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Saturday, June 21, 2003

One of the key reasons for industrial stagnation in AP is the general perception of investors and bankers that many promoters and owners of companies in the state are dishonest. This image is truly unfortunate because we do have some outstanding entrepreneurs who adhere to ethical norms and adopt internationally accepted business and accounting standards. But the truth is far more have cheated the investing public, financial agencies, and the government.

Unfortunately, plunder is passed off as enterprise; corruption is accepted as cleverness; manipulation has become a substitute for management; and fraud has become fashionable. Many businesses collapse, but the promoters thrive! Such disgraceful practices hurt the state badly, give us a bad image, and create hurdles for genuine entrepreneurs.

Recent media reports of fraudulent claims by several Hyderabad hospitals from Central Government Health Scheme (CGHS) are an example of such disgraceful plunder of public exchequer for private gain. According to government audit reports, private hospitals showed fictitious patients whose names were drawn from CGHS rolls; expensive investigations like MRI were claimed to have been done several times a day on the same patient (4 times in one case); abnormally large doses of costly drugs (sometimes fatal doses) were ‘administered’, and all these patently false claims were billed to CGHS. The cases of overbilling are legion. The CGHS authorities failed to make even the most minimal verification, and without a demur promptly settled the claim! Obviously the defrauding hospitals and the officials were in collusion to defraud the public.

For a change, the Union government machinery moved, and internal audit and enquiries were conducted after the events. The reports conclusively established that large scale fraud has taken place. A few hospitals were blacklisted for the time being. But apparently, even such a tepid response is resisted by influential politicians and wheeler dealers. In a sane society, all officials whose connivance, corruption or rank incompetence facilitated such loot should be dismissed. The properties of the hospitals and their promoters should be confiscated. Corrupt officials and the defrauding businessmen must be prosecuted and jailed. Colluding doctors must be delicensed. But our sense of justice and public good is so blunted, that such actions are not even contemplated.

The damage done to public interest in such cases is horrendous. As it is, the governments in India spend only 0.9% of GDP on public health. 83% of all health expenditure is by people themselves, and 90% of it is paid out-of-pocket. The poor are suffering grievously for want of access to effective health care services. And yet the meager public funds are robbed by unscrupulous rouges! As a result, not only the poor are hurt, but honest professionals and entrepreneurs are demoralized. The city, which aspires to be the health capital of India and a destination for ‘health tourism’, gets a bad name. No wonder, hardly any investment comes to the state despite the tall claims of our politicians and bureaucrats.

We all have stakes in what is happening in these hospitals and many enterprises. And business class must be forced to realize that honesty is not merely a moral necessity; but it is an economic imperative. We citizens must boycott institutions resorting to such fraud. That is the only effective way of punishing crooks in the garb of businessmen. Such people give bad name to free enterprise and market economy. Freedom cannot be a license to loot. The honest entrepreneurs must shed their inhibitions and speak out. Or else all genuine wealth creation will be suspect. People already tend to believe that all business is crooked. We need to do the right thing and erase such an impression.