Tuesday, May 22, 2012
Vasu Reddy From Chicago
It must be frightening for an investor to even consider making a valued investment in the Indian market. Every aspect of the country’s economy is being pulled sideways by the continued impact of political witch hunting and uncertain policy making. Even some policies that have been successful in implementing are being overturned to go back to the time when the country was run more or less as a socialistic state.
The never ending scams are the highlight of daily news in the country. From the center to the states, and to local governments, they have become so common; it is difficult to imagine there will be any segment of the policy making or business that doesn’t involve a scam.
The government has no qualms in making changes to policy and procedures, despite the implementation of approved procedures for industry. Some of the latest developments to change tax structure and make it retroactive to encompass the past transactions are beyond reasoning. Such decision making by the government shows disregard for global investors, and will be of little value to global investors. Incompetence in framing guidelines should not penalize the investors who have put money into the economy in good faith.
The entire process of government’s day to day survival is so uncertain that no one wants to make any predictions on what can be done and what cannot be done. In democratic societies elected officials have fixed time in office until they commit serious offence to be terminated from office, and even then there is back-up to fill in the shoes of an elected official who has done disservice to the office. India seem to suffer from constant back stabbing by the parties own elected officials, and definitely by the opposition. The day after they get elected they don’t want to take-up the agenda of the people. They start plotting the down fall of the government.
There are distinct differences in center and state agendas, and often conflict with the policy making. If the elected officials of the state are different from the center, there is constant bickering and posturing about their individual party agenda, and most times there is rhetoric rather than action on public needs. It is amazing that the country survives despite these agendas that are often destructive to public’s interest. Also with so much uncertainty in the government, and disregard for policy nothing gets done, and whatever gets done is undone when a government changes.
The constant investigations are taxing on the system and people who are looking at them. There is not a single person in government both elected or appointed who is not under the scanner. What will be investigated if everyone is under the scanner? Who is determining the investigation initiative, or is it politically motivated to get people who don’t listen to the government to get under the scanner?
Politicians show total disregard and indifference to reality even after they get caught red handed with money or assets in their homes. They simply claim innocence or say they don’t belong to them, and walk away from the possessions. It takes enormous amount of investigative time and money to show the connection between the inappropriate assets and the person, and most times the changes in government erases the impact of the findings. Even when a person gets caught with the stuff on hands they will plead ignorant, and with a straight face deny that they have done wrong. Better yet when someone goes to jail and comes out there are celebrations and utter disregard for what the person did to go to jail.
The media gives outrageous attention to every detail and the media itself is divided in their coverage, where the person who is responsible for a scam or someone who got caught with money, is given spin after spin either positive or negative. There is disregard for the truth, and it is hammered into the media outlets that the person is guilty or innocent in public opinion, irrespective of what they did. There is so much attention given to time but not reality, and no one cares to check the facts of what they are reporting. Most times the media outlet is aligned with a specific party, and they will invariably side with their political affiliations.
Everything that lead India’s economic drive for 20 some odd years seem to unwind as quickly as it was embraced. Hundreds of billions were invested into the Indian economy as it was being opened up for investment and economic openness (so called reforms), and all of them are evaporating as quickly. How can anyone without help get into big business and not have an affiliation or association with someone or the other? If it fails to reform the system that has been globally embraced, India may go back to pre-independence stages of the Raj where everyone is looking for a handout. Better shape up and start behaving like an open economy that doesn’t politicize every business interest, and every business interest doesn’t involve a scam. The politicians should focus on their people’s agenda, and businesses on running the business, and stop the witch hunting and everyone should clean their own house.