With India?s dreams of 9% growth being rapidly ground into the dust and a 7% growth looking more likely?Crisil has lowered its estimates for growth in the current year twice already?it?s not surprising that everyone is beginning to get panicky. A group of eminent citizens?this includes Deepak Parekh, Azim Premji and Keshub Mahindra?first suggested strong anti-corruption bodies (lokayuktas and Lokpal) some months ago. This was in keeping with the majority view that corruption is what is holding back India?s growth?51% of respondents in a KPMG survey felt corruption was making India less attractive to foreigners, 90% felt corruption impacted the performance of stock markets and 68% felt corruption was induced by the private sector. Perhaps why, this time around, the letter from the group of eminent citizens wants a strong UK-style anti-bribery Act to punish the bribe giver, no matter how high he or she is in the organisation.
While that?s a nice suggestion, and enacting such an Act can?t hurt, it has to be understood that this is hardly the solution; in any case, the fact that there are so many corporate executives in jail along with A Raja is proof that there are enough laws to jail the corrupt. Indeed, as the group?s latest open letter points out, a Lokpal Bill can only address episodic corruption. If we?re looking at addressing corruption in its entirety, this needs larger reforms. As long as even the routine business of running a company requires bribes to be paid, it?s unlikely any of these worthies will support putting a company?s chief executive behind bars. Which is why, as they point out, India needs a lot more reforms?online auctions for allocation of natural resources, for instance, will eliminate a whole source of corruption. Indeed, examined carefully, most of the big areas of corruption in India are precisely those where the government?s role continues to be important.
Although corruption is the flavour of the day, it can be nobody?s case that this, above all, is responsible for India?s growth story crashing the way it has. Apart from the obviously serious global crisis, and the near-complete lack of economic reforms, the government?s attitude towards big business has been a major factor. Rejecting Qualcomm?s application for Internet licences 15 months after it had paid a billion dollars for them, forcing Cairn to agree to ONGC?s demands before clearing its sale to Vedanta, stopping work at Lavasa for months ? the list goes on. Sadly, no one is focusing on this.