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L’affaire Satyam: Two Thoughts

Posted by anandrr on January 12, 2009

Just two quick thoughts about this whole Satyam business.

Not to condone what Mr Raju did, has confessed to doing or might confess to over the days to come, but I’m forced to ask: How much of the cavalier attitude towards the law that seems all pervasive in Indian businesses is fostered by the excessive regulation of business with a low price bar set for (apparent) compliance (i.e., just pay off the official in charge of ensuring compliance)? For a country that prides itself on the entrepreneurial spirit of its people, we make it exceedingly hard for entrepreneurs to start companies. To take a tiny example, just being a Director of private company requires registration with the Government, while I would argue that even for a public company the most that should be required is SEBI clearance. I’m not a Laffer curve enthusiast for the most part, but the situation in India seems very pre-Kennedy and it seems like a reduction in regulation would increase (real) compliance very greatly.

Second, we are now in an environment where a large number of software engineers are suddenly going to find themselves out of jobs with a full blown recession ensuring that they have nowhere to turn. Sounds like a great opportunity for the Central Government. The Government has many fine labs and research centres (DRDO, ISRO, HAL, NAL…) suffering from an acute shortage of good engineers because all the good ones go to the private sector for the money. If the labs have any sense, they’ll all go and set up shop in the Satyam’s parking lot and scoop up the best people from there and make some real lemonade from lemons. If I know my Government well, this opportunity too will pass like many others before and many more to come.

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3 Responses to “L’affaire Satyam: Two Thoughts”

  1. subbu567 said

    good thoughts,I agree with your second one more…on the first one I feel first there should be some compliance for us to talk about increasing the same.

    http://subbu567.wordpress.com/

  2. Vaidu said

    also there should be government auditing…another thought..if satyams actual profit was only 3% then just wondering whether the other companies books are clean..just a thought

  3. K.Vaidyanathan said

    We say law in India is an ass.How true!!!. In India if you are arrested, it is the duty of police to prove you wrong whereas in USA you are guilty if you are arrested and you have to prove your innocence. No wonder Raju got himself arrested in India and not USA.Like an old CHIVAS REGAL whiskey ad -Half full and half empty.It is how you look at it.With crooked politicians and stupid laws Raju will come out unscathed and stand for election next time.
    He may even become Chief Minister of Andhra pradesh.It can only happen in India.Like Lord Krishna said in Bhagavad Gita ” Sambhavame Yuge Yuge “

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