The Economic Times

Title : Venal Politicians Exploit the Poor to their Advantage: Rajan

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Article Date : 08/14/2014

Reserve Bank of India Governor Raghuram Rajan has once again torn into venal politicians and
crony capitalists, calling them a drag on the economy because they curtail opportunities for citizens,
impair economic growth and weaken the countrys democratic fabric.
In unusually strong comments on the political class from a serving central bank chief, Rajan, for the
second
time this week, on Wednesday sought to put the spotlight on the sclerosis in Indian society by saying
inaccessible public services for the poor had created a fertile ground for crooked politicians to exploit
the situation to their advantage.
The tolerance for the venal politician is because he is the crutch that helps the poor and underprivileged
navigate a system that gives them so little access. This may be why he survives, Rajan told an audience
in Mumbai.
In a number of states, ration shops do not supply what is due, teachers do not show up at schools to
teach; the police do not register crimes, or encroachments, especially if committed by the rich and
powerful.... Public hospitals are not adequately staffed and ostensibly free medicines are not available at
the dispensary... I can go on, but you know the all-too-familiar picture. This is where the crooked but
savvy politician fits in.An internationally celebrated economist before he took charge as RBI governor,
Rajans plainspeak is uncommon coming from a serving central bank chief and more so because it
comes at a time Parliament is in session.
Predictably, his utterances have created a flutter in industry and media circles.
A big votary of reform, Rajan has been championing financial inclusion and direct benefit transfers to
reduce corruption in the system and ensure that benefits doled out by the government reach the poor.
Corruption became the main
issue in the last election after the Manmohan Singh govern ment was ac cused of giving away precious
telecom spectrum too cheaply and allotting coal blocks for political considerations to unworthy parties.
Cor parties. Cor rupt politicians were not the only targets of Rajan's criticism as he took on so-called
crony capitalists too. By killing transparency and competition, crony capitalism is harmful to free
enterprise, opportunity, and economic growth, he said, adding: And by substituting special interests
for the public interest, it is harmful to democratic expression. If there is some truth to these perceptions
of crony capitalism, a natural question is why people tolerate it. Why do they vote for the venal
politician who perpetuates it? Rajan said corrupt politic ians made an already dysfunctional system
worse.
While the poor do not have the money to purchase public services that are their right, they have a vote
that the politician wants, he said. The politician does a little bit to make life a little more tolerable for
his poor constituents a government job here, an FIR registered there, a land right honoured somewhere
else. For this, he gets the gratitude of his voters, and more important, their vote.
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