Everyone loves a good crime story. You don’t have to be a diamond expert or have deep knowledge about how the banking industry functions to be drawn to the spectacle that is unfolding — there is indeed something eerily addictive about live updates of the Nirav Modi-Punjab National Bank fraud case. Shell firms, giant swindles, frauds, defaults and a cast of glamour-oozing dramatic personae — how can ordinary mortals not be gobsmacked by the stories that tumble out?
Every hour, there is a new revelation pointing to the depth and spread of the scam. Alongside, there is the other narrative of how red flags were raised about the flamboyant billionaire earlier, how the Reserve Bank of India had warned banks at least thrice since August 2016 about the possible misuse of the SWIFT infrastructure, a messaging platform that had been exploited in the alleged PNB fraud case.
It is not just the flamboyant diamond tycoon and his family that has grabbed the public imagination over the past few days. The owner of a pen brand is also under the scanner. Soon after diamantaire Nirav Modi hit the headlines for allegedly defrauding Punjab National Bank of Rs 11,400 crores, the Central Bureau of Investigation swooped down on Rotomac Pen promoter Vikram Kothari and his family members for allegedly defaulting on loans worth over Rs 3,000 crores from several banks. Wednesday’s newspapers told us how finance minister Arun Jaitley had come down hard on public sector banks in the country for not safeguarding taxpayers’ money, and so on.
But much as we are fascinated by these crime stories, especially those involving glamorous people, there is a deeper question that needs to be asked. Frauds can and do happen everywhere, but is there a link between the monotonous regularity with which they happen in India and the general crisis of accountability in the country?
The banking sector is in the spotlight. Experts have told us that the PNB-Nirav Modi fraud highlights the failure of operational risk management and auditing systems. But the failure of an effective regulatory framework is not confined to the banking sector. Look at any other sector, and it is the same story. It makes news only when the scale is spectacular.
Why are we surprised when people game the system repeatedly when the public at large has come to accept everyday flouting of the rule of law as perfectly normal. And where a “jugaad mindset” is all-pervasive. What is the essence of jugaad? It is getting things done by hook or by crook. Small people do it in small ways, like jump the traffic lights, pay a bribe to the traffic cop if you get caught; jump the queue; cultivate politicians, leverage proximity to power for personal benefit and to bypass rules.
In the so-called “New India”, this mindset has not changed. Beauty parlours in tony South Delhi routinely offer discounts to those who pay in cash, bypassing the Goods and Services Tax (GST). It is the same story with gadgets and gizmos.
Big guys operate on a much larger canvas. But the one common thread running through the small and big frauds is the lack of oversight, total contempt for the rule of law and a generalised admiration for the man or woman who gets things done, is visibly successful, no matter what means have been used to achieve that success.
Pick any story about a disaster or gross negligence and one thing becomes clear. Almost none of it is accidental. Almost every disaster story is about warnings ignored. I remember reading a news report back in 2013 about a school in rural Bihar where 23 children had died by poisoning after eating the government-provided mid-day meal. There had been no monitoring to see if the food was stored properly. The story made international news, but such stories of poor quality and bad management are hardly novel. A Reuters review of audit reports and research papers showed that officials routinely ignored warnings of the lack of oversight and accountability in the programme.
It is the same story in the healthcare system that is now the government’s big showcase after the Budget. Patients are at risk of being ripped off routinely because of lack of effective regulations, lack of standard treatment protocol, lack of other types of accountability addressing patients’ rights.
There has been a lot of talk about Modicare and its grand vision. But where is the public discourse about accountability, about the Clinical Establishments (Registration and Regulation) Act 2010, which seeks to prescribe the minimum standards of facilities and services provided by health establishments in the country? Many states haven’t even adopted the legislation. Have they been pulled up for this? Have the public and patients persistently demanded why regulations are not enforced and not accepted silence from public representatives for an answer? The answer is a deafening no.
One of the most puzzling aspects about India is that a robust democracy has not led to the politics of accountability. Audit report after audit report of various programmes across the country expose the faultlines. And the malaise is not confined to the public sector. Private enterprises also routinely violate basic rules. When these violations relate to safety, catastrophes happen. There is much hand-wringing in the wake of each tragedy and then it is back to business as usual, without oversight.
The end results are evident everywhere. Experts say the problem is not lack of rules but poor implementation and a lack of accountability.
A crime story entertains. But it is time to demand more than entertainment, raise the fundamental issue of accountability in every sphere. And it has to begin with small, everyday actions by all of us in our everyday lives. If we jump a red light, if we bribe the official in a train to give us a berth, do we have the right to ask that others stay on the straight and narrow?
