The Hindu : Flexible contracts

Online edition of India's National Newspaper
Thursday, Oct 10, 2002

Opinion

Opinion - Leader Page Articles

Flexible contracts

By P. V. Indiresan

We need a different kind of solution with two features: a price to pay for the benefit that accrues and a formula that takes into account the vagaries of the Cauvery's flow.

AS THE dinosaurs grew bigger and bigger, nerve impulses took a longer and longer time to travel from the remote ends of the body to the pea-sized brain. At times that was as much as five seconds. Then, if a predator started eating the tail, the brain would not know about it for five seconds. It would take another five seconds for the legs to receive the order to run.

As that was unsatisfactory, the dinosaur thought of a clever idea: have two brains, one in the head and another in the tail. Unfortunately, that did not work. If the brain in the tail ordered the leg, "Run! Somebody is eating me!" the brain in the head would say, "stay a while, I am having a nice feed!" Not knowing which brain to obey, the legs were merely paralysed with indecision.

The BJP is like that dinosaur. It has two brains. The "Prime Minister" brain in the tail is saying, "run, or our competitors will eat us tomorrow." The "Sangh Parivar" brain in the head says, "stay and feast on what we cooked yesterday". Hence, like the dinosaur, the BJP is getting nowhere. Kannadigas can appreciate the situation. They have a proverb yetthu yerige yeleethu, Kona neerige yeleethu: the bullock pulled (the cart) towards dry land, and the buffalo towards water.

If the BJP is in trouble, the NDA Government, which has not two but 24 heads, is in even deeper trouble. Such an unfortunate creature is burdened with the responsibility of resolving the bitter dispute between Tamil Nadu and Karnataka on the sharing of Cauvery waters. While the people in the two States tug at each other's throats, few among them are aware of its international implications.

If the Centre favours Karnataka in any way, the Chinese will take that as the law for upper riparian rights. They may take that as an excuse to divert the waters of the Brahmaputra to gratify thirsty farmers in the northern parts of their country. On the other hand, if it favours Tamil Nadu, Bangladesh and Pakistan will pounce on the chance, and demand more waters from the Indus and Ganga-Brahmaputra basins.

The Supreme Court bravely ordered the Karnataka Chief Minister to release waters. That shrewd politician has persuaded his friends to order him not to do so. If he obeys, he will be acclaimed as a national statesman. If he disobeys the Court, he will become a local hero. Understandably, he has chosen to be the latter.

However, open defiance of the Supreme Court by all sections of Karnataka sets a bad and dangerous precedent.

As a rule, a court can adjudicate on the observance of an existing contract, and on the legality of its provisions. It cannot dictate what should be the contents of the contract. That matter lies in the administrative, political or cultural domains.

In the case of the Cauvery, there is no valid contract to enforce. To make matters worse, the quarrel is among politicians who model their conduct not on the Ramayana, or the story of Harishchandra but on the Mahabharata. For them, no contract is sacred.

They will always try to wriggle out of any contract the moment it becomes unfavourable.

A contract should have two components — a benefit and an obligation in return. Then the Court can decide whether due benefit has been given or not, or whether the obligations have been fulfilled or not. The problem with Indian politics is that it is full of contracts that confer privileges with no balancing obligations.

Whatever water Tamil Nadu gets, or Karnataka gets, neither party has any price to pay. That is why the Supreme Court is in a quandary. Where no obligations are specified, the Court becomes a toothless lion.

Sometime ago, the vagaries of the Ganga landed us in an embarrassing predicament. The then Prime Minister, I. K. Gujral, worked out an agreement on the sharing of Ganga waters with Bangladesh stipulating the minimum amount of water India will release in each fortnight of the year from the Farakka Barrage. It so happened that in one fortnight, the in-flow at Farakka was less than the contract figure for that fortnight. Hence, though India had every intention of fulfilling its obligations a contract, it could not do so. Hence, not only do we need contracts, we need flexible, self-adjusting ones.

Some wise people are advocating linking the Ganga with the Cauvery. That is a pipe dream because Bangladesh will never agree. Even if it agrees, disputes will not decrease; they can only increase. Instead of Tamil Nadu and Karnataka alone having fights, we will have dozens of States fighting one another. We need a different kind of solution with two features: a price to pay for the benefit that accrues and a formula that takes into account the vagaries of the Cauvery's flow.

Once these ground rules are clear, solutions will be found. The following five-step process is one possibility. One: each day, the Karnataka and the Tamil Nadu Governments declare how much of the available water they will let the other have. That takes care of the undisputed part. Two: for the balance that is in dispute, each Government will specify how much grain it will contribute in return to the national pool, and at prevailing procurement prices. Three, the bidder who promises more grain, gets that water. Four, as payment for the water it has yielded, the loser gets from the winner the cash equivalent of half the difference of the two offers of grain. Five, in case, the winner fails to deliver as promised, it will pay the loser a penalty equal to one and a half times the price of the shortfall.

This type of contract will prevent either party from making extravagant claims, and force it to pay a reasonable price for what it gets, and be paid for it surrenders. It will also pay a fine if it fails on its promises.

The scheme is flexible to the extent it is adjusted each day according to the state of the river. The main objection against it would be that it is too simple and transparent to keep bureaucrats and lawyers busy.

In the Cauvery case, the dispute is about the sharing of waters from dams. About 1,500 kilometres to the North, two highly admired ladies have eloquently advocated not having any dam at all.

It is a matter of surprise that neither they, nor any of their ardent and highly vocal, admirers have invoked their principle and suggested blasting the Mettur Dam, the Kannambadi Dam and the Kabini Dam.

That will be the ultimate solution: No disputes at all! This is not a facetious statement. It is time our opinion makers decide what the country needs, dams, or absence of disputes, whether social, environmental, or political.

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