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Business not ipso facto criminal: Tendency of presuming it guilty without proof is damaging India's economy
SIDHARTH BIRLA
In recent media and political discourse, one notes with disappointment the unwarranted criticism Indian business in general has been receiving. Insinuations and allegations range from nexus and conspiracy theories to abetting greed and graft.
To preclude being painted with a broad brush, it becomes the duty of business to articulate and act to correct deficiencies as well as wrong impressions. Aberrations exist in all walks of life - in business, society, administration or in the political class. But presumption of endemic greed, irregularity, corruption or collusion is as flawed as to assume that society comprises exclusively of extortionists and wrongdoers on the one hand and their victims on the other.
Above anything else, trust is critical for taking any business risk. For many years, from Independence until about 1991, the Indian state viewed business with suspicion. Ironically it was the trust of our society that allowed enterprise to flourish. There is an underlying ethos across all sections of our society, which essentially continues, that encourages one with capital to act in trust both for himself, his family and for society, and with his wisdom, experience and ability to administer, to do good for the nation.
Current discussions run inconsistent with this social ethos, insinuating that a large part of corporate well-being is a result of various nexuses, usually favourable contracts or government largesse. Casting an undiscerning shadow over business leads to false conclusions. Can almost anything just be alleged to be an outcome of rent offering or rent seeking, leaving those concerned to establish innocence even though the law presumes innocence until proven guilty? How this tendency creates a serious reputational risk to the enterprise or the country seems to be of no concern.
Indian enterprise generates value through the entrepreneurial drive, intellect and hard work of promoters, and white- and blue-collared constituents. Responsible business here and everywhere else in the world essentially seeks from government legislative clarity, contractual certainty and fair treatment. However, discretionary freedom and a maze of opaque laws make the system frequently extortionist and occasionally collusive.
Our economy requires resources of a high magnitude and over an extended period. The very act of placing capital at risk, to generate economic progress and value, deserves encouragement rather than discouragement.
Every government in the world leverages natural resources at its command to generate economic activity, provide jobs and achieve profits in an equitable reward-risk ratio. This in turn creates the atmosphere to sustain an inflow of capital from domestic and foreign investors. Resultant benefits to society, exchequer and expansion of business activity, are the real paybacks. In a negative state of mind one overlooks this holistic picture.
All governments also apply tax policies towards propelling economic activity. Examples of "tax foregone" being equated to doles are as flawed as notional losses being equated with real losses. Tax policies are used to direct investments to areas of priority, to create a level playing field vis-a-vis foreign competition, and sometimes to mitigate certain costs and other inefficiencies inherent in a developing economy.
In an analysis in the public domain McKinsey & Co has suggested job creation and productivity gains have historically been the most powerful forces for improving living standards. India is in need of deep reforms that encourage businesses to invest, scale up and hire. If weak economic performance continues it is possible that in a decade a large part of our population will remain trapped in poverty. Surely this is an outcome that India cannot ignore.
The principal tasks relevant to us are (a) creating opportunities for businesses and jobs, with manufacturing and labour-rich services forming the backbone; (b) raising farm productivity and efficiency of distribution thus raising farm incomes; and (c) increased public spending on basic services and making them effective. Promising strategies include forming public-private-social partnerships and mobilising community participation.
These forces will set off a cycle generating more revenue, enabling meeting of funding needs for so-cial infrastructure besides water, health, food and energy security. But with a disruption in trust, which holds up decisions and hinders capital flows, such partnerships will not come by easily.
It is no one's case that corruption, or improper conduct or violation of law, should go unpunished. Rather the opposite: punishment of aberrant behaviour is the best way to build trust. But doing this swiftly requires upgrading our judicial infrastructure and processes. I am convinced we have more than sufficient laws for attending to misdeeds. Actions and sincere implementation down the line are more relevant than further legislation.
Mere allegations, political expediency or an extension of outmoded economic ideologies, particularly when devoid of irrefutable evidence, are weak foundations on which to threaten a relationship of mutual trust that society, business and government have painstakingly evolved. Arguments or defences on each side can be taken to any level of intensity; but there must be a real purpose at the end of it all.
Suffice it to say, responsible business does not look to doles or undue enrichment. To advocate that it always does so is irresponsible, self-flagellating and against the true interest of India and its people.
The writer is president,Federation of Indian Chambers of Commerce and Industry (Ficci).
Business not ipso facto criminal: Tendency of presuming it guilty without proof is damaging India's economy - The Times of India
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
I am sure Kejriwal will not agree with all this.
Do you?
SIDHARTH BIRLA
In recent media and political discourse, one notes with disappointment the unwarranted criticism Indian business in general has been receiving. Insinuations and allegations range from nexus and conspiracy theories to abetting greed and graft.
To preclude being painted with a broad brush, it becomes the duty of business to articulate and act to correct deficiencies as well as wrong impressions. Aberrations exist in all walks of life - in business, society, administration or in the political class. But presumption of endemic greed, irregularity, corruption or collusion is as flawed as to assume that society comprises exclusively of extortionists and wrongdoers on the one hand and their victims on the other.
Above anything else, trust is critical for taking any business risk. For many years, from Independence until about 1991, the Indian state viewed business with suspicion. Ironically it was the trust of our society that allowed enterprise to flourish. There is an underlying ethos across all sections of our society, which essentially continues, that encourages one with capital to act in trust both for himself, his family and for society, and with his wisdom, experience and ability to administer, to do good for the nation.
Current discussions run inconsistent with this social ethos, insinuating that a large part of corporate well-being is a result of various nexuses, usually favourable contracts or government largesse. Casting an undiscerning shadow over business leads to false conclusions. Can almost anything just be alleged to be an outcome of rent offering or rent seeking, leaving those concerned to establish innocence even though the law presumes innocence until proven guilty? How this tendency creates a serious reputational risk to the enterprise or the country seems to be of no concern.
Indian enterprise generates value through the entrepreneurial drive, intellect and hard work of promoters, and white- and blue-collared constituents. Responsible business here and everywhere else in the world essentially seeks from government legislative clarity, contractual certainty and fair treatment. However, discretionary freedom and a maze of opaque laws make the system frequently extortionist and occasionally collusive.
Our economy requires resources of a high magnitude and over an extended period. The very act of placing capital at risk, to generate economic progress and value, deserves encouragement rather than discouragement.
Every government in the world leverages natural resources at its command to generate economic activity, provide jobs and achieve profits in an equitable reward-risk ratio. This in turn creates the atmosphere to sustain an inflow of capital from domestic and foreign investors. Resultant benefits to society, exchequer and expansion of business activity, are the real paybacks. In a negative state of mind one overlooks this holistic picture.
All governments also apply tax policies towards propelling economic activity. Examples of "tax foregone" being equated to doles are as flawed as notional losses being equated with real losses. Tax policies are used to direct investments to areas of priority, to create a level playing field vis-a-vis foreign competition, and sometimes to mitigate certain costs and other inefficiencies inherent in a developing economy.
In an analysis in the public domain McKinsey & Co has suggested job creation and productivity gains have historically been the most powerful forces for improving living standards. India is in need of deep reforms that encourage businesses to invest, scale up and hire. If weak economic performance continues it is possible that in a decade a large part of our population will remain trapped in poverty. Surely this is an outcome that India cannot ignore.
The principal tasks relevant to us are (a) creating opportunities for businesses and jobs, with manufacturing and labour-rich services forming the backbone; (b) raising farm productivity and efficiency of distribution thus raising farm incomes; and (c) increased public spending on basic services and making them effective. Promising strategies include forming public-private-social partnerships and mobilising community participation.
These forces will set off a cycle generating more revenue, enabling meeting of funding needs for so-cial infrastructure besides water, health, food and energy security. But with a disruption in trust, which holds up decisions and hinders capital flows, such partnerships will not come by easily.
It is no one's case that corruption, or improper conduct or violation of law, should go unpunished. Rather the opposite: punishment of aberrant behaviour is the best way to build trust. But doing this swiftly requires upgrading our judicial infrastructure and processes. I am convinced we have more than sufficient laws for attending to misdeeds. Actions and sincere implementation down the line are more relevant than further legislation.
Mere allegations, political expediency or an extension of outmoded economic ideologies, particularly when devoid of irrefutable evidence, are weak foundations on which to threaten a relationship of mutual trust that society, business and government have painstakingly evolved. Arguments or defences on each side can be taken to any level of intensity; but there must be a real purpose at the end of it all.
Suffice it to say, responsible business does not look to doles or undue enrichment. To advocate that it always does so is irresponsible, self-flagellating and against the true interest of India and its people.
The writer is president,Federation of Indian Chambers of Commerce and Industry (Ficci).
Business not ipso facto criminal: Tendency of presuming it guilty without proof is damaging India's economy - The Times of India
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
I am sure Kejriwal will not agree with all this.
Do you?
