 "Deepak Parekh")
Deepak Parekh, chairman of Housing Development Finance Corporation (HDFC), the country's largest mortgage lender, feels the government needs to focus equally on weeding out corruption, along with ease of doing business.
“It might be easier to weed out large-scale corruption with the government's firm resolve to move towards e-tendering and e-auctions of all natural resources,” said Parekh at an event organised on Tuesday by the Confederation of Indian Industry.
With the government's Digital India drive, and a promised deadline of April 1, Parekh believes the country will make some good headway in the days to come. In the wake of a new list revealing names of nearly 1,200 Indian account holders in a Swiss banks, Parekh said the government should distinguish between legitimate and illicit funds before acting.
“There may be some fraudulent transactions and Finance Minister Arun Jaitley has said the government is investigating. We have a system wherein each individual can remit some amount abroad a year. Many people have done that, too," he noted.
An international body of investigative journalists has revealed a long list of account holders in the Swiss branch of global banking major HSBC. It has 1,195 Indians with funds totalling $4.1 billion (Rs 25,420 crore).
Parekh said everyone agrees that corruption and bribery is rampant but very few cases get reported and become headline scandals. “The rest of the cases are simply considered business as usual. This is hardly surprising because bribes paid by corporations have a totally different avatar. They are disguised so well and the payments are made to look completely genuine or go through a large web of unidentifiable shell companies and the movement of funds can be so rapid that the best of forensic accountants find it difficult to trace,” he said.
The simplest technique is for senior management to adopt and encourage a transparent and open-door policy, he said. “It is important for senior management to constantly interact with their staff. Else, they will probably be the last to know when there is trouble brewing in their own backyard and it might then be too late for course correction.”
Also, the greatest threat of fraud within organisations is by own employees. Which is why hiring the right people is very important. “A disgruntled and unethical employee is a huge risk for an organisation. There is no insurance against reputational risk – once you lose it, you almost never get it back again,” he said.
The Union Budget will be detailed later this month, in which Parekh is awaiting how the investment cycle is sought to be restarted. “We need more investments on the ground level. What the government has rightly done in the past seven months is that there were a large number of stalled projects. The government is very consciously and rightly tackling those,” he said.
Parekh urged the government invest money in the infrastructure sector to drive growth of the country. “The government has less money and the fiscal deficit is large. The government should invest money in infrastructure,” he said.
