White col­lar crimes will con­tinue to hap­pen un­less there is fear of law

The Hindu Business Line - - MARKET WATCH - J MULRAJ

Indians have no fear of law and of the con­se­quences to them of break­ing it. The in­ves­tiga­tive agen­cies are slow, and suc­cumb to a va­ri­ety of in­flu­ences (in­clud­ing po­lit­i­cal in­flu­ence to pro­tect crony cap­i­tal­ists) and weaken their in­ves­tiga­tive process through in­or­di­nate de­lays and even pre­sent­ing a weak case. The ju­di­ciary, too, is in­ex­pli­ca­bly le­nient in its grant of ad­journ­ments; the judges come up through the ranks of lawyers and are wont to per­mit de­lays, thus ben­e­fit­ing the cul­prit and pun­ish­ing the vic­tims.

Coun­tries such as Sin­ga­pore have a set timetable, de­ter­mined at the start of a trial, which grants each side lee­way to ask for only one or two ad­journ­ments per side. Jus­tice is de­liv­ered speed­ily, as it should be. There is re­spect for law. That’s how it is with other de­vel­oped coun­tries too.

Jus­tice is not only dis­pensed speed­ily but also im­par­tially, not grant­ing le­niency or favours to the cul­prit whoso­ever it may be.

In stark con­trast is, for ex­am­ple, cases such as NSEL, which is run­ning, in a theatre near you, for the past five years.

In fact, just last week the Mum­bai Po­lice were seek­ing ‘proof of trade’ from SEBI! The fact that the po­lice ask for de­tails of proof of trade five years af­ter the scam, is state­ment enough.

The case is sim­ple, and the fact that it can be dragged on for five years is tes­ti­mony to the le­niency of the ju­di­ciary.

But the con­se­quences are ob­vi­ous in terms of eco­nomic devel­op­ment. When Lee Kwan Yew be­came PM of Sin­ga­pore, its per capita GDP was equal to In­dia. To­day Sin­ga­pore is far ahead. This is be­cause the first act of Yew was to erad­i­cate cor­rup­tion, send­ing to jail any one found guilty, ir­re­spec­tive of his/her po­si­tion.

Un­less In­dia does that, fi­nan­cial scams will keep re­cur­ring.

There is no fear of law. Those who can, will flee to other coun­tries (Mallya, Modi, Me­hul, the 3 Ms, who do not re­sem­ble a choco­late bar). Those who can­not flee, use the pro­ceeds of crime to hire the top­most lawyers and talk to the in­ves­tiga­tive agen­cies. Cases drag on till the vic­tims, bereft of their life sav­ings, give up.

The cronies get rich. The coun­try re­mains poor.

This is not the In­dia that Modi wants or has promised. He has the right ideas to clean up sev­eral prob­lems, but has ne­glected the pro­tec­tion of in­di­vid­ual in­vestors, per­haps on the (fake) as­sump­tion that law will take its course. Sure it will, but the vic­tims will be dead by then!

There is no in­vestor pro­tec­tion. There are many rules but, thanks to com­pro­mised in­ves­ti­ga­tion and a slow ju­di­ciary, there is, in prac­tice, none.

There are far too many global prob­lems to pre­pare for, to make In­dia glob­ally more com­pet­i­tive. The US Pres­i­dent is throw­ing his weight around and seek­ing to rene­go­ti­ate more favourable terms.

At the root of these threats is the eco­nomic hege­mony of the US, the world’s largest econ­omy, the role of its cur­rency as the world’s re­serve cur­rency and its con­trol of the fi­nan­cial pay­ment sys­tem through things such as SWIFT, which it can, and does, use, to turn off the global pay­ments flow.

Coun­tries are seek­ing to counter this by set­ting up al­ter­na­tive modes.

These changes will be dis­rup­tive and need the full at­ten­tion of pol­icy mak­ers.

(The writer is In­dia Head — Fi­nance Asia/Hay­mar­ket. The views are per­sonal.)

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