Crony capitalism or economic growth?

Both China and India had the same level of per capita income in the ’80s, but China’s is now five times more than India’s.

China, under Deng, enunciated the doctrine, ‘it matters not whether the cat is black or white, so long as it catches mice’, and became a capitalist society in communist garb.

Its economy and military is now second only to the US, which is why Trump’s closest advisor, Stephen Bannon, predicts a war between the two in 5-10 years.

In the meantime, India appoints a JPC to study the colours of the cats, and the number of mice, and their social status, for purposes of entitlements. And lags behind.

Consider the news in February saying that China cracked down on 7 million bank defaulters!. They can’t travel by plane, or get promoted, or apply for credit cards! China has even hung a high-level official for taking bribes!

India prefers to shield cronies. It allows them to default on bank loans, yet escape to other countries.

It allows them to forever delay the wheels of justice by seeking adjournments, which are happily granted by a judicial system that is incestuous, caring more for itself than for victims.

Sorry, but we cannot have one set of rules and laws for cronies, and another for the laity.

There will be no economic growth until crony capitalism stops and speedy justice is delivered. It’s as simple as that!

Subramanian Swamy had recently exposed the fact that the son of a former Finance Minister has 21 overseas bank accounts, details of which he publicly disclosed. The investigation into these has been slow, or halted, and he wonders why. Justice must be equal for all.

In the Vyapam scam, the degrees of several students who had passed the medical exam through fake means, were cancelled, which is right. Yet, no action has been taken against the politicians or government officials who conceived it. This is wrong.

Of course, the government must simultaneously ensure that laws are fair and rules and procedures transparent. The reason black money was created, initially, was because income tax was taxed at absurd rates (as high as 97 per cent once).

People protested by evading tax, and it then became a habit. Crony capitalism extends to the farce of tax-free agricultural income, which this column has written about.

Due to various reasons, India has the highest economic growth amongst large countries. But skewed. And jobless.

The number of jobs needed are a million a month, but the jobs being created are far, far fewer.

This is a global phenomenon. Human jobs are being replaced by machines that can do repetitive ones better, without coffee breaks, holidays or demands for increments.

In future, jobs will come from short assignments and from small start-ups rather than from big companies. The government must have policies, and people, who encourage innovation and start-ups. Instead, we see the opposite.

App-based shared taxi services such as Uber and Ola, which provide thousands of jobs, are being asked to shut down ‘share-a-cab’ service, by States such as Karnataka. This is bizarre! Sharing should be encouraged, as it saves fuel for the nation and money for the consumer.

Rajiv Bajaj laments the inexplicable delay in granting permission to Bajaj Auto’s innovation, the quadricycle, citing vested interests. He also bemoans, rightly so, the request for extension by other auto companies to meet fuel-efficient standards.

(The writer is India Head, Euromoney Conferences. The views are personal)

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