Bureaucrat : " Possible is nothing !!! "

After I witnessed a stellar performance by Abhishekh Bachchan in the movie Guru,I was confronted by some reactions like - "Oh well-thats what happens when you don't pay taxes- you have to face the laws".The protagonist is a villager turned entrepreneur who develops a massive establishment.In doing so he bends laws, bribes officials and even engages in frauds to evade duties.

What invariably most people think is the idea of a heartless,ruthless businessman who would crush or circumvent anything that comes in way of making profits.My friends opined that taxes and duties are necessary to safeguard the interests of the general public and that government tries to 'redistribute' wealth as a means to reduce poverty.They say that it nullifies the 'extreme power' that industrialists may acquire.But is it the right solution? No,in fact it aggravates the problem.

How exactly?The government draws wealth by means of taxes for the welfare of the poor.What one sees is that the money 'will be' used for betterment of poor.What one ignores is that the capital lost by the industrialist could have created a lot more jobs that would productively employ a good number of workers.Also whether the money indeed 'will be' utilised depends on the number of middlemen in the chain i.e. the bureaucrats.The imposition of duties are justified as a way to direct capital towards or incentivise 'needy' industries.The problem is that capital supply towards better performing industries gets restricted.

And it creates the very problem of power that it wanted to remove.Bureaucracy forms a barrier to setting up industries or for increasing production.So only the ones with might of wealth and influence pass through this barrier and command power.The more doors in the process, the more the guards and only those willing to 'salute' them or those with muscle power pass through them.Not only does this increase corruption but also reduces the wealth in the hands of those who actually set up the industries.This wealth would have otherwise been directed towards efficient production or towards employees.

What Gurukant Desai states in the movie is that this restricted form of system wont stop him from bribing bureaucrats if it increases the wealth of his company and its shareholders.The situation is better today than in the pre-1991 license raj but that does not mean that there aren't ways to improve it even more.The Economic Freedom Index ranks India at a lowly 104 below countries like Uganda,Swaziland,Oman,Peru etc.Easy setting up of business is the only way to increase entrepreneurship and reduce unemployment.The fact that more B-school grads now reject job offers to start their own venture is encouraging.Whether a conducive environment is provided for the same is crucial at this juncture when the economy is looking up.

Hope it won't take another economic crisis to wake us up.