Jai Lakshmi Ramana

India, you may well say, is on a roll and, naturally, this is bound to rub off on Indians. Having chosen to spend this Diwali in London, I am struck by the exceptional efforts of retailers, particularly those peddling high-end goods, to target desi pockets. Louis Vuitton, that iconic maker of luggage and women’s handbags, has a Diwali theme for its shop windows throughout the world; in Piccadilly, I spotted a European maker of fine porcelain displaying its stock of Hindu gods and goddesses, and an incongruous figure of Mahatma Gandhi; and, at a dinner hosted by a wine aficionado in Delhi, a representative of Chateaux Margaux was heard asking if Indians were likely to gift bottles of their fine wine at Diwali. These may be isolated examples of innovative marketing but they also represent a trend.
India has not merely arrived with a bang on the global stage but the buzz is that the rich Indians have oodles of money which they are willing to spend. The image of the parsimonious Indian entrepreneur, living simply and on a frugal vegetarian diet, has gone out of the window. Our successful brethren may not yet have matched the spending potential of the Arabs, the Russian oligarchs and the Chinese millionaires, but we are getting there. And the world is noticing.
It is one thing to celebrate the final liberation of Indian entrepreneurship from the shackles of state oppression and penury. It is a complete different matter to suggest that there is also a flip side to this triumph of the Goddess Lakshmi.
As Indian opulence becomes more and more marked and India becomes a good place to do business in, more and more people are expressing a parallel concern: the “cost of business” in India is rising exponentially.
In corporate-speak, “cost of business” is a euphemism for what you and I call corruption. It indicates the extra overhead costs and the hidden service charges that have to be paid to get things done. Most businesses set aside a little bit of their capital and running costs on those hidden taxes and ex-gratia payments that have to be paid to keep the locals happy. But these costs have to be reasonable, otherwise there is the constant danger of killing the goose that lays the golden egg. In recent months, investors are discovering that the “costs of business” are precariously close to reaching punitive levels.
That we should be talking about what is plainly extortion in code is in itself shameful. But what takes the biscuit is the fact that Indians have become blasé about this exponential rise in corruption. Apart from a few sniggers about the recently-held Commonwealth Games, India’s fall in the honesty index of Transparency International didn’t produce any widespread indignation. A Twitter message actually complimented India for being better than Pakistan!
Maybe there is scope for self-congratulation. After liberalisation of the economy, when the scale of government regulations lessened, it was imagined that the loss of some discretionary powers would see a sharp drop in corruption. To be fair, petty corruption has declined in some areas, such as the purchase of railway tickets or the installation of telephones. The rationalisation of personal taxes also made it possible for many Indians to live an honest life with dignity.
However, if the number of people who can be called corrupt has shrunk, the gains have been offset by a smaller number of people becoming more corrupt.
The high economic growth in the past two decades has undoubtedly been a contributory factor. With the solitary exception of Gujarat which has bucked the trend, corruption is highest in precisely those states which have experienced high growth. If West Bengal, Orissa, Bihar, Kerala, Assam, Chhattisgarh and Madhya Pradesh are relatively less corrupt, it is because there is not enough economic surplus. These states remain mired in petty corruption.
As the Adarsh Co-operative Housing Society scam in Mumbai vividly demonstrated, real estate is still the fountainhead of corruption. A casual signature on a file that transforms land use from “agricultural” to “residential” or “commercial” is always worth a few crores in cash. Additionally, anything to do with licenses, whether telecom or mining, invariably attracts a high unofficial surcharge. I am informed that the business of environmental clearances is in the queue to become a billion-rupee underground industry.
Finally, there is a new trend which appears to have begun in Maharashtra by a senior politician, of the extortionists forcing their victims to part with an equity stake in the new venture. We can look forward to this new trend making a dramatic appearance on the national stage.
It is a commentary on the changing course of political discourse that corruption is not seen as a priority issue. This may have something to do with the fact that there are few areas of public life that have been insulated from the disease. Former law minister Shanti Bhushan’s audacious act of identifying the rotten eggs in the judiciary has prised into the open a phenomenon that was only spoken about in whispers; the top brass of the armed forces stand indicted in the public eye after the Adarsh housing scandal; and a section of the media is seen as a blackmailers club.
Since corruption cuts across parties, there is a disinclination on the part of the political class to protest too much. But the government, which was at the receiving end of a Supreme Court stricture for its non-serious handling of the 2G scam, also believes that the spurt in corruption will not have any adverse political fallout because the Opposition is splintered and confused. This may well be wishful thinking but until something tangible happens to force a review of this assumption, we may see the image of Corrupt India overshadowing the triumph of Indian enterprise.

Swapan Dasgupta is a senior journalist