By Ravi Venkatesan
Oct 3, 2013
Lately India has been in the news for all the wrong reasons. Its once tigerish economy is growing at its slowest rate in more than a decade. Newspapers are filled with ever more depressing stories of rape, official plunder and gut-wrenching poverty. To an outsider the headlines can seem surreal: Last week the cabinet actually voted to allow convicted criminals to serve in Parliament and state legislatures, before being forced to back down.
Indians -- who know that almost a third of the members of the lower house of Parliament face criminal charges -- can be jaded about such things. But this kind of official brazenness can hardly inspire confidence in companies looking to invest in India, which has long touted the rule of law as its one crucial advantage over China.
And what about affluent Indians, who unlike foreign companies have a big stake in their country and society? Can they really continue to ignore the chaos and dysfunction that surrounds them, the broken infrastructure and equally threadbare laws? Can they thrive indefinitely in a country where most people exist on less than $2 a day, where half the homes lack toilets and three-quarters of the population doesn’t have access to safe drinking water?
There is no question that India has great potential. Having built successful operations for more than one multinational in my homeland, I know it’s quite possible to navigate India’s chaos and build profitable businesses here. Indeed chaos -- which is really shorthand for corruption, poor governance, uncertainty and volatility -- is a defining feature not just of India but also of many emerging markets. Global companies that learn to conquer it here will be well-prepared to succeed elsewhere.
But without a semblance of governance and the rule of law, India’s rise is hardly inevitable. Demographics and talent -- the lodestones of India advocates -- don’t automatically outweigh criminality, corruption and self-interest.
The culprits for this mess seem obvious: greedy politicians, corrupt bureaucrats and the greasy oligarchs who flatter and fund them. Many middle-class Indians blame democracy itself, which gives the vote to the unwashed and easily bought masses. Increasingly, though, I wonder if the problem isn’t us: educated, relatively wealthy, urban Indians.
Millions of creative and resilient citizens have done well by finding ways around India’s chaos rather than challenging it. We send our children to private schools and abroad rather than to government schools. We patronize world-class private hospitals instead of the public health-care system. We live behind the walls of gated communities, supplied by individual wells and powered by diesel generators.
Indeed, we take pride in our ability to succeed despite the government. The less influence the state has in our lives, the better: We don’t vote (turnout in elite areas is 35 percent or less) or pay taxes (less than 3 percent of Indians actually do). We shudder at the thought of entering government or politics.
Our disengagement has made the erosion of India’s public institutions possible. Now the fragile layer of insulation we’ve wrapped around ourselves is also eroding. Even the affluent and influential can no longer escape the extortion and lawlessness that the less lucky have always faced. I’ve been trying to build a house in Bangalore for more than two years, and have been stymied at every turn by rapacious demands for bribes. One friend’s home has been illegally occupied by a real-estate developer with political connections; the legal process to evict him has stalled because the judge hasn’t showed up for a year.