January 26, 2010

India needs legal system to protect investment

Filed under: Uncategorized — ktetaichinh @ 4:21 am
Tags: , , , ,

Last month the chief judicial magistrate of the Central Bureau of Investigation court fined and sentenced S.P.S. Rathore, a former director general of police, to six months’ rigorous imprisonment for molesting a 14-year-old girl.

The fact that the convict’s profile did not prevent him from being convicted is the silver lining to this whole affair. But the amount of time the system took to deliver its verdict is contrary to the concept of justice. The court took 19 years to decide the case. Meanwhile the victim committed suicide.

In practice it is not the government’s investment-friendly policies that run the show. Rather, it is the people who run the government and several of its departments – and their policies are guided by nepotism, corruption, religion, caste and party politics. At the very minimum, nothing is possible in India without paying bribes. The amount of the bribe is directly proportional to the amount of the investment.

Any sensible investor would be reluctant to spend resources without investment security. Business, irrespective of its nature, is prone to disputes, which in India are not decided by a “peoples'” court as in China. Neither are the courts in India “flexible” as in China, where often connections at appropriate places decide the fate of a case.

Though in China everything is suffixed with the facade “people” – as in the people’s court, people’s police or the people’s party – state-run systems are not people-friendly. For instance, a company can hire and fire at will in China, and the government can evict people from their dwellings whenever it wants. There would hardly be any protest; should there be one, the government would silence it.

China does not have many social organizations where the voice of the people can be documented, distributed or acted upon. The Chinese model contradicts sustainable development.

India is a democracy and the strength of a democracy lies in its people. In essence, it is the democratic space that makes India stronger than any of its neighbors or competitors. And this should be India’s selling point.

But what is lacking in India is the basic infrastructure within which a democracy can gain strength. Instead of addressing issues that affect democratic governance, the government in India is interested in catching up with China and other competitors, at whatever cost. This process has started alienating the people from the government.

If India is to attract business investment, the government must address the immediate requirements of setting up a functioning democratic state. For this, the primary requirement would be to fix the country’s ailing judicial institutions. This would also result in enriching and empowering the country’s people – the real strength and wealth of the country.


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