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ON CORRUPTION & BLACK MONEY

V K Sharma / June 26, 2011

The Preface

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Being an Engineer and a Manager by profession, I do not consider my self competent to write a scholarly treatise on the subject of corruption & black money prevalent in our society. Therefore, what follows is based on practical experience of self and others and some commonsense thinking. Trust that it would touch a chord or two with you.

Introduction
I am glad that Shri Anna Hazare and Baba Ram Dev have highlighted the issue of wide spread corruption in our society. I am glad because spreading tentacles of this social malady in all spheres of life, have made most of us reluctant participants in it to get things moving be it release of payment due to you from a government agency, be it making of a ration card, be it replacement of a burnt electric meter in your house and many such other day-to-day inter-faces with various government agencies. The element of shame in demanding / manipulating things for the purpose has completely disappeared among most. Thus there is a strong sub-conscious feeling of guilt among the reluctant participants for having been forced into it . And that , to my mind, explains the exuberant public support for the cause. Let me illustrate with a simple routine activity which should have been completed in one visit to the agency office. As soon as monopoly of the government in the telecom sector ended, I opted for an alternate landline for obvious reasons and sent the driver to the BSNL office 15 kms away to discontinue the line and return the instrument. He came back with a pulled down face informing that my file is not traceable. On my enquiring the next day at the 2nd floor office, got the same answer, demanded as to why was the file lost and was told that the files are stored in the basement and that they are responsible for it. In the basement found that the person-in-charge was missing, waited for half an hour to be told that my file had been searched earlier and cannot be traced. On my repeated questioning / insisting / offering for a joint search; the file suddenly landed in my hands. On handing over the file on the 2nd floor was assured that my job would be done if I fill up a format for closing a connection and return the

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Instrument. However my driver on the next day again came back empty handed saying that they are not accepting the instrument and the reason is not known. On the 4th trip I met the officer-in-charge and the lady informed me that the instrument does not bear the BSNL marking, so how can it be accepted. I explained that initially I was not given any instrument by BSNL due to shortage and I had to buy an instrument from the market, so how can I now return to you an instrument with BSNL markings; the lady then reluctantly signed the papers. What an ordeal to close the line? How much of unproductive effort , both on the part of BSNL people and the user? You can easily figure out the intent behind. If I was in a hurry, the obvious choice would have been to contact some agent for a price.

What are the causes?

In the above example hint was towards public being forced into such unethical practices. But let us consider if it always is the case. How many of us insist on the shop keeper making a pucca bill always and pay the VAT / sales tax? If not, why is that not corruption? Those 37/- Rs or 1037/- Rs tax not paid, is it not income that I have not earned, is not legitimate and therefore is it not corruption? Recently a group of senior citizen morning walkers adorning the benches in a park were fiercely debating the issue of corruption and vehemently castigating all politicians and bureaucrats. I raised this point about paying VAT and the response was very revealing. YEH TAX HUM KYON DEIN? ISS MEIN TOH APNA FAYDA HAI. TAX TOH HAMARA SALARY SE KUT JATA THA. Another common response justifying non-payment of this tax is that a lot of government funds go into corruption, so why add to the corruption pool. Should we accept that as a valid reason for non-payment or is it only a convenient excuse? How many of us hesitate to put in a phone call to a friend to take care of the nephew in the interview board tomorrow? Wanting some payoff out of turn, not deserved; why is that not corruption? Another aspect of same mindset : A classmate of mine rang up to say that he is coming to meet me. I felt happy as we would be meeting after many years. Believe me, he spent solid one hour abusing my cousin in a position of authority, since he did not help him to get some thing done out of the way.

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APNA AADMI WAHAN HONE SE KYA FAYDA, AGAR WHO HAMARE LIYE KUCHH BHI NA KARE? The pressure of the civil society on the politicians to indulge in unethical practices, to my mind, is not a minor factor. The visibility of the problem has magnified manifold due to the size of the cake getting significantly enlarged. From a news paper report I gather that our GDP in 2004 was around 4 lac thousand plus crores; which in 2010-11 has touched around 78 lac thousand plus crores. Almost 20 times over a period of 6 years. So if an existing corrupt person cuts a slice of the cake at the same angle, the pay off is very much larger.

Historical perspective
The bureaucrats were headstrong, despotic & corrupt as all the energy of the government was centered on wars and diplomacy. The civil servants got full freedom to do whatever they pleased. Kalhan tells us that the civil servants were given to vice and behaved like demons. They cared more for acquiring wealth than for the good of their people.. The people groaned under the tyranny of the civil servants and they were swallowed by the office rather than death The traders and merchants behaved in a very objectionable manner. The only motive before them was profit and acquisition of more wealth. Kalhan refers to their sandal covered foreheads, eyelids, earlobe. their huge bellies and their exploitation. Kshemenmdra refers to the various methods adopted by them to exploit people such as false weights, measures and balances, high rates of interest etc. They posed as religious people , listened to lectures on religion, took long baths on the occasion of eclipses, but gave nothing away by way of charity.. There were references to merchants storing cereals, cotton and salt and charging high prices from their customers and also cheating them Excerpts form History of medieval India by V D Mahajan. The reference is to the 11th century.

Interesting , isnt it? Otherwise, one tended to get the impression from the current debate as if corruption was a very recent innovation. Another look back : From a reliable source it was learnt that in British days the contractors used to leave 3% of the contract value to be shared by the people in the department, which has risen over the years to astronomical heights. Recent mention in Hindustan Times as part of Wikileaks was an item about someone bringing to the notice of an American official in the US Embassy in New Delhi the use of cash in our elections and the corruption in

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India in general, the response of the American official was something like, You will get over it. We have been through it the Tammany Hall, the robber barons etc. It is part of a recorded history that during westward expansion in USA, if money was sanctioned for 100 kms of railway line to be laid, only 5 to 10 kms would get constructed and the rest of the money would be shared among not only the engineers and the politicians; but also among the media and judiciary. Detailed story can be seen by typing on Google, Tammany Hall. How did the situation improve? I believe it was due to the existence of independent judiciary, independent media and independent executive. It took time ( the scene refers to more than hundred years ago) but competition among the media, for example would have led to exposures and counter exposures, followed by corrective action. Now for a look at the situation about a dozen years ago. The only way I see to be effective is that the CVC should have the power to confiscate the ill gotten property. The chairman of the Law Commission, Justice Jeevan Reddy, has drafted an Act, The Corrupt Public Servants [forfeiture of Property] Act 1998. I have sent this to the government with request to enact such a law as urgently as possible. An excerpt from page 234 of Fighting Corruption and Restructurign government by Shri N Vittal, a well known retd. Central Vigilance Commissioner , who had put the names of all IAS accused of corruption on the web site and i had downloaded it. Apparently noting came of it.

Some Conclusions
Does the above narration not clearly demonstrate that corrupt practices in our society have not been invented today and have been there for not only decades, but for centuries? And therefore, can we not say that the problem of corruption, which is closely linked with black money, is highly deep rooted and is a wide spread problem? Here, it must be strongly emphasized that if people in positions of high authority misuse their powers and indulge in corruption ; it sends a very strong signal to the thousands in the hierarchy lower down that it is O.K to feather ones nest. The current incidents of 2G scam, CWG scam etc are symptomatic of this disease. Garnering of huge election funds by the parties obviously is, no doubt, another one big aggravating factor towards spreading the problem.

THE WAY FORWARD

The way forward obviously needs to be a multi pronged effort spread over a decade at the least, as suggested below: An effective LOKPAL BILL would certainly help. It ought to have some essential features like those covered under the act getting investigated & punished without prior clearance from the government. (comment on certain disputed items between the govt. and the civil society reps. can be seen at a later stage)

Money collected through corrupt practices becomes BLACK MONEY and one important channels to put it to use, it seems, is to invest in real estate, where a good chunk of the deal is in cash, it is reported. So one very useful step to take can be to reduce substantially the Capital Gains Tax and the Registration charges. The efficacy of this step can be assessed by the example off Income Tax having been brought down some years ago leading to much higher of %age of population becoming willing payers of Income Tax. So once the temptation level is brought down, I believe , black money in property may come down substantially.

COMPETITION : Can you imagine what would have been the situation today if in the telecom sector there was no competition? Not only the prices would have stayed at the roof top level ( first charge for a call on the mobile announced was Rs 14/- per minute), but it would have provided opportunity to many to indulge in corruption by promising to get you the connection qucik for a price.

TECHNOLOGY : One hears that in the state of Himachal Pradesh FIR can be filed on-line. I am sure that it would help in a big way to curb corruption on the part of some members of the Law & order agency. So also land records getting computerized, (as one hears Chandra Babu Naidu, did in AP, partly or fully I am not sure) can

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be a big positive step. Initiative of UID, now called Aadhar, will be a very useful in this struggle- more so for poor people.

REDUCTION OF DISCRETIONARY POWERS ON THE PART OF GOVERNMENT DEPARTMENTS : You only have to recall as to how much of

corruption got slashed as soon as in the 1991 budget announcement the need for getting licenses for starting / expanding industrial units was done away with. This would certainly reduce the need on the part of corporates to grease palms to get tings moving, where speed is of essence and can not be put in the category of indecent haste. Some Raw materials would deteriorate if not handled in time, interest charges on machinery would mount phenomenally if machines are held up some where for some reason and not get commissioned and start production. PROTECT INDEPENDENCE OF MEDIA & JUDICIARY : In 26/11 episode, when TV media behaved a little irresponsibly showing commandos slithering down from the helicopters and the shots were being used by the controllers of the terrorists inside to guide them; it is learnt that the bureaucracy had drafted a bill to tame the media, it was Dr Man Mohan Singh who scotched the draft bill. Thus the thing to do by all citizens of India is to be vigilant and not let these organs of society get diluted. We do have an independent judiciary, an independent media and an independent executive. We see that all these organs are in active mode today. A fierce churning is going on and I feel sure that some good will come out of it. I am also sure that it will not be a one shot deal. The efforts would need to continue over the years.

LET US CITIZENS, THE CIVIL SOCIETY, CONTRIBUTE : Since we expect a serious change in our society, we have duty to perform, else it will remain a weak story and revert sooner or later to status quo. Let us all insist on paying the VAT / sales tax on all our purchases, as applicable. Such a widespread change of mindset is essential for a lasting progress.

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IN CONCLUSION I would like to say, referring to the points of difference between the reps. of the civil society & the government, that I do not find myself equipped about the pros and cons of PM and Chef Justice of the Supreme court being covered by the Lok Pal bill or not. However I do recall a well publicized probe against the then president of USA , Mr Clinton, which lasted for months together, with truck loads of the final report pictures, but nothing much came out of it, except that a large chunk of Presidents time got devoted towards his defense. The vehemence with which the authority in question pursued the case became suspect and it was learnt that he was a solid republican. So apart from checks

against the Lok Pal turning corrupt, a greater danger of him having a political agenda must be guarded.

Another point relates to the NGOs coming under the purview of Lok Pal or not. It is submitted that NGOs sector is expanding fast, they have access to huge funds and some of them are doing an excellent job whereas there are stories of many a black sheep among them. And their becoming accountable, courtesy fear of scrutiny by Lok Pal would be a desirable step. A funding limit can be laid down to restrict the number coming under the purview of the Lok Pal, to avoid overload. After all the aim should only be to set few examples that wrong doing will get punished. * * * * * * * *