Mysterious India

On the Republic Day, every Indian vows to builds his or her motherland firmly and fastly. While looking for ways and means for the mission, the most important agenda is to find out the current maladies. Unfortunately the maladies are many and the route for implementation is impossible. One step up and ten steps down is the day to day Indian move. It is not a country where everything is horrible and great. Half problematic and half promising nation. When can India minimises its minus and maximises its plus?

Shiv Viswanathan writes in The Deccan Chronicle on 26 January 2011

India is a strange country. We seem to be quarrelling all the time. We identify ourselves by the dislike we feel for other or smugness with which we say “we are not them”. Our identity is composed of divisions, of the memories of Partition, of linguistic re-ordering, of the populism of small states. Our national game is neither hockey nor cricket but factionalism. It adds to the perpetual instability of our system. Yet, long-range watchers studying this chaos wonder if our dividedness hides the logic of a different order. Is there a gene that prevents us from falling apart even as we quarrel with each other? What is the secret of unity which works beyond the magic of even Fevicol advertisements?

To say India is tied by identity and consensus would be naïve. Our differences are blatant. Yet in a way we are tied by our differences. Oddly, it is the logic of our difference that keeps us together. India is a country with the courage of its confusions.

Difference allows for varieties of behaviour. It allows for an interaction in the public domain but restricts communal ties or familial interaction. It is a different kind of wisdom, a different grammar.

We are a country of segmentary minds. Each segment is opposed to the other segment and the two segments confront together a third entity at a higher level. Checks and balances operate according to levels. Nukkad can fight nukkad but combine at a different level. Violence gets contained at the next level of unity. Beyond segmentariness, there is syncretism. Here difference is acknowledged and differences combine to reflect opposites. Sufism could combine Hindu/Muslim tenors, Sikhism, Hindu/Islam. Syrian Christianity uses the Hindu to sustain the Christian core. There is a transference taking place over time, where sharing is always possible over difference. It is almost as if taboos created around difference allow for playful reciprocities. Thirdly, difference in India does not always operate across hard territorialities. Boundaries are porous and choices do not have to be polarised. The People of India survey states that there are 300 communities in India that cannot be classified as primarily Muslim or Hindu. Our identities thrive on cross-connections.

There is a standard narrative of divisiveness that is invoked in every squabble. Indians love factionalism and factionalism seems to provide the dynamic of everyday power. There is the old adage that the English conquered us through a policy of divide and rule. But remember, Indian society like many other segmentary systems is easy to defeat but hard to conquer. In fact we expect the coloniser to be like us, settle down like one more caste and slowly merge into the system. Our news is all about squabbles. Party politics operates as factional politics. Everyone needs some one to differ with in order to be himself.

The Indian idea of unity is based on “I differ from you, therefore I am”, “I contradict myself, therefore I continue to be”. We are a society that believes that logic of some against others is better than the logic of all against one. We allow differences to create multiplicities rather than resort to extermism. Our self as a collection of contestations allows for tolerance and unity.

There are exceptions to the rule. The riots in 2002 in Gujarat are one example. Usually after a riot, there is a plethora of stories of how families of one ethnic group protected another. Stories of friendship, ethics, hospitability, solidarity create a compensatory universe which facilitates a return to normality. With Gujarat, one heard the language of exterminism, of wanting to eliminate a minority. Thankfully such a framework has not extended to other states. However, Kashmir was an example of a similar ruthlessness in another form as the Kashmiri pandits were driven from their homes to become refugees in their own land.

But the glue is not just structural idea of crosscutting differences. Accompanying this architectonic is the gum of folklore, the epidemic of dialects, the grammar of diversity. This unity exists in two forms. Firstly, it is civilisational, articulated as a sacred complex of spaces. The second is national. There is a sense that the flag and the constitution keep us together, providing a frame to negotiate differences. At a level of folklore, there is the cosmopolitanism of the common man, proud of our cultural hospitality, carrying with him a sense that India is a compost heap of differences. We constantly invent versions of unity from Vande Mataram, Jana gana mana to the unity songs of Bollywood from Raj Kapoor’s Mera Joota hai Japani and Made in India. There is a sanitised unity that creates sentiments of togetherness. Our myths always have places for the alien, the stranger, the marginal, the dwarf, and no matter how history sanitises myth, our minds carry the legends of hospitality and syncretism, making us cosmopolitan despite ourselves. We might quarrel with the local Bengali, but happily invite a million Bangladeshis to feel at home. The Tibetan senses our hospitality and Tibetans in turn add to our celebration of difference.

Bollywood captures the mindset of the difference. Bollywood, especially Bombay Talkies, was a miniature answer to the Partition, to the difference between Hindu and Muslim and their creative collaboration across differences. Bollywood has maintained that mindset, even sentimentally forging alliances between Hindu and Muslim at the moment of maximum collective rage. Only one other institution can match that sense of difference and unity — the Army. The Indian Army recognises the ethnicity of battalions — Jat, Sikh, Rajput, Gorkha and Maratha. Each has its own tradition and yet each adds to the collective unity of the Army. Bollywood and the Army are the stuff of legends and folklore. As institutions they provide the imaginative glue of a quarrelsome society proud of its diversity yet convinced there are logics beyond uniformity and homogeneity.

As long as our myths, our memories and our folklore rule the grammar of our lives, history can be as quarrelsome as it wants. If myths are elaborations of contradictions, our democracy is a resolution of the myth of difference.

Dump wrong cultural models for better governance

Culture matters in every sphere of society. Whether politics or corporate administration. Whatever the cultural traits of a particular society is reflected in the functioning of other branches of the society. India is more deep rooted in the traditional culture yet confusedly addicted to the Western culture. Due to this paradox it faces a chain of problems in all arenas of the society. The fungus and virus which are infecting the Indian society needs to be uprooted. The process also need to protect the Indian systems from the evils of Western model of development. Over celebration of the Western system and giving it a clean chit is very myopic and factually negative way of painting the development sector. The Western world is also full of flaws. What is required is a new and clean model of development. Whoever develops it needs to be practiced.

R. Gopalkrishnan writes in The Economic Times on 3 May 2010,


Urban middle class Indians think in English but act in Indian . For example, flexibility and compromise is very Indian. Nee katru, naan maram, yenna sonaalum, thalai aattuven (you are the breeze, I am the tree, my head will sway whichever way you blow), sang Hariharan in the 1998 Tamil film Nilaave Vaa.

Praising to persuade is quite Indian. Hanuman allowed himself to be captured so that he could deliver Rama’s message personally to Ravana. Everyone in the Lanka court wanted Hanuman executed. Only Vibhishana interceded by first praising Ravana and only thereafter suggested a lesser punishment.

Judging through background and appearance is Indian. Urban middle class Indians think that educated Indians (like them) who speak English are likely to be more reliable than their vernacular counterparts. The truth is that unless the raja and leaders are honest, the praja will not be honest.

In the Mahabharata, Duryodhana said, “Contentment and patience, though the virtues of ordinary men, are not virtues in kings.” With that pompous statement, he invited Shakuni to deploy his wiles at his court leading to the battle of Kurukshetra. Why culture matters: Culture matters in many things, including in corporate governance.

The Indian practice need not be completely different from the west, but it must embed cultural influence. The western mind is shaped by the Greek philosophical tradition of analysis, linearity and abhorrence of ambiguity. It believes in a unitary sense of right and wrong and lays great emphasis on meritocracy.

On the other hand, the Indian mindset represents integrative and perambulatory thinking with a great tolerance for ambiguity . Nothing is black or white, everything is shades of grey. Merit is important, but so are age, connections and lineage. These show up in many ways:

Alan Greenspan was Fed Governor in the US till 2006, just before the meltdown. In his book, Greenspan viewed instability analytically and wrote, “Regulation, by its nature, inhibits freedom of market action, and that freedom is what rebalances markets... I fail to see how adding more government action can help.” Dr Y V Reddy was India’s central bank governor.

He viewed the undefined issues of instability intuitively and wrote, “The challenge shifted from managing the successful integration of the Indian economy with the global economy to managing the impact of the global crisis on India.” Very different ways of seeing the same thing.

Indian events are a Grand Spectacle where a few are doers; a few more are lurkers, while many are watchers. For example, think of the doers, lurkers and watchers at our airport security, at a district government office or at an Indian wedding. Even cricket fits the doer-lurker-watcher pattern: four doers, 18 lurkers, and thousands of watchers!

Although the Mughal Empire had long spent its course by 1857, when the soldiers of the Gangetic plains wanted a leader for their movement, they agreed on an illogical choice: the defunct Bahadur Shah Zafar. Dynastic choice was thought to be less unacceptable than a merit-based choice.

Why institutions matter: Politics and government are poor examples of governance. The government is a poor custodian of public assets.

In a recent case at the Panaji bench of the Bombay High Court, the local government lawyer unabashedly stated that “the ants had eaten up 24 kg of charas from the official godown where the government had stored the charas seized from drug traffickers .” The drug racket by local public functionaries is not Goa’s best-kept secret!

Political leaders preach corporate governance , but are silent about political governance . Party accounts are never published, let alone quarterly or being audited by rotating auditors. Parties expect Anglo-American corporate governance but practise Indian political governance.

A few years ago, the government sold a majority shareholding in a PSU through an open process; the concerned minister was unhappy about the buyer and he expressed his unhappiness in several ways. Memorably , he wagged his finger that he would not allow the buyer to implement changes as it was ‘his money’. The 26% owner was warning the 45% owner that he would thwart attempts to change! And he got away with it.

The high-handed behaviour of some government directors on PSU boards and indeed the very functioning of many PSU boards set a poor example to the private sector. The message is right, but the messengers are not credible. How do we live with such contradictions?

It may be because of an awe of rulers. For 25 of the last 30 centuries, citizens’ local issues were sorted out by local panchayats. The ruler or king was a remote person, even thought to be God. Be it the Mysore Dussera Festival or the Nizam of Hyderabad, royalty has always been awesome to common folk.

May be that is why industrial captains are in awe of leaders either or may be for reasons of enlightened self-interest . Exceptions apart, many corporate leaders subconsciously adopt a subservient role in their interaction with ministers.

Politics and business share some things: dynastic leadership, confounding arrangements , one-upmanship and disdain for rules at higher levels. There is a further implicit connection between politics and business. Politicians used to view business as an akshaya patra for funds.

As deregulation denuded the akshaya patra, politicians themselves entered business with benamiidentities — as suggested by the ownership of IPL cricket — the mushrooming higher education colleges and private airlines. Though most politicians avoid garlands of currency notes publicly, they do possess enough currency to make many garlands!

While government pretends to govern, influential citizens pretend to obey them. Highly-connected offenders roam freely with the attitude that they can expose others or that the law is corruptible and inefficient, so nothing can happen to me.

In the US, allegations of the misuse of corporate funds or insider trading, like with Vinod Gupta or Anil Kumar, are brought to speedy conclusions. India cannot emulate this despite adopting the American corporate governance principles.

Like other institutions of democracy, the corporate sector too is flawed. The relationship between shareholder democracy, authoritarian leadership and company growth is not linear and it defies a neat mapping. Some thoughts: I am not sure how, but corporate governance practices need to be tweaked from being precise and prescriptive to being directional and intuitive.

Investors and independent directors should watch behaviour, not only compliance. A structural weakness in India is the poor performance of the institutional shareholders . They need training and encouragement.

They must focus on honesty of purpose and intent rather than just on the rules and regulations. The hard truth is that if the owner, CEO and CFO conspire, no corporate governance system can work. You can arrest the auditor and jail the director, but that will not prevent the next incident where evil intent is present. The Satyam case is the best evidence of this.

The giveaways of bad governance lie in behaviour. Pratip Kar, while at Tata Management Training Centre, showed that one or more of five signals from the C-Suite provide early warning: constantly being applauded by the media as being visionary and daring; displaying excessively risky but exciting ambitions ; showing high connections and lifestyle ; being hubristic and egoistic; being surrounded by ‘non-smelly’ individuals, yet appearing ‘smelly’ .

As former Sebi chief M Damodaran has said, Indian executives regard the boss or the promoter as the karta of the Hindu Undivided Family. The promoter is the ultimate. The top leadership may have managers who kiss up and kick down; who are eager to please the boss. These are telltale signals that need to be considered by intelligent investors.

Review related party transactions with care like a Lakshman Rekha. All related party transactions are not bad or suspicious. But this is the line that is normally breached to achieve differential enrichment . Just as Lakshman drew the line for Sita for her protection, independent directors should regard related party transactions as the watch-line for shareholders and be very alert in an intuitive way.

Independent directors need to be emotionally accountable to minority shareholders. Independent directors represent the interests of minority shareholders. They are elected by the shareholders. The role of the lead director can be strengthened and the lead director should feel accountable for initiating steps to protect minority interests. He can be answerable in writing or in person where necessary.

Focus the rule book on what a board cannot do. There are too many regulators and rules, but too little regulation. Corporate governance rules describe in minute detail how a board is to be composed and all that a board has to do.

In sports, the rule book tells you what you cannot do, and the rules are, therefore, simple. In football, you cannot touch the ball with the hand, you cannot physically push the opposing player and you cannot be ahead of the last opposing player (other than the goalkeeper) before receiving a pass to shoot for the goalpost.

Western intellectuals are reviewing their own model. Sir David Walker, the senior guru of UK’s corporate governance, has wondered whether the western system should be copied by the developing world because the eastern model seems to have advantages.

Magdalene College senior research fellow, Stefan Halper, has wondered in his new book The Beijing Consensus whether the market authoritarianism of the east has some virtue. I wonder whether India needs a modified kind of corporate governance rule book.