Kanika Datta: The road to nowhere

SWOT

Uttar Pradesh is India's most populous state. It sends the highest number of MPs to Parliament. It produces a significant share of India's agricultural produce. Several multinationals have operations there""Glaxo, Coke, Pepsi, Honda, Piaggio, to name a few. In recent years, thanks to some strenuous hard-selling, the state has been the cynosure of corporate attention with many of the Mumbai goliaths committing sizeable investments in the state, especially in infrastructure. "U.P. is presently (sic) the address of every one (sic) who matters in the industry in India," says a perky statement on a government website.

For anyone who has travelled through UP recently, this is a thought-provoking claim. Driving in the state, as I did recently to Corbett National Park, makes you seriously wonder just why anyone "who matters" would want to invest here. In many ways, the six-hour journey to the national park presented a microcosm of some of the challenges to economic reform in the states.

Of India's famed Golden Quadrilateral project, there are but faint signs. Roads that lay claim to the title of National Highway remain perilous, potholed two-lane thoroughfares. The route to the national park""now in newly-created Uttaranchal and the pioneer of one of India's most significant ecological initiatives in Project Tiger""could easily qualify among India's most polluted. Sugar and fertiliser factories spew out thick black smoke and effluents that sting the eyes and choke the lungs. A depressing air of indigence and deprivation hangs over the passing fly-blown towns and countryside.

As noteworthy perhaps were the instances of low-level petty corruption. Being a stretch of heavy industrial activity, the route bristles with trucks, lorries and tankers. At several points, traffic jams form as trucks are openly halted by the state police to receive their pay-offs. The collusive nudge-and-wink culture continues on the few smooth stretches of road that constituted the Golden Quadrilateral. Our driver was constantly asked if he really needed the receipt for the toll he paid. He was even offered an attractive discount if he waived the receipt plus an earnest assurance that he would not have to worry when he reached the other end where the receipt had to be shown (that could be "managed," he was told).

Having dodged these blandishments, it turned out that similar and far more serious hazards awaited us. Being a commercial vehicle, our driver was required to pay tax. This was easily done on the way out. On the way back, his efforts to do so proved fruitless. The tax booths are make-shift units made of painted plywood. They were in evidence on the way in. On the way out, they had disappeared. Repeated enquiries to find out where this local impost could be paid drew blanks. The tax booth was always further up on the road, we were told.

Perhaps the driver had erred on the side of honesty, since he even halted at a police booth to enquire. This proved his undoing. A short while later, he was stopped by two policemen in a radio jeep to display the tax receipt. Explanations about efforts to find a tax booth were brushed aside, as were offers to turn back and pay the tax if only he was told where the booth was located. The car would be impounded and the driver put in jail, unless Rs 300 was paid. Was this a fine? No, there would be no receipt for this, was the curt reply.

Twenty minutes later, another jeep bore down on us and five burly men in rexine jackets and brandishing walk-talkies demanded to see our tax receipt. Same explanation. Same offer. Same counter-offer. But by now, the demand""euphemistically referred to as "mukt-rashi"""had swelled to Rs 5,000 and was subsequently bargained down to Rs 3,000. That paid, we were told there was now no need to pay the tax at all and our journey to Delhi would be trouble-free. Amazingly, there were no such "surprise checks" on the way in when tax had been paid. In this case, India's communication revolution had proved a remarkable ally for the authorities.

Readers who have patiently waded through this account might consider the incident too commonplace to record, as did several people who heard about it. This is precisely the point. Petty corruption at the state level has become so systemic that it is scarcely regarded as worthy of notice. Large corporations have learnt to put mechanisms in place to cope with it. Smaller corporations and petty businesses""like our transporter""have reconciled themselves to higher transaction costs as a result of it. It is telling that in state website after website offering inducements to investors, one constant guarantee is that the provision of basic infrastructure and official clearances will be personally overseen by the chief minister or chief secretary or both. The message is clear: the enabling environment for business will continue to be strictly selective. As a means of fostering a transformational market economy, such institutionalised untrustworthiness is, at best, absurd.

The views expressed here are personal