For the last few days i have been reading a lot. The exams are over and finally I got time to instil some oxygen in my inactive blog. I was a bit confused about what to write. Lots and lots of things were going through my mind, particularly about India and the global scenario. But before i reach there, there has been a thing that has been bugging me a lot. Recently i happened to watch this documentary Enron: the smartest guys in the room. It was a very intriguing experience and at the end of it I was left a bit numb. The magnitude of the accounting scandal and the way it was executed was shocking. Right from the point where SEC granted Enron the right to use “mark to market” practises in its accounting, to the trial where top executives said that they were unaware of what was going on in the company was too much to digest. The worst thing was that top executives earned hundreds of millions out of it and the hardworking employees lost more than a billion dollar worth of pension funds. It was the biggest bankruptcy ever declared in corporate America and was soon overtaken by the bankruptcy declared by Worldcom, which was recently toppled by Washington mutual’s bankruptcy. Although in the aftermath of the Enron scandal the Sarbanes-Oxley act came into existence. But scandals like Enron continue to occur. It left me in a sense of a bad feeling that soon I will be part of this world, where greed continue to exist and is ever increasing. It’s not only limited to the US, India has also seen its fair share of corporate scandals, Satyam being the name that crops up first in everyone’s mind. Although these have been far smaller and too less in frequency compared to the scale of corruption our government engages in. And this is where my apprehensions start. Last night i was reading this article in ET by Swaminathan Aiyar. The article’s name was “India to overtake China in 2020”. A very well written article I must say and he aptly describes why he believes that. He gave many reasons like China’s mean population age will be on the decline, whereas India will have a large young English speaking population. The export based economy of China will not sustain and will suffer the same fate as Japan suffered in the 90’s. He also gives some of the problems India will face like terrorism will increase; tensions with the red dragon will also increase. Demand for smaller states in India will also increase. Well along with all these he forgot a very pressing problem and maybe the most important one prevalent today, its corruption and the corporate world scandals. It was once widespread only in the government run institutions and India’s corporate elite seemed to be saner compared to their western counterparts. The Tatas, the Birlas had built an impeccable reputation. Although Reliance was always seen as someone taking advantage of the loopholes, but it was not up to the extent it occurred in US. But now with the Satyam scandal, LIC housing scandal and many more getting uncovered, it seems like those days are long gone. And then there were other scandals like the 2G scandal, the CWG scandal, the Karnataka Land scam and many more. It can so easily be said that year 2010 was the year of scandals, one after the other kept coming out. And there is a general feeling that many more skeletons might come out of the closet in the near future. Sensex which was supposed to reach new highs has been showing growth signs but every now and then a new scandal hits killing the investor confidence and the ruining the growth. India has got everything it needs to be the next superpower but along with it, it also has everything which can shatter this dream. The billion dollar question “will India become what it is touted to be?” will always remain until we reach that point in the future where we see it fall or rise up to the occasion and prove it to the world. All said and done the disease of corruption is killing India presently and the world thing is, it has infected the very innermost parts of her and is slowly paralysing its economy. For India to rise we need to kill this disease right of its roots, the corporate world needs to be more sensible and so should be the government and regulatory agencies. The need of the hour is strict laws which curb such occurrences and increase investor confidence as well as win the confidence of the common man. Once my economist teacher told us in the class that in America the least trusted institute used of to be the congress and now it’s the corporate world. I fear India might be moving in a same direction. But one must not forget that India’s growth is a story of private players not waiting for government but doing things on their own and getting success and for India to be a superpower that is the way forward. A very happy new year to all who are reading this and to them also who are not. I hope we all step in the New Year with new hopes, new dreams in our eyes and a new found willpower to fulfil them all.
India to overtake China in 2020: Swaminathan Aiyar- http://economictimes.indiatimes.com/opinion/columnists/swaminathan-s-a-aiyar/India-to-overtake-China-in-2020-Swaminathan-Aiyar/articleshow/5401241.cms