Geopolitical notes from India
M D Nalapat
Friday, August 06, 2010 – The only two countries in the world that each have a billion-plus population are India and China, and there is corruption in both. However, the difference is that even dishonest officials in China seek ways of implementing approved policies, in the process, earning some money on the side. However, in India, so far as the huge army of corrupt politicians and officials is concerned, the entire objective of decision-making is to earn money. In the process, if some good gets done, that is entirely accidental. So, whereas in China the making of money is a by-product, with the focus being on ensuring results, in the case of India, results are the (rare) by-product. The sole objective behind each decision is to make money, as much of it as is possible.
During the first five years of the present Sonia Gandhi-led United Progressive Front government in New Delhi, then Union Finance Minister Palaniappan Chidambaram (now Union Home Minister) greatly increased the powers of the tax collection and regulatory agencies, so that these days, they are as operationally unaccountable to the public as was the case during the years when India was ruled by the East India Company. The stock market regulator – the Securities and Exchange Board of India, or SEBI – passes a slew of orders that either bar some companies from doing any business or help other entities in theirs. On record, there seems to be very little justification for either step, so clearly the actual reasons are such as to be invisible to the naked eye. The Reserve Bank of India (RBI) curries goodwill in financial markets in the European Union (the only location that the RBI’s colonial-era higher-level team respond to) by repeatedly raising interest rates and accelerating the very inflation that they profess to reduce.
The RBI top brass is fully aware that in an economy such as India, with myriad supply distortions, raising the interest rate will have zero effect on price rise. However, acting as a trade union for the big banks (all of whom are happy at the high interest rate regime that covers up their inefficiencies), the RBI ensures that Indian business get forced to pay much higher interest than their overseas competitors. Naturally, overseas entities – the beneficiaries of RBI policies – are filled with admiration for the RBI. A former Governor, Yaga Reddy (who was known for his zeal to raise interest rates) even wrote a book, in which he hinted that but for the daily rising of the sun, every positive thing that had taken place in the Indian economy during his time in office was because of his policies.
A modest man, Reddy Chidambaram paid particular attention to taxes, making the Indian taxpayer the highest tax individual on the planet. For example, thanks to multiple levies, the price of petrol in India is far higher than almost anywhere else in the world. There are several thousand separate taxes in India, much of which gets collected by the Income-tax Department. The “democratic” Chidambaram made sure to ensure that the ordinary citizen (those with no access to Congress Party bigwigs) would have zero rights vis-a-vis the department, which has today become known for its intimidation and extortion of the politically unconnected, labelling individuals as tax-evaders at will, even while turning a blind eye to the Everest-scale corruption within Chidambaram’s own party, something that some zealous officials in London uncovered a few days ago, when they came across details of apparently unmerited payments by the Commonwealth Games organisers to a tiny UK-based company. This revelation was followed by an avalanche of others, that reveal scam after scam in the disbursement of more than $ 5 billion for the Games, an unconscionable luxury in a country where more than 200 million people go to bed hungry even while millions of tones of foodgrain rot in government storage dumps so as to keep market prices high for a few well-connected grain speculators.
Although he was unnaturally quiet during UPA-1 (2004-2009), standing aside while scam after scam took place within the government he headed, the Prime Minister who has emerged after the Congress victory in 2009 is a different person. An honest man himself, Manmohan Singh has refused to allow those guilty to escape exposure. Indeed, several of the most recent revelations of graft within the Commonwealth Games setup in Delhi have come from government channels. These days, more and more VVIPs are being exposed and made accountable for corruption. The PM seems to have decided that enough is enough, and that if he wanted to protect his legacy, he needed to go after the big fish rather than – as sual – toss a few minnows before the public. In what is being termed the 2010 Corruption Games, treadmills were hired for just 45 days for Rs 9 lakh, when even the best costs only Rs 4 lakhs to buy outright. At a huge cost, a blimp will circle the Games Stadia, videographing the ceremonies. All sorts of unknown entities based abroad have been paid vast sums of money for tasks that even a village idiot could perform with ease. If the media revelations prove to be correct, out of the $5 billion, more than $3 billion may go into the pockets of a few VVIPs.
These are now frantically looking to the Prime Minister to escape with the loot, but indications are that Singh is determined to clean up the rot, even if in the process, some of his own party persons are shown to be corrupt. Although more than $2 billion is supposed to have been spent on Delhi, the reality is that the city still looks as dysfunctional as it used to be. Traffic is a mess, power keeps shutting down, while water gets mixed with sewage before reaching households, presumably a population control device. The only commendable work has been on the Delhi Metro, which has taken on new routes and works with reasonable efficiency. However, the 2010 Commonwealth (sorry, Corruption) Games seems to have become a curse rather than a blessing, in large part because most of the stadia have been situated in the heart of the city. The reason for such a decision was to ensure that VVIPs reach the stadia from their residences in less than 20 minutes, escorted by fleets of police cars. Had the stadia been situated outside crowded areas, the city would not have become the nightmare that it today is, but in India, decisions get taken only for the convenience of VVIPs, of course in the name of the common man. Should the PM manage to succeed in his mission of ensuring that the guilty behind the Games get booked, the nation would owe him an immense debt of gratitude. However, it is still early days, and the pressure for a whitewash is growing.
This columnist has no doubt that the ISI plans and seeks to execute several actions designed to weaken India. However, none of these – even should all succeed – have the same negative effect on India’s prospects as corruption. The philosophy of basing decisions on personal interest and financial greed has permeated the system, even in matters as vital to the nation as Defense procurement. The revelations about the Games only highlights this situation. The only difference between the present day and that of the British Raj is that then, the loot was carried out by foreigners. These days, the dacoits are Indian citizens themselves, of course helping several unscrupulous foreign nationals to make money. Only a handful – such as Manmohan Singh – have remained unaffected by the grime. The question is: can they stem the rot? If India is to become an economic superpower, the PM will need to choose between the interests of the\ common man and that of the VVIPs, and continue on the path he is taking, of seeking accountability. In October, the Commonwealth Games will take place. When it ends, there will still be 200 million people going to bed hungry each night in India.
—The writer is Vice-Chair, Manipal Advanced Research Group, UNESCO Peace Chair & Professor of Geopolitics, Manipal University, Haryana State, India.