Rural Development: New Perceptions Author(s): N. A. Mujumdar Source: Economic and Political Weekly, Vol. 37, No. 39 (Sep.

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Iommentary

Rural

New Development: Perceptions

Themountainof foodgrain stocks is just one of the consequences of the misguidedmacroeconomicpolicies of the 1990. Caught up in the euphoriaof liberalisation, the new economicpolicy largely ignored the rural economy and its development. Fortunately,since 2000-01, there has been a new-foundinterest in resurrectingthe agenda of rural developmentadoptinga comprehensiveand pragmatic approach.
N A MUJUMDAR

misguidedmacroeconomic management. Secondly,I highlightthe main elements here was a time when ruraldeve- of thenewdevelopment economicswhich in lopmentwas dismissedas a fancy focuson equity-linked growth. Thirdly, of the egalitarian romantics. This the light of the new insightsgainedinto is no longerso. New perceptions I drawa broad of de- development phenomenon, in the sketchof multi-functional economicshaveresulted velopment conceptof rural evolution of whatonemightcallthemulti- developmentand indicatehow it is feafunctional conceptof ruraldevelopment sible to use the huge foodgrainstocksto - a conceptwhich shouldform the core create social and economic overhead of any meaningful development strategy capital. No sensible economic policy, andnot merelyan appendage of an inde- whetherdirigiste or market-led,would workedout strategy. Ruralde- have allowed such alarmingly large pendently in Indiaseems to hold the key foodgrains stocks to accumulate in a velopment to overalldevelopment of the economy, countrywhich is the abodeof the largest food security and improvementin the number of under-fed andundernourished of life. In first in the I would the world. The outlined quality place people proposal seek to demonstrate thatthe 1990s was a here to utilise a sizeable proportion of lost decadefor agriculture and ruralde- foodstocks tocreate rural and employment Intheeuphoria ofliberalisation generateruralincomesmeets the test of velopment. of the Indianeconomy, 'immediacy' andglobalisation in termsof attaining theendbecamethe Cinderellaof In- objectivesof development, agriculture namely,pro- New Architecture of the Rural Credit dian policy-makers.Blessed were they viding food security, reducingpoverty, Systemby N A Majumdar, Universityof who debunked the whole philosophyof and improvingthe qualityof life. Mumbai, August 2001 and Financial economic thosewho Sector Reforms and India Economic planned development: exultedin the allegedmiraculous Vols I powers by N A Majumdar, Development of.the market-led and Academic economybelievedthat LostDecade: Delhi, II, Foundation, 1990s they have beganto live in heaven.Eco2002). nomic reforms created an adversarial Alas! It seems thatin the 1990s Indian We seem to be distancingourselves environment for agricultural hadnotcaughtup withthe fromthe objectiveof povertyalleviation, growthand policy-makers ruraldevelopment.No wonder agricul- new developmenteconomics.In the eu- perhapson the mistakenbelief that in a tural growth decelerated sharply. The phoriaof liberalisation and globalisation market-led economy,the poor mustfend decadehas inherited the debrisof of the Indianeconomy,to talkof agricul- forthemselves. Ithasbecomefashionable present the ruraleconomy shattered becameinfra to arguethatgovernment in intervention by miscon- turalor ruraldevelopment ceived economicreforms.The mountain dig. Financialsectorreformsintroduced economicaffairsshouldbe minimal.It is of theso-called of some in Indiain the 1990swerelargelymimetic. against the background that all surplus foodgrains 60 milliontonnesstandsas a monument We have borrowed 'Basle Norms' for concessionallendingratesto smallfarmof the misguided food policy and also of implementing bankingsectorreforms,or ers, or small borrowersgenerally,were Economicand PoliticalWeekly September28, 2002 3983

toIMF/World Bank responded prescritions as in the case of reformsrelatingto the of the capitalmarket. These development reformswere 'rootless'in the sense that to theIndia-specific theywerenotattuned socio-economicmilieu. The whole idea appears to have been to replicate an American style financialsystemin India. Thepresent thedebris decadehasinherited of the Indianruraleconomy which was shattered by the mindlesspursuitof mimetic policies based on an amateurish understanding of the concept of The 1990s liberalisation andglobalisation. was a lost decadeforagriculture andrural of development generally.The shrinkage the flow of resourcesto the ruralsector, a misconceived interestratepolicy which a moridiscriminated againstagriculture, bund rural credit delivery system, the emergence of a new banking culture, nurtured by reforms,which is far from to andruraldevelopfriendly agriculture ment, and a serious setback to rural employmentexpansion- all these form partof the debris.No wonderthat agriculturalgrowthdeceleratedsharply:the of agricultural GDP annual growth average in value addedterms declined from 3.5 per cent in the 1980s to 2.8 per cent in the 1990s. The last two years 1999-2000 and 2000-2001 were particularly dismal withgrowthratesof 1.3 percent and-0.2 SinceI haveanalysed respectively. percent, in-depththe impactof economicreforms on the ruralsectorelsewhere,I wouldbe content here with merely sketchingthe of thesedevelopments broad contours (The

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abolished. In the resultant anarchy of rates interest structure, todaya smallfarmer pays an interestrateof 12 per cent on his frombanks- a rate which is borrowings thantheeffectiveinterest decidedly higher rateof 4 or5 percentwhichmulti-national elites, (MNCs),othercorporate corporates and exporters pay. The flow of creditto sectors,whichincludeagriculture priority was below the and small-scaleindustries targetedlevel of 40 per cent of net bank creditfor most of the yearsin the 1990s. whichwas So alsowascredit to agriculture level of 18 per cent below the prescribed of net bankcredit.The ReserveBank of India(RBI) winked at these defaultsby banks. Although the priority sector credithas been restoredto the targeted level in morerecentyears,creditto agrito be below the targeted culture continues level. Public investment in agriculture shrank. Thus the size of the flow of financial both in termsof resources to agriculture, long-term capital and working capital declined sizeably, ironically at a phase whenthefinancial systemwashighlyliquid. The Indianeconomy was so affluent in as to affordto foreignexchangeresources to an alarmingly promotegold imports high level of 87 billion in 1998-99. In a economylikethatof India, capital-starved macroeconomicpolicies should be so of forexresultsin designedthatutilisation capacityand export productive improved do of theeconomy.Goldimports potential neither. The only result is that in the and.otherbigger towns tometropolitan are there morejewellery shops day, perhaps than grocery shops. When it comes to largerinvestmentin irrigationthe same of resources pleaded paucity policy-makers as an excuse. The moribund rural creditdeliverysysfrom tem was partof the debrisinherited the 1990s. Most of the ruralbranchesof publicsectorbanks(PSBs),regionalrural banks (RRBs), and cooperative credit weremakinglosses. Theyhad institutions lost the elan of the 1970s or 1980s. Yet anotherdisturbing featureof the system was the new bankingculturenurtured by whichlaid emphasison a 'quick reforms, thanon promoting kill', rather growthby medium and long-termcreditextending supportto the productivesectors of the Togiveonesuchexample, banks economy. had enough resourcesto extend bridge loansto enterprises like theM S Shoesbut they had no fundsto supportthe produc-

Theinvolvetionof sugarinMaharashtra. mentof some PSBs in the securitiesscan of some andthe morerecentinvolvement secooperativebanksin the government curitiesscan,reflectthe impactof thenew to on theirbasicapproach culture banking bankingbusiness. 1999Finally,lookingatthepreliminary 2000 National Sample Survey (NSS) estimateson employmentmany economists had warnedthatruralemployment has suffereda serioussetbackduringthe decadeof economicreforms.These fears have now been confirmed.I can do no betterthanquote from a scholarlypaper publishedrecentlyby Chadhaand Sahu: "Withthe release of the final estimates, and adoption of a few methodological refinements, it is now clear that the initialassessmentwas not wrong...inour assessment,the overall situationduring the post-comparedwith the pre-reform period does pose signs of concern in Rural Setbacks ('Post-Reform Employment' by G K Chadhaand P P Sahu,
Economic and Political Weekly, May 28-

aspects of the economy includingsocial and environmentalissues and poverty reduction. Poverty reduction has been of develbackto the centre-stage brought lesthe most One of important opment. sons learntfromdevelopment experience is that growth does not trickle down; developmentmust addresshumanneeds directly. The second lesson is that sustained developmentshould be rooted in the processesthat are socially inclusive. this pointJosephStiglitzhas Reinforcing that povertyreductionand a emphasised of incomehave distribution moreequitable not only as also assumedan importance an end in themselvesbut also as a means of achieving strongereconomic performance. In fact the experience of Asian Tiger clearly demonstratesthat 'shared growth' is sustainable growth. India's objectiveshouldthereforebe to promote andnotenclavegrowth.Even broad-based those citadels of the marketphilosophy
- the IMF and the World Bank - have

31, 2002). Thereis also some euphoriaaboutthe growth of rural non-farmemployment which needs to be tempered.The nature has to be scrutinised of suchemployment to find out whetherit is growth-ledor of Rural distress-induced ('Determinants The InEmployment: Non-Agricultural and others, dian Case', G Parthasarathy
Indian Journal of Agricultural Econom-

ics, April-June 1998).Especiallythe selfshelters sizeable dissector employed guised unemployment,as the seminal articleby ArthurLewis, 'EconomicDevelopment with Unlimited Supply of Labour' speltoutlong ago. Insomecases, self-employmentis an apology for emto be ployment.It is thereforedangerous of self-employled by statistical numbers ment alone.

II

of Landscape Changing Development

Before we get down to the India-specific issues, let us takea brieflook at the changinglandscapeof developmenteconomics itself. Over the last 50 years, the to developmenteconomicshas approach undergonea sea change, shiftingfrom a narrow focus on macroeconomic and liberalisation, to a comstabilisation encompassingall prehensiveframework

incorporated this approach into their operations.To quote the IMF managing director, "Specifically, we have firmly establishedpoverty as a permanentand on the agendaof pressinglyurgentmatter no financialcommunity, the international longeranissueto be consignedto anafterorpolicypapers. in communiques thought We have broughtthese concerns to the heartof ouroperations. And, equally,we have recognisedthat poverty and social justice are key ingredientsof the framework for national policy formulation." Not to be left behind, the World Bank presidenthas made a more fundamental statement thatthe Bank's "Coremandate develThe current is to reducepoverty". that economic thesis adumbrates opment and lack dependence,disempowerment, of access to credit are the majorcauses have of poverty.The poormusttherefore to becomeempowtheirownorganisation ered throughself-help groups(SHGs) or micro credit institutions.State intervention to improveliteracy,skills andhealth is welcome, but by itself it cannot raise and sustain income-earningcapabilities of the poor. Supportof credit and other services is essential. The main idea in focusing on these new perceptions of development is to sound a note of warningto the Indianevangelists of the markettheology thatwe cannotaffordto ignore the primordialityof the poverty theme; all policies including financial, monetary, and food policies must be

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of thesemisguided nominalat say 1 per cent and the repayanchoredin the objective of promoting As a cumulative impact faster growth specifically designed to policies, offtake of foodgrainsdeclined mentcould startaftera periodof say five and stocks of foodgrainshave soaredto years.The receivinginstitution could add reducepoverty. such heights. While foodgrains stocks a small marginof say one-halfof 1 per accumulatewith FCI, immeserisation of cent and on-lendto the final beneficiary. Ill rural masses has to semidriven Themodalities of howtheFCIcouldextend many Multi-Functional Concept Whilestocksaccumulate, men grainloans to a federalinstitutions, starvation. say, Viewed againstthis background of the decay. The FCI is not exactly knownfor a centralcooperativebankat the district new perceptions of what developmentis its efficiency. Inefficientoperation,bad level, andthepriceat whichgrainsshould all about- perceptionswhich take into anddefectivestorage,deterioration of repayment to in the be valued,theprocedures thelarger account concerns of life beyond quality of foodgrains,wastage - all of be followedby the final borrower, thatis the meregrowthobjective,ruraldevelop- thesefactorshavemadethecarrying - allthese costs NGOsorSHGsorthepanchayat In fact in of foodgrainsby FCI heavy. Any sound needto be workedout for different mentbecomesmulti-functional. states. economieslike thatof Indiaruraldevel- macroeconomic a would never Such a loan confers grain facility management costs opmentholdsthe key to overalldevelop- have allowed such large stocks to accu- twofoldbenefit.First,FCI'scarrying of poverty,improvement mulatein the first place. ment,reduction which are rising because of the factors in thenutrition standards andhealthof the The coexistence of the mountainof mentionedearlier, would be greatly rebulk of the population,reductionin the foodgrainsand the mass of unemployed duced. Second, the resources of credit incidence of illiteracy, in the rurallabouris a uniquesituationspecific institutions in involved as intermediaries improvement would be substanqualityof life - all thesecouldbe attained to the currentIndianscenario.It seems the whole transaction and rural develop- feasible to convertthis situationinto an tiallyenhanced. Theirown incomeswould throughagricultural ment. rural of the largerturnover. to also rise because higher growth, opportunity trigger We have waitedfor 50 years,since the create additionalruralemploymentand The realtest of the success of the grain inceptionof planningin 1951 to reduce income, and build additionalsocial and loan facility lies in linking utilisationof Thebasicidea grain loans to productiveactivities.The poverty and have failed miserably.We economicoverhead capital. cannotaffordto waitfor another 50 years is to establisha grainloan facility which mostconspicuous comes which programme to tacklethepovertyissue. If Chinacould is accessibleto all those involvedin rural to mind in this context is the micro wareduceits povertyto nominallevels in a development - financialinstitutions, like tershed developmentprogrammewhich In not India? of two on a massive scale RRBSandall coopera- can be undertaken commercial decades, banks, why period other words, any measures to reduce tive creditinstitutions, of the microcreditinsti-, throughout the lengthand breadth to the test of tutions, village panchayats,NGOs and country.The bulk of the costs of such povertyshouldbe subjected ear- programmes would be accountedfor by 'immediacy'.One sees a ray of hope in SHGs. The FCI shouldimmediately of foodgrains themountain stocksof some mark of its foodgrain wages, whichcan be paidin kindthrough a sizeableproportion with the stocks,say 10 milliontonnes,for utilising grains obtained from the FCI. The net 60 million tonnes accumulated Food Corporation of India (FCI) - this them as workingcapital,as it were, and gainsto theeconomyin termsof insurance mountainstands as a monumentof our begin to extend the grain loans to the againstdrought,availabilityof drinking the year, higher rural misguided food policy and misguided eligible institutions,on a deferredpay- water throughout macroeconomicmanagement.India is ments basis. The interestrate should be employmentand incomes- all these for home to the largestnumberof underfed and undernourished people in the world. How does thenone reconcilethe coexistence of such a large quantityof the sowithanalarmcalled'surplus' foodgrains Thesimple of underfed for the positionof seeks applications people? ingnumber answeris thatthisis not a genuinesurplus but an effective demandsurplus.A sizedoes not of thepopulation ableproportion simply have the wherewithal to buy willcoverall aspects of the journal's circulation Responsibilities Andthis,in turn,is due to the foodgrains. with on and of circulation focus execution special follow-up planning, factthattheonly assetthatfamiliesin this will efforts. Candidates with be promotion good graduates categoryhave is labourand as we have communication skills and basic computerliteracy.Interestin seen earlier,the economy has failed to generatethe adequatequantumof rural affairs and some familiarity withthe social sciences will current Coupledwiththisfact is the employment. to learn be anadvantage. andassumeindependent Ability quickly food policy. In an overzealous misguided will for the circulation be moreimportant responsibility department attemptto cut down food subsidies,the in work. with relevant than similar the criteria of Indiatightened experience Applications government to access the information to the Editor. foreligibility governing public may be sent immediately at the same as distribution of foodgrains, the issue priceswere raisedsuccessively.

EPW

Circulation Manager

Economicand PoliticalWeekly September28, 2002

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outweighany notionallosses which FCI may sufferby extendinggrainloans on a is basis.Socialforestry deferred payments which fits into this anotherprogramme framework. There may be other whicharelocationspecificto programmes the regionsconcerned.Each state could whichcouldbe identifysuchprogrammes largelyfinancedby grain loans. Ifthereach of suchloansis tobe widened, of financial throughthe instrumentality therural theneedto streamline institutions, creditdeliverysystem becomes obvious. Theexistingneworkneedsto be strengthened to make it vibrant.Similarly, the network of NGOs,SHGsandmicrocredit needs to be widenedgreatly. institutions The snail'space at whichNABARDis at SHGswouldnot do. A present expanding is massiveexpansionof these institutions an ineluctablenecessity. The existence of a mountain of foodgrains thus provides an excellent rural topromote development, opportunity of financial throughthe instrumentality and SHGs institutions, NGO, panchayat raj institutions. or reasonwhy rural Thereis yet another agricultural growth becomes central to overallgrowth.If the objectiveis to put theIndian economyintotheorbitof higher of 8 per cent, as the growth trajectory currentdiscussions on the Tenth Plan indicate,this can be achievedonly on the which can basis of a buoyantagriculture 4 per cent. Publicinvestgrow at around ment in irrigation,extension services, adequateflow of credit,both short-term - all these would have to and long-term of policy. becometheessentialingredients Fortunately,wisdom seems to have in the dawned atlaston ourpolicy-makers decadeandone hopesthatagriculcurrent The turewill Ceaseto be the Cinderella. union budgetfor 2000-01 embodies the following aphoristicstatementof the financeminister."It is my firm belief that sustained and broad-based growth of agricultureis essential for alleviating incomesandemploypoverty,generating food securityand sustainment,assuring domestic market forindustry inga buoyant andservices" Speech1999-2000). (Budget orrural of agricultural Resurrection growth in generalis the best thing development that could have happenedto the Indian economy.In a similarvein, the new deeconomicsalso seems to have velopment to the architectsof the Tenth percolated to emphasise thatthe Plan:"Itis important

equity-relatedobjectives of the Plan which are extremely important are intimately linked to the growth objective and attainment of one may not be possible without the attainment of the other. For example, high rates of growth are essential if we want to provide a sufficient expansion of sustainable high quality employment opportunities to our expanding labour force and ensure a sufficient increase in incomes of the poor and the disadvantaged" (Draft Approach Paper to the Tenth Five-Year Plan, 2002-2007: 5). However, the planner should not be content with merely making appropriate noises. One looks in vain for concrete programmes in the Plan document specifically designed to translate this approach into concrete reality. Finally, there is an India specific issue, which reflects the broaderconcerns of life and which has not received the attention it deserves. This is what one may call building the development conscience. ContemporaryIndiansociety is plagued by moral pollution and it is time that social scientists address this issue. This poses a
- ,-

moredangerous todevelopment threat than say environmentalpollution which has attracteda good deal of attention,both Therampant andinternationally. natinally corruption,including frequentscams in the financial sector, erosion of medical in the academic ethics,irregularities field, for example,the erratic teachinghabitsof some primaryschool teacherswho may stayintownsand'visit'their villageschool only occasionally, marks tamperingat of education, andpromotions higherlevels basedon considerations otherthanmerit. Similar irregularities exist in the health care spherealso - primary healthcentres offices in thevillageand mayhaveregular paramedicsregularly drawing by their salariesbut these centresare rarelyopen for actualtreatment. Again take the case of fiscal termites: aboutone-third of electricity consumption is not 'billed' but treatedas 'transmission and distribution losses'. How can any developmentplan, howsoeverwell designed,succeedin such an environment? There is thus a need to build developmentconscienceamongall sectionsof the

FOR WORKSHOP ONENVIRONMENTAL ECONOMICS PH.D BYWORLD BANK SCHOLARS FUNDED

The Institute for Social and Economic Change (ISEC), Bangalore will be organising a Five-day Workshop on Environmental Economics for Ph.D Scholars in Bangalore during December 9-13, 2002. Interested candidates may send their applications to the Coordinator, Ph.D Scholars' Workshop, Ecological Economics Unit, ISEC, Nagarabhavi P.O., - 560 072. Telephone : 3215468, Bangalore Fax : 080-3217008; e-mail: gssastry@isec.ac.in. through their Ph.D guides giving information covering (a) Thesis Title (b) Registration Date and University, (c) Names of the Guide and Co-guide, (d) Current Status of the Thesis, and (e) a paper briefly giving thesis literature review, methodology and objectives, and preliminary results, if any. While data-base, preference will be given to candidates who have made substantial progress in their thesis, those who have already participated in a similar workshop held elsewhere are advised not to apply. ISEC will reimburse (a) first class/ll AC train fare or bus fare for both ways by the shortest route subject to production of tickets, (b) boarding and lodging at the Institute campus, and (c) supply of books and course materials. The last date for application is October 10, 2002 and the selected candidates will be intimated by October 30, 2002.

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Fromtimes immemorial, Inpopulation. dian philosophyhas maintained that the all-rounddevelopmentof the society is best achievedthroughthe betterment of the individual and this conceptof betterment of individual economic wellincludes, being but extendsbeyondit. Social conscience mustbe inculcatedthrougheducational andprofessional Wemust training. be sensitised to the abject poverty, the andilliteracy disease,ignorance squalour,

that surround us and we must begin to think in terms of what is our dharma or duty towards alleviating some of the infirmities that afflict our compatriorts.The building up of development conscience would go a long way towards improving economic growth and also evolving a compassionate society. 3
[This is the edited version of the Special Lecture given on June 22, 2002, at Dharwad, on the occasion of D P Karmarkar birth centenary.]

Rural and Village Telephones

A SensibleSolution

Public

Government and public policy must be fair and equitableto all enterprisesirrespectiveof ownershipand competitionshould be on equal terms.
T H CHOWDARY hereis lot of misinformation about the provisionof village publictele (VPTs)byprivate phones telephone companies(P-Telcos).The DoT and the Bharat Sanchar Nigam(BSNL)havebeen accusingthe P-Telcosof renegingon the licence condition which stipulates the provisionof ruraltelephonesand especiallyVPTs,whether theyberemunerative ornot.Letus consider thefollowingfacts. InAndhra theDoT/BSNLhave Pradesh, 3,000 telephoneexchanges.The average distanceof the as yet un-telephoned village to the nearestBSNL's exchange is about20 km. The P-Telco,i e, TataTele Services (TCS) has only 10 telephone exchangesin the state. The averagedistanceof the un-telephoned villagesto one of these 10 is about250 km. The capital cost of providing a VPTforTataTele will be morethan10 timesthatfor BSNL (the situationin otherstates is exactly alike). No P-Telcois making on theother profits; losses. Also they hand,theyareall making have paid an entryfees and are shelling outa shareof theirrevenueto the government.BSNL has neitherof these obligations. Requiring the P-Telcos to provide VPTs becausethey signed agreements is like Shylockin The Merchantof Venice insisting on his pound of flesh. This is immoral. BSNL is now representingthat it is a loss of aboutRs 1,000 crore incurring and upkeep per year on the maintenance of about500,000villagepublictelephones it has providedin the last 100 years.It is also submitting thaton all the ruralteleto theVPTs), phones(thesearein addition which are 25 per cent of its main lines, it is losing money because of the low rentals (Rs 70 per month as compared to Rs 250 for urbantelephones).It says that it is losing Rs 850 per month on every telephonein ruralIndia.Now it is a business concern. It cannot afford to incurtheselosses. So it is demanding that the government shouldmake good these losses. It can be seen how unreasonable it was to insist thatthe P-Telcosprovidevillage as publictelephonesandruraltelephones per their licence conditions.BSNL is a legal successorto the DoT as far as its assets and servicesand otherobligations like subsidisedrural services and lossareconcerned. incurring publictelephones For it to plead thatit shouldbe compensatedis exactlylike the P-Telcospleading withthegovernment thattheybeexempted fromtheprovision of loss-incurring VPTs and ruraltelephones.

The DoT earlierandBSNL till recently hada monopolyof long distanceservices. BSNL is the dominant inter-state national It is by pricinglong long distancecarrier. distanceandinternational services'several timeshigherthantheactualcost thatDoT/ BSNLbuiltupassetsof Rs 100,000crore. And it is fromthese surplusesthatit was to payforthelosses on thevillage required telephonesandpublictelephones.Surely, DoT/BSNLhasappropriated moremoney for buildingup its assets thanwhatit has the spenton buildingup and maintaining un-remunerative ruraltelephonesandvilIf it is claimingthat lagepublictelephones. it shouldhereafter be compensated for the deficits on rural telephony and public to telephones,it should also be required workouthow muchof its assetswerebuilt out of the surpluseson long distanceand international revenues.It is notunfairthat if it is to retain those assets, it should continueto bearthe deficitson ruraltelephonesandvillage publictelephonesthat it has alreadyprovided. A veryfairsolutionis thatall telephone companies includingBSNL mustcontribute 5 per cent (or more if warranted) of their gross revenues into the Universal Access andRuralTelephonyFund.There must be very strict cost accountingand economicappraisal of whatarethedeficits .onvarioustypes of servicesandareto be obligatorilyprovidedby every Telco -including BSNL. Whosoeveris providing theseobligatorily mandated deficit-ridden servicesmustbe compensated. Thereis no point in saying that P-Telcos must fulfil their licence conditions but that BSNL must be compensatedfor the ruraltelephones and VPTs that it providedin the pastwhenit enjoyeda monopolyandwas a government andwhenit had department no obligationto pay any incometax, etc. Government andpublicpolicymustbe fair andequitable to allenterprises irrespective of ownershipand competitionshould be on equal terms. [33

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