| BesidesWork |  |
Home / BesidesWork /
|
|
|
 |
| Social Issues |
| Why is there no Public Accountability in India? by Richard D'Souza (XLRI, 1970) |
| Author : | Richard DSouza |
| Institute : | XLRI '70 |
| Posting Date : | 22/10/08 |
|
|
|
|
|
|
|
|
The financial crisis has given rise to various theories and opinions. Richard D'Souza points out the absence of public accountability when markets fail and tells us about the people that benefit from such volatility
|
|
|
As I write this today, on October 15, 2008, the Government of India, through the Reserve Bank of India, keeping in line with US Treasury Secretary Henry Paulson’s directives or entreaties depending on which way one looks at it, has already made about Rs. 60,000 crores of liquidity available to the markets through reduction in CRR (Cash Reserve Ratio) and another Rs. 20,000 crores to Mutual Funds.
Who benefits from all this? The banks, of course. But aren’t these bankers the same guys who are responsible for the crisis in the first place? So what, we are told. This is not the time to be picky; don’t you know that if we do not rescue the banks, the sky will fall? Why should the sky fall, if bad banks go bust, we ask? Isn’t that what free markets are all about, this mantra we have consciously chosen for ourselves? For those not yet suffering from amnesia, during the days of the NDA regime, every free market Economist and his uncle came out of the woodwork to demand wholesale deregulation. Deregulate banking, they roared. Deregulate insurance, they screamed. Deregulate all core sectors like steel, transportation, electricity, they shouted. Let’s have free private sector driven markets, they yelled in unison. Let’s disinvest from PSUs, cooed the Hon’ble Minister. And then, in the face of stiff opposition, he did just that with some PSU units and then we saw that in a few months, without any additional value being created by the private purchasers, these PSUs were then sold at phenomenal profits by the new owners. Imagine what would have happened if this crony capitalism had been extended to the entire public sector.
Who are the other guys who will benefit? Stock market players of course. How many are they? Maximum 30 million though serious punters are probably not more than around 5 million. So why are we not asking why public money should be pumped in to save the fortunes of this miniscule set of the population who, anyway should have known jolly well that stock markets are inherently related directly to risk and that risk is directly proportional to reward? After all, had their bets turned out right they surely would not have been sharing their profits with us. So why on earth is the general population expected to subsidise and pay for the risk which the stock market players had taken?
But let’s come back to this infusion of money which is going to most help the rogues who created the mess. The first impact of infusion of so much money is going to be added inflation. Now hold your horses. Are we not supposed to be fighting double digit inflation in this country right now? Did we not recently in fact take “strong measures” to suck out liquidity from the system because inflation was hurting all of us. Yes, inflation hurts. Inflation is an indirect tax on all of us, poor, middle class and rich alike. But the way it hurts different classes is different. Inflation hurts the poor the most and depending on whose definition you choose of the poor, the poor in this country range from 600-900 million people. Yes, even by the most optimistic definition of poverty there are at least 600 million poor people in this country, subsisting barely at the margin desperately, to meet basic needs of food and clothing and the mud houses that pass for shelter and inflation hurts them directly because their increase in wages, if any, never ever keeps up with inflation. The rich and very rich are not really affected so far as basic needs are concerned because inflation hardly makes a dent in this area; what they are affected is in their lifestyles; my, my, Daddy dear, will we have to skip the vacation to Europe this year? Sob, sob, sob. The middle class of around 200 million of which the upper middle class and pseudo rich (viz. a certain section of the upper middle class pretending to be rich) of around 50 million which is probably the most pampered section of society today also are not seriously affected in terms of basic needs. But lifestyles definitely take a hit. The point that I am making is? Why are we pushing policies that benefit only a few but have a serious adverse impact on around 900 million of our citizens and an adverse impact, though not serious, on another 200 million or so? Is there no way to bring the government to account on this?
Yesterday there was a small, not very prominent news item, obviously emanating from a press release, that TCS, outbidding competition from Infosys and WIPRO, had bagged an order of around Rs. 1,000 crores for passport processing and that very soon, 2010/11 I think, we would get passports within three days of police verification and tatkal passports on the same day of police verification. Wonderful news, no? In today’s Times of India, Economics Nobel Laureate for 2008 in an article “Don’t Cry For Me, America”, gives the dictionary meaning of “sophistry” as “being an invalid argument displaying ingenuity in reasoning with the hope of deceiving someone” (viz. deceiving the person to whom the argument is made), and in my opinion, this passport business was “sophistry” at its magnificent best because anyone who has personally gone through the process of making a passport, as opposed to those who send lackeys and agents to the passport offices, knows fully well that it is the police verification which is the root cause of all the delays. So would we be any the better off for getting a passport within three days of police verification, if the process of police verification itself continues to be the same? But we, taxpayers, are certainly going to be poorer by Rs. 1,000 crores which is going to be transferred from us to a private entity (to me, whether it TCS or Infosys or WIPRO is irrelevant, they are all private entities in the hands of private shareholders who as a collective entity have normally nothing in common with Citizen Ram, Dick, or Hari, and in fact sometimes may even be opposed to the public interests represented by Citizens Ram, Dick, and Hari). And Rs. 1,000 crores for writing software, however fancily the whole deal may be packaged? I used to be in the I.T. industry for donkeys’ years and to my mind, as a citizen, this deal, which is going to take away Rs. 1,000 crores from the public exchequer and put it into private hands, stinks. But to whom can Citizens Ram, Dick, or Hari go to check out all the facts and ensure that the deal is kosher? After all, it’s our money going into private hands, so why aren’t we allowed to demand accountability? And where will this money come from? Either directly from the passport seeker by raising rates for a public service and/or by additional taxation and/or by inflation through deficit financing. However, the only real recourse that we have to enforce accountability is to go to the courts but unfortunately, this country has no institutional public mechanism to take this matter to the courts and if we have to do so the only alternative is for someone among Citizen Ram, Dick, or Hari to go to court in his own personal capacity as a Petitioner in the public interest, spend days and money out of his own pocket and face the lineup of the highest paid, high powered, corporate lawyers in this country (who rake in fees of around a few lakhs of rupees for each appearance, from their corporate masters) who will bring into their arguments all the sophistry that Paul Krugman describes to deflect from the main facts in issue viz. the details of the contract and instead, probably successfully, trash the Petitioner in court and have the case thrown out on the grounds that it is a private matter involving privity of contract when it definitely is not so. And there will no help from the media either because in today’s India the media, for all its hype about democracy and freedom, is known to be notoriously silent when it comes to uncovering the facts on what big business is really up to. In fact had the media really done a responsible job, as we expected it to do, the previous crises as well as the present financial crisis could never have happened in the first place. So where on earth is the public accountability?
The third issue is in the airlines industry. Naresh Goyal and Vijay Mallya have just announced an operational tie-up between their respective airlines. The direct consequence? 1,000 people have lost their jobs overnight. The tie-up has been necessitated, they claim, because of excess capacity at present leading the two airlines to come together to improve so called operational efficiency. In the first place it is strange that whenever there is so called “cost cutting”, human beings, many of whom have families to support, seem to become the first sacrificial goats. Why should it be so? Haven’t Mr. Goyal and Mr. Mallya heard of Southwest Airlines who, post 9-11, when every airline in the USA was sacking people, did not resort to any layoffs but still managed to rationalise their operations and is not only still surviving but also doing very well, thank you. And speaking of capacity in the Indian scenario, who allowed this so called excess capacity to be created in the first place? Why is there no public accountability in this space at all?
I know that the obvious thing to say is that we should all wake up and get our act together to demand better accountability and to create institutional mechanisms towards such a goal. The point is that given all that has happened over the years and given the pathetic situation in which we are today, my saying so would be just another case of mere, glib talk. The fact is that I really have no solutions to offer, I am merely raising the issues and I can only hope that there will be some among you who will come up with some innovative initiatives and follow through to provide the leadership, and the persistence required, to bring together like minded people who will forge the bonds necessary to create the mass movement that will eventually bring in true public accountability into this country.
(Disclaimer: 6bridges.com and its affiliates (‘6bridges.com’), do not necessarily endorse the views and opinions voiced on any of these forums, and cannot be held responsible for the content of sites linked from these pages. The opinions expressed under these pages are those of the people who post them and in no way constitutes those of 6bridges.com. 6bridges.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information provided through its service. In no event shall 6bridges.com be liable to any person for any decision made or action taken in reliance upon the information provided herein.), |
|
|
|
|
|
 | Messages/Opinions |
|
|
|  | 1) Public Accountability.
Mrigesh Divakar IRMA (Anand)'86 |22/12/08 | replies: 0| Post Reply | | |
Absence of effective Public Accountability in INDIA is one of the root cause of many of our problems. Public Accountability should be enshrined to the Group of Eminent Personality in the respective field like Prof.Amartya Sen for Economic activities etc, NGO's for social schemes etc. The Services of Eminent Lawyers interested to provide their services for public issues, should be taken to represent and defend the Public issues in the Court. Also such matters should be heard by special courts to be setup for such issues only and the hearing should be time bound and on daily basis to finalise the matters in time without any delays. The vested interest groups would not agree to this suggestions as this would affect these group adversely. Government should be facilitator and regulator, thus should not provide any funds from public exchequer for modernising the passport services. Such services should be catergorised as 'user should pay'. Thus instead of Government spending the public funds for modernising passport services, the user should be charged by the TCS / organisation providing these services just as toll tax collected on the EXPRESS WAYS / HIGHWAYS from the users. This will help Government to utilise PUBLIC FUNDS for Public GOOD.
Send Personal Mail |
|  | 2) Public Accountability
Alok Misra IIT (Bombay)'66 |02/11/08 | replies: 0| Post Reply | | |
What was the accountability in the time of Akbar What it was in time of British Akbar s time saw India having 27 of world trade share. Our traders never accepted the foreign currency during that time- only gold coins. Why this was so Akbar had called in artisans from Iran and from several other countries to teach local workers.Carpet weaving was one of them.Today we export carpets and are very proud of. Did Shahjahan constructed Tajmahal for tourists No! Today we earn million of dollars becuse of it. The fact is that at that time we spent the govt money in vocations and places where we earned! Are we doing it today No! For example take my city Meerut- makes more ornaments and exports except Honkong in Asia. Is no 5 in paying Income tax payment in India! 11000 Crores per annum. Where is this money going To the sky scrappers of Delhi Flyovers of Delhi. Meerut has 3.5 Lac tax payers. Can you calculate average income tax Do you know the city roads are dotted with pot holes!Power cuts are there for some 12 hours! Now I believe you know the answer.Spend where you earn and not for getting popularity. Take up projects that catch the imagination of people and promote art and science.India will bounce back!
Send Personal Mail |
|
| |
Click Here to login and post message
|
| Indian Alumni and Students from the following Indian and Global Institutes are invited to be members of 6bridges.com: |
| |
| India |
| Business & Accounting Institutes : FMS, ICAI, IIFT, IIM(A), IIM(B), IIM(C), IIM(I), IIM(K), IIM(L), IRMA(Anand), ISB, JBIMS, MDI(Gurgaon), NITIE, NMIMS, SJMSOM(IIT Bombay), SPJIMR, TISS, XIMB, XLRI |
| Technology Institutes : BIT(Mesra), BITS(Pilani), COE-Guindy(Anna Univ.), DCE, IISc, IIT(B), IIT(M), IIT(D), IIT(G), IIT(K), IIT(Kgp),IIT(Roorkee), ISI(Kolkatta), ISM (Dhanbad), IT-BHU, Jadavpur Univ., National Institutes of Technology(RECs), PSG(Coimbatore), RVCE(Bangalore), VJTI |
| |
| Global |
| Business, Technology & Accounting Universities/Institutes : AGSM(Sydney), AIM(Manila), Caltech, Carnegie Mellon, Columbia, Cornell, Dartmouth, Duke, Georgia Tech, Harvard, ICAEW(UK), IMD(Switzerland), INSEAD, Judge(Cambridge), London Business School, Manchester, Melbourne Business School, Michigan, MIT, Northwestern, NYU, Princeton, Purdue, Queen's(Canada), Said(Oxford), Stanford, U.Chicago, U.Penn, UC Berkeley, UCLA, Univ. of Illinois-Urbana, Univ. of Southern California, Univ. of Virginia, Warwick, Yale |
|
|
