Wednesday, October 24, 2012

Why the Red Tape is Tied to India

For all the brouhaha that we have been witnessing from the politicians in outshining each other in their indulgence in corrupt, unethical practices, an important issue keeps coming back to the center of the discussion table. This issue is the issue of how Corporate India has been equally complicit in promoting the quid pro quo way of doing things in India.

I remember an interview of Ratan Tata that took place at the time when crisis of confidence in journalism ethics began to surface. The Radia (or is it Radiia?) tapes that had 'leaked' had pointed the complicity of a few Kashmir expert news editors as well as some medium term analysts (I will not take names) among many others. Ratan Tata had joked that work starts after six in the evening in India because Dubai is two and a half hours behind us. This was followed by an interview of K P Singh, owner of DLF, who discretely admitted to having bribed his way to 'success' (or whatever you may call it) and was in fact strangely proud of displaying his money power. That we can talk so lightly about such issues is difficult to digest, especially when the world over corporates are getting a bad reputation for their indulgences at the cost of the ordinary citizens' money. We often tend to forget that the spectacular growth of the past few years is a bubble that needs to be punctured before we even talk about it. This growth that we saw was founded on two basic premises:
  1. Getting away with the loot of natural resources with the connivance of several members of the political class; and
  2. Absence of scrutiny on the behavior of corporate businessmen (many of whom are also in politics) just because of their status.
  3. Belief in entitlement of the 'clique' at the cost of those who can only stare at their 'meteoric rise' through their 'hard work' (yes, paying bribes through agents is indeed a difficult job) and 'steely determination' (to exterminate anything or anyone coming in the way like locusts).
In the light of all this, we also had 'thoughts' being circulated by eminent economists and 'advisers to government' like Kaushik Basu who wanted to decriminalize bribe giving in India. While the thought was interesting, the ramifications in India would be devastating, since bribes (read party donations, gift boxes and the traditional mithai) have been a favorite tool for building up the kind of political-business-bureaucrat nexus that we have built up in our country.

It is indeed true, and we have heard it a lot (and frankly to the point that my ear drums may burst one day) about the amount of red tapism that we see in India when it comes to 'economic' issues. Red tapism belies our country's potential to grow even faster than some of the other fast growing economies in the 'race'. It is a joke that it takes an average 128 days to enforce a contract in India, and 152 to pay taxes. However, the real reason why red tapism will never be reduced is that it would mean greater transparency in the way businesses shall be run in the country. Any attempts to regulate business is nipped in the bud (case in point, the real estate industry's shenanigans). Our business class revels in secret meetings and shady transactions so much that they are confused today when asked questions about morality and ethics. Moreover, a more business friendly environment leads to two additional scenarios:
  1. It spurs competition (shock!horror!) and forces the existing players to either change the way they do business (for which they are too lazy and miserly) or bow out of the market
  2. It exposes the level of many companies in India and shows just how the people of this country are being fooled with sub-standard goods and services
Status quos never change at the top, for it means hurting self interests. It can only come upwards. However, this country is so steeped in the delusions that we have spread about ourselves that none have the courage to stir the hornets' nest (save a few individuals, whose motives too can be suspect).

Let the red tapism prevail!

Sunday, October 14, 2012

The General Elections of 2013

Yes you read it right - all four of us reading this blog! Much water has been held up along the Cauvery delta (even as Tamil Nadu and Karnataka squabble over who gets the water), and the political climate of this country has been getting uncertain with each passing day. With Sharad Pawar speculating about 'offending allies in November' and Mulayam Singh and Mayawati loathe to play the 'secular' card at the risk of eroding whatever little electoral respect people have for them, the set-up is perfect to precipitate an early general election.

With the government in a suicidal mode (judging by Salman Khurshid's angry exchange with journalists) we have a situation that can only explained by the word hilarious, the only way Congress can salvage its present downfall is to call early elections so that the yuvraaj can take charge and save the party from a severe rout. However, yuvraaj is in no mood to take charge of the party, and would rather go surfing and rock climbing.

BJP is in  fighting mode. No, it is not ready to fight its political rivals - rather it is busy trying to control its infighting. There is nothing family like about the Parivaar, with everyone wishing to be Prime Minister in 2014. The problem is this - who will become a Minister in the government? Moreover, being roiled in corruption, it has been reduced to nothing more than another major party on the decline. The Opposition, or lack of it, is going to hurt India, and soon will need to be filled up, else the country's democracy is in danger.

All the smaller parties are salivating at the prospect of forming a Third United Front/Alliance that can push the country into further uncertainty. What they do not understand is that they cannot survive without the national parties supporting them. Moreover, how can bitter political rivals within the federal set-ups be expected to come together for 'supporting' each other? Can a Jayalalitha and Mayawati come to the aid of a Karunanidhi and Mulayam or vice-versa? It is just impractical. Newer parties will hold the key, but they will certainly end up eating into the votes of all parties, thus causing major upsets that we cannot imagine.

Elections are going to happen for certain in the middle of 2013 - make no mistake about it. May the luckiest alliance win!

The Economic Slowdown Needs Immediate Address

The Buck Stops With the Duo (Courtesy: Bloombergquint) The fracas in Maharashtra notwithstanding, things are at a critical juncture ...