You know something is rotten in the state of Indian corporate governance when an investigation into Infrastructure Leasing and Finance Corporation (IL&FS) reveals gifts and favours extended by the management to rating agency officials. Luxurious villas, tickets to a Real Madrid football match, and a Fitbit watch were among the inducements that change hands for favourable ratings, according to a preliminary forensic audit report by Grant Thornton. Governance is also a top-of-the-mind issue on the 50th anniversary of bank nationalisation. That seminal exercise by Indira Gandhi, embedded in populism, had some beneficial results but as T N Ninan points out here, government-owned banks now have a problem and the private banking system is growing faster and is more profitable. The government’s focus now should be on delivering a vibrant financial sector where health is not determined by ownership.
Elsewhere in the opinion section, columnists examine the parlous state of Indian cities, the bizarre drama in Karnataka and India’s dubious demographic dividend. Kanika Datta sums up the views
Why do Indian cities suck? Because our mindset towards them is still conditioned by one of the great Gandhian hypocrisies we have perpetuated. That the cities are evil, villages virtuous, says Shekhar Gupta here
India’s growing working age population can only be an asset if, like the Asian Tigers, the country creates competitive manufacturing bases, excellent infrastructure and a skilled and educated workforce. The country has missed the bus on all counts, says Devangshu Datta. Read it here
The Westminster parliamentary system that India has inherited imposes moral values on political parties, MPs and MLAs. The controversy over defections in the Karnataka Assembly shows that viewing these factors in a Ricardian way, in this case, in terms of the returns on political power might clarify matters, says T C A Srinivasa Raghavan. Read his explanation here