Monday, May 16, 2011

Lets shift our focus back

Writing a post after a hiatus of six odd months. I also write at The CH Edge as a part of faculty team of CH EdgeMakers. So this is my opinions blog and on issues related to career and MBA Entrance, you shall find me writing at The CH Edge.

My last post was on Corruption. Little did I know at that time that it will turn out to be so insightful. As if as a trigger the floodgates opened soon after. Scam after scam - 2G, Radia Tapes, Balwa, DB realty, Amar Singh Tapes etc. Anna Hazare phenomenon happened, some really high profile arrests happened and today everyone in the media is looking for more dough on a new scam that they can break out.

But wait, what happened to so many other issues that were hot just before all hell broke loose on corruption. Ask yourself what was hot topic just ten months ago?? Thinking?? And may be you can't remember.

What happened to the India growth story? We becoming a financial superpower in the next few decades? Why are the stock markets suddenly cautious? Why do columnists no longer swear by the India shining buzz? Why has FDI in India been declining stubbornly? Have we been derailed?? By whom? for what??

Here is the answer : Yet again, we have got our priorities wrong as a country. Allow me to explain. Corruption is a big problem our country faces but it is not our biggest problem. A bigger problem is a non-functional system of Governance. Too much focus on eradicating corruption paralyses the system further. Uncertainity grows and hence risk in the environment increases. India can ill afford such an environment - specially because there are hardly any global drivers to growth. We need to take broad based Growth as our top agenda. Nothing should deviate us from that focus. Not even an Anna Hazare who ironically is a man with his heart in the right place.

So, you would ask should we overlook corruption? My answer, quite surprisingly, is yes - at least for the time being. Here is why? Corruption has many roots - one is pure & raw greed. But there are others - Poverty, Inequality of Opportunities  and competitive jealousy are some more reasons.

While corruption generating out of pure greed is detestible and need to be dealt with, with iron gloves, others are better handled by focusing and ensuring broadbased growth that leads to widespread prosperity.

Today many walk down the road of crime and corruption because they are forced into it by the basic need and desires of dignified living. Soon they experience the weak and ineffective system and hence they are emboldened to accumulate wealth by all means without fear of law. Check out the number of petty thiefs and small time goondas/politicians who became rich & happening in a few years in most growing cities of our country to understand what I mean.

Some more are compelled to follow corrupt practices simply out of frustration - because opportunities are less and these opportunities also are not fairly distributed. Ask a person who wants to do business honestly, or a job aspirant who wants to bag the job on his/her merit - and you would know what I mean.

Finally, the onslaught of capitalism has waged a new war amongst the huge middle class of India. A war of matching and outdoing each other in lifestyle. I run two education institutes in my town. In our coaching business we came across a student (his father a respected Govt. officer in Hoshangabad) who stole cycle of a fellow student from the parking lot and sold it to a very reputed and old business of cycles in Indore. The guy in question was anxious but not remorseful. The pressures of metro lifestyles and its demands on today's youngsters lead them to such corruption of mindset.

Corruption due to greed generally will be found in the top echeleons of Govt & business quite removed from ground level day to day realities of middle class life - witness all those involved in the 2G scam or the Commonwealth games scam. These people do not care for anything but wealth - not even their reputation.

But this corruption in all its extent is less of an issue to the common man on the ground. He is affected severely by the day to day bribes that he has to pay at traffice signals, sarkari offices, tax offices and muncipality offices. These cases of corruption largely belong to the later categories. Not every policeman is happy taking bribes - but he/she is driven into it because of a thanklessly hard grind of a job that pays just enough to subsist - not to prosper. Further, today his/her job does not even give them the respect that it deserves.

My simple suggestion is that most of these other kinds of corruption is better addressed by spreading prosperity. If policemen gets paid handsomely - there would be many who would not accept bribes. And hence a more long term and permanent solution to widespread corruption is widespread prosperity. Sadly our enthusiasm to root corruption out may be the reason this prosperity may be delayed. Hence the title of my post - Lets shift our focus back to where it should be : Broadbased Growth.

Lets again start discussing and implementing reforms - What happened to the Direct Tax Code(DTC), or the Goods & Services Tax (GST), Lets reform the Police and Governance, Lets move on decontrol of diesel, lets focus on building infrastucture, lets implement UID quickly & effectively, lets focus on more institution building like that of the RBI, SEBI, IRDA, TRAI etc. Aggressive reforms, better governance will bring growth, generating employment and ground level prosperity. This in itself will bring down corruption. A corrupt but functional and growing system is better than a clean but paralysed one.