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Infrastructure development: Honesty of purpose will help

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DQW Bureau
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It was heartening to hear color TV manufacturers pinning hopes on the rural

population to boost sales this year. The reason: good monsoons this year and

expectations of good harvest bringing in good fortunes for the farmers, who

should then hopefully spend part of their earnings on items like color TVs. At

long last the industry is beginning to look up to the agriculture sector too.

This is a good sign. I hope the government learns something from this. I have

always maintained that the only way of bringing about sustained progress is to

enable each other. The larger the section of of our population that is enabled,

the better it will be for all of us.

For far too long the government has dissipated its energies in areas where it

has had precious little to contribute. It has got into the area of running

businesses and does not know how to get out of them (or may be it does not have

the will.). Maybe it was fully justified in getting into these businesses when

there was no one coming forth. But that is not the situation today.

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The government seriously needs to play the enabling role. There is dire need

for development of infrastructure. This is probably the best way in which the

government can play an enabling role.

Unfortunately, we have not moved ahead in any significant manner on most

infrastructure projects. For years, the power situation in the country has not

improved and there does not seem any sign of let up. Construction of express

roadways do not seem to be nearing completion after years.

Maybe funding is a problem. But then we do not see much progress in the

desired direction in terms of dis-investment either. This despite the creation

of a ministry for the purpose. And the manner in which whatever little is

reported to be happening creates more discomfort than comfort. Instead of

maximizing its gains from the process, it appears that it is only filtering away

national wealth!

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What one hears about Enron's Dabhol power project and now Singapore Airlines

vis-a-vis Air India indicates that the government wishes the investors to do

what may probably be impossible, and what it could not achieve itself. No wonder

it is in no position to give guarantees of any sort. The government is hardly in

a position of strength in these matters and in little position to dictate terms.

We are only ending up losing time.

That way, we have been luckier on the telecom front. At least by building a

completely independent infrastructure, the new players will be able to exercise

control on their businesses.

It takes a lot o will and effort to do something well. Most of the government

run ventures have not done well. In a scenario like this it can hardly be in a

position to wield the stick–for there is little to show by way of example. It

cannot take a stand that if the private sector behaves unreasonably it is in a

position to step in and handle the project itself.

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Developed countries have focused on areas like healthcare, roads, education

etc and created a strong enabling infrastructure that has helped their economies

to develop. In stark contrast our governments have got into all kinds of

business ventures and obviously made a mess of most of them. So much so that

most of its earnings goes into supporting and maintaining its inefficiencies.

The tax payer gets little for what he pays.

The state will necessarily need to adopt a more practical and pragmatic

approach towards dis-investment. In my opinion, the term 'dis-investment' itself

is a wrong starter. It conveys an impression that all we are interested in doing

i letting go of the state's share in the businesses it had invested in. That is

not an end objective in itself. A much more holistic approach is required.

A tighter coupling between the areas of infrastructure development and the

sources from where the funds are to be generated would have helped. It would

have given a purpose to the whole exercise of equity dilution and linked it to

some tangible results to be achieved at the end of the process.

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The development of the rural sector and the enabling of its people maybe the

only way in which we can lift the state of the economy from its current state to

a more sustainable beyond state. Water automatically flows if the gradient is

favorable. This is no rocket science. Let not the government spend money on

trying to build booster stations to pump up water. It is an exercise in

futility.

Unfortunately, nothing that I have said is rare wisdom. I am sure those

entrusted with the job understand all this. Just requires honesty o purpose. And

that definitely seems to be rare commodity!

Sumit Sharma is VP, Microland and the author of the book titled 'The

Corporate Circus'. The views expressed in this article are of the author's and

not of Microland.

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