The Indian Premier League auction rigging scandal is the first postmodern event in India that has both pitted, and brought together, enlightened secular education and pragmatic bania enterprise, directed towards making huge profit at any cost. Whether it is subterfuge, entrapment or simple greed only time will tell, or may not tell. The new IPL mega-model of ostentation and profit, now in turmoil, has drawn the attention of the entire nation in the wake of the terrible fight for survival or revolt of the tribal communities, urban poor or rural farmers. The IPL fiasco has also highlighted the fact that those who have either power or money in India can dip their fingers in the pot of honey created by the busy bees of cricket. Meanwhile the rest of the country can go to the dogs.
Cricket which was once an innocent sport enjoyed by millions across India has in recent years attracted liquor barons, greedy Bollywood actors/actresses, politicians of all persuasions, erstwhile cricketers, the august royalty and their pretentious siblings from the north to the south. It has become Ali Baba’s treasure grotto of greed and intrigue. They all want the treasure but no one wants to get caught. When the coulter of destiny fell on IPL, various political and business shadows of IPL mascot Lalit Modi left him in the lurch. Sunanda Pushkar, the pretty consultant of IPL Kochi and supposed girlfriend of Shashi Tharoor, who was to get 70 crores for offering business advice, withdrew into the shadows of Dubai! Though IPL tweets have been silenced temporarily by national investigation, the murky plot refuses to fade away from the media as stories of greed, money, sex, orgies, favoritism and envy surface regularly. It is not the size of the money but its style and modus operandi that has captivated modern India.
Corruption has been a part of our DNA even since independence, if not earlier, but so has idealism. Remember we had the insurance scam in 1947 when private companies made huge profits that led to nationalization of the insurance system in India. But we also had a self-sacrificing Gandhi who brought a contentious idealism into Indian politics. The clash of sleaze and idealism resulted in rampant low-grade corruption.
What has changed in the last twenty years is the arrival of corruption sans idealism. This opens up a whole new world of fantasy and magic—from the Pied Piper to Cinderella syndrome. Most risk takers are obsessed with the belief that no one will say no to their offer or else some miracle will happen that will save them finally from the tax-man’s noose or the legal system. It is generally believed that money should be made at any cost as any and everyone can be seduced by the lure of money and quick profit. It is argued that when the scale of profit is huge, running into 150 to 2000 crores, there is no need to worry about the law and rightly so. Modern forms of digital technology have further exacerbated both the volume and scale of profit-making. Profits can be generated across the country and transferred across the globe in no time. You can Facebook your feelings like Pushkar or Twitter it into confrontation like Tharoor or Modi but this is just the surface reality. After the controversy has died down you can still walk away with the loot. See some of the big scams —
1992-96: The Chain Roop Bhansali Scam 1200 crores
1992-98: The Harshad Mehta Share Market Scam 4600 crores
1992: The Securities Scam, 3500 crores
1993-96: The Initial Public Offers Scam 5000 crores
1994-2006: The Telgi Fake Stamp Paper Scam 30000 crores
1995: The Preferential Allotment Scam 5000 crores
1997: Jain Hawala Scam 650 crores
1998: Teak Plantation Scam 8000 crores
2000: Home Trade 300 crores
2000: The UTI Scam 4000 crores,
2001: The DSQ Software Scam 600 crores,
2001: The K-10 Securities Scam, 1500 crores
2002-3: Taj Heritage Corridor Mayawati Scam 175 crores
2005: IPO-Demat Scam 146 crores
2005: Oil for Food Scam (Natwar Singh) 8 crores
2005: Scropene Submarine Scam 18,978 crores
2006-08: Koda Money Laundering–Mining Scam 4000 crores
2007: Army Ration Pilferage Scam 5000 crores
2008-9: Illegal Money in Swiss Bank Scam 71, 00.000 crores
2009: The Satyam Scam 2009 12000 crores.
The list is long, but it contains just a few scams that happened in a seven year period between 1992 and 2009 in India. Even after whistle blowers give the kiss of death to scamsters few got indicted. Over the years both the scams and the scamsters have either been forgotten or replaced by more sleaze and amnesia.
If we analyze the nature of human psychology and the highly intricate world of modern finance it is surprising that financial scams are not more than what we have now. Weak financial controls coupled with cursory auditing and political pressures to provide credit to undeserving encourage the predilection for gambling. Clandestine bank accounts, black money, uncertain financial controls, shredded/burnt documents can further complicate detection and indictment. The concealment of black money or money laundering is made more elusive with a dubious system of double accounting—actual and doctored account books. Even when people know that schemes which are essentially scams will collapse, they still invest with the twin promise of exit anytime and receive high end dividends. There is nothing wrong in making money from equities. Incentives are necessary to keep business going but sweat equities or undeclared money and influence that political establishment enjoys is another story.
For a developing country like India to imitate a flawed capitalist model of America often leads to disastrous consequences. Hyman P. Minsky pointed out that the fundamental flaw of capitalism was its “instability.” It cannot quantify human emotions like greed, fear or excess. Capitalism, Keynes argued, was therefore always prone to collapse. The recent collapse of the financial institutions in the US has questioned the very foundations of the global system introduced after World War Two. Minsky introduced the Financial Instability Hypothesis which stated that during financial depression financial institutions become more conservative but speculative borrowers increase (Minsky, “The Financial Instability Hypothesis,” 1992). Using freely available credit some borrowers called Ponzi borrowers can only pay their bills by borrowing more. As this category increases economy goes from profit to a freewheeling one. Any economic panic called the Minsky moment could wreck the economy (Stephen Mihm, “Why Capitalism Fails,” 2009). The Ponzi scheme has neither core organization nor promise of profit. We have seen the collapse of the Lehman Brothers and the bail out of Wall Street business. We are aware that the dollar is not secured and the US debt has grown to over 11 trillion. But we do not have another viable economic model to supplant it. The only option is to overhaul it as best as we can.
Greed, fear and excess have been the main stumbling blocks of the IPL catastrophe. India is a poor country but the greed of corporate India is not meager. This greed is fired by the glamour of wealth in big cities and further excited by the fantasies represented by Bollywood and beauty pageants. India now suffers the full-blown brutality of a corrupt capitalistic system like any other developed nation in Asia. In India 37.2 percent of the population is below the poverty line but people continue to accumulate wealth illegally and display it most callously. It is corporate India against the rest of India. In Japan 15.7 percent are below the poverty line, its population is less than one-ninth that of India but its scams are no less.
The greed is writ large on the fabric of democratic India whether you are suave and deracinated or boorish and raucous. The opportunities to make a lifetime fortune at one stroke are more than ever before, so are the arguments at self-justification and methods of concealment. Every day we lose talented people who can do good to India but end up doing good to themselves alone. Will India change or need a revolution to change? You ask corporate India and they have hope. You ask the urban poor, tribal communities or rural farmers and they have none.