Hindsight - Perception of the nature of an event after it has happened. (Merriam-Webster Dictionary)
1. The reason behind the quarrel between me and my girlfriend
It all started when I bought a very expensive gold necklace for my sister. I wanted to buy it for her for a long time and so didn’t hesitate when the yearly bonus came in. Later in the evening, I showed it to my girlfriend and she too approved the design and made a subtle comment that gold is a bonding catalyst for all relations. ;)
All hell broke loose when gold prices went on a downward spiral next day onwards. While having coffee during the next weekend she chose to inform me that had I purchased the necklace for my sister now, it would have been a lot cheaper. I chose to ignore it first. She was in no mood to leave it at that and started pestering me about the need to be careful on expenditures and said that if I asked her opinion before buying the necklace, she would have asked me to wait a bit.
Did she know that the prices will fall? No. It is just that hind sight is always 20/20 as proverbs state. In her eyes, I made a huge loss due to my stupidity. In my opinion, I took a decision that was correct at the time of taking that decision. At the end she stormed out, calling me a fool. May be I am, because I still paid for her coffee.
2. The reason behind the quarrel between CAG and Govt of India
CAG says that since coal mines these days get very high bids, GoI should never have made discretionary allocations in the past. It says that all the mines should have been allocated through competitive bidding.
GoI on its part argues that there weren’t many takers for the mines in the past and the need to increase the participants in the market necessitated the award of mines at a discount. Anyway, competitive bidding was not quite the fashion those days.
Similar is the case with spectrum allocation where questions are now being asked about the ‘First Come First Serve’ and ‘Revenue Sharing’ policies during the tenure of NDA. The argument is that players in telecom sector are very cash rich and would have paid anything to acquire the spectrum which is quite an expensive asset these days. It should be however noted that, the increase in market participants, competition etc. happened in the sector only due to the liberal FCFS and Revenue Sharing policies. The rationale behind those decisions was justified according to the policies, laws and available information of that time.
3. The reason behind the quarrel between Maharashtra State Electricity Board (MSEB) and Dabhol Power Company (DPC)
Dabhol was always a controversial project. The power plant set up by Enron in Maharashtra was blamed for a variety of reasons – especially the high tariff of power from the plant and the fact that Govt of India gave guarantee for the payments to Dabhol.
However, the people who argued against Dabhol knowingly or unknowingly managed to ignore the fact that the tariff increase happened because the naphtha prices, LNG prices and Dollar exchange rates shot up after the signing of the contract. The financial condition of MSEB was so dire that no investor of such a large project as Dabhol would have ventured in a power generation business without the counter guarantee of Union Government.
Conclusion
I do not dare to say that all was well in Dabhol, spectrum allocation and coal mine allocation. The purpose of this article is only to make a point that hindsight should not be the sole or major reason behind criticising a decision. If there is any proof that Govt. officials or politicians knowingly made a questionable decision for personal gains, they must be prosecuted. But mere loss to the Government due to market forces or factors beyond its control should not be a reason for witch hunting or prosecution.
I still maintain that my decision to buy the golden necklace was right. I am sure that my girlfriend would also have agreed with me if I had bought that necklace for her instead of buying it for my sister. ;)
A coincidence.... Just 2 days after I posted this article, Arup Roy Choudhury, chairman of India’s largest power producer NTPC made the following comment:
"If I were to purchase (coal) mines abroad today and coal prices were to fall after a few years, I may be questioned for the deal.... there is a sense that somebody is holding a Damocles sword over your head, waiting for you to make mistakes and catch you."
