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Such clarity, in hindsight?

Questioning collective Cabinet decisions could lead to a freeze in government functioning.

india Updated: Sep 22, 2011 23:23 IST

By the time the Supreme Court delivers its verdict on alleged irregularities in the way telecommunications licences were handed out, two vital immunities the Cabinet enjoys would either have been upheld or torn apart. The first is about which Cabinet decisions are open to judicial review.

By examining the notion of a loss from licensing — as opposed to auctioning — radio frequencies to mobile telephony companies, the court is deliberating on a policy that goes beyond the narrow consideration of how much revenue the Indian government could earn from a scarce natural resource.

Cheap cellular licences make for cheap telephone calls, a decision the Cabinet had to take. Similarly, State-run oil refineries are required to sell diesel and cooking fuels below cost. Both the oil companies and the government lose money on this score. Again, banks must charge lower than market rates as interest on loans to farmers. This, too, is a notional loss.

Every economic decision has a cost — loss, if you

will — attached to it. If you choose to spend R100 today, you ‘lose’ the chance of earning R10 as interest if you had put it in the bank instead. In the case of telecom licences, or oil prices, or subsidised farm loans, the economic agent that has to weigh the opportunity cost is the Cabinet.

It also has to examine the social, political and strategic cost of any decision it takes. Every hungry Indian can be fed if we scrapped the defence budget.

The second immunity the Cabinet derives is from collective responsibility. Ministers can be at each other’s throats before they arrive at it. But once a considered line is taken all must fall in. Consensus will become elusive if individual positions are open to scrutiny post facto.

The courts need to be sensitive about the damage that will be done if P Chidambaram needs to explain why as finance minister he did not insist that spectrum be auctioned to start-up telecom companies in 2008.

Investigations into the role of former telecom ministers A Raja cannot be converted into fishing expeditions inside the Cabinet based on the opinion of an official delivered three years after the event.

The pace of the government’s decision-making, such as it is, will freeze up if ministers’ accountability is extended to beyond the prime minister.

As finance minister, Mr Chidambaram would every year have had to decide how to spend nearly 15% of India’s gross domestic product. If he has to personally account for every rupee spent wrong, his job — and that of his successor Pranab Mukherjee — would become a travesty.