Between them, RIL, ONGC and Coal India make up 12% of the market cap of all listed companies on the BSE. Each of them has run into competition with the other in the last few months, ironically for bad news. Each of those relate to some policy aspect of the government of India.

You cannot have a situation that in a stock market top three companies are in trouble but the economy is in fine health. This is a trouble, and a big one at that. But the way to fix their problems is also a fine lesson on how to get the better of the corruption debate in India.

The corruption that excites Indians the most, happens where the government impacts the lives of the citizens. So, it follows, the way to cut down corruption is not to run for more governmental role but root for a leaner entity.

As the experience of these three companies show, when the government abandons this principle and tries to bite more than it can chew, blue-chip companies go down and corruption surfaces.

In the case of Coal India and ONGC, the government has foisted on them social responsibilities that should not be part of their role at all. In the process, it has created a fine avenue for corruption as the companies have struggled with conflicting demands, which any management will find impossible to satisfy. In the case of RIL, where there was a need for vigilance and clarity in drawing up contracts, it has fallen short.

Given the massive weightage of these three, it will be a brave fund manager indeed who can decide to invest in India and yet steer clear of these from her portfolio. The impact is, therefore, making itself felt in the stock market which, in terms of performance among the emerging market economies, is now just one rung above the bottom.

So, fixing the problems that afflict these three can salvage a lot from the current feel-bad about the India investment story. At the cost of replication, the ONGC problems stem around the rising subsidy burden it is being asked to bear, even as its own revenue growth is falling off. It has not come into this situation suddenly. For the past two years, fund houses have issued warnings about the stock. The sad aspect is that the money this company is shelling out as subsidy for oil marketing has created the most deadly oil mafia in the country. Its latest victim is Jyotirmoy Dey. The ONGC payout is thus the government?s contribution to corruption.

Similar is the case of Coal India. Since coal nationalisation in the 1960s, the exclusive right to market-free coal has passed on to this company. In terms of documentation, corruption in coal is perhaps India?s most recorded bit of economic history. Again, it all came up because of the monopoly to sell coal given to the company. This monopoly was written in to save the people from the excesses of the private sector. Obviously, if instead of nationalisation at that point, had the government pushed for hard regulations enforced by a regulator, the corruption in the sector would not have so flared up. Dhanbad is a town where it is so easy to point out houses of ex-Coal India employees?they have the most impressive ones. The coal mafia is second only to the petrol mafia in this country in terms of reach.

Both Coal India and ONGC will shine once this link between corruption-government control-loss is taken care off by them.

There are other problems that these two face, like the issue of environmental problems vis-?-vis mining, or the lack of railway rakes in the case of Coal India, or ageing wells and shortage of rigs for ONGC. But those are business risks that they can handle far better once their revenue stream is sequestered from the social burdens.

On the face of it, the problems regarding RIL could look more difficult. But they are not. The issue of fixing the dwindling gas reserves from its offshore fields is again a business risk that hopefully its new partner BP will be able to take care of. But analysts are more worried about the fallout of the CAG report. The report has alleged that the company has run up more than permissible cost to cut back payment to the government from its revenue. Of course, this is a draft report, which means that many of the paragraphs will be knocked off by the auditor after discussions with the petroleum ministry. But the charges are tough and, whatever may the petroleum ministry?s explanations, do show the production sharing contract was rather loosely drawn up. Since the ministry has all through been busy allocating petrol pumps and gas agencies, the technical finesse of such contracts was basically outsourced.

This is also the crux of the corruption cycle. Government officers narrow their focus on supremely avoidable stuff and leave the gates open for big contractors to draw up rules that favour them.

All these mistakes have not been committed by a coterie of devious guys bent on creaming off India?s fortunes. These have evolved as supposedly laudable plans to make the lives of the people better, over decades. Well meaning bureaucrats and even politicians actually thought they were doing good for the country. But the lessons are obvious?that more government at the wrong place is another word for corruption.

The debate on the Lokpal Bill will take quite some time to navigate until it becomes an Act. And then people will have to be appointed and so on. For the time being, it is possible to use our domestic equivalent of the 123 rule to fix the problems of these companies fast. Those are not controversial ones which the Lokpal will pick up for examination. Instead, they are plain vanilla issues, but sort out a good percentage of the incidence of corruption for a lot of Indians. There is really little time to lose.

subhomoy.bhattacharjee@expressindia.com