Commentary/Dilip Thakore

As the economy becomes more complex, the government will have to take a firm stand against vested interests which dislocate industry

When some three decades ago when the perspicacious Nobel-prize winning economist Gunnar Myrdal described post-independence India as a "soft state", he hit the proverbial nail dead centre. So enfeebled is the authority of the central and state governments in latter-day India that almost any group of determined people -- no matter how small their number -- can hold the nation to ransom.

This depressing insight into the character of the Indian state was confirmed when I spent almost an entire weekend (April 12--13) struggling with the consequences of a flash nation-wide strike called by the Delhi-based Air Traffic Controllers Union, which grounded all national and international civil flights in Indian airspace for more than 36 hours.

Obliged to see some house guests off to Bombay, I had to spend the whole weekend making more than half-a-dozen trips to the airport to enquire about the status of flights because, inevitably, all the telephone lines to the airport enquiry counters emanated a constantly busy tone. Judging by the volume of car traffic on Bangalore's shabby Airport Road every time I was on it, I hate to think how much petroleum fuel was wasted all over the country on such unnecessary journeys.

But the waste of time and money involved in such relatively short journeys pales into insignificance when one considers the sheer inconvenience which the 36-hour ATC strike visited upon some hundreds of thousands of domestic and international air travellers that weekend. I have no doubt that many of them were prospective foreign investors assessing India as an investment destination.

Admittedly, communication breakdowns and flash strikes such as the nation experienced last weekend are not unknown in the more disciplined industrial countries. But it is only when one examines the absurd rationale of the ATC strike that one despairs for the nation.

Quizzed by the media, ATC union representatives admitted that the rationale of the flash strike was the suspension pending enquiry -- suspension, not dismissal mind you -- of an ATC supervisor at Delhi airport whose negligence and/or misjudgment had almost caused a mid-air collision of a United Airlines aircraft with one of Air India over the capital. According to an ATC union spokesman, this action of the public sector Airports Authority of India, was tantamount to victimisation.

Quite obviously the ATCs had already forgotten that less than six months ago a Saudi Arabian airliner and a Kazakhstan cargo plane had collided in mid-air over the very same airspace, killing over 350 people. The possibility that another 400-odd air travellers would have met the same fate didn't seem as important as the alleged victimisation of one solitary individual whose performance was merely placed under scrutiny. What can anyone of minimal intelligence and objectivity say of such a mindset except that it is quite obviously sick? If I were an ATC, I would have welcomed such an enquiry to save my own and my fellow professionals's reputations.

The fact that the ATCs chose instead to call a flash strike is indicative of their confidence that they need not fear the consequences of their irresponsible and absurd reaction to a suspension and enquiry, even though it was patently in public interest. They are well aware of the soft state characteristics of the Union government and the government-owned AAI. Indeed, so confident were the ATCs of government impotence that when the AAI management resolved to train Indian Air Force personnel for civilian air traffic control duties to avoid a repetition of such disruption, the ATC union struck again within a few hours of calling off their strike after the suspension of the ATC supervisor was revoked.

That governments need not be as helpless as made out by Union government spokesman was demonstrated in the mid-eighties by the Reagan administration in the US which peremptorily fired 7,000 ATCs who called a similar national strike. US Air Force controllers were called in to manage civilian air traffic and to train a whole new complement of ATCs.

But the ATCs were not the only ones to visit huge damage upon the economy and inconvenience millions of citizens recently. A week earlier the national truck owners associations took over two million trucks off the road for over a week, causing damage estimated at Rs 60 billion to the economy. Their grievance? The imposition of service tax (payable by all service industries) and higher insurance premia.

In this case there was perhaps greater justification for strike action because government policies of the socialist past have encouraged the growth of thousands of small trucking firms incapable of managing complex accounts and paperwork. Moreover, the nationalised insurance companies impose premia in concert and often arbitrarily. But in this instance too the government had to cave in before the strike was called off.

The lessons which need to be learned from these two contemporary case histories is that as the economy becomes more complex and technology-intensive, the central and state governments will have to shed soft state attitudes and take a firm stand against vested interest groups which dislocate industry and trade. If sequence does not invite consequence -- especially in the public utilities sector -- guilds and vested interest groups will periodically hold the public to ransom and play havoc with the process of economic development.

Dilip Thakore was the founder editor of Business World and former editor of Debonair.

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