Arvind Kejriwal deserves praise for taking on crony capitalism

The Supreme Court has finally noted the obvious – N Srinivasan is too interested a party to be able to conduct a fair probe into the spot-fixing scandal within the cricket Indian Premier League (IPL). While Srinivasan tries his best to hold on to his chair, the muck of interlinking webs between him and his company, India Cements, which effectively runs the Chennai Super Kings (CSK) team, is too thick for anybody to ignore.

This blatant conflict of interest in the IPL saga is only a grain in the heap of inconsiderate and illiberal relations that generally characterise the relationship between India’s political, corporate, and media elites.

Since the 1991 reforms that liberalised certain sections of India’s economy, the speed of modernisation reached levels previously unimagined. But these new riches brought with them new greed, and the temptation to take advantage of the political or administrative establishment to mint quick money (often in one sweep, if you are at the right place) has been overwhelming for many poorly paid bureaucrats and politicians to ignore. 

This, along with the power over land and resource allocation that politicians possess, and the archaic laws regulating land acquisition, often results in shady transactions of state tenders and valuable real estate. A certain liquor tycoon was able to monopolise distribution of alcohol in one of India’s biggest states, while an upstart family-run business managed to bag most infrastructure tenders in West India’s presumably most prosperous state. The most blatant example of misuse of power was the recent illegalities observed in the 2G spectrum allocation. The release of the Radia tapes gave the perception that India’s leading journalists, corporate titans and politicians have been in each other’s pants all along.

To be sure, cronyism and the incestuous intermingling of politicians and businessmen is neither entirely new nor is it solely an Indian problem. Prior to 1991, people needed contacts in government offices to jump the line for a telephone connection, or even a refrigerator or a car. Moreover, the musings of our small Bombay elite – cushioned capitalists leading comfortable lives thanks to high tariff protection in domestic markets – and the famous upstarts like our ‘polyester prince’, for whom capitalism was more about ‘managing the environment’ than innovating or engineering, have been well documented. 

All the BRICS economies are similarly afflicted with this disease of crony capitalism. Russia is famous for its oligarchs, who are mostly well-connected former Soviet apparatchiks, and they manage to ‘buy’ the nation’s resources at the right time (and at unimaginably low prices). And China, which has the richest set of legislators in the world, displays stringent irony when people who really control and own ‘the means of production’ in this allegedly communist country, are the ones who also set the rules of fair play. 

Then there are those who claim that a certain level of cronyism is inevitable in a fast-growing developing economy. After all, the Americans had their Robber Barons who monopolised natural and land resources, formed syndicates to control prices, and wielded great influence in Washington. The writings of Charles Dickens are also testament to that odd British sense of fair play amongst the soot, dust and abject poverty brought by the Industrial Revolution. 

While cronyism may or may not be inevitable, it certainly has given Indian capitalism a bad name. For every Infosys, there are countless other business houses who have built their fortune on controversial deals with the right people controlling the right political levers. It may also be unavoidable – if bribing the politician is the only way to guarantee a spectra allocation or a coal block, then naturally most corporations will be ready to foot the bill, lest their competitors do so and outrun them. 

This is where Arvind Kejriwal with his relentless attack on Ambani and company comes into the picture. By directly and openly deriding the biggest names in Indian corporate-speak, Kejriwal has essentially scored two important achievements. One, he has made cronyism a serious political issue. History tells us the only thing that shakes politicians, bureaucrats and businessmen out of their apathy for rules of fair play is popular upheaval. Progressive movements, consisting of outspoken middle-class associations, put clamps on the reach of the US’s golden age capitalists. 

Second, and more importantly, Kejriwal has broken an unwritten rule in public discourse by taking on the Indian capitalists. Ever since 1991, and especially since the boom years of UPA 1, criticising corporate titans has often been understood as criticising the free-market economy – something only the Communists would do. The official line, often repeated verbatim by foreign correspondents and oracles of globalisation, runs thus: “Indian entrepreneurs are dynamic whilst the Indian government is incompetent.” Most influential global weeklies, ‘thinkers’, and dailies – from The Economist to Fareed Zakaria and Thomas Friedman – have repeatedly taught the world this evident ‘fact’ about India. The jugadu entrepreneur would do anything to fulfil his vision, but it is the Indian state that repeatedly fails him. 

It is this same sentiment that attracts allegations of statism on Kejriwal by the likes of Tavleen Singh and the Economic Times editorial board. By openly stating something that could very well be a real possibility, Kejriwal has brought (very rightly) to the fore that sometimes Indian capitalists can be just as avaricious as the politicians who demand bribes. The lesson we must draw from this is that both politicians and our entrepreneurial class need to be reigned in, and made to follow the laws and rules of this country, for the preservation of social justice and for the future of this country.

Akshat Khandelwal tweets at @akshat_khan.