Transparency is the crying need as we embrace market based reforms

Markets function when profitable private sector enterprises are transparent in revealing who really owns them and benefits from the profits. Be it the recent disclosure regarding how promoters of large MFIs in India have benefited from the high RoE churned by these institutions, that has created an adverse impression that affects the sector as a whole, or the muck surrounding the Indian Premier League. The positive is that the ownership patterns are out in the open. If the law allows for opaque functioning of any enterprise, it will invariably lead to corrupt practices with the complicity of corrupt lawmen.  The scale will be enormous in case these happen to be for-profit enterprises operating at a significant scale. Conversely if enterprises function in a transparent manner and disclose their ownership structures, innovations will ensure that goods and services that earlier classified as public/merit/club goods will also be adequately provided for by the market.