If it is your assumption that every firm/organization in India follows nepotism and doesn't value true merit, it would be simply a wrong assumption...If you read my post, you'd clearly see that I don't believe every local firm does this: "...I mean both western companies and local companies like Reliance/Infosys..."
My belief, based on my experiences living here, is that this is far more common than in the US, Canada or UK. Admittedly, my experiences are biased - I spend most of my time in bigger cities, and in IT circles. So if you want to claim that your experience disagrees, all we have is our own dueling personal experiences (unless you know where to get data on this). Do you claim I'm wrong on this point?
'Managing by output' isn't really a copyright of the West...
Using the term "western" brought up unnecessary emotional baggage and was not strictly correct. I should have used a different term, perhaps "modern" or "MNC-style" (I think economists have a precise term for it, but I forget what it is).
I have no idea what the relevance of mortgage underwriting standards is, but I think you might be arguing against some claims that I didn't make. I'm not asserting some sort of vague cultural/moral/racial superiority.
I'm claiming that certain modern business practices are not widely used here, but are common in the west[1]. And I'm claiming India will be a better (i.e. richer, happier) place when it adopts them more widely. This is no different than coming up with a list of plumbing devices and saying that they will benefit India's water supply when they are more commonly used. The only difference between business practices and plumbing devices is that business is a bit more abstract - as a result, I didn't even recognize it until someone carefully explained it to me after the fact.
[1] And I've stated elsewhere that they are not as common as they should be, even in the west. For all Michael O. Church likes to rant about it, VC-istan is a lot better than many other parts of the US.