India isn’t in bubble zone

I have met lots of investors over the last month. There is a perceptible change in their thinking towards India. For the first time,they are putting India one step ahead of China. They are impressed with the economic growth and are more bullish about the future of this country. In spite of its strong growth,nobody thinks India is in a bubble territory. This is also very clear in the pick-up in investment flows into India,a part of which can be traced to some asset allocation shifts from China to India.

So,what could derail this sentiment? The common concern across the board with the investors is the corruption in the country. The recent headlines on IPL,the arrest of the president of the medical council of India Ketan Desai for large scale corruption in giving permission for opening medical colleges,etc,only highlight how deep-rooted the problem is today. Even the seats for the Gram Panchayat are getting auctioned today,as there is opportunity to make more money. Corruption is more deep-rooted and all pervasive in the society today.

Most of the investors think this is the time for India to get its rightful space in the world. We have one of the cleanest prime ministers heading the country,whose track record and credibility are impeccable by any standards. Still,why is corruption so pervasive and what could change this situation?

I think there are three things that could change this landscape. First is the Right to Information Act that,if implemented in right earnest,will be one of the big gamechangers for arresting corruption in the country.

Second is the effective media—both electronic and print. Today,news travels very fast and within minutes the new channels are right in front of the concerned minister,seeking his/her views. An alert electronic media is very important to fight corruption in the country. Some of the high-profile cases in the country got justice only because the media had taken active interest and followed through for justice.

Third is the use of IT in government. In spite of the resistance from constituents within the government,it is pushing to implement IT in all areas. This could increase transparency and improve efficiency. The implementation of the unique identity scheme will make sure that the beneficiaries of various social programmes are properly identified and that subsidies are targeted at the right constituents. Computerisation of tax payments will enhance collections. The use of IT for online income tax returns will ensure broadbasing of assessees and improve efficiency. This is also going to be one of the big gamechangers for the government in its fight against corruption.

While the world gets more interested in India and its growth story,a focused attempt from the government to fight corruption and enhance transparency will go a long way in enhancing the credibility of the country and allow India to find its rightful place on the world stage.

The author is the chief financial officer of Infosys Technologies Ltd