July 27, 1998

The Vajpayee Government's fear of flying.

Swapan Dasgupta

This month, the "cool" government of Tony Blair in Britain came a step closer to emulating the equally hip Clinton administration. If the US president is under a cloud for obliging the owner of his favourite Chinese restaurant, the British prime minister is seriously embarrassed by charges that Labour activists are engaged in lucrative influence peddling. "You've surrounded yourself," Leader of the Opposition William Hague told Blair, "with feather-bedding, pocket-lining, money-grabbing cronies."

One of the great virtues of the Atal Bihari Vajpayee Government is that it hasn't really been affected by accusations of sleaze. The coalition may be fractious, naive and sometimes plain incompetent, but at least its integrity is intact. Even Yashwant Sinha's disastrous budget was less prompted by cronyism than by ineptitude and politically motivated, bureaucratic subterfuge.

That, however, was the story till July 11. On that day, the rot began. Brushing aside the norms set by the prime minister, and in disregard of the Government's own policy, the Foreign Investment Promotion Board (FIPB) failed to clear the 40 per cent foreign equity in the Rs 1,475 crore Tata Airlines project. Actually, the FIPB didn't say no. It stalled a decision pending the Civil Aviation ministry's response to a proposal submitted in December 1997. The ministry too hasn't said no. With characteristic nonchalance, it has asked the Tatas for clarifications.

The most unusual feature of the FIPB's non-decision was its sheer predictability. Knowledgeable circles in the capital were convinced that notwithstanding Vajpayee's personal commitment, the FIPB would fail to deliver. Something would happen at the last minute. The issue was not any irregularity in the Tata proposal. Nor is there any plausible suggestion that Bombay House is out to subvert the swadeshi purity of domestic air travel by involving a foreign airline in the new company's equity holding. The Tata proposal was entirely in keeping with government policy.

The reason why one of India's foremost business houses had to bite the dust is well known. The BJP is not committed to either the public sector or planning to fall for arguments that the viability of Indian Airlines (IA) would be impaired by further competition. The budget, after all, proclaimed the Government's intention of initiating IA's privatisation. As a party with a strong middle-class base, the BJP's interest also lay in encouraging greater consumer choice and, through it, cheaper fares. Yet, probity and political sense were conveniently jettisoned.

The issue is not the individuals and groups who played their part in stymieing the Tatas. Their identities are hardly the world's best-kept secret. The question is: why did Vajpayee meekly acquiesce in this subterfuge by the lobbyists? He has to answer because he has set the standards by which his government will be judged. If business proposals are to be subject to discretion and lobbying power, it is best for him to say so and abandon all pretence of transparency. In that case, let the licence-permit raj be officially replaced by the crony raj, as is happening in the Bangalore airport project. Let Vajpayee read Hague's indictment of Blair and ponder whether some day a similar charge will be levelled at him. Let him calculate the cost of allowing his spotless record to be blemished by his surroundings. Let him break out of this infuriating syndrome of helplessness. Let the real PM please stand up.

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