Sucheta Dalal :Integrity campaign must specify not sermonise
Sucheta Dalal

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Integrity campaign must specify, not sermonise  

Oct 23, 2006

The ‘Integrity India Campaign’ launched by the Confederation of Indian Industry (CII) and headed by N.R. Narayana Murthy raises some interesting questions and possibilities.


The intention of the campaign is laudable. As India’s economy grows and Indian companies extend their footprint across the globe through dramatic acquisitions across a wide swathe of industries, it is galling for India to have the dubious distinction of being the most corrupt exporting nation in Transparency International’s Bribe Payers’ Index.


For CII to anticipate a trend and latch on to it early is nothing new. Remember how it wrote up the first Corporate Governance Code, when confidence in Indian business was at a real low in 1996. That was when greedy companies (large, small, known and unknown) took advantage of a stock market and realty boom, raised large sums of public money for greenfield projects that languished for the next decade, while the money went into private pockets.


But there is a vast difference between writing a code and holding seminars to discuss it and actually walking that talk. Murthy knows how angry corporate India was when a Sebi-appointed committee headed by him proposed some far-reaching steps to improve corporate governance and independence of the board.


Will the Integrity India Campaign be different? According to the CII, the campaign aims at “creating a national debate, consciousness and positive action to inculcate the values of transparency, accountability and efficiency in economic activity”. That is nothing new. We Indians are good at discussions as is evident at every seminar on good governance or corporate social responsibility. Murthy himself has got the campaign rolling by lambasting corporate and bureaucratic corruption.


A general tongue-lashing is not without its uses, but the Integrity India Campaign will achieve results only if it picks up specific projects that reek of corruption and pursues them doggedly with all the tools at its disposal, including ticking off CII members who are prone to cutting corners, bend the rules or dictate policy by befriending politicians. Will CII have the courage to do that? If it does, it can truly transform India’s image, but we will have to wait and watch.


Projects and contracts that are guaranteed to give India a bad image are never a secret—they are pretty brazen. For instance, the Information Technology (IT) industry is India’s pride and joy, because the top few companies in this sector have set high standards of ethics and governance. But these companies are themselves aware that key e-governance contracts, with long term implications to the integrity of our systems, including licenses, voting cards etc are going to companies with strange antecedents. Hasn’t the industry remained silent about how these are tendered and decided?


The same goes for infrastructure. For several years now, it has been clear that corrupt and venal politicians and bureaucrats are dragging down India’s economic development. In the 1990s, every industry house in India was aware that the government’s policy on Independent Power Projects (IPPs) was simply unworkable. Yet, each one of them quickly set up a power project or spun off captive units into IPPs. Industry associations watched silently, even when the media warned that failed projects and an inability to pay such high cost of power would inhibit the growth of this crucial infrastructure. That scenario has materialised exactly as predicted, but some of those who let it happen are competitively feted as the “original reformers”.


India’s Special Economic Zones (SEZs) are in an identical position today; every large industry group has rushed in with plans for small, medium and large SEZ. But barring Rahul Bajaj, who has publicly opposed the policy on SEZs (even while he has planned one of his own, on land already owned by his Group), industry has remained silent. The real economic arguments against SEZs have come from US-based economists Raghuram Rajan and Jagdish Bhagwati, not Indian industry associations.


Two of India’s hottest investment destinations—Bangalore and Pune—are also among the worst in terms of infrastructure. Pune’s bad roads must be seen to be believed, and despite the strides in construction technology, its flyovers on the busiest roads are being constructed forever. While the industry in Bangalore has dared to incur the Gowda government’s wrath by speaking out against crumbling facilities, the degeneration of Pune remains a mystery because it is a city of public-spirited citizens and has large concentration of Right to Information activists; yet, they have had no impact on local municipal administration.


Mumbai’s taxis are a similar eye sore and tale of embarrassment. We are the only country in the world which has pretensions of global leadership with beat up old Fiats and Ambassadors comprising the taxi fleet of its commercial capital. Everybody else in Mumbai has moved on to more efficient cars. While air travel has increased phenomenally, but what Murthy and CII’s industrialists do not face is the daily cheating of passengers at the Mumbai airport. We have allowed the creation of such a tight cartel of unions, permits, licenses, dubious ownership and haftas that a small bunch of people can hold the city to ransom. The official argument against change is the livelihood of drivers, but this is patently false. Most drivers are migrants from Uttar Pradesh and Bihar and are exploited by ‘taxi owners’ who are usually petty bureaucrats or police officials employing un accounted money.


There are probably hundreds of such examples, but if Murthy can pick up even four key projects and campaign for complete change, he will have the nation with him and give credibility to CII’s campaign.


-- Sucheta Dalal