The trust factor: India has eaten into its social capital, and undermined growth

In the face-off between Reliance and the petroleum ministry, why is there no easy solution? I would venture two reasons. First, there is the suspicion that Reliance may be holding back on gas production in the Krishna-Godavari basin because it is waiting for the government to allow an increase in the price of gas. A second suspicion is that Reliance is inflating its capital cost in order to deny the government its share of the take from the gas field. Reliance can go blue in the face denying both charges; but the current stand-off about the scope and manner of an audit shows that when there is no trust, no argument cuts much ice with the guy on the other side of the table.

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