India's Continuing Dilemma

So the Commonwealth Games are over, finishing on a high at a closing ceremony last night. This colorfully marked the end of the games' 11 increasingly good days as a stumbling administration got its act together, and Delhi people realized there were splendid events worth watching and gradually filled the initially very empty stands.

I went to the games on Tuesday – to a marvelous afternoon of sevens rugby at a Delhi University ground. There weren't any tickets officially available, and I guess it's better if I don't say who sold me mine near the gate when I arrived there – but I only paid the standard Rs250 (about U$5.50) for a ticket marked ‘complimentary'. The stands were at least one-third empty, but young Indian spectators along with expatriates roared their approval as New Zealand's All Blacks won gold in the final against Australia.

But what is it that makes India spoil such potential internationally significant successes? I'm prompted on this thought partly by the end of the games, which could have been so much better, and also by two other events this week – a fresh crisis in the spectacularly successful though scam-ridden IPL private sector cricket league, and an appalling display of corrupt self-serving mis-governance by unruly politicians in Karnataka, whose state capital of Bangalore (now Bengaluru) used to be seen internationally as the centre of modern Indian excellence.

It is not enough simply to dismiss these three examples, as some foreign commentators do, by simply saying it is all because of India's way of doing things. The problems run deeper in society than that. It is of course partly a lack of managerial focus and, in the case of the games, the unwillingness or inability of professional experts to challenge the often corrupt dominance of self-serving top officials and politicians. That then links with the over-riding drive of greed and corruption that bedevils progress in India.

It is now unfashionable to criticise the Commonwealth Games. The mood in India is upbeat because the country came second to Australia with 38 gold medals, just beating England, and won a total of 101 including silver and bronze.

But at least four of official investigations are now being started by government agencies, with reports of over 30 cases of alleged corruption being examined, so it remains to be seen how many of those responsible for massive corruption and mis-use of public funds (budgets exceeded $6bn) are caught and punished. Those in charge obviously hope to use the current euphoria to sweep away memories of the bribes and disasters, but politicians of non-government parties are unlikely to let this happen.

Some are mounting public relations offensives to rescue their reputations – led by Sheila Dikshit, the Delhi chief minister (left) who presided over much of the chaos, and Suresh Kalmadi, (below) head of the Commonwealth Games Organising Committee.

The games could have been so much better if only those involved had managed them well and not indulged in such all-pervasive corruption that delayed contracts and projects and led to massive cost over-runs. That would have then avoided the last minute completions and allowed time for all the facilities to be tested before the games opened. Most of the glitches such as problems with ticket sales, security equipment, food in the venues, and poor transport faculties, would have been avoided.

Then there is the India Premier League (IPL) cricket league with its fast-paced Twenty-20 cricket matches, which as I wrote in April, must go down in history as India's most popular and celebrated scam.

The league's April crisis uncovered all sorts of shady investments and linkages and led to the ousting of Lalit Modi, who ran the league and is now reportedly evading arrest in the UK.

This week's news is that the BCCI, India's national cricket board, which itself has for years mired in murky politics and corruption, has unilaterally suspended two teams, the Rajasthan Royals and Kings XI Punjab, because of unclear foreign shareholdings. Some investors involved suggest this could spell the end of the league, but whether it does or not, the BCCI's decision smacks of vindictiveness and what, in other areas, would be called insider dealing.

But perhaps the saddest event is the political crisis in Karnataka where regional politicians have been trying to unseat the Bharatiya Janata Party (BJP) state government's chief minister. They are not doing so because of any policy differences, but simply because of business-based rivalries, particularly involving scams in the state's rich mining industry that surfaced last year and centre on the Reddy family of businessmen-politicians. Two brothers, Janardhana and Somashekara Reddy (below), who have been state government ministers and have become enormously rich in a decade with their Obulapuram Mining company, are at the centre of the crisis.

Karnataka used to be one of India's most successful states, initially setting trends for social and education development in the early decades of independence. Then its capital, Bangalore, grew in the 1970s around the success of public sector engineering companies such as Bharat Heavy Earth Movers, Hindustan Machine Tools, Bharat Heavy Electricals, and others. In the 1980s and 1990s it emerged as India's first internationally famous centre of technological excellence, spearheading the development of information technology, and spawning firms such as Infosys and Wipro as well as hosting foreign companies like Texas Instruments.

But the rot had already set in, with political corruption growing from the 1980s as the city boomed, boosting real estate development and the price of land. When I first visited India in 1982 as the FT's industrial editor, Bangalore was the first city I visited and it remained a source for good positive stories into the 1990s.

A dramatic change was evident in 2005 when I went back to look at infrastructure projects, including an airport and highway that had been delayed partly by rival politicians making huge profits from land speculation – with Deve Gowda, who had briefly been a prime minister in mid-1990s, and his family leading the decline in standards to such as degree that it was.

Now it is iron ore and other mining that could be making the state rich, but instead is pulling it down into greed and corruption-based politics, while the information technology and other industries that initially made Karnataka a success expand elsewhere, and the poor remain poor.

John Elliott blogs at Riding the Elephant, which appears on this page.