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!

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