Business

Our Mary, Queen Of Blots

Any clean approach is sullied by a foul politics-business clinch

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Our Mary, Queen Of Blots
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When Fernand Petiot claimed to have invented the ‘world’s most complex cocktail’ called the Bloody Mary, little could he have seen that, almost a century later, India’s complex government-business relations would, in comparison, make it look clearer than water. For a country that got democracy before full-blown capitalism and has got its own mocktail of State-directed markets, what are the implications going forward? The one rough thumb rule one can use is the reaction of business bodies and lobbies to the Union finance minister’s budget speech. One is yet to come across a single instance where corporates have had the guts to do a fair and valid critique of it! It doesn’t need a genius to comprehend the reason—almost every one of them has broken the law somewhere or the other and doesn’t want a tangle with the government.

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The recent invitations by prominent associations to both perceived and potential candidates for top government posts needs to be viewed against a different lens. What makes the business-government concoction even more worrisome is the fact that many corporates, not all, say one thing before TV cameras and something opposite in government offices. For many corporates, one trusty implement is to pluck an advantage through a loophole in law or its implementation, which, moreover, they’d be allowed to use but not their competitors. Another ploy is to open up any protected domain for ‘greater competition’! No wonder, in India pro-market is often seen not as pro-competition but as pro-business; nay, pro-crony capitalism! Today the best corporates first decide what they want, no matter how illegal or quasi-legal. Then they systematically subvert the system, in cahoots with unscrupulous politicians and bureaucrats, often gifting themselves huge gains at the cost of an unprotected exchequer. Finally, they justify it all through well-documented tomes prepared by marquee consulting firms.

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To find perfect examples of this, one needs to just peruse the records of various Special Economic Zone allocations of recent years. It’s sad how some of the finest consulting firms have been reduced to document-assemblers at best and pimps at worst. Not very long ago, a large corporate house switched the fixed and the variable costs in a power plant bid in order to take advantage of the escalation in fixed cost by showing it as variable. It went swimmingly well, thanks to the machinations of a leading consulting firm. Likewise, in a north Indian state, the bid for a super-critical power plant was ‘managed’ to ensure that a particular Tamil Nadu-based power company, with zero experience in such plants, grabbed it. Even the World Bank’s scrupulously clean two-envelope bidding is put to severe tests when the minister in charge of a specific procurement in roads in a south Indian state summons those who usually submit bids, and ‘divides up the state’ between potential bidders and decides who will put in what bid, for which regions and at what price. Such are the examples of how business subverts even the best laid-out government bid processes.

What never ceases to amaze me is how most Indian corporates, with a few honourable exceptions, break the law shamelessly and then sermonise on the virtues of honesty in politics and bureaucracy. Unequivocally speaking, the distribution of honesty and dishonesty is not spectacularly different across professions in India and to claim that any one profession, no matter its public perception, is any more dishonest than the others is simply hogwash.

One of the few honest politicians in a national party confessed to me that within days of his taking over a cabinet position in the Centre, the proverbial ‘suitcase’ app­roa­c­hed him on its own, without him doing anything. When he protested to the party treasurer, he was gently chided and told that there is no university that teaches anyone how to accept a bribe!

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There is no denying that bereft of formal campaign contribution laws, funding of elections will continue through ‘informal’ means. The key question is whether such contributions, from individuals and businesses, are for ‘quid pro quo’ reasons. If it’s so, it must be stopped, or payments by cheques must be made mandatory. The latter measure is perhaps still years away, due to political parties drawing a blank when they ask for donations by cheque from firms, which speaks volumes about Indian businesses!

As Indian democracy matures and surges ahead, it needs to understand that the ‘Indian Bloody Mary’, whether alcoholic or non-alcoholic, can be injurious to its health, unless consumed under strict medical advice. What should eventually matter is not the size of the slices of the pie or who gets what, but on increasing the overall size of the pie itself.

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The author is an IAS officer. The article reflects his personal views and not those of the government. Twitter: @srivatsakrishna

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