Saturday, October 06, 2012

How 2G is India’s First Pro-Poor Scam

The chatterati and the pundits seem to be behaving as if the 2G scam marks the end of the Indian civilization. There is passionate agonizing over how the carpetbaggers of crony capitalism have looted more than Rs 1.7 lakh crore (almost $40 billion) of potential revenue due to the Indian exchequer. There are inevitable and familiar laments about how the money could have been used to build more schools, health care centres et al for poor Indians (the real scam being that enough schools and health care centers for the poor have not been built even 63 years after independence; 54 years of Nehruvian socialism; 39 years of Garibi Hatao and 20 years of economic reforms).

Forgive me for being cynical; but I think the poor of India would actually cheer and welcome 2G style scams because they have actually given something worthwhile to the poor. Look at it this way: till former Minister A. Raja started doling out telecom licenses like prasad in a crowded temple, a handful of telecom operators were making a killing and the really poor could not still afford the tariffs charged by them. Post the monumental 2G scam, telecom tariffs actually dropped to a paisa a second and even lower. More importantly, intense competition forced telecom operators – both old and new – to look beyond saturated urban markets. The fact is: most of the 300 odd million new subscribers since 2008 live in small towns and rural India. For them, the power of mobile connectivity at often Rs.100 a month is literally a dream come true. Also, do not forget how smart entrepreneurs have grabbed this exploding market by importing Chinese handsets. Most of these models are in sync with this new market: they offer long battery (upto 72 hours, even 72 days!) life to people for whom long and unending power cuts are an unending reality.

Ask these poor Indians about the moral, intellectual and existential issues raised by the 2G scam and they will laugh at you. And justifiably. For more than 60 years, they have helplessly witnessed false promise after promise and scam after scam without any material difference to their wretched lives. Now, scam or not, they have got something concrete and worthwhile. As far as they are concerned, the pundits can go on debating to kingdom come.

And don’t underestimate the poor or their ability to figure out what is good for them. The perpetually scam tainted MRNEGA is another example of a pro-poor scam. Everybody knows corrupt politicians, bureaucrats and contractors are still brazenly using NREGA funds to line their pockets. And yet the poor in rural India consider the scheme to be a divine blessing. Their logic? Earlier, they used to get nothing; now they at least get something. Raving and ranting and railing against NREGA corruption is not going to change that.

The fact is: Indira Gandhi was dead right when she categorized corruption as a global phenomenon. You must be living in cuckoo land if you think there is no corruption in countries like Japan, USA, UK et al. The best a society can do is miniminize corruption; it can never be eliminated.


Source : IIPM Editorial, 2012.

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