Thursday, November 1, 2012
Saturday, September 8, 2012
Wednesday, April 4, 2012
In the media frenzy generated by General V.K Singh’s not so startling revelations our genius for muddling very different issues and focussing on the more salacious aspects of them has once again become very evident. Knee jerk reactions like the reference to the CBI of the Tatra procurements will ensure that the flaws in the decision making process remain unaddressed and the opportunity for serious and radical systemic reforms is again passed over.
There are at least four distinct sets of issues the current episode throws up - the issue of defence procurements (policies, systems, processes), the issue of the relationship between the Service Headquarters and the Ministry, the issue of the conduct of the Army Chief and that of the Minister and the issue of the state of our defence preparedness. Each of these deserves a separate analysis.
This essay confines itself to the issue of corruption in defence procurements. ‘Why’ does it occur and what is special about corruption in defence? ‘ Where’ does it occur and relatedly, ‘how’ does it occur ?
The issue of ‘why’ is complex. Many reasons make it different from corruption elsewhere. The market is what is called ‘monopsonistic’ i.e a monopoly on the demand side rather than the supply side and monopolies of both kinds can be pernicious. Paradoxically, however, given the uncertainties and the whimsies of the market the number of suppliers is also limited. This necessarily leads to an unhealthy relationship between the buyer and the supplier which veers between being cosy and crony like to being tense and adversarial. The risks involved are considerable and therefore the need for intermediation often very necessary.
Security concerns necessitate a veil of secrecy on defence acquisitions making it very difficult to apply the rules of transparency applicable elsewhere. Perversely, the need for confidentiality also becomes an excuse for conducting business in devious and furtive ways.
The nature of the market therefore, is one which provides fertile breeding ground for corrupt practices. What increases the complexity is the incredibly tortuous system of procurement designed by the Indian bureaucracy on the famous CYA principle, which ensures that multiple opportunities for charging rent arise and this rent has to be paid and is paid, irrespective of who one chooses to buy from and irrespective of their being honest jokers in the pack at different levels. Procedures, intended to prevent foul play,paradoxically and ironically achieve the opposite of illicit payments being made simply for play to happen- foul or fair.
Which brings us to the question of ‘how’, but before that let us briefly look at the interesting issue of ‘where’ ? There are three separate tracks that all procurements in MOD go through and each of these tracks has a bewildering multiplicity of hurdles and passes through so many stages that it would make a Steeplechase track look silken and smooth.
The first is the track of demand estimation, demand vetting, demand projection and inter se priority determination. This is an exercise firmly in the domain of the Service Headquarters and it is here that decisions are taken on the numbers/ volume required and the inter se priority to be accorded to the items to be procured within available budgets . It is astonishing how incredibly unpredictable this can be. Capital intensive production capacities set up at huge costs on the basis of long term, sustained demand, go abegging for orders simply because a new COAS changes priorities, or a transaction does not go in favour of the desired party, or because the one projecting the demand does not like the face of the supplier or the supplier does not appoint the right intermediary. As no one can be penalised for not wanting to buy, huge sums are paid simply to sustain demand, especially when it comes to repeat orders.
The second track is the technical one - from framing the GSQRs, to preparing the engineering specifications, technical trials, user trials, and techno commercial evaluations before the procurement process commences and the entire spectrum of post contract activities related to quality inspections, controls and quality assurance. This is the jealously guarded turf of the Service Headquarters and brooks no interference from anyone outside. The procedural labyrinth which any supplier has to go through to have his product declared as technically acceptable is Kafkaesque beyond anything Kafka could have imagined and offers limitless opportunities for seeking rent. Most suppliers provide for huge margins in their costs to go through this ordeal successfully, and those who do not or cannot afford to inevitably suffer. Being a purely technical matter, neither the processes nor the practices are ever audited or subjected to independent professional scrutiny.
The third track is the actual procurement one, where the onus shifts to the Ministry and the dreaded Babu.Here, there is a well established hierarchy of rent collectors along the approval chain. The approval cycle itself is so complicated and so lengthy that the opportunity for each functionary or facilitator to collect his share of the booty along the nuisance value chain is maximised . At no stage does anyone really need to circumvent or short circuit the procedure because following the procedure itself provides the opportunity. For the rent collectors/ facilitators along the approval chain, it is not necessary to either deviate from procedure or to influence the purchase decision in favour of any bidder. All he needs to do is to keep the process moving forward because all the bidders open a kind of Letter of Credit with the established chain of rent collectors before the procurement process begins and as each stage of the transaction is crossed , the rent gets automatically paid at the appropriate level. At the apex of the decision making chain is the Chief Collector, which could be the Minister/ Prime Minister , or his/her confidante who gets the highest share of the rent. It matters little who wins an order, because payment is made for the final approval being granted and not for deciding in any one’s favour.The drill is so well established that the flow of rent rarely gets disrupted except when there is a falling out among the middlemen or one of them decides to violate the Thieves’ Code of Honour.
What can be done to change ? First, devolve and delegate clear and full decision making authority for procurements massively down the chain of command- from the Ministry to the Service Headquarters, from the Service Headquarters to the Commands, Commands to the Corps and Corps to the Divisions. Restrict the role of the Ministry to procurement of major weapon systems and platforms. Have a clear hierarchy of Budget Holders who are fully responsible, within their budgets to take all decisions for achieving budgeted outcomes. Second, simplify procedures dramatically, moving from administrative controls and restrictions to budget based methods of control. Third, enhance the level of discretion available to the decision makers rather than reduce or constrict it. There is no substitute for trust. Trust a group of wise and professionally competent men to weigh the pros and cons of each option and take a decision they feel is in the best interests of all stakeholders. Guarantee them complete protection from any allegations of misuse of trust. Four, distinguish between middlemen/agents who perform a genuine service for the supplier and the deal fixers, and give the former legal recognition and allow them free and easy access to the buyers/ decision makers making interactions with them transparent and aboveboard. Five, make a transition from engineering solution based specifications to critical performance parameters, share these parameters with potential suppliers and test product performance against these parameters. Six, integrate the Departments of Defence Production and Defence Research with the Department of Defence and privatise the Defence PSUs, the Ordnance Factories and the Defence Labs by converting them into widely held public limited companies answerable to their shareholders for performance and thereby encourage a shift from pure ‘buy’ decisions to ‘ buy and make’ decisions from a customer friendly industry.
While this may appear too radical an agenda, the point is that the kind of changes in procurement policies and systems that have been attempted so far have managed to achieve the impossible- deterred the honest from taking any decision and paralysed the system and paradoxically, substantially increased the opportunities for the dishonest to eke out his ‘rent’ from a vast new range of hurdles which a supplier has to go through to secure business. Only radical reform can break this deadlock.
Wednesday, February 29, 2012
It feels good when the States of the Indian Union muster up sufficient strength to show the Government of the Union the raised middle finger. For so long having been the victims of the arrogance of the Union and its gross insensitivity to federal ways of working, the States have realised that power equations have changed and they now deserve to be treated with greater respect. First the FDI in retail, then the LokPal/ Lok Ayukta Bill, and now the NCTC- the States have shown that they will not wag their tails each time they are asked to do so. The ways in which policies are framed and grand plans laid out, the protocol now will have to be very, very different.
But first, entrenched attitudes have to change. Much discussion on our federalism still revolves around whether our Constitution is quasi federal, or federal with a unitary bias or unitary with federal features. Couched in legal, juridical terms this pointless debate assumes that political reality will follow the original intent of the Constitution makers in giving the Union a dominating role. The reality, however, is in conflict with this design. The Indian polity is by now irreversibly federal and coalitionary and the imposition of a unitary culture in governance can now never succeed. The existence of superior and exceptional powers with the Union to subdue or supersede the States does not mean that these powers have to be used. What is important is to accept the federal nature of the polity and align administrative structures and processes to this reality. And this is what a Congress led Government refuses to do. So used is it to a High Command style of functioning of unquestioned supremacy in decision making that each time it gets a rebuff it simply goes into a sulk and shelves important policy reform hoping to reimpose its will when it can regain the kind of brute majority it was accustomed to in the past.
Many people in the Union Government continue to see federalism as a problem. The States are at best seen as ‘implementers’ of superior decisions taken by the Union rather than as valued partners. The very fact that both in popular and official discourse people refer to the Union as the ‘Centre’ and ‘Central Government’ - terms which do not exist in the Constitution is a reflection of this attitude. A Union is a union of partners, whereas as a Centre is the inner core of a unitary whole. Appreciating this difference is crucial.
Many also continue to conflate the ‘national’ with ‘central’ and ’regional’ with the States, quite forgetting that without the states coming together there is no Union. Take the proposed NCTC for example. In its favour it is argued that terrorism is a ‘national’ problem which does not respect State boundaries and therefore has to be dealt with by the ‘Central’ Government. This is a deeply flawed argument. Most problems or issues are universal and impact simultaneously at international, national, regional and local levels-be it Climate Change, or terrorism, or poverty, or infrastructure, or security. The problems themselves are never completely ‘international’ or ‘national’ or ‘local’, they simply impact differently at different levels. So countering terrorism has to be not just at the global or national levels but at all levels and each level requires a custom made strategy. Otherwise, it could well be argued that as terrorism does not respect national boundaries, decisions on countering it should be taken by the US Government -being the leader of the global fight against terror!
The second argument is that of the need for better national level co ordination. But coordination does not require a centralised command and control architecture, it requires a networking one. . Information and intelligence is best gathered in a decentralised manner with the active participation of local level agencies, made to conform to agreed standards, pooled into a commonly owned resource and made accessible and useful to all stakeholders. This is possible only in an organisational framework which is confederal and which is jointly owned by the Union and the States, not one in which the Union alone exercises centralised bureaucratic control .
People forget that the more federal the processes, the more democratic and the more collegial, more the possibilities of strategies and actions being better coordinated. This also enables a better pooling of skills, ideas and human resources in the task of policy making. It was this consideration which made the Constitution makers provide for a unique mechanism in the shape of the Inter State Council under Article 263 of the Constitution for the Union and the States partnering each other in identifying issues of common concern, investigating them and arriving at policy recommendations. The Council is chaired by the Prime Minister and has all the Chief Ministers and selected Ministers of the Union as members. While the Constitutional provision had existed from the very beginning the Council was constituted only in 1990 when the Sarkaria Commission highlighted its potential usefulness and a non Congress Government seized the opportunity to set it up.
The unique value of the ISC lies in the fact that it brings the Governments of the Union and the States on a neutral platform as equals and not as superiors and subordinates. In its composition it is perfectly balanced with neither the States nor the Union in a position to dominate. While its recommendations are meant to be advisory, given that they come from the highest levels of Government, they are not capable of being easily shelved or ignored.
Experience shows that the best way of evolving consensus on conflictual issues is by having all the parties define the problem together. If there is consensus on defining a problem comprehensively having everyone to agree to the solution becomes very simple. Had an attempt been made by using the agency of the ISC to collectively define the problem and then investigate it together through the independent Secretariat of the ISC there would never have been the kind of opposition the Union now faces from its constituent units.
Congress led Governments have not yet accepted the inevitability of increased power of the States and the need for a more consensual, inclusive way doing things. They forget that federalism is one of our greatest strengths and deepening it only strengthens the union, not weaken it. Government is surely not the place to sing ‘Ekla chalo re’.
Monday, February 6, 2012
In terms of duplicity, deviousness and hypocrisy in governance and the display of sheer contempt for democracy and secularism, the conduct of UPA II in the Rushdie/ Jaipur Literary Festival episode marks a new low. The incident is not an isolated one, following as it does the shameful behaviour in the cases of M F Husain, and Taslima Nasreen. Democratic and secular practice has been corrupted, and this corruption is infinitely more treacherous than that of the financial kind .
Is this an over reaction, the ‘pseudo anger’ of the elite, liberal intellectual taken in by ‘western’ notions of freedom of speech and stemming from a lack of understanding of the complex socio cultural environment we live in ? Is one being completely ignorant of the difficulties that any administration confronts in maintaining public harmony? Is the reaction commensurate with the gravity of the alleged misconduct ?
It is mostly other members of the same liberal intellectual elite who dub this reaction as elitist and downplay its insidious impact. This stems from the condescension with which many of us treat the practice of democracy- as a plaything of the elite and not the bread and butter concern of the common man. The fact is that in a country of such gross inequities, democracy is the only means of survival with dignity that the common man has and protecting it, nurturing it and resisting attacks on it is the single most important responsibility we have as citizens.
In the Rushdie matter, as events unfolded themselves a few things became very clear. To a party going out of its way to woo the Muslim vote in U.P and fiercely competing with the SP and the BSP in doing so, the Congress could ill afford to antagonise the Deobandis and the Owaisis, not so much to garner votes as not to lose them. In the stakes for competitive communalism the Congress bets slyly and secretively but it bets big. Rushdie had to be stopped from coming without the Congress and the UPA Government showing their hand. So it followed a classic three pronged strategy of deviousness: First , make the State Government take the lead in dealing with the issue so that the federal excuse is always available to pass the buck and have the national level party and Government spokespersons maintain a politically and legally correct stance ; Second, fabricate a scare which is plausible enough for the JLP organisers to willingly persuade Rushdie that it will be in every one's best interests if he does not come and ensure that the decision is publicly seen as one taken reluctantly and voluntarily by Rushdie himself ; Third, keep the Islamist loony fringe protest boiling so that the threat perception remains and the JLP organisers are not emboldened into any further bit of adventurism. It did not expect that an alert media would uncover the bogus nature of the scare and thereby expose the deviousness of their plan.
It is obvious that the masterminding of this ploy was done by the Congress party leadership within the Central Government with assured access to the I.B. The Rajasthan Government was used merely to distance the Centre from any direct role. In turn, the Rajasthan Government played its assigned role to perfection and managed to scare the organisers to an extent where the choice was between having Rushdie or having the festival. Obviously no organiser is going to waste millions on standing up for a principle especially when he is led to believe that he is acting in the larger interests of the nation. The scare was sufficient to make the organisers a tad defensive about the conduct of the Government and they then took it on themselves to try and contain subsequent voices of protest.
I was witness to Amitava Kumar and Hari Kunzru taking a spontaneous decision to read out from the Satanic Verses during their Friday afternoon session. Many of us were sitting around in the private lounge reserved for writer/speakers ( and their spouses) when Amitava and Hari Kunzru said that they felt that it would be an appropriate way to demonstrate solidarity with Rushdie and register their protest. We could not see anything wrong with it. Yet when they started reading out to the spontaneous applause of the packed Durbar Hall, they were stopped midway by the organisers and the session ended soon thereafter in a tame manner. There was no one in the audience who objected and the directions to stop were most probably instigated by the police authorities ubiquitously present at the venue. Meanwhile in another session Ruchir Joshi and Jeet Thayil did the same thing and chose the more provocative parts of Satanic Verses to make their point, once again to spontaneous applause. They too were cut short midway by the organisers and all four were given a polite dressing down for taking the organisers by surprise and and were painted a grim picture of the horrifying consequences that could follow such a blatantly illegal act. As it turns out there was nothing illegal in what they did, but given the nervousness of the organisers it was easy to believe ( a belief buttressed by legal opinion available from a legal luminary present) that some obscure provision of the IPC had been violated by reading out from a banned text and that grim consequences would follow this impulsive gesture. With the entire festival believed to be under threat of closure and rumours of the imminent arrest of the Fab Four feverishly doing the rounds, all four were presumably advised to quietly leave the city and allow the temperatures to come down. So even a very tame, civilised, literary gesture of solidarity was converted by the Rajasthan Government authorities into a threat to public order to achieve an execrable political purpose.
There are several voices of apology attempting to justify the conduct of the Government. The most favoured argument is to range the freedom available to a reckless writer belonging to the most privileged section of society, living in a foreign country against the sensitivities of a complex multi religious, multi cultural society. It is posed as a case of freedom of creative expression of one against the ‘sentiments’ of the masses. The second is the ‘limits to freedom’ argument. The argument is that no freedoms are absolute and romantic notions of freedom of speech borrowed from the liberal west are not applicable in our context. Restrictions have to be imposed in the interests of public order. The third argument is to make this an isolated case of Rushdie versus the Rest of India, where the focus shifts to Rushdie’s intemperance and his lack of contrition at his continued acts of blasphemy, his dubious merits as a writer and his penchant for attracting publicity to himself. The fourth argument is the one coming from the Indian version of secularism which while ostensibly treating all religions/faiths as equally deserving of deference believes that minority faiths, such as, Islam deserve a more aggressively visible demonstration of deference to protect its followers from a predatory majority.Posed in this manner it seems almost reasonable that in the case of the latest Rushdie episode the ‘larger’ interests of the nation prevailed against the interests of a minority of liberal intellectuals.
These arguments are both perverse and fallacious. Freedom of speech and expression is not just one of the Rights available in a democracy, it is its very foundation. Everything else is dependent on it. It is fundamental to democracy in the most fundamentally defining way. Safeguarding the Right, conserving it and promoting it is the foremost responsibility of the State more important than anything else that it does. It is an enforceable Right and failure to protect it amounts to the complete abdication of its most primary responsibility. Freedom of speech includes the freedom to listen, to receive information, to demand information, to discuss and debate and is therefore universal, not just the right of one individual to express himself. Limits on it can only be imposed by law and not by executive action. The limits/restrictions have to be exceptional and justified in the rarest of circumstances.
The perversity of the argument is manifold. First, it places the limits on a Constitutionally guaranteed freedom at a higher pedestal than the freedom itself and makes these restrictions the basis for policy and action rather than the freedom. By this logic, arbitrary and completely illegitimate restrictions on freedom have to be treated as sacrosanct but the freedom itself can be trampled upon with impunity. So the State instead of ensuring an environment where people can enjoy their freedom without fear or peril, supports and abets the creation of an environment of fear to deny them their freedom. Second, those who threaten to disturb public order with ominous warnings of possible violence find protection and tacit encouragement from the State,their threats justified as natural expressions of outrage against a known provocateur but those organising a peaceful and orderly assembly of citizens simply to provide a platform for creative individual expression are threatened with prosecution for attempting to do so. Third, the feelings and the rights of a moderate majority wanting simply to listen to a famous writer are held in complete contempt and treated as inferior to the sentiments of a loony, Talibanist fringe whose rights to vilify and demonise a great writer are upheld as being legitimate and justified. This is reverse secularism at its worst.
The Rushdie episode is a reminder of the extreme fragility and vulnerability of our traditions of democratic practice and how easily and readily the State is prepared to trample over them. While peaceful, democratic resistance at the grassroots have always been suppressed by the State ruthlessly in the interests of security and public order for a long time, the world of the Arts and Literature had generally been left untouched. With MF Husain, Rushdie, Taslima Nasreen that world too is no longer safe from the authoritarian strains that run through our polity. Supporting the right to dissent, to be a contrarian, to be irreverent, to blaspheme, to mock and to deflate authority and pompousness, to expose hypocrisy is what makes a democracy. As intellectuals it is our bounden duty to stand up for it and fight its erosion continuously. What the Government did in this case is utterly abominable and as intellectuals it is our duty to expose it and shame it.