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If our ministers were to take a test on the art & science of policy making, many would fail.

Drafting effective policies is a key task of a minister. Good policies fairly implemented are better than bad policies well implemented. Policy making is a science where methods, tools, & processes can be used to engage stakeholders, gather stated & unstated needs, do cost-benefit analyses etc. It is also an art of making compromises, balancing needs of various parties, negotiating, persuading, selling ideas etc.

confusion

Lets look at two recent examples.

  1. The seedy affair

Monsanto is the dominant supplier of genetically modified Bt cotton seed technology in India. Sometime back, Indian seed companies (who buy & incorporate Monsanto’s technology into the seeds they produce & sell) and the government questioned whether Monsanto was abusing its dominant market presence by charging high fees for its technology, which ultimately may affect cotton farmers who buy the seeds. Over a series of government interventions, the ultimate selling price of the cotton seeds were brought down, thereby squeezing the margins of both the seed companies & Monsanto.

The govt intervened again to reduce Monsanto’s technology fees to lower than what was contractually agreed between Monsanto & the Indian seed companies. All concerned parties cried foul and went to court. Recently, the govt intervened again to further reduce Monsanto’s tech fees and also changed the tech licensing policy. Indian seed companies seemed satisfied. Farmers were happy getting seeds at lower prices. Govt felt victorious in the battle against necessary-but-evil foreign technology. Then, Monsanto and the agri biotech lobby fought back. In a hasty retreat, the govt stepped back, put the policy on hold, and has now called for a public consultation on the policy.

In this whole affair, spread over many months, many other questions have risen. Is this tech good for Indian farmers? Should govt control prices or let free markets reign? How can it protect the interests of all concerned parties?

The key takeaway is how remarkably poor the thinking behind the policy has been. The arbitrary announcements, flip-flops, aggrieved parties in courts etc. – all these show the policy was not well thought out and drafted in the first instance, and even subsequently, given this imbroglio has been going on for months.

2. Questionable UDAY

Uday is the scheme announced by the Ministry of Power to enable the financial turnaround of Power Distribution Companies (DISCOMs)

DISCOMs in the country have accumulated losses of approximately Rs. 3.8 lakh crore and outstanding debt of approximately Rs. 4.3 lakh crore (as on March, 2015). Most of them supply power to homes, offices & factories at prices lower than cost. Operational & technical inefficiencies, irrational subsidies, government interference on pricing, etc. have bled the DISCOMs for decades. Many past efforts to make the DISCOMs financially sustainable have failed. Uday is a fresh new effort.

To fulfill the government’s vision of 24*7 Power For All, Uday largely relies on tech upgrades to improve operational efficiencies and the states taking over the debt of the DISCOMs. However, it is silent on key issues like the need to rationalize power pricing & subsidies, and privatization of power distribution. Unless the DISCOMs have the freedom to price electricity in a financial sustainable way with no government or political interference, the situation is likely to repeat itself.

In both the above 2 examples, we don’t have to reinvent the wheel. We can learn from the successes & failures of other countries. Our ministers have to just look around, think, adapt existing good practices to our needs, and also add their own fresh ideas to the policies they draft.

Why don’t they do it?

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