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Perils Of Decision-making

 Mukesh Kacker |  2013-08-16 23:44:13.0

The Durga Nagpal controversy has brought to the surface the issue of political interference impeding bureaucratic work. A few months ago, presumably in response to the mounting criticism from prominent Indian industrialists and businessmen about the total lack of decision-making in government, the prime minister exhorted the senior bureaucracy to take decisions fearlessly and expeditiously.

Case in point
X, a brilliant and extremely well-educated senior IAS officer, was posted as the managing director of the state industrial development corporation of a state. He had recently returned to India after acquiring a degree in management from a premier institution overseas as part of mid-career training and was bursting with energy and fresh ideas. The state industrial development corporation was responsible for a wide variety of activities, including development of enabling infrastructure for industries, tying up joint ventures with profitable ventures and giving financial support to industries. In addition, it also acted as the procurer of certain specified industrial products for use by the entire government.

X was delighted with his job because it challenged both his energy and education in management and finance. The chief minister, a wise and forward-looking politician, had hand-picked X for this job and they shared an excellent working relationship. X was also on good terms with most senior bureaucrats, barring the principal secretary (finance), a thoroughly incompetent and malicious officer who owed his position to flattery and licking the boots of the state finance minister, a heavyweight politician with direct links with the high-command of the ruling party at the Centre. The chief secretary, though a decent man otherwise, was a nondescript mediocre who had risen in service primarily because he had been non-controversial. X was not overtly concerned about sharing negative vibes with the principal secretary (finance) as he had limited direct dealings with him. In short, X had as good an environment to operate as can be possible in a real-life situation. The state was experiencing high industrial growth and X, as the central figure, had his hands full. There were bids to be finalised for specific industrial activities and for industrial infrastructure creation.

There were also joint ventures and financing proposals that consumed a lot of his energy and time.
Against this backdrop of intense activities came a subject matter which appeared not just routine but also mundane. As a one-stop procurer of water filters for a large number of government departments and programmes, the corporation had finalised a large tender for water filters just before X had joined. In fact X’s predecessor had approved the supply order in favour of a company that was based in the state just a week before X took over as managing director. At the time of the tender there was some controversy over the state government’s decision to restrict the selection only to those firms that had their manufacturing plants within the state and a few national-level companies had protested and even complained against this decision. The state government, however, had issued a direction to the corporation to select eligible bidders only from companies/firms domiciled in the state. However, all this had taken place before X had joined and he had no role in the entire tender process. X became aware of this case only when the first tranche of supply was ready for dispatch and had to be inspected by the engineers of the corporation at factory site.

The site inspection report brought out a deficiency in the body of the product and X immediately ordered a complete halt to the supply. A notice was also issued to the party, asking them to ‘show cause’ why their order should not be cancelled forthwith. At this point, the corporation received two letters. One was a detailed explanation from the party explaining the cause of the deficiency and promising to remove it and supply the first tranche of the improved product within a month. The second was a representation from the party which was L2 in the tender, asking for cancelling the order given to L1 and awarding it to them (L2) at the tender price. After examining these counter-claims, X found that the defect was a minor one and could be removed within a month as promised. He, therefore, decided that there was no plausible reason for cancelling the supply order and awarding it to L2.

Accordingly, a month’s extension was given to the party to supply the improved product, subject, of course, to another at-site product inspection. After one month, engineers of the corporation inspected the improved product at the site and found it to be compliant with all quality parameters. The supply was resumed and completed, albeit with a month’s delay. During all this, X was completely unaware of the quiet rumblings that would spell trouble for him.

The adverse turn
A national-level manufacturer who was also antagonistic to the state-level party, the supplier in the present case, sent a complaint to the chief minister protesting the decision to restrict eligible bidders to state-level parties and alleging favouritism in awarding the tender to the present supplier. The chief minister, who receives many such complaints every day, marked it to the principal secretary (finance). It was here that an otherwise innocuous piece of paper assumed capabilities of dangerous proportions.

The principal secretary (finance), a malicious and conspiring individual, realised the potential for serious harm to X that this paper held. Within the government, there was nothing to be inquired into, as the government itself had issued an order to the corporation for selecting eligible bidders from state-level parties. But sending it to an independent agency like the lokayukta, which functions independently of the government, could perhaps create trouble for X. So, the PS (finance) quietly forwarded the complaint to the state lokayukta. The case spun out of control from there, as the lokayukta marked the complaint to his police wing which received it with alacrity, always eager to make high-profile bureaucrats bite dust. Could there be anything more ridiculous than section 13(1)(d)(iii)? Can there be any contract where the party winning the bid does not obtain pecuniary gain? And which party’s interpretation of the term ‘public interest’ will be relevant?
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