Defining Rajya Sabha

By definition, Rajya Sabha is supposed to represent the interests of the states at the Centre. Every two years, one third of the MPs of Rajya Sabha are re-elected giving it a continuous nature unlike Lok Sabha which will be dissolved for any general election. Now, there are two major incongruities, which for all practical purposes are identical but look different if we are looking from the same time window –

1.     Take the Union Territory of Delhi. In the Lok Sabha elections, all 7 seats went to BJP. In the assembly elections, 67/70 seats went to AAP and the balance three to BJP. But, the two seats in Rajya Sabha under Delhi quota are held by Congress. Going by the electoral numbers, Congress doesn’t exist in Delhi. What justification have we got by giving complete control of Delhi’s interests at the Centre to a party which lost all the elections in the state? Ideologically, Congress is against both BJP and AAP. Meaning, it neither supports AAP nor BJP in Rajya Sabha. Since the people rejected Congress in elections, it can’t even claim to represent them. Acting against the interests of the centre and acting against the interests of the state, whom are they representing? This is the story at least for the first year of AAP rule.

2.     Take the recently concluded Rajya Sabha elections. Samajwadi Party got 7 seats, BSP 2, BJP and Congress 1 each. The numbers reflect perfectly the strength of each party in the assembly. But the issue here is that UP is coming to elections in months. This means that, in case Samajwadi Party loses the elections, it is going to impose itself on the people who defeat it as decision makers in Rajya Sabha. This is the story today. Another interesting thing to note is that the next elected government in UP cannot select it’s representatives in Rajya Sabha simply because the six year tenure of the Rajya Sabha outlives the full term of the next assembly

Both of them point to one single thing – Rajya Sabha, though it is supposed to support the interests of the states at the centre, it always doesn’t do that simply because it exists even after the electorate which elected it is completely dismantled. The greatest implication is this. Current NDA government has a majority MP share in Lok Sabha and a majority MLA share all over the country but still has a minority in Rajya Sabha simply because most of the MPs elected are elected before BJP came to power in those states. Even though the electorate has given a decisive mandate for BJP everywhere, this single flaw of having it’s tenure even after the lapse of electorate puts BJP in minority and hampers it’s decision making. After all, a bill to become a law, should be passed in both the Lok Sabha and Rajya Sabha and the overwhelming majority in the lower house turns meaningless just because of this. Note that this is not an issue for the current government, but will be an issue whenever there is a drastic increase in electoral gains or losses.

The other side of the issue is, who are those are getting electing to Rajya Sabha. Let’s forget eminence and capability for a while. Let’s take the names of a few – Ghulam Nabi Azad, Kapil Sibal and Arun Jaitley. All of them are defeated in Lok Sabha but were made members of Rajya Sabha. How can one justify a person defeated in direct vote takes a backdoor entry to decision making through an indirect vote?

Let’s take another class of people – Subramanian Swamy and Sitaram Yechury. Career politicians they are, can they be continuously allowed to bypass direct vote by getting entry into Rajya Sabha?

Another interesting case is that of Ram Jethmalani. The table below depicts his political fortunes

Start/Year	End	House	Constituency	State	Election Status
1977	1980	Lok Sabha	Bombay North West	Maharashtra
1980	1985	Lok Sabha	Bombay North West	Maharashtra
1985		Lok Sabha	Bombay North West	Maharashtra	Lost
1988	1994	Rajya Sabha		Karnataka
1994	2000	Rajya Sabha		Maharashtra
2000	2006	Rajya Sabha		Maharashtra
2004		Lok Sabha	Lucknow	Uttar Pradesh	Lost
2006	2010	Rajya Sabha		Nominated
2010	2016	Rajya Sabha		Rajasthan
2016		Rajya Sabha		Bihar

There are a few interesting things to note

a.     Lost in Lok Sabha in 1985 and enters Rajya Sabha from a different state in 1988

b.     Enters Rajya Sabha from multiple states

c.     Removed from BJP in 2012 but still is an MP till 2016

d.     Career politician till 2006 but is nominated then. Renominanted as a career politician in 2010.

Now, question time.

a.     Can a person be nominated from multiple states? Contesting in direct elections is fine, but nominating from states, sometimes he never went to?

b.     Defeated in Lok Sabha but given seat in Rajya Sabha – how correct is that?

c.     Can a career politician become a nominated member?

d.     Can a nominated member become a career politician?

All of this point to a serious clean up of Rajya Sabha as a decision making body –

1.     The term of a state quota of Rajya Sabha should lapse along with the state assembly which it represents.

2.     A person representing a state for Rajya Sabha should either have a permanent residence(at least for the last 10 years) or should have a history as an elected member in some capacity in the state.

3.     There should be a moratorium of 10 years between the defeat in Lok Sabha and election to Rajya Sabha

4.     Either the person is a nominated MP or an elected MP but not both

5.     Maximum number of terms as an MP Rajya Sabha, the number dependent on the number of terms in Lok Sabha. After all, in a direct democracy, I don’t expect one to rule me continuously without even contesting an election.

6.     Salary as well as pension for MPs should be calculated on per day basis, based on their attendance and not for the days they didn’t attend. No walkouts or applied leaves above the stipulated maximum should go as Loss of Pay

Well, there are much more to talk about like educational qualifications, disruptions, maximum age and all, but the biggest thing is the composition and attendance. Once they are sorted, we will be on an interesting ground then.

Profit and Loss – Does this concept exist with the Government of India?

On 18 Jun 2016, Punjab National Bank declared a quarterly loss of 5367 crores. One of the most striking comments over this was, What sort of a business model is this, where there is a huge loss and no one is either answerable or accountable? The real question, then, is this. What are we doing to correct this mess, where losses like this are piling up and common citizens are forced to foot the bill for mistakes of some?

Looking at the trends, what we are seeing is that any public sector entity which has got a competition in private sector and is not a department of donkey load is taking a severe beating in the market.

PSU bank share in market stays because they are supposed to hold government money and it is not viable for any private sector firm to deal with all these micro accounts(note India’s average income is 88 rupees per day). Rather than targeting the 125 crore population, targeting the top 1% will give them a better profit model. Even after all this, PSU banks hit a loss as like PNB because of all those non-performing loans. A big industrialist defaults and it’s the bank which takes the load. A private sector entity is supposed to be less affected because of lack of pressure on the management to act. Farm loan waivers, where everyone gets a piece of the loss is applicable only for PSU banks.

Same goes for LIC but General Insurace(Oriental Insurance, National Insurance etc) are taking a beating because it is mostly industrial money – less players and more money. And in this sort of working environment, the entity with a better business model rules. This is the same story with Air India, BSNL, MTNL which are more to do with privileged customers than common populace.

Exceptions exist, like NTPC, BPCL or SAIL which are too big to take down. They have got an added advantage, viz, the raw material is available to them at a fraction of what a private player gets for.

Next are behemoths like Electricity Boards or Indian Railways which act as agents for government populism. To attract the vote banks, they are forced to operate in losses. For example, Indian Railways operates on a loss of above 30000 crores on passenger segment because increasing rates is politically uncomfortable. In the same way, TANGEDCO(Tamil Nadu State Electricity Department) hit a loss of 8500 crores(2016) simply because the government wants to give subsidized power to please it’s electorate.

Next are departments like Postal Department which are used for donkey work. For example, LIC posts a bulk parcel of 50000 letters and pays a pittance as against 5 rupees per item – a total of 1.25 lakhs. Here, we are seeing that of the profit shown by LIC, 1.25 lakh is actually a loss against Postal Department – net sum zero.

On a similar line was these two episodes –

1.     LIC bought 11000 crore worth of shares from ONGC in open market in 2012. What is the business model of operation where a government entity buys the shares of another government entity above the market price? The declared floor price was Rs 290 per share while LIC paid Rs 293.5 per share – an additional 78 crores considering the 5% discount similar to the given as a part of Coal India divestment. But in reality, LIC should have got it at a much cheaper rate. What did the government achieve by transferring money from one entity to other, that too, at a loss to one, except to manage the accounts?

2.     10% of Coal India Limited was divested in 2015. The government got 22,500 crores in return. Does this mean the government doesn’t have money and is trying to get something additional to run the show/reduce the fiscal deficit? If this is the real scenario, where is the humongous amount of tax money and other sources of income going to?

The concept here is simple. If any department involves in business, it should be maintaining a P&L account. Profit should be commended and loss should be frowned upon.

1.     Identify loss making businesses and find ways to trim it down.

2.     Split a department into sub-departments or separate entities, removing profit making entities from the behemoth. For the behemoth, the balance needs to be managed either to it’s closure or to it’s turnaround.

3.     Identify overstaffed departments and prune them

4.     Regular upgrade of tariffs. For example, the fine to pull chain in India is 500 rupees and it stayed the same for more than two decades. When salaries increased and when fares increased, is there any reason to keep the fines constant?

5.     Use of technology and better business model. What is the reason why is ICICI Lombard eating into the share of Oriental Insurance or National Insurance and not the way otherwise?

6.     Let there be a performance pay and accountability for the decision – either you will get a pay cut or you will get a pay hike or you will be booted out. After all, there is no reason for me to give pay hike to an entity like BSNL or Air India or NIC which are slowly losing out their market share to someone else.

A company collapsing is not a big deal. But, a company which funds a considerable part of a country like Railways or the main National Bank collapses, it will bring down the complete country along with it. It, thus, becomes mandatory to control the rot before it eats the complete system.