Indian, appalled and angry

I've got 176000000000 reasons to be appalled and angry.

Why am I appalled? You would be too, if you and your progeny were expected make up for the greed, corruption and systemic failure that cost the India Union - try wrapping your mind around this ridiculously gargantuan numeral: Rs. 1,76,000,000,000.

Rs. 176 billion and change was the profit margin shamefully gifted to businessmen by the Honourable Telecom Ministry of the Government of India, which is ironically led by a venerable economist with Honorary Doctorates in Civil Law from both Oxford and Cambridge!

What makes me angry though, is this... Although there are some red faces - there is an almost righteous indignation at the exposure from the bigwigs involved - the Managements of leading telecom companies, two of the country's richest businessmen, cabinet-level ministers, and top bureaucrats.

That these stalwarts will not be inconvenienced in the slightest is but a foregone conclusion because there are different rulebooks for criminals with money and influence.

Already, there are machiavellian manoeuvers to pre-empt meaningful investigation, or to control the outcome. Tehelka, one of the last remaining vestiges of fearless reporting, has highlighted the swearing-in of a former Telecom Secretary, PJ Thomas as the Chief Vigilance Commissioner (CVC). He now heads the apex anti-corruption watchdog body in India.

What's wrong with that?

Only that this individual was Telecom Secretary at the time of the 2G scam, quite possibly tainted up to his eyeballs like the rest of the despicable worshippers of Mammon in the Corridors of Power & Avarice. As Telecom Secretary, he is on record according favours to individuals under investigated in yet another scam that involved Motorola and MTNL/BSNL. Not just that, Mr. PJ Thomas even today holds the distinction of being Accused No.8 in the infamous Palmolein corruption case in Kerala, which was perpetrated while he was Food & Civil Supplies Secretary - and is still Sub judice.

This is the distinguished gentleman presently tasked by the Government of Indian to enforce the Prevention of Corruption Act and oversee investigations into complaints against corrupt officials. Evidently, the CVC, a proven paragon of probity will begin by leading an impartial investigation against himself.

The pedophile is now the school principal. Sigh! How comforting.

This action offers a rough idea of the extent to which power can be blatantly abused in the face of the citizenry. Now imagine the goings-on behind the scenes...

I'm getting really worked up.

(Update: The tainted CVC has finally been sacked by the Prime Minister. Apparently, the Prime Minister, Manmohan Singh accepted an "error of judgment" in appointing P.J. Thomas as CVC.

But before we praise the wisdom of the PMO, let us keep in mind that this change of heart was AFTER the Supreme Court of India for the first time ever cancelled an appointment made by the Prime Minister of India!")

Thankfully, Theleka's intrepid Shoma Chaudhury in converstion Rajya Sabha MP, Rajeev Chandrashakar provided fodder for some wishful thinking on how the nation must deal with the repugnant perpetrators.

Rajeev, the former Telecom entrepreneur and owner of BPL Mobile (which he sold to Vodafone, reportedly for $2 billion) offered such gems as: "You have to think like a layperson. I don’t think it should be allowed to enter the sophisticated realm of legality. We should keep it simple. Take back the licences or get back the money. Actually there are three types of companies involved in this now. One is the existing operators like Airtel, Vodafone, Idea, Tatas and Reliance Comm who got extra spectrum. Then there are the new companies like Unitech and Swan who got spectrum and sold it off. Third are the companies who got spectrum but are sitting on it and not rolling out services. These three have to be tackled separately. The first guys have to be told you got the additional spectrum illegally not the licences, so you pay a fine of Rs. 3,000 crore each and keep the spectrum or surrender it.

With the second group, there are two problems. Those who sold off their spectrum should be asked to pay a retrospective windfall capital gains tax. The government should claim a 95 percent tax on it. As for the guys who bought these licences from the original buyers, they have to be told that either their licences will be taken back or they should pay massive penalties in the range of Rs. 3,000-Rs. 5,000 crore each.

The third guys who’ve taken spectrum but are doing nothing with it should be told to forfeit the money they paid and the spectrum should be taken back. Through all this, there is one basic theme: we believe you have done wrong and we will make the penalty painful, not just a small rap on the back. What’s disturbing is that Kapil Sibal (who has taken over from A Raja) is already pushing this into an arcane realm of legalese. I can tell you his arguments for this right now. He is thinking if we cancel licences, both investors and consumers will be upset. Neither of these concerns is valid. To say investors will be upset is to say that a criminal will be upset for being put behind bars for a crime.

The fact is nothing is going to happen to investors if we take a strong stand on this. They will continue to invest. The simple stand should be if you do anything against the laws of India, you have to pay for it. The government can’t give an assurance that we shield you from being conned. In China, these companies would have been kicked out. Tax payers can’t be held responsible for the bad investment decisions of companies."

Hmm, now where did we hear the argument, "Too big to fail", before?

The interview actually goes further than I'd hoped for - bringing some welcome facts into the misplaced middle-class bravado and light-headed euphoria around India's 9% economic growth.

Shoma gets the ball rolling with, "Publications like ours and civil society activists have been warning that the euphoria about the growth story in India is misplaced. Do you agree? Even Raghuram Rajan, (former economist with IMF and currently economic adviser to the PM) wrote recently that there has been a “privatisation through stealth” and most Indian billionaires have been created out of their proximity to political power."

Rajeev picks up the ball, and sends it 'outta the ballpark' with this: "I’ll give you a small empirical fact about our growth. We’ve been talking about 9 percent growth. But the three main components of this are mining, real estate and construction which are growing at higher than average. Agriculture is 1 percent. Manufacturing is 3 percent. So the average is high only because of these three sections. There is not a man in India who believes that these sectors are not heavily politicised. And it’s these sectors that have thrown up the most number of billionaires. So the government is asking us to celebrate an economic model whose inside story is about robber barons and crony capitalism. If you are endorsing this percent growth rate, then you are basically endorsing crony capitalism.

We all want growth but we should define the kind of growth we want. Bureaucrats don’t give a damn — they will say 9 percent growth and hype it all up. But the truth is this growth is distorting our wealth creation and creating a small club of billionaires while 480 million of our people still live in sub-Saharan conditions. If you only enjoy spreadsheets and numbers, you can keep plotting graphs and marvel at how it’s going up. But the graphs hide a lot of things [...] If you allow this kind of wealth creation, you are, in effect, putting democracy at risk. It’s going to be a democracy not of the people, by the people, but of, for and by money."

If you have checked out my previous post, you will immediately recognise that the "graph going up" is not a straight line but an exponential curve that simply cannot continue to perpetuity. It has to snap - yes, snap and dive straight down. But before it does, it will wreck havoc of untold proportions on the land and people. Because this isn't 9% of a static quantity we're talking about. It represents the rate of utilisation of natural resources being compounded by 9% every year. Go to my earlier post, click the link and see the video. The Professor explains the concept better. I suck mightily at mathematics. I can just about spell it correctly.

Time to digress a little...

Does this all mean that it is a little premature to expect the Indian Governmemt to take up the Swiss Government's offer to disclose the names of Indian account holders in Swiss Banks? Aw shucks!

The number being bandied about in this case is 1,500,000,000,000 in US Dollars, or $1.5 trillion and change.

But there is no need to worry actually. The government can take it out of the taxpayer's income. Sure, they'd have to work a little harder - but see how nicely it all works out in the end for the moneyed businessmen.