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PRAFUL BIDWAI COLUMN

2G spectrum judgment damages UPA: Correct course or perish

Praful Bidwai
India must abandon neoliberalism. But this would not happen easily. Dr. Singh remains a slave to neoliberalism and is blind to its worst consequences, including persistent hunger, poverty and growing inequalities.***
The Indian Supreme Court's judgment in the 2G-spectrum case cancelling all the 122 mobile telephony licences issued in 2008 is a slap in the face of the United Progressive Alliance government. The licences were the end-product of an illegitimate process begun in the early 2000s which, the Court held, violates the public interest and "Constitutional principles."
The UPA claims the verdict exonerates Home Minister P Chidambaram, who as finance minister in 2008, was complicit in the process and in the licences' under-pricing. The judgment does not delve into individual responsibility. It limits itself to analysing the first-come-first-served (FCFS) licensing approach, and sudden changes in the rules.
The issue of prosecuting Mr. Chidambaram was referred to a special court. Its refusal to sanction prosecution may not be the final word.
The Supreme Court judgment has major policy implications and implicitly indicts the Manmohan Singh government under the principle of collective responsibility of the cabinet. The fact that Telecom Minister A Raja disregarded Dr. Singh and Mr. Chidambaram's advice only raises the question as to why he was allowed to in the cabinet despite this.
The Bharatiya Janata Party should not relish in the UPA's embarrassment. The judgment implies that it too was reprehensible for pioneering the FCFS approach. Its ministers also corrupted the licensing process and made millions.
The judgment is significant for five reasons. First, it says the state holds the nation's natural resources in trust and must allocate them to private enterprises in a fair and transparent manner. Besides airwaves, such resources include land, coal, iron and manganese ore, oil and gas, forests, coastlands, water, air, etc.
The public trust doctrine means that licences issued on the basis of FCFS or of influence-peddling in other sectors can be scrutinised. That would cover hundreds of extractive industry licences, where predatory interests have appropriated public property.
Examples are projects in which long-term coal mining rights were granted to power companies, and Reliance Industries Ltd's Krishna-Godavari gas project.
RIL first argued that KG gas represents national wealth and the government's sovereign decisions on it must prevail over its own "private" agreement with the Anil Ambani group on fixing its price. Now RIL wants to have a say in fixing the price. This won't do.
Second, the judgment recognises the citizen's right to file corruption complaints and thus returns public interest litigation to the high status it once rightly enjoyed in India. Here, the verdict stands in contrast to the dismissal of a petition by a major trade union in the Enron case a decade ago.
Third, however, the judgement does not go into the issue of why the UPA government continued to deny that the 2G scam caused a loss to the exchequer long after the Comptroller and Auditor General's excellent report estimating the loss at between Rs. 56,000 and Rs. 1.76 lakh crores.
Nor does the judgment systematically penalise the companies that manipulated the process. It also does not quash the pre-2008 FCFS licences.
Fourth, the judgment treads tricky ground on judicial review. It rejects the argument that judicial review in commercial matters must be limitedin favour of "the larger public interest." But it does not say how this public interest should be determined beyond the concerned judge's perception.
Unless rigorous criteria are laid down, this could lead to judicial hyper-activism. Yet, it is undeniable that the judges did not allow themselves to be overwhelmed by the political upheavals around the 2G scam.
Finally, the verdict reprimands the Telecom Regulatory Authority for facilitating the 2G scam. Paradoxically, however, it nominates the same agency to design the fresh auctions.
On a broader perspective, the judgment underscores the pitfalls of neoliberal economic policies. Neoliberalism is designed to promote the expropriation of public resources and dispossess people of access to the natural commons. Under it, capital will necessarily colonise more and more natural resources, including land, mineral wealth and water. This cannot be prevented by more transparent market-based mechanisms.
Neoliberalism has aggravated both the global environmental crisis, especially climate change, and the social crisis. In Europe, some of the greatest social gains made through the welfare state are being liquidated. Income inequalities have reached unprecedented proportions and unemployment is touching Great Depression levels.
The g]oom prevalent at the recent World Economic Forum at Davos in Switzerland bears ample testimony to neoliberalism's failure. The representatives of the world's top 1,000 corporations grouped in the WEF had not the foggiest idea of a solution to the global crisis.
Yet, "the Davos class" of filthy-rich executives continues to overconsume resources while impoverishing the majority. Some of this superbly documented in an infographic on the Transnational Institute website
(http:/ Zwww.tni.org/report/state-corporate-power-2012) .
The Great Recession shows that neoliberalism has proved bankrupt in its heartland. It would not succeed elsewhere.
India must abandon neoliberalism. But this would not happen easily. Dr. Singh remains a slave to neoliberalism and is blind to its worst consequences, including persistent hunger, poverty and growing inequalities. He is betraying the UPA's promise of inclusive growth, the key to its return to power in 2009.
The only time Dr Singh speaks with passion is when he rules out a universal Public Distribution System and statutory minimum wages for the National Rural Employment Guarantee Act, or pooh-poohs the idea of giving free food to the poor instead of letting it rot.
Dr Singh is bent upon forcing through "second generation" neoliberal "reforms": dismantling what little remains of labour protection, more doleouts to the rich, and more divestment of public enterprises, which have been milked of $ 10 billion since 2009.
Realistically, the Congress party is unlikely to correct policy course unless it is admonished by the people. I hate to say this, but in today's circumstances, this means that it performs relatively poorly in the Uttar Pradesh elections.
True, this will adversely affect the Congress's leadership transition in and might temporarily help the Right, which would be undesirable. But if nothing else can shake the party's top leadership out of its complacency, what is the choice?
The writer is an eminent Indian columnist. E-mail: bidwai@bol.net.in