In the backdrop of the explosive fallout—that among other things outed the cosy relationship among politicians, businessmen, journalists and lobbyists—of the leaks of the wire taps on corporate lobbyist Niira Radia, let us have a quick quiz. Who said the following: (You are not allowed to read ahead, but here’s a clue: the person has a cast-iron image of impeccable integrity.)
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• The next decade must be a decade of the unleashing of Indian creativity based on individual enterprise and collective effort. Crony capitalism and the politics of populism cannot take us very far.
•They were no crony capitalists, they were no fixers and lobbyists, they were no petitioners and permit-seekers, they did not seek subsidies or quotas, they did not worry too much about the hurdles ahead, for they were determined to triumph and to overcome them. They were visionaries, who thought big and thought into the future of this blessed land of India.
•Are we encouraging crony capitalism? Is this a necessary but transient phase in the development of modern capitalism in our country? Are we doing enough to protect consumers and small businesses from the consequences of crony capitalism?... Have we, in the name of protecting them (domestic enterprise), encouraged crony capitalism?
•I do agree that wherever we need regulations, I think those regulators must be seen to be effective and the crony capitalism is the danger that cannot be wished away… That is a danger we must guard against.
If you haven’t got it so far, then here goes: It is Prime Minister Manmohan Singh. These are extracts from various speeches delivered by him in the last six years as prime minister (specifically, they were delivered on 19 November 2004, 23 November 2004, 1 May 2007 and 6 November 2010 and can be obtained from the Prime Minister’s Office). And all of them very candidly flag the endemic problem of crony capitalism—the practice of corrupt business, wherein contracts/special policy concessions are awarded to friends (cronies) and relatives by politicians who wield executive power.
As the country’s premier executive, Singh has an enviable image of integrity and the above extracts suggest that he has been very cognizant and disturbed about the cancer that has taken over contemporary India—flagging it in public forums on four separate occasions in the last six years. In fact, the more discerning would recall that Singh had issued similar warnings on crony capitalism when he served as finance minister in the regime of P.V. Narasimha Rao.
So if there was a doubt in our minds as to whether this problem was bad enough, Singh’s statements as well as the leaks of the Radia tapes would have sealed it. The fallout is much more than the vicarious thrills that we may have enjoyed at the expense of the hapless few whose conversations have been illegally made public.
The biggest long-term damage is that the three pillars of democracy—without which the idea of India is meaningless—are under siege.
Politics has long been under a cloud, but now journalism, too, is suffering. (My memories as a young journalist in 1986 was of a journalism of courage where being anti-establishment was the in thing. Today, you are counted by how many times one is feted by the establishment, whether government or business.) Similarly, the judiciary, too, is under fire (questioning the integrity of its judges, a Supreme Court bench on 26 November observed on the Allahabad high court that there was “something rotten” there.)
This erosion, if unchecked, will undermine democracy. Something that will be disastrous for the aspirations of over one billion freedom-loving citizens of a country that has truly stuck to the Gandhian notion of pacifism, desisting from first acts of aggression against other countries despite the gravest of provocations and hence stands out like a beacon to the world.
On 22 November, Capital Calculus had argued how the country is at the tipping point of corruption. Something needs to be done about the malaise. Singh at the helm, with his Teflon-like image, is in an ideal position to launch a challenge against crony capitalism. The same column had also called for out-of-the-box solutions that attack the nexus between politicians and businesses.
Alongside, the process of creating independent regulators has to be accelerated; recent attempts to reverse this process, especially in the financial sector, have to be nixed. The government’s credibility has been severely tarnished. Only drastic measures can restore faith. All the more since the biggest instances of crony capitalism have emerged in sectors in which circumstances are created through manipulation of government policy that in turn perpetuate domination by oligopolies.
For a government that never tires of espousing the cause of the aam aadmi (or making growth inclusive so as to draw more ordinary people into the process), this would be the biggest gesture for inclusiveness. This would be the political economy of tackling crony capitalism.
Failure to act decisively at this point will be tantamount to an act of omission; the rot is so deep that even this is no longer excusable. The government would run the risk of inviting the charge that it is but a representative of the khaas aadmi (privileged few).
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at email@example.com