Arvind Kejriwal's supporters are stunned by the media flak that the Aam Aadmi Party (AAP) government has got over regressive subsidies on water and electricity. They have been used to praise for their alternative honest politics. Instead of understanding why media commentators have turned negative, they fume in righteous indignation at the 'capitalist-controlled media' striking back.
They are missing the point. AAP was supposed to usher in a style of governance based on honest politics and a responsible attitude to public finances. We wanted it to create a 'modern welfare state' in Delhi. We wanted it to do good to the poor while enabling those with skills and enterprise to do well.
In this respect Delhi (population 16.7 million, area 1,484 sq km) can adopt the city state of Singapore (population 5 million, area 718 sq km) as its role model. With the highest average individual income of over Rs 2 lakh a year, it can afford to be compassionate. With a globally envied biometric identification programme, Delhi can graft Singapore's efficiency and promptness in delivery of public services to its yearning for democracy. Instead, AAP has chosen to hark back to the failed experiments of the 1970s.
Representational image. PTI
The subsidies on water and electricity are regressive because they do not really address the concerns of the very poor. This category of consumers was paying just the cost of water treatment, excluding cost of supply. Those in the next slab pay five times as much. Even if only half the metered households get the subsidy, the cost to the Delhi Jal Board (DJB) will be Rs 292 crore a year. This is money which DJB could have used to assure every slum, outside of the pipeline network, of one or two tankers of water. The DJB itself is not swimming in money. It has managed to cover operational and maintenance expenses, but is trapped in debt of Rs 35,000 cr.
On power, while AAP's manifesto promises to cut rates by 50 percent through an audit that would expose over-invoicing and cost padding, it makes no mention of a subsidy. But within 48 hours, AAP has gone ahead and given a subsidy of Rs 850 crore a year, without having the mandate of its electorate.
A CAG audit may be necessary to assure the public. From the time of privatization, power rates have more than doubled for those in the lowest slab and have risen two-thirds for those in the highest. Distribution companies (Discoms) have reduced losses (theft actually) from over 50 percent to less than 20 percent.
Discoms have not repaid the loan of Rs 3,450 cr given to them initially to avoid tariff shocks. They owe Rs 4,000 cr to the transmission utility. They claim an uncovered deficit of Rs 7,200 cr. TN Ninan of Business Standard says the gap between cost and price in the case of one Discom has widened from 56 paise a unit to Rs 2.13 a unit over the past four years. So supplying power to Delhi may not be as profitable as AAP makes it out to be. In any case, we need to conclude that special audit to establish these assertions, either way.
The charitable view is that AAP took the two decisions as a survival strategy; it could paint the Congress as anti-people if it withdrew support.
But other aspects of AAP do not kindle hope in those who wish to see Delhi as a vibrant economy. AAP's team has anti-development Greenpeace activists and economists who have a romantic notion of Indians living in genteel poverty in harmony with nature. They see the markets and the consumption-driven economy as a failure. The team on agriculture policy has activists who are opposed to technology. One of them actively persuaded the tribals of Gujarat from planting high-yielding hybrid maize that would have mitigated their poverty, in the name of 'seed sovereignty.'
What we need is smart governance that is based on facts, evidence and processes. We must harness private efficiency for the delivery of public services. Wherever this has been done, whether in the driving license department or the passport office, public satisfaction has improved. Public private partnerships need honest regulation. In the absence of this, private hospitals have reneged on their commitment to treat the poor in exchange for cheap land. AAP's honest leaders can make them abide by the covenants.
AAP wants to improve the education system. It must tap industrialists like Azim Premji, Shiv Nadar and Sunil Bharti Mittal, all of them with charitable interests in schooling. Unlike rural areas, which have primary health centres, cities do not have anything below specialty hospitals. Delhi must have a public health engineering department and corps of epidemiologists like Tamil Nadu to prevent the outbreak of epidemics and to treat them quickly.
Garbage evacuation and slum maintenance must be given to private parties. Unlike politicians who like to employ more people, private service deliverers are likely to invest in productivity-enhancing machines, which are necessary for doing drudge work and also to give sanitation workers a sense of dignity.
The rent control act should be amended, and rental housing encouraged so people are not forced to invest in housing. Vast sprawls of low-rise government housing must be converted into high-rises; not only will this create compact blocks and additional space, the money released from commercial development will pay for the investment.
The upkeep of industrial estates must be outsourced. Delhi has very few farmers; yet it has in place the Agricultural Marketing and Produce Act which compels farmers to sell in mandis which are in a state of disrepair. At the Azadpur mandi the commissions are exorbitant. Farmers have to pay 6 to 10 percent of the value. The act must be repealed and private wet and dry markets must be encouraged. This will help bring down inflation in fruits and vegetables.
Delhi must invest in high-speed railways to cities like Agra that will de-congest the capital, cut the cost of living, while spreading development to the hinterland.
As you can see, AAP should have no dearth of advice or modern welfare projects to fast-track and implement. Professionals are keen to join it. It must tap their skills, insights and enthusiasm to re-invent Delhi. And reinvent itself to give us a modern welfare state, not a subsidy-ravaged, moth-balled version from the 1970s.
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