FROM THE ED­I­TOR-IN-CHIEF

India Today - - FROM THE EDITOR-IN-CHIEF - (Aroon Purie)

In 1991, with Man­mo­han Singh lead­ing the way as fi­nance min­is­ter, In­dia de­cided to open its econ­omy to the world. It was a ground-break­ing de­ci­sion that led to the growth of in­dus­try, man­u­fac­tur­ing, jobs, and house­hold in­comes. In­dia sud­denly be­came a great place to do busi­ness in, with its bur­geon­ing mid­dle class get­ting a taste for prod­ucts and brands that were al­ready pop­u­lar in the rest of the de­vel­oped world. But over the last four years, as Man­mo­han Singh’s UPA 2 has been in­fected by pol­icy paral­y­sis, our econ­omy has got stuck in a vi­cious cir­cle. Gov­ern­ment deficit is lead­ing to growth deficit, which in turn is lead­ing to a trust deficit be­tween In­dia Inc and the In­dian state. At the heart of the prob­lem lies the de-facto re­turn to li­cence raj over the al­lo­ca­tion of nat­u­ral re­sources, which are now con­trolled and dis­trib­uted ar­bi­trar­ily in the ab­sence of a uni­form trans­par­ent pol­icy.

IN­DIA TO­DAY car­ried a cover story on Au­gust 1, 2011 (Good­bye In­dia, Wel­come World) on how In­dian busi­ness houses were look­ing abroad for op­por­tu­ni­ties rather than at home be­cause of the has­sles of do­ing busi­ness in In­dia. The sit­u­a­tion has now changed dra­mat­i­cally where the fear of prose­cu­tion is driv­ing busi­ness out. A clear in­di­ca­tion of how messy things have be­come is the claim of for­mer coal sec­re­tary P.C. Parakh that his push for trans­parency in coal block al­lo­ca­tions was re­sisted at var­i­ous stages. It is this affin­ity for opac­ity that led to the so-called coal scam, in which ques­tions are be­ing asked not just of top busi­ness houses but also the Prime Min­is­ter him­self.

Since the 2G scan­dal, the Ra­dia tapes and the coal scam, the CBI and the courts have gone with un­com­mon ag­gres­sion to charge ma­jor in­dus­tri­al­ists with wrong­do­ing. Many cap­tains of in­dus­try, who’ve shaped In­dia’s mod­ern econ­omy, are fac­ing in­ves­ti­ga­tions. What fur­ther high­lights a dys­func­tional Gov­ern­ment is that most of th­ese probes are be­ing mon­i­tored by courts be­cause of their lack of faith in the in­de­pen­dent func­tion­ing of our in­ves­ti­gat­ing agen­cies. While there is no doubt that wrong­do­ers must be brought to book, no mat­ter how large their busi­ness em­pires, th­ese cases—some of them patently half-baked—have cre­ated an en­vi­ron­ment where cap­i­tal is be­ing driven away from the coun­try. A pall of gloom hangs in the board­rooms as in­dus­tri­al­ists are now find­ing In­dia a scary place to do busi­ness in.

Our cover story, writ­ten by Deputy Ed­i­tor M.G. Arun, looks at the grow­ing lack of faith in the In­dian econ­omy by top busi­ness houses. It ex­plores how courts, in­ves­ti­gat­ing agen­cies and busi­ness be­ing at log­ger­heads with each other could be the last straw in an en­vi­ron­ment where prof­its have slumped and our growth fore­cast for the fi­nan­cial year 2014 has been down­graded to a dis­mal 3.8 per cent by the IMF, which is 1.8 per cent lower than their own July pro­jec­tion.

Any pol­icy or de­ci­sion in ret­ro­spect can be found faulty. But of­ten the dis­tinc­tion be­tween de­ci­sions taken in good faith and cor­rupt de­ci­sions where quid pro quo is es­tab­lished is be­ing lost. Charg­ing big in­dus­tri­al­ists makes for pop­ulist head­lines but un­fairly do­ing so is cost­ing the na­tion dearly. To­day the tele­com sec­tor is in a mess, the power sec­tor is suf­fer­ing be­cause of lack of coal, iron ore min­ing is at a vir­tual stand­still and bu­reau­crats are re­fus­ing to take de­ci­sions for fear of sub­se­quent re­view.

The coun­try needs to have clear-cut poli­cies where dis­cre­tion is lim­ited; the pro­cesses of al­lo­ca­tion are trans­par­ent; an in­ves­ti­gat­ing agency which is gen­uinely au­ton­o­mous and doesn’t give a clean chit to cor­rupt politi­cians while pros­e­cut­ing oth­ers on flimsy ev­i­dence; and a ju­di­ciary which in­ter­prets the law in­stead of de­cid­ing the mer­its of poli­cies or mon­i­tor­ing in­ves­ti­gat­ing agen­cies. Pun­ish the guilty, but swiftly, as no­body can do busi­ness with a sword hang­ing over their heads.

OUR AU­GUST 2011 COVER

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