Saturday 2 July 2011

Truth is not ‘propaganda’, PM Singh (PO)

M D Nalapat
Over the past year, more and more observers have accepted what has been obvious to this columnist for decades: that the government in India is the major roadblock to economic progress. This is in contrast to China, where the unelected Communist Party knows that only strong growth can ensure the stability of its rule. If a visitor were to spend a week in India followed by one in China, the contrast would be obvious. In India, there are frequent power cuts, roads resemble moon craters, and the facilities available to the “Aam Aadmi” (common person) are shoddy and inadequate. In the seventh decade of freedom, there are no excuses left. However, any characterisation of the situation is brushed aside as “Opposition propaganda”, the words used by Prime Minister Manmohan Singh on Wednesday to a carefully-chosen group of newspaper editors. It is no secret in the National Capital Region that the Prime Minister has been constrained from enforcing accountability on colleagues, officials and others by the fact that most of the depredators have strong political connections. The Central Bureau of Investigation (CBI), whose chief was appointed after a friendly nod from Political Secretary to the Congress President Sonia Gandhi, is twisting between two extremes. The “political” who seek to ensure that the organisation continue to protect their interests, and the Supreme Court, which has publicly expressed its testiness at the inadequate pace of investigations into scams that have collectively cost the country nearly $50 billion in lost revenue. 

The Prime Minister is in the same uncomfortable position as the CBI Director. He is aware that the credibility of his government is so low that even his own party workers openly bad-mouth it on street corners. He knows that only by sending the remaining twenty-nine of the “Forty Thieves” to long periods in jail can change the perception that the Prime Minister is a good man paralysed by those more powerful in his party who seek to perpetuate corruption. In the meantime, those who have gained billions from the rotten and opaque system that has been created in India since the 1960s are fighting back, and hard. A top businessperson has since February been making the rounds of his friends in Delhi and Mumbai, to ensure that Prime Minister Singh gets replaced “and fast”. Not accidentally, there is a steady drumbeat of criticism against the PM, including from an Opposition which is led mostly by those who have made billions out of politics. However, should the next CBI charge sheet go after the top echelons of the wrongdoers, rather than remain confined to the middle ranks, it will become difficult to sustain the charge that the PM is conniving at protecting the guilty. Ironically for Manmohan Singh, the more he challenges the “political” by going after their illegal empires, the more stable will he be in office.

Although sending key officials and corporate heads to jail may create temporary instability, yet over time such an unprecedented move would bring closer the day when India will have a transparent and efficient administrative system. Many of the powers of government belong to the colonial past and need to be shed. Most of the procedures are designed to facilitate bribes rather than ensure speedy implementation. On top of such graft and sloth is the judicial system, which is so slow as to require several lifetimes for a verdict. A friend in Mumbai, who has had her property frozen for two decades because of a legal suit brought by an individual who seems interested only in getting money through blackmail, has been in despair as the Mumbai High Court bench hearing the case repeatedly places it too low on the docket to ever get taken up, much less disposed of, that day. Each abortive hearing requires expensive lawyers to be present, in case the case comes up for argument, and the suspension of all other activity by the client in the hope that the judge will take up the matter, which of course never happens. For more than two decades, the life of this friend of the columnist has been placed on hold because of the property case filed against her, even while the other side repeatedly approaches her for a settlement, in which he expects to be paid off in exchange for withdrawing the suit. In India, the honest suffer, and this is what is taking place in this case, with the lady refusing to succumb to blackmail while being unable to get the legal system to move fast enough to ever dispose of the wrongful claims of her tormentor.

Across the Indian legal system, there are hundreds of thousands of cases that are being held up for decades and even for centuries because of the propensity of courts to accept appeals or to grant long adjournments. Each involves a human tragedy. Small wonder that the underworld is so active in property markets in India. Their justice is swift and final, unlike any case that wends its way across the many layers in the Indian system, from lower courts to higher courts to single bench to division bench at the High Court, before moving on to the Supreme Court after an expenditure of millions of rupees and dozens of years. Those with access and cash know how to ensure that they succeed, often at the expense of the truth. Recently, after a slew of high-profile, high net-worth individuals were sent to jail in the Telecom ( and in the now-forgotten Commonwealth Games) scam, television studios were filled with expensive lawyers angered at the “denial of elementary justice” to their clients, who were finally cooling their heels in prison during the summer heat. These lawyers speak of “presuming innocence until guilt be proved” for their clients, but forget the tens of thousands of poor people who languish in Indian prisons as under trials.

Just as in the US, the judicial system in India has become a paradise for lawyers. Each (of many) adjournments and hearings can be charged to the client, with fees now reaching even Rs 75 lakhs per appearance. The longer a case takes, the more the money earned by the lawyer. Small wonder that several of the most luxurious homes in the big cities are occupied by lawyers. Of course, they cannot be blamed for getting monetary benefit from a dysfunctional system. It is the political class that needs to be held accountable. Unlike in Pakistan, where the military is First Among Equals, in India the politicians are in command, and there is no escape from responsibility for the mess that they are making, in collusion with elements of the civil service and the business community.

How long will the merry-go-round last? Perhaps not much longer, for in their haste to get more and more benefit from the system, the politicians and their obedient officials are slowly choking to death the goose that lays the golden eggs. During the past, millions of jobs used to get created each year. Over the past four years, this has fallen to very low levels, because of a deliberate policy of favouring foreign interests and entities over Indian ones. The Reserve Bank of India has raised interest rates to levels that are killing industry and commerce, while giving huge profits to foreign investors. The RBI (in particular a former Governor, Yaga Reddy) claimed credit for “avoiding a sub-prime crisis” in Indian banks. The reality is that up to 40% ( and sometimes even more) of a property is paid in undisclosed income, so that the valuation given to banks is far lower than the actual market value. This gives banks a very comfortable cushion, even should property values come down. To take credit for this as Reddy and the RBI has done is to be dishonest. The fact is that the RBI is facilitating speculation and arbitrage, at the expense of the Indian consumer, looking as it towards the needs of the IMF ( which is European-controlled) rather than to the requirements of the people of India.

The governance system in India has created a period of “jobless growth”. It has created a period of high inflation and high taxes. It has perpetuated a system where graft and incompetence are the rule. In the midst of all this is Prime Minister Manmohan Singh, who has the honesty and the power to set matters right, if only he would stop outsourcing his power to extra-constitutional authorities. Unless he acts, and fast, by the time the monsoon ends, the flood will take away all salience and viability from his government, leaving him little recourse but to oblige his detractors by stepping down in disgrace. Once that happens, rather than 29 more thieves being sent to jail, the eleven (of the Forty Thieves) now in prison will once again walk free, and resume walking all over the national interest, to cheers from the politicians and officials whose friends and partners they are.

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