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Wednesday, October 2, 2013

Corruption in India Lecture Notes, III B A Political Science

Corruption is an abstract term.  According to World Bank report 1997 abuse of public power for private gains is described as corruption.  But this appears to be too simplistic explanation of corruption.  In fact it is a multi-faceted evil, which gradually kills a system. Power tends to corrupt, and absolute power corrupts absolutely. It is not easy to define corruption. But in a narrow sense, corruption is mostly concerned with briber and it takes several forms. Corruption is a global phenomenon and it is omnipresent. Corruption has progressively increased and is now rampant in our society.

The history of corruption in post-Independence India starts with the Jeep scandal in 1948, V.K.Krishna Menon, the then High Commissioner for India in London involved.

In 1950, A.D.Gorwala, an eminent civil servant was asked by Government of India to recommend improvements in the system of governance.  In his report submitted in 1951 he made two observations: “One, quite a few of Nehru's ministers were corrupt and this was common knowledge.  Two, even a highly responsible civil servant in an official report as early as 1951 maintained that the Government went out of its way to shield its ministers” (Report on Public Administration, Planning Commission, Government of India 1951)    

Corruption charges in cases like Mudgal case (1951), Mundra deals (1957-58), Malaviya-Sirajuddin scandal (1963), and Pratap Singh Kairon case (1963) were levelled against the Congress ministers and Chief Ministers but no Prime Minister resigned. 

The Santhanam Committee, which was appointed by the Government in 1962 to examine the issue of corruption in its report submitted in 1964 observed: “There is widespread impression that failure of integrity among ministers and that some ministers, enriched themselves illegitimately, obtained good jobs for their sons and relations through nepotism and have reaped other advantages inconsistent with any notion of purity in public life.”

Nehru had  soft approach on corruption, see  (Pathology of Corruption by S.S.Gill) . Nehru’s tolerance of corruption among his ministers legitimized this malady, his daughter Indira Gandhi institutionalized it by holding both the posts of the Prime Minister and party president.  By doing so she was herself controlling the party funds, which gave birth to the money power in politics.  The famous V.P.Malhotra (Chief Cashier of State Bank of India) case in which he got a telephone call believing from Indira Gandhi to pay Rs,60 lakhs to one Nagarwal remained a mystery.  

Corruption cases like Fairfax, HBJ Pipeline, and HDW Submarine deal came up since then.  The famous Bofor’s deal is well known.  Narsimha Rao was the first Prime Minister being prosecuted in corruption charges.  Cases like Rs.2500 crore -Airbus A-320 deal with France involving kickback (1990), Harshad Mehta security scam (1992), Gold Star Steel and Alloys controversy (1992), JMM bribery case, Hawala scam of Rs. 65 crore and Urea scam (1996) also came up during the period of Narsimha Rao Government. 

Criminalisation of politics is another facet of corruption.  N.N.Vohra, Union Home Secretary in his report (1995) on this issue observed:- “A network of mafias is virtually running a parallel Government pushing the state apparatus into irrelevance.  Quoting some ‘DIB’ sources, he added, “….there has been a rapid spread and growth of criminal gangs, armed senas, drug mafias, smuggling gangs and economic lobbies in the country, which have over the years developed an intensive network of contacts with bureaucrats, government functionaries at local level, politicians, media persons and strategically located individuals in non-state sector.  Some of these syndicates have also international linkages including the foreign agencies.” The small portion of India’s corruption is ‘visible’ to us, the vast bulk being hidden from view; ‘below water’.

1) Visible Corruption
The visible tip of the iceberg is corruption experienced by ‘common’ people. It comprises many types such as transactional, prioritizational and avoidance.
Transactional corruption is where the people have to pay a bribe over and above the government-established charge to get a service which they were entitled to get without the bribe.
Prioritizational corruption is where people get ‘out-of-turn’ favours through ‘speed money’. Such corruption was more relevant in the past where government interventions had resulted in shortages of telephone connections, cars and so on. This kind of corruption has significantly reduced after liberalization. Obtaining gas cylinders now does not require bribing a host of people any longer.
Avoidance corruption is where people pay a bribe to avoid a fine or wastage of time. This is still quite prevalent when people bribe a police constable to avoid a speeding ticket, a tax avoider pays a bribe to an income tax officer, or the truck driver avoids a detailed inspection from the police by handing over Rs.100 at each check post in India.
As a result of some improvements in governance coupled with liberalization, most of us do not face visible corruption to the extent we used to. In any event, the bribe of a few rupees taken by a lowly government functionary – no matter how deplorable – is the least of our problems in India.

2) Hidden Deep Corruption
Below the visible corruption is a mammoth amount of possibly increasing, hidden corruption. This is where the bulk of the ‘money’ is made by politicians, run into thousands of crores of rupees each year. The malaise of hidden corruption goes very deep into the vitals of India and provides evidence of its existence from time to time in frightening ways, as it festers for a long time and then erupts.

3) Hidden Policy Corruption
But there is an even worse, more insidious and dangerous form of corruption not even thought about by most people. Policy corruption, or policy neglect on account of our political leaders devoting their entire waking energy to making money, weaken the foundations of our country. Ministers of education spend most of their time in transfers and appointments of school teachers, for a fee. Other ministers consort with tenderers who bid for government contracts with a view to finding out who will pay them the most dakshina.

National scenario
Corruption in India is a consequence of the nexus between Bureaucracy, politics and criminals. India is now no longer considered a soft state. It has now become a consideration state where everything can be had for a consideration. Today, the number of ministers with an honest image can be counted on fingers. At one time, bribe was paid for getting wrong things done but now bribe is paid for getting right things done at right time. Election time is a time when corruption is at its peak level. Big industrialist fund politicians to meet high cost of election and ultimately to seek personal favour. Bribery to politicians buys influence, and bribery by politicians buys votes. In order to get elected, politicians bribe poor illiterate people, who are slogging for two times meal.

Effects of corruption

Indian administration is tainted with scandals. Transparency International's Corruption Perception Index (CPI) placing it at 94th rank out of 176 nations this year. . Corruption in India leads to promotion not prison. It is very difficult to catch big sharks. Corruption in India has wings not wheels. As nation grows, the corrupt also grow to invent new methods of cheating the government and public.
 Causes of corruption

The causes of corruption are many and complex. Following are some of the causes of corruption. Emergence of political elite who believe in interest-oriented rather than nation-oriented programmes and policies. Artificial scarcity created by the people with malevolent intentions wrecks the fabric of the economy. Corruption is caused as well as increased because of the change in the value system and ethical qualities of men who administer. Tolerance of people towards corruption, complete lack of intense public outcry against corruption and the absence of strong public forum to oppose corruption allow corruption to reign over people. Vast size of population coupled with widespread illiteracy and the poor economic infrastructure lead to endemic corruption in public life. In a highly inflationary economy, low salaries of government officials compel them to resort to the road of corruption. Graduates from IIMs with no experience draw a far handsome salary than what government secretaries draw.
Measures to combat corruption
Foolproof laws should be made so that there is no room for prudence for politicians and bureaucrats. The role of the politician should be minimized. Application of the evolved policies should be left in the hands of independent commission or authority in each area of public interest. Decision of the commission or authority should be challengeable only in the courts. Cooperation of the people has to be obtained for successfully containing corruption. People should have a right to recall the elected representatives if they see them becoming indifferent to the electorate. Funding of elections is at the core of political corruption. Electoral reforms are crucial in this regard. Several reforms like: State funding of election expenses for candidates; strict enforcement of statutory requirements like holding in-party elections, making political parties get their accounts audited regularly and filing income-tax returns; denying persons with criminal records a chance to contest elections, should be brought in. Responsiveness, accountability and transparency are a must for a clean system. Bureaucracy, the backbone of good governance, should be made more citizen friendly, accountable, ethical and transparent. More and more courts should be opened for speedy & inexpensive justice so that cases linger in courts for years and justice is delivered on time. Local bodies, Independent of the government, like Lokpals, Lokadalats, CVCs and Vigilance Commissions should be formed to provide speedy justice with low expenses. A new Fundamental Right viz. Right to Information should be introduced, which will empower the citizens to ask for the information they want. Barring some confidential information, which concerns national and international security, other information should be made available to general public as and when required. Stringent actions against corrupt officials will certainly have a deterrent impact.The Right to Information Act (RTI) gives one all the required information about the Government, such as what the Government is doing with our tax payments. Another potent check on corruption is Central Vigilance Commission (CVC). Strong and stringent laws need to be enacted which gives no room for the guilty to escape. In many cases, the employees opt for corrupt means out of compulsion and not by choice. Some people are of the opinion that the wages paid are insufficient to feed their families. If they are paid better, they would not be forced to accept bribe.

-2013 Agusta Westland chopper deal scam: The deal amounts to Rs 74.5 crore.
-2013 Vodafone tax scandal: The scandal involves Rs 11, 000 crore tax dispute.
-2013 Saradha Group chit fund scam: Earthed recently, the Saradha Group chit fund scam caused a loss of Rs 20,000 crore to the exchequer.
-2013 Railway promotion scam: Infamously known as Railgate, it involves former Railway Minister Pawan Kumar Bansal and his nephew, Vijay Singla for allegedly accepting a bribe of Rs 90 lakh from a Railway Board member.
-2012 Coal mining controversy: Also called Coalgate is one of the well known scams. The scam, where the UPA Government reported a loss of Rs 185,591 crore.
2012 Tatra scam: Bharat Earth Movers Ltd in collaboration with Tatra Vectra Motors had produced over 7000 trucks to the Army. When General VK Singh took over as the Army Chief, he refused to authorise the purchase of trucks after he was offered a bribe. The scam was estimated at Rs 750 crore.
-2012 Uttar Pradesh NRHM scam: Under Mayawati's regime, this scam caused a loss of Rs 10,000 crore to the State. Politicians and senior bureaucrats are alleged to have siphoned off a massive booty from the National Rural Health Mission (NHRM), a Central Government programme meant to improve health care services in rural areas.
-2011 Antrix Devas deal: In 2011, G Madhavan Nair former ISRO chairman and three other scientists were involved in a controversial deal between the Indian Space Research Organisation's (ISRO) commercial arm Antrix Corporation and Devas Multimedia.
-2010 2G spectrum scam: According to the CAG, the scam amounts to about Rs 176,000 crore, whereas the CBI estimates it at Rs 30,984 crore.
-2010 CWG scam: It consisted of a number of corrupt deals involving overstated contracts. Kalmadi also handed out a Rs 141 crore contract to Swiss Timing for its timing equipment; the deal was inflated by Rs 95 crores.
-2008 cash-for-votes scandal: It is a scandal, in which the UPA, the majority-holding Parliamentary-party alliance led by Sonia Gandhi, allegedly bribed MPs in order to survive a confidence vote on July 22, 2008.
-2001 Stock market scam: Stock market king, Ketan Parekh used UTI, Calcutta Stock Exchange and his own index K-10 to swindle investors. When the scam was unearthed, it was reported that he had wiped off over Rs.1 lakh crore of investor's market capital.
-2002-2010 UP Foodgrain scam: Uttar Pradesh food grain scam also dubbed as Mother of all scams took place between years 2002 and 2010. The grain worth Rs 35000 crore, meant to be distributed via PDS to the poor under several schemes like Antyodaya Anna Yojana (AAY), Jawahar Rozgar Yojana and Midday Meal Scheme for Below Poverty Line (BPL) card holders, was diverted to the open market.
-2009 Satyam Computer Services scandal: It was a corporate scandal that occurred in 2009 where Chairman Ramalinga Raju confessed that the company's accounts had been falsified. he had manipulated the accounts by $1.47 Billion.
-2002-2003 Taj Heritage Corridor case: It is an alleged scam wherein 2002-2003, the then Chief Minister of Uttar Pradesh Mayawati and a Minister in her Government, Nasimuddin Siddiqui, were charged with corruption.
-1996 Fodder scam: This scam broke out in 1996 in the town of Chaibasa, Bihar when the animal husbandry department embezzled funds of around Rs 950 crore meant to purchase cattle fodder, medicines and animal husbandry equipment in Bihar. Chief Minister Lalu Prasad Yadav was forced to resign along with former Chief Minister Jagannath Mishra.
17 -1996 Telecom fraud: Former Minister of State for Communication Sukh Ram was accused of causing a loss of Rs.1.6 crore by favouring a Hyderabad-based firm in the purchase of telecom equipment.
18-1996- Urea scam: The scam came into light after a shortage of fertiliser in 1996 was reported, a clutch of businessmen in connivance with top officials of the National Fertiliser Limited, cheat the Government of Rs.133 crore for the import of urea, which was never delivered.
19 -1992 Securities scam: Harshad Mehta manipulated banks and the stock market, pushing shares like ACC from Rs.500 to Rs 10,000. The stacked-up claims of the brokers were a staggering Rs 10,000 crore.
20 -1990 Airbus scandal: Indian Airline's signing of the Rs.2,000-crore deal with Airbus instead of Boeing caused a furore following the crash of an A-320 airliner.
-1980-90s Bofors scandal: It was a major corruption scandal in India in the 1980s and 1990s, initiated by Congress politicians and implicating the prime minister, Rajiv Gandhi and several others who were accused of receiving kickbacks from Bofors AB for winning a bid to supply India's 155 mm field howitzer. -1989 St. Kitts forgery: Documents were forged to allege that former Prime Minister VP Singh was a beneficiary of his son Ajeya Singh's account in the First Trust Corp at St Kitts, with a deposit of $21 million.
23 -1987 HDW commissions: The German submarine maker was blacklisted after allegations that commissions worth Rs 420 crore had been paid in the 1987 deal in India.
24 -1981 Antulay Trust: AR Antulay, the then Chief Minister of Maharashtra, allegedly garnered Rs 30 crore from businesses dependent on State resources.
25 -1948 jeep scandal: It was first major corruption case in independent India. VK Krishna Menon, the then Indian high commissioner to Britain, ignored protocols and signed a Rs 80 lakh contract for the purchase of army jeeps with a foreign firm.


     Corruption is an intractable problem. It is like diabetes, a virus,can only be controlled, but not totally eliminated. It may not be possible to root out corruption completely at all levels but it is possible to contain it within tolerable limits. Honest and dedicated persons in public life, control over electoral expenses could be the most important prescriptions to combat corruption. Corruption has a corrosive impact on our economy. It worsens our image in international market and leads to loss of overseas opportunities. Corruption is a global problem that all countries of the world have to confront, solutions, however, can only be home grown. We have tolerated corruption for so long. The time has now come to root it out from its roots.
The feudal outlook of the ruling class polluted the people’s mindset, which judge the status of an individual on his capability to flout the law to favour them.  This is the reason why corruption is no more viewed by people with hatred in Indian society.  Leaders like Laloo, Jayalalitha, Sukhram and others, who are facing corruption charges, continue to have wide range of people’s support.  Transparency, responsiveness, accountability, probity in public life and good governance are now only slogans.  The legislature has failed to make the judiciary, executive and even media sensitive to the cause of the common people.  The failure of the political leadership to take a principled stand against corruption has clouded the system to the extent that it is now difficult to understand whether the system is alive or dead.  

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