Sailing against the wind - 2

Previously: Sailing Against the Wind; Majority Wins

My name is Nadia Kumar Singh. I am a doctor and I work at the government hospital, Nala. Nala, which is a fairly large village is situated in Jamtara district of Jharkhand. This hospital at Nala was built three years ago to cater to all the surrounding villages in the block. Government spent sufficient money to build state of art facilities at the hospital. Nine doctors were posted to this newly built hospital. The village people were very happy who earlier had to travel two hours to Jamtara or Asansol. 

Everything was perfect to begin with but three months later, three doctors got themselves transferred to some urban location. The vacancies created were not filled. Some of us put in extra shifts to cater to the numbers. The situation deteriorated further when two more doctors stopped coming. Only four of us were left now. Our repeated pleas in the health department went unattended and situation stayed as it is. The free government medicine outlet in the hospital started running short on key medicines. The administrative guy in our hospital said helplessly - "The strings are pulled from above, I can not do anything. As far as possible please prescribe only those medicines that we have." The health department had become deaf by now. One of the educated residents in Nala tried to approach the local media but learnt that media got their share of the public pie from the top to keep quiet.

A few months later our salary stopped coming. On approaching the Registrar at the district we learnt that we need to give 5% of our salary as bribe to get the salary regularly and on time. This was the final nail in the coffin. Three others left and I am the only doctor at Nala hospital. Now, I work in the hospital for as long as I can apart from seeing the emergencies whenever called for. 

The doctors who left earlier were wise and those who did not bother to join government service and go abroad were wiser. I don't know what keeps me hooked to Nala. I don't know why I want to stay foolish.

Epilogue: Government spends billions on developing infrastructures like schools, roads, hospitals etc. but is least bothered in running and maintaining those properly. Why wouldn't an IIT or AIIMS graduate join a private firm or leave for greener pastures abroad?

The Unusual Suspects: FDI in multi-brand retail - a ploy to kill the Lokpal affair

Earlier: The Unusual Suspects: Paid news scandal - a lifeline for UPA

Recently the cabinet unilaterally decided to allow 51% FDI in multi-brand retail. There have been many in support for FDI in multi-brand retail and many have been against it. I personally support the decision to open up multi-brand retail to FDI but the manner and timing of the government’s decision raises several questions.

This major decision was taken without consulting the opposition or a debate in the parliament and the timing was right at the beginning of the winter session of Parliament. What use is the Parliament of when you take such a major decision without discussion let alone taking the Parliament into confidence. Add to this the timing – right at the beginning of the winter session. Now they can enjoy the winter in their blankets purchased from public money as the parliament would be disrupted. (btw: Under no circumstances do I support disruption of Parliament) The opposition stands united against the government and is applying all kinds of pressure tactics including disruption of the Parliament. Same thing happened over the JPC demand in the winter session last year. The Congress was clever enough to choose the timing of its decision.

Now the congress stalwarts will express their concern about Parliamentary democracy and its disruption and blame the opposition of killing precious time of the Parliament. The ‘Strong’ Lokpal bill is supposed to come in this very winter session. The Congress can have a strong and valid reason for not being able to bring the Lokpal Bill in this winter session and blame it on the opposition. 

Enough of privacy!

We have something called Right to Information Act (RTI Act). This law fosters transparency and accountability in public institutions and institutions receiving sufficient government funding. RTI has proved to be a game changer ever since it has come into being. 2G scam was unveiled by RTI and so have many other scams. The attack on various RTI activists across India has proved that it has been a menace for the corrupt. However this law doesn't cover private bodies or large companies that affect resources of the nation, society, economy and environment. Eg: A mining company in a tribal area has to take into account how the operations affect the tribals and the biodiversity. Even the small shareholders do not have access to most of the information in a private company which they should be entitled to – as they hold a ownership right. Putting it precisely – any stakeholder should have access to relevant information whether it be a private organization or a public organization.

Non-financial accounting or social accounting is one such tool. Social accounting is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large. A company does report its performance annually in the annual report but it does not cover the environmental and social costs. Even if it does in some cases it is just a lip service. Why does it need to account for social and environment costs? A mining company’s unfair practices vis-a vis the locals contributes to Naxalism. A manufacturing industry’s release of harmful gases and toxic material leads to climate change and subsequent implications like – temperature rise, rise of sea level, biodiversity loss etc. USA bailed out big banks during the sub-prime crises, a pit that the bankers dig for themselves. Why did the government bail out the banks if it was their fault? Because the failure of banks could have lead to numerous job losses – huge social impact. After the government bailed out the banks and they came back to their ways, they paid hefty bonuses to the CEOs. No learnings still !

From a shareholders point of view, what matters is only profit. Why should they worry about the non financial reporting? Because the information in non-financial reports contributes to building up a company's risk profile. And although it has still not been convincingly demonstrated that good environmental and social practices create value for shareholders, it is clear that bad ones can destroy it (-George Dallas, Standard & Poor’s). Exxon's attitude to the oil spillage from the Exxon Valdez drove customers away from its pumps. Satyam's image took a beating across the board.

Further from a shareholder’s point of view, especially the small shareholders and retail investors there needs to be a framework similar to RTI. Why? Because they hold ownership rights in the company (A share is a ownership right). The major decisions are taken by the board members which consists of majority shareholders. Suppose there are 10 gentlemen who form the board holding 75% shares, rest are retail investors. There may be a nexus among these 10 gentlemen and they may agree to unfair accounting practice whereby they inflate the cost to report lesser profit and in turn lesser taxes to the government and lesser dividends to the retail investors while filling up their pockets. Another implication would be the black money generated because of the cost inflation. A good example is the recent report of CAG on Reliance petroleum operations in the KG basin where it highlighted gold plating of costs.

There are certain safeguards like environmental impact assessment (EIA) and Companies Act but they have proved futile (numerous examples mentioned above). There needs to be a comprehensive mechanism through which the above mentioned issues are addressed. Enough of privacy!

Politics and the post of Governor

Constitution of India provides for a Governor in each state. Governor is the ceremonial head while Chief Minister is the effective head of the state government. The post of Governor was conceived as an independent and impartial Constitutional office and therefore was kept outside the purview of elections. Governor acts as a vital link between the center and the state governments. But this post of Governor has been misused badly by those at the center. Recent controversies in Karnataka, Gujarat and Bihar have flared up the issue once more. Here is a bit of analysis on the present scenario.

Indian State	Governor Name	Took Office	Background
Andhra Pradesh	E.S.L. Narasimhan	27 December 2009	Civil Servant
Arunachal Pradesh	General Joginder Jaswant Singh	24 January 2008	Chief of Army
Assam	Janaki Ballabh Patnaik	27 November 2009	Congress
Bihar	Devanand Konwar	24 July 2009	Congress
Chhattisgarh	Shekhar Dutt, SM	23 January 2010	Civil Servant
Goa	K. Sankaranarayanan	August 2011	Congress
Gujarat	Kamla Beniwal	27 November 2009	Congress
Haryana	Jagannath Pahadia	27 July 2009	Congress
Himachal Pradesh	Urmila Singh	25 January 2010	Congress
Jammu and Kashmir	Narinder Nath Vohra	25 June 2008	Civil Servant
Jharkhand	Dr. Syed Ahmed	26 august 2011	Congress
Karnataka	Hans Raj Bhardwaj	29 June 2009	Congress
Kerala	M. O. Hasan Farook Maricar	August 2011	Congress
Madhya Pradesh	Ram Naresh Yadav	26 august 2011	Congress
Maharashtra	K. Sankaranarayanan	22 January 2010	Congress
Manipur	Gurbachan Jagat	23 July 2008	Civil Servant
Meghalaya	Ranjit Shekhar Mooshahary	1 July 2008	Civil Servant
Mizoram	Shri Vakkom Purushothaman	26 august 2011	Congress
Nagaland	Nikhil Kumar	15 October 2009	Congress
Odisha	Murlidhar Chandrakant Bhandare	21 August 2007	Congress
Punjab	Shivraj Patil	22 January 2010	Congress
Rajasthan	Shivraj Patil (additional charge)	26 April 2010	Congress
Sikkim	Balmiki Prasad Singh	9 July 2008	Civil Servant
Tamil Nadu	Konijeti Rosaiah	26 august 2011	Congress
Tripura	Dnyandeo Yashwantrao Patil	27 November 2009	Congress
Uttarakhand	Margaret Alva	19 July 2009	Congress
Uttar Pradesh	Banwari Lal Joshi	28 July 2009	Civil Servant
West Bengal	M.K. Narayanan	24 January 2010	Civil Servant

As can be seen from the data, 19 out of 28 Governors had political affiliations with the Congress in the past. No Governor had any political affiliation with any party other than the Congress. This data highlights the extent to which President (President appoints the Governor) is biased in favour of the Congress. The probable reason is - she herself was affiliated to the Congress in the past.

Sarkaria commission report on center state relations (1988) noted - "Frequent removals and transfers of Governors before the end of their tenure have lowered the prestige of this office. Criticism has been levelled that the Union governments utilises the Governors for its own political ends. Many Governors looking forward to further office under the Union or active role in politics after their tenure come to regard themselves as agents of the Union". This observation holds true even today.