How India’s Scam-Riddled Telecom Minister Sukh Ram Tried to ‘Reform’ the Sector

The late minister was a risk-taker, but he had his flaws and perhaps bit more than he could chew.

6 min read

PV Narasimha Rao and his teammates in the ministries of finance and commerce, along with the Reserve Bank of India (RBI), are seen as the only drivers of India’s economic reforms of 1991. Largely forgotten is the contribution of the only ministerial colleague outside the charmed circle, Pandit Sukh Ram (1927-2022), who was then the Communications Minister. Only in his home state, ie, the tiny Himachal Pradesh, is he remembered – and fondly at that – as the father of the telecom revolution in India.

The fact is that economic reforms in India had few takers in the government outside the finance and commerce ministries. That was the principal reason for the uneven pace of reforms. Competition, private sector and profit remained ‘dirty’ words for most politicians and bureaucrats. Sukh Ram was a convert – from being a PSU (public sector undertaking) acolyte, he embraced market reforms following a discourse from Montek Singh Ahluwalia, who was sent on a covert mission by Manmohan Singh.


Sukh Ram Took Care of Reforms on the Ground

Economic reforms then and now are practised in two terrains: in the air (pun not intended) and on the ground. Fiscal, monetary and trade policies are fine examples of the former and have been shining examples of success. All the champions of reforms, the financial wizards, have earned their well-deserved kudos in the air. In the early days of reforms, Pandit Sukh Ram was the only successful practitioner on the ground, where the real friction and action lay. To this day, it is one thing to formulate policy and another to implement it on the ground. Sukh Ram deserves attention for the latter for reasons both good and bad.

Critics of Sukh Ram may like to attribute his success to the Prime Minister’s Office (PMO). A proactive PMO is a necessary but not a sufficient factor for the success of economic reforms. PV Narasimha Rao was the indisputable evangelist, but nothing would have happened without the workman on the ground. Two examples illustrate this point. Banking, power and telecom were identified as the three on-ground pillars of the reform process in 1991. The PMO could not make the Ministry of Power budge, all the prowess of AN Verma notwithstanding. Unions resisted banking reforms for close to a decade, despite the architects of economic liberalisation backed by the Prime Minister navigating them from the north block, the citadel of reforms. The progress of only telecom in the Narasimha Rao years was spectacular.

When the Dirt Bomb Exploded

Sukh Ram sullied his hands and reputation in the process, and for no altruistic reasons.

Yet, when the dirt bomb exploded, nobody but he got tainted – neither the PMO, nor the north block mandarins. Contrast this with the aftermath of Pramod Mahajan and A Raja years.

The reason was that Sukh Ram fired from his own and his own shoulders alone. This bears enunciation. It is well known that Sanchar Bhawan opposed the opening of telecom tooth and nail. Realising that it was up against a wall, two strategic changes were made by the PMO. Rajesh Pilot was moved out of the Sanchar Bhavan, where he held independent charge of the Communications portfolio, to the Ministry of Home Affairs as a Minister of State minus the independent charge. Sukh Ram was brought in his place. This was not an innocent move.

'I am the Minister'

Second, the Indian Telecom Service was divested of the charge of Secretary Telecom and the famed N Vithal from the IAS was brought in as the first outsider Secretary and Chairman of the Telecom Commission. As insiders know, Vithal was at his wits’ end in the meetings of the Telecom Commission as well in the briefings of the Minister, thanks to the firepower of the full-time, technocrat members of the Commission, who had been upgraded to the rank of Secretaries as a sweetener while dislodging them from the position of Chairman Telecom Commission. No sooner would Vithal open his mouth, than stray guns would fire from all around. Vithal would scamper to the PMO after every meeting, much to the chagrin of Sukh Ram.

Unfortunately, AN Verma could not chair the meetings that cowered Vithal, and Sukh Ram would not let him call the shots from a remote location in any case. Fed up with the discordant notes and a hapless Secretary, Sukh Ram realised he must be his own counsel. This was to prove to be his undoing, but that was much later.

The policy formulation process generated so much heat that even decisions taken on file by the Minister would return for reconsideration from the Chairman and members of the Telecom Commission. An unusually recalcitrant officialdom that cited ‘license raj experience’ had to be sternly told by Sukh Ram, “Look here, I have been a minister for more years than any one of you have been in the government, and from now onwards, there will be no contradictory noting below my decision.”

The squabbling ended, but the story needs to take note of the sentence that followed. “You are at complete liberty to opine and write what you like for you are civil servants. I am the Minister and have the authority to decide and will brook no defiance of my decision.”

Everyone Was Looking for Gaps

It is pertinent to point out that Sukh Ram did not get his files doctored, allowed the officers to write what they felt like, and overruled them on record. In cases where he later got into trouble, the final decision was found recorded under his hand, even when subjective it was always reasoned. No officer involved in the decision-making got into trouble. The only one who did had nothing to do with decision-making.

That is how telecom opened to competition and the private sector in India, the country was introduced to mobile telephony, a key government department was corporatised, and in a matter of under three years, its capacity to install new landlines grew from under 6 lakh to over 24 lakhs per annum. The Centre for Development of Telematics (CDOT) produced a made-in-India 10k digital exchange, the Indian Telephone Industries (ITI) collaborated with leading switch-makers of the world, the Telecommunications Consultants India Limited (TCIL) moved beyond the middle east into Africa, VSNL ventured into the first GDR (global depository receipts) issue of the country, and the Telecom Regulatory Authority of India (TRAI) was born.

Interestingly, the licensing of new players by Sukh Ram was by auction to the highest bidder. Later, the fixed license fee was converted into a revenue share model.

India was the first country in the world to auction telephony rights at scale as far back as 1994. There were no examples to follow.

Without exception, international consultations were hijacked by interested parties wanting to come in by the nomination route.

The bureaucracy was wary then – as now – of taking decisions to let go of the preserves of the government. The media then – as now – was looking for scandals. Everyone was waiting for reforms to fail. No one was willing to make allowances for trial and error.


Giving Credit Where Due

Fools are known to rush where angels fear to tread. That’s what Sukh Ram did, and not without enticement. Like his mentor PV Narasimha Rao, he burnt his fingers. But then, why deny him credit for a pioneering reform when we are at last willing to overlook the follies of his guru?

It’s not that contemporary observers are unaware of the reformist credentials and on-ground achievements of Pandit Sukh Ram. Circumstances have colluded to obfuscate them. A grassroots politician, he came from humble origins. He wasn’t fluent in the ways of elitist Delhi. The English media never took a liking to him. He wasn’t comfortable with bigwigs of the industry or multinational corporations. The winners of the first round of the auction were devoid of big names – domestic or international. The most successful was an unknown Bharti Airtel!

The clout of telecom was yet to be discovered by the political class. Sukh Ram came to be envied once the cat was out of the bag. In retrospect, he perhaps bit more than what he could chew. A state with four parliamentarians and many small-timers who made it big in his time couldn’t hold the storm when Sukh Ram came under its eye.

Proximity With the High Command

If there was one minister who never kowtowed to Narasimha Rao’s Principal Secretary, it was Sukh Ram. AN Verma was always peeved at being made to hold while the minister took his call.

Rajiv Gandhi spotted Sukh Ram, a perennial minister in Himachal, and moved him to Delhi. The loyalty to the family never diminished but came to be suspect nevertheless.

Sitaram Kesri, a family loyalist, once questioned him about his growing proximity to the Prime Minister. Sukh Ram’s response was that as a minister, he was bound to be close to the high command, it did not matter who occupied it.

(The writer is a former Member of the Postal Services Board. He tweets @PalsAshok. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

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