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Bilateral problems

Source : BUSINESS_STANDARD
Last Updated: Wed, Jul 03, 2013 21:21 hrs

It is now clear that Prime Minister Manmohan Singh was not completely satisfied with the decision of Civil Aviation Minister Ajit Singh to agree with the proposal to offer 40,000 additional airline seats ("bilaterals") on the routes between India and Abu Dhabi, one of the seven principalities of the United Arab Emirates. Dr Singh first asked that the ruling be confirmed by a group of ministers, including Ajit Singh but also the finance minister, the commerce minister and the foreign minister. When the group didn't scuttle the deal - indeed, they raised the number of bilaterals - and the ministry went ahead and signed the memorandum of understanding, or MoU, with Abu Dhabi, the prime minister asked that the matter be brought before the full Cabinet. That was on April 26, two days after the MoU was signed. The Prime Minister's Office (PMO) asked again on April 29 for a Cabinet note and sent a reminder on May 20. And then on June 13, it expressed dissatisfaction with the note that the civil aviation ministry had drafted. In effect, Dr Singh was unable to stop his civil aviation minister from doing precisely what he wanted, and has so far proved unable to even ensure a full and complete discussion of the decision in the Cabinet.



The resemblance to the sequence of actions during the handing out of 2G licences in 2008 is noticeable. Then, too, the prime minister was clearly worried that something untoward was going on. Then, too, the relevant minister - A Raja - insisted that he was acting within ministerial privilege, and that the PMO could not intervene. In both cases, the decision was taken eventually without the prime minister or his office doing enough to stop it. In both cases, private sector parties benefited: a slew of telecom companies in the case of 2G; and the airlines Jet Airways and its partner, Abu Dhabi-based Eithad, in the case of the bilaterals. In both cases, a ministry headed by a representative of a coalition partner of the United Progressive Alliance is handing out valuable resources free to private sector participants. The question, of course, is why India does not sign more bilaterals in a transparent manner, so that there could be more capacity on all routes - allowing passengers the right to choose and reducing the price of tickets. Or why a single ministry still gets to hand out, in a non-transparent manner, something that is supposedly a "sovereign right". The questions that have been raised are serious, and indicate how urgent the need for reform is in this sector.

But the deeper question of political economy is this: if a Cabinet minister chooses to so openly defy his prime minister on such a matter, what action can this prime minister take? It has now become amply clear that he does not have the only real recourse of a prime minister in a Westminster-style system - to fire the offending minister - without the support of the leadership of the Congress party. The Congress leadership has not grasped that coalition management is not just about survival in the occasional vote on the floor of the Lok Sabha. It is also about giving the administration room to manoeuvre. In that, it has notably failed. As a result, the reputation of Dr Singh, of Congress President Sonia Gandhi, and of the party as a whole has suffered.

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