Greasing the wheels of government

Appointing high-powered committees of professionals and bureaucrats to study the petroleum sector and in particular, petroleum pricing, is a time-tested method of political procrastination. The report takes time to prepare; once completed it is reviewed, debated and distilled by the ministry of petroleum and the Oil companies; and if thereafter the denominator of consensus still contains substance, the report is placed before the cabinet. The process can take months, if not years but during this period the Government can claim credit for the initiative but need suffer none of the brickbats of a ‘decision’. The committees, in other words, have all the sound and fury of action but they usually end up conveying nothing. This is not surprising. Petroleum is a political subject and a committee comprised of professionals cannot dig the government out of what is essentially a political hole.

Over the past decade or so, the government has set up many committees to advise on the steps that need to be taken to place the oil companies on a firm financial footing. Four of these committees are notable because of the eminence of their chairman and the quality of their reports. The ‘R’ group committee headed by Dr Vijay Kelkar, currently the chairman of the Finance Commission but formerly the petroleum secretary; Arjun Sengupta, former ambassador to the European Union and member of the Planning Commission; Dr C. Rangarajan, former governor of the Reserve Bank and until recently the chairman of PM’s Economic Advisory Council and Mr. B.K.Chaturvedi, currently member of the Planning Commission but earlier the cabinet secretary and also petroleum secretary. Each of these chairmen had the support of individuals of proven professional and administrative capability. Each of their reports were marked by solid economic logic, analytic rigour and dispassionate clarity. All of their efforts have essentially come to naught. (The Chaturvedi Committee report has yet to find its place on the shelf. It has only recently been submitted and it is still officially under ministerial review. But judging from the widely reported remarks of officials the decision to side step its recommendation has already been made).

There is a simple reason why the government consistently ignores the findings of such high-profile committees. They all come up with a singularly unpalatable recommendation. The price of petroleum products must eventually align with international prices; the subsidies on LPG and kerosene must be reduced and the levels of protection accorded the domestic industry should be cut back. The Chaturvedi committee has for instance advised that the government adjust prices so that within 24 months for diesel and by March 2009 for petrol both products are aligned to international levels. A recommendation to hike fuel prices would be difficult for governments to accept at any time let alone during the run up to a general election.

... contd.

Ads By Google

Message*	Maximum characters allowed

Name*		Email ID*
Subject*		Country*

TERMS OF USE:
The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).

I agree to the terms of use.