Corruption, fast forward-August 30, 2011

Corruption, fast forward

* August 30, 2011

* By Paranjoy Guha Thakurta


The lasting legacy of the agitation led by Anna Hazare will not be the yet-to-be-enacted legislation to set up a Lokpal and Lokayuktas in all states, but the attention that has been drawn to the brazen corruption that pervades life in India.

Long after the hype and hoopla have died down, what will be remembered is how the government was literally forced to listen to the voices of ordinary citizens despite the arrogance and incompetence of some of its important functionaries.

What will, unfortunately, also be remembered in the process is the megalomania of a few representatives of civil society.

If Mr Hazare has emerged as a superstar of sorts, as a person who, willy-nilly, was elevated to the status of a Jayaprakash Narayan who, in the 1970s, united the political Right and the Left against Indira Gandhi’s Emergency, much of the credit should go to the utter stupidity and overblown egos of a small coterie of ministers.

One obvious example was the silly manner in which Mr Hazare’s “preventive arrest” was sought to be “blamed” on the Delhi police. To argue that the police chief of the national capital acted as an agent independent of his superiors in North Block, where the ministry of home affairs is headquartered, is to insult the intelligence of the people of the country.

Arrogance, when coupled with stupidity, is a deadly combination, which is why the government had to backtrack in the face of overwhelming public pressure.

Corruption is neither new nor unique to India. Why then has corruption become such an important issue? One important contributory factor is the sheer scale and the brazen manner in which a slew of scandals have taken place in recent years.

Let’s have a peek at what Prime Minister Manmohan Singh said in the Lok Sabha on August 25: “…corruption sources are numerous. Until the early 1990s, the biggest single source of corruption was the… industrial licensing system, the import controls and the foreign exchange controls. The liberalisation that we brought about has ended that part of this corruption story.

Another major part of corruption was the rates of taxation which were so exorbitant that people were tempted to enter into corrupt practices to reduce their tax liabilities. We, I venture to suggest, ourselves and successive governments, have worked hard to simplify to streamline the taxation system and on balance there is less scope for corruption as far as taxation matters are concerned.”

Dr Singh added that ways and means will have to be found to plug leakages in the administration system, “devise new methodologies to ensure that public distribution system will be free of malpractices” in collaboration with state governments, streamline contracting systems by enacting a Public Procurement Act and improve the functioning of “regulatory mechanisms, especially with regard to the management of the infrastructure”.

During his August 22 speech on the occasion of the golden jubilee celebrations of the Indian Institute of Management in Kolkata, Dr Singh was categorical: “There are some who argue that corruption is the consequence of economic liberalisation and reforms. This is of course completely mistaken… The abolition of licensing has eliminated corruption in these areas. But corruption has not disappeared from the system. It surfaces in many forms. The aam admi faces corruption when he has to pay a bribe to facilitate ordinary transactions with the government.”

“Beneficiaries of government programmes face corruption when those in charge of implementing the programmes misappropriate funds… Wherever there is government discretion in the allocation of scarce resources, whether it be land, or mineral rights, or spectrum, if the method of allocation is not transparent, there is a possibility of corruption... Corruption not only weakens the moral fibre of our country, it also promotes inefficiency and cronyism which undermine the social legitimacy of market economics...”

These statements seek to highlight Dr Singh’s concern that corruption has undermined the very basis of his economic liberalisation programme. The Harshad Mehta scandal was a consequence of, among other things, the government dragging its feet on adequately empowering the Securities and Exchange Board of India.

We have an apology of a Petroleum and Natural Gas Regulatory Board. The Indian Bureau of Mines lacks teeth to act against offenders.

The government has taken years to strengthen the Competition Commission, long after the Monopolies and Restrictive Trade Practices Commission was done away with.

A more proactive and independent Telecom Regulatory Authority of India could have checked the spectrum scam and perhaps even prevented the undignified situation we are in today wherein lawyers on behalf of former communications minister A. Raja and member of Parliament K. Kanimozhi are asking Dr Singh to personally depose in court as part of their legal defence.

The short point: even as the government has opened up large segments of the Indian economy to the private sector, it has failed miserably to strengthen regulatory mechanisms, often deliberately weakened their authority and also packed them with pliable former or serving bureaucrats.

What Dr Singh has omitted to mention in his recent statements is that the fountainhead of corruption is the illegal pattern of election funding we have at present and the corrupt nexus between politics, business and crime.

There are other important reasons why corruption is the big issue that it is. Corruption cuts across most sections of society and does not respect caste, language, religion or region. More significantly, corruption has come at a time when the bulk of the country’s population is reeling from the debilitating impact of high food inflation, which has widened the gap between the rich and the poor and which the government has been unable to check.

Paranjoy Guha Thakurta is an educator and commentator