By Madhavan Narayanan
It is generally believed that India ended the ‘licence-permit Raj’ under which the future of businesses hung by the coat-tails of government ministers and accompanying bureaucrats. But habits die hard.
What we have seen since the monsoon of that momentous year is that allocations, approvals and negotiated approaches to dealing with the self same authorities — be it on gas prices from oil exploration, allocation of 2G spectrum, or provision of coal mines for power generation — have effectively replaced the old Raj as a regime of discretionary powers that smell of indiscretion.
On the other hand, another set of variables has changed in a manner that should make the businesses that thrived in the earlier era, and appeared to do well in the later years, sit up and take note. The arrival of coalition politics, public interest litigation (PIL) and, increasingly, active institutions including the Comptroller and Auditor General (CAG) and Right to Information (RTI) offices have collectively placed businesses in alandscape of increased accountability and scrutiny.
The Supreme Court’s latest angry observations on Friday, and its quick-fix diktat on struggling telecom companies to pay up the Rs 1,47,000 crore dues they owe to GoI under its order issued last October on adjusted gross revenue (AGR), have to be seen in this light.
The judiciary is always governed by the letter of the law and evidence, not by the plaintive notes of despair or pleadings for social good that business lobbyists often are good at.
It is clear as day that companies such as Bharti Airtel, Vodafone Idea and Tata Teleservices, which are groaning under the weight of past debt, eyeing new spectrum charges under a 5G regime and facing competition from Reliance Jio, are in dire need of life support.
But judges usually do not act on contextual pressures, especially so in a context where watchdog institutions (media, CAG or civil society groups) are waiting to dust up accusations of crony capitalism or undue favours.
What is significant in the Supreme Court’s observations is that the judiciary has even steamrollered the department of telecom’s (DoT) own executive order to override the court’s ruling to recover dues by asking it to withdraw its order. The judges saying that the companies ‘have not paid anything since 20 years by way of AGR dues’ is clearly an invocation of a principle of natural justice or administrative propriety.
But more important is the implication that the time may be over for industries trying to influence government agencies for what might look like an out-of-court settlement. What is at stake are issues related to public policy and transparency in governance. This means that attempts to fix industry problems need to avoid ad-hocism based on industrialists meeting ministers.
Instead, they need to make their solutions ‘judiciary-proof’. The apex court had earlier said that all AGR-related dues must be paid by January 23, 2020. Though relief-seekers included State-run Oil India and RailTel, the simple fact is that in India’s lingering legacy of a mixed economy, private sector bullets are often fired from public sector shoulders.
It is time for India’s businesses, in general, and telcos, in particular, to realise that it is difficult to game the government, and more difficult to game the judiciary. Unlike clever politicians who may wriggle out by amending policies, judges usually follow or set precedents — and, in each instance, have the burden of substantiating their verdicts.
Things have become so tricky in post-reforms India that some oldfashioned lobbying will be seen in less enchanting light as manipulation by public officials or institutions. A fine line divides lobbying from manipulation. Erring on the side of safety while being creative in facing deadlocks may be the best way out for companies in a jinx.
This, of course, does not mean that telcos have no case for relief. Both the competitive landscape and the promise offered by digital industries are such that both courts and policymakers need to be creative partners. However, this has to be done within the four walls of accountability, transparency, clarity and cooperation. Rather than ad-hoc measures, such as an executive order that casts a shadow on the exchequer, GoI would be best placed to revisit its policies.
It needs to talk or listen to Competition Commission of India (CCI) and Telecom Regulatory Authority of India (Trai) if needed, and usher in a new framework in which there is a win-win regime for all concerned. An apologetic explanation offered to the Supreme Court, with a promise for Telecom 4.0 (or is it 5.0?) may well be what the doctor ordered for the telcos.
Views expressed are author's own.