With the 2G verdict enthusing the whole country, it is time the government allowed corporate investments and expansions in a transparent and hassle-free manner.

There have been whispers of discontent in some circles that the Supreme Court judgment, cancelling 122 2G spectrum licences issued by the UPA Government in 2008, will send a wrong message to investors. While the country celebrates the historic verdict, this politically incorrect view is not being expressed openly, as you'd be seen condoning the unholy nexus between our corrupt politicians and unethical business houses who do questionable deals.

While the former Telecom Minister, Mr A. Raja, and his cronies have been indicted for taking the country to the cleaners, we seem to be mollycoddling corporates willing to pay mega bucks to get undue advantage in doing business.

Even the media which continuously barrages our politicians and bureaucrats for their corrupt ways, is hesitant to attack business houses. The reason is simple; as a rule, politicians don't sue the media, but corporate houses can flex their muscles, and how!

On their part, many corporates say it is virtually impossible to do business in India without greasing palms. But in recent times, State governments which demand exorbitant sums for clearing business projects, expansion plans, and so on, have seen companies walking out. Invariably, the beeline is for Narendra Modi's land, which is not only business-friendly, thanks to the business acumen of the average Gujarati, but also, it is possible to get clearances in record time and in comparatively cleaner ways.

Cognizant example

Last week, when I met the Cognizant Vice-Chairman Lakshmi Narayanan for a free-wheeling interview, he was uncharacteristically scathing on the frustration people like him feel about India's failure to get the investment it deserves. He said he couldn't comment on Gujarat because Cognizant is not present there. “In most states in India, it is difficult for businesses to operate. It could be so simple, and we can attract so much more investment if our procedures are simplified.”

He says bureaucratic hassles continue to abound; there is corruption, on the one hand, and inaction, on the other. Decisions are not being taken, and permissions not given. “They sit on proposals, worrying that two months or two years later they might be asked why they cleared them. But if they don't act, nobody will question them.”

Describing this state of affairs as extremely frustrating he says, “So we stay away from governments as far as possible and keep our government interactions to the minimum, very straightforward and transparent.” The same is true with the tax authorities; if and when tax notices are slapped, “we willingly open up our books to them. When we get into arbitration on tax issues, we invariably win because things are clean and clear at our end.”

Mr Lakshmi Narayanan says that even when it comes to buying land — “and we have the least quantity of land among IT majors — his company prefers buying it from private people. But for SEZ, “in Siruseri (Chennai) and other places, we bought land from the government, paying the highest prices, sometimes five times higher compared to our competitors.”

That because, while finalising a land deal “the government comes back and says, today this is the market price, you can make a representation. But we always say we'll buy it at this price. Let's register and we'll go ahead with our business!”

Interestingly, he says he prefers to keep the land the company owns to the minimum possible because “land is a liability in this country. You have to maintain it, guard it against encroachments, and people will always crib that you are holding on to so much land.” In Siruseri, he said, Cognizant had to buy 26 acres because that was the requirement for SEZ land. “We don't need so much land, and we suggested to the government to put down a condition that for every acre of land given to a corporate, about 5,000-10,000 jobs should be created. But will that be done?”

Atmosphere of fear

He agrees that “policy paralysis” is seriously hurting Indian business as also investment coming into India. “Also, the frustrating thing for business leaders, even for somebody like me, is that people are afraid of opening their mouths. When we don't like something we are not able to say it.”

In the long run, he adds, this atmosphere of fear which prevents people from speaking their minds, apprehending being targeted by the government, will hurt the country.

As also decisions not being not taken. “We interact with many customers in retail, pharma, and so on. They want to establish supply-chains here, they have a huge chain in the US; say India is a big market and we have fantastic supply chain ideas that can improve efficiency. We're talking with various governments but aren't able to make any progress.”

The result, he adds, is economic slowdown, and wonders why any government should prevent business done in an ethical, transparent way, from being profitable. And this, when “so many people in the country are piling money. Take for example, the mining sector; but you don't do anything about it. Whereas you will prevent others from making money ethically.”

The inability to do anything about such a state of affairs, says Mr Lakshmi Narayanan, is frustrating. “At least if you could talk about it freely, you'd get some satisfaction, but even that is not possible!”

Batting for FDI in retail, he says the kind of technology retail majors can bring to India would improve inventory levels and minimise wastage. He shoots down the argument that this would affect lakhs of kirana shops across India. After all a Wal-Mart can be present only in few large locations.

Our kirana merchants are so smart and savvy “they will go to Wal-Mart, procure in bulk at lower prices and sell the goods to their customers, all of whom can't go to Wal-Mart. They will become the delivery mechanism and solve the last mile problem.”

But our politicians are not willing to bring in this opportunity. “To say I don't have the numbers is not convincing. You should do what is right for the country and the people.”

The only way to fuel economic growth would be to devolve more power to the States, just as successful corporates do it within their businesses, he adds.

Well, grossly dishonest ways of helping dubious corporates have landed the present dispensation in Delhi in a real mess, with its image and reputation in tatters. It's time the governments listen to sane, and honest voices such as these.

Responses to rasheeda@thehindu.co.in and blffedback@tehhindu.co.on

(This article was published on February 6, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.