And the Missing Moral Quotient
Dr R Balashankar
STUNG hard by irrefutable evidence of corruption, Robert Vadra, son-in-law of Sonia Gandhi hit back with biting sarcasm, “mango people in a banana republic.” What he meant was that, the allegations are of no consequence for him as long as his mother-in-law was powerful enough to protect him. In his place most other politicians would have reacted similarly. Because, corruption and crony mafia capitalism go hand in hand. And they form a cartel in every segment. Cartel creates artificial scarcity, manipulates price, holds back production and subverts the system.
It doesn’t matter that Vadra’s mother-in-law’s party fought the election in 2004 in the name of the “mango people” alleging that the coalition of parties then ruling had come to represent the rich and elite to the detriment of the poor. The large majority of middle class, the pride of India now stand devastated, the poor have been reduced perpetually to live on doles as captive vote bank to the ruling clique. The system brazenly allows pillage of national assets, a theft for which the nation can never be re-compensated.
At the time of writing this, the raging controversy in the national media is about how Reliance forced the UPA into removing Jaipal Reddy from Petroleum Ministry because he stood in its way from having a free run over the energy sector. As such, they control half of the total market. This is monopoly, not competition which free market promises. Gas, petroleum and power pricing since liberalisation has slipped into the hands of private parties. Soon, water also will flow into their hands. Still, the taxpayer has to feed the behemoth government of no good. The mango people look at not only what the government says but also at what it does.
This is not the first time the corporate interest has dictated the choice of the minister in this particular department. Under Manmohan Singh thrice this ministry saw changes to suit corporate interest. The Radia tapes revealed how the ministers were selected for key infrastructure ministries after the 2009 poll. There is an insatiable greed and competition between politician and businessmen to corner and monopolise all factors of production. Corporate make more money not by producing and offering their goods and services but by being close to government and flaunting that proximity.
A chit from sources close to AICC headquarters reportedly fetched coal blocs to the chosen few. Same was the case with spectrum. Telecom is a humongous tale of cronyism. The SEZs which have never really come up tell the same story of land loot in the name of development. Airports, road building, dams, irrigation and power projects tell similar tales of collective loot. Even the parties in opposition keep quiet and share the booty. Corporate correlation is a large enough web.
The same corporate house has been blackmailing the government similarly in the matter of DMRC, which provides rail link to the common man to the airport and in the pricing of power supply in the national capital. Everyone is aware that the discoms have been making excess profit (as revealed by repeated regulatory agency reports) leading to and funding political corruption. They easily forced the Delhi government to repeatedly raise power tariff on the one hand and bailout the companies that fictitiously claim losses. The logic of privatisation of electricity supply is defeated here. The tax payer is made to face the double whammy of astounding electricity bills and bailout from the tax-kitty.
A bailout, according to Robert J. Shiller of the best selling The Subprime Solution, “is a rescue by the government of an irresponsible person or entity arising from a failure to follow rules or take reasonable precautionary steps.” This term, of recent origin, of late, has become a very common ruse to excessively fund failed private ventures with public funds. This is a diabolic game. This strikes at the root of free market. “Of course any post contract government action that invalidates prior contract or expectation will be called unfair by some… the term bailout is more intense with its suggestion of abandoning an aircraft in midflight—leaving it to crash and burn on someone else”, he says.
This is very relevant in the context we are discussing here. What Reliance is often threatening the government with (rather the consumer) or Vijaya Mallya is doing with Kingfisher airlines is exactly this. Mallya says he will not sell his family silver to save the airlines. (Mallya might have meant the airline will survive like the kingfisher on the fish in other’s pond). A bailout is unfair, unjust and criminal to those who paid their commitment in time, acted responsibly to avoid a failure and met the deadline. It dispirits the honest and encourages if not incentivizes, the swindlers. When the government financially bailout a private enterprise it is ultimately the taxpayer who is typically on the line to pay up the crook.
Nationalised banks are once again considering to write-off Rs 8000 crore loans given to Kingfisher as NPA. This is being done the second time in the recent past. These companies were given a bailout package in the wake of the 2008 US-European meltdown to tide over its impact. During the UPA regime according to the Economic Survey Rs 1.25 lakh crore has been written off by nationalised banks as NPA (irrecoverable asset) to propitiate the corporate. The SBI alone has been demanding a Rs 80,000 crore package from the centre to recapitalise it. Or the bank will go into foreign hands. The government has been in installments replenishing the banks to cover-up for the pilferage. (The case is not dissimilar when the government announces grandiose loan waiver plans for the farmer on election eve. Same is the case with the much publicised NREGA where tax-payer’s money is swindled away for creating political constituency for the ruling party. Unsustainable welfarism is what has brought the European countries to their knees. A careful study of Going South, by Larry Elliott and Dan Atkinson, which predicts a third world status for UK by 2014 will convince many of our reform enthusiasts how India is blindly following the policies of the West that brought them economic disaster.)
In his famous book Globalisation and its Discontents, Joseph Stiglitz, with remarkable insight describes how one of the most important economic transitions of all time began after the fall of the Berlin Wall in late 1989, failed to succeed because its agenda was set elsewhere with sinister consequences. With indulgent enthusiasm, the US and the IMF manipulated transforming economies into becoming hostages to crony mafia capitalism. He was more focused on Russia, South and East European countries.
What was the promise of liberalisation twenty one years ago? We were promised a smaller government, less government spending on nonproductive sector, profitable public sector, better, efficient use of national resources, generation of jobs, lower rate of inflation, better services and availability bank loan on lower interest rates. Politics was to take the back seat. Sadly, like in all banana republics two decades past liberalisation, politics has become the most lucrative profession and business.
Reform was expected to reduce political corruption. The public sector, the government monopoly on factors of economic growth was considered the breeding ground for corruption. The government was to systematically exit from non-essential areas. At the peak of scandals that shocked the country last year Sonia Gandhi supposedly asked her government functionaries to shed all discretionary powers. Last one year has however seen the government acquiring more discretionary powers. In the name of democratisation of institutions, the taxpayer has to feed the greed of an army of politicians larger than the Indian Army.
Post-reform, institutions instead of becoming stronger and independent have become more pliable and dependent. Most persons who obtained their wealth by stealth and political connections rule the roost. In the absence of rules and systems in place we have the familiar sight of closeness to the government ensuring windfall gains. Our media proudly proclaims that in India a Rajat Gupta, Raja Rathinam, Bernard Madoff would have gone scot-free. Why, we have our own Rajas, Kanimozhis, Khurshids, Kalmadis, Chidambarams, Vadras, Pawars, Laloos and Mulayams doing both politics and business mocking the public and the system. The list is really endless from both the ruling party and the opposition to list here. But rest assured, they might taunt each other but they are all in it together. And protect each other. So a Narendra Modi, Anna Hazare, Arvind Kejriwal or any sincere move against graft that try to ruffle the equilibrium, upset the balance of power are branded inconvenient. In the name of protecting democracy, preventing anarchy, or preserving the supremacy of parliament all join hands, like the local thugs or pavement dwellers closing ranks to protect their territory from a new comer.
Why is it that the same set of people benefit from a mining scam, 2G Scam, CoalG, or CWG scam? The nexus is clear. Politician, bureaucrat, businessman and the media. They form the solid gang. Before Mamata Banerjee entered the scene and upset the applecart, the Congressmen in West Bengal used to be described as watermelon (torbooj). Green outside and red inside, meaning in the payroll of Communists in power. The Congress had lost all desire of ever replacing the CPM. Pranab Mukherjee, it used to be said, won on CPM vote. (May be when his son contested the bypoll he won by just 2500 votes despite the Trinamool support, just because the CPM might have reclaimed its captive vote). It’s cool, be it in power or in the opposition. Ideology, paradigm shift etc are old time passions in new age politics. It’s foolish to be an idealist.
Shri Guruji drew a fine distinction (in Bunch of Thoughts) between martyrdom, dying for a cause and living for it. One cannot manipulate martyrdom after building up a bank balance and insurance security. Majority of middle class Indians and the elite had developed a cozy coexistence with the British when Mohandas Karamchand Gandhi launched his boycott of foreign goods. It took two decades for Gandhiji to popularize his message. First challenge for him was not the Birtish, but to prepare the mindset of his own people on the futility of sucking up to the ways and habits of the British. He made his men see the agony of the Indian farmer, weaver and trader pushed to poverty under the alien yoke.
We are yet again repeating the history, perhaps as a tragedy. In time every crisis ends. The challenge before India today is about a battle of ideas, about the ideas that led to the failed policies that precipitated the crisis and about the lessons that we take away from it.
Post-liberalisation India has seen more scams than ever before. Values are changing. Consumer instinct is driving cyber class crazy. Till 1991, most politicians had some shame. Some lofty pretense. Some sense of reticence. Politics then was largely a medium of service. Only those who wanted to do something for the society entered politics. During freedom struggle people renounced their families, lucrative professions, rich agriculture and profitable business to help the national cause. There is no innovation without inspiration. Today politicians join hands, irrespective of ideologies or partisan interest to protect their turf, to expand their privileges and preserve discretionary powers. So politics is bland, politicians sound hollow.
Sri Ram renounced the kingdom to protect the word of his father, he saw merit even in the opinion of a washer man, Janaka lived like an ascetic though an emperor, Harishchandra gave up everything for upholding truth, Vishwamitra gave up his kingdom to acquire wisdom, Sri Krishna played politics to establish dharma, Chanakya won over kingdoms to remove a decadent system, Ashoka renounced everything being an emperor. Our history is replete with lives that inspire. In contemporary history we have Netaji, Bhagat Singh, Aurobindo, Gandhiji, Vinoba, Shyama Prasad, Shri Guruji, Jayaprakash, Deendayalji, and Lohia.
What has happened to us in the last two decades? All that we learnt in schools are of no relevance for life? In modern text books we will not see these lessons. The tragedy is globalisation has deprived us the ability to distinguish good from evil. Mammon worship has become the national goal. They call it aspiration. Without moral quotient we are becoming a decadent culture, a dissipating economy.
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