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The Satyam fraud: welcome to incredible India

The late Indira Gandhi, perhaps the best known of India's prime ministers after her father, Jawaharlal Nehru, once made a statement to the effect that corruption is a way of life in India.

She knew the country well, how to exploit the feelings of the masses and how to win elections by rigging them.

But then anyone with a modicum of intelligence who has lived in India and understands the country knows this as well. Naked patriotism, the refuge of those with an inferiority complex, often gets in the way of people admitting the truth about their countries, especially when they are abroad.

To me, as a person of Indian origin, the news about the massive fraud at Satyam, the Indian outsourcing company which has fairly large contracts in Australia, not to mention the US and the UK among others, comes as no surprise.

Indeed, I would not be surprised if this was just the beginning of a mass mea culpa from Indian companies about similar doings. It happened in the US, it can just as easily happen in India.

Some background about the Indian outsourcing phenomenon helps to understand how such greed has permeated an eastern country which often poses as something different from the West and parades itself as adhering to a different set of values.

Over the last 15 years, Western companies eager to make profits and conscious of the low cost of labour in India have gone thither in droves, in a desperate effort to keep profits high. They have been welcomed with open arms in India by the middle-classes who need the kinds of jobs they offer.

Governments have been eager to spread out the red carpet for these fortune-seekers, forgetting that in the past it was the colonials who raped India and then left it when they could no longer justify their adventures on the economic balance sheet.

The agricultural sector, the foundation of the Indian economy, has been ravaged by the constant acquisition of land by governments to put up concrete monstrosities to accommodate branches of all these new companies. Land has also been taken up by Indian firms which have come into being to cater to the back-office functions of these Western companies.

Hundreds of thousands of farmers have killed themselves as they have lost their land and their livelihoods; an equal number have migrated to the nearest slum, and proceeded to become drunks and then beggars.

The proliferation of the outsourcing sector has created a falsity which was earlier unknown in India – when young people have to ape Western accents and try to converse about culture and sports of which they have no real knowledge in order to try and sell products, it does not help an individual's integrity in any way.

But the size of the pay packets which those who work in these outsourcing industries take home is reason enough for them to justify the savagery it has wrought on the real India. The wealth from the outsourcing industry has created unprecedented greed among a certain class of people and fierce competition to obtain more and more lucrative contracts from abroad.

And as more and more companies come up to capitalise on the outsourcing market, the competition for labour becomes even more fierce; salaries have to be increased in order to ensure that one can attract enough staff who will stay long enough to get the work done.

Bigger payouts mean that profits have to become bigger as well to keep the bottomline looking good. And here's where the kind of fraud indulged in by the chairman of Satyam, B. Ramalinga Raju, comes in; it's a handy way of looking good financially when the core is rotten. Not for nothing is the Satyam fraud being labelled India's Enron.

The Indian media is quiescent in this whole business; indeed, there is a sense of pride that India is doing something which maks it valuable to the West. The governments in India have done enough to muzzle the press to the extent that anything which does not cater to the false sense of pride which is encouraged among the middle-class is deemed to be against the national interest.

Nearly a quarter of India's population — that's roughly 300 million, 15 times the popilation in Australia — still lives below the poverty line. Which means they survive on less than one American dollar a day. Things are much cheaper in India but even then, that one dollar will not provide roti, kapada aur makaan (food, clothing and shelter). That's Indian reality.

But to the people who run companies like Satyam, there is an alternative version of reality, the one which led them to indulge in malpractice in order to get rich. Traditional values have been cast aside, forgetting that everything is cyclical and that it will all come back to bite them. As it has.


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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.