Paying the price of a poorly governed democracy - Straight from the Hip by J Mulraj
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Investing in India - Straight from the Hip by J Mulraj
Paying the price of a poorly governed democracy A  A  A

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16 JULY 2011


The repeated terror attacks in Mumbai, and other parts of India, is the price of a poorly governed multi party democracy. One in which political parties, merely to get elected, have created and perpetrated schisms, on the basis of caste, creed, economic well being or religion. With a majority of our MPs being charged, though not convicted (a necessity for disqualification) of criminal activities, they have, obviously, subverted law enforcement agencies, who now serve their interests more than the people's. Little wonder that terrorists manage to slip in and out with impunity.

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The biggest irony is that the safest person in Mumbai today is Ajmal Kasab, who killed hundreds of innocent people! Why he is being kept alive, using up law enforcement resources that could have helped prevent the bomb attacks in Mumbai, is a mystery. He has been found guilty and ought to be hanged without delay! Every day he is kept alive also increases the chance of a hijack or kidnap, placing the Indian state and people in grave jeopardy. Why is it difficult to see that?

The reason is because we are poorly governed and have only selfish interests at heart, not those of the nation.

The Prime Minister has promised to bring the perpetrators to justice, a claim that sounds hollow, especially since he is unable to bring those who have sworn allegiance to him, in his Government, to book. If he is half serious in his intent, why does he not start with two things. One is to remove any exemption from searches for VIPs? There is a list of VIPs who are exempted from personal security checks at airports (which includes those not in Government either). Let the security agencies do their job, without fear. The attack on our Parliament happened because the terrorists used official looking vehicles and badges, and the security forces were too scared to challenge them. The threat of transfer of those who do their job, but may annoy a VIP in doing it, should be used with great discretion. The second thing is to give back the security forces the ability to do their job. The only reason agencies like the CBI are kept under political control and not transferred under the control of the Lokpal, is because the agencies are political tools of convenience.

Until we govern for the people, and not for the political establishment, terrorists will have the ability to strike with impunity.

Poor governance and absence of planning also manifests itself in other tragedies. The Kalka mail derailed, killing several people. The Railways, pressed for funds, has not insured itself against this! The Minister of State refused directions (as if he needed any!) to visit the accident site! Compulsions of coalition politics allowed him to get away with such callous disregard for people; the price we pay for democracy.

Contrast this with what is happening in China where the leaders are thinking ahead. The train from Beijing to Guangdong stops at some 30 stations and the planners felt that if they can avoid the 5 minute stop at each, it would cut 2 hours of the travel time. So they came with a concept of a train that never stops!. Passengers wanting to alight climb into another compartment riding above the train, which detaches itself at the station allowing the passengers to alight at their convenience. Not only does it cut time, it saves energy since the train doesn't slow down and, by cutting travel time, gives people the option to commute by train, rather than air, more ecologically friendly.

Why should poor governance matter to investors?

For the June quarter, China's GDP growth is 9.5%, higher than ours. Its industrial production has grown by 15.1%. In India, May IIP was a disappointing 5.6%.

Whilst Chinese leadership is busy planning for the future, ours is busy doing a nano re-shuffle. The nano is the smallest of IPod shuffles, as was this one. Again, compulsions of coalition politics made the Prime Minister retain non performing ministers. This is a price we pay for our democracy.

The Government is now asking the Supreme Court to review its decision to appoint a special investigative team (SIT), comprising retired judges, to probe into corruption charges, which are taking CBI far too long to investigate. For reasons stated above. The latest episode is the news that Ramalinga Raju, self admitted perpetrator of a scam in Satyam, is likely to be let off on bail as the Court directed the investigations to be completed by end July, which are not! The opposition apparently stems from the constitutional impropriety of one arm of Government (the judiciary) stepping into the turf of another (the executive).

Yet the Government had no such qualms when a SIT was appointed to investigate the allegations against Narendra Modi.

In corporate news of interest, Jindal Steel and Power is to invest $ 250 m. in establishing a rail line in Bolivia, where it owns mines, to link the mines to the port. It would not be so allowed in India.

Inflexible labour laws are compelling some auto manufacturers to shift production to other countries.

There were three success stories of post liberalisation India. One was the telecom boom, which has now resulted in 750 m. mobile users and some of the cheapest call rates in the world. This is now being derailed because of the spectrum pricing and 2G corruption scandal.

The second was IT. Here the IT Department is trying to tax onsite work on the dubious plea that it amounts to body shopping and not software exports. The industry is trying hard to cope with the global slowdown and the problems over visas. June quarter profits for Infosys were down 5.3% and for TCS 7.9%, over the previous quarter, though up year-on-year.

The third was auto - India has built the world's cheapest cars. But auto sales are slowing down, and there is labour unrest at the largest auto maker.

Last week the BSE-Sensex fell 296 points to end at 18561, and the NSE-Nifty declined 79 to end at 5581. There are huge concerns for both Europe and for the US, where rating agencies are threatening a downgrade.

The US President is trying hard to hammer a compromise, before the August 2 deadline for US debt to hit the permissible ceiling. Failure to reach one would lead to a downgrade of its AAA status making it more expensive to raise money. In Europe, surprisingly, only 9 banks failed the stress test, fewer than expected. Investors are expressing concern by pushing up the price of gold to record highs.

If Obama can hammer out an agreement global markets will rally and the sensex can go up to 19500. If he cannot, and rating agencies downgrade USA, then global markets would drop sharply. Any rally should be a selling opportunity for now.

J Mulraj is a stock market columnist and observer of long standing. His weekly column on stock markets has run for over 27 years. An MBA from IIM Calcutta, he has been a member of the BSE. He is Conference Head - India, for Euromoney. A keen observer of events and trends, he writes in a lucid yet readable style and takes up issues on behalf of the individual investor. Nothing pleases him more than a reader who confesses having no interest in stock markets yet being a reader of his columns. His other interests include reading, both fiction and non-fiction, bridge, snooker and chess.

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13 Responses to "Paying the price of a poorly governed democracy"
Mahesh Thakar
Jul 21, 2011
Why should you regret and feel sorry ? Your views and thoughts are 100% correct. Gujarat is the best governed state in the country. The administration is sensible and responsive to the citizens. The corruption is public life is almost zero. You feel respected and proud while dealing with the public office or dept.
The worst part of our country and society is we have plenty of people who do not know this and hence do not recognize, appriciate & support the excellent work done by Gujarat CM Shri Narendra Modi. Those people are simply carried away by the SUDO SECULAR media who only talks about Gujarat riots and do not even highlight the growth & developement of the people of the state. Gujarat has shown a way to solve water scarcity, power availability & infrastructure development. There is lot to learn from Gujarat in the areas of Water Management, Power Management and Pollution Management. The time has come to elect shri Narendra Modi as a PM of India.
Best of luck to all the Indians.
Like (1)
Tikam Patni
Jul 20, 2011
Our present PM is the most non performing minister in the entire cabinet of non performers. Or as his title suggests, he Performs, but only for the Madam.

He has conceded that he has allowed all around loot out of "compulsion of Coalition Politics", the compulsion to remain PM so as to continue serving the interest of the boss. Ar'nt they really the biggest beneficiaries of all the scams ??.
Like (1)
Yogesh
Jul 18, 2011
Badi Badi bato se kuck nahi hota.
Persons those who are writting on these issues are good because they are concerned with this and they are informing people that what is happening with their democracy, but but what is this yaar I have leasten & Read so much about this but nobody is taking any action everybody is just saying or writting.
Itellectual peoples who really want to contribute for the betterment of the society should come forward and do something to remove such corrupt person who everyday spend the hard earned money of citizens for their convenince without thinking of those who are suffering alot because of these.There is no values in anybody which one time one of the biggest asset of the indians today everybody is just living like animals surly animal not having any values like animals not have.
In the past days only issue are raised but nothing is done to get them solved by anybody( Intellectuals activist or political parties). After all these things one things come in my mind is the everybody is acting showing that they are good but the actual picture of that animal is covered by the mask
I may be not competent to speak as not have experiance but these are my feeling about intellactuls, politicals & activist too.All are just an actor not leaders.
Why these political parties fighting like two dogs for bone.After every issue they start giving statement against each other.If oppositaion is saying that if they are in the middle than they would do better than this than why not they are doing now it is neccessary for people to be in power for doing something for betterment of the society. If they can so why they are not suggesting these guys who is in power to do.
Like (1)
Dr. Amarjeet Singh
Jul 17, 2011
what you have written is absolutely right but things are going to remain same. Our politicians are thick skinned people and are corrupt to the core. I have no hope. Your article is quite informative. Like (1)
SUMAN
Jul 17, 2011
U have so rightly talked about KASAB..I too wonder why is he kept alive with so much security and money spent at the cost of poor tax payers !!?? ALL public should raise the voice and ask.
If there is any valid reason , it should be openly told to all Indians !Govt should justify their act.
Like (1)
Gangadharan Nair N
Jul 17, 2011
An 8 tier (Gramapanchayath, Block Panchayath, District Panchayath, Legislative Assembly, Legislative Council,Lok Sabha,, Rajya Sabha & nominated Governors) Democratic System will never functions any where in the world. It only increases the expenditure on the exchequer without any return but it helps to corruption, black money and in turn Anarchism. India spends 70% of its tax collected, whether at Centre or at States or at Panchayaths, only on Salary & Pension on Govt. Employees and its Elected Members. This is ridiculous. That is what Mr. Churchill predicted 70 years ago. But we the Indians never realized even after suffering for 64 years. Tha is the tragedy. We got to change the system of Panchayath Raaj to a SINGLE TIER Presidential form of Government, which is being practiced in Singapore. That is the only solution. "Too many cooks spoil the broath." Like (1)
S.K.DAMANI
Jul 16, 2011
It is comments and indifference by people like anurag garg, which has led our country to this condition.
Even I do daily trades on the exchange 9 X 3.30. I am equally concerned with the nation and not with what happens on 2nd Aug. to US and Obama. Mandi karke baith jha. Sell your stock and BUY BUY BUY gold and silver till 5th Aug. You may get stocks atleast 20to 30% down.
The three comments in the article are most imp. for a person to understand.
THE GOVT IS SLOWLY KILLING ALL THOSE INDUSTIRES WHICH EARN MONEY. TELECOM IT & AUTO.
Possibly these people must not have "paid" the "protection haftas to the ministers. Therefore stangle them and kill them with absolute ridiculous law.
And pl. Mr. Mulraj do not rub more salts in our wounds by giving us details about how other countries are progressing.
Like (1)
S.K.DAMANI
Jul 16, 2011
This article makes interesting read. yes the price of democracy has gone up very high & the people are paying a very very high price for it.
Absolute incapable Sardar as PM. Maybe a great economist but is the worst kind of "katputli" in the hands of madam and her cotirie like sibal.
Highly ridiculous and idiotic statements by congress Gen. sec digvijay:"kalmadi and others have done no corruption"
Kasab and afjal guru enjoying secured life in Indian Jails. Fast track courts and expeiditeing cases of local criminals (shiny ahuja) while terrorist enjoy luxury at tax-payers monies.
By the way "fast track means a normal case would take 15/20 yrs, these cases MAYBE completed in 10 yrs minimum.
Lakhs & Crores of Indian money in foreign banks, but govt. shamelessly unconcerned about it. NO, protecting it from the Supreme Court. By the time the final outcome comes, these monies would have totally vanished.
Things are very very worse.
Ram bharose country is running with No law & order.
AND THEN:
Best is Gujarat has 9% agricultural growth, compared to 2/3% of All india level. The Sardar and Madam and her gang are trying their best to bring down Gujarat which is the best administred state in the entire country.
Sincere regrets and Sorry.
Like (1)
sultan fazelbhoy
Jul 16, 2011
There are only two TRUE defences against the current economic crises the world over: 1) reduce defense expense in all countries. It is trillions worth of non-productive expenditure. 2) pray for a vast change in human nature -- away from borderless greed and selfishness. But apparently God is not listening to this earnest request in spite of all the chantings in temples, churches, mosques and in homes. And we human beings are failing to evolve in the right direction. THEREFORE THE ULTIMATE ANSWER: AN AESTOROID TO WIPE OUT HUMANKIND AND MOVE THE FEW SURVIVORS TO ANOTHER HEAVENLY BODY FOR A FRESH START AS A LIMITED OPTION. BUT WILL GOD LISTEN ???? IT IS ADMISSION OF HIS FAILURE . . . Like (1)
P.R.CHARI
Jul 16, 2011
What surprises me is the surprise with the deteriorating law and order situation and the secure future of terrorism in India. How come the criminal cases against the perpetrators of the anti-Sikh riots in 1984 are still pending? And we have a Sikh Prime Minister! Answering that question will provide the answer to the repeated terrorist attacks on Mumbai. I don't see any quick or happy ending. Like (1)
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