Gains of economic failure.

Highway development companies have settled payment disputes with the National Highway Authority of India. A Committee of Chief General Managers has negotiated 9 claims out of which 8 have been resolved. TOI, 17 June. Out of a total claim of Rs 3.54 billion in  the 9 cases companies have settled for Rs 560 million in the 8 cases that have been resolved, which is one sixth of the total. In 2 cases the developer agreed to take nothing, not a paisa.  This is apparently to avoid long legal battles. " In many cases, the claims made by developers have little basis. Once we sit down and discuss the issues, such claims are sorted out," said an NHAI official. What does that mean? Does it mean that these companies were making fraudulent claims? In which case why are they not being prosecuted for trying to cheat the taxpayer? How can any company opt to take nothing for building a road? Does it not have to account to its shareholders? This being India the developers may have thought that they could offer a hefty share of the proceeds to government fellows and keep the rest but with budget conditions being tight and the elections getting ever closer these fellows are having to negotiate a way out. Our previous Finance Minister boasted with unrestrained glee how companies actually paid the government a premium to be awarded contracts to build roads. Companies may have thought that this would allow them to submit inflated or bogus expense claims. After all if the fellows awarded coal mines were allowed to sit on them to rake in windfall profits by selling them once the price went up why should road builders have to build roads. Poor fellows, you have to feel sorry for them. On the other hand our judicial system is almost useless with cases dragging on for decades so that very often a verdict is delivered when the original litigants have already expired. Companies may have decided to at least cut the legal costs of years of litigation and book losses which can be offset against profits from other ventures, thus reducing the tax burden. It is better to get something up front than wait 25 years to get a little more when, if the Congress is still in power, the rupee could be 200 to the dollar and whatever they are awarded would be worth nothing anyway. Finally, what kind of a creature is a chief general manager? Foreign companies have either a general manager or a chief executive officer, sometimes two people to separate responsibilities, but even legendary chief executives like Jack Welsh and Lee Iacocca did not carry such a double barreled moniker. Delusion of grandeur meets flimflam. The failing economy may have some uses after all.