Say "No" To The Chacha State

I found today’s lead editorial in Mint, on Indian entrepreneurs, compelling. I quote:

It is well known that India is not a great place to do business, as the annual World Bank surveys repeatedly show. The latest shows that India is 133 in a list of 183 economies rated according to how easy it is to do business. Separate studies show that… New Delhi’s rickshaw pullers pay Rs8 crore of bribes a month. Street vendors in the Capital have to spend Rs40 crore every year to grease various palms.

(One crore = 10 million.)

Note that these “various palms” that have to be greased all belong to State Institutions – like the police and the municipality. The edit above refers to bribes in Delhi alone; if we try and compile figures pan-India, I am confident that the total bribes paid by our smallest entrepreneurs to these corrupt “institutions” will be staggering.

What would be my solution? Obviously, freedom. That’s it.

However, there are other views on parade today: first, from Arun Maira, former Tata executive who till recently headed the Boston Consulting Group in India, and who is now a member of the (ugh!) Planning Commission. He has written a desperate piece today in Mint as to how markets need “institutions.”

I remain firmly on the side of Liberty – from our The State, and all its corrupt institutions.

There is also this small report in the ToI on the Suresh Tendulkar Committee report, which altered the measure of poverty and recalculated the figure, showing a growth in poverty, especially rural poverty. The recommendations that obviously follow are bigger budgets for IAS district officer baboons. Tendulkar is a former Director of the Delhi School of Economics.

Once again, I stand firmly opposed to such ideas. The “institutions” (like the IAS) through which the poor are supposed to receive State-delivered handouts are corrupt and ineffective. Further, as we all know, much of village India is already in the cities and towns – where they are milked by our “institutions.”

A key institution is the Police. Here is Vir Sanghvi, editor of HT, writing that a new book by the widow of one of the officers slain during the Mumbai massacre shows the Mumbai police “in a very poor light.” We cannot depend on this State Police for security. Their main purpose, their daal-roti, is fleecing small entrepreneurs.

HT is also carrying this story of the Shopian double rape-murder. It seems the Central Bureau of Investigation has concluded, 7 months after the event, that the 2 women were not raped and murdered; rather, they had drowned. Does this mean that the local police, who had registered the case, were stupid? Recall all the tampering with the vaginal swabs of the victims. Who do you believe? Do you have faith in any of these “institutions”?

So what would be my policy prescription? Just this:

Make India the world’s #1 place to do business, free from all “institutional interference” but fully according to “private law”: Property, Contracts and Torts. I have written a column on this, which is yet to appear. We will continue the discussions once it is published, but I hope you are getting my drift: Say “No” to the Chacha State.