Retail corruption as heinous as wholesale corruption

Several apologists of the venal UPA 2 including former IT czar and now government strategist, Nandan Nilekani have tended to rubbish the growing outrage against crony capitalism as alarmist. Their postulation is that India should collectively fix what politicians and bureaucrats very patronizingly call “retail corruption” and not expend its limited energies on purging wholesale or “big ticket” corruption.  Such a view is patently immoral, if not criminal in its intent.

The Delhi bus that was the scene of the gruesome sexual assault on the departed brave heart was allowed to ply fearlessly on the capital’s mean streets thanks to “hafta”, the lowest form of retail police corruption.  Sim cards used by terrorists are arranged by their handlers who grease the palms of petty distributors of mobile connections by flouting KYC norms; guns smuggled into cities across state borders make their way past lax and debased policemen & excise employees guarding highway outposts. Ammonium nitrate, a common ingredient for assembling IEDs find its way on shop shelves in an unregulated manner owing to bribes paid to lowly sales tax personnel.  Data thieves working in BPOs (who have severely embarrassed India’s outsourcing industry) slip into unsuspecting companies using doctored employment certificates obtained from complicit HR managers of other companies.

Most of the collections from the “retail” channel find their way right to the top of the political, bureaucratic and corporate pyramids as without the overarching patronage of the powerful, the hyenas  on the street will not dare to extort. Of late, some self-righteous IAS officers are hauling the lower bureaucracy over the coals for their seemingly vested interest in illegal rent seeking but such arguments don’t wash with a discerning audience. Their poor leadership cascades down the ranks and allows the clerks to run riot.

Election tickets are routinely bought and bureaucratic and police appointments are generally available to the highest bidder as Railgate has recently exposed. Businesses usually play venture capitalists in this cynical market for favors but investors invariably expect ROI! Many of those who buy their way into legislatures and secretariats have signed a term sheet with their financiers. And such repayments have to necessarily come at the cost of the honest tax payer, an endangered class in India, that has learnt to grin and bear it or migrate to less oppressive and more civilized regimes. The rupee’s slide may alarm many of you reading this but it does not exercise those fat cats (primarily the residents of SoBo and Lutyens Delhi) who have built an impregnable war chest of dollars through fake cross border transactions over the years.

The “aam aadmi” Indian voter does not care about the bigger picture as long as he can do a favorable trade close to the polling date but fund managers sitting atop multi-billion dollar portfolios in international money centers are not missing some defining signals like Warren Buffet’s withdrawal from India, UBS & Morgan Stanley choosing to surrender their banking licenses and Wal-Mart’s misery in the midst of extortionate Indian political parties who are ensuring that adherence to FCPA is near impossible in the “jungle raj” that is now India.

That the UPA has been able to co-opt Raghuram Rajan, one of the most vocal critics of crony capitalism, into its policy making apparatus is simply a case of too little too late. Such fig leaves end up revealing more than they conceal.

Much as the UPA and their partners in crime (NDA) would have us believe that they are at odds over their respective economic agenda, the traditional Indian political class is agreed on some extremely dangerous economy policy prescriptions that include reckless non plan expenditure, profligate subsidies (the Food Security Bill has the potential of dragging our currency down below 75)and unwieldy bureaucracies and patronage rackets that hemorrhage the taxpayer (like the Left Front government’s mountainous wage bill on account of primary school teachers who were essentially unemployable party cadres in West Bengal). Combine such economic adventurism with a total disregard for the rule of law and you have a perfect banana republic.

The International Olympic Committee warning its Indian counterpart to decriminalize the body has not come a moment too soon. Other international organizations have been too polite so far by couching their criticism in a lot of floss.  Since our political class is not likely to take its cues from the domestic constituency, more IOC like threats could be the only path to salvaging a drowning India. The rating agencies have lost their luster following the Lehman collapse while the World Bank is no longer taken seriously by most member countries.

Who does the honest Indian tax payer turn to? Will 2014 throw up some credible options? If you don’t have your election ID card in place, move heaven and earth to acquire it. Because if you still continue to be an armchair critic, you may even lose that liberty after the next general elections.

Posted in Leadership

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