Expert Speak India Matters
Published on Feb 22, 2016
With no changes in systems, can mere 'Make in India' transform country?

As the Government's much touted week long Make in India exposition was unveiled in Mumbai, almost in parallel in far away Ranchi, a typical Indian story was playing out. The contrast was stark and once again threw into relief how India refuses to change, the black taint unwashable.

On the one hand was the government and its Prime Minister showcasing the manufacturing prowess and ease of doing business in Mumbai. On the other, in Ranchi, Bambara Dhullu Mahto, a rogue lawmaker from his own party, was turning everything associated with Make in India on its head.

Already an accused in 29 criminal cases of various nature, Mahto was again in the news. This time a delegation from the Russian consulate in Calcutta was calling on Dhanbad SSP Surendra Kumar Jha beseeching adequate security for Russian firm IZ-Kartex Ltd operating in Baghmara. It is believed the company officials had been receiving extortion threats from supporters of the local MLA regularly. The company, which supplies and maintains machinery at some BCCL mines in Baghmara, had also been pressurised to provide jobs to 40 local people, apparently supporters of the MLA, on an annual basis.

These things aren't lost on investors. A pedestrian and capital deficit India refusing to come to terms with the reality of how agnostic investors are free to choose destinations where they get the best return on investment. The world cannot wait for India to get its act together. India sadly remains smug that it is doing better than the rest of the globe. A compelling India story riddled with a slew of governance and transparency issues will trip repeatedly, the economy’s growth forever hostage to demands made by corrupt officers and politicos.

Dhullu Mahto's actions remind one of Lady Macbeth’sr fervent appeal -- Out, damn'd spot! out, I say! It is indeed tough to wash, scrub, or soak stained and tainted hands. Like Lady Macbeth, the system finds the blood dyed into its conscience.

India has a several problems. Judicial over reach has led to an overhang, a fear of post-facto scrutiny, resulting in a bureaucratic machine that refuses to jumpstart -- archaic rules and regressive tax laws, uncouth and openly corrupt politicians who dry gulch the nation in its quest to move to rise to their next level of competence.

Take a gander at the fresh tax notice issued to Vodafone for Rs 14,200 on February 16 which in its fine print says that failure to comply will result in the company's assets being seized. The case is under arbitration and hence sub juice, but the trigger happy tax department scorns due process. And this fresh notice comes after the PM himself assured British investors that regressive, retrograde and retrospective taxation was a thing of the past. The thumb doesn't know what the forefinger is doing. So which investor will believe the promises made by a Government that does not seem to be in control over its actions?

Dhullu Mahto is a mere symptom of everything that is wrong with India. At every level in the government apparatus, an investor has to deal with asymmetry in systems, processes, procedures, laws and regulations. How does India change itself? It cannot.

Fear stalks the bureaucracy every minute. The UPA's worst legacy was that this slow moving mammal that prided itself as the Indian mainframe has practically cowered to a halt before the spectre of the three Cs - CAG, CVC and CBI. There may be plans, blueprints and ideas to ramp up the manufacturing base in India but when a hobbled bureaucracy and extortionist law makers continue to dominate, India only takes three steps backwards.

These fresh instances of Dhullu Mahto and tax notices once again convince die hard nationalists that something seriously rotten exists in our system which prevents us from taking gigantic leaps. China took the hard decisions and saw a long of exponential growth. It also brought about endemic corruption which XI Jinping is now trying to address. It has led to cataclysmic changes in the Chinese economic system, but Xi's purge will result in a better and more transparent China. A China which has seen its stock market go for repeated bungee jumps and its currency, yuan, devalued several times. Just short of a hard landing, it is fighting to keep its head above water with Xi cleaning the Augean stables aggressively.

Against that, we continue our addiction with serial gabfests. India cannot remain a captive of its past or for that matter present. It needs to move on by unfettering itself. It cannot be crippled by dysfunctional institutions or individuals anymore. The growth calculus must acquire a life force of its own -- self sustaining and pro creating. India cannot remain a prisoner of its past, manacled and chained. India has to break free.

The author is a senior journalist and commentator based in New Delhi.

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Ritika Prasad

Ritika Prasad

Ritika Prasad Student Tata Institute of Social Sciences (TISS)

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