Corruption casts a shadow over India's growth

“We have made a lot of progress economically in India but there is a great shadow over our progress — and that is corruption,” India-born British industrialist Lord Paul of Marylebone has said.

Corruption was not specific to India. “But a country of 1.2 billion people where even the basic necessities of life have not been provided for a large number of people who are [living] below the poverty line, it is something that cannot be justified,” he told The Hindu in an interview.

“Unfortunately, with the economic growth of India, corruption has grown even faster,” he said. The interview was conducted during Lord Paul's visit to Chennai recently and later on email.

Lord Paul welcomed the involvement of civil society activists in the issue, “especially when national leaders have not made the necessary efforts, or have made efforts but only half-heartedly. Somebody needs to do something, and I am delighted to see Anna Hazare take up this issue. I wish him all the luck.”

“Otherwise, we are in danger of India falling into the corruption trap that is plaguing many countries today. India, with its moral heritage, should surely stand for more than glorifying economic growth alone. If such growth stands on a plinth of corruption, what does it say about our nation and its leadership?” he asked.

Bribery and corruption, he said, was a two-way street, and the giver was as guilty as the taker.

India, according to Lord Paul, seemed to be falling into the trap, which the Nobel Prize-winning economist Wassily Leontief said: “Capitalism and free enterprise without strict regulation will hugely enrich the wealthy few under the pretence of national progress and widen the poverty chasm.”

“If we are serious about this, we have to start examining the problem right from the top. There can't be any exception. When I was at MIT, another famous Nobel laureate, my teacher, the economist Paul Samuelson's favourite remark was: “The bottleneck is always at the top.” Let us start from the top and I am sure the rest will follow.”

Lord Paul, who is the chairman of the Caparo Group, pointed out: “We have built 32 plants in India in the last eight years. We have not paid anybody any money, nor have we been asked to, which I am very proud of.”

In response to another question, he said capitalistic system and socialism had both failed the people. Socialism, with all its experiments, had not been able to deliver social justice to people. Capitalism, he added, failed far more. “We have seen in the 1990s and more recently the banking crisis, I don't think that they [banks] have carried the trust put in by people, seems like most of them have lost conscience. They [top executives of banks] are still enjoying bonuses.”