Opinion Let’s clear the air

This columnist would like to point out that a similar logic applies to the current “approvals process” from his ministry of environment and forests. Even though he and the civil servants in his ministry may be operating without bias,the fact of the matter is that when it gives an approval,withholds one or cancels an earlier approval,it is almost invariably seen as arising from short-term political considerations.

The flip-flop on the Posco plant is a good example. The cancellation of the approval was first seen as a political move against the BJD which is in power in Orissa — and which by happenstance is not part of the UPA dispensation in Delhi. The reconsideration later is being seen as a result of the Korean government putting pressure on India. Now,as a matter of fact,all the actions of the environment ministry may in fact be perfectly valid,reasonable and correct. But that is not what it will be believed to be. The Vedanta story has similar overtones. The Congress party’s desire to capture the emerging tribal votebank is seen as behind the anti-Vedanta stance. This is exacerbated by the fact that Scandinavian and Canadian business interests are perhaps behind the funding of the shrill anti-Vedanta campaign by NGOs and the Anglican church in Britain. Lavasa is seen by many as the victim or the beneficiary of internecine UPA politics.

In fact,the joke making the rounds is that the best way to stymie a competitor is not by making a better product at a lower price,but by funding NGOs to raise environmental objections and using political clout to get the ministry to hold up the competitor’s new factory/ mine/ plant. The point is that,irrespective of the facts,the environment ministry’s decisions can be seen as motivated,biased and so on. All of this is exacerbated by the fact that the ministry and other government bodies are seen as being unable and unwilling to ensure that the “conditions” attached to a “conditional approval” are in fact fulfilled.

Why does not Jairam Ramesh as part of his legacy to the country remove the power of discretionary approvals from his ministry and hand it over to an independent “Environment Commission” to be statutorily established and charge this commission with the tasks of granting and monitoring approvals? Appeals from this commission should go directly to a tribunal and then to the courts rather than through a slow and cumbersome judicial hierarchy. This commission would be along the lines of the Election Commission or SEBI where the members are appointed for fixed terms. Preferably the commission should be located outside Delhi. (In passing,it should be noted that SEBI and IRDA which are located outside Delhi have performed with greater credibility and perceived integrity than the TRAI which is located in Delhi!) Several of SEBI’s decisions have been appealed. But on balance,most of its decisions regarding approvals for IPOs,fines for non-compliance,restrictions from capital market access,etc have been seen as fair and have helped the reputation of Indian capital markets — one soft infrastructure item where by all accounts we are way ahead of China,unlike in the hard infrastructure sector China is a decade,if not a century,ahead of us with respect to bridges or railways.

The environment commission could not only implement transparent procedures for approval of projects,but also monitor them. If a company or some investors flout SEBI regulations,they are fined and sometimes they are not allowed to access or invest in capital markets for a defined period. If a company does not comply with the conditions of a conditional approval,the environment commission can refuse to give fresh approvals or force a transfer of the project (and the rights associated with it) to another company through a transparent auction process. As one of our prominent citizens,Azim Premji,said,“If we can have an independent regulator for our capital markets,why not one for our water resources which are far more important than our financial resources?”

In giving up control,Ramesh will meet resistance from many in the political and bureaucratic establishment. But if he wishes to go down in Indian history as a Sher Shah,a Munro or a Curzon,this is his golden opportunity. Let’s hope he grasps it.

jerry.rao@expressindia.com