Thursday, January 22, 2009

Provoked Ideas of Meghnad

Meghnad Desai writes few observations on Satyam and politics in India. The following are from his article:

“Like a murderer, who has escaped undetected but can’t keep away from the scene of his crime, he provoked detection. The market, which our intellectuals tell us does not work (hence we need regulators!), smelt a rat and dumped on him. 

The biggest danger right now is that this will be seen as solely a Satyam problem, and be dealt with technically, that is assuming that in Indian context anyone ever comes to judgment. After all, the murderers of 3,000 Sikhs are still swanning around Delhi 24 years later. The roots of the fraud lie —I guess , since we don’t know—in the real estate and infrastructure Matyas firms. Real estate everywhere in India is embedded into corrupt politics. In Mumbai as in Hyderabad, local politicians take their bribes in real estate and in return give fat contracts. This is why Sreedharan, the Delhi Metro boss, smelt a rat about the Hyderabad Metro contract. He called the contract awarded to Matyas ‘a land scam’. 

No inquiry will report before the election of 2009 or even the one after that! Think Lieberhan. Sebi had already been found asleep when someone used its stationery to do an insider trading job. Who could now trust anything Sebi does, if it leaks like a sieve? No one took responsibility, and no one resigned. One cannot have effective regulation in a country with dysfunctional politics, which appoints people to sensitive jobs only after making sure they are not likely to embarrass their masters. What the scandal needs is a wide ranging inquiry, perhaps a judicial one chaired by a reliably independent person, preferably a foreigner, to delve into this murky pool. 

I predict that no such inquiry will be initiated. Raju will be free for decades. Matyas companies will escape undetected. 

That is par for the course and should not shock anyone. But I feel sorry for India Inc. For a while it looked like the Indian private sector would overcome the handicaps placed on it by the politicians it has to genuflect to. I even hoped that the business leaders would reform politics. It seems politics can corrupt any business faster than you can think. Even as recently as August 2008, India was touted as a success story, the next super power with a dynamic economy and vibrant democracy”.

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