You scratch my back I'll scratch yours

The Business Standard carried this op-ed piece yesterday. It brought to the fore what one already feels in one's bones - we are a nation of insidious insiders. We operate on the philosophy of you-scratch-my-back-i'll-scratch-yours; justice, national interest and fair play be damned. Sample this
- we have 55 billionaires for every trillion $ of gdp (more than the US, approx. 3 times Germany and approximately 3.5 times Brazil). The only country that exceeds us is Russia, and we all know that that country is run by crooks.
- the fact that most (27, to be exact) of our elected 'youth' politicians are the sons / daughters / nephews or brothers-in-law of other politicos.

The article in question raises some probing questions into the national soap opera being played out right now - the ugly saga of the 2 brothers - and its repercussions on national energy security. Had it not been for the younger brother being peeved (and rightfully so, in my opinion!) with not getting what was promised to him, no one would have raised some pertinent questions on the way the gas - a national resource - is being priced.

The way the contract works is quite simple - the gas belongs to India, and the contractor (RIL in this case) is compensated for the capital expenditure incurred and operating expenses in extracting the gas via a revenue share on the gas sold. Obviously, the contractor has an incentive to pad capital costs, since this enables recovery of more revenues from the government. This conflict is supposed to be contained via a review mechanism where a 4 member committee approves the capex. Now, the fact is that the capex per cc of gas DOUBLED in 2 years (from 2004 to 2006) . The 4 wise men who stamped this were found to be related (indirectly, of course) to RIL and sister concerns. The government's independent verifying arm, the CAG, has publicly said that it has not been given access to the contractor's data for the last 18 months, despite asking for it repeatedly!

If this is not bad enough, the oil ministry is siding quite openly in the legal process with one side of the litigants. While there is nothing wrong in this, the rub comes here - it is also openly hurting the interests of NTPC, another national company and our largest power producer. The country’s top law officials, the Attorney General and the Solicitor General have openly criticised Deora’s ministry for having hobbled the public NTPC from pursuing its legal battle against RIL.

It is not my case to take sides in the gas dispute - legality aside, it seems to me that the national interest would be served better by NOT honouring the contract between RIL and RNRL. However, I do think that we need a lot more scrutiny and a lot more transparency to prevent India from turning into another oligarchic banana republic.