Bad laws lead to fat lawyers but no business.

Seems that companies in India have spent around $1 billion on legal fees in 2012. The Tata group has around 400 lawyers and the $27 billion Essar group has a legal team for each of its 8 businesses. The reason is that there are too many laws in India, laws are designed to be oppressive so as to extract massive bribes and our courts are almost somnolent so that cases drag on for years. On the one hand it allows convicted criminals, such as the former telecom minister,Sukhram, to evade justice for decades while on the other it denies justified recompense to an injured party. Thus, the Australian mining company, White Industries, fed up with the dilatory tactics of the government owned, Coal India, obtained a judgement from an international arbitration tribunal in Singapore overriding both Delhi and Calcutta High Courts. Russian telecom company, Sistema has already sent a notice to the government threatening arbitration proceedings unless it is compensated following cancellation of all 2G licenses by the Supreme Court. In 2007 Vodafone bought a 67% stake in Hutchison Essar for $11 billion through an entity based in Cayman Islands. As per Indian law Vodafone should have withheld $2.5 billion in tax from the seller Hutchison Whampoa of Hong Kong so the government rightly demanded compensation from Vodafone. Either the law is vague or the government lawyers are totally incompetent because the Supreme Court found in favor of Vodafone. Instead of making the law clear and fair the government decided to introduce a law called General Anti Avoidance Rules under which tax fellows can impose taxes retroactively, going back to 1960. Foreign companies set up a huge outcry saying that they would stop investing in India. At about this time the economy went into a tailspin which spooked the Congress so now the law has been delayed till 2016. The mobile maker, Nokia is fighting a tax demand of Rs 20 billion on royalties it receives on software while Vodafone and Shell are contesting taxes on transfer pricing. Even Indian companies such as Reliance have threatened to go for arbitration on the pricing of gas from the Krishna Godavari fields. Bad social schemes need bad taxes which need bad laws which cannot be enforced by bad lawyers. Is it any wonder that we remain poor?