Not long ago, I wrote about the need for a conducive atmosphere in governmental interactions and a regulatory environment where laws and their implementation are precise.

This was also in the context of an increasing gap between articulated intent and actual drafting — be it a statute or something as simple as a notification. Rather than easing conduct of business, such glitches create uncertainty. The quality and approach of drafting needs significant overhaul.

As underlying philosophy I cannot beat the words of Reginald Johnston (played by Peter O’ Toole in The Last Emperor ) as tutor to young Puyi: “A matter of words perhaps, but words are important. If you cannot say what you mean, Your Majesty, you will never mean what you say”.

For purposes of my contention let’s replace the word “say” with “write”. We need written words to reflect, without ifs-and-buts or artificial caps and boundaries, what the leadership promises in the name of reform, simplified rules and ease of doing business.

Reign of suspicion This cannot happen until thinking in the administration continues to be rooted in legacy, when India was “controlled or regulated” and provided a command-control-blame-punish culture. Such attitudes do not fit needs anymore. We must appreciate that even those systems that created our bureaucracy/laws gave up the command-control duality long ago.

From post-independence till about 1991, the Indian state largely viewed private enterprise with suspicion; ironically, it was trust of society that supported it. Our ethos encourage capital owners to act in trust for family and society while doing the best for the nation with their abilities.

Above all, systemic trust is critical for taking business risk, entering into a contract or, for that matter, for bureaucracy to take decisions. But when push comes to shove, our national instinct seems to immediately devalue trust and pursue perception. Allegations and perceptions of cronyism persist with some instances good enough to threaten a mature systemic balance.

Public breast-beating or posturing achieves nothing. It is no-one’s case that wrong conduct or violation of laws remains unpunished. Swift judgments build systemic trust but require larger judicial infrastructure and processes, not more laws and rules.

Practical solutions Let me move away from theoretical analysis to practical situations. This is not to criticise (which is easy) but to point out ills in the hope they are attended to. It is not required to evolve solutions to individual issues — correction of the approach will solve them.

The contradiction — between what the government promises/intends in terms of resolving sticky tax matters with global ramifications and what transpires in terms of actions or explanations — is not lost on anyone. One can use finer aspects of law to justify, but the truth remains that outcomes and stated intent are divergent.

It is a no-brainer that if a system leverages legal fine print when confronted with issues requiring solutions, it destroys the trust that positive policy statements generate. Damage to the credibility of general tax law implementation is real, no matter how progressive rules seem on the surface.

I have heard broadly of recent policies ostensibly leading to “decontrol” in certain sectors - yet in detailed rules government specifies artificial caps or discretionary intervention powers — so, what is the truth? Do we mean what we write?

The Companies Act (and many governance-related SEBI clauses) continue to struggle with after-effects of evolution from negativity and a desire to micro-manage or over-prescribe standards of hygiene and governance. If we are convinced that the law and rules had many problem areas, there are enough models globally which can be emulated — this will help avoid just tinkering and yet being saddled with a sub-optimal legislation.

I, for one, have yet to see any global jurisdiction where tax or corporate laws have been able to prevent leakages or transgressions perpetrated by those determined to do so. On the other hand the laws in most progressive jurisdictions make it easy for an abider to abide, and for the guilty to be punished quickly.

The most topical subject right now is the NPA stress on the banking sector. I worry that soon we may not have a fresh wave of thought and knee-jerks by which every problem loan is viewed with a jaundiced eye. Generalisations are made which sometimes destroy borders between valuations (which are opinions and time-dependent) and accounting (which is exact) or naively equate loan taking with personal enrichment.

The systemic approach must be unambiguous — being in business or borrowing/lending money are fraught with true economic risk. The system must bear this risk, yet punish wrong conduct where established. Giving/taking loans must not get affected.

It is also a part-and-parcel need that (i) rules are not over-exerted so that a perfectly reasonable commercial action gets wrongly coloured and (ii) banks must declare with equal enthusiasm their NPA’s recovered in the past/now. Otherwise honest business and processes will remain blamed.

At the end of the day, we must also evaluate the effect judicial outcomes had on management and resolution of NPA’s; after all if an NPA could not be resolved because of judicial intervention, who can we blame but the effectiveness of laws?

Need deep reforms The biggest injustice inflicted on the nation is when people remain in jobless poverty or in under-employment (employed below fair- earning capacity). India requires deep reforms that allow people and businesses to invest, scale up and hire, and it is necessary for private enterprise to step up in a much larger way. While maximum governance is on an upward incline, the minimum government aspirations appear indistinct.

Award winning author Joseph Hallinan argues that when something goes wrong the natural tendency is to lay blame; but misattribution of blame is a reason we make the same mistakes over and over.

In our way of doing things we seek (but usually fail) to ensure a functioning utopia through more regulation and dos-and-don’ts. Instead we could do far better by following the Japanese maxim fix the problem, not the blame!

The writer is an entrepreneur and former president of Ficci. The views are personal

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