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EDITORIALS
The Great Let-Down
Cracks in the Vajpayee mystique reveal a story of mandate
betrayed
 The
sense of resignation is overwhelming, Prime Minister Atal Bihari Vajpayee's
I'm-fed-up is only its most dramatic, maybe melodramatic, manifestation.
Personally for the prime minister, it must be a moment of existential
revelation. Look at him: the grand old man of Hindu nationalism, tired
and tiring, and there seems to be no national catharsis at his moment
of tragedy. To some extent, he may have been let down by situations. But
that cannot be the whole truth. Many may feel that they have been let
down by him as well. Because he is more than just a BJP leader. He continues
to be the most popular politician in India. The so-called philosopher
king who could rise above the stereotypes of his own party. Larger than
his party, Vajpayee has that image of not being subordinated to realpolitik.
That Vajpayee looks so remote from today's Vajpayee.
This is more than his personal loss. This is
a great loss to the BJP as a political party and to those who have seen
in its politics a vision of change. For BJP in power was a momentous turn-and
the first right turn-in Indian politics. It was supposed to be a celebration
of the end of the Congress century, also a redeeming break from the farce
of social justice as exemplified by the Third Front. Well, the tectonic
shift in Indian politics was an expression of popular will and desire.
As a responsible, nationally conscious party on the right, the elected
had the mandate to herald the new. But power seems to be a great leveller,
particularly in this country. The party has failed to be new as in, say,
the New Democrat or the New Labour. It is losing on ideology as well as
ideas. And it is ideas, more than ideology, that drive politics in this
age-the so-called vision thing from the leader. From Tehelka to Agra to
UTI, it has been a case of diminishing leadership, of mandate betrayed.
It should not have happened so soon.
Controlled Autonomy
Bankruptcies and bailouts are all that FIs will get under government control
 It's
a Rs 1,50,000 crore fear. Is the collapse of the UTI's US-64 a precursor
to a bigger bloodbath in India's financial system? The Industrial Finance
Corporation of India (IFCI) could have gone belly up but for the Rs 1,000
crore bailout last week. More than a fifth of its loans are non-performing
assets (NPAs), i.e. they are not recoverable. That's the smallest of the
big three financial institutions (FIs). The Industrial Development Bank
of India (IDBI) has NPAs of over Rs 8,000 crore and its profits have been
declining for three consecutive years. ICICI is in a better shape, but
its profits took a knocking in 2000-01. The combined asset
and liabilities of these institutions exceed Rs 1,50,000 crore. Created
to feed the investment and expansion needs of large industries in the
era of a controlled economy, these institutions have grown into financial
dinosaurs who have to compete with banks, mutual funds, insurance companies
and even foreign financial institutions.
For FIs to have any chance of revival and survival,
they must move out of government control which not only breeds the promoter-politician-manager
nexus but also leaves no scope for the management to be efficient and
accountable. That the degree of government control is inversely proportional
to the efficiency of an FI is evident from the performance of ICICI. The
government stake in it is the least of the three big FIs and its ratio
of NPAs to loans is the lowest. Ironically, the poor performance of UTI
and IFCI is being taken as an excuse to unleash babus into the boardrooms
of FIs. UTI already has a bureaucrat as its head. IFCI too is likely to
have one once its present chairman goes. And
IDBI, which has been headless for seven months now, may also have a bureaucrat
as its chairman. But this cure is worse than the disease.
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