Indians have no fear of law and of the consequences to them of breaking it. The investigative agencies are slow, and succumb to a variety of influences (including political influence to protect crony capitalists) and weaken their investigative process through inordinate delays and even presenting a weak case. The judiciary, too, is inexplicably lenient in its grant of adjournments; the judges come up through the ranks of lawyers and are wont to permit delays, thus benefiting the culprit and punishing the victims.
Countries such as Singapore have a set timetable, determined at the start of a trial, which grants each side leeway to ask for only one or two adjournments per side. Justice is delivered speedily, as it should be. There is respect for law. That’s how it is with other developed countries too.
Justice is not only dispensed speedily but also impartially, not granting leniency or favours to the culprit whosoever it may be.
In stark contrast is, for example, cases such as NSEL, which is running, in a theatre near you, for the past five years.
In fact, just last week the Mumbai Police were seeking ‘proof of trade’ from SEBI! The fact that the police ask for details of proof of trade five years after the scam, is statement enough.
The case is simple, and the fact that it can be dragged on for five years is testimony to the leniency of the judiciary.
But the consequences are obvious in terms of economic development. When Lee Kwan Yew became PM of Singapore, its per capita GDP was equal to India. Today Singapore is far ahead. This is because the first act of Yew was to eradicate corruption, sending to jail any one found guilty, irrespective of his/her position.
Unless India does that, financial scams will keep recurring.
There is no fear of law. Those who can, will flee to other countries (Mallya, Modi, Mehul, the 3 Ms, who do not resemble a chocolate bar). Those who cannot flee, use the proceeds of crime to hire the topmost lawyers and talk to the investigative agencies. Cases drag on till the victims, bereft of their life savings, give up.
The cronies get rich. The country remains poor.
This is not the India that Modi wants or has promised. He has the right ideas to clean up several problems, but has neglected the protection of individual investors, perhaps on the (fake) assumption that law will take its course. Sure it will, but the victims will be dead by then!
There is no investor protection. There are many rules but, thanks to compromised investigation and a slow judiciary, there is, in practice, none.
There are far too many global problems to prepare for, to make India globally more competitive. The US President is throwing his weight around and seeking to renegotiate more favourable terms.
At the root of these threats is the economic hegemony of the US, the world’s largest economy, the role of its currency as the world’s reserve currency and its control of the financial payment system through things such as SWIFT, which it can, and does, use, to turn off the global payments flow.
Countries are seeking to counter this by setting up alternative modes.
These changes will be disruptive and need the full attention of policy makers.
(The writer is India Head — Finance Asia/Haymarket. The views are personal.)