Birla FIR affair: fear, transparency and India Inc

The Kumar Mangalam Birla episode is one more opportunity for the business class to learn some important lessons

ashishm

Ashish Mehta | October 18, 2013


Kumar Mangalam Birla: when it comes to transparency, the corporate world too can do its bit.
Kumar Mangalam Birla: when it comes to transparency, the corporate world too can do its bit.

A future historian of Indian business may well mark the current phase – the first decade of the century, or the time of UPA-II regime – as a critical juncture when old-fashioned corporate houses finally decided to put their respectability aside and play the market by its rules.

First there were the Ambanis, then a Tata and now a Birla. Is no name sacrosanct any more? What shall we make of Kumar Mangalam Birla, one of the most respected business leaders, being named in a CBI FIR? As with any other citizen, we have to wait for investigation and trust that the law will take its course.

But the business community is upset. Commerce and industry minister Anand Sharma has come out in the support of Birla [Should ministers defend coal scam-accused Kumar Mangalam Birla?], while CII, the industry lobby, has even used the F word – fear. CII president Kris Gopalkrishnan has said, “Every effort should be made to ensure that there is no atmosphere of fear created, when it comes to decision making.” [Do not create atmosphere of fear, says CII]

Fear? Why should a straight-playing businessperson be afraid? The larger story that the above-mentioned future historian will notice is that in spite of liberalisation and the end of the licence-permit raj, economic reforms left it to the ruling regime’s discretion how to apportion natural resources – a fit case of crony capitalism. That in nutshell is the story of every major financial scandal of our times, from 2G spectrum to coal block allocation.

The business community on the whole – noted exceptions apart – participated in the corrupt system gleefully.

Isn’t that why we have some of the top billionaires doing rounds of courts these days? Against that backdrop, talking about ‘atmosphere of fear’ is slightly out of place.

And that is not the only word out of place in the statement from the CII president, who can be assumed to be speaking on behalf of the whole business class. There is one more: transparency. “Swift decisions and transparent policy environment are pre requisites of an enabling business climate,” says Kris Gopalakrishnan.

Yes, changes in the policy on coal block allocation were opaque and discretionary, and it would have been wonderful if one of the business lobbies had flagged the problem when it was happening, but then the very discretionary nature itself implied business interests, didn’t it?

When it comes to transparency, the corporate world too can do its bit. For example, as retired bureaucrat Sanjeev Ahluwalia has pointed out [Shine a light on gas & power 'deals'], private developers like Reliance Industries, Tata Group and Adanis have been hiding a lot about their deals with the authorities in crucial sectors like coal, natural gas and power, leaving the citizen clueless. Even public sector banks refuse RTI queries (for example, about how much of our money they have turned into NPAs) under the guise of business interests.

India Inc can choose to learn the right lessons from the latest episode and strive for transparency, but then it has to begin at home.
 

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