Tackling Corruption through better governance
- Mr. N. Vittal
Talk delivered at MIT School of Governance, Pune on 11th May 2006
The MIT School of Government visualizes preparing leaders for tomorrow’s India. We will be exploring in this talk the all pervasive issue of corruption which is responsible for the very poor governance in our country. We will examine what could be done to tackle the issue of corruption so that we achieve better governance. Our objective would be to understand the root causes and the dynamics of corruption and work out practical solutions and strategies to achieve our objective of better governance.
Corruption from a broad perspective means, lack of integrity. The term integrity includes financial integrity, moral integrity and intellectual integrity. In the context of government, we can go by the World Bank definition of corruption, which is the use of public office for private gain. Corruption is against good governance. It is anti national, anti poor and anti economic development. India is rated as one of the most corrupt countries in the world. In the Corruption Perception Index for 2005 published by the Transparency International, a Berlin based NGO, India ranks at 91 out of 156 countries. The state of corruption at the level which affects the common man when he interfaces with the public offices has been captured in the 2005 report of the Center for Management Studies which undertook the survey on behalf of the Transparency International India Chapter. The highlights of the study are the following:
“The eleven public services covered in this Study are : Police (Crime/Traffic), Judiciary (Lower Courts), Land Administration, Municipal Services, Govt. Hospitals, Electricity (Consumers), PDS (Ration Card/Supplies), Income Tax (Individual Assessees), Water Supply, Schools (upto 12th Std.), and Rural Financial Institutions (Farmers).
According to the Study, common citizens of the country pay a bribe of Rs.21,068 crores while availing one or more of the eleven public services in a year. As high as 62 percent of citizens think that the corruption is not a hearsay, but they, in fact, have had first hand experience of paying a bribe or “using a contact” to get a job done in a public office.
Three-fourths of citizens think that the level of corruption in public services has increased during the last one year (2004-2005). Hardly ten percent think that such corruption is on the decline. There are no significant differences among the States in the perceptions about the extent of corruption or in their experience with such corruption.
This Study brings out that one-third to half of the compulsions leading to such petty corruption involving the common man could be addressed and also removed with simple initiatives, including introduction of technologies.
According to this Study, relatively Police stands out high on the corruption score. Judiciary (Lower Courts) and Land Administration are rated next. The corruption in Government Hospitals is mostly to do with non-availability of medicines, getting admission, consultations with doctors and availing of diagnostic services. Despite reforms, Electricity services figure high on corruption score. PDS figures lower in the corruption score because the problem of common man dealing with services is more to do with leakages in the system rather than direct monetary corruption.
Going by the composite ranking of States on corruption involving common citizens and in the context of eleven Public Services, Kerala stands out as the least corrupt State in India. Bihar, on the other, is the most corrupt State. Jammu & Kashmir is not only to Bihar. In fact, perhaps not surprisingly, on all parameters and in the context of all services, Bihar stands out far ahead as the most corrupt state. Himachal Pradesh in contract somes out as being less corrupt when compared to States like Tamil Nadu, Maharashtra or Gujarat. Madhya Pradesh, Karnataka, Rajasthan and Assam, on the other hand, also are on the top of corruption scale.
An overwhelming majority of citizens are vocal about the absence of transparency and accountability in the delivery of these services. They are full of anguish and, at times, some are anger at the state of affairs. It is evident from the annual CMS surveys on corruption that the use of technology at the front-end of those offices is likely to bring down corruption with increase in transparency.
One-sixth of public think that citizens/users of Government services themselves are responsible for corruption. They believe that there is no active and sustained civil society movement. The efforts are sporadic, localized and short-lived and have never acquired a character of a larger movement.
Users of various public services across the country in this Study have named seven key factors that stand out as responsible for a widespread corruption in the system. These include:
Lack of transparency and accountability in the system;
Lack of an effective corruption reporting mechanism
Lack of honesty in officials in the Government;
Acceptance of ‘Bribe’ as a way of life, custom and culture;
Ineffective anti-corruption institutions, including Police and Judiciary;
Poor economic policies; and
Inadequate training and orientation of Government officials”
The level of corruption in any organization or country depends on three factors. The first is the individual’s sense of value. The second factor is the set of social values and the third is the system. As students of government, we will have to focus on the system, which encourages corruption in our country today. So far as influencing the values exhibited by individuals is concerned, it has to be a long-term project. We must focus on the issue of values at the stage of education. Unfortunately in our country, with the commitment of the government to secularism, moral values have been de-emphasized. This is because many of the moral lessons are rooted in religion. It is not possible to talk about morals or ethics without referring to our cultural tradition and religion. It is only institutions which are based on religion and values like the Ramakrishna Mission, or the Society of Jesus or the Dayanand Anglo Vedic Schools which have been able to inculcate some sense of values in education. Most of the government educational institutions have failed to inculcate values. Any attempt at inculcation of values can be characterized as an attempt at saffronisation by the secular section of our politicians. they are busy today with ‘de-toxification’ of our education.
Social values are ultimately the reflection of perceptions in the society. These are largely shaped by the leaders of the society. As the Bhagwat Gita very rightly says,
Yadyad acharathi shesta
Tatat deve ithorojana
Sayat pramanam kurute
Loko tat anuvartate
The behaviours of the leaders are reflected by the followers and the techniques adopted by the leaders are copied by the followers.
In our country, the leaders in public life, particularly, at the political level have been notorious for corruption. Most of them are lacking in morals. The present UPA government itself has got ministers who are called tainted. They are only surviving because of the legal fig leaf that everyone is innocent till convicted as guilty in a court of law. Nearly 20-25% of the members of parliament also have a criminal and a tainted background.
It is not only politicians who set the standards in a society. In business, thanks to the culture of the permit licence raj, we have a system of something similar to crony capitalism. The manner in which some industrial houses have been built based on greasing the palms of powers that be during the license raj is well known. The sad part is that the acceptance of the presence of ill-gotten wealth and a reluctance to enquire into them and take action on the part of even those who are entrusted with the task of checking tax evasion. On 13th of March 2001 the Tehelka.com expose highlighted the corruption issue in politics and defence purchases. As CVC, I brought to the notice of the then Secretary, Revenue and the Chairman, Central Board of Direct Taxes in the Ministry of Finance the fact that one of the contractors, one Mr. Jain claimed in the Tehelka tapes that he made a profit of Rs.1 crore in a Russian arms deal. I asked them whether this amount has been revealed in his income tax return or whether any raid was contemplated. There was a thundering silence on the part of both these dignitaries. If the senior officials entrusted with the task of taking action against black money, behave in this manner, it is a telling commentary of the amount of tolerance we have for black money and corruption in our system at all levels.
In fact, corruption has become respectable in our country, because many respectable professionals like, lawyers, doctors and chartered accountants, who are successful in their profession also keep a lot of black money and do not declare their real income. It is the leaders in such professions who also lay down the standards. Therefore, it is not surprising that the social values in our country are highly tolerant of corrupt behaviour.
We then come to the third aspect of corruption, which is the system. As Central Vigilance Commissioner, from 1998 September 3rd to 2nd September, 2002, I tried to focus attention on this aspect so that the corruption can be tackled to the extent possible. Corruption in our country is a vicious cycle which covers five players, whom I call as the neta, babu, lala, jhola and dada. The root cause of corruption is political corruption and our democracy is based on corruption. This is because all political parties collect funds and these are mostly in cash. Black money is the oxygen for corruption and corruption is the oxygen for black money. A system of governance based on corruption definitely can never tackle the issue of corruption.
The basic question is, is it possible to tackle political corruption? It is possible, because, we have seen in our own times how Singapore, which was like any other Asian country and also a island state to begin with was able to set up a very high standards of governance, thanks to one committed leader, Lee Quan Yew. Going back in history we find William Gladstone who was prime Minister of Britain four times in the 19 century was able to drastically change the basic parameters of public life in Britain and bring down the level of corruption. it is therefore, possible to tackle the issue of political corruption if there is a will on the part of political leaders or even a single strong leader. Even though Mr. Atal Bhihari Vajpayee, when he was the prime minister, mouthed the words of “Zero tolerance of corruption” in his talk on 16th October 1999, when he became prime minister for the third time, there was only zero action and no significant initiative taken. The original coiner of the term zero tolerance of crime, Rudi Juilian, Mayor of New York was able to walk the talk.
The first point for consideration is, can any person who enters politics today, think of the issue of tackling the issue of corruption? Will it not amount to committing hara kiri? After all the entire system is based on corrupt practices. Any person who tries to tackle corruption is likely to finally end up a loser in Indian politics today. Therefore, in India, if a politician has to tackle the issue of corruption, he will have to tackle it indirectly. Looking into other causes like for example, bringing in more transparency in the electoral funding system and also more transparency in the operations. The Volker report states that the Congress party has also tried to get funds from the ‘oil for food’ deal. This shows that political parties may have go to extreme lengths to get resources. It is possible to bring in greater check on the black money by simple methods. I have been advocating the following formula:
(i) Eliminate all the 211 exemptions in the Income Tax Act and have a personal income of Rs.5 lakhs annually from the income tax. Above that there can be a flat tax of 20%. This would eliminate the scope of corruption within the department and also the tendency for black money substantially;
(ii) Secondly, in 1988, the government enacted the Benami Transaction (Prohibition) Act. Section 3 of the Act provides for confiscation of benami property and Section 5 of the Act empowers the government to make rules for implementation of the Act. You will be surprised to note that though 18 years have passed since the act was passed, no rules have been framed. Best thing is to provide the rules and start systematic confiscation of the binami property and there by striking at the root of the parking of black money; and
(iii) The third act is the Prevention of Money Laundering Act. This has been made in India with a big loop hole. The money laundering has been defined in the Act as handling proceeds of a scheduled crime. A scheduled crime is any crime which is an offence under any of the acts mentioned in the schedule of the act. This does not include Income Tax, Customs, Excise and other Acts which are the main source of generation of black money. The present schedule cover only the following acts:
1. The Indian Penal Code
2. The Prevention of Corruption Act
3. Drugs and Psychotropic Substances Prevention Act
4. Prevention of Immoral Traffic in Women; and
5. Arms Act.
(iv) Similarly, the Excise Acts provide enough loop holes for corruption to flourish and for generation of black money. These Acts should also be made in to zero exemption Acts with more precise definitions so that the discretion given to the officials in the Customs and Excise departments are drastically reduced. These measures will bring a certain check on the black money generation and simultaneously with the black money generation control, there is need for more open funding of political parties. We should adopt the practices in United States as well as Britain where there is much more transparency in fund raising for political parties. These two measures will go a long way in reducing the scope for black money in politics correspondingly the root cause for political corruption.
One method of bringing in greater cleanliness in the government is to debar any candidates against whom criminal charges framed in a court of law by the judge so that till the case is decided he can not contest the elections. They are many who argue that falls cases can be hoisted. But then, while police may be vulnerable to the powers that be, at least in the judicial level we may expect that when a judicial mind has been applied on facts at all and find prima facie case for a framing charges there is no reason to encourage such candidates to contest in election and give a boost to the criminalisation of politics.
Bureaucratic corruption can be tackled by a three point strategy. One is, simplification of rules and regulations so that the scope for corruption is reduced. (ii) Transparency and the empowering of the public. In transparency, the measures taken by the government for Right to Information Act is a right step. This should be fully exploited by NGOs and all citizen activists, so that there is greater transparency brought in the system. Simultaneously with the Right to Information Act, the attempt to bring in e-governance and extensive use of IT is one method of ensuring reduction in corruption.
The three successful cases of reducing corruption in a large public system are (i) the computerization of passengers railway reservation system, (ii) the use of electronic voting machines in the elections and (iii) the use of satellite network for building up of National Stock Exchange has emerged as the third largest stock exchange in the world after the NASSDAQ and the New York stock exchange. Greater use of IT is one method of checking corruption by bringing in speed, transparency and also empowerment of the public.
The third element of tackling corruption at the bureaucratic level is, effective punishment. This calls for a look at our criminal justice system. The shocking incident like the Jassica Lal case and the open purgery by Zahira Sheikh in the Best Backery case have highlighted the weakness of our judicial system. We are having only courts of law and not courts of justice. in order to ensure this, we must bring in simply the concept of a time limit of maximum six months for any corruption case to be decided in a court of law. This will mean going in for summary trial procedures. Only one appeal must be allowed either to the Supreme Court or High Court and even at the appeal stage the same six months period should apply. This will drastically bring down the scope for corruption and the procedure to linger on and the guilty to escape.
Ultimately it is the education of the people at large and the citizens empowerment by way of his capacity to assert his right, that will be a guarantee against corruption. It is rightly said that eternal vigilance is the price of liberty. This can be realized as more and more people become aware of their rights and also there is demystification of the functioning of the public offices.
Finally, it is better to remember the advice of the Chandokya Upanishad, if we want to tackle the issue of corruption and better governance in the country:
Yadeva vidhyayakarothi shradhyaya upashadha
Sadeva veeryathvayam bhawathi
When we apply our knowledge with conviction and faith and after deep analysis, then our actions become strong and leading to success
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