Minister with mojo

sambuddha mitra mustafi | Updated on November 28, 2014

Driver’s seat: Suresh Prabhu is known for implementing smart reforms pti/kamal singh

Suresh Prabhu proved his mettle as Power Minister. Will he succeed in doing the same for the behemoth that is the Indian Railways?

It was one of those only-in-India moments: in August 2002, then Shiv Sena minister Suresh Prabhu was withdrawn from Atal Bihari Vajpayee’s government for being “too honest”. It happened on orders from party supremo Bal Thackeray, who was unhappy that Prabhu was not using his position as Power Minister to “fundraise” for the party. The joke in Mumbai was that Prabhu had failed to deliver real power to Matoshree.

A few days before Prabhu was withdrawn from the Union Cabinet, Thackeray told the party mouthpiece Saamna that ministers who did not work according to the “people’s wishes” had no right to continue in office.

The last straw was when he clashed with Bal Thackeray over the appointment of the Power Secretary: he had disregarded Thackeray’s nominee, choosing to reward efficiency over politics. PM Vajpayee went with Prabhu’s recommendation. Thackeray was livid.

Prabhu’s friend Uddhav Thackeray batted for him at the time. He unsuccessfully tried to cajole his father into keeping Prabhu in the Cabinet, where he was widely hailed for his work. But the Raj Thackeray camp, and senior Sena leaders like Manohar Joshi prevailed on Bal Thackeray to replace Prabhu in the Cabinet, overruling Uddhav’s protests. Ironically, it was Uddhav who nearly stopped Prabhu from becoming Railway Minister in 2014. But on this occasion, the four-time MP from Rajapur would have none of it: he dumped the Shiv Sena and moved to the BJP.

In some ways, Suresh Prabhu was always a misfit in the Shiv Sena. A chartered accountant and lawyer by training, Prabhu was managing director of the Saraswat Co-operative Bank, which is where he started making political friends — from the Shiv Sena to its main rival, NCP’s Sharad Pawar. In 1996, he fought his first election from Rajapur, part of the coastal Ratnagiri district in south Maharashtra. He defeated veteran socialist Madhu Dandavate.

Soon he was elevated into the NDA Cabinet, first as minister for environment and later for chemicals and fertilisers. In 2000, after the sudden demise of R Kumaramangalam, Prabhu was made Power Minister. Prabhu is more of a technocrat than a grassroots Shiv Sainik, rarely seen at their shakhas: his quick ascent caused heartburn among many Sena veterans, who eventually influenced Bal Thackeray into removing him.

Packed with a punch

As Power Minister, Prabhu had found his mojo. He was credited for the Electricity Act of 2003, which opened up the power sector for greater private investments. The private sector for the first time got non-discriminatory open access in the transmission of power, and the State Electricity Regulatory Commissions were mandated to introduce open access in power distribution, after accounting for State-specific conditions. Today, more than one-third of India’s power capacity is operated by the private sector.

His other big achievement came in securing dues from State electricity boards. In February 2001, the Montek Singh Ahluwalia Committee had found that States owed central PSUs over ₹40,000 crore in power dues. Prabhu got 22 states to agree to pay past dues and roped in almost as many states to a reforms-linked roadmap that included metering, regular audits and bottomline improvements.

While Prabhu’s changes to the Power Ministry were more incremental than radical, this current government has a stronger mandate than Vajpayee’s government did. And after the power sector, Prabhu now faces another ailing behemoth, Indian Railways.

Reforms express

With over 1.3 million employees, a corrupt and change-averse bureaucracy, shoddy service and helpless passengers (roughly 23 million a day), the Indian Railways is a remnant of the old, socialist India that wore ineptness and patronage as a badge of honour. Moreover, the ministry has had the misfortune of being led by demagogue populists — such as Lalu Prasad Yadav and Mamata Banerjee — who treated the Railways as their personal fiefs.

Injecting a sense of purpose and reforms in this environment will be a difficult task for Prabhu. Being more of a technocrat than a populist politician may work to his advantage, but there will be pressure on him to use his position to extend favours to his home State of Maharashtra. Another big challenge remains the bureaucracy, and here Prabhu has already shown that he is ready to innovate.

One of his first moves has been to incentivise timely project completion — by declaring that officials and project chiefs will receive up to two per cent of the project cost for finishing on time.

The ministry has also demonstrated its intentions to encourage foreign investment on some pre-designated routes. But there is a deeper problem underlying all these initiatives: until the government has complete monopoly over rail transport in India, it will continue to treat domestic or foreign private players merely as vendors who it can exploit, not as genuine partners with whom it can achieve strong results.

So if Prabhu is looking to make radical, rather than incremental changes in his new role, then he will have to bring about a change in thinking: ultimately, Indian Railways is only a transport corporation, and that is how it should be treated. And if the consumer’s benefit is the end goal, then the government will have to cede its monopoly over rail transport in India.

Of course, bringing about this radical change will not be an easy task. Political constituents, the rent-seeking bureaucracy and trade unions are likely to oppose any such move. So don’t expect real change at the speed of a bullet train. But as long as the reforms express is not derailed, there is hope.

(Sambuddha Mitra Mustafi is the founder of The Political Indian)

Published on November 28, 2014

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