{"id":11265,"date":"2011-11-19T03:11:41","date_gmt":"2011-11-19T03:11:41","guid":{"rendered":""},"modified":"2011-11-19T03:11:41","modified_gmt":"2011-11-19T03:11:41","slug":"For-India-Swift-Growth-and-Rapid-Rot","status":"publish","type":"post","link":"https:\/\/asiancemagazine.com\/?p=11265","title":{"rendered":"For India, Swift Growth and Rapid Rot"},"content":{"rendered":"

The only important question in the West right now is how to restart stalled economic growth. So it is easy to be dazzled by India, where a 7 percent rise in gross domestic product is the nightmare scenario, and optimists are shooting for 9. But Indians themselves are starting to worry about how that growth is being achieved \u2014 and who is benefiting. The headline complaint is corruption. That is nothing new here, of course. But the country now has a middle class self-confident enough to feel humiliated by paying quotidian bribes and resentful of the rise of baksheesh billionaires. Anna Hazare\u2019s hunger strike became a national political event because it tapped into this anger of the urban bourgeoisie. \u201cIndia has been overwhelmed by corruption scams,\u201d said Kiran Bedi, the first woman officer in India\u2019s elite police service and one of Mr. Hazare\u2019s chief lieutenants. \u201cWhile it has been apparent that India is shining, India has also been declining in many ways in that there has been rampant exposure of corruption.\u201d<\/strong> <\/p>\n

Nor is it just the activists who say that alongside India\u2019s remarkable economic surge the rot has been spreading, too. \u201cCorruption is endemic,\u201d said Rajiv Lall, chief executive of the Infrastructure Development Finance Company, a partly state-owned financial institution. \u201cI don\u2019t think anybody here is pretending that there\u2019s no corruption in the country. And corruption can take on a new dimension, especially in this time of great transformation.\u201d Graft is just part of the story. One of the reasons to celebrate India\u2019s astonishing economic rise is that the subcontinent desperately needed to get richer. In 1991, when Manmohan Singh, then the finance minister and now the prime minister, began the liberalization program that underpins the country\u2019s transformation, India\u2019s 854 million citizens had an average annual per capita income of only $1,300. The problem, said Arun Maira, a former industrialist who is a member of the country\u2019s influential planning commission, is that India\u2019s economic rise has had the least impact on the people who need it most. \u201cMy thesis is that most people are not feeling included in the growth,\u201d Mr. Maira said. \u201cThis has become a very loud voice which is saying \u2018Come on guys, the economy is growing very fast now. You\u2019re celebrating this 8, 9, 10 percent growth, but what about us?\u201d\u2019 <\/p>\n

As Mr. Maira points out, one of the most powerful advantages of the wealthiest 1 percent is \u201caccess to people in power.\u201d Corrupt business deals are the most extreme use \u2014 and abuse \u2014 of those relationships. But there is a more subtle reason the game is most effectively played by those who are already winning it. S. Gopalaskrishnan, the co-chairman of Infosys, the pioneering Indian technology company, said that \u201cThe tendency is that people who have access to power and access to governments, etc., tend to get a better deal. \u201cThe policies, the roots, are framed because they are people who give inputs to those policies,\u201d he said. This is the Indian version of what Willem Buiter, the former London School of Economics professor who is now chief economist at Citigroup, calls \u201ccognitive capture,\u201d and which he blames in part for the regulatory and legislative lapses that helped create the 2008 financial crisis.<\/strong> <\/p>\n

SOURCE<\/a>
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