The goings-on at ITDC, the state hotel company that runs the Ashoka and other properties, along with most duty-free shops at the country's international airports, shows more than anything else why the government should not be in the business of business. | |
| Given the facts put out by the new ITDC chief""that the manufacturer of a whisky brand was selling to its Indian subsidiary at two-thirds of the price offered to ITDC""it is possible that questions needed to be raised about the effectiveness of ITDC's negotiations with suppliers. |
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| But it is difficult to imagine any other self-respecting country where top-ranking officials, including en enterprise chief as well as the governmental head of tourism, get moved out on a matter dealing with the purchase of alcohol for a handful of duty-free shops. |
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| Or a situation in which the minister personally takes charge of the matter, and even orders that all contracts/purchases over Rs 1 crore are put up to her for approval before they are executed, raising other troubling questions: Where is the company's board of directors in all this? |
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| Will the minister now have the power to over-rule everyone else, if she so wishes? Doesn't that place executive power in her hands, when the minister's role should be to focus on policy? |
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| Where is ITDC's vigilance and correction machinery that should swing into action when something goes wrong? So much, then, for professionalism and the autonomy that public sector enterprises are supposed to enjoy. |
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| Needless to say, the matter will consume Parliament time in the days ahead""which is why, some reports suggest, the Prime Minister's Office is now monitoring the case. |
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| After transferring a host of officials from Delhi to run hotels in other parts of the country that are said to have no staff (more evidence here of how well the government runs businesses), ITDC's new chief has said the ITDC purchase manual will now be amended to allow it to buy liquor from agents as well, as against the current practice where it can be bought only from the manufacturer. |
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| This raises a fresh set of suspicions, since it is well known that reputed companies use agents to make pay-offs that they do not want to handle directly (remember Bofors), and also seems to confirm the impression that a particular episode is being used to put in place a new system that is even more open to abuse. |
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| Among other things, in a business where spurious products abound, it is principal-to-principal transactions that ensure at least that the product is genuine. |
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| The remedies are not what Ms Chowdhury and her chosen lieutenant have worked out to their own satisfaction. The remedy is for the government to get out of the business of buying and selling liquor. |
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| The government has already brought in private competition by allowing one company to bid for duty free shops and most of the country's international airports now have two sets of shops (Delhi's private shop is expected to open soon). |
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| It would be a good idea to get others to bid for the existing ITDC shops as well. Ms Chowdhury can then focus on how to develop tourism, instead of approving and disapproving liquor purchase contracts on the basis of her considerable commercial experience. |
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