B S Raghavan

Eternal vigilance is the price of reforms

B.S.RAGHAVAN | Updated on March 12, 2018

To all appearances and purposes, the UPA-II Government, and Prime Minister Manmohan Singh have got second wind and are on a reforming spree. They have to battle against the universal attribute of human nature: The fear of any attempt to change the status quo.

There was nation-wide commotion when in the early years of Independence it was decided to declare Sundays as postal holidays. I also remember the stubborn resistance put up against the introduction of decimal currency and metre system and the abolition of compulsory rationing.

That is what is happening in the matter of the new wave of economic reforms also. Zillions of words and sound bytes in debates and commentaries over the print and electronic media, and in seminars and public meetings all over the country, leaving aside the protests and agitations organised by political parties, have been making it out that the Government has embarked on a course that will push India over the precipice.

ATAVISTIC DREAD

In India, there is yet another psychological factor that operates, in addition to the alarm over the unfamiliar. That is the East India Company syndrome, derived from the memory of a band of traders under that banner, converting their initial foothold in India into an Empire. It is a composite of the atavistic dread and suspicion of foreign business persons, investors and traders as a whole.

That was what coloured the general approach of Jawaharlal Nehru and, to a large extent, even Indira Gandhi and kept India insulated and isolated, in the name of non-alignment, in their time. But for the desperate straits in which India found itself in 1991, it would have continued to be stuck in the same old groove.

The series of steps that Manmohan Singh, as the Finance Minister, then took to liberalise the economy have proved a game changer. Indeed, they have been responsible for all the spectacular growth achieved by India in the years since, and even giving it the economic muscle to be counted as a potential superpower.

In their wake has followed the infusion into the Indian work-culture of the best practices from abroad with emphasis on accountability, responsiveness and service-delivery that have made the life of the common man at least a little better. If only those who are vociferously opposing the recently announced measures remind themselves of what the state of the nation was before and after 1991, they would not be so obstructionist.

Of course, if they are opposing for the sake of opposing and are not willing to do rational thinking, that is another matter. There is, in that case, no redemption either for them or for the nation.

DESERVING REFORMS

To say all this is not to say that reforms must mean throwing away the keys after opening the doors. Eternal vigilance is the price of any reforms process. Without it, a free market will in no time degenerate into a free for all. In fact, it is only when the economy is liberalised that the Government’s role as a monitor, an umpire and a watchdog becomes crucial.

It should play this role not obtrusively or overbearingly, but discreetly and helpfully, through independent regulatory mechanisms set up to take care of important sectors.

There is no harm in their being subjected to the Government’s policy guidance but only in the rarest of rare contingencies.

The corporates too should be on guard against loosening the reins and leaving too much to chance. Most of them are apt to relax their vigil under the mistaken notion that getting involved and asking questions make for micro-management.

The fate of the once legendary business leviathans such as Enron, the Barings Bank, WorldCom and more recently J.P.Morgan, and the devastation caused by the sub-prime mortgage fiasco and the financial crisis are testimony to the criminal negligence of the persons at the top.

There is no reason to assume that the same kind of disasters cannot strike in India as well, given that human greed and propensity to take things easy are the same everywhere.

The corporate heads, and particularly the independent directors and the audit committees, should go deeply into even a seemingly little error, without assuming that it is innocuous.

In sum, it is not enough for corporates to clamour for reforms; they must also deserve them.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on September 25, 2012
null
This article is closed for comments.
Please Email the Editor
This article is closed for comments.
Please Email the Editor