The Supreme Court’s recent landmark judgment, which ensures that convicted politicians will now get immediately disqualified from contesting in elections or holding office, marks an end to almost a two decade long tug-of-war between political parties and the Election Commission over the right of electoral candidacy to tainted candidates. While it is surely a landmark judgment and it’s not fair to be critical about everything, yet, the board is split into equal halves in their opinion towards the SC ruling, as pros and cons of the judgment seem to weigh equally.

On the one hand, just because a case is hanging against a candidate, it is grossly unfair for the person to be assumed disqualified (due to the hyped up fear of future conviction) – as the allegation could well be fabricated. As it often happens in the political domain, a candidate could be debarred based on false allegation brought about by vested interests to stonewall him from standing in an election. It’s quite easy and simple: just file a case against him, tom tom the fact that the candidate could end up getting convicted, and he is done for good.

Morally, it’s our Constitutional right to remain innocent until proved guilty. And if that doctrine is applicable to all Indian citizens, it is only fair that the same applies to the politicians as well. It is not that the SC judgment goes against this. But the scrutiny that politicians will face now, especially the honest ones who have trumped up cases against them, could well be unfair. The attempts over the years to enforce stringent rules against political candidates has been to stem the growing criminalization of Indian politics and to debilitate the nefarious nexus of politicians with goons and unlawful activities. But I have to admit, in this attempt to secure a fine balance between being just and unjust, it is debatable how far the strings should be pulled in curbing criminal activities in politics and how much latitude should be given to electoral candidates. The fact also is that a mind-numbing high percentage of Indian politicians have got criminal cases pending against them, most of which are genuine, but they are not convicted due to their muscle power.  Read More....

An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Normally, it is difficult for me to be cynical like media pundits generally are. But after looking at election results in so many states since 2010, the one sad conclusion that I can draw is that the corruption card is being overstated and over-hyped. it appears as if allies and perception management play a bigger role in deciding elections than actual facts related to corruption and plunder.
This should be the biggest lesson that the top BJP leaders must draw from the elections. Compare two states and two parties and see what has actually happened. In Karnataka, the Lokayukta, Justice Santosh Hegde and his office accused the BJP government led by the then Chief Minister B. S. Yeddyurappa of corruption. These charges were related primarily to mining operations in Bellary. Subsequently, Yeddyurappa was forced to step down. At that time, my colleagues told me that senior BJP leaders based in Delhi had a bigger role to play in the ouster of Yeddyurappa than opposition parties! In a significant development, the Karnataka High Court actually absolved Yeddyurappa of some charges slapped against him. Despite this, Yeddyurappa was treated badly by the top leadership of the BJP and he quit the party a bitter and frustrated man to form his own party. Yeddyurappa vowed to ensure that the BJP is given a humiliating defeat in the Karnataka assembly elections. He has ensured that and the BJP has indeed lost very badly. This despite BJP leaders screaming loudly that they have purged the party of corrupt elements. Now look at what happened in Himachal Pradesh last year. Despite serious charges of corruption against him, the Congress made Virbhadra Singh the de facto candidate for the post of Chief Minister. There were loud whispers that this cynical move would prove costly for the Congress party since Indian voters were sick and tired of large scale corruption exemplified by the Commonwealth and 2G scams. What was the actual result? The ‘tainted’ Virbhadra Singh led his Congress party to a very comfortable victory and became Chief Minister!

So what does a surface analysis of the election results of the two states reveal? The BJP loses Karnataka very badly despite showing the door to a Chief Minister who faced charges of corruption. And the Congress wins Himachal Pradesh with a handsome margin despite giving charge to a former Chief Minister who faced serious charges of corruption! Of course, this is a surface analysis and many other factors must have played a role in deciding the elections in Himachal and Karnataka. But you cannot escape the sad conclusion that corruption is overrated as an election issue. And that really is the sad news for India.  Read More....

An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).

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SC slams AICTE's illicit control on MBA courses
MBA, MCA courses no longer under AICTE
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
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India’s scams and corruption are perennially ubiquitous – they keep recurring time and again. There is hardly a month that goes unnoticed without any major scam breaking out. It is not that there isn’t any scam elsewhere, but barring some sub-Saharan and Asian rogue states ruled by the junta, the scale and magnitude of Indian scams have outperformed every other nation by an unprecedented margin of frequency and scale. Typically, a scam exposé starts off with media frenzy and then gets lost into thin air! The typical Indian middle class’ short memories, inevitably brushes the scam off, and then the judiciary typically bails out the accused, and everything is business as usual. Even though media spotlight continues on the case for a while, the same mostly focuses on the economic aspect of it, largely ignoring the enormous social impact. Mostly, the multi-million dollar scams that prop up every now and then have huge negative externalities both at the regional and national level.

Let me talk a little about the recent scam, which has been rocking the nation – Coalgate! Coal mining – the lifeline of thermal power that constitutes around 66 per cent of installed capacities in power generation in India – is very inefficiently run, and I’m being graciously modest when I say that. The sector is marred by massive pilferage and corruption with open disregard to environment and conservation. However, there are many other serious ground concerns that have been missed amidst the entire current hullabaloo. To start with, the mandatory regulation of open cast and underground mining requirement is flouted openly, causing health hazards on account of environmental degradation per se. The corruption level is beyond one’s wildest imagination. Sample this: even the sand purchased to fill the old mines is being sold in the open markets for petty gains!

There have been waves of protests in most of the coal mining states – particularly socially conscious Maharashtra – against pollution, environment hazards, and land acquisition... but nothing much was done. Land procurement is done by the government, and also by the private coal mining companies, which have very little respect for the laws, and who have very little good-faith negotiations with the land owners! And mind you, these activities are on since decades, even before any coal scam was discovered.    Read More....

An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).

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2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
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IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
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Professor Arindam Chaudhuri – A Man For The Society….
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Amongst the many critical predicaments that the Indian economy suffers from, corruption has been one of the biggest monsters, and thankfully the most talked about in recent days. Needless to say, corruption has corroded every delivery system and has made it completely dysfunctional. The entire Indian public life is riddled with overriding rates of corruption – from the Adarsh land scam to Commonwealth Games misappropriations to the 2G spectrum scam – the list here has been endless, and the magnitude, obscene. In fact, India’s public life was never clean – the infamous Bofors scandal, Harshad Mehta’s nexus with senior politicians and Ketan Parekh’s stock market manipulation – all had their own perilous impact on the economy! It requires no empirical study or statistical survey to exhibit that we comfortably are the top performers in all corruption related global indices.

Take for instance, Transparency International’s Corruption Perception Index (CPI) where India’s rank has been slipping consistently – languishing at the 95th position now with a score of 3.1 (on a scale of 10), a sizable 23 ranks down from 2007! We are far behind China that stands at 75th position with a score of 3.6. CPI score is not only about corruption but is more about the way corruption has got institutionalised in our system. Also, it is a fact that India’s score could have been better had it not been battered with the monstrous 2G spectrum scam. Interestingly, all the least corrupt countries like New Zealand, Denmark and Finland with 9.5, 9.4, and 9.4 scores respectively are not just socially developed but also economically progressive. And that’s why these are those nations that experience very few cases of crime, corruption and other forms of social malaise – unlike India.

The thumb-rule that set the pattern is that the developed countries mostly have high CPI scores, whereas at the bottom of the table are the countries mired by civil strife and oppressive regimes; and in-between are the emerging economies as well as former communist blocks. There is also a direct correlation between CPI rankings and Human Development Index (barring some aberration like Greece, which, in spite of being a developed country is ranked below China at number 80; and South Korea, which is ranked 12th in HDI and is 43 in CPI). Most of the African as well as Asian nations have a combination of low CPI and low HDI scores and most of the European and North American countries have the opposite; thus reflecting a direct bearing between the two indices! On hindsight, it may appear that there is no impact of corruption on GDP growth and investments. China and India, both scored quite low on CPI, yet have been riding on decent economic growth and FDI inflow. Vietnam and Indonesia are even lower in ranks in CPI (2.9 and 3.0 respectively) are recipient of quantum investments with their economy kicking!

Another case in point of disconnect between GDP growth and corruption is Brazil with a score of 3.8 and Russia appallingly with 2.4, who are at the bottom half of the draw! However, there is an interesting catch here, particularly, with respect to India. We have an increasing income inequality with a dubious distinction of possessing the highest number of poor in the world. An OECD report reveals that the people belonging to the top 10 per cent of our income group are 12 times richer than the bottom 10 per cent. And this is increasing as the difference 20 years ago was only 6 times, that is, before the beginning of our magic potion of liberalization! Gini Coefficient another notable measure to evaluate inequality, is on a rise too – it has increased from 0.32 in 2000 to more than 0.37 now! There is no secret in the fact that the income inequality assuages the chances of employment to many, lowers purchasing power for consumption expenditure, halts the access to borrowing, and hinders the ability to save and invest! For the uninitiated, CPI also takes into account various parameters that have a higher social impact. India fares badly on almost all parameters considered under CPI – viz. bribery, extortion, nepotism, patronage, graft, embezzlement. The 2G spectrum scam, CWG scandal, cash-for-vote bribery case have set infamous benchmarks on all these parameters and surely are the reasons for such poor showing in the index.

More alarmingly, as India develops, there is an ascent of illicit money being stashed in foreign shores as well. There is no doubt that due to this corruption plaguing India, the fruits of development are certainly not reaching the desperately poorer sections of the society – a fact quite evident from the increasing gap between the rich and the poor. World Bank too has drawn a poor picture of India’s achievements in curbing corruption! The report is one on Governance Indicators, where India has fared quite poorly and is below the half level on most parameters. In the parameter ‘Rule of Law and Control of Corruption’, which directly addresses corruption related issues like crime, tax evasion, black markets, and judicial independence – India has scored a lowly 56th percentile! That said, India’s low score is quite expected and obvious on this particular scale. India is probably the worst performer globally with respect to tax evasion as a humungous amount of black money gets stashed abroad (we top the global list with more than $1 trillion of Indian black money floating around the world). Added to that, the efficacy of the Indian judiciary has been in question too as even such a corrupt nation like ours can still hardly boast of any political or business leader who has ever been sentenced to long years of imprisonment.

Shamelessly, leaders like Kanimozhi and many others who were arrested on corruption charges are now roaming scot free. And a few who are still behind bars are leading a luxurious life inside the prison with all luxuries at their disposal. This speaks volumes on the credibility of the so-called ‘Rule of Law’. Such lousy rules of law are the vital motivating factors for our political and business class to adhere to such corrupt practices.

Another research and advocacy organization, the Global Financial Integrity (GFI), released a report called ‘The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008’. The report alluded to some jaw dropping facts! As a direct result of black money stashed abroad, India has lost a humungous sum. Tax evasion, bribery and kickbacks, cases of crime and other forms of corruption – all are listed between 1948 and 2008! The 2G spectrum is a classic case of a royal kickback scam by A Raja and it is intriguing how our system managed it to keep it off-the-hook, more so as this was done during the Bofors era. Notwithstanding, in our gigantic corruption saga, the present valuation of this illegal capital flight is more than double the US external debt! Even at the corporate level, the private sector always preferred overseas financial centers – the share of which (in terms of deposits), went up from 36.4 per cent in 1995 to 54.2 per cent in 2009.

Because India was positioned as a nation-state post Independence, corruption developed a strong foothold in Indian politics. Moreover, given the series of scams that have come to limelight in the last one year, it is tempting to assert that Indians are by nature immoral and are liable to be corrupted easily. However, researches have shown that Indians are as prone to become corrupt as their peers in other developing nations of Asia. But one thing that sets Indians apart is their willingness to tolerate such corrupt measures. This is evident from the amount of bribes the common man in India pays for availing of even the basic services in his day to day life. From getting a service in the hospital to lodging an FIR or getting a driving license, every service requires a common man to pay bribe for getting the work done without much bureaucracy. Almost all the public services like the Public Distribution System (PDS), hospitals, schools, water supply, are corrupt from head to toe. As per the India Corruption Study 2010 by CMS, rural households of 12 surveyed states have paid an amount close to Rs 4700 million as bribes during the last one year. Critically, the most affected people by these corrupt practices in public services are those from socio-economically weaker sections of the society, particularly in rural areas.     Read More....

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Just like the last time I wrote about one of the landmark developmental initiatives of the UPA government – NREGA – this time I decided to write upon an equally, or rather more significant, developmental initiative: Sarva Siksha Abhiyan; an initiative which holds the promise of transforming the entire socio-economic landscape of the nation, if delivered to its potential! Now, there is a big ’if’ here, as going by precedence, each and every developmental initiative of the government has been full of corruption, coupled with delivery inadequacies. And the same has been a reality with respect to SSA as well.

A recent report by British media revealed that millions of pounds of aid for education under the Sarva Shiksha Abhiyan (SSA) programme have literally disappeared. The report put this figure at a staggering £340 million, which is around Rs 2,327 crore! To further this report, the Comptroller and Auditor General’s (CAG) investigation found that almost £14 million (around Rs 100 crore) had been spent on luxuries viz. new cars, luxury beds, computers et al, that had no connection with SSA. So much so that around Rs 1.02 crore was transferred into non-traceable bank accounts. Not just that, electronic equipments like air conditioners, faxes, photocopiers, colour television sets et al were bought for regions which had no electricity supply! And that’s just one side of the entire SSA story! Another CAG report reveals that around 68 per cent of the Rs 8000 crore allotted for ‘Elementary Education’ development work, which was spent under SSA, had no records. A 2006 report highlighted irregularities of funds usage to the tune of Rs 470 million in almost 14 states in SSA schemes. A brief glimpse through other media reports, in the span of the last few years, is enough to give a concrete idea about how states like Bihar, Madhya Pradesh, Maharashtra and Uttar Pradesh are spending allocated funds on projects that have nothing to do with SSA.

As such, India is amongst the lowest spenders on education. Couple this with the fact that India also houses the maximum number of illiterates in the world! In this light, it is criminal that funds to the tune of thousands of crores get siphoned away just like this. Putting the numbers into perspective, if the total allocated money (Rs 31,036 crore as per the budget 2010-11) were to be disbursed directly to 192 million children (or 19.2 crore children) who officially come under the ambit of SSA, then each student would receive more than Rs 1600 each this year. Considering that a student generally has to pay an average monthly fee of Rs 100 (actually ranges from Rs 70-150 in rural areas) at rural elementary schools in India, giving Rs 1600 annually to students directly would not only enable them to pay the annual fees, but would also result in some extra pocket money! The direct disbursement seems to be a much more rational and fruitful method, when seen in the shadows of corruption and scams.     Read More....

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