This is an election in which the fate of many political giants is uncertain. But when I toured Himachal Pradesh last week, I discovered that one person is regarded by all and sundry as unbeatable—Mr Sukh Ram, the union telecom minister.
Ever since Mr Sukh Ram made the future of Himachal Futuristic, he has been pilloried by Opposition partied for corruption. People in New Delhi think of him as the sort of scamster who should be booted out by voters. But in Himachal Pradesh voters regard him as a local hero.
Why? Because he has licensed public call offices with a STD facilities in almost every village of the state. This has made him enormously popular with villagers. They care little for stories of corruption in New Delhi. One villager told me, \”All politicians make money, without doing anything for the people, but Sukh Ram has given us PCOs\”.
City folk might be surprised that semi-literate villagers want to make STD calls. In fact it is an economic blessing. Villagers grow fruit and vegetables, which they sell in major markets of India. STD calls enable them to find out instantly what market prices are in Delhi, Chandigarh or even far-off Bombay. This helps them decide when to sell and when to hold back, where to look for customers and where not. In the past, traders had a monopoly of such information, and exploited it. Today, thanks to STD phones, the villager cannot be fooled by the trader. For this, villagers cannot thank Mr Sukh Ram enough. Besides, they say, STD calls are vital if anybody needs serious medical attention, and helps them keep in touch with lawyers over court cases (litigation is the third biggest occupation in rural India, after agriculture and playing cards).
This demonstrates how liberalisation benefits people. In the bad old days, access to phones was poor because of an inefficient government monopoly on phone call offices. Villagers had to walk miles to a post office, and then wait hours for a manual trunk call to get through. Now that entrepreneurs have been allowed to open public call offices (PCOs), almost all villagers happily pay for a new facility, the ministers get his votes (and, cynics say, kickbacks too). It is a win-win-win situation.
Yet it is far from classic liberalisation. Private PCOs are a great improvement over government ones, but are still licensed. The minister still has powers of allocation, and so can create old-style patronage networks. In many cases, ministerial discretion delays benefits. But Mr Sukh Ram has used it aggressively to licence PCOs in hi home state. So he owes his popularity to a combination of liberalisation and patronage politics.
Contrast this with the performance another liberaliser in the state, Mr Shanta Kumar, who was BJP chief minister from 1990 to 1993. After coming to power, he decided to shake things up and improve government finances. He initiated the privatisation of bus services, hotels and restaurants. He decided better off people should pay higher medical fees. Since the theft of electricity was rampant , he decided to levy a minimum charge on all consumers of electricity, based on the number of electric points. He drastically reduced the subsidy that relatively well-off apple growers enjoyed through government procurement at fancy prices.
Earlier, the state government financed village projects totally, and this helped officials to line their pockets. Mr Shanta Kumar decreed that villages should raise 40 per cent of the funds for a project themselves, the state government would finance the rest, and the villages themselves should execute the projects efficiently. In this manner he sought to empower villages at the expense of officials, and instil a sense of ownership of projects in villagers. Above all, he decided to get tough with government employees who tended to strike nearly every year. In this state almost one family in five has a member in government service, so the Congress always cultivated this vote bank. Congress CMs traditionally adjusted strike periods against leave due to employees, so that they suffered no loss in income. But Mr Shanta Kumar came out with a new decree that all reformers (and indeed many illiterate villagers) will applaud –\”no work, no pay\”.
This outraged the employees, who believed that work had nothing whatsoever to do with pay. They turned against the BJP, and used their numbers to defeat Mr Shanta Kumar in the 1993 state election.
Few will dispute that his aims were worthy. But he made the mistake of antagonising every important lobby in sight, without cultivating any. Some economists might approve this style of liberalisation, but is proved to be bad politics. His Congress rival, Mr Vir Bhadra Singh, Exploited every aggrieved lobby. It is another matter that, after winning, he continued with many of the reforms.
The lesson is that liberalisation is a political act no less than economic, and must be handled with political finesse. Enough must be done to produce economic benefits, yet the transition must be managed skilfully enough to reduce dissent from those who will lose out. Mr Sukh Ram has hit on a reform that produces lots of winners and virtually no losers, and so is riding high in his state. But not all reforms are so simple. The more difficult reforms will create many losers initially and create winners only in the longer run. Such reforms can be undertaken by a government with considerable moral authority, but not by the corrupt bunch of opportunists that dominate virtually all parties today. In such a moral terms, and look only to narrow parochial benefit. Mr Sukh Ram has proved that if you provide tangible benefits at the local level, voters will forgive you a thousand sins at the national level.
