Tuesday, November 24, 2020

Regulation nation

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Why some industries and services in India continue to go unregulated and what they could learn from Australia. By KUSHAGRA BHATNAGAR

regulation.Indian Link
I migrated to Australia in 2008. Since then I have been closely observing the Australian way of life in comparison with the Indian way. There are stark differences between our two societies, and we are all too aware of them. We all have our own way of explaining away the differences – especially when the Indian side appears to be weaker, which it is in many cases.
However, I am not going to discuss the most commonly known real or perceived differences. I am taking up the difference in the way the governments of the two countries handle regulations. The glaring difference exists in the fact that many businesses in India are completely unregulated while those same businesses in Australia (and I suspect in most of the developed world as well) are strongly regulated.
It is no new discovery that two of the most unregulated breeds in India are commercial drivers and builders or developers. The commercial drivers, whether for taxis, auto-rickshaws, trucks or buses, are hardly controlled under any kind of regulation.  With total impunity, they feel free to cheat customers, behave rudely with them and violate traffic rules. This is not to mention the occasional abhorrent rape of some hapless women. No government has so far been able to rein in these people. Why? Because this crowd forms a strong vote bank.
Any effort to control their conduct is perceived to be politically unwise. This may or may not be true because no one has tried. This needs no passing of bills in parliament; this needs no presidential ordinance; this just needs those in power to enforce the law with a stern hand.

Taxi and auto-rickshaw drivers are free to do what suits them. The police cannot book them for refusing a fare, for misbehaving with a customer, overcharging or even for drunk driving. Your average Delhiite will vouch for the misery commuters have to suffer at the hands of the misbehaving breed of such taxi or auto-rickshaw drivers. In effect, the only law for this lot is that there is no law.

In sharp contrast, in Australia all commercial drivers are strongly regulated. While an ordinary citizen may have the opportunity to get off lightly for traffic offenses, commercial drivers have zero chance. One error and they lose their license, making them unemployable as drivers. Even in nations such as Dubai and Turkey, commercial drivers are subject to tight discipline. The slightest over speeding will see their driver’s license taken away for a few years. A second offense and the license is lost for life.
Builders and developers in India also enjoy the luxury of working in a regulation-free environment. Name any aspect of bad, irrational, unruly, unethical, unfriendly behaviour, outright cheating or fraudulent business conduct and you will find this lot is guilty. They enjoy complete, unrestricted freedom with regard to whatever business practice each one of them wishes to employ. Why? We cannot explain this nonsense by trying to link this with politicians’ fear of losing an election. This lot does not exist in numbers that are large enough to become a vote bank. So why the inexplicable liberty?
One possibility is black money or fraudulently obtained income. We all know that the property market is one of the largest creators of black money; it creates black money and it also consumes black money.  A great proportion of the parallel economy thrives in the property market. Who are the people with enormous amounts of unaccounted for money?  Politicians of course.  Hence, it stands to reason that they have a huge stake in the property market. This is why irrespective of which party is in power, or out of it, this lobby continues to make merry at the expense of the customers.  If I, as a politician, invest billions of rupees in the property market, I will jolly well make absolutely sure that the people who handle the market remain protected at all times.
Builders and developers are regulated with strong rules in Australia which do not permit any discretionary powers to the bureaucrats or politicians which can be misused. We all know there is a thin, practically invisible, line between discretion and discrimination.
Food for thought?

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