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Where The Crooked Are King.... - Views on News from Equitymaster
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  • Jun 20, 1997

    Where The Crooked Are King....

    Yet again, the newspapers and television programmes are filled with what must be the most widely-used word in our daily language: scam. After the securities scam of 1992, we have had the cobblers' scam, the fertilisers scam, the fodder scam, the hawala scam, the share-switching scam, the telecom licences scam, and now this recent event called the CRB scam.

    In a country with 950 million people, there are bound to be some crooked people but, the frequency of these scams suggests a more serious problem that we may have in India. No, I am not blaming the regulators who fail to do their job time and again, and neither am I blaming the CBI and the hapless cops who don't have a clue of what is going on when asked to investigate these scams (how many policemen you know would understand the meaning of chaalu upla? how many of us in the business understand it?). Nor would it be wise to pick on the judges and the courts to understand the trail of events that result in these scams masterminded by brilliant scamsters. In many cases the judges intuitively know that there is something wrong but cannot quite figure it out due to lack of evidence, fatigued prosecution lawyers, a bad CBI case, or smart defence lawyers that the scamsters (rich that they are) can hire to fight for them in courts. In many cases the law is plain wrong and outmoded and that, too, may be a problem for the judges and courts.

    Or maybe the fault lies with our legislators who do not amend the laws suitably and in time to catch up with technology and the changing times because they are so busy playing the numbers game to remain in power. And these outdated laws result in creating a national pool of small criminals, ready to beat the (stupid?) system at any moral cost. To give you an example of an outdated law being used by VSNL - probably one of the biggest legalised scamsters in the country today: I was told that VSNL actually put out an advertisement in the newspapers saying that using callback facilities was illegal and punishable with imprisonment! Now, here is an opportunity for many Indians to use cheaper international phone rates to make international calls (sometimes at prices that are 60% less than what VSNL and DOT charge) and like a child hiding behind a mothers' petticoat, VSNL talks about some outdated 100 year law to protect its unjustified monopoly! Till today, not a single consumer has bothered to file a public interest litigation against VSNL asking it to explain its pricing policies and its scam operations because it is easier to beat the system.

    Which brings me to the final point: maybe we have so many scams because we are a nation of scamsters. We like these scamsters when they make it to the front pages of our newspapers and magazines because that means that we - the junior scamsters - have a lot more to learn from these seasoned people. For forty years we have had laws that stifled us and made us into scamsters - we beat the tax man, we beat the ration card system, we beat the queues for gas cylinders, we cheated on our bookings for Bajaj Auto scooters and Padmini cars. Yes, all of us, in some shape or form have done a scam. And, with stupid laws that protect monopolistic actions such as VSNL's ludicrous international tariff rates, we will continue to do our share of mini-scams.

    And it these small mini-scams that will one day give some of us the courage to take on the bigger scam that we read about in the front pages or hear about on news channels. Once I can justify to myself the act of breaking a small law - paying a bribe to get some approved phone connection installed, I can soon begin to justify paying a bribe to get a license to build 1 million phone lines in some telecom circle. Once I can justify to myself the act of paying a junior clerk a bribe to get an already approved bank loan disbursed, I can soon justify the act of bribing a bank chairman or senior person to give me a loan. Once I can justify to myself the act of paying a bank official a bribe to give me loans against my shares, I can soon feel comfortable giving all these banks fake or duplicate shares on a rotational basis to get loans.

    The basic truth is that we, as a people, have got such lopsided values in life that the next generation of Indians will probably think that Mahatama Gandhi was an imported brand name selling a Levi's lifestyle living concept to inhabitants of this hot and humid country in dire need of cool cotton clothing! From a country which a little less than 50 years ago was seen as the model of truth and saintliness, we have rapidly converted ourselves into a nation known for its scamsters. And its continued acceptance of them. Most of the people involved in many of these scams that we have read about continue to enjoy fantastic lifestyles and walk freely flaunting their wealth with an impunity that would shock any honest person. More important, the sick society that we live in, wishes to be seen with them. Clubs and hotels that cater to the rich continue to crave their business and the press - a reflection of our times - honours them with media coverage and treats them as heroes.

    Want to do a simple check? If you are interviewing anyone for a job in the age group of 21 years to 25 years ask them who are the 3 people whom they worship, look up to, and would like to be like. This is a question I have routinely asked every candidate that I have interviewed over the last 7 years and the names may have changed but, sadly, most of these candidates mentioned people who achieved their end result without any thought to the integrity of their means. Living proof that the Mahatama's importance towards means and ends is completely lost on us - less than 50 years after his death.

    So, the next time you read about the newest, improved, repackaged scam (if the petroleum price hike comes through, that should be considered a scam as big as the VSNL one) just consider itself a result of your actions - of your voting into power or agreeing with a combination of legislators, legislation, legal systems, CBI sleuths, bank managers, regulators, and businessmen that has led this country to where it is today - going rapidly downhill into a graveyard of slush money and scams.



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