No leaks

Ratan Tata is upset with the publication of the Radia tapes. He has gone to court to stop leaks of this kind. He is right; life would become a nightmare if government departments began to tape our conversations and leak them to the press. What would happen to wives with toy boys, or to girls with lovers outside the khap? Government servants may develop a thriving racket: pay a fortune for silence. In the days of licensing, junior civil servants routinely leaked to industrialists information about the progress of files relating to their competitors. When I joined the government in the early 1990s, industrialists were often well informed if I had recorded doubts or queries about their intended capital issues or whatever. They did not stop at collecting the information; they would also try to overcome obstacles — for instance, by pushing the file through the system while I was travelling, or having it routed so that it did not come to me. In the end I was removed from the decision-making process and sidelined. So I left the government. This kind of intrigue persists in the many areas where the government still interferes in business matters. This is the kind of business in which Niira Radia is involved amongst other things.

The tapes mostly relate to two matters in which she involved herself. One was to keep Dayanidhi Maran from getting the telecommunications ministry after the general elections of 2009. That Maran had hurt the Tatas is likely; whether it was the Tatas or someone else that conspired to keep him out of telecommunications is unclear. Keeping him out was difficult, because he was well liked in the Congress, capable, and being fluent in English and Tamil, was a natural intermediary between Congress leaders and M. Karunanidhi of the Dravida Munnetra Kazhagam, the hard-of-hearing supremo of Tamil Nadu who can speak nothing but Tamil. Radia created a parallel communications channel. She persuaded M.K. Kanimozhi, Karunanidhi’s MP daughter, to do the intermediation. But they had another problem — Karunanidhi quite liked Maran, and readily used him to deal with the Congress. Kanimozhi was not close enough to the Congress to tell its leaders to use herself as intermediary; nor, apparently, was Radia herself. So she enlisted two journalists, Vir Sanghvi and Barkha Dutt, to persuade Ghulam Nabi Azad. Extensive bad-mouthing of Maran was also employed. A. Raja got the ministry. Karunanidhi’s mind was so thoroughly poisoned that he banished Maran. From Radia’s point of view, the operation was a success.

The other was as a henchman of Mukesh Ambani in his feud against Anil. While Dhirubhai Ambani was alive, his two sons worked in harmony as his lieutenants. He thought it unnecessary to leave a will or instructions about the division of his empire between them. In 2005, the two brothers decided to go their separate ways, and worked out an agreement to divide the business. It broke down because the Krishna-Godavari concession turned out to be huge and Mukesh did not want to give Anil his share of it. After that, Mukesh worked to destroy Anil’s business. He prevented Reliance Communications from buying MTN by threatening to exercise his so-called right of first refusal. They ended up in court. The Central government egregiously thrust itself into the suit and supported Mukesh. The Bombay High Court ruled in favour of Anil. So Mukesh went to the Supreme Court, which gave a strange judgment: that assets underground and under water — to wit, the Krishna-Godavari basin reserves — belonged to the State under the Constitution; in other words, the Central government could arbitrarily throw out Anil’s claim on the Reliance concession. Soundly beaten by the combination of Mukesh and the Central government, Anil sued for peace. In this war, Radia enlisted the assistance of some journalists to lobby for Mukesh, and they promised to help — by giving Mukesh television time, writing in his favour, and so on. I do not know if they delivered on their promises.

Ratan Tata is an honourable man; one would wonder how he could be connected to Radia. He explained to Shekhar Gupta that he engaged her agency to fight fire with fire. He found that for no fault of theirs, the Tatas were being defamed or were losing out in government favours. They were always defending themselves against attacks of competitors or corrupt politicians who wanted to favour one industrialist over another. The Tatas employed Vaishnavi Corporate Communications as part of a pre-emptive strategy — to discover and anticipate attacks, and counter-attack. But he drew a line: the Tatas did not use her to pay bribes or influence policy. He asks her to be presumed innocent until proved guilty.

I have given a faithful rendering above of what she did, from her and her accomplices’ recorded words. Whether they prove her guilt or innocence is irrelevant. She is not the only one. I came across a number of brokers like her in my brief time in power. I come across them even now; after all, I live in Delhi. I used to think that corruption and misuse of power were due to licensing, and worked to have it abolished. I was wrong. Both persist, although licensing is gone. The fact is, that balancing of conflicting objectives is inherent to government, and will be done by human beings as long as we live in orderly societies. It is simple economics that they will have an incentive to tilt the balance in favour of whoever pays most. Many designers of governments have been concerned about this, and looked for mechanisms to prevent the tilt.

The British invented, and gave to India, a bureaucracy that was selected on merit, paid well enough not to have to be corrupt, and financially secure for the entire lifetime so that it did not have to worry about old age. That did not suit her nefarious designs, so Indira Gandhi subverted the Indian civil service. The Americans invented a confrontational, powerful and intrusive parliament; but from time to time they run into corruption amongst members of their two Houses, and their procedures for keeping it in check are laborious. The French, after the revolution, created a powerful central government with a rigorously selected and trained bureaucracy, and severely limited the domain of the legislature. The Chinese execute anyone found corrupt, define the tasks of their bureaucrats, and reward performance. They have thereby created an efficient government and driven corruption underground, but the concept of government as a service to citizens is quite foreign to them. The European Union recognizes and registers lobbyists, and has drafted a handbook of rules for them. Paul Romer has suggested that countries should create provinces consisting of major cities and their hinterland, and ask the world’s best governments to come and administer each province. We could experiment with these models, or we could adapt them and work out our own variant. It is not an entirely foreign thought. The Bharatiya Janata Party wanted to review and revise the Constitution; but because it came from the Hindutwits, the idea never had a chance. But the idea of junking our government and starting anew is an idea whose time has come.