Inadequate Governance and Vacillating Policies – Indian Phenomenon?

250 years ago, the English East India Company was having trouble with the Government of Bengal’s policies. The Company acquired its trading rights from the Monarch in Delhi. The provincial Government of Bengal under Siraj-Ud-Daula initially obliged. But levied additional provincial taxes later, in clear defiance of Delhi. And then doubled it. Delhi was too weak to enforce its seal. Sounds familiar?

Taxes and services were at the heart of the English-Bengal problems. Taxes were too high, arbitrary and yet the government was unable to fulfill its basic responsibilities – according to H E Busteed, the biographer of early English life in Calcutta. Bandits kept raiding the Company warehouse. Bengal government was unable to provide the security.

Likewise, Indian highways have been notorious – infested with thugs. The rulers were unable to ensure safe highways. Emperor Tughlaq’s own emissary (Ibn Batuta) & entourage to China, were looted and left penniless on the highway a short distance from the imperial capital of Daulatabad.

Jean Baptiste Tavernier traveled to India in 1665. After he sold his goods to the Governor at Dhaka, he preferred to get paid by Bill (traveler’s cheque) at Murshidabad. By the time, Tavernier reached Murshidabad, the Bill was revoked. It took the Dutch factory’s CEO at Cassimbazar, to articulate to the Governor the important point that unless policies on trade and finance were consistent and reliable, no one would come to India to do business, and then there would be no access to advanced arms and technology. The Governor made a payment.

And these accounts could go on. Sadly, there are virtually no accounts written by Indian businessmen of those times.

So many centuries later, we don’t seem much different. We handle licenses to mobile operators in an arbitrary manner. And even though unconvinced, the chief in Delhi is a silent spectator. We said yes, then no, and then yes to Enron. We employ a plan for Special Economic Zones (SEZ) to rival China. Then roll it back.

In the past, strong Governments have brought prosperity to India, and the weak ones have brought hardship to people.

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