Twenty years ago, India was worst corrupt country. Politicians and businesspeople worked with each other for the mutual benefit, national interest sidelined. The license rule prevailed. Politicians dominated the businesspeople showing the fear of seizing their operating license. Politicians could also protect the illegal and unfair conducts. As they made unfair conduct, businesspeople paid a large amount of money as donation to the political parties and leaders to secure their license. On return, businesspeople threatened the politicians of withdrawing the support or not paying the donation, if the politicians didn’t conduct at their interest. Donation drive was the principal feature of Indian economy. This scenario is still portrayed by many Indian films. This was once a very common reality.
However, the situation has much changed now. India is growing as one of the world’s fastest growing economy. There are estimates that within few years, India will dominate considerable share of world’s market in terms of consumption and production. The rapid entry of multinational business companies in the 1990s played significant role for this change. As some of the world’s largest producers and Billion dollar companies entered Indian business arena, the situation reversed. Despite many unfair conducts yet, the corruption situation has changed in India.
Multinational companies were grown in the western countries where the political and business systems didn’t complement each other, instead worked as the watch dog of one another’s unfair conduct. They fought with one another to protect their interest, instead fairly. As businesses were operated fairly and legally, they had no point bowing down before the politicians. The same situation reflected in India as well. The multinational companies made their conduct fully legal and fair. To ensure fair conduct, international auditing firms began to audit the accounts of Indian business companies. Any leakage, legal or financial, was caught immediately and action taken. Other existing Indian companies also learned the conduct from those multinational companies. They learned that it is better serve the public than a handful of politicians. Central bureau of Investigation was given authority to take action against any such conducts and strong anti corruption laws were enforced. And the situation is changed now.
But Nepal is at the situation where India exactly was twenty years ago. A handful of business firms are operating unfairly. Weak implementation or lack of proper legislation and absence of the agencies to implement financial discipline has crippled Nepal’s economy. A handful of businesspeople and politicians are accumulating more and more wealth whereas poor people are getting poorer. They are dominating politics for unfair conduct. There are nor as many multinational companies as to affect the Nepal’s system. None of the companies here makes audit of its accounts by international firms. Our politicians don’t have enough moral to go against those businesspeople, with fear that their donators will be lost. The best example is government’s incapability to take action against the defaulters. No matter how they blame the situation for not being able not to repay the bank loans, they can’t be exempt from the punishment. They are threatening the politicians not to take action against them. Those who have the highest bank loans are in so called respectable positions e.g. at FNCCI or other confederations and chambers. And they are misusing the privilege of their post for their petty interest. Every defaulter is trying to prove himself non willful. But it is his WILL not to pay the loan.
The international financial discipline can be a cure all to those problems. Segmenting politics from business is a prerequisite for such discipline. When there is fair business, it helps the politics to be fair and vice versa. Thus, business and politics should act as watchdog of one another’s activities. They can complement only to ensure fairness at one another’s conduct.
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Things do not get better overnight. It will take years before India’s poor can benefit from the recent economic boom that India’s has oberved. It is government’s responsibility to think about poors. Government should know how to use the tax money that they collect from businesses and working people. Businesses will think on how to grow their business. Businesses do not run charity.
Yestai Ho
Disagreement, allow me my two cents on your pessimistic views on India’s economy.
It is disheartening to see so many suicide cases of small farmers in India. I am with those who are advocating welfare of farmers and raising strong concern in the need of addressing this serious issue by bringing much needed reforms in India’s agriculture sector where 65% of India’s population is engaged. As you must be aware that productivity in this sector is extremely low and without substantial gains in productivity in agriculture sector, small farmers are very likely to be burdened by more debt. The formal institutions have always exhibited lack of interest in providing loan to the small farmers due to both higher transaction costs involved in making loans to the small farmers (raising the cost of loan to the small farmers) and high risk of loan default in this sector. So, it is a conundrum awaiting for long term solution. I say “long-term” solution because the key solution is shrinkage of this sector from absorbing surplus agriculture labor into manufacturing/service sector. The evidence from the developed nations during their economy transition period is clear on this.
On the positive note, plethora of economic indicators reveals that India is heading towards attaining a rank of high growth economy. The middle class in India is growing, poverty is declining, and government is pushing for reforms in every sector. Even the left are embracing capitalism and market reforms.
Beside exemplary growth in IT sector, recent economic indicators have shown high growth in both service and manufacturing sectors. Is it stainable is still a looming question as much needs to be done in sectors such as education, health, manufacturing, service, infrastructure, public service etc.
It is a fact that 40 years of socialism impoverished India even more. It will take a long period of sustained economic growth for India’s prosperity. India’s economy is undergoing great transition and we should not forget that in the period of such transition there are both winners and losers in the society.
I am writing this in disagreement with what you hv written about the Indian economy and politics of recent years.
I diasagree that corruption has reduced with liberalisation of the economy and i have facts to show this which i will share later. amongst other things, you article lacks proper analysis and i you need to get your facts clear. please consider looking at the rate of farmers commiting suicides in India, the decilining sex ratio and many other things that indicate the level of development of any society. if u believe that GDP is the only thing that indicates the development level..please do reconsider your presumptions and live with the ppl of India for some days. and please ask urselves where u r coming from and whose sepctacles u r using to make jugdments about the increasing prosperity of India…probably ur eyes can only see the happy indian middle class( that also i doubt given the level of competition and pressure on them to show who is the richest).
also please take a look at the Union Carbide and the Bhopal Gas Tragedy, the Kalinga nagar incident of Jan 2006…the recent criticisms against SEZs. atleast know why others are protesting..though umay choose to disagree. also remember Enron in the US!!! It amazes me to hear that corruption has gone down..where!! how!! when!!
and u think Nepal needs to copy what the Indian state is doing?? this at a time when people in India and other places are looking at Nepal and Venezuela to look for alternative models of development.
you may know many things and agree/ disagree with things but plz do consider keeping ur mind open to read more, learn more, listen more…and for ur own sake please use ur own brain to formulate opinions. Thanks