Nation’s lifeblood: Corruption

It is not a question of a black Congress being worsted by a lily-white BJP. Barring individual exceptions, all parties and politicians are the same

Nation’s lifeblood: Corruption

Listening to Pranab Mukherjee’s televised speech on the eve of Republic Day took me back to another President of India, the very first, in fact.  Mukherjee called corruption a cancer that would weaken democracy. Rajendra Prasad prophesied that corruption would prove to be the nail in the coffin of the Congress Party.

 He was wrong. If the Congress does get only 81 seats against the BJP’s 220 in the coming Lok Sabha election, as some predict, it won’t be so much because of scams that grab newspaper headlines, provoke TV anchors to frothing fury and fuel Opposition propaganda. It will be more because the system is distorted, as Rahul Gandhi pointed out in his TV interview. The question is: what is Gandhi doing to correct the system, of which he and his mother are integral features?

 History shows Indians judge politicians by performance and not integrity or secularism. Punjab’s Pratap Singh Kairon was a classic example. So is the rising tide in favour of Narendra Modi. By that token, it’s not difficult to understand why Manmohan Singh, whom not a breath of scandal has ever touched, is everyone’s least favourite prime minister. Support for him has sunk in West Bengal from 11 per cent, to only 5 per cent. It is even held against him that he is a ‘good’ man. Goodness in a politician is equated with ineffectiveness. Voters would much rather have a robust scoundrel or a communalist who delivers. They also want deliverance from the systemic petty corruption to which we are all permanently subject, regardless of which party is in power.

 No one denies that major corruption like the Bofors scam damages the economy. But the very fact of Indians holding money abroad is neither proof of criminality nor harmful to India, unless it is established the money is stolen. Being illegal is not the same as immoral, for prejudiced lawmakers frame all kinds of biased laws. We might say that the national economy could do with the money stashed away abroad, but there is no guarantee that our authorities would put the money to constructive use if it did come back.

 The field is rife with wildly exaggerated rumours. According to a 2010 estimate, Indians had approximately $1.4 trillion in Swiss banks. It was even claimed in 2006 that a Swiss Banking Association report showed Indians had more black money than the rest of the world combined. But the SBA’s Head of International Communications denied that any such statistics existed. The SBA also rejected as ‘complete fabrication’ another report claiming that Indian funds in Swiss banks were worth 13 times the country’s national debt. According to the SBA’s James Nason, the SBA never published such a report. “Anyone claiming to have such figures should be forced to identify their source and explain the methodology used to produce them,” said Nason.

 Another study, by Dev Kar of Global Financial Integrity, concludes that media reports about Indian nationals holding “around $1.4 trillion in illicit external assets are widely off the mark.” Kar claims the amounts (including money accumulated through corruption, bribery and kickbacks, criminal activities, trade mispricing and avoidance of legitimate taxes) are not more than 1.5 per cent of India’s GDP.

 According to a third and officially confirmed report, published in May 2012, the Swiss National Bank estimates that the total amount of deposits in all Swiss banks by Indian citizens at the end of 2010 amounted to $ 2.1 billion or Rs 9,295 crore, which is about 700 times less than the alleged $1.4 trillion. The report also showed that deposits by Indian citizens constitute only 0.13 per cent of total bank deposits of all foreigners, having fallen from 0.29 per cent in 2006.

 What should cause far greater concern than Swiss secret accounts is the 2005 Transparency International finding that more than 62 per cent of Indians had first-hand experience of paying bribes or of influence-peddling to get something done in a government office. The percentage had fallen to 40 three years later, but still meant no one could get his legitimate rights without greasing palms. It’s a disgrace that Transparency International’s Corruption Perception Index ranks India 94th out of 176 countries, at par with Benin, Colombia, Djibouti, Greece, Moldova, Mongolia and Senegal.

 Government entitlement programmes and social spending schemes, like the Mahatma Gandhi National Rural Employment Guarantee Act and the National Rural Health Mission, are the biggest sources of corruption. Other sources include the long distance haulage industry, which is forced to pay billions of rupees in bribes to numerous regulatory and police stops on interstate highways.

 The causes of corruption include excessive regulations, complicated taxes and licensing systems, numerous government departments, each with an opaque bureaucracy and discretionary powers, monopoly by government-controlled institutions on certain goods and services, and the lack of transparent laws and processes. There are significant variations in levels of corruption as well as in state government efforts to reduce abuses.

 It’s generally believed that the very wide discretionary powers enjoyed by public servants enable them to extort undue payments from companies and citizens. The awarding of public contracts is notoriously corrupt, especially at the state level. Scandals involving high-level politicians highlight kickbacks in healthcare, IT and even military sectors. The deterioration of the government’s overall efficiency, protection of property rights, ethics and corruption, as well as undue influence on government and judicial decisions, has resulted in a more difficult business environment that partly explains declining foreign direct investment. The corporate sector fears that corruption erodes India’s business worthiness.

 The main reason why people get away with such crimes is that the lower judiciary is riddled with abuse. Transparency International attributes corruption to “delays in the disposal of cases, shortage of judges and complex procedures, all of which are exacerbated by a preponderance of new laws.” WikiLeaks cables have commented on the shortage of judicial officers, huge backlog of cases and also, too few police officers to prosecute cases. In short, not only does the system invite abuse, but it provides no effective redress.

 This is not a party matter. It is not a question of a black Congress being worsted by a lily-white BJP. Barring individual exceptions, all parties and politicians are the same. The low-level manpower that operates the system ensures that nothing is achieved without what a long-dead vigilance commissioner, Subimal Dutt of the ICS, called “speed money.” The various impressive laws being discussed and Arvind Kejriwal’s crusade may check large-scale scams by important ministers; but I see no way they can enable the aam admi get a ration card or have a telephone repaired without some form of ‘baksheesh.’ Can the systemic reform Rahul Gandhi promises cleanse what was India’s way of life even before Kautilya’s ‘Arthasastra’ was compiled?

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