Graft, bureaucracy denting India’s global image (Interview)

June 9th, 2011 - 4:35 pm ICT by IANS  

New Delhi, June 9 (IANS) India won’t be able to achieve double-digit economic growth unless it reforms its bureaucracy and curbs widespread corruption, both of which have dented the country’s global image, an expert in corporate governance says.

“India is definitely not achieving its full growth potential because of the bureaucracy and corruption. Unless something substantial done to correct these problems, double-digit growth is not possible,” Rajeev Peshawaria, chief executive officer of Kuala Lumpur-based ICLIF Leadership and Governance Centre, told IANS in an interview.

Peshawaria, author of a the just-published book “Too Many Bosses, Too Few Leaders”, said India has the potential to achieve and sustain double-digit economic growth but corruption and bureaucracy were holding the country back. “Definitely, India’s time for growth has come. Everybody is looking at India as this is the place to invest in. But there are certain things that are holding them back.”

“On a scale of 1 to 10 — where 10 represents the situation of a country achieving its full growth potential, India has not yet reached even half the mark. Will it achieve 8, 9 or 10 that is a big question,” said Peshawaria, who has also held senior positions with several blue-chip companies, including Coca-Cola, Goldman Sachs and Morgan Stanley.

Amid a rising tirade against corruption, India’s economic growth slowed to 7.8 percent in January-March period, the slowest in five quarters. India has targeted 9-9.5 percent growth for the next Five Year Plan that starts April 1, 2012.

Black money has attracted a lot of public and media attention in the recent past. According to unofficial estimates, the quantum of black money ranges between $450 billion to $1,400 billion. A recent study by Global Financial Integrity has estimated the illicit money outflow to be $462 billion.

“I personally know some people who have either put off or delayed their plans to invest in India because of the inflexible and corrupt bureacracy,” said Peshawaria.

Foreign direct investment (FDI) in India dipped 25.67 percent to $18.3 billion during the first 11 months of fiscal 2010-11 as compared to $24.62 billion during the corresponding period of previous year.

About his future plans, Peshawaria said ICLIF, formerly known as International Centre for Leadership in Finance, planned to expand its operations in India.

“We are already serving some major clients, including Indian Railways. Our plan is to expand our operation aggressively here,” said Peshawaria adding ICLIF might open a centre in India. “It is under consideration. But I can’t give you a timeline.”

(Gyanendra Kumar Keshri can be reached at gyanendra.k@ians.in)

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