Monday, October 04, 2004


Times of India, Oct 3, 2004

Mani Shankar Aiyar is my friend. I don’t hold it against him for going to the wrong school. Nor do I grudge him his failure to learn economics from his sensible brother. I also ignore his juvenile scraps, such as the Savarkar affair. I even overlook his feudal bouts of sycophancy for the first family. With all his flaws, I like him because he is wilful. He is headstrong like Arun Shourie, and only determined people make history.

What I especially like about Mani is his passion for the Panchayati Raj. And this is why I am going to give him the best advice of his life this Sunday. It is to give up the ephemeral attractions of the no-win Oil Ministry and become instead a full time Minister for Local Government. If you don’t want to go the way of the forgettable Ram Naik, and if you want to be remembered as the man who brought good governance of India, I say, go and breathe life into Panchayati Raj.

We need determined people to fight the vested interests in the states that prevent the rightful devolution of power and funds to the panchayats. Don’t cop out by saying, it is a state subject. You know as well as I that the centre controls the purse strings, which means the clout to get things done. Panchayats need the authority to sack (or at least transfer) teachers that don’t show up in school; they need to withhold the salary of doctor and nurses who are absent from primary health centres. They need funds to dig wells for drinking water and build bunds for irrigation. The politicians and the bureacrats in the state capitals are naturally dragging their feet in passing on these powers to the panchayats, who now own them by law. Hence, there’s a man’s job waiting for you—go and implement the law.

In comparison, political suicide awaits you at the Oil Ministry. With oil prices at a historic high you will be the sacrificial lamb who will only be remembered for raising prices. Moreover, the only new idea to come out from your Oil ministry is a bad one, which is to merge the oil companies. We need the opposite. We need vibrant competition between companies, both government and private, to give us an efficient oil sector. We have seen time and again, whether in airlines or telephones or TV, competition has improved services and brought down prices. What is less well understood is that intense rivalry in the marketplace also makes companies stronger. Competition is a school where companies learn to improve products and lower costs--Michael Porter of Harvard taught this lesson to the world in the 1980s. For this reason we have competing brands within P&G, such as Ariel and Tide detergent. At J&J, they used to spin off an autonomous division when its sales crossed $100 million. Competition is the lifeblood of industry; so don’t merge the PSUs.

The ancient Greeks taught us the value of realizing our human capabilities. This is a theme that Amartya Sen and Martha Nussbaum have also taken up in recent years. The tragedy of modern India is that so many young people don’t realize their capabilities because they lack access to quality education and health care. With a single-minded focus on Panchayati Raj, you can improve governance on the ground and help millions realise their capabilities. It is the only moral thing to do. Besides, a man can either do one thing brilliantly or two things in a mediocre way. So, follow your passion, dear Mani


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