Listing Of NHAI
Why in news?
Union ministry of Road transport is planning for initial public offering or IPO of National Highways Authority of India (NHAI).
What is an IPO?
- An initial public offering, or IPO, is the very first sale of stock issued by a company to the public.
- Until a company’s stock is offered for sale to the public, the public is unable to invest in it.
- Prior to an IPO the NHAI has shareholders made up primarily of early investors i.e. government itself or its authorised firms.
- By now any individual or institutional investor who wasn’t involved in the early days of the NHAI’s capital, can buy the shares.
What is the need for such proposal?
- Roadways ministry has long argued that there is “no shortage” of money but due to changing economic trends, it came up with the plan of IPO.
- Due to bad debts and NPAs the government is not so confident in investing on infrastructure projects.
- Banks are taking too long to approve the financial closure of highway projects, sometimes taking as much as an entire year.
What are the positive outcomes of this?
- Revenue escalation - This would open up an additional source of revenue, which the authority could use to finance projects under the engineering-procurement-construction (or EPC) financing structure.
- Boosts accountability - Listing NHAI inevitably leads to pressures towards increasing transparency in its operation, and being accountable to the public.
- Eliminates corruption-It has become increasingly clear that the NHAI could benefit from such transparency, and will lead to eliminating corruption.
- Promotes Reputation - Due to series of allegations the roads sector does not have a healthy reputation overall, listing the NHAI would take an important step in that direction.
- Performance upgrade - There is a huge gap between actual achievementsof road building from the target of 40Kms/day, this IPO plan will resolve the issue.
Social Business – Redesigning Our Economies
What is the issue?
- Grameen Bank in Bangladesh made capital available to the poor - especially women.
- Its micro-credit program enabled millions to lift themselves out of dire poverty.
- Its work also exposed the shortcomings of our traditional banking systems thereby flaggin the need for large scale systemic reforms.
What are the flaws in our economic system?
- The Crux - Our reactions to poverty, unemployment and environmental destruction have been largely muted thus far.
- These are either perceived as natural calamities completely out of human control or as unavoidable costs of economic growth.
- Profit Maximisation - The central problem with the current form of capitalism is that it prioritises pursuit of individual profit.
- As a result, only businesses designed around this goal are recognised and supported.
- Greater Aspirations - Goals like the elimination of poverty & unemployment are currently being neglected.
- These can be corrected if we replace the existing with a new system that more accurately reflects human nature, needs and desires.
- Social business models are a beginning in this regard.
What is social business?
- Freedom from profit pressures is primary to any social business.
- It is different from charity as it is designed to generate revenues and thereby become self-sustaining.
- It therefore does not need to constantly attract new streams of donor funding to stay afloat - which drains the time and energy of so many in the non-profit arena.
- Social business offers advantages that are available neither to profit-maximising companies nor to traditional charities.
- The simple economics and sustainablility of social business is already being illustrated by successful experiments worldover.
Generalist Vs Specialist
What is the issue?
- The debate on generalists and specialists is kick-started with rising demands for lateral entry into civil services.
- Also, the changing nature of government creates the need for a reassessment of the nature of civil servants involved in administration.
What is the need for specialisation?
- Changing nature - The Indian Administrative Service(IAS) was modelled on the colonial era Indian Civil Service as a generalist service.
- It was conceived primarily to deliver the core functions of the state such as tax collection and maintenance of law and order.
- But with the evolution of public administration and economic reforms changing the State's role, there is a higher demand for domain knowledge at policy level.
- Drawbacks - IAS, as generalists, tend to over-weigh their experience of the process and form over understanding of policy content.
- Generalists heading specialised areas seems to be an inefficient arrangement at times.
- There is also a misconception that only generalists who have a breadth of understanding and experience can provide best leadership.
- All these have raised questions about the role and relevance of the generalised IAS.
What could be done?
- The Constitution Review Commission 2002 suggested the “need to specialise some of the generalists and generalise some of the specialists”.
- However the task of managing specialisation needs the consideration of many factors:
- When - From generalised field postings in the initial decade of service, an IAS gradually moves to policy formulating positions.
- This mid-career level transition provides the ideal marker for beginning to specialise.
- How - Possibly, complying to the demands of behavioural attributes and aptitudes, ministries could be broadly categorised into three groups - welfare, regulatory and economic ministries.
- Secondly, specialisation process needs to be flexible according to the preference of IAS officers.
- Given this flexibility, it is also essential that the government make the process more predictable and transparent to avoid favouritism.
- Thirdly, once allocated to specialist positions, officers should be provided study and training for deepening their domain knowledge.
- In addition to these, the specialised lateral entrants should be required to “generalise” through field postings.
- The nature of policy-making at present demands that specialist expertise has to go with generalist experience.
- Thus, proper cadre management that provides for a right proportion of generalisation and specialisation can improve the efficiency and relevance of civil services.
Author : Shankar IAS Academy, Chennai.
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