Implosion (12 page)

At the Delhi Metro, Sreedharan used his authority to insist, before he was appointed in 1997, that he would have full autonomy and would be free from any political interference – which, he was, apart from an early battle over whether the track should be broad or standard gauge, which he lost. He was able to insist on that independence, he told me in 2005, because at his age he had no career ambitions and could walk out at any time.
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That meant he could set new parameters for public project management in a country where politicians and bureaucrats routinely interfere and demand favours from public sector corporations.

Before Sreedharan was appointed, it had seemed as though the metro would be doomed to go the same way as other major projects. After years of talk, the corporation (jointly owned 50–50 by the governments of India and Delhi) was registered in 1995, but nothing much happened, partly because of problems finding someone to head it. ‘That’s how government works,’ said Sreedharan. ‘No one wants to take responsibility for an action.’ He was appointed when Japan threatened to withdraw substantial soft loan funding, without which the project would not have been feasible. ‘People have to become aware that delay means money,’ he said. The first stage of the system was built within budget and opened in 2002, three years ahead of schedule – a dramatic change from India’s only other metro railway, which had taken 23 years to build in Kolkata.

Sreedharan applied private-sector methods that most public-sector bosses would never dare attempt, starting with a work culture that encouraged executives to take ‘fast and transparent’ decisions. Faced with the need to divert complex services such as communication cables and sewers, Sreedharan insisted that the corporation should take the work away from Delhi’s state government departments. ‘We did in a few days what they would have taken months to do,’ he told me. When construction of an underground section was running eight months late after four-and-a-half-years of work, he gave contractors acceleration payments to speed up their pace. ‘I’ll get that back in one month’s revenues,’ he said. Corruption was also significantly reduced. Sreedharan says he selected senior staff for their integrity, introduced strict systems, and did not allow agents to come between the corporation and its contractors. Government officials often delay paying suppliers in order to demand bribes for sanctioning partial payments, so Sreedharan insisted bills were paid quickly – 80 per cent were paid within 24 hours of falling due.
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The metro is now a huge success, running – profitably – for 190 km on six lines with 142 stations, and carrying two million people a day. Extensions are on the way to bring the total to 330 km by 2016. It has been modelled on the Hong Kong Mass Transit Railway (MTR) metro and the rolling stock has the same style and feel, with open carriages stretching the length of a train. The only downside is poor construction maintenance at many stations, plus an Airport Railway that was run unsuccessfully as a public–private partnership (PPP) by the Reliance Group controlled by Anil Ambani till it was taken over by the metro corporation.

Overall, the metro has done more to develop Delhi than any other initiative, opening up new areas and changing society and working patterns. It has improved lifestyles and boosted aspirations for people living in the crowded alleyways of old Delhi, the comfortable colonies of central areas, and new multistorey flat developments in the suburbs, including Gurgaon and Noida,
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as it extends into neighbouring areas. Sreedharan’s success story has also led about ten other Indian cities to plan and build networks, some with him appropriately as the adviser.

Nilekani’s Aadhaar

Another project which shows the importance of strong political support is the Unique Identification Authority of India (UIDAI), whose chairman is Nandan Nilekani. The task is to set up a countrywide personal biometric database and issue hundreds of millions of people with a 12-digit unique identification number called an aadhaar (foundation stone). Estimates have for years suggested that 70 per cent or more of such aid is lost on its way down to rural recipients. By early 2013, the system was beginning to be used for a direct cash transfer scheme to deliver aid money via Aadhaarvalidated bank accounts.

There were, inevitably, technical glitches when the scheme was being rolled out, but Nilekani’s ambitious aim is to have enrolled more than 50 per cent of the population by 2014. He was appointed by Manmohan Singh with the rank of a central cabinet minister in 2009 to set up and run the UIDAI. That provided him with the status he needed to be effective, but his strength in cutting through political and bureaucratic blockages has stemmed from the backing of Sonia and Rahul Gandhi. P. Chidambaram, the finance minister, has called the identification number a ‘game changer’ in the delivery of corruption-prone aid money and a ‘massive re-engineering of the system’. Pranab Mukherjee and Montek Singh Ahluwalia were also supporters, but the Gandhis’ backing was crucial in the project’s early days when Chidambaram was home minister (2008–2012) and favoured his ministry’s rival scheme that was focused more on catching illegal immigrants.

Nilekani, a politically savvy and cautiously media-friendly technocrat, says he was looking for a public role where he could make a difference with his technology knowledge when he was invited by Manmohan Singh to lead the UIDAI.
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He was attracted to the challenge and simple definition of success – to build the biometric database and enrol hundreds of millions of people. Aadhaar is intended to include the poor in India’s growth by giving them an identity and easier access to opening bank accounts, obtaining mobile phones and gas connections and, most importantly, protecting the delivery of their aid funds. ‘This enhances access of the common man to public services while reducing the hassle he or she faces in accessing the service,’ says Nilekani.
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Nilekani sees this as a first step in a continuing programme to bring know-how metaphorically from his old base of Bengaluru to Delhi, using information technology to streamline and improve government operations ranging from national information programmes to taxation. ‘Needless to say, active political support and civil society engagement is a sine qua non for this to happen’, he says.
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He envisages combining technology with regulatory and institutional reform to change the way the government relates with the private sector as a buyer on defence and other equipment and services, as a seller such as on licences for natural resources, and as a regulator in areas such as telecoms.
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He has been advising the government on the formation of a not-for-profit company called Goods and Services Tax Network (GSTN), jointly owned by central and state governments, with additional private sector equity, that could provide a countrywide technology infrastructure for the new tax.

Notes

1
.   Interview with JE, June 2013

2
.  
http://ridingtheelephant.wordpress.com/2013/10/14/odishas-cyclone-shows-india-can-handle-disasters-but-longer-term-action-is-needed/

3
.   ‘Harvard to get Kumbh lesson from Akhilesh’,
Indian Express
, 13 April 2013,
http://m.indianexpress.com/news/harvard-to-get-kumbh-lesson-from-akhilesh/1101841

4
.   In conversation with JE, May 2013

5
.   Rahul Mehotra’s architecture firm website
http://rmaarchitects.com/

6
.   ‘Lessons of a temporary city – Researchers from across Harvard share findings from India’s Kumbh Mela festival’,
Harvard Gazette
, 4 April 2013,
http://news.harvard.edu/gazette/story/2013/04/lessons-of-a-temporary-city/

7
.   Speaking at the British Council in Delhi, May 2013

8
.   ‘“Direct cash transfer facility for UID cardholders”: Nandan Nilekani’, PTI, 26 November 2012,
http://articles.economictimes.indiatimes.com/2012-11-26/news/35364892_1_uid-project-uid-numbers-nandan-nilekani

9
.   JE, ‘On the Road to Repair’,
Fortune
magazine, 31 October 2005

10
.
http://ridingtheelephant.wordpress.com/2007/07/19/hastening-slowly-on-india%E2%80%99s-highways/

11
.
http://ridingtheelephant.wordpress.com/2009/06/02/nath-inherits-a-muddy-murky-highways-programme/

12
. Clive Bell and Susanne van Dillen, ‘How Does India’s Rural Roads Program Affect the Grassroots? Findings from a Survey in Orissa’, World Bank, August 2012,
http://elibrary.worldbank.org/docserver/download/6167.pdf?expires=1379402806&id=id&accname=guest&checksum=AEDB7F1E5FDEB9CFF94647C0E6D0F2C9

13
.
https://ridingtheelephant.wordpress.com/2009/01/02/sheila-dikshit-gets-it-wrong-and-now-plans-a-%E2%80%9Cflexi-brt%E2%80%9D-muddle/

14
. ‘E. Sreedharan: More Than the Metro Man’,
Forbes India
, 5 October 2012,
http://forbesindia.com/article/leaderhip-award-2012/e-sreedharan-more-than-the-metro-man/33847/1#ixzz2OjIjaBOF

15
. JE, ‘Delhi’s Delight’,
Fortune
magazine, 31 October 2005

16
. Anuj Dayal,
35 Management Strategies for Delhi Metro’s Success: The Sreedharan Way
, published by Delhi Metro Rail Corporation, Delhi, 2012

17
. A series of articles on the
Wall Street Journal’s
‘India RealTime’ blog reported in 2012 on the impact of the Delhi Metro:
http://blogs.wsj.com/indiarealtime/2012/05/30/metrocity-journal-delhis-changing-landscape/
,
http://blogs.wsj.com/indiarealtime/2012/05/31/metrocity-journal-the-new-trade-routes/
,
http://blogs.wsj.com/indiarealtime/2012/u06/01/metrocity-journal-public-vs-private-space/?mod=WSJBlog&mod=irt
,
http://blogs.wsj.com/indiarealtime/2012/06/02/metrocity-journal-up-up-and-away/

18
. Conversations with JE, 2012

19
. Nandan Nilekani, ‘Tackling Corruption: Some Alternative Approaches’, The 19th Lovraj Kumar Memorial Lecture, 1st November 2012,
http://uidai.gov.in/images/tackling_corruption_01112012.pdf

20
. Ibid.

21
. Nandan Nilekani, ‘Passing a law can’t solve the corruption problem’, CNN-IBN, 22 October 2012; video trailer of interview:
http://ibnlive.in.com/news/nilekani-slams-kejriwal-says-passing-a-law-cant-solve-the-corruption-problem/301655-37-64.html
and
http://ridingtheelephant.wordpress.com/2012/10/23/corruption-tamashas-and-gossip-flood-india-but-change-will-be-very-slow/

II
OPENING UP

6
Clearing the Cobwebs

‘We have got to get rid of the cobwebs,’ Prime Minister Narasimha Rao told top officials on 21 June 1991, the day he formed his new Congress government. Go away to your office, he said to Manmohan Singh, and work out some details. Thus was born, with a classic understatement, India’s biggest burst of economic liberalization that, over the past 25 years, has touched almost every corner of this vast country and affected the lives of virtually everyone in the billion-plus population. Chalta hai had been pushed aside by a dire financial crisis, but none of the officials in Rao’s office that morning could have dreamed of the long-term effects of the measures they would be launching, and nor could he. They knew they were about to remove industrial, trade and financial controls that would help to solve the crisis by freeing up economic activity and generating international trade.

What happened, however, was far more dramatic. The moves they initiated gradually unleashed previously repressed entrepreneurial drive, skills and aspirations. This was accelerated by unpredictably rapid expansion of information technology and the internet, plus India’s growing involvement in international business and trade.

Manmohan Singh was at the meeting because he was about to be named finance minister – he was sworn in later in the day with the rest of the cabinet. The country’s financial plight was desperate. A collapse of international confidence in the rupee had caused capital flows to dry up. Foreign exchange reserves had plunged so far that they only covered two weeks of imports, which was not viable. Talks were in progress with the International Monetary Fund for a rescue package. The rupee was devalued in two 10 per cent tranches a few days later on 1 and 3 July, and dramatic trade reforms were quickly introduced to coincide with the second devaluation. Two weeks after that, 47 tonnes of gold were ignominiously flown to the capital of India’s former colonial ruler and deposited in the vaults of the Bank of England to cover a desperately needed bridging loan. Major reforms were announced in a ‘New Industrial Policy’ on the same day as Singh’s first budget speech on 21 July, which made it clear that real and not cosmetic change was happening.
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The Beginnings

The ground for all this had been well prepared, and there were plenty of ideas ready for Singh to pick up. Plans for reform had emerged in various debates and policy papers over several years, notably in the 1980s when Rajiv Gandhi was prime minister, and then during two years of unstable coalition rule between his defeat in a 1989 general election and the formation of Rao’s government.

The reforms really began at the start of the 1980s after Indira Gandhi was returned (in 1980) as prime minister, having recovered politically from a controversial two-year state of Emergency that she had declared in 1975. She had a new approach on economic policy, as L.K. Jha, her top adviser and a veteran bureaucrat, used to explain to me, sitting in the study of his home at the 10 Janpath bungalow in New Delhi where Sonia Gandhi now lives.
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His task, he said, was to begin to reverse some of the state controls and protectionist policies that Indira Gandhi (and he) had introduced and extended in the 1960s and 1970s, building on the centralist economic doctrine of her father, Jawaharlal Nehru.