LEADER ARTICLE
It's Shourie's Call Now

Just days before he was removed from the government, communications and IT minister Pramod Mahajan met telecom industry leaders who complained to him about a particular corporate''s open defiance of the rule of law.
Why don''t you also learn to survive like that corporate by joining their dirty tricks university? the minister suggested to a stunned delegation. Also stunned were the bevy of senior officials of the telecom department present at the meeting.
An expat among the industry group came out of the meeting and enquired whether this was a banana republic. The minister''s suggestion may have prompted the immediate reaction, but one could see it coming. For over the past couple of years, the telecom sector in the country had been run on the whims of a few, completely bypassing established norms and systems. That is what Arun Shourie has now inherited.
Telecom is indeed one of the success stories of liberalisation, but look closely, and the real picture emerges. Despite visible improvement, the policy and regulatory framework in the sector is in a mess.
There is no faith in policy-makers or the regulators'' ability to deliver. Matters routinely end up in litigation, and sometimes even that doesn''t help as was on show recently in the interconnect imbroglio. Mr Shourie''s task, therefore, is unenviable. He is being flooded with suggestions to stem the rot, no doubt, but he has rightly said he will comment only after studying the entire issue in detail.
While no one doubts Mr Shourie''s meticulousness, and his disdain for lobbies and pressure groups, one is tempted to warn him not to fall into the trap of attempting piecemeal solutions.
This strategy has so far achieved little more than clearing the immediate mess for an interested party here or a lobby group there. In fact, this constant tinkering with policy is the principal reason for the mess, scaring away potential investors.
Getting investor-confidence back in the sector is a challenge Mr Shourie should relish. But there are no shortcuts for this. For increasing investor-confidence, for example, there are suggestions that increasing FDI from 49 to 74 per cent would do the trick.
This is a myth, for, stand alone, it would do no more than once again help a few corporates. The truth is FDI is just one of the many issues which need to be grappled with to improve sentiment. The more important requirement for improving sentiments is to have a strong and credible regulator in place.
The incompetence of those in charge of the current regulator apart, the supine approach, and the propensity to give in to lobbies, often resulting in orders where fine printism reigns, has done a great deal of harm. One needs look only at the recent Interconnect Usage Charges order for proof.
Although superficially it seems it is for the good of all, the clever play of pulse rates, differential tariff regimes for different services and forbearance, among others, clearly give the game away. It not only benefits the Wireless in Local Loop with mobility operators, but penalises the incumbent MTNL and BSNL the most.
The regulator aspect is not too difficult to address, for the term of the present set comes to an end soon.
But for that, Mr Shourie must demonstrate the will. The will to not interfere, to show that the regulator is not anybody''s footmat, the will to insulate the regulator from lobby groups, the will to support the regulator''s decisions, and most important, the will to select members and chairperson from the best available.
To reiterate what has been said in these columns a while ago, we don''t need a bungling babudom, but a regulator who has demonstrable credibi-lity. It is imperative for the growth and success of the sector and any delay here will only make things worse.
Another aspect Mr Shourie must watch out for is the use of every politician''s holy cow, the common man. The decision to launch BSNL''s cellular services on a nationwide basis with extremely low tariff, which incidentally did not have the regulator''s sanction, was supposed to benefit the common man.
All it did was to erode severely BSNL''s long-distance revenue within the circles, which are generally contiguous with the state boun-dary. Sixty per cent of BSNL''s long-distance revenue comes from the intra-circle calls.
Analysts are already pointing out how a cash-rich organisation is being pushed towards bankruptcy so that it can be sold cheap. All over the world, thanks to the extremely rapid changes in technology, telecom as a sector is embroiled in some dispute or the other. But policy-makers and regulators are constantly at work to keep such conflicts to a bare minimum.
In India, however, the malaise is now so deep that the maintenance dose alone won''t help. For us to reach that stage, we have to identify and remove the root cause. One hopes with the scalpel in the hands of a new surgeon, there will be more lasting solutions to the sector''s problems.
That can only come with a thorough review of all that has been done in the past and taking corrective measures. And till that is done, any important decision should be put on hold.