Friday, January 20, 2012

Our Mai Baap Sarkar

Many newspapers carried an interesting photo on January 19, 2012. It showed the who is who of India Inc in a meeting with the Prime Minister Dr Manmohan Singh, the deputy chairman of the Planning Commission Montek Singh Ahluwalia, the new all powerful bureaucrat in the PMO Pulok Chatterjee and sundry other ministers and officials. India Inc was represented by Ratan Tata and his anointed successor Cyrus Mistry, Anil Ambani, brothers Sajjan and Naveen Jindal(who happens to be a Congress Lok Sabha MP), the chairman of Vedanta Anil Agarwal, Ashoka Hinduja of the Hinduja group, three new age barons from Andhra Pradesh G M Rao of the GMR group(his group runs the Delhi airport and is asking for a 800% plus hike in airport user charges), Sanjay Reddy of the GVK group and Madhusudan Rao of the LancĂ´me group. Some others present were Prashant Ruia of the Essar group and Gautama Adani of Adani Enterprises. Apart from Ratan Tata, I think all the other belong to the hallowed club of dollar billionaires. Collectively,nthe value of their equity holdings even at today's depressed stock market prices could finance the NREGA scheme for almost 10 years

You might be thinking the Union Budget is round the corner and these titans were pow wowing with the Prime Minister and other big wigs about the future of the Indian economy. You are wrong. This powerful group of businessmen had come as supplicants, or beggars if you choose to be politically incorrect. All of them have invested in, are in the process of investing in or have plans to invest in the power sector in India. Almost all have signed agreements to buy coal and gas at pre determined prices and sell electricity to utilities at pre determined prices. The problem is, they are not able to get their hands on either coal or gas from domestic suppliers. The fall of the Rupee against the dollar has made imported oil and gas terribly expensive. And of course, the Ministry of Environment and Forests simply swats away plans, projects and proposals to increase coal production in the country. These barons are now claiming that the power projects are becoming financially unviable. And it is no joke. They have already invested $ 40 to $ 50 billion in new power projects and are scheduled to invest another $ 50 billion plus over the next five years. And even a school student knows that these investments are crucial because India already faces intolerable power cuts. This winter, the power cuts have been so bad that residents of Srinagar have been forced to make pilgrimages to hospitals to charge their mobile phones since some hospitals were the only place with some electricity supply.

The aftermath of the meeting was even more revealing. Newspapers reported how the industrialists were elated at the response of the Prime Minister who apparently instructed Pulok Chatterjee to fix the problem in a hurry. Of course, a committee of secretaries will now meet every week to push for solutions. This hallowed group has been promised another pow wow by Dr Singh in 90 days to take stock of progress. Apparently, one of the solutions is that the Ministry of Environment will not stop a 25% hike in production from captive coal mines. Incidentally, India has the fourth largest reserves of coal in the world. And yet, coal output is so woefully inadequate that power and steel companies have to import tens of million tons of coal every year to keep their plants running. And of course, you and me have to spend massive sums every month on generators, inverters, 'private' power and other sources while the poor in the interiors of India are going back to the era of candles and lanterns.

This one meeting revealed how important the State still is in India and the kind of discretionary powers that it still wields over all of us. If the likes of Ratan Tata and Anil Ambani have to trudge to Delhi hat in hand, what chance do we have of being spared the indignities heaped every day on us by our Mai Baap Sarkar?


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