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Markets  |  June 06, 2012 09:24:56

M. Mobius: Reforms in India - the right way

The international community has in the past, investors were concerned about attempts by the Indian government on the treatment of retroactive tax evasion through tax measures. Many investors began to show its concern their download dollars, the pressure eventually forced the government to postpone action on this year. From my perspective it is a step in the right direction, while the debate on this measure was not completed, but only postponed.

-Webkit-text-stroke-width: 0px "> The issue of tax evasion has led to a further palčivému problem, corruption. Corruption can easily dim view of investment and erode investors' beliefs, it is not immune against any country, whether developing or developed. The good news is that today's information technology time limiting the potential for corrupt practices simply sweep under the rug. Social media gradually increase pressure on politicians who attribute the blame for the current situation in the country about what is happening in India is very quickly informed the rest of the world. India has so recently found itself in a very uncomfortable situation, thanks to increased media attention on the practices through which the Indian government reduces corruption.

Progress in the fight against corruption

Word-spacing: 0px; PADDING-TOP: 5px; border-image: initial;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> I am convinced that India needs the introduction wide range of reforms, in case I handle this task, but an optimist. in favor of India also speaks of its high potential for long-term foreign investors and for residents themselves. Do not be so easily manipulated inch newspaper headlines. still believe in all the BRIC countries have compared with many developed countries a much greater potential for economic growth.

Vertical-align: baseline; BORDER-LEFT-WIDTH: 0px; word-spacing: 0px; PADDING-TOP: 5px; border-image: initial;-webkit-text-size-adjust: auto;-webkit-text-stroke- width: 0px "> During the past year, India has seen a sharp protests that ousted corruption top list of priorities of all government officials. activism I see this direction as the first step towards addressing this problem and I believe in that action activists moved to troubleshoot corruption in India, a good bit ahead. However, a handful of people equipped with a force of social and electronic media system itself does not change, inevitable in this respect the government's action, which has far greater resources to promote change.
The corruption scandal that surfaced recently, India has lost up to $ 211 billion by selling coal fields from a very low price, it is clear at least from the state auditor's report, which was recently published. On the other hand, I should also mention that the sale of state property is often abused in many countries in this respect, India is not unique in any case.
After surfaced in a number of corruption scandals, it seems that is much harder to commit corrupt practices, at least compared to the previous decade. I doubt that the current fruits of politicians and officials are reforming the system, but these measures will have a significant impact on future generations of statesmen, who already will have to be very careful about their behavior and become, at least in this, I hope, less zkorumpovatelnými

BORDER-TOP-WIDTH: 0px; BORDER-BOTTOM-WIDTH: 0px; letter-spacing: normal; COLOR: rgb (0,0,0); vertical-align: baseline; BORDER-LEFT-WIDTH: 0px; word-spacing : 0px; PADDING-TOP: 5px; border-image: initial;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> The way forward

Departure of corruption scandals to the surface could be the impetus for change. The power of media, thanks to their right of access to information, and the increasing use of information technology in providing services in both the private and public sector should help to reduce corruption in both private and state sector. In this regard, I am also an optimist and I believe that India will soon be able to forget the recent corruption scandals. For this to happen, however, India will have to begin to move in small steps toward the goals in some areas while changes take place now, they are

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Copyright and license - precisely defined copyright and licensing rights, whether in telecommunications or mining industries are crucial for the correction. I believe in that, precisely defined and tradable copyrights and licenses will help to further reduce corruption.

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Creating a surplus - one of the causes of corruption and overall lack of the economy. Creating abundance and opening of the economy would again could be a way to stop corruption.

Clarity of laws - with clarity of laws and courts could more easily understand the people what is right and what is bad. Some of the recent judicial decisions in India we have already shown that the Indian judicial authorities are not indifferent to the current situation, and that these authorities are determined to fight for the rights of citizens and the country as a whole.

Citizens' Charter - a proposal for its formation has appeared several times. In practice it is more effective relations between the authorities and citizens, the citizens should be in negotiations with the authorities spared the endless waiting periods.

Independence police and other investigative forces - this proposal has already appeared on the tables of Indian politicians. The aim in this respect is the emergence of an independent ombudsman function, while it would be in their work nezodpovídal or government or individual ministers.

In India, I still significant room for improvement. Measures adopted by India have shown desire to go in the right direction, particularly in the public sector. As part of its efforts to remedy the Indian government announced its plan to provide a unique number (known as Aadhaar) to all residents in the country over the next 4-5 years, so as to prevent the misuse of public funds.

Many state enterprises also took steps in the right direction, notably by adopting the integrity pact. At this point in the project realized in cooperation with Transparency International India participated for 44 state-owned enterprises, 95% of them stated that it really helped bring integrity to the award of government contracts more transparent.
Although it is very easy to be discouraged scandals, continuing in India in search of attractive long-term investment. I believe in the enormous potential of local natural resources and a positive (but uneven) growth trend of middle class growth and GDP growth in domestic demand for consumer goods. Like everywhere else in India, yet when assessing the attractiveness of investments proceed bottom-up system.

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Copyright © 2012 by Franklin Templeton Investments. All rights reserved.
The article was translated and reproduced with kind permission from Templeton Investments Frangklin blog from Mark Mobius

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