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India Inc points to corruption in political system

India Inc is no stranger to the rent-seeking political economy which raises the cost of doing business.

Written by Fe Bureau | New Delhi |
November 17, 2010 2:20:32 am

It may be the first time a respected corporate chief like Ratan Tata has blown the whistle on corruption in the government system,but India Inc it seems is no stranger to the rent-seeking political economy which stifles enterprise and raises the cost of doing business.

Tata’s remarks have emboldened industry counterparts to come out and speak openly against corruption when FE caught up with them at the just-concluded India Economic Summit. On Monday,Tata was quoted as saying that an industrialist had suggested that he pay Rs 15-crore bribe to enter the airline business,but he was not comfortable with the idea.

Said Rahul Bajaj: “I dont think I can run my company saying that there is no corruption. It is top to bottom (corruption). One has to pay facilitation fees for what? But I think only 10% are corrupt and they bring a bad name to everyone.”

Though purely coincidental,the timing of Tata’s ‘I-was-not-comfortable-paying-a-bribe’ revelation is also right in the backdrop of the ongoing head-hunt of scam-tainted politicians. While the Rs 1.74 lakh-crore 2G scam claimed telecom minister A Raja and the Adarsh Society allotment and building scam cost Maharashtra chief minister Ashok Chavan’s seat,the noose is tightening around Commonwealth Games organising committee’s disgraced chairman Suresh Kalmadi.

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“It’s very difficult to do business here. It’s not easy. But at the same time,we do not have any complaints against the environment since this is our country. Good or bad,we have to live here. Sometimes,we have lost business due to the adverse environment,but that’s OK. We want to sleep well,” Moser Baer chairman and managing director Deepak Puri said.

Corporates have unofficially spoken about government agencies asking for ‘cuts’,but have not come out openly earlier as they did not want to be seen as annoying the system on which they had to willy-nilly depend to a large extent for business growth.

“We also encounter situations where bribes are asked. But we still push for our work without making a compromise. It’s very unfortunate that somebody asked Ratan Tata for a bribe,” Jindal Steel & Power executive vice-chairman and managing director Naveen Jindal said.

Calling for a mix of strong regulation,self-regulation and transparency to put paid to rampant corruption,many corporate honchos came out forcefully in favour of systemic change towards more open government.

“We must recognise that we are a lot better than we were before. But we must continue to improve levels of transparency,levels of governance and levels of justice. I have seen that company after company is demanding good global governance,even if it is a locally-based company,” said Ajit Gulabchand,chairman & MD,Hindustan Construction Company.

Added Pawan Munjal,MD & CEO,Hero Group: “I personally feel we have to have regulation and good regulators. Corruption must go away and governance must come in to support the kind of growth that we want at all levels.”

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First published on: 17-11-2010 at 02:20:32 am

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