Crony capitalism a big threat to countries like India, RBI chief Raghuram Rajan says – The Times of India

Crony capitalism a big threat to countries like India, RBI chief Raghuram Rajan says – The Times of India.

That the government does good is something that I have held on to almost as a belief, in comparison to what we can deem as private sector. Many big names in the private sector survive because of the government’s benevolence and ‘conflict of interest’ is not a fully accepted idea.

This speech by the RBI Governor is quite forthright in recognising crony capitalism. We can not wish it away when we have proponents of a private sector who believe it to provide a better service than the public sector. A half way measure of joint public-private sector ventures seems to work in areas such as airports, but wonder if they can be applied to vast and critical areas such as food, health, defence etc..

The Indian voter is getting matured alongside with a unique brand of democracy. Unfortunately their focus is on a national horizon when the service or infrastructure is felt greatest at the local level. How does one get good service at the municipal level when the educated middle class focuses to get a Prime Minister who performs. I think as a people we set rules for the King and expect a behaviour out of him, and almost accept blindly the changes he may or may not make at the local level.

Infrastructures ultimately belong to the people and the state, even though they are operated by private parties. It is only the state that can provide for its upkeep through diligent management at the local level. This lack of local governance unfortunately is the bane of public infrastructure maintenance. What is needed is good public amenities, schools and a safe environment at the local level, whereas all discussion  is at a national level.

About the wealth of individuals, rightly land is the key factor in our ethos. Possession of land and property guarantees security to generations. Wealth gotten from Information Technology seems hollow and its sustainability eventually will be through investment in land. Most of our mega wealthy citizens and politicians have their roots as landed gentry, becoming government contractors, erstwhile contractors of the Raj, the builders of  infrastructure and preferred suppliers. In a truly free market, whatever that means, it is all fair and square, but then what should bother us is the wobbly bridge, the collapsing flyover and garbage and sewage overflowing onto roads.

There are many few good men, and I can say they are in the pillars of Indian democracy, the institutions that have upheld it. There are several examples of sacrifice, who served with honour and went home with a clean concious. Unfortunately we don’t celebrate them and know not of their contributions.

Nice speech Mr Rajan!



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