Anti-corruption hysteria has hurt India more than any scam


Senior Member
Sep 22, 2012
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There is a rot at the heart of India. But it is not the rottenness that anti-corruption crusaders, for example, imagine it is. Instead, it is a corrosive lack of trust; a mainstreaming of conspiracy theorising; and a slackness with procedure and common notions of justice in the pursuit of imagined corruption that are eating away at India. When future historians examine this period, they will assign to this breakdown of good sense the responsibility for faltering Indian growth, and for lasting damage to India's institutions and balance of power.

Perhaps historians will view as the high-water mark of this dark period the Central Bureau of Investigation's (CBI's) decision to register a first information report (FIR) against, among others, the non-executive chairman of Hindalco, Kumar Mangalam Birla, and the former coal secretary, P C Parakh. As is now widely known, Hindalco had been assigned coal from a mine that had earlier been earmarked by a previous screening committee for a public sector company; the committee's decision was overturned on the request of the Odisha government and the urging of the prime minister. The Prime Minister's Office has released the timeline of decisions, and it is almost painfully obvious that the reasons made sense: that the plant that Hindalco required electricity for would help Odisha's income and employment. This is the sort of decision that governments must make - and in fact, it is the basic logic underlying the entire principle of coal block allocations.

The fact that the group of which Hindalco is a member is generally believed to be among the more ethical in India's private sector is what allowed India's companies to properly express their anger; but the truth is that even for supposed "fly-by-night" operators, the justification for the policy remains the same. Naturally, the CBI is supposed to discover whether it can clearly establish quid pro quo for the dispensation of a coal linkage; but the perception now is that it first assumes that criminality exists thanks to the existence of a decision, and then looks for a money trail. An FIR may amount to nothing; but in the years the CBI seems to take, reputations and companies are destroyed, and the economy with them. And nothing could be worse from the point of view of common citizens, whose welfare depends on their government taking judgement calls, and not marching in lockstep with procedure.

The sight of P C Parakh, the former coal secretary who had argued for auctions from the start, defending himself on television should have inspired anger, as well as some self-criticism among those who have led this assault on reason from the start. And when Mr Parakh correctly pointed to the absurdity of the idea that he had entered into a conspiracy to illegally benefit Hindalco by pointing out that, in that case, even the prime minister was a conspirator, the more cretinous among us took that to be an indictment of the prime minister, rather than an explanation of how ridiculous the accusation was.

Mr Parakh, elderly and long retired, will now fear he will spend his declining years and his savings defending himself in court, relying on his memory of decisions and reasoning long after the fact. Who among us would relish that prospect? Which civil servant will take even the slightest initiative when that is what could lie in their future? Even this prime minister, who is not a man with enormous resources when he leaves this job, must know that his robust defence of his decision could mean he spends his 80s trying to clear his name. Nor can he expect any support from the ingrates that populate the upper echelons of the Congress party. He will remember how the previous prime minister from the Congress, Narasimha Rao, died with his name cleared - but abandoned and nearly penniless. This is the pass that we have been brought to by a reckless abandonment of good sense in the prosecution of imagined offences and presumptive losses.

Perhaps the most infuriating aspect is that Hindalco never actually got any coal out of the Talabira block in spite of putting in a Rs 11,000-crore investment. How more imaginary can an offence be? Who are the victims here? The fracas over coal block allocations reveals not just India's collective persecution mania in assuming that "giveaways" are necessarily dangerous, but also that so few of the giveaways actually fructified thanks to complicated and dilatory environmental regulations - which civil society darling Jairam Ramesh did precious little to simplify as environment minister, choosing instead to "implement" them selectively.

This moment in India's history started, perhaps, with the mass hysteria that followed the leak of the wiretaps on lobbyist Niira Radia's phone. It's thus appropriate that the Radia tapes are in the news again, with the CBI now investigating issues arising from them. Remember, these were taps made by the income tax department; they were illegally leaked; thanks to that, allegations made in them unrelated to Ms Radia's taxes are being investigated.

It is depressing that even further investigation of some of the most questionable decisions of the past few years - among them the granting of coal to Anil Ambani's plant at Sasan - must start from such a dubious source. Indeed, the government is now also investigating a mention by Ms Radia that iron ore mines might be allocated to Reliance Anil Dhirubhai Ambani Group (ADAG). No such mines were actually allocated, nor did ADAG build a steel plant, making this something of an Orwellian thought-crime. But mark how far we have descended: we no longer see anything odd in investigating a non-event on the basis of passing gossip in an illegally leaked wiretap of the phone of someone lobbying for a rival company. India has always been a nation of gossips, but no great nation could possibly enthrone gossip thus.

So we assign mines to help our industries grow and benefit citizens, but first environmental objections keep the minerals in the ground even when the factories come up; then we investigate the assignments, and even the non-assignments; and then we go after the retired bureaucrats who signed off on them. And meanwhile we hope and pray for headlines that implicate the prime minister himself in a corruption case - without actually believing that he received the slightest form of quid pro quo. If this isn't mass delusion, what is? And you still think it's the United Progressive Alliance (UPA) alone that destroyed investment?

Certainly, corruption is caused by a lack of transparency in decision making and excessive discretion. But, as time goes on, as transparency and technology change, the opportunities for such corruption will dwindle. Under the UPA, and sometimes with bipartisan support, systems were being put in place to fix this - a regulatory reform Bill, dispute resolution for public-private partnerships, a reduction in arbitrary discretion and so on. How many will survive the current climate is unsure. But one thing's certain: the lasting damage to India from this moment of shared hysteria goes much, much deeper than any scars that corruption could leave.

Mihir S Sharma: Corruption and corrosion | Business Standard


Senior Member
Jul 4, 2013
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I'm not sure how the author of this article came to the conclusion that the damage from this case is lasting and how he is quantifying this damage to the damage caused by corruption.

The conclusion is of the form "The lasting damage of chemo therapy is going to be much deeper than any *scars* cancer could leave"

Either he chooses to be blind to the all pervasive corruption or he is too privileged to encounter it.

Thanks for the article though


The Chairman
Apr 17, 2009
The article is a pro business houses plug.

If scams after scams unfolds, where there is total loot & plunder & pillage of India, does the writer feel that Indians should sit as zombies?

If one's house catches fire, there will be fear, and if that house on fire crumbles & the fire brigade still does not arrive, then would it bring unnatural if that fear turns into hysteria?

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