Shooting from the Lip

Has law and justice minister Salman Khurshid done a service to Corporate India by his statement reported in the Indian Express: “If you lock up top businessmen, will investment come?”
He has not.
Worse, he has only ammo to the opponents of liberalization, who will cite this as yet another example of the government caving in to `neo-liberal forces’ and how opening up of the economy has only encouraged big-time corruption.
Remember Arundhati Roy and Prashant Bhushan saying the economic policies post-1991 were the reason for corruption becoming pervasive.
When will these Congress ministers learn to zip their lips?
The following is the exact context of his statement: “What will affect the functioning of the government is if other institutions do not understand the kind of political economy we are faced with today: what is needed to encourage growth and investment? If you lock up top businessmen, will investment come? What optimal structure should be put in place for investment to come?”
Obviously he was talking about corporate biggies – notably Unitech’s Sanjay Chandra and D B Realty’s Shahid Balwa –  currently in Delhi’s Tihar Jail facing trial on corruption charges in the 2G case.
But what does investment or the lack of it have to do with businessmen being in jail for corruption charges? If they are innocent, they will come out free. If they are not, they deserve to be in jail.
The Indian investment scenario isn’t suffering because of corruption charges against businessmen. It is suffering due to a poor investment environment – lack of policy clarity, squabbling ministers affecting both policy and its implementation in areas like mining, red tape, corruption (petty as well as high level) and now rising interest rates.
And, yes, corruption.
India ranks 134 in a list of 183 companies in the World Bank’s annual Doing Business report. Taking action against businessmen for corruption is not a criterion. The categories are starting and closing a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders and enforcing contracts.  Go to this link to see how India fares on all this.
And in 2010, India slipped four notches in the global Corruption Perception Index – from 84 to 87. Ask anyone – this is a dampener for foreign investment.
Has no action ever been taken against corrupt businessmen in the United States or the United Kingdom or any other free market economy? Nowhere in the world will a minister go out and say taking action against corruption will discourage investment.
Khurshid will probably come out and clarify that he meant businessmen being jailed without proof. But that is what the trial process is about – to decide on whether someone is guilty or not guilty. Or is it his case that in corruption cases, it is okay for receivers of bribes to be jailed but not those who pay bribes? (I am not pronouncing a verdict on those jailed in the 2G case).
Corporate India can do without such supporters.
Instead of telling the courts to go easy on businessmen facing charges of corruption, it might be better for Khurshid to tell his Prime Minister, his party leader and ministerial colleagues to do something to improve the investment environment.

Selective about Scams

Much is being made of Prime Minister Manmohan Singh and Congress President Sonia Gandhi snubbing the Commonwealth Games Organizing Committee honcho Suresh Kalmadi, under fire for mismanagement and corruption).

This is the first sign of the government’s resolve that it will not let the guilty in all the Games-related scams go unpunished. The country was assured that action would be taken immediately after the Games and that seems to have started (the logic behind not axing Kalmadi and other scam-tainted people earlier was that it was too close to the Games and that the event would suffer).

So why am I not too impressed by the cold-shouldering of Kalmadi.

For one, because it has come too late. That things were wrong with the way the Games were being organized were evident one year earlier when the government brought in several IAS officers into the Organising Committee to get things going after Michael Fennel, head of the Commonwealth Games Federation, publicly criticised delay in October 2009 (see this story: http://www.telegraphindia.com/1100613/jsp/7days/story_12559538.jsp). Whispers about scams were doing the rounds long before the media got evidence of it and splashed it. So why wasn’t action taken then instead of waiting for media exposes and then expressing helplessness two months before the Games? 
And the real test will be - not the social boycott of Kalmadi - but actually bringing all the guilty to book and not making scapegoats of some, while others get away.

There is, however, a larger second point I want to make.

Why haven’t the Prime Minister or Sonia Gandhi snubbed other politicos at the centre of corruption charges?

The most glaring example, of course, is telecom minister A Raja, whose name crops up in the context of the 2G spectrum allocation scam, which is expected to cost the exchequer Rs 60,000 crore. Forget socially boycotting him, the Prime Minister takes Raja into the UPA-2 cabinet in the same ministry as he held in the UPA-1 cabinet, which is when the scam occurred. Giving a scam-tainted minister another ministry is hardly an attack on corruption, but it would have given this government some semblance of respectability. But no, even that was denied to this country.

If that weren’t bad enough, look at what happened on the appointment of the Central Vigilance Commissioner. The CVC is to be appointed by a panel that includes the Leader of the Opposition. This is to bring in a measure of impartiality into the appointment prevent charges of the CVC – who heads an office which has a crucial in checking corruption – being the stooge of the government of the day. But the following story will illustrate how even this important requirement is being treated in a cavalier fashion by none other than Manmohan Singh.

Sushma Swaraj – the Leader of the Oppostion – was called on Friday to a meeting with the Prime Minister and home minister (the panel to select the CVC) and presented with three names for the CVC’s post. She said she had no objection to two of the names but pointed out problems with the name of P J Thomas. She gave her reasons – not only did Thomas’ name figure in a scam in Kerala (he belongs to the Kerala cadre of the IAS) but more importantly, he was telecom secretary under Raja and, as CVC, would have to probe the 2G scandal. The Prime Minister and the home minister said they wanted Thomas. She said they could choose any of the other two. They didn’t agree. She then suggested that the panel of names be widened so that they had more choice. But they said there was no time to do that, since the new CVC was to be sworn in on Tuesday. She pointed out that there was time till Monday. But they didn’t agree and wanted to finalise Thomas’ name that day itself. At which point, she remarked that they didn’t just want his name finalized that day, but that very moment. Prithviraj Chavan, the minister of state in charge of personnel, public grievances and pension, and asked him to prepare a letter appointing Thomas as CVC. Swaraj then insisted on recording her dissent. Swaraj has gone public with this sequence of events and the government hasn’t really contradicted it.

Maybe the BJP’s fears that Thomas may scuttle the probe will prove unfounded; maybe Thomas may prove to be impartial. But the manner in which Thomas was appointed does make one uncomfortable.

If the government did not want the other two retired bureaucrats to be CVC why did it include their names in the panel? Clearly the government had made up its mind to appoint Thomas and expected the Opposition to go along with it silently. Unfortunately, because the main opposition party is the BJP, others are not raising enough of a stink.

What is this if not a sham and a mockery of the principle behind making it necessary to get the approval of the Leader of the Opposition? Is the Leader of the Opposition meant to rubber stamp the government’s choices on crucial appointments?

So far from boycotting Raja, the government appears to be going out on a limb to protect him.

In the light of this, the snub to Kalmadi is laughable. And the flurry of action against the Games-related scams evokes only a cynical sneer.

Don’t get me wrong. I have no sympathies for Kalmadi; I think he represents all that is wrong with Indian politics and sports (I am giving a link to a story we did in The Telegraph on the way Kalmadi has risen to dominate Indian sports http://www.telegraphindia.com/1100808/jsp/7days/story_12786018.jsp).

But this crusade against corruption in the Games will ring true only if it extends to ALL scams. We cannot afford to be selective about scams.