Response to FT article - India's 'bumble bee' defies gravity

Dear David,

I recently read your article titled "India's 'bumble bee' defies gravity” published on Financial Times dated February 16^th 2012. Here are some of the after thoughts that I wanted to share with you.

The front page of ‘Financial Times’ referred this article with the reference 'Undependable India'. That description was quite damaging. I do not agree with that. India has been an open democracy with the much open market for the last 2 decades. If today's India not dependable, then a communist China or an ex-Soviet Russia is more dependable to the capitalistic world is it?

Unlike the west, India does not have the ‘sophisticated’ incarnation of bribing called ‘lobbying'.
India is not a banana republic as you quoted somebody’s words in the article. It’s the largest democracy in the world. You should also understand that India is still trying to recover from devastation of the centuries of external aggression. It is a country where the national reconstruction is still under progress. The western world would interpret the word 'National Reconstruction' as ‘a contract to rebuild a country’s infrastructure after bombing that country . The 'National Reconstruction' that I am referring is a much deeper meaning. If a country is under continuous external aggression for centuries, the society would become rigid & selfish and divided. Rebuilding such fractured society into a vibrant nation is what I am referring as National Reconstruction’.

India is perhaps the most capitalistic country in the world today. We don't run ‘Government Motors’ (GM can also be called that way). We don’t have to bail out banks, insurance companies and mortgage agencies. We don’t have a large 'per capita external debt' that we cannot grow out of. Countries with those characteristics are the undependable ones, you never know when they will go 'bust'.

I personally feel that Vodafone should have been asked to pay the tax that was due ($2.9 billion) & that verdict was wrong. It has also sets a wrong precendence.

Other hand, the mentioned court verdict on the 2G spectrum case is a very positive one. Even during the court proceedings the corporate executives who tried to bribe were behind the bars. The judgement to cancel 2G licenses sent a very loud & clear message that 'if your company thinks that it can get a favourable deal by influencing the government, that deal may not last for ever'. Isn't it a positive message? It is. Especially for the people of India who have been let down frequently all the 3 pillars of Indian democracy (executive , Legislature & Judiciary)

It might not be positive for European companies like Bofors / BAE, (or even American companies like 'Enron' ) which are used to bribing governments to get business deals.

Business deals & asset valuations are not written 'on stone’. They should be re-negotiated with changing circumstances.

I don't agree with the cry that decision like this will impact 'Foreign Direct Investment' into India. ‘The verdict has not singled out any foreign companies. What is even more important is that ‘the foreign companies are NOT treated specially’ like the case of Vodafone.

Even if the 'so called' foreign direct investment dries up, it’s not a big deal for India. The statistics on foreign direct investment in India shows that the FDI is 'very little' compared to the investments derived from savings of Indians themselves. Most of the foreign money coming is the name of investment is 'hot money' chasing the stock market, which you cannot consider as long term capital investment.

You will not hear these opinions neither from the Indian businessmen in the cocktail parties that you attend / nor from the regular Indian English media. It is the voice of strong and vibrant, resurgent India.

Thanks for your closing remarks in the article. I am quoting it again, 'If India had a strong government, less corruption and more policy visibility', just imagine how high it could fly'.

with regards
Arul Krishnamoorthy
4mythoughts.blogspot.com