Corruption between government and business is not new. During India’s previous United Progressive Alliance (UPA) administration, it developed and was present. Signs of its expansion during the National Democratic Alliance (NDA) administration are noticeable and concerning. The NDA’s agenda has included a decrease in the role of the state and an increase in reliance on markets.
The fact that this hasn’t led to less corruption suggests that the government still has a lot of discretionary power when it comes to deciding which contracts to award for the construction and management of infrastructure like ports, airports, highways, telecom systems, electricity generation and distribution, and infrastructure, as well as land and water resources that can generate economic rents.
Major industrialists and investors receive these rents, which boost their profits without necessarily increasing production. The Adani imbroglio, which is under investigation, highlights the vulnerability of government-business collaboration and corruption due to the business group’s recent spectacular rise and precipitous crash of its trading shares following the release of the Hindenburg report.
Since Adani valuations plummeted, the reputation of Hindenburg Research, a US-based investment firm with a questionable short-selling track record, has become a distraction. Allegations of fraud, share price manipulation, and tax evasion by the group couldn’t be dismissed after the reaction of the stock and bond markets signaled a loss in confidence.
Although rent-seeking behavior is still ubiquitous and compelling, there are other approaches to research business-government collaboration and analyze the corruption that results from crony capitalism.
