in public procurement is that of exceptional cases where the project owner can exercise discretion while procuring contractors or material. A conceivable case in point can be qualitative superiority. However, with political rhetoric increasingly in favour of muzzling the discretionary powers of decision-making bureaucrats, the convenient numbed bureaucracy is unlikely to even exercise such ´exceptions´ in practice (for example, for ´strategic purpose´ as outlined in the Bill), fearing repercussions. However, the clause conveniently leaves room for justifying several purchases as being beyond the ambit of the bill & hence an impediment in the quest for governance. A mechanism where purchases under ´strategic´ exceptional circumstances would require a stamp of approval by a fair committee could be the solution for this predicament.