The topic of discussion on the role of planning especially in Railways, the relevance or otherwise of PC and the impact of dispensation of PC, raised by Shaju Francis is thought provoking. Indian Railways presently is both – a “Government agency” and a “Commercial arm” of the GOI. It is in this context there is a need to bring in a discussion on the paradox of such an assumption. It is akin to saying that something is both a “Devil” and a “God” at the same time. Philosophically speaking, one can argue that both are but sides of the same coin. But at the micro level of man-made institutions, there is a need for distinction in roles and both need to retain their separate identities and functions. Apart from administration, social welfare is also Government business. But it surely cannot mix with it with any commercial business. Commercial entities have their own set of rules to be functional and accountable. It is basically a business run efficiently with a view to make profits. Optimum utilisation of resources to benefit the stake holders is the norm. In order to efficiently discharge its duties and render the desired results, it needs to earn its keep and also survive on its own. You may ask – all resources are the property of the people of the country and hence how can any commercial organization be permitted to only benefit its stake holders? It is from this thought that the principle of Corporate Social Responsibility took shape. Even as you use resources to make profit, there is a need for ploughing back some of benefits to the National stake holders. The social commitment is judged from the quantum it gives back. The giving back may be in the shape of money, service or owning responsibility. The allocation of public resources to commercial enterprises should be based on the track record of giving back. Now, GOI gets raises its resources from the people – mostly in the form of taxes. Even though it is deemed all are born equal, taxes are collected on the basis of affordability – more from those who can afford. In short, it is admitted that even when all things are equal, the ability to pay is unequal. Borrowing a common phrase, Government has to collect more (if not rob) from Peter to pay Paul! You will agree that business can be simply explained as the satiating of a demand for a price. The operative word is “price” meaning somebody has to foot the bill. It may or may not be the actual beneficiary. The price includes not only return of investment, but also an element of profit which takes care of inflation, improvement and incentive for investment. Coming to Indian Railways, it is owned by the GOI. Here, Government uses the resources of the people to create a facility/service to fulfill the demand of the people. For the success of the facility /service, the rules of business have to be followed to make it self sustainable. Railway is just one among the many facilities for the people and its ranking in the needs of the people may not be at the top. Basic needs such as food, water, clothing, shelter, health, security etc., take priority in the utilization of the resources of the people. Travel does not enjoy the status of the above basic needs. This means, in majority of the cases, travel is the need of the people whose basic needs have been taken care. This majority represents the Peters and they need to pay as per business rules to enable GOI to service Pauls whose basic needs are yet to be met. This is a social responsibility. Where then is the free meal? Market economy, for good or for bad is seen as efficiency of business at its best. So, let the GOI allow the market economy to efficiently extract the last pound of flesh from the affordable Peters and let it directly subsidise only the Pauls instead of letting the Peters also to steal from them, which is what is happening now.
Posted on: Sun, 19 Oct 2014 09:31:12 +0000
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