Citizens' Issues
As Anna Hazare continues his fast against corruption, the Internet is waking the citizens up against graft—and fuelling protests all around India

Where does the private sector in India stand on corruption, is the question being asked at Jantar Mantar—so will it please answer it? The politicians are silent, but why is India Inc not logging in?

Rallies and demonstrations are not new for those of us who live and work in Delhi, and by those standards, Anna Hazare's "India against Corruption" March from Rajghat to India Gate and thence to Jantar Mantar earlier today was a minnow in the field of much bigger events of the political procession sort. But if as an astute observer of the street scene in and around Delhi this correspondent can say one thing at the beginning of this report-this movement is likely going to snowball like nothing ever did before in the recent past, with the possible exception of the Mandal agitation. If you are in or around Delhi, then hop on to a Delhi Metro train, ride to the appropriately named "Patel Chowk" station, and go meet the man people are calling the "Second Gandhi".
 
Corruption is nothing new to most Indians, especially readers of finance magazines. Nor are the after effects of bribery. Truth be told, there is a well-known and practised school of thought within private commerce in India at all levels which encourages corruption and bribery as a means to keep competition away, and that is about as straightforward as it gets, on why any attempt to curtail corruption is usually sabotaged from within-the idealists amongst us don't have a chance. Especially if we haven't tried our hands at any dhanda in our lifetimes. Especially in newly liberalised India.
 
It was not always so.
 
Before Independence, at least, the domestic private sector in India joined hands with those seeking freedom by political means. Corruption wasn't the issue. Dominance was. And they got it after 1947. Some would say this was by way of a quid pro quo-as decades of licence raj and restricted competition came their way. Sweet rewards after John Company handed over the keys to the select few approved of by the new rulers. There wasn't really any need to be corrupt or give bribes-our private sector, such as it was, owned the game, the playing field, the umpires, everybody. They made their own rules too, and then called it "Bombay Club", remember?
 
Then along came "liberalisation". Enough said. Suddenly the stakes were higher, and a whole lot of new players landed up, while the older lot flew in to Delhi to fight court cases on "privacy". After having blown steam through the spout on everything including everybody else's privacy for decades, the pot was now calling the kettle black.
 
And so, when by right, domestic private enterprise as a victim should have been seen out there on the streets condemning corruption, we have the amazing sight of observing and noting that they are doing nothing of the sort-even as they are visiting, not too far away, a Joint Committee of Parliament or something like that, on the very same subject. A Tata or an Ambani, even a Birla or a Bajaj, could have easily dropped in to lend support to a movement against corruption in the neighbourhood, right? Maybe a Bharti, a Singh, anybody?
 
Wrong. However, those who did try to join, and were then seen sulking on the sidelines as they had not been invited on to the dais, were a whole lot of people who could easily be identified as political hangers-on. Whether fat and in white karat-pyjamas or fit and svelte in jeans and t-shirt, there were more than a few political types who looked as though they were waiting to be invited. And were roundly booed off. However, despite it, some tried.
 
Of these, Sharad Yadav went on stage to loud protests, and an unidentified person trying to refer to a leader from the NCP was given the Kalmadi treatment when he took his boss, Sharad Pawar's, name. Bad day, overall, for Sharads at Jantar Mantar. Next, some random BJP functionaries arrived, and then stood quietly in the background, while their leader then gave quotes on television from some other location. What the BJP did about corruption when they were in power at the Centre is well known-the Lokpal Bill didn't make much progress then, either. Ram Vilas Paswan's group was seen at the periphery too. No dice.
 
Sarcastic comments about Manmohan Singh, oblique references to High Commands, and then of course-the favourite flogging horses. Arvind Kejriwal knows how to work a crowd now, and his main agenda was to take on Sharad Pawar and Kapil Sibal, while asking people to pray for Anna Hazare's health. Kiran Bedi, on the other hand, tried to work the numbers-if we were not so corrupt, we would all be rich, said she, while she led us into prayer. And then there was some pandemonium, as assorted political sorts tried to come on stage, and were denied by a Swami Agnivesh playing monitor. On the sideline were stern posters from M/s Baba Ramdev of Patanjali and M/s Sri Sri Ravi Shankar of Art of Living. Actually, in a way, they were the corporates present!!
 
It then became even hotter, and the mass of people supposed to be on hunger strike started looking at the food stalls doing brisk business not too far away-after all, with dozens of television crew vans and hundreds of media and plenty of uniformed and plains-clothes types, all keeping an eye on each other, something had to be done as the speeches got repetitive. (There is a catchy tune, though, which reminds one of the same tune used for the lap of victory done by the cricketers a few days ago).
 
And then, suddenly, the swish set arrived. This follows a typical pattern-the mouthpieces from the out of power and "opposition" parties join the party, the same old same old chiffon and georgette low-navel display types land up to be quoted and also to see and be seen, a few off-duty television anchors who have nothing to do with anything land up and preen around, the television media hankers for bites before sunset, and after some time the crowd goes home for dinner to get swayed by the television anchor fresh from her toe and nail pedicure making it, once again, a bi-polar debate between the "secularist centres" and the "religious right" with the "left leaning" and the anti-corruption rest brought in for humour.
 
But not this time. For the first time, probably, this has been an Internet-driven assembly. On a national basis. The crowd was just about a few thousand strong at the Jantar Mantar in Delhi. But there were thousands and lakhs more all over the country, logging in and posting from small outposts you haven't even heard of. And lakhs online.
 
The first Internet-based movement, against corruption, has arrived in India. And, from our point of view, the private sector had better take a stand soon-one way or the other. Stand up and be counted.
 
If you are in or around Delhi, do your bit for the anti-corruption movement. A short walk away from a Metro station, go there, do something for the supporters, carry a few bottles of water or some home-cooked food for those not fasting, as they stand guard over a frail 73-year-old man trying to make it a better country for all of us. And if you who are reading this and are from the private sector, then a banner in support will mean a lot-try it?
 
And if you are on the Internet-then just log in.

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COMMENTS

SUBHASH MEHTA

7 years ago

All those who are with the movement must remained united. They should not be altered by the politicians and others who tried to harm the movement.

If u believe the methodology of Hon'ble Anna Hazare Ji, then try to use ur wisdom to counter the move of politicians and others, who r either corrupt or have some vested interests.

REPLY

yeshwant sane

In Reply to SUBHASH MEHTA 7 years ago

This movement about corruption is essentially a moral and Spiritual movement.Enemies try to trap it in corrupted administrative,Legal,economic,financial,and other Parliamentary procedures by adopting tricks of the trade obtained through using brains like sibal etc .There should be awareness and outcry against such materialist thinkers,who put it on the wrong track by confusing even the sincere intellectuals.Till 15-8-2011 we have to be watchful and vigilant about both the sides of the game.

SUBHASH MEHTA

In Reply to yeshwant sane 7 years ago

Thanx 4 ur comments. Persuade all friends to visit site of indiaagainstcorruption.com and enroll themselves as a voter, supporter and/or volunteer. Those who have accounts in social networking sites, may use the same and join the community i.e. India Against Corruption. All friends who read this comments are hereby appealed to do the same.

K B Patil

7 years ago

The people have won a battle. The war is not yet over. After the bill is ready and is presented in parliament, will the corrupt majority vote for a bill which is as good as their arrest warrant. The people must be on their toes and show the politicians that we can see through their games. Each and every MP must be made aware that the people will not rest till a strong bill is in place.

Our politicans seem to be very headstrong or downright stupid as a few incidents that happened during the last few days show. For instance, it is said that a minister from Goa was caught going abroad with about 50 crores in cash, but the airport officials say that it was only 5 crores. Rumors are that he was let off after a call from the FM's office. The same ministry which has done nothing about Hasan Ali for over 3 years. The second instance is that two of UP's ministers were sacked by Mayawati on suspicion of the murder of a CMO. The CMO was said to have some knowledge of huge corruption in his department. So, for politicians involved in murder, the punishment is just removal from their posts, not arrest. The third example is that of an Andhra minister slapping his PA in full view of the public for not answering his mobile. When an unprecedented agitation is sweeping across India, our politicans carry on with a swagger. When will they try to behave like democrats and not like dictators of a banana republic.

yeshwant sane

7 years ago

History is likely to repeat. The ruling Congress party, today, is not an agent of any radical social change or evolution. It is without any ideology or futuristic culture. The constitution and the Parliamentary System may be a victory of the Indian citizens. But, both these institutions are outdated concepts. These are materialistic European concepts in essence. Our task should be to evolve a form of protecting the birth rights of the independent citizens about its spiritual concept of "Swaraj "{Soul Freedom} as envisaged by Lokamanya Tilak. Our System of governance should facilitate evolution of human consciousness to divinity as propounded by Aurobindo. By praising Sonia Gandhi, who does not inherit this culture, it seems that Congress will again hijack the main content of the struggle, which potentially is struggling for this kind of solution. Corruption, the present issue, is merely a result of the outdated System. The absence of any ideological direction of all the political and social leaders on the scene is visible. Be warned, my dear citizens, about the impending hijacking of the new rising movement by the corrupt Congress party.


(Yeshwant Sane)

REPLY

malq

In Reply to yeshwant sane 7 years ago

Very valid points, and thank you for writing in, grateful.

jak

7 years ago

Anna Hazare Jai ho!
People of India are now almost certain that Anna Hazare will now Book all Corrupt and Criminals and recover the Vast Treasures of Wealth to Mother India!

REPLY

malq

In Reply to jak 7 years ago

Thank you for writing in! As a matter of fact, now the role of the average citizen becomes even more important - not only has he got the right to query,but she also has the right to follow up.

mak

7 years ago

Anna Hazare hum tumare saath hain!We all Indians hope that this is beginning to end Corruptions and end to allow enchroachments on public Lands, roads and foot paths by criminals and supported by vested interest like politicians and goverments. Why these people announce FREE millions booty, awards, rewards and Lands to already rich and famous persons out of our of public funds! Naturally these encourages Black money, crimes and inflation in our country. Corruption in all forms and shapes should end.
Awards, rewards and Lands should be announced and given by already Cash Rich Organisations for whose benefit they work and not by politicians and governments. As public funds are exclusively for welfare of general needy public.

amarish shah

7 years ago

each and every indian should come
forward agisnt the corruption.
this movement should not be stopped.
here is shri ramdev baba who is next gandhiji and who is also fighting for
swiss bank money.
this movement also should be done fast

Nisarg Patel

7 years ago

The soldier-turned-social reformer has grabbed the national headlines in the past 3 days with his campaign for an effective anti-corruption law. But very few are aware of the die-hard Gandhian’s nearly four-decade long struggle to improve the lot of common people from his village in Maharashtra and his continuing agitation for good governance that has succeeded in bringing about citizen-friendly laws in the state

Udit C

7 years ago

True: Industrialists are the ones who gain the most from a corruption-free environment - if they want to gain -and pass on this gain to their markets. And they are just mute spectators, along with the most otherwise-vociferous Neytaas and Baboos.

But why target Netas alone? Is there corruption without bribery, embezzlement and graft without at least mute connivance and so on?

And what about the corruption in other sectors? Who fuels it with a bribe or freebie for favours?

Let us first vow not to fear, favour or bribe and brave ourselves against negative consequences of such.

NANU NATVERLAL MEHTA

7 years ago

Nehru Dynasty and Mukhota like Atal Bihari have made the entire country a storehouse of corrupt practises.It has become a NATIONAL CHARECTOR.It has reached at such monumental proportions that Many Annas will be required to wash this sins of corruption.Congress party without doubt is the biggest Corrupt party of India.

XYZ

7 years ago

Leader ki Maa ki.... Jai...
Jo aise kamine paide kiye...

SUBHASH MEHTA

7 years ago

It is good step from ur side to write on this topic. All the net users must registered themselves in vote bank and support the cause by visiting their site i.e. indiaagainstcorruption.com

REPLY

malq

In Reply to SUBHASH MEHTA 7 years ago

Thank you for writing in. Please do more by joining the movement on the ground also, by taking part on site, in any way you find workable. But go to any of the groups and gatherings in your city today. Come to Jantar Mantar in Delhi if you can.

Humbly submitted.

SUBHASH MEHTA

In Reply to malq 7 years ago

Thanks for ur motivation.
Though first success is likely to be achieved yet this may be consider as start and not end.

It seems that the coordiator appointed by the organisers, in my city, is not so active as she should be. I requested her though email to inform me about events in this connection in my city, but I never receive any input from her. I came to know about the event afterwards through newpapers. It seems that coordinator of my city had note organized any event at her own initiatives. Press Club and Students of a College organised demonstrations at their own, about which I read afterwards. However I'll try to contact her on mobile and shall participate in the events of this movement in my city.

Utsal Karani

7 years ago

The leading Media House in India is at the forefront in this campaign against corruption and joined the Anna Hazare Bandwagon. It is biggest culprit in "paid news" malpractices and raked in hundreds of crores of rupees.

REPLY

SUBHASH MEHTA

In Reply to Utsal Karani 7 years ago

I'm unaware of the media house u r pointing. But it is good that the said house is now at the forefront of this compaign against corruption and joined the Anna Hazare Bandwagon, as stated by you. I don,t think that the organisers of movement is paying or paid to media for his compaign. Instead media is incurring a lot of expenditure for this compaign because the audiance want to watch about the movement, so every media house try to give more and more material & information about this compaign and thus try to increase their audiance and readership, as the case may be.

Utsal Karani

In Reply to SUBHASH MEHTA 7 years ago

As long as such media houses exist, corruption will thrive in this country. For them this issue is nothing but a branding exercise. The hypocrisy of the media has to be exposed which is similar to that of the Corporate sector.

I never said the organisers of the movement is paying or paid to media for this campaign.
I fully support Anna Hazare for enactment of effective Lokpal Act.

malq

In Reply to Utsal Karani 7 years ago

Thank you for writing in. Please do more by joining the movement on the ground also, by taking part on site, in any way you find workable. But go to any of the groups and gatherings in your city today. Come to Jantar Mantar in Delhi if you can.

And never mind the hurdles, remember the aim - remove corruption.

Humbly submitted.

Adi Daruwalla

7 years ago

Anna Hazare has got support from many corners of India. The agitation has collegians taking up his cause all over Mumbai. medium sized groups of collegians have been demanding the passing of a stingent anti corruption law by the govt in support of Anna Hazare. Even Nana Chudasama in his trademark fashion has paid tribute to the cause of the Jan Lok Pal bill espoused by the Gandhian, Anna Hazare and warned the politicians to be careful of a revolution, at the Not just Jazz by the Bay corner where he puts his banners. Jai Ho and in full support of Annaji. Corporate India and its counter parts in the US Europe etc I cant say the same for Germany but even the Swiss corporates are corrupt are all acting as sheep in wolves clothing

REPLY

mak

In Reply to Adi Daruwalla 7 years ago

As you rightly pointed out Powerful Lobbies are still Ruling India and other nations by Corrupt means. Thereby increasing the crimes, poverty, unrests and disturbances etc !

nagesh kini

7 years ago

Shankar's punishment for the corrupt is not bad enough.
Immediately after defeat in WW II , the Italians in an open square at Rome hung dictator Benito Mussolini and his mistress up side and showered bullets.
India has enough space at India Gate at Delhi and the Gateway at Mumbai are ideal locations to display our corrupt.
No Tihar or Arthur Road.
As it is the crores on a single terrorist is unwarranted.

shankar

7 years ago

India is full of Corruption A law should be made such as any one found guilty of corruption will be tied in public place and stones must be thrown to that person.(like the Talibans way of justice).But the question is who will make this law?because all are corrupt

Do private organisations come under the purview of RTI?

While the RTI Act states that only those private organisations which have “substantial” funding from the government come under the purview of the RTI Act, in cases where these entities are in partnership with the government, it is possible to get necessary information. The Pune-Mumbai Expressway toll matter is a sterling example


With municipal corporations, state and central governments increasingly opting for Public Private Partnerships (PPP), transparency could take a beating, as private organisations have been given an opportunity to duck under the Right to Information (RTI) Act. The Act says that only if private organisations are "substantially" funded then they come under the purview of public domain. Who's to decide what is "substantial funding"? And here's where private bodies take cover and refuse to give information.

A sterling case is that of the Ideal Road Builders (IRB), a private agency which collects toll fees from most of the highways in Maharashtra, including the Pune-Mumbai Expressway. It is impossible to procure information regarding the data of toll collection. However, in such cases, since their partnership is with a government body, the citizen can get access to such information from the government organisation.

Strangely, the Maharashtra State Road Development Corporation (MSRDC), the government body in this case which is mandated to monitor whether IRB is collecting toll honestly or is cheating people, itself has not monitored the revenues of the IRB, despite appointing an independent engineering consultant, STUP Consultants Pvt Ltd, headed by RY Deshpande. However, thanks to citizens demanding this information under RTI, the MSRDC was compelled to request the IRB to send the data of toll collection, year-wise. When this writer conducted inspection of files under Section 4, one of the officials confessed that they had only recently asked the IRB to supply information due to pressure of RTI queries, otherwise they had nothing to do with the information. The fact is that it is binding on the MSRDC to do proper auditing of the toll revenue collected by IRB and gauge whether it is usurping more profits than what it is supposed to get.

Similarly, Metros that are being "forced" upon citizens in several towns and cities across the country, without proper planning, are mostly constructed by the Delhi Metro Rail Corporation (DMRC). Here too, the DMRC is a private body and any query under RTI is denied. In the case of the Pune Metro, the DMRC has disastrously planned the metro and submitted a shoddy and superficial Detailed Project Report (DPR). Despite the project report not satisfying the Pune Municipal Corporation's (PMC) terms of reference and it not abiding by the central government guidelines while making the DPR, the PMC's general body and the administration has blindly passed the project. It now lies with the state government, which failed to allot finance for it in the current budget. The scandal of this Rs10,000-odd crore infrastructure that is going to add to the chaos of the already congested roads in Pune and become a heavy tax burden for citizens for many years, came to light due to the RTI invoked at the PMC. Thus, in private-public partnerships one can get access to public documents by putting a query to the 'public partner'.

However, as per a high court judgment, co-operative banks do not come under the RTI. A few years back, the Reserve Bank of India (RBI) declared that co-operative banks do not come under the purview of the RTI Act. At that time, the Gujarat State Cooperative Bank Ltd, which is an apex institute of co-operative banks, had sought the opinion of the RBI. The RBI stated that since co-operative banks come under the Co-operative Act of the respective states and not under any parliamentary statute, they are not public authorities as defined by the Act.

According to Shailesh Gandhi, central information commissioner, the Company Law gives significant rights to those who own 26% of the shares in a company. Perhaps this could be taken to define the criterion of "substantial finance".

"Subclause d(i) and (ii) together mean any non-government organisations which are substantially owned, controlled or financed directly or indirectly by the government would be covered. Thus aided schools and colleges are public authorities, as also any trusts or NGOs which have significant government nominees; or companies where the government either owns substantial stake, or has given substantial finance, are directly covered under the RTI Act. The substantial finance can take into account tax incentives, subsidies and other concessions as well.

Elaborating further, Mr Gandhi states, "There is some confusion about the words owned and substantial finance. This confusion is evident in the various decisions of the information commissions. Let us look at the words carefully. "Public authority" means any authority or body or institution of self-government established or constituted, … and includes any

(i) body owned, controlled or substantially financed;

(ii) non-government organisation substantially financed, directly or indirectly by funds provided by the appropriate government."

The finance could be either as investment, or towards expenses, or both. The way in which the words have been placed, indicates that perhaps (i) relates to investments and (ii) relates to the running expenses.

"Thus every institution which is owned by the government is clearly covered. By any norms, whenever over 50% of the investment in a body lies with any entity, it is said to be owned by that entity. Since bodies owned by government have been mentioned separately, the words 'controlled' and 'substantially financed' will have to be assigned some meaning not covered by ownership. Thus it is evident that the intention of Parliament is to extend the scope of the right to other organisations, which are not owned by it. No words in an Act can be considered to be superfluous, unless the contradiction is so much as to render a significant part meaningless, or it violates the preamble. Therefore, it becomes necessary to consider a situation where an entity may be controlled by the government without ownership or substantial finance. Such a situation exists when a charity commissioner or registrar of societies appoints an administrator to run the affairs of a trust or society, or a court liquidator takes over administration of some body.

Thus concludes Mr Gandhi: "It is therefore obvious that as per Section 2 (h) (i) 'a body …substantially financed' would be a body where the ownership may not lie with the government, nor the control. Hence, clearly the wording 'substantially financed' would have to be given meaning at less than 50% holding. Company law gives significant rights to those who own 26% of the shares in a company. Perhaps, this could be taken to define the criterion of 'substantially financed'. The finance could be as equity, or subsidies in land or concessions in taxation.

"Similarly some definition is required where the State provides money for the running expenses of an institution as covered under (ii). Presently, aided schools and colleges have all clearly been accepted as 'public authorities', though there appears to be no clarity in the matter of NGOs and other organisations which are receiving significant amounts of finance.

"The key approach and philosophy of the RTI Act appears to be that since the State acts on behalf of the citizens, wherever the State gives money, the citizen has a right to know. In my opinion, if the money given for the running expenses is over either 20% of the running expenses, or Rs1 crore, the body should be considered as receiving 'substantial finance' and is covered in the definition of a 'public authority'."
 
Putting up information in the public domain, especially where infrastructure is concerned, is very important in the case of roads. The Economic Survey of India estimates that over the next five years (the survey was of February 2008) the investment needs in physical infrastructure will be $500 billion, out of which the share of the private sector will be $150 billion-odd, which comes to over 30%.

It is time to know the truth, as the truth involves us all!

(Vinita Deshmukh is a senior editor, author and convener of Pune Metro Jagruti Abhiyaan. She can be reached at vinitapune@gmail.com.)

 

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COMMENTS

Vijesh Kaushik

6 years ago

What are the Rate of Interest for Crane, Hydra of M/Ssrei Equipments Finance Co. Ltd.

VTGokhale

7 years ago

It is stated in the article "However, as per a high court judgment, co-operative banks do not come under the RTI. A few years back, the Reserve Bank of India (RBI) declared that co-operative banks do not come under the purview of the RTI Act. At that time, the Gujarat State Cooperative Bank Ltd, which is an apex institute of co-operative banks, had sought the opinion of the RBI. The RBI stated that since co-operative banks come under the Co-operative Act of the respective states and not under any parliamentary statute, they are not public authorities as defined by the Act. "

In this connection I have to submit as under:

1) as per sec. 2(h)(c) RTI Act 2005 public authority could be one which s established or constituted by any other law made by State legislature.

2) As per the said act it is only CIC or SIC can ecide whether a particular entity is a public authority or not under RTI act. RBI, to my mind does not have any authority to give such opinion. One has to approach CIC/SIC for this.

Can we stop corruption?

The real problem with bribery is paradoxically a problem with law. So, the best and most economically efficient method of eliminating corruption would be simply to eliminate the laws themselves

Kaushik Basu is a professor of economics at Cornell University. Cornell is located in the quaint, neat and beautiful town of Ithaca, which is about 320 km, or a four-hour drive north of New York City, in the US. He has recently returned to India, the country of his birth, to advise the government.
 
Like all emerging markets, India has a problem-too much corruption, too many bribes. Professor Basu has a solution. He has suggested that paying bribes should be legal.

His ideas come from one of my favorite disciplines, game theory. The logic goes like this. Right now, both the government official, who receives the bribe (in good legal speak the bribee), and the person making the bribe (the bribor?) are punished if the crime is discovered. Since both are equally guilty under the law, the bribor has no incentive to expose the activity.

Professor Basu's idea is that for so-called "facilitation payments", small payments made to expedite routine business needs, like clearing customs or obtaining permits, the bribor's actions should be legal. In theory, once the bribe has been made, the bribor can expose the bribee to prosecution. This threat would act as a legal disincentive to deter the bribee or government official from soliciting the bribe in the first place. Right now, the interests converge. Since both bribor and the bribee face punishment, it is in both their interests to keep quiet.

But will it work? To answer that you have to ask why do people pay bribes anyway? Bribes by definition involve government activities. There has to be a government official. The bribor wants the government official to act, refrain from acting or act in a manner that favors the person making the bribe.
 
In the case where bribes are paid for purely ministerial functions, making bribe-paying legal might help, if we assume that the government official once exposed would actually be subject to punishment. No doubt this would occur in Ithaca, New York, but would it occur in India or another emerging market? Probably not.

Recently, according to the Indian newspaper, The Hindu, via WikiLeaks, an American diplomat was shown two chests full of cash that the ruling Congress Party was going to use to bribe opposition Members of Parliament at $2.2 million apiece. Although, no doubt well aware of the bribes, the squeaky clean Congress party leader, prime minister Manmohan Singh, denied the allegation.

Again, by definition, the government official taking the bribe is part of a government. The government, or the party in power, most likely appointed the official for political reasons. As the former American president, Ronald Reagan, said "the 11th commandment was that thou shall not criticize a member of your own party."
 
So the government, in order to protect itself, will not have an incentive to prosecute the official receiving the bribe. Instead it will be more likely to persecute the person who exposed the malfeasance, the whistle-blower. Which points to the problem neglected by professor Basu, other economists and financial analysts, who assume that their theories will work anywhere regardless of the legal framework.

The real problem with bribes for ministerial functions is that the government has monopoly. For example in many countries for many years the state controlled telephone service. Getting a landline often took many years and many bribes. With the advent of mobile phones, multiple companies offered service and the monopoly disappeared along with the potential for corruption.

The other aspect of bribing government officials has to do with having the government official use his discretionary power in a manner that benefits the person paying the bribe. In this case, if paying the bribe was legal, it would make the situation worse.

The person making the bribe is doing so to obtain a competitive advantage, like a cheap mobile licence. If he exposes the official, then he loses the advantage. So his best move in game theory would not be to expose government official, but rather use the evidence of the bribe to extort further advantages.

One of the main problems with bribery is transparency. Businessmen are not sure who to bribe, how much to bribe and how to ensure that the bribed official actually performs the contracted action, so the market is always inefficient. Decriminalizing the paying of bribes will simply help the bribors enforce the contract through extortion.
 
The real problem with bribery is paradoxically a problem with law. Many laws have a tendency to distort the economic environment and markets. So, the best and most economically efficient method of eliminating corruption is usually simply to eliminate the laws themselves. Reducing the size of government, reducing its monopoly, outsourcing its services, limiting discretion, reducing regulatory interference, diversifying enforcement and above all, increasing transparency, are far better methods to eliminate corruption than decriminalising an obvious theft.

(The writer is president of Emerging Market Strategies and can be contacted at william@emergingmarketstrategies.com or w.gamble@alrroya.com)
 

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COMMENTS

RNandakumar

7 years ago

The recent elections have given the public an opportunity to learn about our Politicians assets. It is interesting to note a strange and notable coincidence of the wives of politicians being always richer than the politicians. Another intriguing aspect without exception in all the politician's
asset is that they have doubled or tripled at the minimum within the last five years. I do not know whether these are brought to the notice of Income-tax department. Perhaps like CBI they too wait for an order from the politician to probe his wealth. When Tiger becomes vegetarian our politicians would be corruption free.

nagesh kini

7 years ago

The euphemism "facilitation payment" or "speed money" or "cost-benefit-analysis" for the payments whether made over or under the table or in suitcases displayed by Ram Jethmalani and Harshad Mehta or routing them via "Corporate Consultancy" through Niira Radia seek to "smoothen" the rough passage! That is why our business honchos have chosen not to sign the appeal as they perceive that they've nothing wrong(?) They believe these don't attract the Anti-Bribery Laws!
We have enough laws but not effectively implemented and/or enforced.

The Jan Lok Pal in its present form proposes to extend it to higher neta-babu-judges

It ought to be more pervasive to specifically include others like professional go-betweens be they lawyers, tax consultants and architects.

suresh kumar yvs

7 years ago

yes. there should be time limit to close any file. example if there is a person retired, his documents should be immediately processed and which ever is pending, the reason should be written and taken an acknowledgement by the person. this is for govt. related. even for works, etc., it is very difficult to define the process. it should be in-build within public and politicians. if they found guilty, the punishment should be loss of job, imprisonment for min 5 years and max 14 years..even for a small or big bribe. after all bribe is bribe.

Shadi Katyal

7 years ago

One misses the point that such corruption is legalised through the Constitution of India and thus niether the officer nor the clerk has anything to worry.
The Economist last week had witten that failure of India is due to such bribes and promises and thus money spent or given has no hope of anything being done.
There is no accountability of any officer and thus files can lie in dust till more money is paid.
It is harsh to say but it is evident that we Indians have now become used to such bribes inordeer to facilitate any thing to be done in time. Whether it is a driving licence or pasport, begging hands are always there.
Unless Law and Order has some power we will neve become an economic power.
Most of the investment are passing buy to Thailand,Vietnam and we still scratching our heads.
One of the biggest problem is that we have become to such GHOOS so well that we dont feel the pinch

Angelo Extross

7 years ago

Some classify bribes into two categories: - one, speed money and the other, illegal execution. While some do not term the former as a "bribe", they denounce the latter. The question is, "Why speed money".
The answer is quite simple, "Because there is no time limit specified in any Govt. office for the job to be done." If this is done a lot of the former type of bribes will vanish.

firstchoiceipo

7 years ago

As long as we have corrupt political leadership ( all parties included), it is difficult to put an end to corruption. The action should start from the political field.

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