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India’s guilded age

18 June 2012 By Jeff Glekin

“Rajat Gupta is no criminal, he’s just an Indian,” said India’s Firstpost. That sentiment should rile business leaders from Mumbai to Bangalore. It was a mistake for leading industrialists – including Mukesh Ambani, the head of Reliance and Adi Godrej, the current president of the Confederation of Indian Industry – to back a campaign supporting Gupta. An open letter expressing admiration for his charity and his role in setting up the Indian School of Business looks like an apology for Gupta’s crime.

The lack of reflection on the Gupta case fits in with a common line of thinking in India: you have to play the game. In Gupta’s case, the game was helping a friend with some juicy privileged information. He appears to have seen no contradiction between that and his role as a standard bearer for middle-class Indians – a philanthropist and thought leader who founded a world class business school in Hyderabad.

There is a better way. The Tata group practically invented corporate social responsibility, way before it became a buzz word in the West. India should take some inspiration for the ethics of its best role-models and leaders.

Today’s India has much in common with America’s Gilded Age. The Ambanis and Godrejs have amassed wealth to rival the Vanderbilts and Rockefellers. Billionaires have created fortunes securing access to valuable natural resources and developing businesses through their ability to influence government to reduce competition and create a regulatory environment which favours incumbents.

But the Gilded Age was followed by the Progressive Era with cleaner politics, and a collective fight against corruption. And if the U.S. model is not inspiration enough, the fact that decision-making has ground to halt in Delhi, in part as a result of scandals, should encourage everyone to draw a line under the old system.

Gupta was once the face of modern India. His fall from grace could be a turning point, an opportunity for today’s tycoons to set out a new vision. How about a second draft of the Gupta letter setting the agenda for India’s own progressive era?

 

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