Thursday, January 29, 2009

CORRUPTION FREE NATION

The word corruption, according to the Merriam Webster’s Dictionary, is defined as "impairment of integrity, virtue or moral principle; depravity, decay, and/or an inducement to wrong by improper or unlawful means, a departure from the original or from what is pure or correct, and/or an agency or influence that corrupts." Transparency International (TI) defines corruption as “the abuse of entrusted power for private gain.” While the former definition enlists the elements affecting the sphere of activities of an individual, the latter encompasses the individualistic as well as group behavioral trait leading to certain ethically and legally wrong consequences. But, when the corruption pervading in a nation state is concerned, the major factors that lead to corruption are individualistic to a lesser degree and are rather factors favoring institutionalized corruption.
The establishment of a socialist model of development post independence in India was based on the basic premise that the state will be involved in the running of social as well as economic programmes for the growth and development of the masses. This meant that along with running welfare programs that entailed huge costs, the wealth generated by the people will be redistributed through the state machinery. For this purpose, the state machinery that was used was the one whose base was established by the British long ago in which important additions were made by the initial governments which only added further layers to the whole bureaucratic set up. The critical factor that led to the present scenario was the setting up of the “permit license raj” system which played the instrumental role in the growth of roots of corruption in India. Hence, in order to describe the effective ways to make India a corruption free nation, it is imperative to under the state of corruption in India and its causes.

FORMS OF CORRUPTION
Corruption, in its present forms, has plagued the Indian society ever since the establishment of the bureaucratic system by the British in the pre independence era. The major forms of corruption prevalent in India are – bribery, extortion, embezzlement and fraud. These activities are carried out in various spheres of public life from politics, public services, to government programs and businesses. Today, the culture of corruption has pervaded all the levels of hierarchy especially in government organizations and programs.
The biggest contributor to the corruption in India is bribery. Bribery is a multi-billion dollar industry and has gained institutionalized status in our country to an extent that Transparency International has consistently ranked India at the bottom in its Bribery Payers Index (BPI) list of 30 countries consisting of the world’s biggest exporters. Businesses pay bribes to government officials for attaining permissions and clearances. Public services like municipal services, transport and electricity have a huge bribing culture to get the work done easily. Rampant bribing exists in sales tax and excise tax departments which easily ‘earn’ from businesses. Above all, the Police force in India is the biggest bribed of the lot and it is a custom to bribe so as to avoid any encounters with the law be it for small issues or bigger crimes.
Extortion is closely linked to bribery but exists at a higher and deeper level and the perpetrators are mostly politicians and businessmen. Cases of politicians asking for bribes and threatening honest public servants and ordinary civilians to conceal their crimes are everyday affairs. Compelling civilians to vacate public land for commercial purposes, getting false reports made to attain clearances and weekly bribe payment called “Hafta” are common activities conducted in every nook and corner of India.
Embezzlement and Fraud are closely linked such that they exist in government run programs involving huge sums of money wherein billions are siphoned off to private accounts by politicians and government officials and these sometimes reach offshore. The Telgi scam, The Hawala Scam and the inefficiencies in the NREGS scheme are some prime examples of the above kind of corrupt practices.
Similarly, lack of standardized accounting practices and monitoring methods lead to accounting and financial frauds resulting in huge losses of revenue to the exchequer as profits are muted by Micro and Small businesses to avoid payments of the appropriate taxes. The same exists in corporate India wherein Harshad Mehta, Ketan Parekh and Satyam Fiasco are major examples although they are much fewer in number.
All the above practices have been a part of many areas of public life in India and some of the major institutions entrusted with critical responsibilities in the country have been found to indulge in such under the table practices. Some of the major walks of public life and institutions indulged in corruption and its major causes are discussed in detail in the next section.

CORRUPTION IN PUBLIC LIFE AND ITS CAUSES
Political Corruption
The real increase in the corruption quotient of the country occurred in the mid 1960s when the country’s politics took a tectonic shift from the Gandhi Nehru idealism to a more individualistic and self profit seeking tendencies. The corruption in our political class is manifested not just through the numerous scams and huge accounts of black money and unaccounted property held by the kith and kin of our politicians that come in public eye whenever the lid is blown off but also through the very fact that a majority of people seeking election tickets and holding posts in parliament and state assemblies are accused in numerous number of crimes and are involved in cases running on them. At the same time, complete unawareness about the sources of election funds allows the politicians to use unfair means of funds and quite often black money is used for such funding.
Firstly, the single biggest cause of this deep rooted corruption in our politics is the massive socialistic governing framework developed by the government in the 1950s and early 60s and a complete closure of many private enterprises and nationalization of many others in the late 60s which gave the government unchecked control over all national resources and wealth generated. Secondly, a complete lack of transparency and accountability measures to monitor the actions of the elected representatives and ministers till the time they hold office have allowed characters with a shady past and to run our country. Thirdly, a lack of clearly defined norms in sync with global benchmarks for allowing only worthy and educated candidates to stand for elections has brought the Indian politics close to its nadir in recent times.

Government Bureaucracy
The government bureaucracy is the biggest source of corrupt practices in the country which can be gauged by the famous statement from the former Prime Minister Rajiv Gandhi that only 15 paisa out of every rupee spent on public expenditure by the government reaches the poor while the rest goes into the pockets of the government bureaucrats. For instance, a substantial portion of foodgrains, sugar and kerosene meant for the Public Distribution System (PDS) and for welfare schemes for the poor, including the Scheduled Castes (S.C.s) and the Scheduled Tribes (S.T.s), actually reaches the black market. Also, only 16% of the funds meant for the S.T.s and the S.C.s reach them in reality (Consultation Paper on Probity in Governance, National Commission to Review the Working of the Constitution, 2001).
A TI India’s India Corruption Study in 2005 covering more than 14000 respondents surveyed across 20 major states in the country stated that out of the 11 basic public services, the total estimated value of corruption in a single year amounted in excess of Rs. 21 thousand crore. The major causes of the above rampant corruption in the government bureaucracy can be attributed to three factors. Firstly, the existence of multiple layers in the bureaucratic structure in every department in the state and central government makes the process of completing routine tasks cumbersome and the paperwork has to be completed by scores of officials before it can be cleared which makes bribing the only option. The funds disbursed for development programs are first siphoned off by every official in the hierarchy under the patronage of the ministers and politicians. Secondly, lack of effective accountability, punishment and penalizing mechanisms within the government departments has made the entire machinery run without checks and boundaries to control the foul play going on at a massive scale. Thirdly, a lack of adequate technological infrastructure to facilitate effective conduction of public services at all levels ranging from monitoring the money transactions which avoids production of black money to the timely and accurate disbursement of information has resulted in manual handling of documents has provided an open ground for foul play.

Corporate Corruption
The onset of the license raj in the 50s favoured the culture of bribing to avoid hassles in getting clearances and running the businesses smoothly. The completely hostile atmosphere to opening of large scale private enterprises and foreign investment led to the flourishing of the government enterprises like the PSUs in which opaque and archaic labour laws stymied the professional functioning and adoption of global practices.
But, the severe financial crisis of late 80s and early 90s led to the much needed economic liberalization in India which ended license raj and brought about foreign investment and privatization although newer domains and ways have emerged where corrupt practices are prevalent. Today, one sector of industry where major forms of corruption still persist is in the area of Small and Medium scale Enterprises (SMEs). The single biggest consequence of the lack of accounting standards for the SMEs has been the generation of Black Money in India, which according to latest estimates constitutes 40% of the GDP of the country. Every small and medium sized business in India, for decades has been avoiding the payment of legitimate taxes that has resulted in the creation of parallel economy. The biggest cause of the creation of this black money has been the culture of “cash” transactions in India and avoidance of using invoices. All this black money directly ends up in the foreign accounts of the kith and kin of politicians and bureaucrats in India and thus in this way, black money is the single largest consequence as well as cause of corruption in India.
Police Corruption
The security forces in the country especially the people handling the internal security, the police have been the biggest perpetrators of corruption in India. According to the TIs India Corruption Study in 2005, the Police was the most corrupt of all the 11 public services surveyed with 88% of the respondents considering the Police to be corrupt. The police officials in India are involved in common instances of corruption like accepting bribes for not filing FIRs against citizens indulged in ordinary and small crimes on a day to day basis. Then again, major administrative procedures like issuance of Passports, Driving Licenses etc. all involving police investigations are completed by hefty bribing to the officials. Another area where the police have gone to new lows in India are a complete neglect to criminal or illegal activities going on within the areas of a jurisdiction of a particular police station and in return, accepting bribes by rich and influential businessmen and politicians to turn a blind eye towards the crimes.
Firstly, the biggest cause of the massive corruption in the Indian Police is the complete lack of reform in the legislation governing Police forces in India which is still functioning according to the Police Act of 1861. Many of its ill defined provisions are easily misused by the forces like actively threatening innocent citizens and businesses to pay regular bribes to them. At the same time, a total lack of a punishment and penalty measures in the Act has made the officials completely fearless of any action being taken against them by ordinary citizens as the route is so long, complex and risky that an ordinary citizen cannot endure the ordeal. Secondly, the complete control of the transfers and promotions process of the Police officers by the government ministers and politicians directly brings the police to act as pawns of the politicians which results in the complete lack of integrity and transparency while discharging their duties. Thirdly, the complex and massive levels of hierarchy in the forces makes the people at a particular level remain at that level for almost their entire lives which promotes corrupt practices among officials to strengthen their financial positions.

Judicial Corruption
The largely elitist perception of the judiciary has concealed it from the public eye to quite an extent over the years but the Indian Judiciary is fraught with corruption although not at the scale of the bureaucracy or the police. There are numerous cases where the conduct of a judge is not appropriate and there are complaints of behavior graft and corruption. The former Chief Justice of India, S.P. Bharucha made a famous remark in Kerala in 2002 that almost 20% of the judges in the country including all levels could be corrupt. Lack of effective sentences to the accused and lack of directives to the police and authorities for proper investigation in cases involving high profile political and influential people are often observed in India.
The major cause that makes way for such corruption is the lack of a practical and easier way of initiating action against or removal of judges. The only way that action against judges could be taken is through a tribunal or through the parliament. The Judges Act, 1968, prefaces impeachment by judicial inquiry. Hence the only way, some action can be taken is thorugh a judicial inquiry which is done again, by other judges and thus there is a yawning gap in terms of making the judges be accountable for their in court actions and initiating appropriate action against them.

METHODS TO ELIMINATE CORRUPTION IN INDIA
The way corruption has stymied the growth of various sectors of the economy and has affected the upliftment of the underprivileged sections affecting inclusive growth needs urgent and fool-proof measures which must the long term perspective and be flexible to bring into effect necessary changes in the coming decades.
Police Reforms
The very first initiative that must be taken should be the establishment of a National Police Force Regulator that will have autonomous powers without any political influence to decide and implement modern and globally benchmarked procedures for recruitment, training, appraisal and transfers of the Police officials at various levels. This regulator must also establish norms for compensation and awards of the Police officers and constitute adequate monetary rewards and recognition measures directly linked to performance. The members of this regulator must be selected for a term of 4 years and must consist of former police commissioners, senior lawyers, judges and other senior administrative officers possessing clean and impeccable records of service.
Secondly, the police force should be divided into two parts – one section meant for maintaining law and order and second, for investigations of all sorts that come within the jurisdiction of the Police as a whole. This will ensure that the Police meant for maintaining law and order can concentrate on large scale operations like containing violence, riots and other crimes from occurring and the investigating team can focus on the specifics of individual cases without having to worry about daily law and order maintenance operations. This will require separate training for officers for the different functions which can be done at the training academies in India through running courses with the help of foreign help and taking cues from Police Training models of foreign countries.
Thirdly, there is an urgent need for amendment of certain provisions of the policing acts one of them being the Indian Penal Code 1860, chapter VIII “OFFENCES AGAINST PUBLIC TRANQUILITY”(141-160)-PROVOCATION TO RIOT,PROMOTING ENIMITY, IMPUTATONS ASSERTIONS PREJUDICIAL TO NATIONAL INTEGRATION,RELIGIOUS OFFENCES,DEFILING PLACE OF WORSHIP WITH INTENTION TO INSULT” under the garb of which police officers can detain and harass any individual without any thorough evidence. Similarly, the provision of Police Act 1861-“Duty of police Officer - section 23, Regulation of public assemblies and processions and licensing of the same” must be revised to remove the near absolute authority in the hands of the Police to control public assemblies and processions yet at the same time, it must be taken care that the police has the authority to control any sort of violence and public disturbance occurring in such assemblies.
Fourthly, State Police Commissions must be set up which will direct the development of Police Compliant Authority which will function independent of any police or political hindrance to allow the accountability mechanism for the police to function effectively. At the same time, the commissions will work directly under the National Police Forces Regulator to implement effective programs for the division of the force into two parts as mentioned earlier and maintain records on all police officers for rewards and punishments.
Effective Implementation of the RTI Act
The Right to Information Act was brought into place to curb the rising corruption in the public services and government programmes in the country but it has not delivered as expected because of the failure of the Public Information Officers’ (PIOs) in carrying out their duties properly as quite often, the demanded information is provided much later and then, sometimes it is totally refused. Even the Information Commissions (ICs) set up to take care of providing speedy justice in case of any public grievances against the PIOs have been lethargic and ineffective in delivering as even after instructions from ICs to PIOs to provide information to the citizens, there is no monitoring mechanism to note whether the information is provided or not.
Hence, the ICs must be equipped with the latest technological aids to help in monitoring the functioning of the PIOs and the citizens must be involved in the functioning of the ICs to direct the PIOs thorough the Citizens’ Charter (discussed later) so that there is complete transparency. At the same time, there should be a public accessible network put in place through which any person can monitor the progress made by PIO regarding fulfilling its duties and whether any improvement has been done by it to furnish the required information accurately and in time. There must be a method of stiff penalties and punishments for the PIOs found to e defaulting against their duties and immediate removal and suspension systems must be put in place.

Development of an Active Citizens’ Charter
The Citizens’ Charter is an essential tool to hold the service providers’ in the government responsible and accountable for their actions. The Citizens’ Charter can also act as the deterrent to the bureaucrats if it is drafted in consultation with all the stakeholders involved including the citizens and the service providers. The charter must consist of practically applicable actionable standards and not just statements of intent. These standards should be measurable so as to compare the performance of the various persons and departments involved.
The charter must consist of provisions for accountability and must have adequate penalizing and punishment norms mentioned in case of failure of service of a department or inadequate service in terms of timely delivery and quality. An independent service and quality auditing system must be maintained for the department and the entire system should be publicly accessible along with all the content of the charter so that people are fully aware of all the provisions. In the end, there should be a clause of severe legal action that can be taken by the citizens availing the services of the department if the department fails to deliver services or tries to indulge in some malpractices.
Curb on Black Money Generation
Black money is the biggest threat to the development of the country as the parallel economy is not contributing to the productivity or the employment generation of the country. Most of this money ends up in foreign banks where secrecy norms keep them hidden from the public eye. There should be laws and regulations made so as to avoid the generation of black money.Firstly, in the real estate sector which is the biggest contributor to black money generation in the country, stamp duties must be rationalized and there should be continuous upgradation of land records and a publicly accessible system must be in place so that anyone can have a look at those records. Secondly, all the selling of land for profitable activities must be on the basis of public auction and without any discretion. Higher taxes for vacant land must be levied so as to enhance development activities to take place on that land. Thirdly, laws musts be strengthened and amended to implement modern accounting and auditing practices to curb the level of black money being generated. This must also include the money transactions to be taken through the cheques or the demand draft route so as to avoid the cash transaction route for any business transaction involving a sum higher than a certain minimum amount.
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