Of all the doublespeak Indians have been sold at election time since we declared ourselves a sovereign socialist secular democratic republic, the elimination of corruption and black money has remained the all-time bestseller regardless of market sentiment. So why has this eternally winning formula never translated into any effective action on the ground?There are of course three sides to every story and the story you buy depends mainly on who you hate the most.First up is the Robber Baron narrative, much favoured by those who truly resent the wealthy. It proceeds on the basis that we are a deeply fractured society and our elites have no sense of equal opportunityor equal protection of the laws.These elites offer kickbacks, rake offs, bribery and quid pro quos just so they can stay ahead of the queue. India then is a country of crony capitalists who promote whichever politicians best dish up rules that serve their purpose. Thus, a group of businessmen got together and hired Niira Radia to secure Spectrum Raja’s appointment as Telecom Minister so that they could corner telecom licences to the exclusion of those in the breadline out the door. There is great truth in this narrative because a great deal of corruption is about getting ahead of the pack in the allocation of scarce resources.Next, there is the Power Usurpation narrative, best loved by those who truly resent political power or who are most vulnerable to it on the ground, as for instance cycle rickshaw pullers. This proceeds on the basis that politics remains the leading way to very quickly accumulate a very large amount of tax free wealth. Our democracy then is the procedure by which gang lords, hoods, crooks, racketeers and thieves propel themselves from the margins of society right into the legislature, thus acquiring the power to make and implement laws. They bully the bureaucracy on pain of victimisation and transfer and use their extensive powers to extort money from their own people. In this narrative, the queue jumping businessman reincarnates as the eternal victim, his business paralysed till he disgorges political payments. There is great truth in this narrative too, especially when you think of the extortionist activities of revenue collecting departments.That brings up the final narrative: corruption and black money as a Democracy Tax, which appeals most to those who have a keen sense of pragmatic cynicism. In this narrative, corruption and black money are the means we employ to fund our much admired democracy. If you want to win an election – even if it’s only to the local gymkhana – you have to stitch together a coalition of politically significant groups and persuade them to vote for you. It doesn’t matter why you want power. You can want it for the good it will do the poor, the nation, your extended family or just because your daddy and his daddy before him had power. If you want to get what you want, you have to give those who put you there what they want. That is where corruption and black money enter the picture.There is great truth in this narrative too. Every successful politician has basically been great at putting together such coalitions. Indira Gandhi successfully sold it to Brahmins and Scheduled Castes as a voting block: Chaudhary Charan Singh successfully sold it to Aheers, Gujjar, Jats and Rajputs; Arvind Kejriwal now sells it to slum and resettlement colony dwellers, scooter rickshaw drivers and kaabadiwallahs.Running like a leitmotif through all narratives is your real problem. In general, righteous rhetoric notwithstanding, self-interest trumps morality every time. As our politics has now developed, the electorate expects payment for its votes in two instalments. First, there is the upfront pre-election earnest money paid in the political equivalent of shagan in an engagement ceremony. That includes cash, liquor, saris, laptops, et al. That’s just the beginning. If you win, you then have to deliver the big ticket payment: vast numbers of jobs in some yet to be built railway factory or PSU, lucrative contracts from the development funds allocated to parliamentarians to build imaginary roads to fictitious villages, contracts to build large local infrastructure with great scope for misappropriation of funds, stuff like that. Welcome to corruption.So how are you going to win an election? Who will pay for the booze and the saris? You could hold out your hat to an industry lobby but unless you are offering a tax sop or an industrial license, why would they bother? Basically, unless your daddy left you rolling in it, you are compromised before you start your political career. Succeeding elections only compound your compromises because next time around, you are going to need even more money. A ministerial berth is the best chance you have of funding your next election and you’d be a fool not to cash it in. That explains why we allocate a significant sum of money as a constituency development fund to every parliamentarian, especially those who don’t become ministers. It’s not that the Government can’t more efficiently manage development budgets: its all a parliamentarian has to reward his constituency with!Now, if you do become a minister, you have countless ways to make this money:1. Sell windfall profits disguised as economic policy. Increase customs duty here, allow imports of some items at concessional rates for a while there, change a tax rate here, allow a banned activity to select industrialists there, etc.2. Sell licenses, spectrum, mines, real estate development approvals, forest clearing permissions, and whatever else is controlled by Government in the guise of protecting the public interest, or the environment or whatever.3. Sell jobs and postings. Have you ever wondered why the petty bureaucrats hate working? They have purchased their jobs from politicians and the salary is just an interest payment on the cash deposits they made decades ago. If citizens want them to work, they expect citizens to pay cash for them instead of calling them bribes. As for posting, sovereign processes – like collecting taxes and managing long haul cross state border trucker traffic – generate large pay-off opportunities and it makes sense to auction the collection process to a pliable bureaucrat for an upfront payment. If you can get over your moral outrage, it’s no different from auctioning a parking lot to a local contractor.So if someone with a crusading zeal comes along and wants to chance the whole shooting racket, chasing Swiss bank accounts seems like symptomatic treatment. Clearly, the key to changing the national paradigm comes down to two bullets. The public funding of electoral processes is the first bullet. If you can win without commercial sponsorship premised on post-election benefits, you’ve gone a long way in getting rid of the compulsion that makes politicians corrupt. It then frees development funds for developmental activities.State funded elections are not rocket science. It’s been done before by many societies using many models. Whether you have the public money to fund this is another question. Law enforcement is your second bullet. You have to catch the corrupt and you have to then send them to jail. In fairness, we’ve been doing a bit of that lately to the unpleasant surprise of Amma, Chautala and Lalu amongst others. We need to do a lot more, and that means much better policing and a way more effective judicial system.In that view of the matter, what should we make of the oft repeated threats of incoming governments bringing black money back to India? First things first: if it is your fate to have the skill to generate a lot of black money abroad, what would you do with it? Would you fly down to Geneva, have some poor porter haul bags of crisp notes up the stairs and into the nearest bank? Would you then whip out your Indian passport, prove your identity to the bank and ask them to hold this money for you in a safe deposit box like you were Jason Bourne? Anybody smart enough to have money abroad is smart enough to know how to get it there anonymously and then put it to work multiplying itself without compromising the owner. That won’t happen if the money sits in a Swiss safe deposit box.Clearly, the idea that vast Indian wealth continues to sit in Swiss bank account is incredible on the face of it. How do you get ‘black money’ to work? You have to set up a trust fund run by chartered accountants in a tax haven and then funnel money into ‘white money’ investments. You have to send it to a market you understand offering returns you can live with. If you are an Indian industrialist or politician, where do you think that is going to be? That really is the heart of the matter. If you check out FDI figures in the last decade or so, you will find that a lot of it is coming through tax havens, trust funds, Private Equity and Hedge funds. Have you the slightest reason to believe that these funds and trusts are owned by foreigners?To put it bluntly, if you are a politician determined to bring black money back to India, you are twenty years too late. In announcing his globalisation policy and allowing FDI, late great Mr Narasimha Rao already did that in 1992!(The author is managing partner of the Gurgaon-based corporate law firm N South. He is the author of “Winning Legal Wars” and “Bullshit Quotient: Decoding India’s corporate, social and legal Fine Print”. He can be contacted at rcd@nsouthlaw.com or ranjeevdubey@hotmail.com).
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The question of regulation of colleges has always been a bone of contention between private universities and the regulatory authorities. Most regulators are seen as villains by the institutes, but students see them as heroes. The issue of regulation was thoroughly discussed at the Businessworld | BW India's Best B-Schools event. R.C. Natarajan, director of T.A. Pai Management Institute (TAPMI), spoke against any kind of regulation in B-Schools. According to him, the worst and most regulated sector today in India is education. He cited the example of an institute set up by some American B-Schools. They simply refused to comply with any conditions and come under the scrutiny of Indian laws. This prompted the Indian government to blacklist the institution. Still, that institute's one-year diploma is considered equivalent to a two-year course by many recruiters. "The more you comply, the more are you regulated," Natarajan said. "In education world, different set of regulations are present for the self-supported institutions and the government funded. When it comes to giving grants in the areas of development, maintenance and research, the private institutes should be supported by the government. I am okay with the idea of regulation without bias," said Harivansh Chaturvedi, director of Birla Institute of Management Technology (BIMTECH). "There is no point in threatening the private institutes under the UGC act. In certain cases, private institutes have a better faculty than the IIMs and pay them better in order to retain them. Thus, the fee regulation should be left to the market," he added. "Certain set of policies and certain set of people who are dealing with AICTE (All India Council for Technical Education) have somehow abused the process due to which there is a bit of angst about the whole thing. One of the big issues we need to deal with is how much of regulation is aiding the student to take that leap towards employability and skill building and how much of regulation is impeding the institutions in providing the right kind of education that is needed to succeed in the modern world," said Peri Maheshwer, chairman of Pathfinder Publishing India Pvt. Ltd.
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Just as most every crime novel has its fall guy and every blood sport its bum-of- the-month, Satyam has spawned not one but two innocent victims of which we looked at independent directors in last month’s Fine Print Too Much Heaven On Their Minds. In the weeks since, it seems auditors are winning the victimisation war by a long shot. For reasons that seem not to be associated with the actual conduct of their duties, two respectable members of the chartered accounting community have been arrested. So far, there has been no public disclosure of any specific wrongdoing for which any auditor appears to be culpable. All we have here is a witch hunt followed by a media trial, neither inspiring much confidence. The bazaar talk is deeply entertaining but insubstantial. There are rumors galore and conjectures worse confounded but the moment you start to scratch at the surface of any story, it doesn’t hold up. Duplicate FDR’s they say? Exactly how did Satyam match that up with TDS returns? False billing they say? How were the cross-border customer remittances matched up with Banks? It’s hard not to think that wise heads are contriving conspiracy theories after the fact without thinking very much about the scale of the deception. More significantly, no one has asks this question: how come the auditors were more competent to discover this alleged fraud than either the Income Tax Department or the Reserve Bank of India? Indeed, I would want to know the law, fact, practice, principle or auditing norm by which it is an auditor’s job to discover a fraud. I understand the legal position here is still held by the twenty year old case of Tri-sure India Limited v A.F.Fergusson and Company {[1987]61CompCas548(Bombay)} where the Bombay High Court took the view that: “(it is) directors of a company who are primarily responsible for the preparation of the annual accounts and for the information contained in it… The auditor does not conduct the audit with the objective of discovering all frauds...such an audit would have to involve a detailed and minute examination of all the books, records and other documents of the company, and the cost of doing so would be prohibitive and disproportionate to the benefits which may be derived by the shareholders. I don’t presume to be able to put the issue in better perspective; or language. What is it that we want our auditors to do? We can expect the auditor to check that adequate internal controls and systems are in place and that they are being followed. To be doubly sure, we can expect the auditor to selectively verify compliance with these internal controls and systems. However, can we expect the auditor to verify compliance in relation to more than a fairly small sample of transactions? And how deep do we want them to go? Let me be really tedious here and deal with specific examples of the sort of creative accounting that is de rigueur in India. First, there is the whole inventory game of inflated quantities of goods enroute to customers and understated warranty returns none of them reconciled. Do we want our auditor to contact his client’s individual customers: after all, a company that can fake sales can fake customer certifications? Then there is the ‘pre-booking’ of sales: do we want the auditor to talk to individual customers and ask them if they placed an order? Then there is bad debits masquerading as receivables: do we want the auditor to chase up people who the company claims will eventually pay? I could go on all day. All these solutions are part of serious forensic work, as tedious as police work and as labor intensive as breaking stones on a road. Quite apart from the whole antagonism of the process, there is too the question of cost benefit. As a young lawyer, I have done enough forensic due diligences to know how frustratingly difficult and painstaking forensic cross verification can be. Imagine an auditor doing this year after year using an army of lawyers in respect of each of his clients with NO reason to believe that anything is amiss. Have we ever asked our auditor to be this hostile to their own clients? Should we? How do you define paranoia? Let me take the argument a step further within the Satyam context. Even if something amiss could with appropriate precision be found but wasn’t, what is an auditor accused of? In law, a man is not negligent because his conclusion differs from that of another, nor is he negligent because he is not as smart or skilled as another. If this was so, every lawyer of lesser intellectual stature than a leading Supreme Court counsel would be in jail. The true test is only that such a man should have failed in circumstances where an ordinary man proceeding with ordinary diligence would not have failed. Indeed, in the Tri-sure India case, the Bombay High Court said as much when it observed that: "An auditor, however, is not bound to do more than exercise reasonable care and skill in making inquiries and investigations. He is not an insurer; he does not guarantee that the books do correctly show the true position of the company's affairs; he does not even guarantee that his balance-sheet is accurate according to the books of the company.” This at last brings us to the heart of the matter: Raju’s incomprehensible confession. I for one do not buy into his ceremonial hara kiri. He had an agenda to pursue which is understood only when we admit that beneath the surface lies a large political storm waiting to go off. Too many contracts have been won and this generally entails too many expenses. E Sreedharan, that rarest of rare being who is both incomparably effective and utterly incorruptible, told us as much in September 2008. So this is the question: is it that Satyam never make money (and inflated its sales to push up share valuations) or is it that it siphoned off the money to bag contracts beyond what it could afford? Raju was facing an investigation and the slammer anyway. He was going to have to explain about the money: did we expect him to admit that he passed the money on to people who control the people who run the jail he was going to? It’s obvious that he would say that he never earned the money in the first place. So as I see it, Satyam is really not about Raju but about the system. In most democracies, one way or another, businesses fund politics through more than direct contributions and if we are going to arrest auditors for that crime, isn’t it self-evident that all your auditors are going to end up in jail? And if this is the inevitable result of our compulsions: then who will secure the little compliance that the system does allow us to have in the first place? Do we really believe in this self-righteous suicide? (The author is managing partner of the Gurgaon-based corporate law firm NDLO South and author of the pioneering business book, Winning Legal Wars. He can be contacted at rcd@ndlosouth.com )
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A Note Near YouAdd places to notes, and you suddenly have something useful on your hands. Free Android app NearNotes is a sort-of geo fencing of notes and checklists. Let's say you are stopping at the super market on your way home. Enter the location and a list of things you typically need to pick up. Now when you actually go to that supermarket, the app will surface the list for the supermarket. Obviously, you need to have your location services enabled -- you can use network location or GPS as well. All your notes are saved with their attached locations and the nice thing about this is that when you make a new note the options auto fill and you can then choose what to retain. You can make checklists or regular notes. It's a neat and well-designed app too. Just Wynk For MusicThere's a surfeit of music apps. There are radio apps, including the FM app, that stream music anytime. All the same, Airtel has come up with a new music streaming app that joins Gaana and Saavn to offer an alternative. It's available free on iOS and Android. Wynk has a library of over 1.5 million Indian and western songs, and is ad free. You can browse for music or tap into curated playlists. There are three flavours of Wynk. The free Wynk lets you stream music online. A Wynk Plus, gives access to downloads for offline use for Rs 99 on Android and Rs 60 on iOS. Airtel customers get a discount. A third option is a subscription for Rs 129 available to Airtel 3G users on Android giving access to unlimited streaming and downloads with no additional charges. Take A Qwicknotekeeping pace with more current interface trends, Qwicknote for Android is gesture enabled. Slide-outs on both sides of the screen hold the buttons to add new notes, folders, change settings, share, etc. When you start a fresh note, it doesn't take up the whole screen, but expands as you type. You can change text size and paper colour and opt for a checklist format or a regular note. Qwicknote syncs with Dropbox. You swipe away notes you don't want and swipe them back in if you've made a mistake. It's a slickly designed app. But there are a few annoyances. Big ones. Selecting, cutting and pasting text isn't particularly working. And while you can bring in photos, no handwriting is supported. The Android app is free but to get rid of a few minor ads, it's Rs 153. (This story was published in BW | Businessworld Issue Dated 20-10-2014)
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At the HR Strategy Forum 2014, organised by BW | Businessworld on 7 August at Crowne Plaza, Gurgaon, top executives from across industry verticals talked about the evolving role of human resource in these changing times and the key to creating great workplaces. Panelists discussed how they would do things differently if they were to head the HR function, what the real business challenges are and applying expertise to managing and solving these challenges proactively.Click here to view slide show 'HR Strategy Forum'(This story was published in BW | Businessworld Issue Dated 22-09-2014)
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Type InaccuratelyUsually it's apple users who wish they had some of the keyboards available on Android (though they won't admit it) but in this case it's Android users who have only recently been able to get a typing method born on the App Store. Fleksy gets a second mention as it finally makes it to the Play Store. Fleksy is interesting. I find it particularly helps type in physical keyboard style, using your thumbs. The thing is that it's totally tolerant of inaccuracy. You hit the keys in roughly the area you need to and Fleksy will do a surprising job of guessing the words you're trying to type. Short swipes let you select words additionally and add punctuation and spaces. However, it takes some getting used to and learning can be a little frustrating. The full featured app is a paid one and lets you develop your custom dictionary.Beautiful Screensfor those who use their smartphones to the hilt, every bit of screen matters. You don't just want it to look good, you want it tailor-made so everything is arranged exactly where you want it to be. A launcher is your answer. Give the easy-to-use Buzz Launcher a try. You'll find it free on the PlayStore. Once you trigger it off, you'll find you have a database of some 400,000 "homepacks" to choose from. These are pre-organised and beautified home screens that you can just download and apply to your own phone. Read the comments and descriptions first though. In some cases, you will be prompted to download widgets from the Google store. After this, you move things around, change things to your liking, and make it your own. It's fairly simple and needs no expertise.Your Time, In A Cubecalcube for ios really has to be seen to be understood. It's a simple calendar when it comes down to it. What distinguishes it is a totally different interface. Your time is fitted onto a cube. You use gestures and look at different sides of the cube to switch from one view to the other, such as from year to day or week view. Swipe in any direction and something will happen, accompanied by a sound. You can select your calendars and choose to display your contacts birthdays and the weather. As usual. Tapping will let you enter new events. But browsing everything is through swipes to get to different sides of the cube. It's a bit of a gimmick and I would recommend making sure the app is free on a promotion when you pick it up because you could either like it or hate it but it's worth having a look at.(This story was published in BW | Businessworld Issue Dated 25-08-2014)
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How DelectableBefore you take that sip of wine — what do you know about it? In today’s society, it’s not just about the taste of wine, but your knowledge of its characteristics. If you’re an iPhone user, get yourself the app, Delectable, and use its camera to click a wine label. Now, once it’s been recognised, see what Delectable has to say about it, where is it from, what vineyard, etc. And more interestingly, go social with it. If you let the app into your contact list and networks, you can see who else has been partaking of the particular wine and what they’ve said about it. In fact, you can see what wines your friends have been drinking and what they like. Delectable is both a wine scanner and a wine journal and a lot more enjoyable way to learn about wine than attending a course. Also a way of getting reviews and recommendations before you buy.Get your ColoursArtists, designers, interior decorators — or anyone who frequently has to deal with colours such as when creating marketing material, schemes for an app or logo colours — here’s a wonderful tool on iOS. Spectrum is a great way of creating or capturing colour schemes and sharing them with others who may be working with you on a project. The app has colour wheels and matrixes of various kinds, but the more interesting part is how you can extract the colours from a photograph and use them for something else. In fact, if you spot a set of colours that grab your attention, just take a good picture and then pull the photograph into Spectrum. The whole palette will open up for you to edit so that you can adjust any colours or add or throw out some if you like. You can save the palette to your camera roll or share it.Salient EyeAt a pinch, you can use your Android phone as a security camera. Download the free app and it’s best to watch a tutorial on how to use it though it isn’t very complicated. You configure the app on various parameters like whether to switch the screen off, how many seconds to take to arm, password, etc. You then set the phone to have the rear camera face an entrance or vulnerable area, press the button to arm, and get out of the way. The problem is that it’s rather fussy and insists the user stop moving so it can finish arming. You can experiment with the sensitivity level. If it detects movement before arming, it’ll just start all over again. Once it’s armed, you move away totally. If anyone passes in front of the camera, even from a distance, an almighty alarm will go off and only stop when you enter your password. (This story was published in BW | Businessworld Issue Dated 11-08-2014)
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