The fire that killed 14 people at the two swanky, upmarket restaurants at Kamala Mills in Mumbai’s Lower Parel provides deep insights into doing business in India. It also explains why most people are unimpressed by the 30-point jump in India’s World Bank’s Ease of Doing Business ranking (moving from 130 to 100). Nothing that matters to people has changed on the ground.
India’s over-crowded commercial capital also has the most expensive real estate in the world, making property development a lucrative and corrupt business. So, when over 500 acres of beautiful mill land, with lots of greenery and beautiful water bodies, was opened for development in the 1990s, we had an opportunity to model a tiny part of this sprawling metropolis along the lines of Sir Edwin Luyten’s NewDelhi or Le Corbusier’s Chandigarh.
Instead, a continuously corrupted planning process, brazen disregard of rules, haphazard development, pathetically inadequate infrastructure and overcrowding have given us two heart-rending tragedies in less than four months. The stampede at Elphinstone Road Station (Elphinstone) crushed 23 people on 29 September 2017 because basic amenities, like the foot over bridge (FOB), were inadequate to meet the footfalls that burgeoned over the past decade. The railways had ignored all pleas and warnings for nearly two years.
In December, a fire at two restaurants at Kamala Mills snuffed out 14 lives because two posh restaurants had violated dozens of building and fire safety norms and one was even operating without a licence, at that point. It is no coincidence that the tragedies occurred within a kilometre of one another.
Instead of a well-planned business and entertainment hub on what were once the mill lands, what we have is ill-planned 360 acres of development that stands testimony to the rotten nexus of collusion, corruption and monumental apathy that is killing the city. Typical of how the corrupt neta-babu-underworld mafia works, the process of converting the mill lands into commercial space began with the pretence of earnestness. The late Charles Correa, a legendary architect, was asked to head a committee to suggest ways to redevelop mill lands in 1991. The textile mills had gone bust after a prolonged trade union agitation of the 1980s. The committee recommended that one-third of the open land must be used for public amenities.
But mill-owners lobbied with corrupt politicians and, in 2001, the formula was tweaked to slash the land available for public use. One industrialist told me, we (Mumbaikars) would be lucky to get “10% of the promised 30%.” It turned out to be even worse. The construction spree that followed led to rapacious flouting of rules, destruction of greenery and disregard for open space and, worse, no attempt to upgrade civic amenities and infrastructure, widen roads or ensure disaster management facilities.
What we have is the incongruity of luxurious, gated office complexes with their gleaming towers and manicured green patches (replacing ruthlessly hacked trees) with high-speed elevators, tony restaurants and meeting spaces opening out to narrow roads choked with traffic. The dilapidated chawls that line these roads have lost hope of redevelopment. India’s top builders, powerful bankers, highly paid consultants and CEOs have all helped build this monstrosity. Most of them wax eloquent about their corporate social responsibility efforts to the media, but do they pause to reflect on what they have helped create as their luxury cars crawl through the choked roads and incessant honking to reach office?
Kamala Mills and Elphinstone are not two tragic incidents—they are a harbinger of worse to come, unless there is bigger effort to tackle infrastructure needs and punish infractions in the entire mill land complex. Will it happen? Unlikely. It is no secret that jobs at the Brihanmumbai Municipal Corporation (BMC) involving the grant of licences and permissions are sold or auctioned. Yet, we naively believe tired clichés about punishing the guilty after a spate of face-saving arrests and suspensions, even though there is no systemic change.
What does any of this have to do with Ease of Doing Business? Everything. Rules and permissions of the BMC are deliberately opaque, confused, excessive, out-dated and non-transparent only to allow the most rampant corruption. Our own experience in holding an outdoor event led to the discovery that we needed a dozen licences/permissions each of which had a fixed bribe—sometimes thrice the licence fee. This was openly collected at the BMC headquarters and included the traffic police whose permission was required to ensure that our guests were not harassed. Do we really expect these officials to enforce rules or bribe payers to follow them?
Municipal officers make annual rounds of offices to inform people that they have violated rules by failing to maintain some British-era registers. Yes, ‘lime-wash registers’ (it was mandatory to lime-wash offices every couple of years to prevent epidemics such as cholera and typhoid!), mandatory cross-ventilation rules (despite 50 years of air-conditioning), remain in the books and are invoked to demand bribes—or what is euphemistically called a ‘service charge’.
As new entrepreneurs, we asked for the rules in order to ensure were compliant; an amused municipal official told us it was not possible. The system is geared to make every honest enterprise into a lawbreaker and allow the more flagrant violations and infractions to go unpunished.
Journalists investigating the Kamala Mills tragedy are discovering a well-oiled cover-up process. Media reports indicate that municipal officials have diligently documented every violation and infringement of rules and issued multiple show-cause notices that were deliberately never followed up. In a couple of cases, prosecution was also filed as a self-protection strategy, with no intention to follow it through.
Municipal officials remained absent at court hearings or sought repeated adjournments. This gives iron-clad protection to the corrupt in case of disasters such as a fire or a building collapse. No municipal or fire officials has been arrested; they are only suspended. After a while, if the inquiry drags on, they will also start getting half their salary. It is only the businessmen who were jailed. Those affected by the tragedy learn to survive after collecting a small ex-gratia payment.
While it is easy to blame business for the violations, the current system is actually an invitation to break the rules and allow the most connected and corrupt, to prosper. As property prices soared, officials and politicians got so greedy in their demands that it drove a couple of builders to commit suicide. The temporary outcry that followed also died down without any significant change.
Forget about ease of doing business, there is a higher frictional cost of doing business. While some get furious at the extortion, others take advantage of it to flout rules and cut corners.
The fire department, instead of worrying about safety norms, also colludes in helping leading business houses to build more floor-space by recommending fire escape corridors that was later misused. The fire department issued 4,592 notices but launched just 14 prosecutions in six years, says a media report.
The rot is so deep that, instead of promoting transparency, the municipal commissioner’s reaction was to blame Right to Information (RTI) activists for colluding with corrupt officials. It is not hard to fathom why he did not name or act against such ‘activists’ but chose to tarnish everybody; he is looking for scapegoats. A PIL (public interest litigation) has sought a commission of inquiry which may be quickly set up. But if its report implicates powerful netas and babus, it will probably be buried or ignored. This has happened so often in the past.
If we want to prevent tragedies like Elphinstone and Kamala Mills, we need to scrap irrelevant rules and regulations, promote transparency and better disclosures, online payments and encourage public feedback. We also need stringent personal accountability of key personnel who buy their way into ‘lucrative’ posts. Only then can we begin to truly improve the Ease of Doing Business instead of touting a meaningless jump in ranking by gaming certain parameters.