A chance at fair allocation

A chance at fair allocation

Finally, the United Progressive Alliance (UPA) government has woken up to the problem of allocating natural resources in a fair manner. Loot would not be a wrong word for the manner in which all kinds of these resources, which rightfully belong to citizens, were distributed to powerful individuals in the country. This issue is closely linked to the debate on cronyism in India.

As reported in Mint on Wednesday, a government panel, headed by former finance secretary Ashok Chawla, has called for a centralized database of all natural resources handled by the Union government to curb corruption. This is a good first step, but a first step only.

To begin with, mere creation of a database accessible at one place will not do much. Most natural resources, from land to spectrum to minerals, have been, until now, allocated on ministerial whim. One could say this is not true: after all there are recommendatory bodies, groups of secretaries and other mechanisms that are part of the allocation machinery. The truth, however, is that it is ministerial discretion that has prevailed in these matters.

More needs to be done after this database of natural resources is set up. There are two key additional steps that are required. First, settling of price discovery mechanisms. In most cases, these resources are only dwindling and their use/allocation/distribution in an efficient manner requires they go to the user who can pay the most for them. This requires a law that bans allocation by ministerial order (for example, on a first-come-first-served basis).

Two, a mere law that bans ministerial discretion will not do, for a smart secretary can always find loopholes in any law. If the 2G-spectrum allocation holds any lessons, it is that a minister can overcome any law unless it threatens him with punishment in case of such transgressions. Thus, the second requirement will be a law that prescribes a strict punishment for the political head of the ministry dealing with allocating resources. The law should also specify separate, fast-track courts that have vastly simplified procedures for evidence.

The UPA government has just taken the first step in what is likely to prove an arduous, if not near-impossible, task. If only for the sake of its credibility, it needs to take other steps to make the allocation of natural resources fair and efficient.

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