Column : Sebi gets it right on consent orders
Manish Sabharwal : May 29 2012, 02:12 IST
Last week, Shah Rukh Khan patronisingly offered to pay the fine for his public offence of smoking—his tone implied that the fine was complete redemption. This reminded me of our youthful calculation during our hostel days at Delhi University, comparing the cost of paying bus fees (R2 per trip) with paying the fine for ticketless travel (R20). Given the crowded DTC buses with overwhelmed conductors, many day scholars with genuine monthly bus passes, and short travel distances, we estimated that the odds of getting caught without a ticket—lower than 1 in 10—made it rational to not buy tickets and pay the fine when caught. This calculation is repeated today in many situations involving fraud, corruption or wrongdoing in India because of the lack of punitive consequences and low enforcement capabilities. But, as I get older, I realise that a fine should be large enough to matter, should have more social consequences than a fee, and some acts must not be subject to undoing by paying a fine. Sebi’s revisions to the consent order process restricting certain offences last week reflected this wisdom.
This issue is wonderfully highlighted in a new book called What Money Can’t buy: The moral limits of markets by Michael Sandel. Sandel is a Professor of government at Harvard, whose legendary course “Justice” is available free online (www.justiceharvard.org). This book—a bit heavy and preachy in parts, but nonetheless a great read—laments the drift from a market economy to being a market society where every act is monetised. He
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