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CULTURE OF CORRUPTION IN INDIA
“Corruption and hypocrisy ought not to be inevitable products of democracy, as they undoubtedly are today”
"Ethical and responsible behaviour needs to become the cornerstone of corporate behaviour" -ManMohan Singh
CULTURE OF CORRUPTION IN INDIA
CULTURE OF CORRUPTION IN INDIA
भारत में भ्रष्टाचार की संस्कतत ृ
CULTURE OF CORRUPTION IN INDIA
INTRODUCTION PAGE 1) Corruption 2) Who is Responsible? 3) Is Corruption a Global Typology? 4) The Donors’ Interest in Tackling Corruption 5) Prevention an Important Tool in Fighting Corruption? 6) Underlying Principles Of This New Governance Strategy 7) Prevention And Integrity Tools And Activities 8) More quests Than Answers 9) Challenges Ahead 10) Conclusion 11) Hypotheses of Corruption CULTURE OF CORRUPTION IN INDIA 12) Corruption in India 13) Corruption and Democracy 14) Effects on Politics, Administration, And Institutions CAUSES 15) Hawala 16) Money Laundering 17) Slush Fund 18) Mauritius Route 19) Rent-Seeking 20) Licence Raj EFFECTS 21) Black Money 22) Scandals 23) Slow Progress 24) Poverty CRIMES 25) Mafia Raj 129 111 112 117 120 95 100 104 104 105 108 58 89 92 5 18 19 20 21 23 33 45 51 53 55
2002 42) Vohra Report 43) 2011 Indian Anti-Corruption Movement 44) Present Anti-Corruption System & Watch dog agencies 45) E-Governance 133 135 144 148 151 152 156 159 160 167 170 174 175 178 179 182 183 194 198 214 SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 4 26) Child Labour 27) Rape 28) Honor Killing 29) Bankruptcy 30) Chit Fund Misused 31) Human Trafficking PREVENTION &REDUCTION TOOLS (ACT’S) 32) Transparency International 33) UNOAC 34) RTI Acts 35) Ombudsmen 36) Whistleblowers 37) Alertness 38) Jan Lokpal Bill 39) Civil Society 40) Prevention of Corruption Act 1988 41) Money-Laundering Act.
being corrupt are a way to get what they desire. face menace of corruption. nepotism. Over 1500 year ago the mighty Roman Empire disintegrated when its rulers became corrupt and selfish. In societies which ignore corruption. Inequality of wealth. A corrupt society stops valuing integrity. These values should revive among their congregation and subjects and in this effort religious leaders and chiefs have an important role to play. But they do not realize that corruption cause suffering to other. the media has carried out of large number of stories of prophets who misuse offerings and traditional healers who abuse penitents. low wages and salaries are some of the economics cause of corruption. A license-permit regime or scarcity of basic commodities promotes corruption. virtue or moral principles. The judiciary. Various forms of corruption include extortion. Corruption cannot be divorced from the economics. graft. corruption often thrives. ruining or the spoiling of a society or a nation. CORRUPTION The word of corruption means the destruction. People getting very low wages feel they have to demand bribes in order to lead decent lives. Nations having tyrannical powerful ruling elite that refuses to punish the corrupt within it. At times. extortion drug trafficking to thrive. Selfishness and greed are two main cause of corruption.CULTURE OF CORRUPTION IN INDIA 5 A. religious. SATISHCHANDER . ethical teaching and standards of morality are weak. punishments and the education system. cronyism. the law enforcement agencies and the education sector have an important role to play the corruption by changing prevailing laws. It changes for the worse. it becomes a way of life. Such a society begins to decay and sets itself on the road to self-destruction. bribes are given to avoid punishment . Employees often strike corrupt deals to supplement their meagre income. Corruption is an old age phenomena. Corruption allows criminal activities such as money laundering. In societies where traditional.For some people. Of late. INTRODUCTION 1. embezzlement and patronage. Political corruption is the abuse of their power by the state official for their unlawful private gain. A corrupt society is characterized by immorality and lack of fear and respect for law. Corruption has prevailed in all form of government. bribery.
the use of this definition excludes the possibility of corruption in the private sector. the most promising answer is the one made by Vito Tanzi: “Corruption is the intentional noncompliance with the arm’s-length principle aimed at deriving some advantage for oneself or for related individuals from this behaviour. The first element deals with the arm’s-length principle as it requires that personal or other relationships should play no part in the economic decisions that involve more than one party. Resources are diverted from the sectors such as education and heath to less important sectors or personal enrichment. Bias towards particular economic agents definitely violates the arm’s-length principle and fulfils a necessary condition for corruption. The rule of eroded and the people no longer respect or trust the state.” as “the misuse This definition considers the cause of corruption in public authority and its abuse. its activities.In the long run unchecked corruption pushes more and more people into poverty which often destabilizes a society. A few people manage to get rich at the expense of society as a whole. If there is no bias. The authorities move very quickly when the press or the television highlights instances of corruption. Education spreads political add social awareness and are some factor that help curb the menace of corruption. there is no corruption.” There are three basic elements of this definition. The impact of development assistance of reduced and natural resources are overexploited causing further harm to a country’s environment assets. Societies can fight corruption by letting the state know that they have had enough of it. Definition of corruption Corruption is defined by the World Bank & transparency international (TI) of public office for private gain. SATISHCHANDER . we abolish corruption”. while the poor suffer terribly . Corruptions hinder economic growth and deter investment. This definition is consistent with the behalf of Noble Prize laureate Gary Becker that “If we abolish the state.CULTURE OF CORRUPTION IN INDIA 6 The consequences of corruption for social and economic development are bad. What is corruption? There are several answers to this question. and it focuses exclusively on corruption in the public sector. and links corruption to the state. Equal treatment of all economic agents is essential for a well-working market economy. Analytically speaking. state intervention on the market and the existence of the public sector. In other words.
we abolish corruption. otherwise. Namely. but definitely not corruption. Furthermore. but those two actions can be taken at different times. there is no corruption. its activities. but it is not corruption. but the obligation is assumed. imperfect information. or rather conditions that must be fulfilled for observed bias (“non-compliance with the arm’s-length principle”) to be specified as corruption. The first condition is that the bias must be intentional – accidental violation of the arm’s-length principle because of. in formulating the corruption contract. fraud. Giving expensive jewellery to the wife of the person who violated the arm’s length principle and providing a well-paid job (with little work) for his son is definitely corruption. but similar gain can imply expensive gifts or various favours returned. embezzlement. “The problem with the alternative definition is that not all abuses of public office are corruption. Violating impartiality may sometimes represent racism. so that seizing the benefits from the one who is corrupted moves into the future.” This definition considers the cause of corruption in public authority and its abuse. This definition is consistent with the beliefs of Nobel Prize laureate Gary Becker that “if we abolish the state. can have different forms. state intervention on the market and the existence of the public sector. but sometimes binding obligation of the corruptor to return or repay the favour. If a senior governmental official simply illegally appropriates a sum of money from the budget without providing any SATISHCHANDER . the use of this definition excludes the possibility of Corruption in the private sector and it focuses exclusively on corruption in the public sector. it is obvious that there is a time gap between the two actions. or similar activities. and that obligation does not grow obsolete. In other words. Some of them are straightforward theft. Seizing some benefit or deriving some advantage can be carried out simultaneously with a violation of the arm’s-length principle. does not represent corruption. There is an alternative definition of corruption frequently used by the World Bank that specifies corruption as “the abuse of public office for private gain. Deriving some advantage. or seizing some benefit for the corrupted economic agent. for example. It is a rather widespread notion that corruption is receiving money (this form of corruption is most often called bribery).CULTURE OF CORRUPTION IN INDIA 7 There are two additional necessary conditions for corruption. If the returned favour is a well-paid job for the son. Second. and the son has just started college. the returned favour is sometimes not even specified. there must be some advantage for the individual who commits a violation of the arm’s-length principle. biased behaviour of the one who is corrupted makes an informal. and links corruption to the state.
there will be no rents. Corruption is just a form of rent appropriation and its dissipation. Rent is a factor’s income that is above the competitive returns of the factor. i.e. It is socially unacceptable. but of another kind. but it is still not corruption. its transactions costs are multiplied. This origin of corruption should always be taken into account when discussing the factors of corruption. i. a properly operating court would process corruption as a criminal offense.e. formulating the contract (particularly taking into account all foreseeable and unforeseeable contingencies). This is not to say that standard legal contracts are free of transaction costs. a situation in which economic agents are willing to pay a bribe to be included in the rent appropriation scheme – they are paying to earn some rent. This very specific feature of corruption as an illegal contract generates its substantial transaction costs. The transaction cost feature of corruption is of great relevance and must be taken into account when the consequences of corruption are analysed. Corruption undermines democratic institutions. It is an informal contract because it is illegal – no court in the world will uphold it if there is a problem with its enforcement. the consequence of rent appropriation. The factors that create rent are the ones that create fertile ground for corruption. that is not corruption – it is a crime. monitoring the contract. hence in the world of perfectly competitive markets. extortion is something that provides intentional non-compliance with the arm’s length principle. From the enforcement point of view. slows economic development and contributes to governmental instability. for example) a violation of this kind is not corruption. It is important to distinguish between corruption and other illegal activities because factors of corruption and policies to fight corruption usually are or can be quite distinctive from factors and policies against other types of illegal activities. Corruption attacks the foundation of democratic institutions by distorting electoral processes. corruption is a contract. In addition. Economic development is stunted because foreign direct investment is discouraged and small businesses within the country often find it impossible to overcome the "start-up costs" required because of corruption. and enforcing the contract. Competitive returns are those achieved on the competitive market. This is to say that due to the illegal nature of the corruption contract. corruption is in most cases. corruption is not the only thing that is socially unacceptable and illegal. but since there is no advantage for the victim of extortion (a judge or a prosecutor. the most important of which are: finding the counterpart. From the point of view of its source. political and economic phenomenon that affects all countries. On the contrary.CULTURE OF CORRUPTION IN INDIA 8 service orator to anyone. perverting the rule of law and creating bureaucratic quagmires whose only reason for existing is the soliciting of bribes. SATISHCHANDER . Corruption is a complex social.
if corruption is considered endogenous to the political process. In that sense Tanzi’s definition of corruption is morally neutral. hence principal-agent relations (and the scale and scope of asymmetry of information) are not as influenced by the political process and political constellations as by the outcomes of the process. The issue of morality is irrelevant to the considerations in this document. this approach cannot explain political corruption. Corruption is nothing but a consequence of the political process. corruption is institutionalized and its level and pattern depend on the political constellation. Nonetheless. corruption is considered as a form rent appropriation by the ruler. Only administrative corruption (corruption of civil servants) can be explained and predicted. including administrative corruption. i. This approach is based on the assumption that there is an asymmetry of information between principles (politician or decision maker) and agent (civil servants or bureaucracy). Economic theory has developed two basic views of corruption. it is the evil that should be fought because its very existence is against basic moral principles. the political regime in the country. One view is set within the framework of the principle-agent theory. corruption is not institutionalized. so there is no possibility for political corruption. In other words.e. According to the main assumption. For an overwhelming majority of people corruption is something morally unacceptable. it is very well developed. The methodological breakthrough of the kind has been recently achieved by Charap are Harms. the economics of organized crime and the political economy of dictatorship. it seems that not only are the assumptions of the model unrealistic. Basic Types of Corruption The types of corruption are strictly linked to the theoretical view on corruption. Accordingly. The methodological approach based on recent contributions to literature on the economics of conflict and appropriation. This approach is analytically very clear. but also its predictions regarding political corruption are wrong. Within such a framework. Political corruption simply cannot be explained within this methodological framework. The crucial feature of this approach is that corruption is exogenous to the political process. the state is benevolent. Since the list of corrupted politician and associated political scandals is lengthy in virtually all counties of the world. However. as they can explain a wide range of behaviours of civil servants. benevolent politicians are not informed about the misdemeanours of their subordinates. The analysis of corruption which follows is morally neutral.CULTURE OF CORRUPTION IN INDIA 9 A few words on the ethical aspects in defining corruption should be added. SATISHCHANDER . and the models of theoretical models of corruption based on this approach are analytically rich.
i.e. If a person bribes civil servants in charge of issuing a passport that a briber/corruptor is entitled to. they are effectively constrained. civil servants are cooperative because they have their share in the spoils. The rent is extracted through sales of a limited number of permits and licenses for economic activity. due to their own participation. The frequency of this type of corruption is a good indicator of the capacity and effectiveness of a country’s administration. Corruption serves as a hostage mechanism to minimize the probability of defection or insurrection by lower level insiders of corrupted civil servants. Nonetheless. its poor administrative capacities or a poor supply of administrative service. The first one is corruption for achieving or speeding-up materialization of some specific right that the citizen or legal entity is entitled to-corruption without theft. civil servants are corrupted to do their job or to do it more quickly then they usually do. find a reason why an uncooperative civil servant is found guilty of corruption. Corrupt civil servants are created to satisfy ruler desire to foster loyalty through patronage. given the level the structure of corruption. that is exactly the first types of corruption. instead of not doing it. Finally. One should bear in mind that the shortage of supply of administrative services can be deliberately produced. endowing only a few civil servants with the power to grant license enables the diversion of the licensing proceeds from the budget toward private gain. hence we have information on the driving force of the change. there is no legal barrier for his passport to be issued. when and is necessary. as suggested by Shleifer and Vishney. Furthermore. i. Its specific and more aggressive version is bribing officials for jumping the queue for providing the service that is thoroughly legal. Dictators can. The main problem is that the structure of incentives to the political decision makers and change of the structure are not explained. there is both the carrot and the stick to strengthen loyalty. The second type of corruption is a corruption that violates the legal rules. Corrupt civil service is nothing but the extension of efficient rent appropriation by the ruler. although the model provides information on the structure of incentives for rent appropriation. In other words. or a very biased enforcement of the rules. there basic types of corruption are identified. This approach is tempting because it provides grounds for understanding and explaining the relationship between corruption and the political process. Hence. This is administrative corruption and is the most modelled type of SATISHCHANDER . In general.CULTURE OF CORRUPTION IN INDIA 10 Corruption is the answer to the problem of internal cohesion of predatory teams. within one or other theoretical views. from turning to the public to denounce the system. this methodological approach does not provide a clear analytical framework for consideration. aimed at creating the rent and its redistribution via corruption.e.
not the public. In other words. The most significant direct consequence of this type of corruption is that legislation and public policies are not justly enforced. Accordingly. Finally. and that this type of corruption can explain some elements of public policy in many counties (not only transitional ones). The underlying assumption is that legislation and public policies are influenced by the bribing of legislators by a few oligarchs-very powerful business people. corruption is seen as a solution for bad public polices. the concept of ‘’state capture’’ lacks analytical clarity. Subsequently. In brief. The concept of state capture was developed by the World Bank primarily for explaining the reality of political life in transitional economies. there is “state capture’’. as the total supply of corruption (demand for the bribe for violating the rules) is provided by the civil servants. A cynical approach to the issue within counties with widespread corruption is that some pubic polices are so bad. Strong lobbying is an entirely legal and legitimate activity in mature democracies. Nonetheless. it is actually better for the society that they are not enforced. The crucial analytical problem of the “state capture” concept is specifying a cut-offline between legitimate political lobbying and “state capture” created by corruption. one should take into account the costs of corruption as a method for circumventing bad public policies. public policies are inevitably formulated to favour the oligarchs. Although there is no doubt that such a process exists. the analytical framework of “state capture’’ should be substantially improved in order to better explain its mechanisms and for an enhanced understanding of the process. Nonetheless.CULTURE OF CORRUPTION IN INDIA 11 corruption – the vast majority of theoretical contributions in the field are about administrative corruption. This is due to very clear motives and incentives for each economic agent and very clear relation between them. since the political process resulted in bad policies (and no alternatives to political process are feasible in the foreseeable future). The main problem is that interest group influence legislators’ decision making in all counties. although the type of corruption that influences public policy is very important to consider. whatever the source of these bad public polices. SATISHCHANDER . It would be better if these policies were not enforced at all. This type of corruption corresponds to the principle-agent model of corruption. corruption is considered to be the second best solution. The state can be captured both by aggressive lobbying and by effective corruption. and more specifically are the public policies designed by lobbying superior to ones designed through corruption? Additionally.corruption that is aimed at changing the rules and regulations into rules and regulations that favour the interests of the corruptor. the question is whether the social costs (in terms of the opportunity costs of resources uses) of lobbying are greater or less compared with the social costs of corruption. the crucial question is to what extent are the outcomes regarding public policies from legitimate lobbying and illegal corruption different.
instead of enabling the free market to regulate relations and transactions among economic agent on the market. the analysis of industrial organization cannot answer why some (benevolent) governments are equipped with agencies like the KGB while others are not. Basic Causes of Corruption All economic agents are maximizing their individual utility. In decentralized corruption. decentralized pattern of corruption.e. i. As described earlier. Within the methodological framework of a benevolent state. Resources are allocated to the activities the greatest return on investment (an allocation decision).Accordingly. people in all conceivable conditions behave economically rationally.CULTURE OF CORRUPTION IN INDIA 12 The other important distinction in the case of corruption is its industrial organization. violation of free market operations. rent is a factor of income above the competitive returns (opportunity costs) of the factor. In other words. emphasizing centralized (monopolized) vs. i. In short. SATISHCHANDER . The crucial prerequisite for centralized corruption is the ability to enforce joint profit in bribe collection. rent can be created in a few distinctive ways. personal welfare (wealth). rather than single. but in realty the most significant rent generator is government intervention. the government. the process of creation and distribution (appropriation) of rent. Theoretically speaking. It is closely related to problem of the problem enforcing collusion in oligopoly. steps in and regulations in a hands-on manner. corruption in the country is centralized. such as the KGB in the former Soviet Union. the crucial distinction is the one of transaction costs. A frequently used synonym for this type of government intervention is regulation. i. It has been pointed out that when governments have an effective policing machine to monitor the action of civil servants. economic agents are engaged in the rent-seeking process. a single corruptor is dealing with multiple. Because of that. In other words.e. as Shleifer and Vishney thoroughly analysed the phenomenon.e. because rent appropriations will maximize individual utility (welfare). corruption contracts (transactions) hence the transaction costs are multiplied. selfish interests of economic agents are the basic motive for economic transaction between them. Apart from the prerequisites for distinctive industrial organization of corruption. whatever the motive may be. a monopolized corruption pattern is superior to a decentralized one regarding the scale of transaction costs.
at the discretion of civil servants in the enforcement process. The more complicated. There are some cases of corruption not Linked to rent. at the end of the day. That difference is economic rent which will be distributed. and ambiguous the rules. That will inevitably create a shortage in the market. Needless to say. and therefore more corruption.e. most common. Not only does such legislation create incentives for corruption. for efficient enforcement the rules should is simple. a portion of the Rent is appropriated by the corruptor and the remaining Portion is appropriated (in the form of bribe) by the Corrupted. Accordingly. Only the firms the obtain import certain goods and only the quantity specified in the license. but the most significant. results in fewer free-market operations. clear. is very important for corruption. apart from the content of legislation that introduces government regulation. the amount of money consumers are prepared to pay for an additional unit of the good) will be substantially higher than the costs of its production/import. i. By paying a bribe to get an import license. Furthermore. unclear. supply will not be formulated according to the marginal costs of the producer/importer. and easily understandable by anyone. unless the government explicitly empowers some of them to do so. Nonetheless. there are strong incentives for corruption aimed at misclassification of the goods and illegally reducing the levy by applying the lower rate.e. making threats to the corruptors and corrupted less credible. As to the specification of the rules. more government regulation ceteris paribus (all other things being equal). economic agents’ are precluded from doing something. procedural legislation. At that specified quantity. the more opportunity there is for corruption. The complicated and non-transparent legislation specifying slow procedure (procedures with unspecified time limits or no binding deadlines). i. and consequentially dangerous forms of corruption are linked to Rent-seeking behaviour.CULTURE OF CORRUPTION IN INDIA 13 The majority of government intervention on the market is prohibitive. A typical example of this occurs with a large variety of customs tariff rates in general and for rather similar products in particular. it is very important how these rule and the process of the enforcement are specified.e. without introducing import License regulation there would be no rent and there would be no corruption. but it also decreases the probability of detection. the commanded by demand (i. A typical regulation of kind is import licensing. creates tremendous opportunity for corruption. but by the administratively specified quantity. appropriated. which are rules regarding enforcement of rules and regulations. If the customs tariff rate for one product is 3% and for another similar product is 30%. SATISHCHANDER .
government power should not be diminished. There will be no barriers to entry that must be circumvented by a certificate issued by a civil servant. etc. The basic reason for the government to exist is to provide the rule of law. and transparent rules that are understood by all concerned parties. thus allowing market forces to function effectively. no black market and no rent generated and appropriated from long queues and the black-market. on the contrary it should be enhanced – there is no room for the government to withdraw from this area as a key element of anticorruption strategy. as the strategy should take into account and address the main sources of corruption. There will be no shortage on the market.CULTURE OF CORRUPTION IN INDIA 14 The analysis of corruption factors is a prerequisite for an effective strategy for fighting corruption. Deregulation means abolishing government intervention that is prohibitive. Market forces on the free market will drive all the factors’ returns to their competitive level and there will be no rent due to government intervention. For economic agents the most important aspect of the rule of law is protection of private property rights through efficient contract enforcement. Deregulation and decreasing the role of the government has its limits. Such Rules of the game – and the name of the game is market competition – will minimize disputes regarding their enforcement which will minimize the uncertainty of economic agents and substantially decrease any room for corruption. strict rule of law is one of the elements of an effective strategy for fighting corruption. Civil servants will lose their power to decisively influence the fortune of businesspeople and citizens. From another perspective. the crucial element for any effective strategy for fighting corruption is deregulation. For example. Accordingly. all measures that improve the rule of law will definitely contribute to the fight against corruption. no queues for goods whose supply is limited. because civil servants will not be in a position to offer any favour to the corruptor. hence there will be no source of corruption of that kind. Then there will be no incentive for private parties to bribe civil servants. Taking into account that rent is the most important source of corruption and the government intervention that creates rent is the most important factor of corruption. One of the crucial elements of strengthening the rule of law is the creation of simple. On the contrary. clear. deregulation will decrease and in some cases eliminate corruption due to the lack of discretionary power of civil servants. SATISHCHANDER . In the case of rule of law. there will be no import licenses because anyone can import whatever she likes in the quantity that she considers profitable or good for the business.
reduces the discretionary power of civil servants. but not sufficient. punishment. excessively high wages in the public sector can have an adverse effect on the allocation of the labour force as talent is moved away from the private.CULTURE OF CORRUPTION IN INDIA 15 Streamlining procedural legislation and making it simple and transparent is also very important because it minimizes the uncertainty of economic agents. Such a will can be generated by identifying the most significant consequences of corruption. Increasing wages of civil servants is another important segment of the strategy for fighting corruption. the wage scheme as a segment of an anticorruption strategy should always be considered along with the probability of apprehension. value-adding sector. In this sense. Nonetheless. In other words. therefore decreasing incentives for corruption. Furthermore. Accordingly.e. If such a will exists. wages in the private sector. high wages of civil servants (higher than in the private sector) can provide incentive to not accept bribes only if there is a substantial risk of apprehension and punishment that includes a decrease in their future (expected) incomes. i.e. The increased probability of apprehension and punishment creates a deterrent for civil servants to accept bribes. government must send an unequivocal and credible signal to all concerned parties that it is committed to fighting Corruption. Such a framework increases the probability of detecting corruption misdeed sand apprehending corrupted civil servants. it should be recognized that the bribe itself is nothing but a redistribution of income. and increases the visibility of corruption cases. Consequences of Corruption As to the consequences of corruption. the bribe itself is not a welfare loss – the SATISHCHANDER . These words must be followed by actions and accomplishments in the area of policy and institutional reform along the suggested lines as well as action in the area of the criminal prosecution of corruption. i.e. Nonetheless. situations in which procedural legislation is violated. i. Part of the punishment for corruption should be expulsion of the civil servant from the job that provides higher wages than those on the labour market. Strong words are necessary. the most important prerequisite for effective anticorruption strategies is strong and unconstrained political will. this element of the strategy should be considered within the framework of the deterrent. for credibility.
according to this approach. they are not in favour of the public interest. Although strictly speaking this is true. only its distribution. In other words. all firms produce the majority of inputs internally. i. These public policies can be deliberately pursued specifically because they create rent. i. There is a rather widespread notion that the corruption income of corrupted civil servants provides compensation for their lower wages. and the rule of law is prerequisite for the market economy. Hence there is no need for a wage increase and no need for increasing the tax burden. However. this is the amount of transaction costs in terms of the opportunity costs of highly skilled labour. The origin of rent-seeking is public policies that boost government intervention and disable free market operation. If there is no rule of law. they are completely wrong regarding maximization of economic efficiency and social welfare.e. Corruption violates the rule of law. it was demonstrated that rent-seeking activities are closely related to corruption. And transaction costs are real costs: the opportunity costs of resources engaged in transaction activities. these policies can be influenced (irrespective of whether it is done by legitimate lobbying or illegitimate “state capture “corruption) by interest groups with a vested interest in creating and appropriating rents. corruption “taxation” is inferior in terms of economic efficiency. Hence. Furthermore. proper taxation (together with efficient tax administration) decreases Uncertainty and transaction costs.e. As it has been pointed out. senior managers in countries with widespread corruption spend about 20% of their working time negotiating corruption and enforcing corruption contracts. emphasizing only distributional aspects of corruption is one of the major fallacies of corruption research.CULTURE OF CORRUPTION IN INDIA 16 scale of social welfare does not change. Although these public policies are in favour of these interest groups. The first reason is the existence of huge transaction costs from corruption. According to some estimates (Tanzi). Because of the poor exchange between firms. There is poor exchange between agents because there are no incentives for exchange due to poor protection of property rights and inadequate support of contract enforcement. enables the proper tax burden to be decreased. In other SATISHCHANDER . there is no protection of private property rights and noncontract enforcement. the corruption burden is its own kind of a “tax burden” that. and therefore its transaction costs are Massive. instead of the purchasing these inputs on the market. corruption is an illegal contract.
and sometimes evens a destructive. Since corruption decreases expected returns.e. making their decisions based on expected profit rate (returns). As a consequence. If corruption is widespread. other resources will be also be allocated to redistributive activities. SATISHCHANDER . This kind of uncertainty decreases the expected profit rate for potential investors. entrepreneurs. corrupt countries receive less foreign direct investment and consequently record lower growth rates. New methods of corruption will be introduced instead of new products and new methods of production. particularly regarding protection of property rights. activity. This is a crucial dilemma for every nation: will the available resources be engaged in creating wealth or merely in its redistribution? Widespread corruption is a symptom of a severely ill society with a majority of resources and innovation allocated to the area of redistribution. wealth creating activities will focus on corruption. if the highest possible returns are in the area of corruption. Corruption is definitely an unproductive. This is particularly true for the foreign direct investors who compare expected returns. And it is the nation that must make some difficult decisions regarding it. i. Corruption is not about an amount of money changing hands or about “grease in the wheels of business. There is another reason that countries with widespread corruption cannot expect high growth rates that is directly related to entrepreneurship and innovations. Innovations that are a result of entrepreneurship will be allocated to redistribution and corruption.CULTURE OF CORRUPTION IN INDIA 17 words. entrepreneurship is a resource that can be alternatively allocated to productive activities or to unproductive and destructive activities.e. expected cash flow for investments in various countries and decide to invest their capital in the country with the highest expected returns. there is no social division of labour and no prerequisite for specialization. are less likely to invest when lower returns are expected. a significant source of increasing economic efficiency is absent. It will go to the activity that enables the entrepreneur the highest possible returns on his activity. Investors.” It is about the future of the nation. Since there is no specialization. redistributing activities and allocating their talents to it. instead of focusing on productive. This is the indirect way in which corruption diminishes economic efficiency and consequently Social welfare. Corruption increases basic business uncertainty. i. As suggested by Baumol.
Such a strategy would be likely to create new inefficiencies in government. efficiency. In most countries. is not to achieve complete rectitude but rather a Fundamental increase in the honesty. it would be Unrealistic and cost-prohibitive to attempt to eliminate corruption completely. For their part. Additionally. moreover. Draconian anticorruption Programs. can have a negative effect on personal freedoms and fundamental human rights if regulations translate into excuses for public officials to become in caressingly abusive toward the citizenry. Each corrupt transaction requires a “buyer” and a “seller.CULTURE OF CORRUPTION IN INDIA 18 2. An active. foreign governments and others engaged in corrupt practices either actively or passively. The aim. therefore. bureaucratic discretion is necessary for effective administration. The responsibility of containing corruption must not ignore the participation of international Firms. the demand for reform is being led by organizations of civil society and the International donor community. Governments need to introduce appropriate legislation to reduce corruption and provide whatever means is necessary to ensure that appropriate steps are taken to build systems of integrity and rule of law. Among stronger measures is the criminalization of bribery. including the prosecution of companies and governments in the North and tax deductibility of bribes paid by Northern companies in the South. WHO IS RESPONSIBLE? Ultimately.” The government is responsible for dealing with civil servants who engage in extortion and bribery but it is businesses and individuals who offer bribes to civil servants to obtain certain advantages. SATISHCHANDER . all parts of society must share the responsibility for containing corruption because all are willing or unwilling participants. A number of instruments are available to curb cross-border corruption. Reformers can only achieve real gains when a Society changes its expectations and understanding of its entitlement to a government that is not corrupt. While all those who are part of the problem must be part of the solution. The new “No bribery pledge” initiated by OECD is one. government leaders’ politicians and bureaucrats’ must provide the political will to address all forms of corruption. involved and empowered citizenry is indeed essential to any anti-corruption campaign. and fairness of government.
Despite these common characteristics. and non-merit based appointments. the failure to pay a living wage lies. Others have politicians who create legislation that seems designed to render corrupters free from prosecution. In some countries. In other Countries. it occurs in all countries regardless of the level of social and economic development. public servants still engage in corrupt behaviour despite adequate pay. in others. Corruption most likely will occur in the interaction between the public and private sectors. Some Developing countries enjoy the rule of law and benefit from an independent judiciary that conscientiously reviews the legality of official actions. And it is generally practiced by public officials who have direct responsibility to deliver services to the public. in money or in kind. customs duties. promotions. there must be a public official with discretionary power followed by a misuse of that power. or levy fees or taxes. For example. in some countries. to all parties involved. SATISHCHANDER . For corruption-extortion or bribery-to take place. income tax collection. there is also collusion between the dishonest official and one or more public or private officials. Still. and many more. Corruption flourishes in different places in different forms including: land Re-joining. For instance. In the case of bribery. Corruption has a freer rein in some countries than in others. it is unlikely that a detailed attempt to achieve a global or even regional typology would serve a useful purpose because of the number of variables involved. even if they are caught. they are weak and unaccustomed to having a ‘voice’ or speak authoritatively to their government. The actors amenable to leading or supporting reform also vary significantly from country to country. at least in part. corruption takes on very different features from one place to another. Some governments have incentives that encourage law enforcement officers to be willing partners in anti-corruption activities. at the root of the problem. or neutralized.CULTURE OF CORRUPTION IN INDIA 19 3. and a benefit. elsewhere the judiciary is suborned. the private sector and other elements of civil society are well-organized and poised to assume an assertive role. acquiescent. IS CORRUPTION GLOBLE TYPOLOGY? Corruption does have some common characteristics. All of these factors dictate the importance of carefully choosing the strategy and entry points for anti-corruption measures. apply or enforce specific regulations.
SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 20 4. More and more development experts have come to the conclusion that it is impossible to alleviate poverty without first curbing corruption. Most donors are concerned “not with the exercise of state powers in the broad sense but specifically with the appropriate management of the public sector and the creation of an enabling environment for the private sector. can directly support civil society’s efforts. and though civil society is crucial to sustaining reform. However. -Adding its voice and support to international efforts to reduce corruption. As an example of a framework for addressing corruption “at home” the World Bank works at four levels: -Preventing fraud and corruption within Bank-financed projects. there are limits on the extent to which the Bank. The Donors’ Interest in Tackling Corruption The topic of anti-corruption has recently generated substantial academic interest as well as support from the highest levels of the World Bank. Some multilateral donors’ mandate dictates that they can only become legitimately involved when corruption is treated as an economic phenomenon and its actions or reactions to corruption must have economic development at their core. the Bretton Wood organizations’ mandate do not extend to the political aspects of controlling corruption. This framework allows for activities in which the Bank and IMF can advise countries on economic policy reform and strengthening institutional capacity. policy dialogue. and in the choice and design of Projects. -Greater consideration of corruption in country-assistance strategies. analytical work. IMF and the international community in general. as a lender to governments. country-lending Considerations. -Helping countries that request support in their efforts to reduce corruption. corruption can be addressed by World Bank and IMF staff as an economic Concern within the framework approved by the Board for governance issues. The new approach presented in this book is founded upon the premise that corruption is a major hindrance to economic development. More specifically.
on supporting governance activities. It is often easier to get various stakeholder groups to support preventive measures through the creation of a system of national integrity rather than specific measures designed to fight corruption. which means “using public powers for the public good. and (c)building an prevention and anti-corruption capacity of the public sector-including parliament. particularly by strengthening non-governmental organizations (NGOs) and the media. improve their public services and create an enabling environment for the private sector. and therefore. is to help client countries curb corruption and build integrity. 5. The approach to promote good governance through among other things. which focuses on prevention through civil-service reform and public-expenditure planning and management. The model assumes that corruption is a function of weak institutions and of policies that create economic rents. (b) institutional strengthening and (c) international action. Legislative reforms to strengthen parliament role in overseeing the executive but also the passing of new anticorruption legislation Legal reforms. that strengthen the rule of law Building “integrity”. research and dissemination of findings. as well as. SATISHCHANDER . The strategy is based on action coming from three directions: (a) economic policy reform. which suggests a positive. prevention. Experience gained from work with client countries demonstrates that it is preferable to focus on prevention through the building of integrity.(b) building integrity by promoting governmental accountability and transparency. Prevention an important tool for fighting corruption The approach presented in this paper is essentially holistic.CULTURE OF CORRUPTION IN INDIA 21 The ultimate goal of most donors’ strategies on corruption is to help countries move from systemic corruption to an environment in which a well-performing government minimizes corruption’s negative effects on development. Corruption is viewed as a systemic issue requiring the donors to work on several fronts and to collaborate with all branches of government and many parts of society. watchdog and enforcement agencies. The majority of donors believe that tackling corruption is less a matter of new instruments than of reducing corruption through existing ones. pro-active preventive approach.” is the flip side of fighting corruption. The program dovetails with other reforms such as: Public Sector Management program. The Governance and Anti-Corruption program comprises three principal activity areas: (a) improving public sector service delivery by focusing on public sector accountability and legal reform in order to re-introduce rule of law. and the judiciary -and of civil society.
established rule of law and creation of an enabling environment for the private sector. A first element is to build systemic integrity within the society as a whole and establish the rule of law. A second and related element is to strengthen the institutional capacity of select public-sector and civil society organizations so that systemic integrity and better publicsector performance become possible. It is often necessary to explain to partners that what is sought is not merely the curbing of corruption or the improvement of integrity. A third is to reorient government in order to improve performance or results. SATISHCHANDER . As Shown in Figure 1. The real impact these programs seeks is improved delivery of public services. against the background of an appropriate macroeconomic framework. Three areas of focus combine to promote better delivery of public services.CULTURE OF CORRUPTION IN INDIA 22 SUSTAINABLE DELELOPMENT IMPACT OUTCOME OUTPUT COST INTEGRITY CAPACITY RESULTS ORIENTION MACRO ECONOMIC FRAMEWORK Figure 1: Key Focus Areas for Institutional Reform The new approach links integrity to other key variables for sustainable development.
Governments and donors alike gave little recognition to the private sector.CULTURE OF CORRUPTION IN INDIA 23 6. Underlying this new approach is the belief that elected politicians and public sector employees should focus on generating sustainable development results by meeting the needs of the general public and other clients. Underlying principles of this new governance strategy A. Politicians and employees should be held accountable individually and collectively for fulfilling government’s responsibilities and commitments. More attention was given to budgets and activities than to the economic outcomes and impacts that would be achieved by these activities. Most capacity building focused on “tools and skills” for the executive branch of government with little emphasis on the capacities of the legislative and judicial branches of government or of civil society and the private sector. donor agencies preferred to work almost entirely with government agencies. Results were seldom the focus. New Paradigms In the old paradigm. This new strategy can be expressed in the new paradigms shown are… • Accountability through transparency (access to information) • Focus on prevention rather than enforcement • Raise awareness and expectations of civil society • Focus on results-oriented service to the public • Develop the capacity of “Pillars of Integrity” to fight corruption New Paradigms of a Governance Strategy SATISHCHANDER . the general public or civil society organizations as important agents for change. And government accountability and transparency were not seen as particularly important.
In recent years. more will need to be done because less than two per cent of the population in most developing countries works for the government. To institute accountability and transparency in government. Prevention through Increased Accountability Lack of accountability by national and international politicians and civil servants is probably one of the most important reasons why sustainable development has not occurred in most of the world’s poorest countries. and empower the citizens to Monitor the government through periodic service delivery surveys. newspapers. it has helped clients organize integrity workshops and administer informal surveys involving public sector officials to raise their awareness of the causes and consequences of corruption. TV). • Conduct annual broad based national/municipal integrity workshops were all Stakeholders are invited to discuss problems and suggest changes. Raising Public Awareness Educating and involving the public in building integrity is the key to preventing corruption and thereby the key challenge and the keystone of this holistic integrated strategy and can take different forms: • Public education and awareness campaigns (radio. both internal and external pressure is needed. tools have been developed that can help client ministries and municipalities increase government accountability and performance. C. including the private sector. • Inform citizens about their rights (Citizens’ Charter). SATISHCHANDER . How can transparency and accountability be generated? The approach presented in this paper is to help clients change the mind set of public-sector employees. Through its work with client countries. Accountability must be generated by a combination of political will from the top and public pressure from the base. media and civil society. Even if leaders are successful in changing attitudes within the government bureaucracy.CULTURE OF CORRUPTION IN INDIA 24 B. involvement and empowerment of the remaining98 per cent of the population. The new governance approach is based on the assumption that increased public sector accountability can only be achieved through the education.
Integrity is critical when appointments of key executive or civil service positions are made and is equally important among politicians. transparency and a focus on objectives and results. The new approach emphasizes the importance of leadership and an integrity mind set among Public servants. such projects financed infrastructure. Broad Based Capacity Building to strengthen all Pillars of Integrity Capacity building has traditionally focused on expanding government facilities and skills. equipment and technical skills training. Typically. • Investigative journalism and information by the media. and declarations and monitoring of assets. • Dissemination. codes of conduct. SATISHCHANDER . These activities are important. but without a leadership confident in introducing Accountability. involves two major shifts from traditional approaches. “Mind set” refers to the outlook and state of mind that policy-makers and Civil servants bring to their jobs. municipal and sub-county level. D. The new approach to capacity building encouraged and Pioneered by the Economic Development Institute (EDI) of the World Bank in close Collaboration with TI. the sustainable effect of these initiatives are questionable. Donors work as facilitators with clients to establish Standards and ground rules for leaders in the public service through the introduction of Leadership codes. • Production of integrity surveys at the municipal or sub-national level.CULTURE OF CORRUPTION IN INDIA 25 • Production and dissemination of a national integrity strategy and an annual corruption survey at national.
The collection of stakeholder groups is referred to as “pillars of integrity” because it is incumbent on them to support and uphold SATISHCHANDER . Pillars of Integrity To ensure that there is an enabling environment that is supportive of private. The “pillars of integrity” in a society include actors outside the executive and outside government itself.SKILLS.EXECUTIVE.MIND-SET.A New Definition The second change is that the audience for the capacity building be broadened to include all Parts of society interested in creating and maintaining national integrity.and publicsector Contributions to sustainable development. public account committees. PARLIAMENT. a National Integrity System needs to be built with mutually supportive pillars. Capacity Building . LEADERSHIP.INTEGRITY.PRIVATE SECTOR. Traditionally. However.INCENTIVES. A more systemic approach to building integrity and sustainable development requires institutional strengthening of other “pillars” that is.WATCHDOG AGENCIES. INFORMATION. law enforcement agencies.JUDICIARY. the focus of donor attention has been on the Executive branch of government.CULTURE OF CORRUPTION IN INDIA 26 INPUT TRADITIONAL CAPACITY BUILDING NEW APPROACH OUTPUT WHAT TOOLS. particularly the relating to government ministries.MEDIA. Donors have in some of the more advanced countries been invited into help initiate awareness raising and skill building efforts with parliaments. domestic stakeholders both inside and outside government. NGOs and private-sector organizations. CIVIL SOCIATY. judiciaries. WHO ENFORCEMENT AGENCIES. capacity building focused most entirely on strengthening the capacity of ministries to deliver public services is insufficient.
E. A National Integrity System is based on eight pillars of integrity:- (1) Executive (2) Parliament (3) Judiciary (4) Watchdog agencies (5) Media (6) Private sector (Chambers of Commerce. The Role of the National Integrity Unit in Integrating Reforms Develop a systemic approach to building integrity by ensuring the inclusion of Integrity issues in the economic reform agenda. civil society.CULTURE OF CORRUPTION IN INDIA 27 practices that promote public integrity. The reasons for building an integrity system may differ from country to country. Where several pillars weaken. and donors into a coherent framework of institutional strengthening. Three broad. and quality of life. Examining a National Integrity System requires identifying gaps and opportunities for corruption within each of the pillars and then cocoordinating the work of the government. the system can no longer support sustainable development and effectively collapses illustrates the inter action of the different stakeholders in combating corruption. This is particularly the Case in much of Latin America and Africa where it is estimated that many countries need ten To fifteen years of intensive work before effective rule of law can be established. 1. objectives are identified: rule of law. almost generic. In the fifteen countries that have embraced the reform effort. a weakening of one pillar results in an increased load being shifted on the others. sustainable development. Provide a direct link between government and institutions of civil society for research. SATISHCHANDER .) (7) Civil society (8) Law enforcement agencies The pillars are interdependent. etc. inadequate rule of law could turn out to be the critical bottleneck for progress.
The focus of the strategy is on achieving Specific out comes in the expectation that these will.CULTURE OF CORRUPTION IN INDIA 28 2. NGOs. 4. The National Integrity Strategy should result in a wide range of reforms that are interrelated and integrated in order to create systemic change. providing. and citizens. contribute significantly to such impacts as improved public-service delivery and an enabling environment for privatesector development through the establishment of the rule of law. and using Information in partnership with the media. in turn. integrity-building Workshops and other events. public-education and awareness-raising activities. Requesting. Conduct SDSs. 5. Facilitate integrity-building activities as part of the implementation of the government’s economic and public-sector reform programs. Elements of a National Integrity System INTEGRATED STRATEGY FOR CURBING CORRUPTION IN INDIA INDEPENDENCE OF BRANCHES AND CHECKS AND BALANCES LEGISLATIVE REFORMS BUILDING CAPACITY: -SKILLS & TOOLS -MINDSET -INTEGRITY -INCENTIVES -LEADERSHIP JUDICIAL REFORMS BUILDING INTEGRITY TO FIGHT CORRUPTION TO IMPROVE SERVICE DELIVERY EXECUTIVE REFORMS ECONOMIC REFORM: -TAX REFORM -DEREULATION -OPEN THE ECONOMY -CUSTOMS REFORM EMPOWERING CIVIL SOCIETY AND THE MEDIA TO MONITOR THE STATE CITIZENS/YOUTH EMPOWERMENT RESPONISIBLE MEDIA CIVIL RIGHTS POLITICAL REFORM SATISHCHANDER . Information and public awareness-raising 3.
Customs 1) 2) 3) 4) 5) 6) 7) Review customs precede legislation to strength incompliance. Have regular meetings with various stakeholders Establish Complaints Bureau (report to outsider) Code of Ethics for all officers Raise public awareness Increased transparency about where you get what service in customs Implement the declaration and monitoring of assets for customs officers. The Champions of Reform in India A ninth “pillar” can be added to the eight organizational or institutional pillars. F.. Following are two examples of a series of outputs that may be needed to achieve outcomes in terms of public administration and civil-service reform as an element of institutional reform. Such groups increasingly have the power and influence needed to protect the Institutions undergoing reform from the enemies of reform. Private Sector 1) Strengthen Code of Ethics for managers of private-sector companies 2) Increase transparency of political party financing 3) Implement declaration and monitoring of assets for private-sector managers SATISHCHANDER . and in terms of deregulation as an element of economic/regulatory reform. a country’s Executive Would is the chief champion of reform and this is the case in most of the countries where Donors facilitate governance work. This pillar would be composed of those essential individuals or groups of people who provide the Political leadership necessary to give vision to the reforms and the political will to see them Implemented. Depending on the country.CULTURE OF CORRUPTION IN INDIA 29 Each of the outcomes listed in represents a series of integrated activities and outputs. the nation’s chief executive May be the formal client for governance work while the real champion is another senior Government official India. in other situations. However.. this group could be derived from municipalities or youth. Ideally.
open to the media and the public 8) Sanction parasternal bodies for late submission of annual report to Parliament 9) Introduce more parliamentary committees to discuss corruption reforms 10) Introduce regulation of political funding before the next general election 11) Introduce written answers to PQs communicated in advance 12) Introduce annual returns of assets for MPs published in the media 13) Amend legislation to deal with corruption SATISHCHANDER . banking.CULTURE OF CORRUPTION IN INDIA 30 4) 5) 6) 7) Increase public accountability for private-sector managers Increase protection of shareholders’ interests Increase control of monopolies and quasi-monopolies Improve monitoring of financial services. and insurance Watchdog Agencies and Ombudsman 1) Review the role of the ombudsman 2) Reappraise institutions assigned to combat corruption 3) Strengthen anti-corruption legislation and institutions Executive Branch 1) National Transport Authority: “Clean up” vehicle fitness test through privatization and improved Enforcement 2) Introduce and enforce Code of Ethics in the public service 3) Create a Human Resource Division and job appraisal review 4) Implement declaration and monitoring of assets for top civil servants 5) Introduce more realistic ceiling on funding of political parties 6) Demand registration with Electoral Supervisory Commission Parliament 1) Shorten parliamentary holidays for MPs 2) Increase number of weekly sessions 3) Demand annual report of Ministries to Parliament 4) Introduce live broadcast of parliamentary proceedings 5) Introduce more regular meetings of Public Accounts Committee (PAC) 6) Improve staffing and resources of PAC 7) Have the PAC’s report debated in assembly.
Local Ownership First among key elements in promoting new governance strategy is local ownership. and the internal dynamic vary subtly but distinctively from country to country. Government efforts have failed when the confidence and support of civil society were absent. There are practical benefits to including an international NGO such as TI in the partnership. There are no standard solutions SATISHCHANDER . The Role of Donors as External Facilitators Most donors would probably today openly accept that they have more questions than answers and must work with partners in a learning process. cynical public could undermine even a government’s best intentions. This protects the donor’s objectivity on political issues and ensures that work is directed towards the entire system rather than individuals. The local community is best positioned to know and understand its particular problems. so it is essential to develop broad coalitions supporting reform. There are various stakeholders in the integrity system and success depends on involving as many as possible. The Role of Civil Society Civil society’s involvement is a central part of a strategy to build integrity. Such a partnership also helps minimize risks and exposure for the donor in this admittedly sensitive area of activity.CULTURE OF CORRUPTION IN INDIA 31 Strategy for building integrity A. The potential partner in civil society must be one the government feels comfortable with to enhance creativity. Local actors must drive the process for the very reason that they will be bringing about reform. thus the stipulation that credible donors be invited into a country by government and an organization in civil society. and the best possible solutions. It is naive for outsiders to believe they can solve another country’s corruption problems. Corruption takes a myriad of forms. Local “Ownership” must be rapidly achieved when a pilot governance program is launched. the network of participants. An apathetic. Having an international NGO as a partner opens avenues into civil society through its contacts with leading individuals and opinion-makers in the country.
” B. With a shared understanding of objectives among all the partners and with the process being locally owned and driven. and (c) Its capability of contributing relevant experiences from other countries and contexts into the answer-seeking processes. accountability and improved service delivery. (b) Its ability to help identify the questions that should be asked. the objective is to help client countries mainstream integrity so anticorruption practices become institutionalized and systemic. ranging from formal surveys. which provide baseline data and measure. change over time. Where is the money going? SATISHCHANDER . Various instruments and tools are used. Rather than presenting themselves as policy experts. The strategy is to demonstrate an approach that can be incorporated into projects and to act as a resource for NGOs and local institutions. Action Research Action research refers to learning by doing. There are many questions to be answered. to do establishment of integrity units within government. What is the role and impact of donors on corruption in a country? 3. What is the role and impact of bribes paid by companies from the North to civil servants in the South? 2. Who is paying and who is receiving the bribes? 4.CULTURE OF CORRUPTION IN INDIA 32 that any donor can impose upon or recommend to a country. Ultimately. The donors’ competitive advantage lies in: (a) The knowledge it acquires through its global experience and perspective. focusing on the process. One of the strategies is to initiate a process that will lead all the stakeholders to identify their roles and recognize that “they are either part of the problem or part of the solution. the donors should work as facilitators. which might include: 1. These facilitators should help governments determine how to manage a change process that results in increased transparency.
learn from the results as they become available. While these efforts need to be tailored carefully to each client’s situation. The Governance Program works on a regional basis because a country is likely tube most interested in the experiences of other countries in the same region and therefore more receptive to their examples. SATISHCHANDER . To promote national reform. The objective of the action-research process is to monitor the performance of different tools and processes within these countries. Data from different surveys and other economic and financial data are made available to all integrity pillars. adapting to case law and best practice experience in order to improve the strategy’s effectiveness.CULTURE OF CORRUPTION IN INDIA 33 5. Facilitating the building of national integrity to curb corruption in sixteen countries or more allows for sharing and learning among them. some approaches based upon the Team’s prior experiences have married well with the circumstances of other countries. The strategy for building integrity systems must remain flexible at all times. C. and adapt each national strategy accordingly. 7. opening up government to the public. the following prevention and integrity tools have been developed. The information disseminated about the government’s responsibilities and what it is actually doing empowers the public and increases the accountability of public servants. this element is being studied in each country case. Is there a link between paying a small bribe and improved service delivery? CICP and UNICRI both emphasize the piloting of new approaches to public-sector Management issues and the dissemination of lessons learned from such pilots and experiences elsewhere. Prevention and integrity tools and activities The process of strengthening a National Integrity System begins with a national dialogue followed by national action. Action-Oriented Data Collection Critical to the success and sustainability of the integrated approach to governance is the innovative use of information. In order to make this learning process as rich as possible. The Sequencing of reforms is an action-research issue of particular interest to CICP’s and its Clients. countries across all five regions have been chosen. While it is too soon to provide clear guidelines.
CIET international. including information about the cost. The SDS covers many aspects of service delivery and identifies the multiple reasons for inefficient and ineffective service delivery. privatization. including factors constraining the delivery of public services. The SDS provides essential baseline data and periodic evaluation information to help design civil service. External oversight in tender process 5. and other reforms. The Integrity Pledge 8. By obtaining more accurate information about service delivery. and ultimately make services more responsive to citizens’ demands. effectiveness. Enforce code of conduct including declaration and monitoring of assets 6. National Integrity Steering Committee (NISC) 10. monitor results. the SDS cycle employs processes which build local capacity for data collection and analysis. government clients are better equipped to decide which services should be delivered by the State. If the information SATISHCHANDER . Islands of Integrity 9. timeliness. Municipal and Sub-national Integrity Workshops 4. decentralization. and quality of each service.CULTURE OF CORRUPTION IN INDIA 34 1. private sector. Integrity or corruption Surveys 3. One reason for this is that programs are frequently designed with limited information about the quality of service delivery before reforms to improve delivery are implemented. Equally. The Service Delivery Survey (SDS) is an important tool used by governments to provide information about service quality. Service Delivery Surveys (SDSs) In many countries. National Integrity Unit (NIU) A. developed the SDS methodology and continues to administer the surveys for the government. and NGOs. If not more important. coverage. and efficiency of public management have had limited success. Surveys focusing on service delivery 2. National and Integrity Workshops (NIWs) (broad based action planning) 7. programs to increase the integrity. The NGO.
instead. The SDS process involves a number of steps. it develops from and along with national capacities. It builds skills among planners and decision makers at local levels in the process of designing surveys.g. SDSs do not require highly developed capacities to be in place.CULTURE OF CORRUPTION IN INDIA 35 leads a government to privatize some services or to ask NGOs to deliver them. the surveys will also give the agencies responsible for the out-sourcing excellent information to manage the contracts. A group of communities is chosen in given region or country. taxation. All SDSs observe the same guiding principles and methods. and institutional reviews. After the data is collected. The SDS uses a large enough sample to permit statistical analysis of the survey results data. the methodology is inherently inter-sectorial. Next. Several survey cycles are required to build local capacity sufficiently so that future surveys may be conducted independently. which enables national and subnational public managers and policy makers to do their jobs more effectively. capacity building is a central theme. roads and police protection). Finally. First. interpreting findings and planning on the basis of timely. key informant interviews. representatives of the public-service Institutions that will be the focus of the survey and representatives from the private sector help analyses any existing data and prepare the process. the appropriate number of Local supervisors and interviewers are trained to organize the surveys and analyses the results. and in all cases. Thus. By emphasizing analysis and communication capacities. collecting data. Since households have a wide range of contacts with public institutions (e. workshops bringing all key stakeholders together are conducted to build consensus and find acceptable solutions to service delivery problems. Second. households and service providers are asked about their perceptions of the quality of public services. which permits comparison between communities over time in order to measure the effect of reforms. SATISHCHANDER . the survey is conducted. SDSs can contribute substantively to national capacities for evidence-based planning. existing problems. An SDS supplements existing institutional data with community-based data. The quantitative data is supplemented with qualitative data collected through focus groups. and ways to overcome the problems. relevant information. The basic building block of the community-based data is the household survey. the results are shared and interpreted by focus groups comprised of both the households and the service providers. The survey results provide valuable information. A large number of nationals are trained to sustain the process. health. The SDS process provides data for sub-national levels (such as regions and districts) as a basis for rational planning at these levels..
and their suggestions for improvements. environment. The surveys help identify areas of institutional weakness that prevent the optimal use of resources and allow individuals to use public power for private gain. New laws. in Mali. Integrity Surveys Since 1997. with donor support. By contrast. The information gathered was used to raise the awareness of designers of an institutional development Program to improve service delivery. These additional “pressure points” outside the civil service should increase the accountability of the public sector and may lead to improved efficiency. which services were most important to them. The SDS was part of an effort financed by donors to reform public administration. effectiveness. capacities. B. and customs services) that opted into the reform program. and responsiveness. instruments. In each country. rules and regulations serve little purpose without an adequately funded and staffed enforcement strategy. and outcomes are different and reflect the particular country’s context. and needs. the objectives. Survey questions dealt with specific problems that public-sector manager shad identified. which ones had problems. the SDS compares public and private services and highlights the areas where the public and private sectors interact. which examine many aspects of service delivery and identify multiple reasons for inefficient and ineffective delivery. One way of doing this is to conduct an annual bribery survey similar to the TI SATISHCHANDER . For most reformers and governments committed to change. NGOs such as TI. A pilot cycle was run in ministries (urban transportation. They can also be used as part of an anti-corruption enforcement strategy. client countries have found it useful to complement the extensive Service Delivery Surveys. SDSs were used further up-stream in program development. The “integrity surveys” or “corruption surveys” are used to identify those areas in the public service where corruption is a problem and to raise awareness of the extent of corruption. The central government and a municipal government may use the data as a performance monitoring tool in part of a broader results-oriented management scheme. enforcement remains one of their biggest challenges. Regionally. With the growing realization that an assessment of public-service delivery should consider the private sector.CULTURE OF CORRUPTION IN INDIA 36 Survey results are used in different ways by different stakeholders. with smaller surveys focused specifically on corruption. The public is empowered when the same data when it is disseminated by the media and other means to civil society and the private sector. a representative sample of households were asked open-ended questions about their contact with government services. can play an important role in helping reformers to monitor the effectiveness of enforcement measures.
In small discussion groups. When this was done in Tanzania. and others. Examples of these activities include:- -the declaration and monitoring of assets as occurred in Tanzania. watchdog agencies. The objective of an NIW is to promote better public service.Payment of adequate wages. papers written by representatives of each of the “integrity pillars” describing how corruption is present in various stakeholder groups. The workshop can start with a presentation of the SDS and Integrity Survey data. . -the establishment of Citizens’ Charters.CULTURE OF CORRUPTION IN INDIA 37 Index. and international experiences and best practices in controlling corruption. With a contextual understanding of the problem. but the dialogue and its results must be developed and therefore owned by the local stakeholders. In addition to the formal integrity surveys. External actors can facilitate the process. 60 per cent of the proposed actions in the plan were accomplished within a year. Follow-up activities may aim to help prevent corruption. The NIW assembles representatives of all the major stakeholders or integrity pillars in society: the executive branch of government. SATISHCHANDER . raise public awareness. these small groups are then encouraged to apply lessons learned and prepare an action plan. Delivery is by facilitating actions and promoting reforms that increase accountability and transparency in institutions and among stakeholder groups. and build (or strengthen) institutions. strengthen enforcement. informal participant surveys are sometimes Included as part of an integrity workshop or symposium to draw attention to a particular corruption issue. National Integrity Workshops (NIWs) The completion of an SDS or an Integrity Survey generally involves a workshop where different stakeholders discuss the causes of inefficiency and corruption and seek to form a consensus about possible solutions. the participants identify and form a consensus about where and how corruption affects their society. parliament. media. C. civil society. the judiciary.
etc. Awareness-raising activities include: -dissemination of survey and workshop results to the media (Tanzania. the facilitators describe their experience in working with societies addressing comparable problems and actions taken internationally. participants are invited to: -discuss the needs of their country in the context of building a workable National Integrity System and in the light of evidence of corruption. The main purpose of the initial NIW is to build a consensus for a National Integrity Action Plan involving representatives from each of the integrity pillars. -prepare an outline drawing on best practice that can serve as a basis for informed public discussion and political debate. and -concrete expression of political will A series of two or more NIWs is useful in building a National Integrity System. -a media campaign and public-education program about corruption (Tanzania. to constrain transnational corruption and its impact on countries in the South. and Ukraine). As part of this dialogue. The workshop develops a general outline of a National Integrity System within the guidelines of the country.). Uganda. Another key objective of the workshop is to raise awareness about the negative effect of corruption in the country and the progress that has been made in curbing it. This is done by drawing on experience and identifying the relevant actors in the society and the roles they would assume in establishing a program where civil society can complement the efforts of government. SATISHCHANDER . Uganda. and Ukraine). During the initial workshop.CULTURE OF CORRUPTION IN INDIA 38 -The re-enforcement of anti-corruption laws (on election financing. including the political opposition. -The strength inning of the court system and the police. the issues of integrity and ethics and their relation to corruption control are addressed. gifts for civil Servants. Specifically. especially within the OECD.
Municipal and Sub-national Integrity Workshops Conscientious mayors and municipal managers are generally concerned about the quality of Municipal services and how to improve municipal efficiency. Seek agreement on the importance of an improved service delivery system to increase the efficiency and effectiveness of delivery. and enhance the image of the municipality. SATISHCHANDER . Accountability and value for money. A National Integrity Action Plan by the end of the workshop. This is done through a Municipal Integrity Workshop. They want to know residents ‘opinions of the services provided. Phase II focuses on carrying out an SDS directed at specific areas of concern.CULTURE OF CORRUPTION IN INDIA 39 -determine how the society as a whole might participate in continuing the debate on the issue of integrity and how to work with like-minded political players in a creative and constructive fashion. install a Local Integrity System to improve service delivery. B. Municipal and other sub-national workshops are part of a four-phase program to introduce a Municipal (or subnational) Integrity System. -establish ownership and commitment of the participants to the conclusions and an action plan. The specific objectives of this first workshop are to: Determine the views of the workshop participants regarding the provision of municipal services by conducting an informal opinion poll. An Integrity Pledge that expresses the consensus of the workshop on the issue of corruption. The integrity workshop model marshals the ideas and resources of key stakeholders by inviting them to contribute to the proceedings as equal partners. A review of progress made on an earlier Action Plan. effectiveness. D. find out where corruption may be siphoning resources. transparency. It also emphasizes the production of tangible outputs:- A. or C. Introduce the idea of a Local Integrity System to enhance accountability and transparency. Phase I is intended to help build a coalition in support of reform by focusing on discussions with local stakeholders and deciding on the modalities for a program.
g. changes in foreign direct investment. Being Held accountable for decisions made at the workshop makes participants role models for accountability throughout the country. Each stakeholder should be encouraged to self-assess the outputs and outcomes achieved by the organization. the municipal or other sub-national workshop should Produce tangible outputs. Phase IV involves implementing the action plan according to the agreed timetable. monitoring and evaluation. and (b) a Local Integrity Action Plan which established a time Frame for specific actions to address priority areas and identifies a group (probably an NGO) That will be responsible for monitoring the achievement of the plan’s goals and tasks.. or evidence of successful prosecutions for corrupt practices). Regularly repeated SDS will provide outside confirmation of changes in public-sector performance and of the factors that are responsible for these changes.CULTURE OF CORRUPTION IN INDIA 40 Phase III.Measuring results may show progress in terms of “outputs” (e. Of particular importance is the extent to which the plan has been implemented. Other indicators of progress can be established at the Municipal Integrity Workshop (e. introducing a Code of Conduct and periodic appraisals of the SATISHCHANDER . The results of the Local Integrity Action Plan can be measured in terms of progress made in building a Local Integrity System. changes in revenue collection. including: (a) an Integrity Pledge. the content of the second workshop includes the following Topics:- Define the nature and magnitude of corruption in the municipality Define the detrimental effects of corruption Define a Local Integrity System to fight corruption Raise public awareness and emphasize the role of the civil society Emphasize public participation and the democratic process Discuss anti-corruption strategies Discuss watchdog agencies Discuss the judicial process Discuss role of the media Discuss role of the private sector Like the National Integrity Workshops. which expresses the consensus of The workshop about corruption. Integrity surveys can provide additional information on the extent to which the public perceives that corruption has been curbed.g. the results of the SDS are presented at a second Municipal Integrity Workshop and an Action Plan is drafted. Drawing on the SDS findings. media coverage of corruption.
CULTURE OF CORRUPTION IN INDIA 41 performance of municipal employees) and the desired “outcomes” of these changes such as a decline in requests for bribes. The sustainable “impacts” of these changes in terms of less corruption and improvements in public services overall will be influenced. The same principles apply to all action plans. 3. Occurrences of ministerial indiscretions being vaguely defined and being defended as being “in the public interest” are all too common. Fostering discussion of what will be needed to set up a Local Integrity System with all Integrity pillars. 2. these workshops aim at: 1. Special Integrity Workshops for Each Integrity Pillar Special workshops have been held for peer groups. NGOs. Workshops for ministers have similar objectives. this kind of reasoning has been used by an Attorney General to justify the action taken by a Minister of Finance who exempted his own car from import duties. Assisting/facilitating local authorities in setting up Local Integrity Systems. Defining the roles of relevant actors (donors. which focus on corruption as seen from their perspective and what it means for them in carrying out their public roles and responsibilities. F. 4. SATISHCHANDER . For example. however. and other integrity pillars). To give one example. municipal or other sub-national action plans. whether they are a National Integrity Action Plans. Action Plans Translating dialogue into action is a critical step in the process of building a National Integrity System. The overall objective of these workshops is to create a pool of trainers in the region equipped with skills to assist local authorities in developing and setting up a Local Integrity System to fight corruption. by factors (such as wage scales and offers of bribes from the private sector) beyond the control of a particular municipality. More specifically. making participants appreciate the detrimental effects of corruption. a workshop for parliamentarians includes discussion on how to prevent or curb corrupt practices among the parliamentarians themselves and seeks to strengthen Parliament as a watchdog agency. E.
which proved successful in the INDIA reform efforts. public procurement agencies. any action plan should call for major initiatives in four separate areas: awareness-raising. Donors will also need to co-ordinate their actions as the undertaking will be too all-embracing to allow for the luxury of ad hoc assistance. can be used. The action plan should be endorsed or issued by an executive commission.Select actions where the participants have authority to change things . both top-down and bottom-up. space and protection. and professional Associations among other groups. Fourth. prosecution agencies. Most action plans developed so far have had concrete action items for each of the pillars Workshop emphasized the importance of: Agree on a focused and realistic action plan (no more than 5 items) . Donors can help organizations achieve reform by providing resources. Public opinion surveys. government departments. As a third principle. The process of devising a National or Local Integrity Action Plan is event-driven. that some changes are made quickly and that they are communicated to the public to maintain their confidence in the process. to be successful. the civil service. A time table with benchmarks. Stakeholders should be held accountable for achieving results. Implementing the national action plan. a high level of co-ordination within the government will be needed as actors and Stakeholder execute the program.Pick action items that you can afford to implement SATISHCHANDER . will typically involve the auditor-general’s office the ombudsman’s office. institution building. In particular.Pick areas that are visible and important to the public . the country’s political leader and his/her deputy play a central role in setting the Tone and asserting moral authority. staggered events. and enforcement Expectations must be managed carefully to ensure that promises are realistic. for example. a major effort must be made to draw civil society into the process in imaginative and Constructive ways.CULTURE OF CORRUPTION IN INDIA 42 First. and monitoring schedules is necessary but there should be some room for flexibility. the effort must be wholly owned and driven by the subject country. prevention of corruption by minimizing opportunities and increasing risks of detection. Second.
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- Agree on who is responsible for the implementation and a time frame
G. The Integrity Pledge
Another tool used is an “integrity pledge” that participants sign at the end of integrity workshops. These pledges are not legally binding, but participants commit themselves with their signatures to take certain actions against corruption. Pledges have included the Following; launching a local chapter of Transparency International; committing to act honestly and openly in all aspects of their lives; putting the well-being of the people ahead of their personal and party interests; uniting to fight corruption by using all opportunities both in their place of work and in their private lives; and sensitizing the public to the effects of corruption on the development of their countries. These pledges are given wide publicity at the end of the workshops by both print and broadcast media, and the names and signatures of participants are printed in newspapers in most cases. Such public commitment by participants, who include parliamentarians, journalists, educators, civil servants, ordinary citizens, non-governmental organizations, etc., puts added pressure on the participants to take the fight against corruption seriously.
H. Islands of Integrity
The “Island of Integrity” or “enclave” approach was developed by Transparency International as one way of guaranteeing a transparent process in procurement. The approach fences off an area of government activity to address corruption in a manner isolated from other influences.
For example, in the area of procurement, the approach is based on pledges by bidders not to pay bribes to win government contracts. Sizeable bonds are subject to forfeiture in the event of non-compliance. Other consequences could include, disqualification from further Involvement in the project or other publicly-funded projects (blacklisting) for all private sector parties who violate the pledge and immediate dismissal of those in the public sector.
Who are found guilty of violation? This approach has been tried in countries like Ecuador, Argentina, and Panama, sends a definitive message that private industry is no longer a party to defraud the government and the public. Key donors have been including this approach as
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one of the integrity tools in the fight against corruption. Although it is too early to pass judgment on its successes, the challenge of this approach is to introduce integrity into the process before any irregularity takes place and to obtain a credible commitment by all stakeholders involved, to ensure the rules are not broken.
I. The National Integrity Steering Committee
A first practical step in strengthen a National Integrity System is to establish a National Integrity Steering Committee (NISC) which brings together all stakeholders. Within government this would include representatives of the nation’s executive, judiciary, cabinet, electoral governing body, and civil servants in key departments such as customs, procurement, revenue collection, and local government. Representatives from outside government would include leaders from religious groups, business, the media and special interest groups.
The committee’s task is to analyses the framework, identify and priorities areas for reform, and develop a plan that includes short-term, medium-term, and long-term goals along with a public awareness-raising program. It should assign subcommittees to follow up action and receive reports on the progress toward stated goals. The working group should publish the names of its members, its overall plan, and regular status reports. Input from the general public should be solicited from the beginning and regularly throughout the national integrity working group’s existence. The endorsement of the working group and its plan by political leaders and the public is essential and must be solicited for the duration of the committee’s existence. The group should pay particular attention to achieving several “quick wins” to build public confidence early in the process. In doing their work, the NISC members should be guided by certain key principles.
-Local Ownership -Increase accountability through increased transparency -Enforce access to information to all -Balancing of powers across executive, legislative and judiciary
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-Broad-based capacity building -Public empowered to monitor the state -Administration based on rules -Rule of law -Focus on corruption initiated both from the “North and South” -Overall objective is improved service delivery and high quality growth
8. MORE QUESTS THAN ANWERS
Despite the work done over the past few years, its intensity and the involvement of both academics and activists, reformers and development agencies, there are still more questions than answers.
We have found very clearly that what outsiders have to offer is process: substance has to be provided by the internal actors. Outsiders can facilitate and provide information, but they cannot diagnose and they cannot prescribe. Only the local people are in a position to do either. However, together, the facilitators and the facilitated, there can be potentially powerful impact emerging from informed discussion, particularly through the creation of action plans. We have found, too, that the concept of the single “national integrity system” is an extraordinarily useful one and one which helps put the various components into a coherent perspective. It also can throw short-comings into sharp relief, especially where discourse takes place in the setting of a national integrity workshop.
A classic example is provided by experience in Uganda. There a stakeholder innocently asked of the Inspector General of Government how it was that although many cases of corruption were unearthed by him, few if any people appeared in court. The IGG said that his was not the job to prosecute, simply investigate, and so the files were sent to the Director of Public Prosecutions for action. The DPP said that his office did not receive the files. Why not, asked the questioner, have the IGG prosecute, as this would eliminate the gap through which the files appeared to be leaking and make it plain where accountability lay? The DPP agreed to a recommendation that the constitution be amended to provide for
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this, and the amendment was made several weeks later. One of the morals of the story is that the DPP and the IGG might well never meet in a work environment, and so the workshop provided a unique opportunity for pillars of the integrity system to discuss their difficulties in ways that otherwise would not have eventuated. It has also appeared very clearly that an effective anti-corruption strategy must be integrated and holistic. Ad hoc, standalone reforms are unlikely to achieve much progress, at least in the short term. It matters little, for example, to tidy up a judicial system is the prosecution and Investigation “pillars” are left to crumble.
There can be longer term advantages—the reforms in Kenya which have strengthened the office of the Auditor-General have resulted in much more transparency and greater awareness of the extent of corruption in that country, but because of an enfeebled parliament and a dominant executive, despite the media discharging its role and getting the messages out, the levels of corruption do not appear to have abated.
A clear lesson—and a widely accepted approach—is that prevention is better than prosecution. The move to clean up a system through prosecution depends on having a working judiciary and good prosecution service in place and numbers of people being charged who can be accommodated within the system, and the available resources, both human and material, to conduct the necessary investigations. It thus lends itself more for tidying up a strong integrity system which has hit a bumpy patch, rather than resolving problems of systemic corruption. Enforcement is certainly essential if the corruption equation of “Corruption = High Profit, Low Risk’ is to be converted into a deterrent which says “Corruption = High Risk, Low Profit”. But it can seldom be the major tool. Enforcement is retrospective, and what matters most is to stop the leakages at once, not chase after the Leakages after they have taken place. This in turn points to the need to address “the system” rather than the individual. There is little point in indulging in indiscriminate witchhunts (though some scalps may well assist raise public confidence in the credibility of the reform process).
Corruption is generally being a secret undertaking, with benefit flowing to both giver and receiver; we are left with having to battle against perceptions of where corruption is taking place. The need for hard facts is obvious, but obtaining them may be another matter. One way is to install telephone call-in lines, guaranteeing anonymity, and inviting the public to ring in with their complaints. Another is to establish a commission of inquiry, such as the Warioba Commission in Tanzania (although this unearthed so much corruption that popular
particularly to information management being essential). Instead there was a Prime Minister who was well-paid and ruthlessly determined to rid the country of corruption. respectable and respected future as a member of the U. He was well paid and could look forward to a comfortable. with the exception of an outsider as head of government. The country was undemocratic. More recently. enabling local mayors and councils to clean up local government without having to rely on central government (which may itself be paralyzed by corruption or otherwise be unwilling to take the issue on). Added to this there was a working judiciary and a pool of well-paid. The fact that the country was a de facto one party state also meant that the room for politicization of anti-corruption work was kept to a minimum. We have also seen very starkly that what will work in one country. highly professional Investigators and prosecutors to conduct enforcement work. although the Commission (actually an Agency) was accountable to the Prime Minister (and formed part of his office). pointing to other lessons. which was introduced so successfully in Hong Kong. Singapore took the model. and a robust economy (particularly over the later years) capable of delivering significant budgets to the Commission for its public awareness and prevention work. may be wholly ineffectual in another.K. and again it worked. and thus could sustain the shocks of a police strike and an enforced partial amnesty being granted for past sins which shocked the populace and might well have brought down a popularly-elected government. The most outstanding example of this would be the Independent commission Against Corruption. and there will be many interesting insights gained at the local level in the coming months. it knew that it had the whole-hearted support of the Prime Minister and so could and did investigate even cabinet ministers where these were suspected as having transgressed. The same ingredients were there. Thus. What was it about the Asian model that helped it succeed there. not better.g. and copied with a high degree of success in Singapore. There was also determined to see the experiment succeed and so honoured the independence of the Commission.CULTURE OF CORRUPTION IN INDIA 47 perception seemed to be that matters were getting worse. even though this was nominally accountable to himself. with no family or business links into the local scene. whilst failing dismally in e. and work well. Africa? The Hong Kong environment was an ideal one for the Commission approach. in some countries we have seen municipalities start to realize that there is space for them to reform local practices. Mayors are starting to develop strategies. House of Lords. drawing civil society watch-dogs into the frame to inform and to authenticate the processes. There was a head of government (a Colonial Governor) from outside the colony. which he had identified as the major barrier to the country succeeding. Yet when the same models SATISHCHANDER .
its reports simply disappeared into a black hole. and although they were largely free to investigate the system determined that none could touch the untouchables who developed around the office of former President Mwinyi. The fatal flaw was unquestionably taking the Hong Kong and Singapore models and applying them into different situations where they simply would never be able to function. the money would have vanished and the story would have ended then and there). So if prosecution for all past transgressions is not a viable option—too many people. “How do I explain to a family why it is their brother or their sister who has been singled out for treatment?” she fairly asked. but these departed in situations surrounded by controversy. Just as quickly a rash of prosecutions began against low level civil servants and are form introduced to snare big fish was scooping up minnows. By contrast. It tried to resolve these at times by bringing in expatriates to head the office. This. a government that has corruption at the highest levels lacks moral authority to act against those. courts were unpredictable to say the least. once the unquestionably “clean” Julius Nyrere stepped down as president. As the Vice President of Uganda remarked to donor mission. a Commission was established under the Hong Kong model and a former Deputy from the Hong Kong ICAC brought in to run it. but without doubt the presence of ethical leadership at the highest levels of government have played a significant role in the achievements to date. The Prevention of Corruption Bureau in Tanzania was been blunt about political interference in its work. Quickly. and many of those working in the public sector were poorly paid. inadequately motivated and professionally lacking. The development in Botswana are too recent for us to be able to judge the success of the reforms. then. north. highlights the problem of transition. east or south. who are corrupt at the lower levels. well-resourced and where the rule of law was functioning—adopted the Hong Kong model after scandals involving ministers had been uncovered. The fact that these discoveries were triggered by police at a car accident scene finding a considerable sum of money in US treasury bills say much for the prevailing ethical environment (in many countries. Reporting to the Office of the President. In both countries the resources available for the agencies were grotesquely insufficient. hugely disruptive and the state lacking moral authority to act—how does one achieve an amnesty. Botswana—an African country well-run.CULTURE OF CORRUPTION IN INDIA 48 were established in Africa they undoubtedly failed. both to set minds at rest and to ensure that there is not a huge spate of prosecutions such SATISHCHANDER . the rule of law was far from entrenched. Zambia is another country that had a similar problem.
One way or another he or she will have acquired assets and a style of life that is out of line with their official income— particularly where this has not constituted a “living wage”. the chances are that he will have (perhaps have been forced by economic circumstances to have) augmented his income in irregular ways. the procedure must be such as to deter people from making false declarations (e. but it is easy for a political opponent to blow the case out of the water with a blast of populist oratory—“Soft on crime. and unknown by. whether publicly or privately. or they must be Accessible to the press and the public to enable civil society to do its own monitoring). There are very real problems. with legislators notorious for their male chauvinism suddenly becoming advocates of the rights of wives to earn and hold wealth separate and apart from. but the jury is still out as to whether ways will be found to cut through a classic conflict of interest: the legislators/executive are being asked to provide firm rules to keep themselves honest. “ghost” up-country trips or simply servicing his private car in the public service garage. Rationally one can explain why this might be necessary. This means that anyone filling out a declaration of assets will in effect be declaring that they possess illicit wealth. Indeed. the whole exercise is valueless. whether through unnecessary foreign travel. And if they do not complete the forms correctly. An alternative approach—or a supplemental one—can be the introductions of systems whereby senior decision makers declare their assets. soft on the causers (sic) of crime”. and the immediate family of the of the official must also be covered in appropriate ways (the debates in legislatures are wonderfully instructive. But for the monitoring of assets to work there must be several thresholds met—the declarations must be true and correct (and so able to serve as a benchmark against which future assets can be measured). The same questions overhang another simple reform. which requires that all assets be declared but then goes on to exempt just about everything imaginable). It has to be said that the authors are not aware of a serious recent attempt to get on top of the problem through this route. it might be. This is now widely seen as the key to unlocking the anti-corruption chest. Hong Kong introduced the offence of a civil SATISHCHANDER . the assets covered must include all the areas that lend themselves to be used to store looted public funds (an excellent example of how to ensure that legislation is wholly ineffectual is provided by the law in Tanzania. They must be subject to random audit if they are made in confidence.g.CULTURE OF CORRUPTION IN INDIA 49 as appears to have been the case in Botswana? The public (as was the case in Hong Kong) deeply resent corrupt police being given an amnesty for their illegal actions against the public. If a person has survived for some time in a systematically corrupt environment and risen to a position of prominence. their spouse). etc. There are many legislatures who have been going through motions of one sort or another.
The Government of Rajasthan recently recognized the people’s right to access to official documents at the local level. Part of the answer lies in the participation of civil society and the active involvement of the professions and the private sector in cleaning out their own houses as well as helping the government with prevention strategies. Singapore and Malaysia to name three. A crowd soon gathered and most stayed for the next six hours. Why not? Again. even more potently. It was enough for a person in a position to prosper illicitly as being in possession with wealth or leading a life style wholly out of line with official income. The Indian village of Surajpura is a long way from Washington D. more and more started to ask questions and to identify a wide range of frauds. The accounts listed some as being paid who had not been. Some showed inflated bills. In building accountability between officials and the public they are meant to be serving. the Mazdoor Kisan Shakti Sangathan (MKSS) is taking that information to the people. yet access to information—which forced President Nixon from office in the USA after the Watergate Tapes become public—proved no less potent there. A large part of the answer lies in non-legal approaches: In dismissing public servants “in the public interest” and not risking an endless succession of hazardous and time-consuming trials through an incompetent and perhaps corrupt legal system. A public hearing.. Others suggested that payments had been made for materials that were never used. an EDI/TI team was told that the provision was “a bit harsh “and that “we do not like it very much”. drainage and sewage schemes and other projects were looked at and as confidence among the crowd grew. on 19 January 1998 in Surajpura village began with a puppet show dealing with the abuse of development funds by politicians and government functionaries. Schools. SATISHCHANDER . unless and until he or she can Produce an affirmative defence and show that the wealth came from licit sources. The crowd roared with mirth when the name of a person long dead was listed as a paid labourer. by organizing Meetings in which officials explain to people at the grass roots just where the money has an excellent model for this latter approach is provided by activities in India. landmark legislation itself the culmination of a 53-day hunger strike. But again. It was not necessary to show a corrupt act. in Africa the provision has been enacted but there have been no prosecutions. both by the use of surveys and. This has proved powerful in Hong Kong. Now an NGO.CULTURE OF CORRUPTION IN INDIA 50 servant “living beyond known means”. Some had been involved in development works as labourers or masons and followed with interest as the accounts for 23 development projects were publicly examined.C. attended by village leaders.
This points to access to information being a powerful tool if creatively used by civil society and suggests that more work needs to be done in this are. This will differ from country to country. Aside from being a creative exercise in government for the people by the people. Unpaid workers and suppliers were promised payment. if necessary at the expense of some of the work that has been going on in more traditional governance research areas. providing as it does an opportunity for all stakeholders to participate in a process that otherwise tends to be dominated. by lawyers. there is a Gordian knot that needs to be cut if it cannot be untangled. CHALLENGES AHEAD If there are many unanswered questions. We know where we want to be.CULTURE OF CORRUPTION IN INDIA 51 Throughout. It is in this context that the “national integrity system workshop” can be most effective. Just how do we get there? The answers are coming. 9. the meeting was surprisingly constructive and orderly. but across rural India small development projects have been undertaken in the name of the poor only to have the funds looted for private gain by contractors and officials. made possible through skilful facilitation by MKSS and its success in persuading officials that they really had no alternative but to take part. but the outsider must be able to SATISHCHANDER . but actually working out precisely where to start in the process is an important one as it will dictate much of the path ahead. At its end. There may be many who offer themselves. Overall. for no good or compelling reason. First. The looted money then helps pay for the buying of votes and so distorts democracy as well as development. We know where we are. these meetings are small but significant steps towards a transition from representative to participatory democracy. A particular challenge for the outsider is to identify the appropriate (and clean) partners in a given country. but not just yet. These may seem small victories. there are also as many challenges. some even agreeing on the spot to return money where personal liability had been established. the question is the sequencing of reforms. about 20 per cent of the funds were found to have been misappropriated and leaders involved had agreed to co-operate with a follow-up process to recover the funds.
So donor organizations must re-examine their own practices. Credible agencies will attract public co-operation. The road blocks. And in many instances there is substance to the complaint. the tools they need to undertake the job and. This dictates a Special role for civil society in a country from the very outset so as to ensure that the reform process is fostered with the right “champions”. something which many have been doing. should and do fund. The credibility of enforcement and watchdog agencies is crucial to the building of public trust and confidence. it is a perception that is very real. back up the data collection processes needed to empower civil society to hold the civil service accountable— to turn public servants into servants for the public. both as part of the problem and as part of the solution. unfair some may think this to be. too. but it is essential that these be locally owned and driven. supportive and facilitative. defined. They are part of the problem because in many quarters they are viewed as having turned a blind eye to corruption in the projects they have been funding. both as complainants and as witnesses. a word of encouragement. Whatever may have been the position in the past. at times. Their leaders must role model conduct of the highest kind. And as part of the solution there are activities which donors can. and to tolerate the misappropriation of public funds to suit their own ends.) the less likely the efforts are to bear fruit. Thus the donor’s role is to be low key. And at the heart of credible institutions lies their manifest and popularly-accepted integrity. doing a job and going—has been conspicuous by its failure to achieve sustainable development. and the base line of acceptable (or perhaps better described as tolerable)conduct which the people are prepared to live with. but they may need access to information. The donor community can.CULTURE OF CORRUPTION IN INDIA 52 determine what hidden agendas there may be and what individual motivations are as well as gain a reading on where the people concerned stand in their community. (dominating small group discussions etc. in particular. need to be identified from the outset. SATISHCHANDER . However. An institution lacking in trust will not. most countries now have the human resources to tackle their own problems. The donor community also has a significant role to play in developing countries. The traditional form of expert aid—a foreigner flying in for a short period. The more conspicuous is the role of the donor.
economic reforms. including: sector reforms. constitutional reforms.CULTURE OF CORRUPTION IN INDIA 53 And they can help stress a focus on the bribe giver. This is why TI are joining with the Vienna-based UN Crime Prevention Programme and the Commonwealth Secretariat in London to build a web site which will contain as much best practice as possible. army demobilization. SATISHCHANDER . but concerted action against the “grand corrupters” from abroad (and the OECD treaty signed in December 1998 offers a way forward for the industrialized world) creates a climate of change and the moral ground necessary to address forms of corruption at lower levels. and the final one is information sharing. 10. The “hand that gives” must also be addressed at the national level. and legal reforms. and with it an equally frank admission that no country can claim any sort of moral supremacy when it comes to corrupt practices goes a long way towards cementing a meaningful partnership. CONCLUSION The process of building national integrity systems is as important as the content. privatization. and not just the bribe receiver. decentralization. Frank acknowledgement of the role of the rich countries in contributing to the present decline. and pruned from. financial reforms. 2) Reform is a long-term process where attitudes and conduct must be examined and reevaluated for effectiveness at all levels. The following are six final thoughts about the process. 1) Successful reform requires a country to integrate and harmonies all reforms in to a National Reform Program. as experience grows. There are many lessons to learn. The task countries Confront is daunting and everyone needs access to as much experience and information as possible. This will be added to. where for a generation or more exporters from the industrialized countries have been accustomed to bribing officials in developing countries to win business or to create what in many cases became “white elephant” projects. This is particularly the case in so-called “grand corruption”. This is not an area in which “experts” should develop stand-alone and discreet information bases. And we would conclude with an invitation to others to join in this project as being one from which all can benefit through sharing. civil-service reform.
It is significant to note that surveys used for pure awareness raising and problem identification are going to be less involved and smaller than surveys used for problem description or in the development of a broader reform program. Surveys help establish baseline on which to judge progress. reform should only tackle areas: (a) that can show credible impact on issues Important to key stakeholders. However. are in the latter category and are consequently expensive. and(e) that can have some short-term positive impact. more analyses are needed to assess the relative advantages of decentralization and the process for the efficient delivery of public services. which are Often more relevant and easier to sell to other countries in the same region. At the heart of successful reform is the State’s. Some the anti-models based upon the governance group’s prior experiences have been effective. As decentralization becomes a growing priority. done in partnership with CIET International. 5) Reform is a process of instituting building blocks that must be put in place over a number of years. (c) that are discrete and where reformers can control implementation. The so-called Service Delivery Surveys (SDSs). 4) Initially. They play an important role in measuring the places where the private sector interacts with the public.CULTURE OF CORRUPTION IN INDIA 54 3) Successful reformers will have to manage both expectations and change while introducing realistic incentive structures and sanctions. All CICP country based activities should be compatible with the other donors’ general strategy and an overall larger framework of country reform (CDF) Collaboration between all active donors to put -corruption into an effective overall strategy can only facilitate these efforts. The growing realization that the private and public sectors should be examined supports efforts to develop effective. These ten country examples are important since they act as regional examples. but the strategy must remain adaptable. (d) that are within the budget. actionoriented information-gathering procedures. to ensure effectiveness. (b) where the return on investment is greatest. much of the governance work should be done at the sub-national level. such as the case of the TI survey. The process of and commitment to reform must be visibly supported from the top Essential to curbing corruption is undertaking and maintaining the public’s confidence in the State as an institution. SATISHCHANDER . and political welfare. It is dependent upon the people’s loyalty to its philosophy and policies regarding the development of the society’s social. The model should change as “case law” or best practice experience increases with the final objective being improved effectiveness. economic.
16 billion inhabitants. a country of 1. is a country with high levels of ethnic. Montinola and Jackman 2002). Numerous studies have shown strong empirical support for the impact of income and education on corruption (Treisman 2000. Lip set posits that as citizens (the agents) become wealthier and better educated they will be more capable of monitoring their public representatives (the principle). La Porta et al 1999. Higher Levels of Income and Education In most all studies of the determinants of corruption – whether at the national or subnational level – studies have found that most affluent and better educated countries or regions are associated with lower levels of corruption. The Heterogeneity/ Fractionalization Hypothesis India. 15 official languages and at least 5 major religious (Hindu. As Mauro (1995) argues. This sentiment is essentially echoed by Huntington (1968). in that he claims that in earlier stages of development there are greater opportunities for corruption due to the changes in the socio-economic system of the state. Due to the greater likelihood of being caught. would.CULTURE OF CORRUPTION IN INDIA 55 11. Buddhism and Sikh) 4. be less corrupt. regions or countries with higher levels of ethno-linguistic fractionalization might reduce the Like LaHood that citizens will oppose or penalize corrupt public officials. Alt and Lasson 2003. the theoretical Foundations for this hypothesis come from Lip set’s theory of modernization (Lip set 1960) combined with the standard principle-agent model oftentimes employed in the corruption literature (Rose-Ackerman 1975). The higher levels of wealth also give more citizens the resources to mobilize and take action against corrupt public officials. Islam. linguistic and religious diversity3. Christianity. 2. Hypotheses of corruption Additional Literature and the Hypotheses 1. It has two major ethnic groups (Indo-Aryan and Dravidian). Essentially. Citizens are more apt to back a politician that is of their SATISHCHANDER . on average. incentives are reduced for politicians and bureaucrats to engage in rent-seeking behaviour. We would thus hypothesize that regions in India with greater levels of education and affluence. Thus a discussion about the effects of heterogeneity on corruption applies quite well in the case of India.
4. Income Inequality Hypothesis Although admittedly it is next to impossible to distinguish a distinct causal direction between these two variables. Gyimah-Brempong 2002) and others showing support that inequality increases corruption. leaders of various groups might be more inclined to allocate resources in a systematically unfair way to benefit their own ethnic. greater diversity is associated with higher levels of corruption (Alesina et al 2003. the more opportunities for vote buying during a political campaign. which would come from taxing the wealthier class (Meltzer and Richard 1983). higher levels of income inequality in Indian states are associated with higher levels of corruption. In response to redistributive pressures. Several studies have found evidence suggesting that on average. the poorer Citizens have fewer resources to keep the wealthy in check or monitor their behaviour and are likely to receive poor services such as health and education from the state. financial or administrative . religious or linguistic group. In areas that are more unequal. the wealthy have greater incentives to engage in political corruption to avoid paying higher tax along with bureaucratic corruption to avoid tax payments. Based on this. The argument as to why these two forces are related is rather straight-forward. Charron 2009). more of the citizens will of course be poorer. Additionally. They are thus themselves more likely to be dependent on petty corruption to receive services because bureaucrats are in a better position to extort them in exchange for basic public services (You and Khagram 2004). Further. inequality is likely to have a greater impact on corruption than in dictatorships because the wealthier classes are forced to rely on corruption over repression of the masses. La Porta et al 1999. 3. We would thus expect that. Several recent studies have demonstrated a significant relationship between these two variable. India is a long-time federal system with state-level SATISHCHANDER . inequality and corruption are expected to be related. regions that have greater levels of heterogeneity will be more susceptible to clientalism and politics of division that lead to greater corruption in the public sector. we would anticipate that on average. The Effect of Decentralization on Corruption The impact of decentralization – whether political. in particular in democratic states (You and Khagram 2004). the greater number the poor. In this scenario.on corruption is a hotly contested topic. ceteris paribus.CULTURE OF CORRUPTION IN INDIA 56 religion or ethnicity and in return. you and Khagram (2004) show that in democracies. with some finding that corruption has a positive effect on income inequality (Gupta et al 2002. which should compel them to pressure the state for greater redistribution.
thus voters do become more confused regarding to whom they should assign blame for corrupt politics. the greater the political or fiscal decentralization. because local leaders are expected to be less competent than those at the national level and might be more prone to clientalism because of closer and more frequent contact with citizens. Ahrend 2002). At the provincial level. Gerring and Thacker (2004) find empirical evidence in a cross-sectional study supporting this argument with respect to political decentralization. thus building a population that is better suited to monitor and penalize corrupt behaviour in the public sector. encourage responsible governance and reduce corruption. Today it contains a total of 28 states and 7 unit territories. Moreover. However. On the other hand. one might expect that states with higher levels of media consumption might have a more informed public on political matters. The Media Several studies have argued and found empirical evidence to support the idea that countries with greater media access and an independent free press have lower corruption at the national level. On the one hand. most of which under the States Reorganization Act in 1956 were draw around linguistic lines5. Since this analysis is examining a sample of state within one country. Ferraz and Finan (2008) and Francken et al (2005) demonstrate the media’s pivotal role in helping curb corruption in certain regions due to higher volume of radio listeners in Brazil and Madagascar respectively. Lindstedt and Naurin 2005. Provincially elected governments that are more responsible for collecting their own revenues via citizens in their state should be less inclined to rent-seeking than a regional government that is mainly subsidized by the central government – meaning that public officials are less accountable for their funds and policies. Tanzi (2001) and others argue that fiscal decentralization might lead to greater levels of corruption. the lines of responsibility are more blurred than in a strict unitary. Thus it will be fruitful and interesting to test whether greater levels of instate fiscal responsibility are correlated with higher or lower corruption across the sample.CULTURE OF CORRUPTION IN INDIA 57 elected official and parliaments which are represented by both national and regional parties. most of the tests of this hypothesis have been conducted using national level data on corruption and aggregated levels of decentralization. ceteris paribus (Brunetti and Weder 2003. and hospital care within their borders. Fisman and Gatti (2002) and Gurgur and Shah (2005) find empirical evidence for greater levels of decentralization being associated with lower corruption levels. However. 5. SATISHCHANDER . education. Each state is primarily responsible for issues such as law enforcement. who should increase accountability. centralized system. public works and services. India provides an excellent test case in that there are substantial variations in the level of decentralization – especially fiscal decentralization – among the states. variations in press freedom are expected to be low to non-existent across regions. the closer the voters come to their politicians. especially in developing countries.
Successive central governments and members of India's famous Nehru-Gandhi political dynasty have often been accused most of corruption and amassing illegal wealth among India's political class. embezzlement. with widespread public protests and movements led by social activists against corruption and for the return of illegal wealth stashed by politicians and businessmen in foreign banks over the six decades since independence. evasion of tax and exchange controls. However. corruption takes the form of bribes. In 2010 India was ranked 87th out of 178 countries in Transparency International's Corruption Perceptions Index (3. Corruption has taken the role of a pervasive aspect of Indian politics and bureaucracy. etc. Since 1991. she also publicly stated "nonchalantly" that "corruption was a global phenomenon" and her government was no different. Overview Although former Prime Minister and Congress party leader Indira Gandhi is quoted as saying that corruption is a misuse of power. supported the transition towards a market economy and transformed the economy.CULTURE OF CORRUPTION IN INDIA 58 B. The year 2011 has proved to be a watershed in the public tolerance of political corruption in India. Political and bureaucratic corruption in India is major concerns. A 2005 study conducted by Transparency International in India found that more than 45% of Indians had first-hand experience of paying bribes or influence peddling to get jobs done in public offices successfully. though the Indian economy has become the 6th largest in the world. CULTURE OF CORRUPTION IN INDIA 12. Corruption in India Corruption is widespread in India. economic liberalization in India has reduced red tape and bureaucracy. In India.3). with record growth rates of 9.2% in 2007and 9.6% in 2006. its growth has been uneven across social and SATISHCHANDER . Transparency International estimates that truckers pay US$5 billion in bribes annually.
000 crore (US$24. The Comptroller and Auditor General of India said. To put things in perspective. “As on March 31. the organizers of Dandi March II in the United States said. and immigration. whereas all the corrupt ones. SATISHCHANDER . such as the 2G spectrum scam. It seems as if only the honest people are poor in India and want to get rid of their poverty by education. 2010. evidence available with a news source in India shows that he had transactions of over Rs 112. The cost of corruption. In July 2008 The Washington Post reported that nearly a fourth of the 540 Indian Parliament members faced criminal charges.339 crore. rape and even murder".000) villages in India for the next 10 years. According to the data provided by the Swiss Banking Association Report (2006). India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (approximately USD 1. like Hassan Ali Khan are getting rich through scams and crime.86 billion) between years 2005 and 2006. It seems as if India is a rich country filled with poor people".1. emigration to cities. It is estimated that more than trillion dollars are stashed away in foreign havens. "including human trafficking. Criminalization is also a serious problem in contemporary Indian politics. is undermining efforts to reduce poverty and promote sustainable growth. 05. Indian-owned Swiss bank account assets are worth 13 times the country’s national debt. This amount is enough to fund the national drinking water project in all the six lakh (600. embezzlement. while 80% of Indians earn less than 2$ per day and every second child is malnourished.” In a most recent example of corruption. are well known.4 trillion) in the form of black money.CULTURE OF CORRUPTION IN INDIA 59 economic groups. Endemic corruption contributes to this uneven distribution of wealth. unutilized committed external assistance was of the order of Rs. even as the Enforcement Directorate (ED) probes US$8 billion worth transactions allegedly involving suspected money launderer Hassan Ali Khan. immigration rackets. perceptible in public sector inefficiencies and inadequate infrastructure. India has more black money than the rest of the world combined. with sections of society experiencing some of the highest levels of poverty in the world. “The recent scams involving unimaginably big amounts of money.
License Raj was often at the core of corruption. The economy was subject to extensive regulation. studied the problem of the criminalization of politics and of the nexus among criminals. leading to pervasive corruption and slow growth. and by design. particularly pre-1991. They were connected to the military. some of the distorted cultural norms that took hold during the earlier period are slowly being repaired by the sheer forces of competition. These were largely distortions created by the politico-economic regime. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government.N. however. It revealed that political leaders had become the leaders of gangs. and decisions could get made. power-hungry politicians. politicians and bureaucrats in India. and public ownership. There is a lack of transparency in governance rules. when the License Raj held sway. Forms of Corruption Most reports and studies emphasize that the country continues to face major governance challenges. It will not change overnight. The Vohra Report. procedures are complicated SATISHCHANDER . While a sea change has occurred in the years following 1991. According to Jitendra Singh.CULTURE OF CORRUPTION IN INDIA 60 History The economy of India was under socialist-inspired policies for an entire generation from the 1950s until the late 1980s. The unpublished annexures to the Vohra Report are believed to contain highly explosive material." One of the major problems and obstacles to development that many developing countries face is corruption by greedy. Vohra. and even the Parliament. The process will be long and slow. "in the bad old days. Over the years criminals had been elected to local bodies. such that scarce resources could still be allocated within the economy. submitted by the former Indian Union Home Secretary. in October 1993. which is endemic in certain parts of the world. all kinds of free market mechanisms were hobbled or stymied. State Assemblies. N. protectionism. It also discussed criminal gangs who enjoyed the patronage of politicians — of all political parties — and the protection of government functionaries. and corruption emerged almost as an illegitimate price mechanism. a shadowy quasimarket.
patronage. The country is further characterized by rigid bureaucratic structures. and one to take it. bribery alone is estimated to involve over 1 trillion US dollars annually. and human trafficking. an exclusivist process of decision-making. which make it difficult to distinguish between legal and illegal actions. A state of unrestrained political corruption is known as a kleptocracy. In some cases. overly centralized government. but include bribery. money laundering. Nepotism is embedded in the civil service. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties. Political corruption and corruption scandals involving high ranking officials and ministers periodically hit the headlines. Worldwide. such as repression of political opponents and general police brutality. extortion. nepotism. Types Bribery A bribe is a payment given personally to a government official in exchange of his use of official powers. For instance. is not considered political corruption. poorly-paid civil servants and the absence of effective internal control mechanisms. graft. and embezzlement. Political corruption Political corruption is the use of legislated powers by government officials for illegitimate private gain. it is not restricted to these activities. Either may initiate the corrupt offering. Misuse of government power for other purposes. government officials have broad or poorly defined powers. While corruption may facilitate criminal enterprise such as drug trafficking. literally meaning "rule by thieves". a customs official may demand bribes SATISHCHANDER . Bribery requires two participants: one to give the bribe. for example. journalists are harassed for reporting on corruption and recent years have seen an increase in off-the-books campaign finance arrangements. The activities that constitute illegal corruption differ depending on the country or jurisdiction.CULTURE OF CORRUPTION IN INDIA 61 and the bureaucracy enjoys broad discretionary power. undermining the legitimacy of democratic processes and citizens’ trust in public institutions. Forms of corruption vary. cronyism. Neither are illegal acts by private persons or corporations not directly involved with the government. certain political funding practices that are legal in one place may be illegal in another.
grease money. or promotion (rise of position/rank). In some Spanish-speaking countries. sweetheart deal. are considered criminal acts of bribery in some countries. free food. SATISHCHANDER . while in others the two concepts may not be interchangeable. receiving. Political campaign contributions in the form of cash. emolument. advantage. while in the United States they are legal. in Arab countries they are Baksheesh or Bakshish. vote. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering. Bribes may be demanded in order for an official to do something he is already paid to do. sponsorship/backing. free tickets. "bite"). higher paying job. stock options. They may also be demanded in order to bypass laws and regulations. up to half of the population has paid bribes during the past 12 months. campaign contribution. discount. gift. Bribery. a form of corruption. In addition to using bribery for private financial gain. or influence of a person in an official or public capacity. free trip. perk. Tipping. for example. or a smuggler might offer bribes to gain passage. funding. right in action. Forms of bribery Many types of bribes exist: tip. free ad. skim. Bakshish is more akin to tipping. The bribe is the gift bestowed to influence the recipient's conduct. or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty. In some countries the culture of corruption extends to every aspect of public life. is an act implying money or gift given that alters the behavior of the recipient. inflated sale of an object or property. no financial incentive). waived fee/ticket. property. privilege. lucrative contract. However. Expectations of when a monetary transaction is appropriate can differ from place to place. favor. or merely a promise or undertaking to induce or influence the action. making it extremely difficult for individuals to stay in business without resorting to bribes. secret commission.e. they are also used to intentionally and maliciously cause harm to another (i. for example. It may be any money.CULTURE OF CORRUPTION IN INDIA 62 to let through allowed (or disallowed) goods. preferment. bribes are referred to as "mordida" (literally. donation. good. giving. One must be careful of differing social and cultural norms when examining bribery. fund raiser. In some developing nations. is considered bribery in some societies. object of value. kickback/payback.
For example. are open to bribery. the expression "dessous-de-table" can be often understood as a commonly accepted business practice (for instance. SATISHCHANDER . needless to say. bribery is an important aspect of the local SLUG Queen pageant that sets it apart from other pageants. The offence may be divided into two great classes: the one.) Bribers and recipients of bribery are likewise numerous although bribers have one common denominator and that is the financial ability to bribe. who are the judges of the pageant. "pot-de-vin" (literally. without the knowledge of his principal. a bribe may be effectively extracted from the person paying it. In German the common term is Schmiergeld ("greasing money"). a profit made by an agent. Oregon. where power is obtained by purchasing the suffrages of those who can impart it. Bribery may also take the form of a secret commission. sweetener. "wine-pot"). or "commission occultes" ("secret commission" or "kickback"). The moment a new queen is crowned. Likewise. corruption would be rare in that part of the world. a partial payment made between the buyer and seller. in the course of his employment. this is a good way to launder money). the other.CULTURE OF CORRUPTION IN INDIA 63 French-speaking countries often use the expressions "dessous-de-table" ("under-the-table" commissions). the briber might hold a powerful role and control the transaction. The forms that bribery takes are numerous. In Eugene. or in other cases. Bribery around the world is estimated at about $1 trillion (£494bn). on the occasion of a real estate transaction before the notary. kick-back etc. although this is better known as extortion. a motorist might bribe a police officer not to issue a ticket for speeding. While the last two expressions contain inherently a negative connotation. a citizen seeking paperwork or utility line connections might bribe a functionary for faster service. Euphemisms abound for this (commission. but according to the Transparency International corruption perception index. the old queens. The Slug Queens set the rare example of creating an environment where bribery is both accepted and encouraged. where a person invested with power is induced by payment to use it unjustly.
which is the use of state resources to reward individuals for their electoral support. it becomes possible to provide for distinctive criteria and to consider that trading in influence involves the use of "improper influence". the formal relationship between a Patronus and his Cliens. social. as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe. the term may refer to a type of corruption or favoritism in which a party in power rewards groups. As well. Where lobbying is (sufficiently) regulated. the business given to a store by a regular customer. ethnicities for their electoral support using illegal gifts or fraudulently-awarded appointments or government contracts. refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). or influence peddling in certain countries. painters. From a legal point of view. The difference with bribery is that this is a tri-lateral relation. these appointments go to people who have supported the political party of the Prime Minister. arts patronage refers to the support that kings or popes have provided to musicians. decision power or influence to those lobbyists who offer the highest retribution. or other regulations perceived as too stringent. including where for instance the latter act on behalf of powerful clients such as industrial groups who want to avoid the passing of certain environmental. in many cases. etc. encouragement. Some patronage systems are legal.or decision-makers can freely "sell" their vote. In the history of art. The term derives from the Latin patrons. It can also refer to the right of bestowing offices or church benefices. the role of the third party (who is the target of the influence) does not really matter although he/she can be an accessory in some instances.CULTURE OF CORRUPTION IN INDIA 64 Trading in influence Trading in influence. and the guardianship of saints. SATISHCHANDER . families. In some countries the term is used to describe political patronage. privilege. Patronage Patronage is the support. or financial aid that an organization or individual bestows to another. and sculptors. It can be difficult to make a distinction between this form of corruption and certain forms of extreme and poorly regulated lobbying where for instance law. as in the Canadian tradition of allowing the Prime Minister to appoint the heads of a number of commissions and agencies.
or the Junkers in Imperial Germany) that support the regime in return for such favors. They may be almost exclusively selected from a particular group (for example. as when a newly elected government changes the top officials in the administration in order to effectively implement its policy. SATISHCHANDER . Nepotism and cronyism Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. This may be legitimate. trumped-up charges are often brought up against journalists or writers who bring up politically sensitive issues. The most extreme example is when the entire state is inherited. are selected before more able ones. for example with government employment. A milder form of cronyism is an "old boy network". where the government is often accused of patronage (when a new government comes to power it rapidly changes most of the officials in the public sector). In the Indian political system. For example. Sunni Arabs in Saddam Hussein's Iraq. as a payment for supporting the regime. In no democracies many government officials are often selected for loyalty rather than ability. leadership of national and regional parties are passed from generation to generation creating a system in which a family holds the center of power. It can be seen as corruption if this means that incompetent persons. such as a politician's acceptance of bribes. the nomenklatura in the Soviet Union.CULTURE OF CORRUPTION IN INDIA 65 Patronage refers to favoring supporters. in which appointees to official positions are selected only from a closed and exclusive social network – such as the alumni of particular universities – instead of appointing the most competent candidate. A similar problem can also be seen in Eastern Europe. Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. some examples are most of the Dravidian parties of south India and also the largest party in India – Congress. for example demanding that a business should employ a relative of official controlling regulations affecting the business. for example in Romania. This may be combined with bribery. as in North Korea or Syria.
Kickbacks are not limited to government officials. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. and in exchange for betraying the public. Another common type of embezzlement is that of entrusted government resources. He can give a contract to a company that is not the best bidder. Also called voter fraud. Embezzlement Embezzlement is outright theft of entrusted funds. For example. the official receives a kickback payment. when a director of a public enterprise employs company workers to build or renovate his own house. the company benefits.CULTURE OF CORRUPTION IN INDIA 66 Electoral fraud Electoral fraud is illegal interference with the process of an election. or allocate more than they deserve. whether by increasing the vote share of the favored candidate. suppose that a politician is in charge of choosing how to spend some public funds. Acts of fraud affect vote counts to bring about an election result. for example. Kickbacks A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. It is a misappropriation of property. which is a portion of the sum the company received. intimidation at polls. or both. and improper vote counting. In this case. the mechanisms involved include illegal voter registration. SATISHCHANDER . depressing the vote share of the rival candidates. any situations in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption. as many doctors and physicians receive pay in return for added promotion and prescription of the drug these pharmaceutical companies are marketing. Kickbacks are also common in the pharmaceutical industry.
An early. where Huang Jinrong was a police chief in the French concession. invaded Panama and captured Noriega. Like patronage. prostitution." – 1912 Progressive Party Platform. The United States accused Manuel Noriega's government in Panama of being a "narcokleptocracy". by its deceptive nature and often great financial resources. an unholy alliance can be much more dangerous to the public interest.S. attributed to TR and quoted again in his autobiography where he connects trusts and monopolies (sugar interests. and consequently both major political parties.CULTURE OF CORRUPTION IN INDIA 67 Unholy alliance An unholy alliance is a coalition among seemingly antagonistic groups. while simultaneously being a gang boss and co-operating with Du Yuesheng. Involvement in organized crime An illustrative example of official involvement in organized crime can be found from 1920s and 1930s Shanghai. but unlike patronage. the local gang ringleader. to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day. for ad hoc or hidden gain. well-known use of the term was by Theodore Roosevelt (TR): "To destroy this invisible Government. a corrupt government profiting on illegal drug trade. Standard Oil.) to Woodrow Wilson. Conditions favorable for corruption It is argued that the following conditions are favorable for corruption: Information deficits SATISHCHANDER . Howard Taft. especially if one is religious. and protection rackets undisturbed. Later the U. unholy alliances are not necessarily illegal. etc. The relationship kept the flow of profits from the gang's gambling dens.
" o Lack of investigative reporting in the local media. instead of handling payments by giro or on a separate cash desk—illegitimate withdrawals from supervised bank accounts are much more difficult to conceal. using regular surveys of households and businesses in order to quantify the degree of perception of corruption in different parts of a nation or in different government institutions may increase awareness of corruption and create pressure to combat it. o An individual voter may have a rational ignorance regarding politics. This has created competition among government agencies in order to improve. o Weak accounting practices. The Peruvian organization Ciudadanos al Dia has started to measure and compare transparency. Lacking control of the government. o Tax havens which tax their own citizens and companies but not those from other nations and refuse to disclose information necessary for foreign taxation. o Lacking civic society and non-governmental organizations which monitor the government. This will also enable an evaluation of the officials who are fighting corruption and the methods used. Opportunities and incentives o Individual officials routinely handle cash. o Weak judicial independence. especially in nationwide elections. o Weak legal profession. o Weak civil service and slow pace of reform. including lack of timely financial management. often corrupt bureaucracy to its knees and changing power equations completely. o Lacking protection of whistle-blowers. in the same government or others. o Lack of benchmarking that is continual detailed evaluation of procedures and comparison to others who do similar things.CULTURE OF CORRUPTION IN INDIA 68 o Lacking freedom of information legislation. It annually awards the best practices which has received widespread media attention. and efficiency in different government departments in Peru. since each vote has little weight. in particular comparison to those who do the best work. SATISHCHANDER . o Contempt for or negligence of exercising freedom of speech and freedom of the press. The Indian Right to Information Act 2005 has "already engendered mass movements in the country that is bringing the lethargic. o Lack of measurement of corruption. For example. costs. o Weak rule of law. This enables large scale political corruption in the foreign nations.
000 is embezzled from a local agency that has Rs 2. such as repression of political SATISHCHANDER . unsupervised public investments. for instance certain high rank officials in French government services (e. giving benefits to certain ethnic groups Politics The public trust in democratic processes in India is seriously undermined by opaque financing of electoral processes. like applications and tax forms. such as the Soviet blat system. This may also speed up the processing and reduce unintentional human errors. e. o Lacking literacy and education among the population. o Frequent discrimination and bullying among the population. Social conditions o Self-interested closed cliques and "old boy networks’’. For example. if Rs 1. o A gift economy. See e-Government. o Less interaction with officials reduces the opportunities for corruption. o A windfall from exporting abundant natural resources may encourage corruption.000 funds. with expenses exceeding normal sources of political funding. emerges in a Communist centrally planned economy. especially when funded with taxpayer money. For example.g.CULTURE OF CORRUPTION IN INDIA 69 o Public funds are centralized rather than distributed. with a tradition of nepotism/favouritism being acceptable. import licenses.. widespread bribery and other forms of corrupt practices. o Tribal solidarity. o Large. and then processing this with automated computer systems. Rotating government officials to different positions and geographic areas may help prevent this. o Costly political campaigns. and encourage bribing and kickbacks. o Poorly-paid government officials. o Family-. Political corruption is the use of legislated powers by government officials for illegitimate private gain. treasurerpaymasters general) must rotate every few years.g.000. using the Internet for sending in required information. o Sale of state-owned property and privatization. o Government licenses needed to conduct business. o Long-time work in the same position may create relationships inside and outside the government which encourage and help conceal corruption and favoritism. o War and other forms of conflict correlate with a breakdown of public security. and clan-centered social structure. Misuse of government power for other purposes. it is easier to notice than from a national agency with Rs 2.000 funds.
For instance. and human trafficking. patronage. and the bureaucracy is tasked to determine how it can achieve its purpose and mission with the greatest possible efficiency and at the least cost of any resources. which make it difficult to distinguish between legal and illegal actions. A state of unrestrained political corruption is known as a kleptocracy. and non-governmental organizations). including murder and rape. around 40 of these are accused of serious crimes. it is not restricted to these activities. literally meaning "rule by thieves". money laundering. and embezzlement. cronyism. including Cabinet Ministers and Chief Ministers. Worldwide. Neither are illegal acts by private persons or corporations not directly involved with the government. Bureaucracy The purpose of a bureaucracy is to successfully implement the actions of an organization of any size (but often associated with large entities such as government. certain political funding practices that are legal in one place may be illegal in another. The entry of criminals into politics . more than a fifth of federal parliament members in 2008 faced criminal charges. graft. Forms of corruption vary. The activities that constitute illegal corruption differ depending on the country or jurisdiction. nepotism. In some cases. SATISHCHANDER . Many of the biggest scandals since 2010 have involved very high levels of government.CULTURE OF CORRUPTION IN INDIA 70 opponents and general police brutality. 120 are facing criminal charges. Of the 522 members of India’s current parliament. According to The Economist. in achieving its purpose and mission. bribery alone is estimated to involve over 1 trillion US dollars annually. but include bribery. such as in the 2G spectrum scam and the Adarsh Housing Society Scam. is not considered political corruption. extortion. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties. corporations.despite laws requiring public disclosure of candidates’ assets. criminal records and educational backgrounds – is another alarming facet of political corruption in India. While corruption may facilitate criminal enterprise such as drug trafficking. government officials have broad or poorly defined powers.
and a classic. As the most efficient and rational way of organizing. With the hierarchical authority and functional a specialization. Weber listed several preconditions for the emergence of the bureaucracy. and furthermore. It was Weber who began the studies of bureaucracy and whose works led to the popularization of this term. efficient method of organization – something to take the place of the arbitrary exercise of power by authoritarian regimes. he saw it as the key process in the on-going rationalization of the Western society. bureaucratization for Weber was the key part of the rationallegal authority. hierarchically organized civil service of the Continental type is called "Weberian civil service". Weberian Bureaucracy Bureaucratic administration means fundamentally domination through knowledge. Bureaucracy brought the same logic to government work that the assembly line brought to the factory. It connoted a rational. His critical study of the bureaucratization of society became one of the most enduring parts of his work. The growth in space and population being administered and the growth in complexity of the administrative tasks being carried out and the existence of a monetary economy resulted in a need for a more efficient administrative system. Development of communication and transportation technologies made more efficient administration possible but also in popular SATISHCHANDER . they made possible the efficient undertaking of large complex tasks. but a hundred years ago bureaucracy meant something positive. Many aspects of modern public administration go back to him.CULTURE OF CORRUPTION IN INDIA 71 Development Modern bureaucracies arose as the government of states grew larger during the modern period. – Max Weber Weber described many ideal types of public administration and government in his magnum opus Economy and Society (1922). and especially following the Industrial Revolution. As the authors David Osborne and Ted Gaebler pointed out in 1993: It is hard to imagine today.
South Korea. in which increasing rationalization of human life traps individuals in the aforementioned "iron cage" of bureaucratic. delineated lines of authority in a fixed area of activity. The decisive reason for the advance of bureaucratic organization has always been its purely technical superiority over any other form of organization. Bureaucratic corruption pervades the Indian administrative system with widespread practices of bribery. where the public meets public officials. Thailand.CULTURE OF CORRUPTION IN INDIA 72 demand. A 2009 survey of the leading economies of Asia. Hong Kong. nepotism. rational control. Taiwan. Japan. and even indispensable for the modern state. not individuals. and misuse of official positions and resources. and career advancement depends on technical qualifications judged by organization. revealed Indian bureaucracy to be not just least efficient out of Singapore. rules are implemented by neutral officials. A 2005 study done by Transparency International (TI) in India found that more than 50% of the people had first-hand experience of paying bribe or peddling influence to get a job done in a public office. Corruption in Bureaucracy in India These findings confirm the prevalence of the bureaucratic and administrative forms of corruption that take place at the implementation end of politics. – Max Weber While recognizing bureaucracy as the most efficient form of organization. SATISHCHANDER . the system needs entrepreneurs and politicians. action taken on the basis of and recorded in written rules. Weber also saw it as a threat to individual freedoms. China. Weber's ideal bureaucracy is characterized by hierarchical organization. rule-based. Taxes and bribes are common between state borders. Transparency International estimates that truckers pay annually US$5 billion in bribes. and the on-going bureaucratization as leading to a "polar night of icy darkness". Vietnam. and democratization and rationalization of culture resulted in demands that the new system treats everybody equally. bureaucratic officials need expert training. Malaysia. In order to counteract bureaucrats.
More rarely. divided corrupt officers into two types: meat-eaters. 50% of the people admit having paid money. which investigated corruption in the New York City Police Department in the early 1970s. an investigation or arrest. The duty police officer (54%) is seen as the chief beneficiary. The Knapp Commission. Police corruption Police corruption is a specific form of police misconduct designed to obtain financial benefits. 14% have pointed out that money has been demanded for making an FIR. or selectively pursuing." and grasseaters. clerk in the police station. 53% have said that political intervention has been the key corruption that they have faced. and/or career advancement for a police officer or officers in exchange for not pursuing. Police sector The percentage of people affected by corruption in Police sector is about 2% of the entire population of India. who "aggressively misuse their police powers for personal gain. other personal gain." The sort of corrupt acts that have been committed by police officers have been classified as follows: SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 73 Philippines and Indonesia. Corrupt acts by police officers Police officers have various opportunities to gain personally from their status and authority as law enforcement officers. who "simply accept the payoffs that the happenstances of police work throw their way. Other beneficiaries are the investigation officer. officer in charge. police officers may deliberately and systematically participate in organized crime themselves. Another example is police officers flouting the police code of conduct in order to secure convictions of suspects — for example. However this is lower in the West (36%) and the metros (39%). through the use of falsified evidence. further it was also found that working with India's civil servants was a "slow and painful" process. One common form of police corruption is soliciting and/or accepting bribes in exchange for not reporting organized drug or prostitution rings or other illegal activities.
Prevalence of police corruptions Accurate information about the prevalence of police corruption is hard to come by. casinos. the widespread existence of a Blue Code of Silence among the police can prevent the corruption from coming to light. 5) Protection of illegal activity: being "on the take". illustrates how powerful the code of silence can be.CULTURE OF CORRUPTION IN INDIA 74 1) Corruption of authority: police officers receiving free drinks. 4) Shakedowns: accepting bribes for not pursuing a criminal violation. rather than the exception. in American policing. 8) Internal payoffs: prerogatives and perquisites of law enforcement organizations. 7) Direct criminal activities: of law enforcement officers themselves. for bribery or as a personal favour. Officers in these situations commonly fail to report corrupt behavior or provide false testimony to outside investigators to cover up criminal activity by their fellow officers. since the corrupt activities tend to happen in secret and police organizations have little incentive to publish information about corruption. and other gratuities. independent politician John Hatton forced the New South Wales state government to override the Independent Commission against Corruption and the advice of senior police to establish a ground-breaking Royal Commission into Police Corruption. by 46 votes to 45. contractors and tow truck operators. for instance. large-scale corruption involving the police not only exist but can even become institutionalized. a police officer who spoke out about pervasive corruption in the NYPD despite the open hostility of other members. 2) Kickbacks: receiving payment from referring people to other businesses. 3) Opportunistic theft: from arrestees and crime victims or their corpses. Where corruption exists. This can include. 6) "Fixing": undermining criminal prosecutions by withholding evidence or failing to appear at judicial hearings. SATISHCHANDER . Police officials and researchers alike have argued that in some countries. being bought and sold. meals. such as shifts and holidays. especially in drug cases. accepting payment from the operators of illegal establishments such as brothels. The well-known is case of Frank Serpico. or drug dealers to protect them from law enforcement and keep them in operation. One study of corruption in the Los Angeles Police Department (focusing particularly on the Rampart scandal) proposed that certain forms of police corruption may be the norm. 9) The "frame-up": the planting or adding to evidence. In Australia in 1994.
1) There are two main forms of corruption faced in this sector. real estate developers and law enforcement officials. develop and sell land in illegal ways. Land Administration The percentage of people affected by corruption in Land administration sector is about 3% of the entire population of India. In 59% of the cases money is directly demanded. SATISHCHANDER . DPP. 2) On an average.CULTURE OF CORRUPTION IN INDIA 75 Police and Prosecution 1) Set up of an independent police complaints board with its own investigators 2) Have complaints go to media. Mafia Raj consisting of municipal and other government officials. elected politicians. acquire. The first one is waiting a long time for getting documents and the second one is an offshoot of the money involved in various activities such as mutation. or ombudsman 3) Introduce an independent group within the police force to investigate corruption within the police 4) Implement a declaration and monitoring of assets for police officers 5) Implement and monitor Code of Ethics for police Suggestions for improvement 1) Suspension / suitable punishment for corrupt officials 2) Bribery to be penalized 3) Authorities to be more vigilant for prevention of corrupt activities Land and property Officials often steal state property. In cities and villages throughout India. services and tax. 36% of those interacted talk of money being demanded. judicial officers. This incidence is the strongest in the North (58%).
Shoddy construction and material substitution (e.CULTURE OF CORRUPTION IN INDIA 76 3) The key beneficiaries of corruption in this sector are perceived to be Surveyors (45%). are dominated by construction mafias. and sometimes simply washed away when India's heavy monsoon season arrives. politicians and construction contractors.g. such as road building. Income tax There have been several cases of collusion of officials of the income tax department of India for a favourable tax treatment in return for bribes. SATISHCHANDER . which are groupings of corrupt public works officials. Revenue officers (30%) and Tehsildars (23%). Preferential award of public resources As detailed earlier. Medicine In Government Hospitals. Other examples include the award of mining leases to private companies without a levy of taxes that is proportionate to the market value of the ore. consultations with doctors and availing diagnostic services. Many state-funded construction activities in India. Tendering processes and awarding contracts Government officials having discretionary powers in awarding contracts engage in preferential treatment for selected bidders and display negligence in quality control processes. mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous. corruption is associated with non-availability of medicines (or duplicate/fake medicines). There have been cases of diversion of medical supplies from government hospitals and clinic as well as supply and distribution of medicines of inferior quality. materials suppliers. getting admission. land in areas with short supply is relatively common with government entities awarding public land to private concerns at negligible rates.
all of which are exacerbated by a preponderance of new laws". Food Corporation of India. In such contexts. Major commodities distributed to consumers include staple food grains such as wheat. Court procedures are very slow and complicated. and kerosene through a network of Fair Price Shops (FPS) established in several states across the country. According to Transparency International. 1) Introduce Code of Conduct for all sectors within Judiciary 2) Conduct speedy investigations into allegation of misconduct made against judicial staff according to Existing regulations 3) Entrust responsibility of recruitment and discipline to the judicial and legal service 4) Commission for administrative staff as well 5) Introduce Code of Conduct for administrative staff in the judiciary Suggestion for improvement in judiciary 1) Punishment / suspension of the wrong doer 2) Judgment to be correctly made / and fast This is the crux of all suggestions made for curbing corruption in this sector. people are tempted to resort to bribes. sugar. Public Distribution System Public Distribution System (PDS) is a national food security system. This results in delays in the processing of cases. and the court system is severely backlogged and understaffed. established by the Government of India under Ministry of Consumer Affairs. favours.CULTURE OF CORRUPTION IN INDIA 77 Judiciary The Indian court system consists of a supreme court. and a loss of confidence in the law and in the justice system. shortage of judges and complex procedures. hospitality or gifts not only to obtain a favourable decision but to move the case through the system and speed up the court proceedings. judicial corruption in India is attributable to factors such as "delays in the disposal of cases. Also to add to this point “Justice delayed is justice denied”. rice. a PSU. It distributes subsidized food and non-food items to India's poor. SATISHCHANDER . Food and Public Distribution and managed jointly with state governments in India. There is also a high level of discretion in the processing of paperwork during trials and multiple points where court officials can misuse their power with impunity. high courts at state level and subordinate courts at district and local level.
However the food grains supplied by the ration shops are not enough to meet the consumption needs of the poor or are of inferior quality. As of date there are about 4.D. 5. The PDS has been criticized for its urban bias and its failure to serve the poorer sections of the population effectively.S System 1. it is considered to be the most important food security network. The targeted PDS is costly and gives rise to a lot of corruption in the process of extricating the poor from those who are not poor. India accounts for over 400 million poor and hungry people. 3. but the number is still extremely low. Also. Despite the PDS.C. Deceitful dealers replace good supplies received from the F. A lot of families also mortgage their ration cards for money. Generally. Many BPL families are not able to acquire ration cards either because they are seasonal migrant workers or because they live in unauthorized colonies. This is one of the biggest bottlenecks in the efficient functioning of PDS in India. 2. This results in the genuinely poor being excluded whilst the ineligible get several cards. In terms of both coverage and public expenditure. The average level of consumption of PDS grains in India is only 1 kg per person / month.I (Food Corporation of India) with inferior stock. the consumers get inferior food grains in ration shops. which are managed by state governments. There is also no clarity as to which families should be included in the BPL list and which excluded. Many FPS dealers resort to malpractice since they acquire little profit.99 lakh Fair Price Shops (FPS) across India. SATISHCHANDER . Several schemes have augmented the number of people aided by PDS. Numerous malpractices make safe and nutritious food inaccessible and unaffordable to many poor. 4. Poor supervision of FPS and lack of accountability have spurred a number of middlemen who eat up (literally) a good proportion of the stock meant for the poor.CULTURE OF CORRUPTION IN INDIA 78 distributes food grains to FPS throughout the country. Fallouts of P. Many retail shopkeepers have large number of bogus cards to sell food grains in the open market. the stock assigned to a single family cannot be bought in instalments.
and other prominent agencies should provide quality food grains for distribution. in which case the market system is more apt anyway. 5. The Civil supplies Corporation should open more Fair Price shops in rural areas. the following suggestions are furnished for: 1. which would cause reasonable belief that the PDS system is only fuelling starvation in India. the same India that has developed nuclear weapons. which is an added expenditure for taxpayers. which is a tall order for an agency that has no real incentive to do so. only about 42% of subsidized grains issued by the Central Pool reach the target group. according to a Planning Commission study released in March 2008. Personnel in charge of the Department should be chosen locally. Margin of profit should be increased for honest business. 6.CULTURE OF CORRUPTION IN INDIA 79 To improve the current system of the PDS. which is again is an added expenditure and not fool proof. 7. The Fair Price dealers seldom display rate chart and quantity available in the block-boards in front of the shop. 3. and is even talking of putting people on the Moon.I. Suggestion for improvement in PDS 1) 2) 3) 4) Proper and timely inspection of Ration shops Ration shop owner to stop black marketing Product should be given on time Weights should be proper Corruption mars India’s healthcare system "Doctors who concerned themselves with mass disease and the health of the population had to be committed to political activity if they wishes to may progress" But in India today. Vigilance squad should be strengthened to detect corruption. Frequent checks & raids should be conducted to eliminate bogus and duplicate cards. 4. This should be enforced.C. somewhere a child dies every minute of SATISHCHANDER . F. there is still polio. In aggregate. 2.
not tobacco. not the salmonella. or cultural values enshrined in centuries or millennia of cultural attitudes and beliefs. and even in districts where female literacy is the highest e. but trying to change human nature. dysfunctional and often dead? The biggest killer in India today is not the mosquito. Infant female foeticide is raging . But we also need to address it because it is alive and well amongst health professionals themselves. Doctors and other health professionals have an ethical responsibility to highlight the contribution of corruption to the health status of their patients. staphylococcus or streptococcus bacteria. So what is ‘causing’ these problems. because of the undermining effects of corruption in all areas of the health system. investments in buildings. and a myriad more that leave countless millions every year disabled. training courses.ironically in wealthier districts. mass distribution of drugs and vaccines. and consider its role in the morbidity and mortality of hundreds of millions of people across the globe today. it is corruption. Logically.g. We do not need a better polio vaccine or better oral rehydration salts. but I would argue that we are largely wasting our time with massive health projects and programmes. is too big a step at this stage. Let us look at some of its manifestations first. and certainly not the polio bacterium despite the disproportionate effort spent on eradicating it. then at what might be done about it: SATISHCHANDER . and what might be done about it. in Orissa). Corruption may be. and to become politically active to control such a significant cause of death. Tackling these problems does not require more research or the application of more expensive technologies. Each of these deaths is preventable with low tech technology already well known for decades. Such a study may seem outside the responsibility of the health professional. To make it sound more technical and acceptable to the medical profession perhaps we need to label it. So let us focus on this one cause.CULTURE OF CORRUPTION IN INDIA 80 every day from diarrhoea and every 6 minutes a woman dies from pregnancy related causes. I should take a step back and focus on what causes or enables corruption to thrive. Road traffic accidents in Delhi alone are of epidemic proportions.
because officials know there is no accountability. due to lack of accountability and incentives from unscrupulous pharmaceutical companies. • Buildings fall down in earthquakes because of building violations. • Inattention to ensuring clean water and hygienic environments resulting in filthy hospitals . • Students bribe college staff resulting in under-experienced/ qualified staff taking up posts. so another generation grows up ignorant of basic health measures. • Spurious and adulterated drugs proliferate because high level politicians protect the killers who sell them. • Subversion of licensing. • Issuing of licences to service providers and manufacturers inappropriately. • Education of SCs and STs and slum dwellers neglected because teachers concentrate on children whose parents pay them. • Unnecessary duplication and irrational drug prescribing by doctors. • Doctors don’t attend place of work despite drawing a wage from the Government. a woman with an obstructed labour can’t call an ambulance. accreditation and legal systems intended to promote quality and root out negligence. and she dies. • Lack of electrical energy because politicians will not tackle theft of electricity. and power breakdowns compromise the safety of hospitals.CULTURE OF CORRUPTION IN INDIA 81 • Phone doesn’t work because of lack of bribe to telephone lines-man. • Misappropriation of vehicles (and much more) by officials and doctors. • Staff not paid or reimbursed for outreach work because of embezzlement of their wages or babus demanding favours to move their files. • Drivers can bribe policemen on side of road so speeding and ignoring red lights is common-place. • Failure of drugs and other consumables to reach the intended point of use. • Under the desk payments demanded from patients by everyone for the watchman to the doctor. • Official government and externally funded programmes are neglected as senior District health officials are more interested in recouping the cost of buying their post. • Lack of accountability of staff and contractors due to corrupt supervisors/ masters SATISHCHANDER .
• The wrong staff is sent on training courses (even abroad) because of patronage. etc. Despite his successful demonstration of the efficacy of this simple remedy. similarly incompetent consultants and advisers are appointed to ‘assist’ projects. so they do not properly challenge the non-appropriateness of buildings. Development agencies are under pressure to spend money and to show short term results. However. and also led indirectly to more hygienic conditions in non-health settings. or to blame development agencies. • Politicians and public servants badger development agencies or private sector banks for loans which have little or no technical justification. • Theft and sabotage of instruments by staff wanting to make their private practices look more efficient than the public sector. his pioneering work led to better aseptic practices in hospitals and clinics around the world. SATISHCHANDER . thereby promoting healthier living (unless one accepts the hypothesis that such over-attention to hygiene causes low tolerance to infection and a tendency to asthma. sites or non-maintenance. so we must not necessarily anticipate universal admiration of our efforts to tackle Coruptionomia. Semmelweiss became convinced that he and his colleagues were transmitting the disease (caused by a variety of infectious agents) and experimented with using limewater to wash hands between examinations and deliveries. But if anything is to happen to improve governance India’s health sector doctors and other health professionals need to start putting their own house in order. he was hounded out of Vienna and finally died in a mental asylum.CULTURE OF CORRUPTION IN INDIA 82 • Buildings constructed at inappropriate sites to please politicians and others. Let us look back again into medical history. To blame are the politicians for veniality or civil servants (especially the IAS) for their unholy alliances with the political classes.). to become active combatants in a crusade to eradicate this mass killer. It is easy to blame the effects of globalisation. At about the time Virchow was active in Silesia a doctor in Vienna was growing more and more perturbed by puerperal fever and the unacceptable high maternal mortality it caused. It is easy to blame the masses for voting short-sightedly for the wrong sorts of politicians. They also need to take seriously the challenge of ‘political medicine’. And certainly for far too long development agencies have ignored or connived in such corruption. discouraging proper use.
• Refusing pharmaceutical companies’ and others’ incentives. • Refusing to buy posts or co-operate with those who buy post. O To shun errant colleagues • For professional are associations to support the Medical Council of India in making violations of the above a ’striking-off’ the register offence. O To commit themselves to rational drug use. medicine) were to start with a zero tolerance campaign within the sector itself.CULTURE OF CORRUPTION IN INDIA 83 If the health professionals of India and other developing countries (led by the profession primus inter pares. SATISHCHANDER . and to set up their own selfdisciplinary machinery if the official machinery won’t do it. • Refusing to tolerate bribery among junior staff. O To anonymously report for collective action to highlight where and when outside interference occurs (there is safety in numbers). receive or countenance bribery in their sphere of influence. who knows how far the ripples would spread out? What are some of the practical steps that India’s health care workers could start taking themselves? The sorts of moves I have in mind would be: • Hippocratic type oath to be promulgated by IMA which would make it a matter of professional self-discipline to: O Refuse to give. It is only when India’s health professionals decide that enough is enough and recognise that their calling includes stamping out this major cause of death and disease that the health status of India’s people will begin to improve significantly again. • Participate actively in designing and pressurising for governance systems that are transparent and fool proof. referral and evidence based interventions.
food etc. 2) The dominant corruption after getting admission is non-proper care by doctors and nurses and also in terms of non-proper medicine. Improvement in Health Sectors 1) Government to keep close vigil on the working of the hospitals. 4) Doctors should demand less money. 1) Payment of money through hospital staff is the dominant irregular process encountered for admission. got admission through an irregular process. This trend was strongest in South (39%) and lowest in East (6%). This could also mean that more doctors should be employed in the hospitals depending upon the demand of doctors in a particular department. Payments made for admission to hospitals are higher in the South. A. Education The percentage of people affected by corruption in Education sector is about 5.3% of the entire population of India.CULTURE OF CORRUPTION IN INDIA 84 Health Sector The percentage of people affected by corruption in Health sector is about 8% of the entire population of India. The key process that seeds corruption in this sector is the Admission process. 3) 25% of those who has interacted with the health sector talk of money being demanded and it is especially high in the South (38%) 4) The key actors leading to corruption in this sector across zones are allegedly Doctors (77%) followed closely followed by Hospital staff (67%). 2) Better medicines arrangement: Availability of Medicines to patients should be improved 3) Doctors should come on time. followed by direct payments being made. SATISHCHANDER . The Study shows that 18% of those who interacted with this sector.
B.9% of the entire population of India. About 50% respondents who had interacted with the Power sector in the past one year had to pay the office staff. and give in to their unreasonable demands. D. C. then people will not have to unnecessarily flock to only ‘some’ reputed institutions. The two main dominant modes of corruption in the Admissions process are (a) Donations (57%) and (b) Use of an influential relative (19%).CULTURE OF CORRUPTION IN INDIA 85 B. Inspection of teachers / schools Proper and timely inspection of all educational institutions and teachers would also ensure the above stated point. Power Sector The percentage of people affected by corruption in Power sector is about 5. Proper punishment for offenders This would be necessary if norms are broken and would further ensure accountability in the system by rule of the stick. If the management of all Schools and other educational institutions are able to ensure good quality education. if the quality of education imparted is improved. B. Management to see – teacher teaches responsibly. Private tuition should be stopped It was suggested that private tuition in all its forms should be prohibited. the students will not have to seek private tuitions. ‘Improper supply of electricity’ and ‘Payment of excess bill’ – were the key corruptions faced. Of these 50%. Receiving donations is a custom strongly rooted in the South zone (70%). Even otherwise. SATISHCHANDER . A. in most cases (67%) money is directly demanded. Education Sectors A.
Quick rectification of faults this would prevent people from falling prey into the unreasonable demands made by linesmen and the like. Taxation The percentage of people affected by corruption in Taxation sector is about . Stealing of electricity to be stopped: This is more or less a subset of the above suggestion. Solutions A. Telecom A. A. Time to time checking against corruption C. The incidence of this experience was much higher in West Zone (72%).CULTURE OF CORRUPTION IN INDIA 86 C. SATISHCHANDER . Officers (24%). Surprisingly this sector has garnered a lower ‘Corruption score’ as compared to other sectors.66% of the entire population of India. Privatization of telecom sector D. Punishment for wrong doers’ Proper punishment in the form of Suspension of corrupt officials was suggested B. The key actors in corruption in this sector are Linesmen (37%). Close watch on the linesmen by officers The above suggestions are more or less inter-related and are mainly in line with a strong desire to bring accountability to this sector. Punishment for wrong doers B. Meter readers (23%) and Billing clerks (22%). About every second person having interacted with the power sector had to make repeated visits to the office just to get their complaint registered or addressed. D. C.
On the other hand. more than 50% people who had interacted claimed to be paying Income tax. However. Recent sukhna land scandal involving four Indian Lieutenant Generals has shaken public faith in the country's growing military at a time when large sums are being spent on modernizing the armed forces. SATISHCHANDER . Indian Navy and Indian Air Force. Municipal tax (»80%) features are very strongly in the West and South. Many officers have been caught for allegedly selling defence stores in the black market in the border districts of Indian states and territories. Armed forces The Indian Armed Forces have frequently witnessed corruption involving senior armed forces officers from the Indian Army.CULTURE OF CORRUPTION IN INDIA 87 B. only about 11% talk about paying money. The tax officer (44%) and the clerk in tax department (35%) are the key actors in the corruption in this sector. The latest Adarsh land scam is another example of the nexus between the armed forces. A string of eye-popping fraud cases has damaged the institution in recent years. C. In the North zone. Many privately operated television channels have been formed since the privatization of Indian television in 1991. bureaucracy and the politicians in the embezzlement of government property. The key corruption faced is “paying for getting reduced or correct assessment”. D. Media The role of media in systemic corruption cannot be undermined at it shows it involvement through paid news and sometimes unethical support to corrupt. Media bias in India Media bias in India refers to the bias of journalists and news producers within the mass media in the selection of which events and stories are reported and how they are covered. and metros.
However. Some of the Church of North India is making money by selling Baptism certificates. and compared to China and other lower developed Asian nations. although the chairman for the Centre for Media Studies believed that the content. Ambika Soni claimed that it was "probably the freest in the world". The chief economic consequences of corruption are the loss to the economy an unhealthy climate for investment and an increase in the cost of government-subsidized services. etc.. the average time taken to secure the clearances for a start-up or to invoke bankruptcy is much greater. investigative journalism) Demand more balanced coverage between private-sector and public-sector on corruption issues 7) Have media engage in public awareness campaign on corruption issues Religious institutions In India.7 billion). a representative from Tanzania commented that he had not seen evidence of political bias in Indian newspapers. The TI India study estimates the monetary value of petty corruption in 11 basic services provided by the government. judiciary. A group of church leaders and activists has launched a campaign to combat the corruption within churches. police. Media 1) 2) 3) 4) 5) 6) Leg-is-late liberalization of broadcasting Leg-is-late more access to information in ministries Demand more balanced reporting Implement Code of Conduct for journalists Introduce more specialized training (e.068 crore (US$4. "smack (sic) of elitism". to be around 21. in April 2011 the incumbent information and broadcasting minister. particularly on television.g. India still ranks in the bottom quartile of developing nations in terms of the ease of doing business.CULTURE OF CORRUPTION IN INDIA 88 Political bias There have been events when the media has been accused of political bias. like education. At the same gathering. SATISHCHANDER . healthcare. the corruption has also crept into religious institutions.
young democracies suffering from insufficient checks and balances and lack of transparency. At the theoretical level. But as the institutions of transparency and accountability in new democracies rise as they mature. at least up to a point. A combination of rapid growth and democratization ultimately led to at least a semidemocratic polity by the early 1980s (Chai-Anan 1990). the bureaucracy and the army (Rock 2003. government officials. rises. this combination implies an inverted U pattern between corruption and the durability or maturity of new democracies. at least up to a point. provided protectionist rents to a surprisingly small number of Sino-Thai entrepreneurs in exchange for kickbacks. Because of free entry into rent-seeking. including army officers. Taken together. which they did. Corruption and Democracy What We Know Both theory and case evidence provide compelling support for a democratization breeds corruption hypothesis. corrupt networks were more or less tightly controlled by political elites in government. democratization led to the break-up of a centralized corruption network between political elites. As Rock (1994. provide rent-seekers with greater access to public officials and hence greater opportunities for collecting public sector rents. As in Indonesia. aggregate rents and corrupt activity fall because rents per rent seeker fall and because the cost of rent-seeking (including the probability of getting caught and punished) to rent-seekers and the government officials. The case evidence. senior bureaucrats and senior army officials on the one hand and the Sino-Thai entrepreneurs who drove the growth process following the growth coalition assembled by General Sarit in 1960. Rock and Bonnett. In this centralized network. without making the corrupt acts of rent-seekers and officials open to public scrutiny. during the time Prem SATISHCHANDER . the government protected private property and extracted rents at a low enough ‘tax’ rate to entice entrepreneurs to invest. In both polities. Rock 2000. 2000) and Rockand Bonnett (2004) argue with respect to Thailand’s bureaucratic polity. In their model. is broadly consistent with this picture. 2004). who accept bribes. For a while. Mohtadi and Roe (2003) model corruption as the monopolistically competitive behaviour of private sector agents who can either invest in productive activity Orin rent-seeking (corruption). competition among rent-seekers ultimately reduces returns to individual rent seekers even as it drives aggregate rents up.CULTURE OF CORRUPTION IN INDIA 89 13. at least from Indonesia and Thailand.
SATISHCHANDER .7 Although it is difficult to know whether the new constitution reduced corruption in Thailand.6 They did so. The Westminster parliamentary democracy. and key business leaders regularly met in a high level Joint Public Private Sector Consultative Committee to work our problems associated with Thailand’s policy shift which favoured the export of manufactures. Thailand’s bureaucratic polity evolved toward both a broker polity (Ramsay 1985) and a Northeast Asian style developmental state (Anek 1988) as core economic agencies. King 1996). The rise of shadowy provincial businessmen in politics and their corrupt frontal assault on the state ultimately led bureaucratic and political elites in Bangkok to try and slow the spread of corruption by enacting a new constitution in the late 1990s designed to reign in the corruption associated with money politics and rural vote buying (Callahan 2005). who became prime minister in a government that for the first time in Thai history captured a majority in parliament for his Thak Rai Thai Party (McCargo and Ukrist 2005). of which India is one. competitive party systems. They used their control of both to carry out a frontal and corrupt assault on the state to reward their supporters and build their coffers for the next election (King 1996: 136-137). free media and free speech that make open and transparent government possible. intra-government checks and balances. But this transformation did not last as unscrupulous up-country provincial politicians subsequently captured both the legislature and the prime minister’s office (Girling 1997. by among other things. politicizing the core institutions of macroeconomic policy—the Ministry of Finance. One outcome of this process was the rise of another provisional businessman Thaksin Shinawata. factions and small parties with narrow interests and constituencies. Poor Democracy Poor democracies do not lack the structural mechanisms that help constrain corruption: reelection pressures. is also supposed to be the least corrupt structurally among the variety of parliamentary and presidential democracies. This led at least one long time analyst to ask whether new democracies could manage their macro-economies (Ammar 1997). Murray 1996). Callahan and McCargo 1996.CULTURE OF CORRUPTION IN INDIA 90 was the prime minister (1980-88). and the national planning agency. Its plurality voting system tends to produce national parties and reduces extortions by individuals. the Central Bank. the National Economic and Social Development Board (Rock 2000: 197-198. peak business associations. the new constitution recentralized politics by significantly reducing the number of political parties (Hicken 2006).
intense political competition. along with economic opportunities and political SATISHCHANDER . then these different relationships should have an important impact on the types of corruption resulted.CULTURE OF CORRUPTION IN INDIA 91 Poor Democracy with Corruption in India In a poor democracy. patronage politics is fragmented. and scarce economic opportunities. the combination of elite accessibility and meagre economic opportunity can contribute to a fragmented patronage system leading to extreme corruption. Corruption takes many forms. produce in India decentralized structures in the corruption process. In short. a weak state (elite accessibility). Yet because material rewards are scare and political opportunities more plentiful. In such a political setting. and the dominant patterns in modern political and economic systems take the form of illicit exchange between state power and societal interests. Elites build personal followings. and find them hard to control due to a chronic shortage of material rewards yet availability of political alternatives for followers. These characteristics have indeed afflicted India’s political system. If democracy or the lack thereof is characterized by different relationships between the state and society (aside from institutional differences). rather than broad-based parties. Such patronage politics may also involve more sinister groups that resort to intimidation and violence.” The strength of the state is a strong determinant of corruption because the relative autonomy of political elites is critical for shaping the corruption scenario in a political setting. Efforts by politicians to create broad organizational support have often failed because “the ordinary voter has an extremely narrow view of public responsibility and is not willing to give time and effort without the promise of immediate material reward. combined with political opportunities and economic scarcities. The clientalism literature establishes a causal relation between democracy and corruption by suggesting that clients or voters desire patronage politics because it supplies extra-bureaucratic material benefits. A stronger state (elite autonomy). They therefore depend on building personal patronage systems to seek and maintain power. political elites are not only accessible but they seek power amid weak institutions. encouraging independent monopoly or fragmented rent seeking and a greater dissipation of rents.
corruption erodes the institutional capacity of government as procedures are disregarded.CULTURE OF CORRUPTION IN INDIA 92 scarcities. corruption in the judiciary compromises the rule of law. More generally. developing country has not been more successful at tackling corruption than an authoritarian developmental state. and institutions Corruption poses a serious development challenge. and public offices are bought and sold. Economic effects Corruption undermines economic development by generating considerable distortions and inefficiency. In the private sector. it undermines democracy and good governance by flouting or even subverting formal processes. Effects On politics. It violates a basic principle of republicanism regarding the centrality of civic virtue. the management cost of negotiating with officials. In the political realm. Conclusion Democracy in a poor. resources are siphoned off. Though the socialist legacy and economic liberalization are compounding factors in the Indian scenario. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking. and corruption in public administration results in the inefficient provision of services. Although some claim corruption reduces costs by cutting bureaucracy. administration. At the same time. corruption increases the cost of business through the price of illicit payments themselves. are produces in other country more centralized corruption with a lesser degree of rent seeking. and the risk of breached agreements or detection. the availability of bribes can also induce officials to contrive SATISHCHANDER . The reasons are a combination of the sources of corruption that characteristically affect democracies on one hand and those that typically afflict developing countries on the other. 14. corruption undermines the legitimacy of government and such democratic values as trust and tolerance.
and increases budgetary pressures on government. have been modeled in theory by economist Mancur Olson. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market. it cannot be enforced if officials can easily be bribed. unionization prevention. and the fact that new governments often confiscated previous government's corruptly-obtained assets. more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.) In the case of Africa. but often accurate. image of African dictators having Swiss bank accounts). The same applies to social rights worker protection. thus further distorting investment. Corrupt countries may formally have legislation to protect the environment. or other regulations. Asian administrations such as Suharto's New Order often took a cut on business transactions or provided conditions for development. This encouraged officials to stash their wealth abroad. corruption has primarily taken the form of rent extraction with the resulting financial capital moved overseas rather than invested at home (hence the stereotypical. Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in the former. shielding firms with connections from competition and thereby sustaining inefficient firms. Where corruption inflates the cost of business. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. law and order.CULTURE OF CORRUPTION IN INDIA 93 new rules and delays. for example. out of reach of any future expropriation. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings. Corruption also lowers compliance with construction. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Environmental and social effects Corruption facilitates environmental destruction. reduces the quality of government services and infrastructure. capital flight from 30 sub-Saharan countries totaled $187bn. exceeding those nations' external debts. environmental. one of the factors for this behavior was political instability. University of Massachusetts researchers estimated that from 1970 to 1996. SATISHCHANDER . through infrastructure investment. expressed in retarded or suppressed development. In Nigeria. (The results. and child labor. it also distorts the playing field. etc. In contrast.
bribes paid by suppliers to the automotive industry in order to sell poor quality connectors used for instance in safety equipment such as airbags. developing. Corruption is not specific to poor. India. medical and laboratory staff involved in anti-doping controls. bribes paid to obtain diplomas. These various manifestations of corruption can ultimately present a danger for the public health. Corruption can also affect the various components of sports activities (referees. etc. In western countries. Similarly. public safety. there have been cases of bribery and other forms of corruption in all possible fields: underthe-table payments made to reputed surgeons by patients willing to be on top of the list of forthcoming surgeries. players. Other areas: health.CULTURE OF CORRUPTION IN INDIA 94 The Nobel Prize-winning economist Amartya Sen has observed that "there is no such thing as an apolitical food problem. and warlords alike. as well as religious organisations. financial and other advantages granted to unionists by members of the executive board of a car manufacturer in exchange for employer-friendly positions and votes. criminals. Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good. In Bihar. etc. education. they can discredit certain essential institutions or social relationships. or transition countries. SATISHCHANDER . it is government action or inaction that determines its severity. The 20th century is full of many examples of governments undermining the food security of their own nations – sometimes intentionally. Examples are endless. trade unions. food aid is often robbed at gunpoint by governments." While drought and other naturally occurring events may trigger famine conditions. Officials often steal state property. bribes paid by suppliers to manufacturers of defibrillators (to sell poor quality capacitors). more than 80% of the subsidized food aid to poor is stolen by corrupt officials. contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children. and sold for a profit. members of national sport federation and international committees deciding about the allocation of contracts and competition places). and often even whether or not a famine will occur. There have also been cases against (members of) various types of non-profit and nongovernment organisations.
which was "not permissible under Roman law but became widely practiced in medieval Europe. especially in commercial transactions".CULTURE OF CORRUPTION IN INDIA 95 Ultimately. Hawala itself later influenced the development of the agency in common law and in civil laws such as the aval in French law and the avallo in Italian law. the Horn of Africa. which are primarily located in the Middle East. was due to the large extent of the "trade conducted by the Italian cities with the Muslim world in the Middle Ages. The words aval and avallo were themselves derived from Hawala. Islamic law and the later common law "had no difficulty in accepting agency as one of its institutions in the field of contracts and of obligations in general. The transfer of debt. the "contractor himself was considered the party to the contract and it took a second contract between the person who acted on behalf of a principal and the latter in order to transfer the rights and the obligations deriving from the contract to him. and South Asia. HAWALA Hawala (also known as hundi) is an informal value transfer system based on the performance and honour of a huge network of money brokers." In Roman law." The agency was also "an institution unknown to Roman law" as no "individual could conclude a binding contract on behalf of another as his agent. D." On the other hand. CAUSES 15." SATISHCHANDER . Origins Hawala has its origins in classical Islamic law and is mentioned in texts of Islamic jurisprudence as early as the 8th century. North Africa. the distinction between public and private sector corruption sometimes appears rather artificial and national anti-corruption initiatives may need to avoid legal and other loopholes in the coverage of the instruments.
it can operate even in the absence of a legal and juridical environment. Generally. Settlements of debts between Hawala brokers can take a variety of forms. money is transferred via a network of Hawala brokers. Hawala brokers often earn their profits through bypassing official exchange rates. which was only gradually replaced by the instruments of the formal banking system in the first half of the 20th century. Its advantages are most pronounced when the receiving country applies distortive exchange rate regulations (as has been the case for many typical receiving countries such as Pakistan or Egypt) or when the banking system in the receiving country is less complex (e. city.CULTURE OF CORRUPTION IN INDIA 96 Hawala is believed to have arisen in the financing of long-distance trade around the emerging capital trade centres in the early medieval period. Hawala is probably used mostly for migrant workers' remittances to their countries of origin. Moreover. Informal records are produced of individual transactions. the funds enter the system in the source country's currency and leave the system in the recipient country's currency.g. Somalia). the transaction takes place entirely on the honor system. usually foreign. A customer approaches a Hawala broker in one city and gives a sum of money to be transferred to a recipient in another. they can be made at other than official exchange rates. in some parts of the world it is the only option for legitimate funds transfers. As settlements often take place without any foreign exchange transactions. gives disposition instructions of the funds (usually minus a small commission). The unique feature of the system is that no promissory instruments are exchanged between the Hawala brokers. it appears to have developed into a fully-fledged money market instrument. Hawala is attractive to customers because it provides a fast and convenient transfer of funds. SATISHCHANDER . In addition to commissions. As the system does not depend on the legal enforceability of claims. and need not take the form of direct cash transactions. and a running tally of the amount owed by one broker to another is kept. and has even been used by aid organizations in areas where it is the best-functioning institution. The Hawala broker calls another Hawala broker in the recipient's city. and promises to settle the debt at a later date. due to differences in legal environment in places such as Afghanistan. or Hawaladars. usually with a far lower commission than that charged by banks. Today. How Hawala works In the most basic variant of the Hawala system. Yemen. In South Asia.
These people mostly act as a parallel banking system for businessmen. Being a part of an informal system. a Hundi is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order.2-0.S. or other concerns. They were mostly used as Cheques by indigenous bankers. the transfers are usually informal and not effectively regulated by governments. These were used in trade and credit transactions. they were used as remittance instruments for the purpose of transfer of funds from one place to another. In the era of bygone kings and the British Raj these Hundis served as Travellers Cheques. 1881. currency control.5% per transaction from transferring money from one city to another. however. immigration. Angadia The word Angadia means courier (in Hindi) but it is also used for people who act as Hawaladars within the country (India). It continues.CULTURE OF CORRUPTION IN INDIA 97 Furthermore. In some countries however. states and other countries as it is seen to be a form of money laundering and can be used to move wealth anonymously. which are a major advantage to customers with tax. SATISHCHANDER . Hundis referred to legal financial instruments evolved on the Indian subcontinent. Hawala are actually regulated by local governments and Hawaladars are licensed to perform their money brokering services. Hundis On a similar note. 2001 Hawala has been made illegal in some U. to be a legal and effective system in many countries across the globe. Hawala after September 11. They charge a commission of around 0. Technically. Hundis now have no legal status and were not covered under the Negotiable Instruments Act. They were also used as credit instruments for borrowing and as bills of exchange for trade transactions.
Many of its agents in several countries were initially arrested. to better curb the activities of the financiers of terrorism and those engaged in laundering the profits of drug smuggling. though some assets remain frozen. but rather by inter-bank wire transfer to a SunTrust Bank in Florida. where corruption is high and these transactions are neither taxed nor recorded. though later freed after no concrete evidence against them was found. Al-Barakat is now able again to access its bank account funds. though. authorities. Whether these initiatives will have the desired effect of curbing such activities has yet to be seen. In August 2006 the last Al-Barakat representatives were taken off the U. where two of the conspirators had opened a personal account. However as a result of intense pressure from the U. the company had been on the list for the past eight years. there is little sign that these actions have brought the authorities any closer to identifying and arresting a significant number of terrorists or drug smugglers. The 9/11 Commission Report has since confirmed that the bulk of the funds used to finance the assault were not sent through the Hawala system. terror list. the Swedish branch of Al-Barakat was removed from the United Nations' list of terrorist organizations. In October 2009. that the overwhelming majority of those who use these informal networks are doing so for legitimate purposes. and had had its bank account funds frozen. for example into neighbouring Kenya. widespread efforts are currently being made to introduce systematic anti-money laundering initiatives on a global scale. SATISHCHANDER . it has been suggested that the recent change in the European Union's position regarding the many organizations "that have been too easily included in the UN terror list" might have influenced the UN's position. According to the Swedish Public Radio broadcaster SR. although a number of Hawala networks have been closed down and a number of Hawaladars have been successfully prosecuted for money laundering. the UN did not explain why it had elected to remove Al-Barakat from its terror list. In November 2001. the American government suspected that some Hawala brokers may have helped terrorist organizations to transfer money to fund their activities.S. the Bush administration froze the assets of AL-Barakat a Somali remittance Hawala company used primarily by the large Somali diaspora.CULTURE OF CORRUPTION IN INDIA 98 After the September 11 terrorist attacks.S. Experts emphasize. Media has been speculating that Somali pirates use the Hawala system to move funds internationally. However.
He ordered a commission to review scores of past and current anti-corruption inquests. the Jain brothers. Thousands of records were seized to dig into the movement of billions of dollars in and out of Afghanistan.CULTURE OF CORRUPTION IN INDIA 99 The 2010 court case United States v. It was a US$18 million bribery scandal that implicated some of the country's leading politicians. Senior US military and civilian officials viewed Karzai's move as an effort to protect those close to him and. the Major Crimes Task Force. The Hawala system is in Afghanistan also instrumental in providing financial services for the delivery of emergency relief and humanitarian and developmental aid for the majority of international and domestic NGOs. allegedly because this company could be involved in laundering profits from the illicit opium trade and moving the cash earned by Taliban through extortion and drug trafficking. Many were acquitted in 1997 and 1998. the country's national anti-graft task force vetted and trained by the US Drug Enforcement Administration (DEA). the Financial Crimes Enforcement Network issued an advisory on "Informal Value Transfer Systems". donor organizations.S. In August 2010. to quash the investigation into New Ansari. Afghanistan's largest Hawala money transfer business. Hawala scandal in India The Hawala scandal or Hawala scam was an Indian political scandal involving payments allegedly received by politicians through Hawala brokers. and another US-advised anticorruption group. In January 2010. Karzai took control of the taskforce that staged the raid. was shuttered following a raid by the Sensitive Investigative Unit. 2010. SATISHCHANDER . There were links between the money transfers by this company and political and business figures in the country. sanctions against trade with Iran. and development aid agencies. in the process. partly because the Hawala records (including diaries) were judged in court to be inadequate as the main evidence. including relatives of President Hamid Karzai. Banki dealt with the question of whether Hawala transactions violated the current U. the Kabul office of New Ansari Exchange. On September 1.
the FATF. An in-depth study of the symbiotic relationship between organized crime and terrorist organizations detected within the United States of America and other areas of the world referred to as crime-terror nexus points has been published in the forensic literature. As a result.CULTURE OF CORRUPTION IN INDIA 100 16. admitted that "overall it is absolutely impossible to produce a reliable estimate of the amount of money laundered and therefore the FATF does not publish any figures in this regard. governments and international bodies have undertaken efforts to deter prevent and apprehend money launderers. SATISHCHANDER . including drug dealing. the amount of money laundered each year is in the billions and poses a significant policy concern for governments. both as a result of government requirements and to avoid the reputational risk involved. either worldwide or within their national economy. Money laundering is the process where cash raised from criminal activities is made to look legitimate for re-integration into the financial system. and tax evasion. Regardless of the difficulty in measurement. Ultimately. However. but it is what the funds are to be used for that defines its scope. The money involved can be generated by any number of criminal acts." Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance. terrorist financing and money laundering are conceptual opposites. and dismantle organizations operating along the crime-terror nexus points. an intergovernmental body set up to combat money laundering. The Perri. it is the process by which the proceeds of crime are made to appear legitimate. Many regulatory and governmental authorities quote estimates each year for the amount of money laundered. Lichtenwald and Mackenzie article emphasizes the importance of multi-agency working groups and the tools that can be used to identify. whereas terrorist financing cares little about the source of the funds. The methods by which money may be laundered are varied and can range in sophistication from simple to complex. Often linked in legislation and regulation. corruption. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money. In 1996 the International Monetary Fund estimated that two to five per cent of the worldwide global economy involved laundered money. infiltrate. accounting and other types of fraud. Money Laundering Money laundering is the practice of disguising the origins of illegally-obtained money.
Transactions involving a high volume of incoming or outgoing wire transfers. Unexplainable clearing or negotiation of third party Cheques and their deposits in foreign bank accounts. transfers between bank accounts of related entities or charities for no apparent reasons. Bulk cash smuggling and placement through cash-intensive businesses is one typology. and through international ATM transactions. Terrorists also continue to move monies through MSBs/Hawala. go to. Charities also continue to be used in countries where controls are not so stringent. C. They also use trade linked schemes to launder monies. Suspicious activity Operation Green Quest was the US multi-agency task force set up in October 2001 to combat terrorist financing and had developed a checklist of suspicious activities. Nonetheless. for example a lack of small Cheques or typical donations associated with charitable bank deposits. wire transfers.CULTURE OF CORRUPTION IN INDIA 101 Terrorists use low value but high volume fraud activity to fund their operations. Cheques. non-cooperative nations and sympathizer nations. They are now also moving monies through the new online payment systems. Paramilitary groups in Northern Ireland are using legitimate businesses such as hotels. Structuring at multiple branches or the same branch with multiple activities. Account transactions that are inconsistent with past deposits or withdrawals such as cash. 1) Wire transfers by charitable organisations to companies located in countries known to be bank or tax havens. with no logical or apparent purpose that come from. Corporate layering. The following patterns of activity indicate collection and movement of funds that could be associated with terrorist financing: A. D. pubs and taxi operators to launder money and fund political activities. Even beyond Ireland. the older systems have not given way. etc. terrorists are buying out/controlling front-end businesses especially cash-intensive businesses including in some cases money services businesses to move monies. or transit through locations of concern that is sanctioned countries. SATISHCHANDER . 2) Lack of apparent fund raising activity. B.
international transfer of funds) revealing links with other countries including FATF blacklisted countries. Bank processes In addition to normal AML controls. references and financial activities. 7) Issuing Cheques. The funds may have moved through a state sponsor of terrorism or a country where there is a terrorism problem. these activities must be examined in context with other factors in order to determine a terrorist financing connection. money orders or other financial instruments. or to a person or business whose name is spelled similarly. For this reason. It would be difficult to determine by the activity alone whether the particular act was related to terrorism or to organized crime. Reverse transactions of this nature are also suspicious. particularly for trafficking in narcotics and weapons and may be linked with foreign terrorist groups. The Operation Green Quest raids led to the convictions of two people. often numbered sequentially. who worked for the SAAR Foundation. Alamoudi admitted that he plotted with Libya to assassinate the Saudi ruler and was sentenced to 23 years in jail. or other identifiable similarities associated with addresses. A link with a Politically Exposed Person (PEP) may ultimately link up to a terrorist financing transaction. 5) Overlapping corporate officers. 6) Cash debiting schemes in which deposits in the US correlate directly with ATM withdrawals in countries of concern. banks must focus on the CFT angle with renewed vigor and knowledge derived from the extensive databank of case studies now available. Accounts (especially student) that only receive periodic deposits withdrawn via ATM over two months and are dormant at other periods could indicate that they are becoming active to prepare for an attack. A charity may be a link in the transaction. that is. bank signatories.CULTURE OF CORRUPTION IN INDIA 102 3) Using multiple accounts to collect funds that are then transferred to the same foreign beneficiaries 4) Transactions with no logical economic purpose. including Abdurrahman Alamoudi. Simple transactions can be found to be suspect and money laundering derived from terrorism will typically involve instances in which simple operations had been performed (retail foreign exchange operations. Some of the customers may have police records. no link between the activity of the organization and other parties involved in the transaction. to the same person or business. Banks must focus on not just name matching with sanctions databases but also with other know SATISHCHANDER .
Detection rules designed to capture the suspicious activity list given above. They must use technologies like link analysis to establish second and third level links that identify transactions as potentially suspicious from a CFT perspective. Focus on preventing identity theft is an integral part of any CFT program. India The Prevention of Money-Laundering Act. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. 2002 came into effect on 1 July 2005. To safeguard against this. The Prevention of Money-Laundering Act. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed. account openings by groups of individuals. Section 12 (1) prescribes the obligations on banks. Any bank that is used for terrorist financing will suffer tremendous reputational damage and also a real business impact in terms of share price and expensive fines. Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned above. whether such transactions comprise of a single transaction or a series of transactions SATISHCHANDER . should be evaluated. Controls out of the transaction monitoring process. The recent activity in money laundering in India is through political parties’ corporate companies and share market. are also important to watch for.CULTURE OF CORRUPTION IN INDIA 103 your customer (KYC) high-risk databases of good third party vendors. 2002 came into effect on 1 July 2005. for example. Section 12 (1) prescribes the obligations on banks. must be maintained for ten years after the transactions finished. and where such series of transactions take place within a month. financial institutions purchase anti-money laundering software from companies such as Lexis Nexis and C6 along with databases of high risk individuals and organizations developed by companies such as World Compliance and C6. (b) to furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed and t records of the identity of all its clients. whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed.
For example. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. Richard Nixon's "Checkers speech" of 1952 was a successful effort to dispel a scandal concerning a rumored slush fund of campaign contributions. The term slush fund is used in accounting to describe a general ledger account in which all manner of transactions can be posted to commingled funds and "loose" monies by debits' and credits' cancelling each other out. 17. and where such series of transactions take place within a month.CULTURE OF CORRUPTION IN INDIA 104 integrally connected to each other. illegitimacy. Mauritius route Mauritius route is a channel to evade paying taxes in India amounting to thousands of crore of rupees with the help of loopholes in a bilateral agreement on double taxation. and can be viewed on the surface as corrupt and subversive of the democratic process. or secrecy in regard to the use of this money and the means by which the funds were acquired. large corporations or other bodies and individuals. The recent activity in money laundering in India is through political parties’ corporate companies and share market. (b) to furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed and t records of the identity of all its clients. colloquially. Political dealings with slush funds tend to create suspicions of quid pro quo (buying political favors). Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned above. SATISHCHANDER . a slush fund can have particular connotations of illegality. 18. is an auxiliary monetary account or a reserve fund. Slush fund A slush fund. in the context of corrupt (including but not limited to) political dealings by governments. However. must be maintained for ten years after the transactions finished.
in order to attain. masquerading as Mauritian companies. The term itself derives. or by imposing burdensome regulations or other government decisions that may affect consumers or businesses. These companies. maintain or increase monopoly power. such as by gaining control of land and other preexisting natural resources. Foreign entities have set up paper companies in Mauritius. Rent-seeking agents will spend money in socially unproductive ways. claiming to be Mauritian residents. Many current studies of rent-seeking focus on efforts to capture various monopoly privileges stemming from government regulation of free enterprise competition.CULTURE OF CORRUPTION IN INDIA 105 Double Taxation Avoidance Convention The key to the apparent paradox lies in the provisions of a two-decade-old bilateral agreement. have invested in India and taking advantage of the DTAC they save paying taxes in India. the Double Taxation Avoidance Convention (DTAC). Description of concept Rent-seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity. such as political lobbying. An example of rent-seeking is the limitation of access to skilled occupations imposed by medieval guilds. however. 19. rent-seeking is an attempt to derive economic rent by manipulating the social or political environment in which economic activities occur. SATISHCHANDER . from the far older practice of appropriating a portion of production by gaining ownership or control of land. rather than by adding value. Rent-seeking In economics.
Studies of rent-seeking are focus on efforts to capture special monopoly privileges such as government regulation of free enterprise competition. The expression rent-seeking was coined in 1974 by Anne Krueger. economic benefits derived by most people involve some form of rent-seeking. for instance. is obtained when a third party deprives one party of access to otherwise accessible transaction opportunities. Often a further distinction is drawn between rents obtained legally through political power and the proceeds of private common-law crimes such as fraud. embezzlement and theft. Rent-seeking behavior is distinguished in theory from profit-seeking behavior. Often-cited examples include a farm lobby that seeks tariff protection or an entertainment lobby that seeks expansion of the scope of copyright. SATISHCHANDER . by contrast with these two.by shifting the government tax burden or government spending allocation. and rent. in which entities seek to extract value by engaging in mutually beneficial transactions. there may be difficulties distinguishing between beneficial profit-seeking and detrimental rent-seeking. by force or fraud inflicted on one party by another. and the proceeds of common-law crime non-consensually. Rent. Other rent-seeking is held to be associated with efforts to cause a redistribution of wealth --. but in the aggregate such behaviors may result in substantial social losses. The term "monopoly privilege rent-seeking" is an often-used label for the former type of rent-seeking. wage. The word "rent" does not refer here to payment on a lease but stems instead from Adam Smith's division of incomes into profit. through a mutually agreeable transaction between two entities (buyer and seller). Development of theory The phenomenon of rent-seeking in connection with monopolies was first formally identified in 1967 by Gordon Tullock. Critics of the concept point out that in practice. This viewpoint sees "profit" as obtained consensually.CULTURE OF CORRUPTION IN INDIA 106 In modern industrialized countries. making nominally "consensual" transactions a rent-collection opportunity for the third party.
Taxi medallions are another commonly referenced example of rent-seeking. It has been shown that rent-seeking by bureaucracy can push up the cost of production of public goods. as they are neither legal profits nor the proceeds of common-law crimes. Rent-seeking may be initiated by government agents. This results in a sub-optimal allocation of resources — money spent on lobbyists and counter-lobbyists rather than on research and development. forbidding competition by non-medallion taxis makes the otherwise consensual transaction of taxi service a forced transfer of wealth from the passenger to the medallion holder. a firm may choose the former option. such agents soliciting bribes or other favors from the individuals or firms that stand to gain from having special economic privileges. improved business practices. or the undue influence of special interests. It has SATISHCHANDER . The concept of rent-seeking has been applied to corruption by bureaucrats who solicit and extract ‘bribe’ or ‘rent’ for applying their legal but discretionary authority for awarding legitimate or illegitimate benefits to clients. which opens up the possibility of exploitation of the consumer. or additional capital goods — which retards economic growth. Regulatory capture is a related concept which refers to collusion between firms and the government agencies assigned to regulate them. To the extent that the issuing of medallions constrains overall supply of taxi services (rather than ensuring competence or quality). which is seen as enabling extensive rent-seeking behavior. especially when the government agency must rely on the firms for knowledge about the market. Possible consequences From a theoretical standpoint. the moral hazard of rent-seeking can be considerable. If "buying" a favorable regulatory environment is cheaper than building more efficient production. reaping incomes entirely unrelated to any contribution to total wealth or well-being. employee training.CULTURE OF CORRUPTION IN INDIA 107 The abnormal profits of the illegal drug trade are considered rents by this definition. Faizul Latif Chowdhury suggested that ‘bribery’ is a kind of rent-seeking by the government officials. tax officials may take bribes for lessening the tax burden of the tax payers. For example. Rent-seeking is held to occur often in the form of lobbying for economic regulations such as tariffs. Claims that a firm is rent-seeking therefore often accompany allegations of government corruption.
Term The term plays off "British Raj". if granted. 20. the period of British rule in India. maintenance of peace and order. [. the government would regulate production. where the value of land is largely attributed to provision of government services and infrastructure (e.CULTURE OF CORRUPTION IN INDIA 108 also been shown that rent-seeking by tax officials may cause loss in revenue to the public exchequer.. road building. It was coined by Indian statesman Chakravarthi Rajagopalachari.. "I want the corruptions of the Permit/License Raj to go. but Indian labour laws still prevent manufacturers from reducing their workforce without prohibitive burdens. Up to 80 government agencies had to be satisfied before private companies could produce something and. refers to the elaborate licenses. rather than resulting from any action or contribution by the landowner..] I want the officials appointed to administer laws and policies to be free from pressures of the bosses of the ruling party. Rent-seeking behavior. and gradually restored back to the standards of fearless honesty which they once maintained. the Permit Raj. etc. Reforms since the mid-1980s have significantly reduced regulation.g. in terms of land rent. regulations and accompanying red tape that were required to set up and run businesses in India between 1947 and 1990. SATISHCHANDER .The License Raj was a result of India's decision to have a planned economy where all aspects of the economy are controlled by the state and licenses are given to a select few. License Raj License Raj. figures in Georgist economic theory. provision of public schools. who firmly opposed it for its potential for political corruption and economic stagnation and founded the Swatantra Party to oppose these practices.) and the community in general.
The labyrinthine bureaucracy often led to absurd restrictions — up to 80 agencies had to be satisfied before a firm could be granted a license to produce and the state would decide what was produced.. The government also prevented firms from lying off workers or closing factories. the rupee. The central pillar of the policy was import substitution. would determine how much investment was needed in which sectors. at what price and what sources of capital were used. the belief that India needed to rely on internal markets for development. Before the process of reform began in 1991. The quantity of goods they were allowed to produce was determined by the license regime. India also operated a system of central planning for the economy. High growth rates SATISHCHANDER . rather than markets. India's first Prime Minister. Like a command economy. The key characteristic of the License Raj is a Planning Commission that centrally administers the economy of the country. C.. in which firms required licenses to invest and develop.CULTURE OF CORRUPTION IN INDIA 109 [. Planning and the state. was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market. he implemented a mixed economy in India.] I want real equal opportunities for all and no private monopolies created by the Permit/License Raj. A mixed economy is one in which capitalism is combined with government intervention. the government attempted to close the Indian economy to the outside world. Rajagopalachari History The architect of the system of License Raj was Jawaharlal Nehru. how much. India has five-year plans on the lines of the Five Year Plans in the former Soviet Union. Consequences India had started out in the 1950s with good era. Inspired by the economy in the Soviet Union. Private players could manufacture goods only with official licenses. not international trade — a belief generated by a mixture of socialism and the experience of colonial exploitation. The Indian currency. not by free-market demand." Swarajya Newspaper.
Low growth rates Closure to trade and investment A license-obsessed. manufacturing organizations still encounter a permit process (though not as extensive as earlier) in procurement of land. restrictive state Inability to sustain social expenditures Macro instability. Liberalization resulted in substantial growth in the Indian economy. this liberalization may be altered under a draft bill seeking to regulate broadcasting media. by the 1980s. reduced licensing regulations. However.V. lowered tariffs. indeed crisis Current status The License Raj-system was in place for four decades. importing equipment. Recently.CULTURE OF CORRUPTION IN INDIA 110 Openness to trade and investment A promotional state Social expenditure awareness Macro stability However. the Rupee devalued and economic reforms were forced upon India.Narasimha Rao. etc. with DrMan Mohan Singh as finance minister. Gold bullion was transferred to London as collateral. SATISHCHANDER . and opened up to international trade and investment." The federal government. The government of India initiated a liberalization policy under the Prime Minister ship of Rajiv Gandhi. which continues today The License Raj is considered to have been significantly reduced in 1991 when India had only two weeks of dollars left: "In return for an IMF bailout. the country was left with bad age. though much of the actual progress was made under P. duties and taxes.
In January 2011 the Supreme Court of India asked why the names of those who have stashed money in the Liechtenstein Bank have not been disclosed. To put things in perspective. a Professor of Finance. will allow the government to make inquiries of Swiss banks SATISHCHANDER . Indian-owned Swiss bank account assets are worth 13 times the country’s national debt. The court argued that the government should be more forthcoming in releasing all available information on what it called a "mind-boggling" amount of money that is believed to be held in illegally in foreign banks.280. Swiss banking officials have said that the largest depositors of illegal foreign money in Switzerland are Indian. on which income and other taxes have not been paid. India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (approximately USD 1. According to the data provided by the Swiss Banking Association Report (2006). India has more black money than the rest of the world combined.CULTURE OF CORRUPTION IN INDIA 111 E. The total amount of black money deposited in foreign banks by Indians is unknown.4 trillion). estimated the total at over Rs 7. the government revised the Double Taxation Avoidance Agreement to provide means for investigations of black money in Swiss banks.4 trillion) in the form of black money. but one estimate by R Vaidyanathan.000 Crore (USD $1. Black money in Swiss banks While official numbers are not available. This revision. In August 2010. expected to become active by January 2012. EFFECTS 21. BLACK MONEY Black money refers to funds earned on the black market.
Monaco. the Isle of Man. the Cayman Island.000 crore in foreign banks. corporate and others.Bahamas. Argentina and the Marshal Islands . SCANDALS Major scandals involving high level public officials have shaken the Indian public service in recent years. with politicians and public servants regularly caught accepting bribes or mismanaging public resources. Hassan Ali Khan was arrested on charges of stashing over 36. Tax Information Exchange Agreement To curb black money.where money is believed to have been stashed away Prominent cases In April 2011. India has signed TIEA with 10 countries . financial. These include political. 2011 Hassan Ali Khan scandal SATISHCHANDER . St Kitts and Nevis. The following is a list of alleged scams and scandals in India since independence. the British Virgin Islands. Bermuda. 22. and the British island of jersey. This suggests corruption has become a pervasive aspect of Indian politics and bureaucracy.CULTURE OF CORRUPTION IN INDIA 112 in cases where they have specific information about possible black money being stored in Switzerland.
CULTURE OF CORRUPTION IN INDIA 113 Devas-Antrix deal scandal Cash-for-votes scandal Indian Black Money in Swiss Banks 2010 2G spectrum scam and Radia Tapes Controversy Adarsh Housing Society scam Commonwealth Games Scam 2010 housing loan scam in India Belekeri port scam Lavasa Scandal Uttar Pradesh Food Grain Scam Andhra Pradesh Industrial Infrastructure Corporation Controversy ISRO-Devas S band Scam Indian Premier League Cricket Scandals 2009 Madhu Koda mining scam 2008 Cash for Votes Scandal Pune billionaire Hassan Ali Khan tax The Satyam scam 2006 Stamp Paper Scam Kerala Ice Cream Parlor Sex Scandal Scorpion Deal Scam Navy War Room spy scandal (related to Scorpion Deal Scam) SATISHCHANDER .
CULTURE OF CORRUPTION IN INDIA 114 2005 Oil-for-food programme scam 2004 Gegong Apang PDS Scam 2003 Taj corridor scandal 2002 Kargil Coffin Scam 2001 Ketan Parekh securities scam Barak Missile Scandal Calcutta Stock Exchange Scam 1997 Sukh Ram telecom scam SNC Lavalin scandal Hawala Scandal 1996 Bihar fodder scam Sukh Ram Telecom Equipment Scandal C R Bhansali Scam 1995 SNC Lavalin scandal Purulia arms drop case Telgi scam 1992 SATISHCHANDER .
The scam involved allegations regarding.. but none bigger than the scam involving the process of allocating unified access service licenses. 1) The under-pricing of the 2G spectrum by the Department of Telecommunications which resulted in a heavy loss to the exchequer.1.. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 115 Harshad Mehta securities scam Palmolein Oil Import Scam 1989 Bofors Scandal 1982 Cement Scam 1971 Nagarwala Scandal 1957 Haridas Mundhra scandal 1948 Jeep Scandal The Top Scams in India 1) 2G Spectrum Scam We have had a number of scams in India. The 2G spectrum scam in India involved the issue of 122 licenses by the ruling Congress-led UPA alliance of the 2G spectrum to 85 companies including many new telecom companies with little or no experience in the telecom sector. has evaded norms at every level as he carried out the dubious 2G license awards in 2008 at a throw-away price which were pegged at 2001 prices. At the heart of this Rs.76-lakh crore worth of scam is the former Telecom minister A Raja – who according to the CAG.
The Telgi clearly had a lot of support from government departments that were responsible for the production and sale of high security stamps. Finally. Yes. Satyam is the biggest fraud in the corporate history to the tune of Rs. were accused of receiving kickbacks from Bofors AB for winning a bid to supply India’s 155 mm field howitzer. will-full delays in execution of contracts. every scam must have something unique in it to make money out of it in an unscrupulous manner. when the then PM Rajiv Gandhi and several others including a powerful NRI family named the Hindujas. The Bofors scam was a major corruption scandal in India in the 1980s. the company was taken over by the Tech Mahindra which has done wonderfully well to revive the brand Satyam. 14000 crore.and Telgi scam had all the suspense and drama that the scandal needed to thrive and be busted. over-inflated price and bungling in purchase of equipment through tendering – and misappropriation of funds. The scam came to public notice when the Supreme Court of India took Subramaniam Swamy's complaints on record. The tentacles of the fake stamp and stamp paper case had penetrated 12 states and was estimated at a whooping Rs. The company’s disgraced former chairman Ramalinga Raju kept everyone in the dark for a decade by fudging the books of accounts for several years and inflating revenues and profit figures of Satyam. 4) Satyam Scam The scam at Satyam Computer Services is something that will shatter the peace and tranquillity of Indian investors and shareholder community beyond repair. the grand event was soaked in the allegations of corruption. Abdul Karim Telgi had mastered the art of forgery in printing duplicate stamp papers and sold them to banks and other institutions. 20000 crore plus.CULTURE OF CORRUPTION IN INDIA 116 2) The illegal manipulation of the spectrum allocation process to favour select companies. It is estimated that out of Rs. literally a loot! Even before the long awaited sporting bonanza could see the day of light. involved in probing the alleged corruption in various Commonwealth Games-related projects. The Central Vigilance Commission. only half the said amount was spent on Indian sportspersons. 3) Telgi Scam As they say. 2) Commonwealth Games Scam Another feather in the cap of Indian scandal list is Commonwealth Games loot. has found discrepancies in tenders – like payment to non-existent parties. Most of SATISHCHANDER . 5) Bofors Scam The Bofors scandal is known as the hallmark of Indian corruption. 70000 crore spent on the Games.
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all, the Bofors scam had a strong emotional appeal because it was a scam related to the defence services and India’s security interests.
6) The Fodder Scam
If you haven’t heard of Bihar’s fodder scam of 1996, you might still be able to recognize it by the name of “Chara Ghotala,” as it is popularly known in the vernacular language. In this corruption scandal worth Rs.900 crore, an unholy nexus was traced involved in fabrication of “vast herds of fictitious livestock” for which fodder, medicine and animal husbandry equipment was supposedly procured.
7) The Hawala Scandal
The Hawala case to the tune of $18 million bribery scandal, which came in the open in 1996, involved payments allegedly received by country’s leading politicians through Hawala brokers. From the list of those accused also included was then the Leader of Opposition. Thus, for the first time in Indian politics, it gave a feeling of open loot all around the public, involving all the major political players being accused of having accepted bribes and also alleged connections about payments being channelled to Hizbul Mujahedeen militants in Kashmir.
8) IPL Scam
Well, I am running out of time and space over here. The list of scandals in India is just not ending and becoming grave by every decade. Most of us are aware about the recent scam in IPL and embezzlement with respect to bidding for various franchisees. The scandal already claimed the portfolios of two big-wigs in the form of Shashi Tharoor and former IPL chief Lalit Modi.
9, 10) Harshad Mehta & Ketan Parekh Stock Market Scam
Although not corruption scams, these have affected many people. There is no way that the investor community could forget the unfortunate Rs. 4000 crore Harshad Mehta scam and over Rs. 1000 crore Ketan Parekh scam which eroded the shareholders wealth in form of big market jolt.
23. Slow Progress
According to a report by KPMG, "high-level corruption and scams are now threatening to derail the country's credibility and [its] economic boom".
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Will Growth Slow Corruption In India?
Now that India is playing an ever larger role in the world economy, the issue of corruption, in both the private and public sectors, is coming into sharper focus. Two scenarios are possible: As India's multinational corporations develop both economic and political muscle; they may act as a broom, sweeping corruption from the economic sphere. On the other hand, entrenched practices may prove the stronger force, and corruption could end up being a significant brake on India's economic rise. Widespread corruption in India costs billions of dollars and threatens to derail the country’s growth, a survey says. The report by consultancy firm KMPG said that the problem had become so endemic that foreign investors were being deterred from the country, BBC News informs. Over (2010) the last six months India has been hit by a series of corruption scandals including a Multi-billion dollar telecoms scandal, alleged financial malpractices in connection with the Commonwealth Games and allegations that houses for war widows were diverted to civil Servants.
The License Raj and the Spoils System
One strand in the knot of corruption is the legacy of the License Raj, which ended in the early 1990s. The system created bureaucracies that were all but self-perpetuating. In a context where government workers were routinely underpaid, graft became an industry all its own. Civil servants were, and remain, anything but disinterested administrators.
Wharton management professor Jitendra Singh and Ravi Ramamurti, professor of international business at North-eastern University, have been studying the emergence of multinational corporations in emerging economies such as India. In late June, they organized a conference on this topic in Boston; the conference's papers will form the core of an edited volume which is planned for publication in 2008.
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"In the bad old days," Singh said in an interview, "particularly pre-1991, when the License Raj held sway, and by design, all kinds of free market mechanisms were hobbled or stymied, and corruption emerged almost as an illegitimate price mechanism, a shadowy quasimarket, such that scarce resources could still be allocated within the economy, and decisions could get made.
"Of course, this does not in any way condone the occurrence of such corruption. The shameful part of all this was that while value was captured by some people at the expense of others, it did not go to those who created the value, as it should in a fair and equitable system."
The real failing, he said, "was a distortion of incentives within the economy, such that people began expending efforts toward fundamentally unproductive behaviours because they saw that such behaviours could lead to short-term gains. Thus, cultivating those in positions of power who could bestow favours became more important than coming up with an innovative product design. The latter was not as important, anyway, because most markets were closed to foreign competition--automobiles, for example--and if you had a product, no matter how uncompetitive compared to global peers', it would sell.
"These were largely distortions created by the politico-economic regime. While a sea change has occurred in the years following 1991, some of the distorted cultural norms that took hold during the earlier period are slowly being repaired by the sheer forces of competition. The process will be long and slow, however. It will not change overnight."
India's advancement producing valuable goods is of limited utility if they cannot be transported in a timely fashion, for example. Transparency International estimates that Indian truckers pay something in the neighbourhood of $5 billion annually in bribes to keep freight flowing. "Corruption is a large tax on Indian growth," Ramamurti said in an interview after the conference. "It delays execution, raises costs and destroys the moral fibre."
Corruption also cripples the effort to ameliorate poverty in India and to improve the country's stock of "human capital." The rate at which this happens varies tremendously from region to region. Edward Luce, for example, author of In Spite of the Gods: The Strange Rise of Modern India notes that "Rates of theft vary widely from state to state in India, with
CULTURE OF CORRUPTION IN INDIA
the better states, such as Kerala and Tamil Nadu, getting more than 80% of subsidized government food to their poor. Meanwhile, in the northern state of Bihar, India's second poorest with a population of 75 million, more than 80% of the food is stolen."
Indian MNC's as Change Agents
"A few Indian companies," Ramamurti said, "such as the Tata group or Wipro, have taken the high road, but most firms find it impossible to get anything done without greasing palms." Wipro, headed by Azim Premji, is India's third-biggest global tech services provider (behind Tata Consultancy Services (other-etc.: TACSF - new - people) and Infosys).
In Bangalore Tiger: How Indian Tech Upstart Wipro Is Rewriting the Rules of Global Competition, business journalist Steve Hamm writes that "Wipro is not just a company, it's a quest." That quest, according to some observers, is as much about moral rectitude as it is about business success. For example, according to Hamm, the company pays no bribes and has a zero tolerance policy for corruption.
"The paradox," Ramamurti said, "is that even though India's faster growth in recent years is the result of fewer government controls, most Indian managers would tell you that corruption has increased, not decreased, in tandem.
"How could this be? The explanation is that faster growth has created new choke points at which politicians and bureaucrats can extract payments, such as land regulation, spectrum allocation or college admissions--all of which have become much more valuable in this century. Faster growth has also raised the economic cost to firms of delays in public approvals, giving officials that much more 'hold-up' leverage over private investors."
Poverty is widespread in India, with the nation estimated to have a third of the world's poor. According to a 2005 World Bank estimate, 41.6% of the total Indian population falls below
998) annually (or more than US$ 3 PPP per person). and SATISHCHANDER .000 per year.000– 90.6 a day in urban areas and Rs 14.25 a day (PPP. The Arjun Sengupta Report (from National Commission for Enterprises in the Unorganized Sector) states that 77% of Indians live on less than Rs 20 a day (about $0. Another 80 million households are in income levels of Rs 45.The N.50 per day). The Planning Commission of India has accepted the Tendulkar Committee report which says that 37% of people in India live below the poverty line. These numbers also are more or less in line with the latest World Bank estimates of the “below-the-poverty-line” households that may total about 100 million (or about 456 million individuals). of the 222 million households in India. the Indian government and non-governmental organizations have initiated several programs to alleviate poverty.000 (US$1.6% of them or about 35 million (about 200 million Indians). increased access to loans. Saxena Committee report states that 50% of Indians live below the poverty line. The World Bank estimates that 80% of India's population lives on less than $2 a day which means a higher proportion of its population lives on less than $2 per day as compared with sub-Saharan Africa. The World Bank estimates that 80% of India's population lives on less than $2 a day which means a higher proportion of its population lives on less than $2 per day as compared with sub-Saharan Africa. improving agricultural techniques and price supports. in 2009. in nominal terms Rs 21. the absolutely poor households (annual incomes below Rs 45. Estimates by NCAER (National Council of Applied Economic Research) show that 48% of the Indian households earn more than Rs 90. Impact of poverty Since the 1950s. Poverty estimates There has been no uniform measure of poverty in India. According to NCAER.3 in rural areas).CULTURE OF CORRUPTION IN INDIA 121 the international poverty line of US$ 1. including subsidizing food and other necessities.000) accounted for only 15.C.
5%). the effects of the worldwide recession in 2009 have plunged 100 million more Indians into poverty than there were in 2004. Uttar Pradesh (4. 31. 43. India is on track to meet its poverty reduction goals.7% a scooter.5% a car. 9. economic groups.23% by December 2008 and has an annual growth of 40%. motorcycle or a moped. and 2.3% or 268 million people by 2020. at the same time. its growth has been uneven when comparing different social groups.However. 34.1% owned a radio or transistor.6% of the population will still live under US$1. increasing the effective poverty rate from 27. 11.7%).25). 35.5% of the households had none of these assets. an estimated 53 million people will still live in extreme poverty and 23. Haryana (8. Despite significant economic progress. As per the 2001 census. that a family of four with an annual income of 1. 35.1%).7% a bicycle. Although the Indian economy has grown steadily over the last two decades.6% a television. Presence of a massive parallel economy in the form of black (hidden) money stashed in overseas tax havens and underutilization of foreign aid have also contributed to the slow pace of poverty alleviation in India. According to a recently released World Bank report. Between 1999 and 2008. or Madhya Pradesh (3.4%). and rural and urban areas. According to Department of Telecommunications of India the phone density has reached 33.5% of Indian households availed of banking services. geographic regions.1% a phone. jeep or van. However by 2015.37 lakh rupees could afford some of these luxury items. or Delhi (7. the annualized growth rates for Gujarat (8.25 per day.4%) were much higher than for Bihar (5. These tallies with the fact.5% to 37. This number is expected to reduce to 20. cut absolute poverty levels by more than half. and reduced illiteracy and malnutrition. SATISHCHANDER .2%. These measures have helped eliminate famines. one quarter of the nation's population earns less than the government-specified poverty threshold of 12 rupees per day (approximately US$ 0. Poverty rates in rural Orissa (43%) and rural Bihar (41%) are among the world's most extreme.8%).CULTURE OF CORRUPTION IN INDIA 122 promoting education and family planning.
US$13. casteism is widespread in rural areas. the average income in India was not much different from South Korea in 1947. The License Raj was a result of India's decision to have a planned economy. License Raj refers to the elaborate licenses. however. compared with US$619 for China. respectively. social expenditure awareness and macro stability but SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 123 Causes of poverty in India Caste system According to S. By 1999. Dalit’s constitute the bulk of poor and unemployed. Corruption flourished under this system. M. US$770 for South Korea. where all aspects of the economy are controlled by the state and licenses were given to a select few. how much. According to William A.259. India was left as one of the world's poorer countries. Others. The labyrinthine bureaucracy often led to absurd restrictions . 65% of rural forward castes are below the poverty line.818. have noted the steady rise and empowerment of the Dalit through social reforms and the implementation of reservations in employment and benefits. the numbers were US$1. Another cause is corruption.720. but South Korea became a developed country by 2000s.up to 80 agencies had to be satisfied before a firm could be granted a license to produce and the state would decide what was produced. Haviland. (Numbers are in 1990 international Maddison dollars) In other words. and US$15. the average annual income in India was US$439. at what price and what sources of capital were used. regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990. Using the Definition of poverty. US$3. At the same time. In 1947.317. —BBC India had started out in the 1950s with. Caste explanations of poverty fail to account for the urban/rural divide. high growth rates. a promotional state. Michael. and continues to segregate Dalit. and US$936 for Taiwan. openness to trade and investment.
CULTURE OF CORRUPTION IN INDIA 124 ended the 1980s with: low growth rates. according to Sainath. while market forces determined the price of the cash crop. with some saying the true number is much higher. resulted in a very high portion of rural households getting into the debt cycle. agriculture growth rate has dropped from 4. resulting in a very high number of farm suicides. P Sainath describes in his reports on the rural economy in India. when at the same time. He also points out that rural economies across India have collapsed. inability to sustain social expenditures and macro instability. according to official statistics. a licenseobsessed. The human cost of the "liberalization" has been very high.000. Farmers are a large about 60% of the population depends on agriculture whereas the contribution of agriculture to the GDP is about 18%. hunger in India has reached its highest level in decades. Poverty has decreased significantly since reforms were started in the 1980s. There is a surplus of labour in agriculture. in place of traditional food crops. India’s top economist on agriculture. Commentators have faulted the policies pursued by the government which. closure to trade and investment. As journalist and the Rural Affairs editor for The Hindu. Also: Vote bank and use their votes to resist reallocation of land for higher-income industrial projects. or on the verge of collapse due to the neoliberal policies of the government of India since the 1990s. Sainath points out that a disproportionately SATISHCHANDER . restrictive state (License Raj). although demographers generally agree that this is a symptom rather than cause of poverty. As professor Utsa Patnaik. Government policies encouraging farmers to switch to cash crops.8% to 2% Over-reliance on agriculture. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totalled close to 200. the level of inequality has risen to extraordinary levels. has resulted in an extraordinary increase in farm input costs. indeed crisis. Liberalization policies and their effects Other points of view hold that the economic reforms initiated in the early 1990s are responsible for the collapse of rural economies and the agrarian crisis currently underway. has pointed out. While services and industry have grown at double digit figures. the average poor family in 2007 has about 100 kg less food per year than it did in 1997.High population growth rate. That number remains disputed.
(Only the National Rural Employment Guarantee Act has brought some limited relief in recent times. it is pointed out that there has been a wealth increase of close to US$1 Trillion in the time frame of 2003-2007 in the Indian stock market. As of 2006. the government spends less than 0. In a report by Chetan Ahya.CULTURE OF CORRUPTION IN INDIA 125 large number of affected farm suicides have occurred with cash crops. Rich Indians not generous There are 115. this elite group has grown an average of 11 per cent annually. Life was being made more and more impossible for small farmers. marginal or small farmers. India kept reducing investment in agriculture (standard neoliberal procedure). Much has happened to make it a lot worse.6 per cent. even if the price falls. the number of wealthy individuals in India surged by 23 per cent. the same time as India became the nation of second highest number of dollar billionaires. while only 4-7% of the Indian populations hold any equity. there is food left to survive on. which is the highest growth rate in the world. too. However. Hunger has grown very fast. During the time when Public investment in agriculture shrank to 2% of the GDP. some government schemes such as the mid-day meal scheme and the NREGA have been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty. Sainath argues that Farm incomes have collapsed. He also points out that inequality has reached one of the highest rates India has ever seen. In one estimate.2% of GDP on agriculture and less than 3% of GDP on education. Executive Director at Morgan Stanley. there are few jobs to be found. But now there is no. Employment has collapsed.) Millions move towards towns and cities where. the nation suffered the worst agrarian crisis in decades. Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal “economic reforms.” from 26 per cent of farm households to 48. Between 2006 and 2007. Meanwhile. sub-marginal. Public investment in agriculture shrank to nothing a long time ago. over 85 per cent of rural households are landless. because with food crops such as rice. Non-farm employment has stagnated.000 individuals in India with high net-worth. SATISHCHANDER . all along. Since 2000.1 country. Nothing has happened in 15 years that has changed that situation for the better.
govt. SATISHCHANDER . which is ranked one level below the 'upper class' on the income and education scale. and "a large part of CSR initiatives are artfully masqueraded and make it back to the balance sheet". Bain & Company. the wealthiest have the lowest level of giving at 1.2 in the United States. Only 10 percent of funding comes from individuals and corporates. Marvin J. At the current rate of growth. Despite government initiatives. "While the 'high class'. donates 2. sustained.9% of household income to philanthropy. and refined various planning schemes to help the poor attain self-sufficiency in food production. the middle class gives 1. The widening income gap between the rich and the poor over the years has raised fears of a social backlash." says Arpan Seth. corporate social responsibility (CSR) remains low on the agenda of corporate sector. available throughout the country as poor spend about 80 per cent of their income on food. Analysts such as the founder of "Forecasting International".6 where the percentage is 2. Probably the most important initiative has been the supply of basic commodities.CULTURE OF CORRUPTION IN INDIA 126 However. partner. Efforts to alleviate poverty Since the early 1950s. particularly food at controlled prices.6% of their household income for charitable purposes. The percentage of India's GDP that is spent for charitable purposes is only 0.1% to charity. India currently adds 40 million people to its middle class every year. a majority of Indians will be middle-class by 2025. has initiated. one-third of them have emerged from poverty in the last ten years. Cetron writes that an estimated 300 million Indians now belong to the middle class. Reduction in Poverty Despite all the causes.
reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society. Poverty alleviation is expected to make better progress in the next 50 years than in the past. Cetron writes that an estimated 390 million Indians now belong to the middle class. It is incorrect to say that all poverty reduction programs have failed. Literacy rates have risen from 52 per cent to 65 per cent during the initial decade of liberalization (1991–2001). but the distribution of wealth is not at all even. Analysts such as the founder of "Forecasting International". a majority of Indians will be middle-class by 2025. After the liberalization process and moving away from the socialist model. Controversy over extent of poverty reduction The definition of poverty in India has been called into question by the UN World Food Programme. Outlook for poverty alleviations Eradication of poverty in India is generally only considered to be a long-term goal. India is adding 60 to 70 million people to its middle class every year. In its report on global hunger index. SATISHCHANDER . At the current rate of growth. Marvin J. it questioned the government of India's definition of poverty saying: The fact that calorie deprivation is increasing during a period when the proportion of rural population below the poverty line is said to be declining rapidly. one-third of them have emerged from poverty in the last ten years. Increasing stress on education. as a trickle-down effect of the growing middle class.CULTURE OF CORRUPTION IN INDIA 127 The schemes have however not been very successful because the rate of poverty reduction lags behind the rapid population growth rate. highlights the increasing disconnect between official poverty estimates and calorie deprivation. The growth of the middle class (which was virtually non-existent when India became a free nation in August 1947) indicates that economic prosperity has indeed been very impressive in India. are also expected to contribute to the alleviation of poverty.
with most working in "informal labour sector with no job or social security. the extent of poverty reduction is often debated. the highest in the world) as of 2008.5). India is positioned at 132ond place in the 2007-08 UN HDI index. While there is a consensus that there has not been increase in poverty between 1993–94 and 2004–05.3 per cent in 1990 to 295 million or 23. SATISHCHANDER .6 per cent by 2015 and 268 million or 20. It can even be argued that the situation has become worse on critical indicators of overall well-being such as the number of people who are undernourished (India has the highest number of malnourished people. Nicholas Stern. at 230 million. USD 2.50 nominal. or 836 million people.0 in PPP). making the issue of urban poverty more significant in the long run. He argues that increasing globalization and investment opportunities have contributed significantly to the reduction of poverty in the country. like journalist P Sainath. together with China. living in abject poverty. finding that the number of people living on US$1. With the rapid economic growth that India is experiencing. He insisted that the 1999-2000 survey was well designed and supervised and felt that just because they did not appear to fit preconceived notions about poverty in India. hold the view that while absolute poverty may not have increased India remains at an abysmal rank in the UN Human Development Index. India.3 per cent by 2020. as well as the declaration made by India's former Finance Minister Yashwant Sinha that poverty in India has reduced significantly. and is 94th of 119 in the world hunger index).CULTURE OF CORRUPTION IN INDIA 128 While total overall poverty in India has declined." However. It is the lowest rank for the country in over 10 years. has published defences of the poverty reduction statistics. has shown the clearest trends of globalization with the accelerated rise in per-capita income. and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18. lived on less than 20 rupees per day (USD 0. education. a new report from the UN disputes this. A 2007 report by the state-run National Commission for Enterprises in the Unorganized Sector (NCEUS) found that 77% of Indians. In 1992. the picture is not so clear if one considers other non-pecuniary dimensions (such as health. India was at 122ond place in the same index. they should not be dismissed outright.25 a day is expected to go down from 435 million or 51. crime and access to infrastructure). vice president of the World Bank. Some. it is likely that a significant fraction of the rural population will continue to migrate toward cities. Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall poverty in India.
live in India. F. property and funds are controlled and systematically embezzled by a criminalized nexus (or "mafia") of government officials. and they project that it will drop to 26% by 2025. is estimated that about 42. 93% of the Indian population lived on a household income of less than 90. elected politicians. states that "About 49 per cent of the world's underweight children. business interests and other entities (such as lawSATISHCHANDER . 34 per cent of the world's stunted children and 46 per cent of the world's wasted children. Mafia Raj Mafia Raj refers to an economic and political situation where public goods. Contrary to popular perceptions. has not translated into superior nutritional status for the South Asian child. the superior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa. Report concludes that India's economic reforms and the increased growth that has resulted have been the most successful anti-poverty programs in the country.CULTURE OF CORRUPTION IN INDIA 129 A study by the McKinsey Global Institute found that in 1985. rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985 to 61% in 2005. The World Bank.3% annual growth over the next 20 years." A special commission to the Indian Supreme court has noted that the child malnutrition rate in India is twice as great as sub-Saharan Africa. Persistence of malnutrition among children According to the New York Times. or about a dollar per person per day.5% of the children in India suffer from malnutrition. CRIMES 25." The World Bank also noted that "while poverty is often the underlying cause of malnutrition in children. 465 million more people will be lifted out of poverty. They project that if India can achieve 7. by 2005 that proportion had been cut nearly in half. to 54%.000 rupees a year. citing estimates made by the World Health Organization. More than 103 million people have moved out of desperate poverty in the course of one generation in urban and rural areas as well.
The phenomenon of Mafia Raj is highly prevalent in Pakistan and Bangladesh as well. terms like Goonda Raj (rule of the Dons’). non-governmental organizations. Pilferage and sale of coal on the black market. In the Indian and Pakistani media. even a human corpse has been discovered in a sealed coal wagon. Terms such as coal mafia. The term is used primarily in India. countries which share a similar culture to that of India. the mafias are usually mentioned by the name of the economic sector in which they are involved. SATISHCHANDER . states. Once. Higher quality coal is sometimes selectively diverted. forest mafia). inflated or fictitious supply expenses. The coal mafia has had a negative effect on Indian industry. The Dhanbad mine complex is allegedly dominated by a coal mafia. sometimes openly and with the use of violent intimidation. falsified worker contracts and the expropriation and leasing-out of government land have allegedly become routine.CULTURE OF CORRUPTION IN INDIA 130 enforcement authorities. timber mafia (sometimes. government departments. The state-owned coal mines of Jharkhand were among the first areas in India to see the emergence of a sophisticated mafia. Due to the ability of these mafias to operate their illegal activities in a sustained fashion. public sector businesses or entire sectors of the economy that are subject to these conditions. with coal supplies and quality varying erratically. and missing coal replaced with stones and boulders in railway cargo wagons. A parallel economy has also developed with a significant fraction of the local population employed by the mafia in manually transporting the stolen coal for long distances over unpaved roads to illegal mafia warehouses and points of sale. road construction mafia or road contract mafia) and land mafia are commonly used. contractor mafia (sometimes. trade unions or criminal organizations). beginning with the mining town of Dhanbad. Coal Mafia An Indian coal mine. It is alleged that the coal industry's trade union leadership forms the upper echelon of this particular arrangement. and employs caste allegiances to maintain its power. and can refer to cities. Jungle Raj (law of the jungle) and Anarchy are used to refer to the same phenomenon.
Timber Mafias India's Himalayan and other forests are vulnerable to timber mafias. such as Jammu and Kashmir. In an incident in 2005. specialized in illegally logging sandalwood in Karnataka and Tamil Nadu. in fact. has gained international attention. are vulnerable to illegal logging by timber mafias that have coped or intimidated forestry officials. there have also been incidents of substitution. The spill-over of the effects of illegal mining into problems such as Naxalism and the distortion of Indian democracy by mixed political and mining interests. Terrorist groups have also joined the nexus in militancy-affected areas such as Kashmir. Protected forest areas in several parts of India. Clear-cutting is sometimes coveredup by conniving officials who report fictitious forest fires. officials determined that high-quality deodar wood meant for military and railway use had been substituted with lower-quality chir wood in Jammu and Kashmir State. which spans encroachment of forest areas. As with coal. and one 1994 estimate of stolen timber in the state of Karnataka amounted to Rs 1. until his shooting death by state police in 2004. when the procurement of wood is. Karnataka and Jharkhand. Many studies indicate large losses of forest cover to indiscriminate logging by timber mafias. Himachal Pradesh. with over a million hectares in the environs of Chhotanagpur alone being illegally transferred by the forest department directly to industrial. underpayment of government royalties. authorized for government use. and the higher quality wood was intercepted in the process of being smuggled across the state border into Punjab.000 crore (about US$ 230 million). public financial losses can be substantial. businesses and citizenry. mining and logging companies. Veerappan was a notorious bandit who. and conflict with tribal regarding land-rights. of low-grade wood. SATISHCHANDER . local politicians. Besides the environmental degradation. for highquality timber. and has generated controversy.CULTURE OF CORRUPTION IN INDIA 131 Illegal mining in India Illegal mining in India is widespread in various ore-rich states of India.
a project director with the National Highways Authority of India. Sometimes. Attempts have been made to reduce mafia influence by making construction tendering processes more transparent. politicians and construction contractors. such as road construction. which are groupings of corrupt public works officials. and sometimes simply washed away when India's heavy monsoon season arrives. develop and sell land in illegal ways for profit. was murdered in 2003. mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous. such as road building. Shoddy construction and material substitution (e. his family and supporters maintained that an attempt at a cover-up was being made.g. In a widely covered case. sometimes by attempting to move them online. mafias consisting of municipal and other government officials. Many state-funded construction activities in India. with the connivance of administrative and police officials. elected politicians. materials suppliers. government land or land ostensibly acquired for some legitimate government purpose is then handed over to real estate developers who build commercial and residential properties and sell them in the open market. for example in the public works for which the Municipal Corporation of Delhi is responsible. judicial officers. In cities and villages throughout India and Pakistan. Construction mafias are alleged to have used their political influence decisively to frustrate many such attempts. Land Mafias A local land mafia reportedly attempted to seize land planned to be used by the Central Zoo Authority as the site for India's first night safari. real estate developers and law enforcement officials. are dominated by construction mafias. acquire. allegedly because he had written a letter exposing deep-seated contractor mafia involvement in the construction of a section of the prestigious Golden Quadrilateral project to the Prime Minister's office. are sometimes dominated by contractor mafias. SATISHCHANDER . Although a CBI investigative report after the assassination stated that there was no contractor mafia involvement in Dubey's murder. so that a complete audit trail of bids and activity is maintained.CULTURE OF CORRUPTION IN INDIA 132 Contractor Mafias Public works. Satyendra Dubey.
Companies including Gap. the land mafia in the Noida area. This approach has been effective in Bangalore.6 million children in hazardous occupations. For example. which is expected to become quite valuable once the highway is inaugurated. but efforts to extend it elsewhere have sometimes met with strong resistance by land mafias. connecting Delhi and Agra. Primark. a lake was filled in and government buildings torn down after illegal transfers to a developer by mafia-connected officials. Although the Constitution of India guarantees free and compulsory education to children between the age of 6 to 14 and prohibits employment of children younger than 14 in any hazardous environment. intended to procure private land at relatively low prices for public benefit or redistribution to poorer people under social justice programs. and Monsanto etc. manifesting itself as bureaucratic inaction. was reported to have illegally begun carving out plots for commercial sale on land identified by the Central Zoo Authority of India as the site for India's first night Safari park. although it may have shifted its attention to illegally encroaching on land along the planned Taj Expressway. Child labour Of 12. 26. India has the highest number of labourers in the world less than 14 years of age. Madhura Swaminathan from the Indira Gandhi Institute of Development Research argued that economic growth in Western India was associated with an increase in the number of child workers over the last 15 years and that SATISHCHANDER . which transfers the land to developers at those low prices.CULTURE OF CORRUPTION IN INDIA 133 In one set of allegations in Karnataka. In 1998. Subsequent to coverage in the press. Focused vigilance in specific areas by government agencies has also acted as a deterrent to land mafia activities. and who in turn sell it back on the market at much higher prices. have been criticised for using child labour in either their operations in India or by their suppliers in India.s Eminent domain laws. are abused to pressure existing landholders to sell land to a government entity. vigorous legal action by the Greater Noida Authority reportedly led to this mafia alliance backing away from this theft. child labour is present in almost all sectors of the Indian economy. Computerization of records relating to the classification of tracts and land ownership is a key tool in countering the illegal activities of land mafias. on the outskirts of Delhi. since it creates transparency on all information relating to a given parcel of land.
500. The ministry of Labour and Employment had implemented around 100 industry-specific National Child Labour Projects to rehabilitate the child workers since 1988. working in awful conditions. children as young as five years old are employed and work for up to 12 hours a day and six to seven days a week. Official estimates for child labour working as domestic labour and in restaurants is more than 2. Children are forced to dip their hands in scalding water to palpate the cocoons and are often paid less than Rs 10 per day. In 2011. the Indian government formed the Gurupadswamy Committee to find about child labour and means to tackle it. for they had to be paid more. Some of the children are actually sold to the brick kiln owners. for the construction of the Asian Games care house. Adults are found in construction of both home and office buildings. SATISHCHANDER . spas and resorts effective from October 10. hotels. making it a small issue. the contractors had employed adults. and are not paid. Each year. Human Rights Watch estimates that at least 350.000 bonded children are employed by the silk industry in India.000 while NGOs estimate the figure to be around 20 million. As per Human Rights Watch. The Government of India expanded the coverage of The Child Labour Prohibition and Regulation Act and banned the employment of children as domestic workers and as workers in restaurants. The misuse of adult labour can be found in the construction industry too.CULTURE OF CORRUPTION IN INDIA 134 children work at simple repetitive manual tasks that do not require long years of training or experience in low-paying hazardous works that involves drudgery and forecloses the option of school education for most children. A National Policy on Child Labour was formulated in 1987 to focus on rehabilitating children working in hazardous occupations. thousands of children are rescued from brick kilns. The Child Labour Prohibition and Regulation Act were enacted based on the recommendations of the committee in 1986. Initiatives against child labour In 1979. dhabas. 2006.
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The Child Labour Prohibition and Regulation Act (1986) bans employment of children in occupations related to
Transport of passengers Manufacture and selling of crackers and fireworks Abattoirs Carpet weaving Manufacture of Beedi, cement, matches, explosives, soap, slate pencils, agate products, agarbatti etc. Building and construction industry Hazardous processes under the factory act Brick kilns etc.
The violation of the act can result in punishments ranging from imprisonment for one month to two years.
Many NGOs like CARE India, Child Relief and You, Global march against child labor etc. have been working to eradicate child labour in India. In 2005, Pratham, an Indian NGO was involved in one of the biggest rescue operations when around 500 child laborers were rescued from zari sweatshops in North East Delhi.
Rape is a type of sexual assault usually involving sexual intercourse, which is initiated by one or more persons against another person without that person's consent. The act may be carried out by physical force, coercion, abuse of authority or with a person who is incapable of valid consent. The term is most often defined in criminal law. A person who commits an act of rape is known as a rapist.
CULTURE OF CORRUPTION IN INDIA
Internationally, the incidence of rapes recorded by the police during 2008 varied between 0.1 in Egypt per 100,000 people and 91.6 per 100,000 people in Lesotho with 5.0 per 100,000 people in Russia as the mean. According to the American Medical Association (1995), sexual violence, and rape in particular, is considered the most under-reported violent crime. The rate of reporting, prosecution and convictions for rape varies considerably in different jurisdictions. The U.S. Bureau of Justice Statistics (1999) estimated that 91% of U.S. rape victims are female and 9% are male, with 99% of the offenders being male. Rape by strangers is usually less common than rape by persons the victim knows, and several studies argue that male-male and female-female prison rape are quite common and may be the least reported forms of rape.
When part of a widespread and systematic practice, rape and sexual slavery are recognized as crimes against humanity and war crimes. Rape is also recognized as an element of the crime of genocide when committed with the intent to destroy, in whole or in part, a targeted ethnic group.
The definition of rape varies both in different parts of the world and at different times in history. It is defined in many jurisdictions as sexual intercourse, or other forms of sexual penetration, of one person by another person without the consent of the victim. The United Nations defines it as "sexual intercourse without valid consent," and the World Health Organization defined it in 2002 as "physically forced or otherwise coerced penetration – even if slight – of the vulva or anus, using a penis, other body parts or an object. “Some countries such as Germany are now, however, using more inclusive definitions which do not require penetration and the 1998 International Criminal Tribunal for Rwanda defines it as "a physical invasion of a sexual nature committed on a person under circumstances which are coercive". In some jurisdictions, the term "rape" has been phased out of legal use in favor of terms such as "sexual assault" or "criminal sexual conduct".
Some jurisdictions continue to define rape to cover only acts involving penile penetration of the vagina, treating all other types of non-consensual sexual activity as sexual assault. In Brazil, for example, the legal code defines rape as non-consensual vaginal sex. Thus male rape, anal rape, and oral rape are not included. The FBI uses the following definition of rape
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in compiling their annual Uniform Crime Reports: "The carnal knowledge of a female forcibly and against her will." This has been interpreted to mean only forced penile-vaginal penetration.
In any allegation of rape, the absence of consent to sexual intercourse on the part of the victim is critical. Consent need not be expressed, and may be implied from the context and from the relationship of the parties, but the absence of objection does not of itself constitute consent. Lack of consent may result from either forcible compulsion by the perpetrator or incapacity to consent on the part of the victim (such as persons who are asleep, intoxicated or otherwise mentally helpless). The law can also invalidate consent in the case of sexual intercourse with a person below the age at which they can legally consent to such relations with older persons. Such cases are sometimes called statutory rape or "unlawful sexual intercourse", regardless of whether it was consensual or not, as people who are under a certain age in relation to the perpetrator are deemed legally incapable of consenting to sex. Consent can always be withdrawn at any time, so that any further sexual activity after the withdrawal of consent constitutes rape.
Duress, in which the victim may be subject to or threatened by overwhelming force or violence, and which may result in absence of objection to intercourse, leads to the presumption of lack of consent. Duress may be act or threatened force or violence against the victim or somebody else close to the victim. Even blackmail may constitute duress. Abuse of power may constitute duress. For instance, in Philippines, a man commits rape if he engages in sexual intercourse with a woman "By means of fraudulent machination or grave abuse of authority”. The International Criminal Tribunal for Rwanda in its landmark 1998 judgment used a definition of rape which did not use the word 'consent': "a physical invasion of a sexual nature committed on a person under circumstances which are coercive."
Marital rape, also known as spousal rape, is non-consensual sex in which the perpetrator is the victim's spouse. As such, it is a form of partner rape, of domestic violence, and of sexual abuse. Historically, and still in some countries, consent was assumed within the marriage contract, thus making spousal rape an impossibility; however, spousal rape is now repudiated by international conventions and increasingly criminalized. In 2006, it was estimated that marital rape could be prosecuted in at least 104 countries (in four of these countries, marital rape could be prosecuted only when the spouses were judicially
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separated), and since 2006 several other countries have outlawed spousal rape. In the US, spousal rape is illegal in all 50 states; the first state to outlaw it was South Dakota in 1975 and the last North Carolina in 1993. Other developing countries outlawed it in the 2000s. In many countries, it is not clear if marital rape may or may not be prosecuted under ordinary rape laws. However, in the absence of a spousal rape law it may be possible to bring prosecutions for what is effectively rape by characterizing it as an assault
There are several types of rape, generally categorized by reference to the situation in which it occurs, the sex or characteristics of the victim, and/or the sex or characteristics of the perpetrator. Different types of rape include but are not limited to: date rape, gang rape, marital rape or spousal rape, ancestral rape, child sexual abuse, prison rape, acquaintance rape, war rape and statutory rape.
Causes and motivation
There is no single theory that conclusively explains the motivation for rape; the motives of rapists can be multi-factorial and are subject to debate. Several factors have been proposed: anger, a desire for power, sadism, sexual gratification, and evolutionary pressures.
Victims of rape can be severely traumatized by the assault and may have difficulty functioning as well as they had been used to prior to the assault, with disruption of concentration, sleeping patterns and eating habits, for example. They may feel jumpy or be on edge. After being raped, it is common for the victim to experience acute stress disorder, including symptoms similar to those of posttraumatic stress disorder, such as intense, sometimes unpredictable emotions, and they may find it hard to deal with their memories of the event. In the months immediately following the assault, these problems may be severe and upsetting and may prevent the victim from revealing their ordeal to friends or family, or seeking police or medical assistance. Additional symptoms of Acute Stress Disorder include:SATISHCHANDER
or nightmares 4) Avoidance of things. Amy M. victim-blaming is more common. these are countries where there is a significant social divide between the freedoms and status afforded to men and women. and women who have been raped are sometimes deemed to have behaved improperly. Check & Malamuth. victims are said to have "asked for it". this concept refers to the Just World Theory and popular attitudes that certain victim behaviours (such as flirting. A global survey of attitudes toward sexual violence by the Global Forum for Health Research shows that victim-blaming concepts are at least partially accepted in many countries. like being in a daze or a dream. Kunju. Victim blaming "Victim blaming" is holding the victim of a crime to be in whole or in part responsible for the crime. etc. In most Western countries. Miller. Kuriloff. the defense of provocation is not accepted as mitigation for rape. Bridges. in a review of studies of rape myths. these symptoms continue beyond the first few months and meet the conditions for the diagnosis of posttraumatic stress disorder. Muehlenhard & Rogers. In the context of rape. In extreme cases. rape and sexual assault are among the most common causes of PTSD in women.CULTURE OF CORRUPTION IN INDIA 139 1) Depersonalization or dissociation (feeling numb and detached. Franco.g. & Lottes.) 6) Avoidance of social life or place of rape For one-third to one-half of the victims. 1998) or leading the man on because they have gone along with the sexual experience thus far. or wearing sexually-provocative clothing) may encourage rape. Often. 1996). 1983. Finally. 1994. memories. simply by not behaving demurely. Shaherwalla. places. which seems to suggest the stereotype that these women are engaging in token resistance (Malamuth & Brown. SATISHCHANDER .. In some countries. rape victims are blamed more when they are raped by an acquaintance or a date rather than by a stranger (e. Bridges & McGrail.1989. thoughts. concentrating. In general. state: Rape victims are blamed more when they resist the attack later in the rape encounter rather than earlier (Kopper. and/or feelings that remind the victim of the assault 5) Anxiety or increased alertness (difficulty sleeping. or feeling that the world is strange and unreal) 2) Difficulty remembering important parts of the assault 3) Reliving the assault through repeated thoughts. 1994. 1991. Buddie and Arthur G. Kanekar. Bell. & Pinto.
1995).CULTURE OF CORRUPTION IN INDIA 140 1991.S. the victim may either be perceived as weak or. SATISHCHANDER . In the case of male-on-female rape. these include the idea that power is reserved to men whereas women are meant for sex and objectified." A number of gender role stereotypes can play a role in rationalization of rape. state may have different requirements while other countries may have less stringent limits. and that male sexual impulses and behaviors are uncontrollable and must be satisfied. is considered the most under. The legal requirements for reporting rape vary by jurisdiction — each U. in cultures where men acquire status by sexual conquest. 1982. which seems to evoke the stereotype that victims really want to have sex because they know their attacker and perhaps even went out on a date with him. Investigation Since the vast majority of rapes are committed by persons known to the victim.reported violent crime (American Medical Association. the number of reported rapes is lower than both incidence and prevalence rates (Wallaby and Allen. However. the initiation and process of a rape investigation depends much on the victim's willingness and ability to report and describe a rape. Thus. The underlying message of this research seems to be that when certain stereotypical elements of rape are in place. as fortunate. In the case of female-on-male rape. Prosecution Reporting Sexual violence and rape in particular. 2004). that women want forced sex and to be pushed around. Tetreault & Barnett. they also state that "individuals may endorse rape myths and at the same time recognize the negative effects of rape. L'Armand & Pepitone. 1987). rape victims are prone to being blamed.
blood. and be compared to reference samples collected from patients and suspects. usually accessed by "umbrella" organizations (see List of anti-sexual assault organizations in the United States) are prevalent. The responses can be categorized as: individual approaches.6% in 2002. "Recovery from sexual assault is a complicated and controversial concept. Now it will be considered a war crime. Prevention and treatment As sexual violence affects all parts of society. vaginal epithelial cells (typically collected by a rape kit) may be identified and genetically typed by a crime lab. The information derived from the analysis can often help determine whether sexual contact occurred. 2002a). putting it at an all-time low of 5. rape has been regarded as spoils of war. Judge Navanethem Pillay of the International Criminal Tribunal for Rwanda said: From time immemorial. including some on-line. community-based efforts and actions to prevent other forms of sexual violence. provide information regarding the circumstances of the incident. the response to sexual violence is comprehensive. saliva.CULTURE OF CORRUPTION IN INDIA 141 Biological evidence such as semen." Support groups. vaginal secretions. figures on reported rape cases show an ongoing decline in the conviction rate. We want to send out a strong message that rape is no longer a trophy of war. SATISHCHANDER . health care responses. The government has been expressed its concern at the year-on-year increase in attrition of reported rape cases. and pledged to address this "justice gap" (Home Office. Conviction In the United Kingdom. War rape In 1998.
000 Korean and Chinese women were forced into prostitution in Japanese military brothels. and exaggerates. in the course of war. During World War II an estimated 200. ancient enough to have been mentioned in the Bible. but also that the Mongols especially "found pleasure" in humiliating women. The Mongols. the Mongol soldiers looted pillaged and raped. Wartime propaganda often alleges. drawing a link between the occurrence of sexual violence with the significant uprooting of a society and the crumbling of social norms. the International Criminal Tribunal for Rwanda found that systematic rape was used in the Rwandan genocide. Some estimate that around 60% of combatants in Congo are HIVinfected. mistreatment of the civilian population by enemy forces and allegations of rape figure prominently in this. The Israelite. to assemble an accurate view of what really happened. Chad and the Democratic Republic of Congo.000 women were raped during the Bangladesh Liberation War by the Pakistani army (though this has been disputed by many including the Indian academic Sarmila Bose). As a result. Commenting on rape of women and children in recent African conflict zones UNICEF said that rape was no longer just perpetrated by combatants but also by civilians. Rape by soldiers was common in many areas occupied by the Red Army. Greek and Roman armies reportedly engaged in war rape. UNICEF states that in Kenya reported cases of sexual violence doubled within days of post-election conflicts.000 women by the Japanese soldiers during the six weeks of the Nanking Massacre is an example of such atrocities. The systematic rape of as many as 80. It is estimated that more than 200. dates back to antiquity. According to UNICEF rape was prevalent in conflict zones in Sudan. and that at least 20. The Tribunal held that "sexual assault [in Rwanda] formed an integral part of the process of destroying the Tutsi ethnic group and that the rape was SATISHCHANDER . it is often very difficult. In 1998. as so-called "Comfort women". who established the Mongol Empire across much of Eurasia.CULTURE OF CORRUPTION IN INDIA 142 Rape.000 females living in the Democratic Republic of the Congo today have been raped in recent conflicts. caused much destruction during their invasions. According to UNICEF rape is common in countries affected by wars and natural disasters. Persian. It has been alleged that an estimated 200. Documents written during or after Genghis Khan's reign say that after a conquest. Rogueries’. pointed out not only the genocidal element of the occupation. a monk who survived the Mongol invasion of Hungary. French Moroccan troops known as Goumiers committed rapes and other war crimes after the Battle of Monte Casino.000 Bosnian Muslim women were raped by Serb forces during the Bosnian War. both practically and politically.
policemen and members of paramilitary groups after the takeover of the city in April 1992. describing a culture in which rape and sexual violence against women are common and in which prevalent attitudes. and media condone. excuse. manifesting the specific intent required for those acts to constitute genocide. The indictment was of major legal significance and was the first time that sexual assaults were investigated for the purpose of prosecution under the rubric of torture and enslavement as a crime against humanity. Now India is making a rape culture. which defines the jurisdiction of the International Criminal Court. it was recognised that Muslim women in Foča (southeastern Bosnia and Herzegovina) were subjected to systematic and widespread gang rape. or tolerate sexual violence against women." An estimated 500. norms. torture and enslavement by Bosnian Serb soldiers. The Rome Statute. practices. enforced prostitution.CULTURE OF CORRUPTION IN INDIA 143 systematic and had been perpetrated against Tutsi women only. Rape was first recognized as crime against humanity when the International Criminal Tribunal for the former Yugoslavia issued arrest warrants based on the Geneva Conventions and Violations of the Laws or Customs of War. sexual slavery. forced pregnancy. enforced sterilization. "or any other form of sexual violence of comparable gravity" as crime against humanity if the action is part of a widespread or systematic practice.000 women were raped during the 1994 Rwandan Genocide. recognizes rape. Amnesty International stated that the ruling challenged the widespread acceptance of the torture of women as an intrinsic part of war. Specifically. Rape culture Rape culture is a term which originated in women's studies and feminist theory. Examples of behaviors commonly associated with rape culture include victim blaming and sexual objectification. The indictment was confirmed by a 2001 verdict of the International Criminal Tribunal for the former Yugoslavia that rape and sexual enslavement are crimes against humanity. normalize. SATISHCHANDER .
usually death. Honour killings are directed mostly against women and girls. due to the belief of the perpetrators (and potentially the wider community) that the victim has brought dishonor upon the family or community.CULTURE OF CORRUPTION IN INDIA 144 28. (b) wanting to terminate or prevent an arranged marriage or desiring to marry by own choice. The perceived dishonor is normally the result of one of the following behaviors. Women and girls are killed at a much higher rate than men. Nauta sought a term that could be used in distinguish honour killings from blood feuds. The mere perception that a woman has behaved in a way that "dishonors" her family is sufficient to trigger an attack on her life. the term was first used by a Dutch scholar of Turkish society. committed by male family members against female family members. Definitions In the modern age. Honor killing An honor killing or honour killing is the killing of a member of a family or social group by other members. Human Rights Watch defines "honor killings" as follows:- Honor killings are acts of vengeance. Ane Nauta in 1978. being the victim of a sexual assault. The United Nations Population Fund (UNFPA) estimates that perhaps as many as 5. (c) engaging in heterosexual sexual acts outside marriage. or the suspicion of such behaviors: (a) dressing in a manner unacceptable to the family or community. or even due to a non-sexual relationship perceived as inappropriate.000 women and girls a year are killed by members of their own families. SATISHCHANDER . Many women's groups in the Middle East and Southwest Asia suspect the victims are at least four times more. and (d) engaging in homosexual acts. who are held to have brought dishonor upon the family. including: refusing to enter into an arranged marriage. seeking a divorce—even from an abusive husband—or (allegedly) committing adultery. A woman can be targeted by (individuals within) her family for a variety of reasons.
Sociologists have called this Turkey's first publicized gay honor killing. was shot outside a cafe and later died in hospital. There is some evidence that homosexuality can also be perceived as grounds for honor killing by relatives. during the year 2002 in Pakistan. a gay Jordanian man was shot and wounded by his brother. Men can also be the victims of honour killings by members of the family of a woman with whom they are perceived to have an inappropriate relationship. The honour killing is not a means to SATISHCHANDER . publicly engage other communities. What the men of the family. For example. As a cultural practice Sharif Kanaana. or adopt some of the customs or the religion of an outside group may be attacked. Sometimes a mother may support an honor killing of an "offending" female family member in order to preserve the honor of other female family members. professor of anthropology at Birzeit University. or tribe seek control of in a patrilineal society is reproductive power. Alternatively. In countries that receive immigration. clan. Women for the tribe were considered a factory for making men.CULTURE OF CORRUPTION IN INDIA 145 The loose term "honor killing" applies to killing of both males and females in cultures that practice it. for example in feminist and integration politics. Women in the family tend to support the honor killing of one of their own. says that honor killing is:- A complicated issued that cuts deep into the history of Arab society. it is estimated that 245 women and 137 men were killed in the name of Karo-karis in Sindh. since many men in these societies will refuse to marry the sister of a "shamed" female whom the family has not chosen to punish. Some women who bridge social divides. thereby failing to "purify" the family name. matriarchs may be motivated not by personal belief in the misogynistic ideology of women as property. In another case. In one case. a homosexual Turkish student. These killings target women and men who choose to have relationships outside of their family's tribal or religious community. some otherwise low-status immigrant men and boys have asserted their dominant patriarchal status by inflicting honor killings on women family members who have participated in public life. Ahmet Yildiz. but by pragmatic calculations.
literate. Rajasthan. mainly in the Indian states of Punjab. as a result of people marrying without their family's acceptance. "The right to life of women in Pakistan is conditional on their obeying social norms and traditions. honor SATISHCHANDER . Nighat Taufeeq of the women's resource center Shirkatgah (Lahore. the predominantly Kurdish area of Turkey." India Honor killings have been reported in northern regions of India." A July 2008 Turkish study by a team from Deckle University on honor killings in the Southeastern Anatolia Region. Pakistan) says: "It is an unholy alliance that works against women: the killers take pride in what they have done.CULTURE OF CORRUPTION IN INDIA 146 control sexual power or behavior. In contrast. the tribal leaders condone the act and protect the killers and the police connived to the coverup. Of all those surveyed. An Amnesty International statement adds:- The regime of honor is unforgiving: women on whom suspicion has fallen are not given an opportunity to defend themselves. 60 percent are either high school or university graduates or at the very least. The lawyer and human rights activist Henna Jilani says. has so far shown that little if any social stigma is attached to honor killing. and sometimes for marrying outside their caste or religion. What's behind it is the issue of fertility. It also comments that the practice is not related to a feudal societal structure. Uttar Pradesh and Bihar. and family members have no socially acceptable alternative but to remove the stain on their honor by attacking the woman. "There are also perpetrators who are welleducated university graduates. notably West Bengal. Haryana. or reproductive power. honour killings are rare to non-existent in South India and the western Indian states of Maharashtra and Gujarat. In some other parts of India.
they were kidnapped. In May 2008. a man and woman of the same clan who eloped and married in June 2007. In June 2010 some incidents were reported even from Delhi. According to data compiled by the Punjab Police. and four in 2010.CULTURE OF CORRUPTION IN INDIA 147 killings ceased about a century ago. their mutilated bodies were found a week later in an irrigation canal. marriages with members of other castes can provoke the killing of the married couple and immediate family members. Bhagalpur in the northern Indian state of Bihar has also been notorious for honour killings. The Indian state of Punjab is notorious for honour killings. Recent cases include a 16-year-old girl. In 1990 the National Commission for Women set up a statutory body in order to address the issues of honor killings among some ethnic groups in North India. Ahmed. largely due to the activism and influence of reformists such as Vivekananda. and imprisoning for life the khap (local caste-based council) head who ordered the killings of Manoj Banwala (23) and Babli (19). Indian women are considerably better protected against honor killings by Indian law and government than Pakistani women. Karnal district court ordered the execution of the five perpetrators of an honour killing. Jayvirsingh Bhadodiya shot his daughter Vandana Bhadodiya and struck her on the head with an axe. This form of honour killing is attributed to Rajput culture and traditional views on the perceived "purity" of a lineage. Ramakrishna. only to find her still smoldering. from Bhojpur who was set on fire inside her house in a case of what the police called ‘moral vigilantism’. 34 honour killings were reported in the state between 2008 and 2010: 10 in 2008. The NCW's activism has contributed significantly towards the reduction of honor killings in rural areas of North India. The victim had screamed for help for about 20 minutes before neighbours arrived. Haryana also is known for incidents of honour killing. This body reviewed constitutional. Among Rajput’s. She was admitted to a local hospital. legal and other provisions as well as challenges women face. Despite having been given police protection on court orders. In a landmark judgment in March 2010. According to Pakistani activists Henna Jilani and Emans M. and they have suggested that governments of countries SATISHCHANDER . Imrana. Vidyasagar and Raja Ram Mohan Roy. 20 in 2009. where she later died from her injuries.
Hence. to advertise to the public that the person to whom the bank belonged was no longer in a condition to continue his business. etc. in markets. Fraud Bankruptcy fraud is a white-collar crime. A "bank" originally referred to a bench. the Government planned to bring a bill in the Monsoon Session of Parliament July 2010 to provide for deterrent punishment for 'honour' killings. 29. bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the insolvent individual or organisations). Alarmed by the rise of honour killings. The word bankruptcy is formed from the ancient Latin bancus (a bench or table). In the majority of cases. concealment or destruction of documents. Haryana and Rajasthan to take preventive measures against honor killings. and ruptus (broken). Punjab. scrutinizing the increasing number of honour killings. While difficult to generalise across jurisdictions. An involuntary bankruptcy petition may not be filed against an individual consumer debtor who is not engaged in business. etc. conflicts of interest. wrote their bills of exchange. which the first bankers had in the public places. Creditors may file a bankruptcy petition against a business or corporate debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. he broke his bank.CULTURE OF CORRUPTION IN INDIA 148 affected by honor killings use Indian law as a model in order to prevent honor killings in their respective societies. fairs. In June 2010. on which they tolled their money. Bankruptcy Bankruptcy or insolvency is a legal status of a person or organisations that cannot repay the debts it owes to its creditors. false SATISHCHANDER . common criminal acts under bankruptcy statutes typically involve concealment of assets. fraudulent claims. however. the Supreme Court of India issued notices to the Central Government and six states including Uttar Pradesh. when a banker failed.
Legal meaning of the terms bankruptcy. Winding up of companies is in the jurisdiction of the Courts which can take a decade even after the Company has actually been declared insolvent. On the other hand. There is no regulation or statute legislated upon bankruptcy which denotes a condition of inability to meet a demand of a creditor as is common in many other jurisdictions. Bankruptcy fraud should be distinguished from strategic bankruptcy. insolvency. but they may violate provisions of bankruptcy law. trustee if a debtor attempts to later assert ownership of such an "unscheduled asset" after being discharged of all debt in the bankruptcy. it is for the creditors. Multiple filings are not in and of themselves criminal. Falsifications on bankruptcy forms often constitute perjury. which is not a criminal act. All assets must be disclosed in bankruptcy schedules whether or not the debtor believes the asset has a net value. This is because once a bankruptcy petition is filed.CULTURE OF CORRUPTION IN INDIA 149 statements or declarations. supervisory restructuring at the behest of The Board of Industrial and Financial Reconstruction is generally undertaken using receivership by a Public Finance Institution. The future ramifications of omitting assets from schedules can be quite serious for the offending debtor. India India does not have a clear law on corporate bankruptcy even though individual bankruptcy laws have been in existence since 1874. SATISHCHANDER . The trustee may then seize the asset and liquidate it for the benefit of the (formerly discharged) creditors. liquidation and dissolution are contested in the Indian legal system. and fee fixing or redistribution arrangements. A closed bankruptcy may be reopened by motion of a creditor or the U. The current law in force was enacted in 1920 called Provincial Insolvency Act. but may work against the filer. not the debtor to decide whether a particular asset has value.S.
Lebanon and Luxembourg. regretted that the banking system is still opaque in various non-tax and low tax jurisdictions. Each State Party shall ensure that. in the case of domestic criminal Investigations of offences established in accordance with this Convention. a criminal complaint has been filed).’’ he said. he said. Mukherjee. Bank secrecy is prevalent in certain countries. as well as offshore banks and other tax havens under voluntary or statutory privacy provisions. Singapore. come countries have agree to do so only from a prospective date and are not willing to exchange past banking information. Despite efforts made at the global level and statements issued by G-20 leaders at their London summit in April 2009. BANKING SECRECY IN INDIA Finance minister of India Pranab Mukherjee on 13 June 2011 called for stepping up multilateral cooperation to end the era of banking secrecy and deal with the “abusive” transfer pricing mechanism that is robbing developing nations of their scarce natural resources. while addressing a seminar on international taxation jointly organized by his ministry and the Organisation for the Economic Cooperation and Development (OECD). “While countries have accepted to end bank secrecy in the general. such as Switzerland. SATISHCHANDER . there are appropriate mechanisms available within its domestic legal system to overcome Obstacles that may arise out of the application of bank secrecy laws.CULTURE OF CORRUPTION IN INDIA 150 BANKING SECRECY Bank secrecy (or bank privacy) is a legal principle in some jurisdictions under which banks are not allowed to provide to authorities personal and account information about their customers unless certain conditions apply (for example. In some cases.”We cannot say with certainly that the bank secrecy is over in all cases. Such issue put a question mark on the efficacy of exchange of banking information. additional privacy is provided to beneficial owners through the use of numbered bank accounts or otherwise.” the minister said.
The chit fund company provides a variety of mechanisms by which the savings of the members can be transformed into lump sums. in the form of a commission. insurance which allows a lump sum to be enjoyed at some unspecified future time (for SATISHCHANDER . Participation in Chit funds was mainly for the purpose of purchasing some property or. This makes it easier to provide chit schemes in urban settings where social linkage among members might be weak. Initially it was in the form of an informal association of traders and households within communities. (d) given that the law determines the size of the bidding and the commission the company can charge. It allows the chit fund operator to use the legal means to handle defaults and more importantly it infuses faith in the clients that there are sufficient checks and balances which will prevent opportunistic behaviour. (c) to some extent ensures transparency in the operations. Under the Chit Fund Act. it encourages competition among chit fund firms to improve services to clients. in recent times. and (e) legal recognition also helps the chit fund operators to scale their operations. It enables poor people to convert their small savings into lump sums. (b) provides an option to people to participate in schemes where members need not know each other. hence there is a larger diversification of the idiosyncratic risks. in India. This institutionalization of the chit funds (a) makes it easier for poor or illiterate people to know exactly what different chit schemes the chit companies offer. However. ROSCAs are a means to „save and borrow‟ simultaneously. there have been tremendous alterations in the constitution and functioning of Chit funds. chit funds have been formally institutionalized as well. In return the chit fund companies take a fee from the clients to cover their expenses. Chit fund misused Chit Funds are also misused by its promoters and there are many instances of the founders running what is basically a Ponzi scheme and absconding with their money. loans which allow a lump sum to be enjoyed at present in exchange for a series of savings to be made in the future and. The concept of chit funds originated more than 1000 years ago. in other words.CULTURE OF CORRUPTION IN INDIA 151 30. this industry has been highly regulated and is governed by stringent rules. The main mechanisms are. It is considered one of the best instruments to cater to the needs of the poor. Legally recognized firms provide a variety of chit schemes. savings deposit which allow a lump sum to be enjoyed in future in exchange for a series of savings made at present. Whiles in most places ROSCAs are user-owned and organized informally. wherein the members contributed some money in return for an accumulated sum at the end of the tenure. Chit funds are the Indian equivalent of the Rotating Savings and Credit Associations (ROSCA) that are famous throughout the world. for „consumption‟ purposes.
In Kerala. chitty. and children trafficked for the purposes of forced labor and commercial sexual exploitation. 1982. SATISHCHANDER . by providing easier access to credit. called Kerala State Financial Enterprise. Women and girls are trafficked within the country for the purposes of commercial sexual exploitation and forced marriage especially in those areas where the sex ratio is highly skewed in favor of men.CULTURE OF CORRUPTION IN INDIA 152 example. Chit funds also played an important role in the financial development of people of south Indian state of Kerala. "Chit means a transaction whether called chit. NGOs estimate this problem affects 20 to 65 million Indians. A Chit fund is a kind of savings scheme practiced in India. men. the main business activity of it being the chitty business. There are also variations of chits where the savings are done for a specific purpose. agriculture. agent or in any other capacity. 1982. women. Children are subjected to forced labor as factory workers. Internal forced labor may constitute India’s largest trafficking problem. beggars. In Kerala chitty (chit fund) is a common phenomenon practiced by all sections of the society. destination. domestic servants. Human trafficking in India India is a source. and transit country for men. and children are held in debt bondage and face forced labor working in brick kilns. kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical installments over a definite period and that each such subscriber shall. 31. Such chit fund schemes may be conducted by organized financial institutions or may be unorganized schemes conducted between friends or relatives. be entitled to the prize amount". there exists a company under the State Government. chit fund. as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement. chits as defined in Section 2 of the Chit Funds Act. daughter’s marriage) in exchange for a series of savings made both at present and in the future. women. According to Section 2(b) of the Chit Fund Act. While no comprehensive study of forced and bonded labor has been completed. rice mills. as foremen. conducting or supervising. and embroidery factories. in his turn. A Chit fund company means a company managing.
India also prohibits bonded and forced labor through the Bonded Labor Abolition Act. Europe. such workers are the victims of fraudulent recruitment practices that lead them directly into situations of forced labor. restrictions on movement. however. These laws are ineffectually enforced. In some cases. unlawful withholding of passports. There are also victims of labor trafficking among the thousands of Indians who migrate willingly every year to the Middle East.CULTURE OF CORRUPTION IN INDIA 153 and agriculture workers. Indian women are trafficked to the Middle East for commercial sexual exploitation. Nepali children are also trafficked to India for forced labor in circus shows. and protect traffickers and brothel keepers from arrest and other threats of enforcement. bonded labor and movement of sex trafficking victims. the Child Labor Act. and their prescribed penalties — a maximum of three years in prison —are not sufficiently stringent. Prosecutions The Government of India prohibits some forms of trafficking for commercial sexual exploitation through the Immoral Trafficking Prevention Act (ITPA). prohibiting kidnapping and selling minors into prostitution respectively. including nonpayment of wages. high debts incurred to pay recruitment fees leave them vulnerable to exploitation by unscrupulous employers in the destination countries. and have been used as armed combatants by some terrorist and insurgent groups. in other cases. India is also a destination for women and girls from Nepal and Bangladesh trafficked for the purpose of commercial sexual exploitation. Prescribed penalties under the ITPA — ranging from seven years’ to life imprisonment — are sufficiently stringent and commensurate with those for other grave crimes. to arrest traffickers. including debt bondage. is facilitated by corrupt officials and people having a stake in this lucrative business. In addition to this. They protect brothels that exploit victims. and physical or sexual abuse. SATISHCHANDER . Indian authorities also use Sections 366(A) and 372 of the Indian Penal Code. and the Juvenile Justice Act. where some are subjected to conditions of involuntary servitude. Penalties under these provisions are a maximum of ten years’ imprisonment and a fine. and the United States for work as domestic servants and low-skilled laborers.
Indian diplomatic missions in destination SATISHCHANDER . Government authorities do not proactively identify and rescue bonded laborers.CULTURE OF CORRUPTION IN INDIA 154 Usually. Protection India’s effort to protect victims of trafficking varies from state to state. Although children trafficked for forced labor may be housed in government shelters and are entitled to 20. the quality of many of these homes remains poor and the disbursement of rehabilitation funds is sporadic. State governments regularly conduct campaigns through their welfare departments along with police raids. so few victims receive this assistance. The government does not break down these statistics by sections of the law. but remains inadequate in many places. sustained efforts in combating trafficking for commercial sexual exploitation usually come to a naught because of ineffectual laws as well as delays in prosecution.000 rupees ($450). it did not. there are no efforts made to tackle the problem of government officials’ complicity in trafficking workers for overseas employment. India’s Central Bureau of Investigation incorporated anti-trafficking training into its standard curriculum. Some states provide services to victims of bonded labor. The central government does not provide protection services to Indian victims trafficked abroad for forced labor or commercial sexual exploitation. Bulk of bonded labor heads for Middle East to emerging economies and there are several media reports which testify the plight of Indian workers. meaning that law enforcement data regarding trafficking offenses may be conflated with data regarding arrests of women in prostitution pursuant to Section 8 of the ITPA. In November. but this program is unevenly executed across the country. However. but Non-Governmental Organisations provide the majority of protection services to these victims. allocate appropriate funding to accomplish the objectives of this plan. the State of Maharashtra developed an action plan to combat trafficking.000 rupees ($225) from the central government for rehabilitation. however. Victims of bonded labor are entitled to 10.
Therefore. neither the central government nor most state governments offer any medical. psychological. the government and some NGOs report that. Section 8 of the ITPA permits the arrest of women in prostitution. legal. Prevention Ministry of Labor and Employment displays full-page advertisements against child labor in national newspapers at periodic intervals. Most of the Indian workers’ pay huge sums of money to agents who facilitate their emigration outside the official channels and willingly emigrate despite being aware of the conditions prevailing in those destinations. NGOs report that some Bangladeshi victims of commercial sexual exploitation are pushed back across the border without protection services. or reintegration assistance for these victims. This is because of the fact that most of the destinations abroad pay better sums of money. NGOs primarily perform this function. Some foreign victims trafficked to India are not subject to removal. Although statistics on arrests under Section 8 are not kept. a dream of better future ahead often lures the people abroad and hence trafficking cannot entirely be prevented. Many victims decline to testify against their traffickers due to the length of proceedings and fear of retribution by traffickers. NGOs that receive funding indirectly from either the central or state government do not want to be brought within the scrutiny of anybody. once repatriated. police officers no longer use this provision of the law. through sensitization and training. Those who are subject to removal are not offered legal alternatives to removal to countries in which they may face hardship or retribution.CULTURE OF CORRUPTION IN INDIA 155 countries may offer temporary shelter to nationals who have been trafficked. India has not ratified the 2000 UN TIP Protocol. it is unclear whether arrests of women in prostitution under Section 8 have actually decreased. The government has also instituted pre-departure information sessions for domestic workers migrating abroad on the risks of exploitation. some victims may be arrested and punished for acts committed as a result of being trafficked. Because most law enforcement authorities lack formal procedures to identify trafficking victims among women arrested for prostitution. SATISHCHANDER . The government also does not repatriate Nepali victims. however.
Español. TI began publishing the Bribe Payers Index (BPI) which ranked nations according to the prevalence that a country's multinational corporations would offer bribes. SATISHCHANDER . Hansjörg Elshorst. PREVENTION &REDUCTION TOOLS (ACT’S) 32. It publishes an annual Corruption Perceptions Index. a comparative listing of corruption worldwide. It was criticized for poor methodology and unfair treatment of developing nations. based upon surveys of business people. Jerry Parfitt. In 1995. The CPI was subsequently published annually. Eigen acted as Chairman and Pope was Managing Director. a former regional director for the World Bank. The headquarters is located in Berlin. while also being praised for highlighting corruption and embarrassing governments. Michael Hershman. Transparency International Transparency International (TI) is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. The CPI ranked nations on the prevalence of corruption within each country. Joe Githongo. Germany but operates through more than 70 national chapters. History TI was founded in May 1993 through the initiative of Peter Eigen. George Moody Stuart.CULTURE OF CORRUPTION IN INDIA 156 G. Kamal Husain. In 1999. TI developed the Corruption Perceptions Index (CPI). Dolores L. Founding board members included Eigen. Fritz Heimann. Jeremy Pope and Frank Vogl.
companies and governments to implement them. both in and outside the countries they are analysing. It brings people together in a powerful worldwide coalition to end the devastating impact of corruption on men. Originally founded in Germany in May 1993 as a not-for-profit organization. TI compiles surveys that ask businessmen and analysts. whereas prior to the 1990s this topic was not broadly discussed. a Global Corruption Barometer and a Bribe Payers Index. Germany. with an international secretariat in Berlin. It develops tools for fighting corruption and works with other civil society organizations. Corruption Perceptions Index The CPI—besides the World Bank corruption index—is the most commonly used measure for corruption in countries worldwide. The goal of TI is to be nonpartisan and to build coalitions against corruption." Since 1995. To form this index. TI does not undertake investigations on single cases of corruption or expose individual cases. TI's mission is to create change towards a world free of corruption. TI's biggest success has been to put the topic of corruption on the world's agenda. TI furthermore played a vital role in the introduction of the United Nations Convention against Corruption and the OECD Anti-Bribery Convention. TI has issued an annual Corruption Perceptions Index (CPI). and claims to be moving towards a completely democratic organizational structure. it also publishes an annual Global Corruption Report. their perceptions of how corrupt a country is. TI says of itself: "Transparency International is the global civil society organization leading the fight against corruption.CULTURE OF CORRUPTION IN INDIA 157 Organization and role TI is organized as a group of some 100 national chapters. women and children around the world. TI is now an international non-governmental organization. International Institutions such as the World Bank and the International Monetary Fund now view corruption as one of the main obstacles for development. Relying on the number of actual corruption cases SATISHCHANDER .
Competitiveness and corruption A review of the linkages between countries' competitiveness and the incidence of corruption was initiated at a TI workshop in Prague. the completeness of the surveys and the methodology used. including a study entitled “Differences between Politically Connected and Non-Connected Firms: A Cross Country Comparison”. To address these challenges. The main one stems from the difficulty in measuring corruption. USA) has issued a number of papers on this subject. firms and individuals take actions based on perceptions". corruption remains an obstacle to achieving much needed progress. The CPI has received criticisms over the years. The 2010 Corruption Perceptions Index shows that nearly three quarters of the 178 countries in the index score below five.CULTURE OF CORRUPTION IN INDIA 158 would not work since laws and enforcement of laws differ significantly from country to country. They argue that "perceptions matter in their own right. which by definition happens behind the scenes. since. on a scale from 10 (highly clean) to 0 (highly corrupt). November 1998 and picked-up in the International Anti-Corruption Conference three years later.. These results indicate a serious corruption problem.. This makes it difficult to evaluate the result of new policies. Data can vary widely depending on the public perception of a country. The CPI therefore needs to rely on third-party surveys which have been criticized as potentially unreliable. Transparency International advocates SATISHCHANDER . from the instability of financial markets to climate change and poverty. With governments committing huge sums to tackle the world's most pressing problems. governments need to integrate anti-corruption measures in all spheres. The second issue is that data cannot be compared from year to year because TI uses different methodologies and samples every year. The CPI authors replied to these criticisms by reminding that the CPI is meant to measure perception and not "reality". Mara Faccio (Purdue University. from their responses to the financial crisis and climate change to commitments by the international community to eradicate poverty.
1. a major concern for countries that pursue the assets of former leaders and other officials accused or found to have engaged in corruption. international cooperation. New Zealand and Singapore are tied at the top of the list with a score of 9. 33. Denmark. followed closely by Finland and Sweden at 9.5.3. abuse of power. SATISHCHANDER . and various acts of corruption in the private sector. the only global initiative that provides a framework for putting an end to corruption. United Nations Convention against Corruption The United Nations Convention against Corruption (UNCAC) is the only legally binding universal anti-corruption instrument. Notable among decliners over the past year are some of the countries most affected by a financial crisis precipitated by transparency and integrity deficits. and technical assistance and information exchange. asset recovery.CULTURE OF CORRUPTION IN INDIA 159 stricter implementation of the UN Convention against Corruption.2. the general absence of OECD states underlines the fact that all nations need to bolster their good governance mechanisms. global policy solutions too many global crises are at risk. such as trading in influence. criminalization and law enforcement measures. Bringing up the rear is Somalia with a score of 1. transparency and accountability are critical to restoring trust and turning back the tide of corruption. A further significant development was the inclusion of a specific chapter of the Convention dealing with the recovery of assets. Among those improving in the past year. The UNCAC covers five main areas: prevention. The UNCAC covers many different forms of corruption.4 and Iraq at 1. The rapidly growing number of States that have become parties to the Convention is further proof of its universal nature and reach. Without them. The Convention's far-reaching approach and the mandatory character of many of its provisions make it a unique tool for developing a comprehensive response to a global problem. The message is clear: across the globe. slightly trailing Myanmar and Afghanistan at 1.
Right to information act The Right to Information Act (2005) and equivalent acts in the states that require government officials to furnish information requested by citizens or face punitive action. which grants citizens access to government information and a mechanism to control public spending. with institutions including the Central Bureau of Investigation. infrastructure. corruption remains widespread in the country and there have been many instances of political and bureaucratic corruption. However. The 2006 report by Transparency International puts India at the 70th place and states that significant improvements were made by India in reducing corruption. computerization of services and various central and state government acts that established vigilance commissions have considerably reduced corruption or at least have opened up avenues to redress grievances.CULTURE OF CORRUPTION IN INDIA 160 34. however. has taken a firm stance against corruption in recent years and made several important rulings. High ranking officials have also been involved in major corruption scandals. public funds embezzlement. and the police. SATISHCHANDER . the Office of the Comptroller and the Auditor General. The Government has put in place a well-developed legal and institutional framework. The Supreme Court. tax and customs administration. in particular. public utilities. The latter has been identified as one of the most corrupt institutions by various surveys. Another achievement in the fight against corruption has been the enactment of the Right to Information (RTI) Act in 2005. The sectors most affected by corruption include public procurement. fraudulent Procurement practices and judicial corruption. In spite of progress. law enforcement remains weak and reforms have a long way to go. RTI Acts AS a Corruptions Reduction Tools in India The fight against corruption has been declared a high priority by Prime Minister Man Mohan Singh. and the Central Vigilance Commission.
SATISHCHANDER . State Government sand Local Bodies. The Act promises to make the right to information more progressive. and inter alia includes all authorities under the Central Government. to set up systems and mechanisms that facilitate people’s easy access to information.CULTURE OF CORRUPTION IN INDIA 161 Salient Features of Right to Information Act. The non-governmental organizations (NGOs) substantially funded. on every public authority to suo motu provide to the public with the information as prescribed therein. but also have the right to get it. to minimize corruption and inefficiency in public offices and to ensure people’s participation in governance and decision making. so that the public has to take minimum recourse to the use of this legislation for obtaining information. A duty has been cast. as it encourages the common citizen to enthusiastically participate in the whole process of governance. Specifically. directly or indirectly. the main objectives of the law on RTI are: to operationalize the fundamental right to information. unless specifically defined exemptions apply. The scope of the Act extends to all authorities and bodies under the Constitution or any other law. (ii) The duty of the Government to proactively provide certain key information even in absence of a request. The citizens are not only free to ask for information from the Government. RTI is based on the key concepts: i) The right of the public to access the information and the corresponding duty of the Government to meet the request. to promote transparency and accountability in governance. participatory and meaningful. 2005 Right to information (RTI) is inherent in democratic functioning and a precondition to good governance and realization of all other human rights. by the public funds also fall within the ambit of this Act. in section 4 of the Act. including education and health care that have intense and pervasive impact on all the human activities.
under Section 25(5) of the Act. efficient. the Commission may also advise the appropriate Government in the matters of maintenance SATISHCHANDER . In cases of allegations of violation of human rights. it has been made mandatory to provide it within 48 hours of the receipt of the request. The Commission is vested with the power of a Court. incomplete or misleading information. makes it mandatory for the PIO to provide the information within 30days.CULTURE OF CORRUPTION IN INDIA 162 The procedure of securing information as provided in section 6 of the Act. responsive. which are exempted from the provisions of this Act. In addition. such exemption would not be available. or forgiving incorrect. Moreover. prescribes a procedure. The second appeal lies in the Information Commission. if there were cases of allegation of corruption and human rights violation. as well as an alert. who do not comply with the requirements of the Act. information would be made available after the approval of the Information Commission. or destroying information and so on. The jurisdiction of the lower court is barred under section 20 of the Act. The fee payable is reasonable and information is to be provided free of cost to citizens living below the poverty line. transparent and accountable government. which is very simple. If the information requested concerns the life or liberty of a person. Under Section 20. The Act establishes a two-tier mechanism for appeal. The categories of information exempted from disclosure in this Act are kept to a bare minimum. mainly information seekers and providers. The first appeal lies to an officer within the organization who is senior in rank to PIO. This Act. thus. The Act provides for penalties in case of failure to provide information in time. Even in the case of security and intelligence agencies and organizations. The Central/State Information Commission has a major role in enforcing the implementation of the provisions of the Act as well as for educating the parties. section 7 of the Act. the Information Commission has also been empowered to recommend disciplinary action against the government servants. To assure that the information sought is provided quickly. paves the way for an empowered citizen. the Commission may impose penalty on the concerned officials for denial of information and recommend disciplinary action against the errant officials. or for refusing to accept application for information. Even the exemptions are not absolute if disclosure of the information outweighs the harm to the public authorities. A citizen has to merely make a request to the concerned Public Information Officer (PIO) specifying the information sought by him.
and (iii) preliminary research studies and publications of results. particularly during the course of hearings conducted by the Author in the cases listed before the Commission to resolve the disputes between information seekers and providers.CULTURE OF CORRUPTION IN INDIA 163 and preservation of records and the norms for disclosure of information with a view to enabling the people to observe and scrutinize the decision making process. The powers vested with the Information Commissioner. propose to find an answer to the question: whether the objectives of the Act are being realized? It must be admitted that the assessment of the RTI on good governance and development is indeed a daunting task. It is stated furthermore that:Democracy requires an informed citizenry and transparency of information which are vital to its functioning and also to contain corruption and to hold Governments and their instrumentalities accountable to the governed. since data are lacking to permit methodological rigour of analysis. (ii) media reports on the issues pertaining to RTI matters. Impact of RTI on the Elements of Good Governance The RTI Act was implemented in October 2005. therefore. it may be worthwhile to analyse some evidences. reliance is made on (i) the responses of the RTI requesters and the activists. who are appointed by the President of India/Governor of a state. We. for developing an understanding on how it works and what it does or does not do. Though a period of less than three years is too a short period to assess the success of RTI. SATISHCHANDER . The assessment of impact is proposed to be made in terms of the stated objectives of the RTI Act. as under: An Act to provide for setting out the practical regime of righto information for citizens to secure access to information under the control of public authorities. ensure effective implementation of the Act. mainly those relating to corruption and accountability of public bodies. However. which are outlined in its preamble. in order to promote transparency and accountability in the working of every public authority.
Evidently. the Prime Minister of India. 3) Promotion of partnership between citizens and the Government in decision making process. The public authorities are therefore required to make pro-active disclosures through publication of relevant documents. 2) Improvement in accountability and performance of the Government. an era which will eliminate the scourge of corruption. 2005: I believe that the passage of this Bill will see the dawn of a new era in our processes of governance. 4) Reduction in corruption in the Government departments. as under. Besides. an era which will ensure that benefits of growth flow to all sections of our people. stated. All these parameters are critical elements of good governance. an era of performance and efficiency. In compliance of the above provisions of the Act. including internet. so that the public have minimum resort to the use of this Act to obtain information’. regulations and decisions. on May 11. an era which will bring the common man’s concern to the heart of all processes of governance. Transparency With a view to ensuring maximum disclosure of information regarding government rules. States and Local Bodies. every public authority is mandated to `maintain all its records duly catalogued and indexed in a manner and the form which facilitates the right to information under the Act’. including Village level Panchayats – have put the records in SATISHCHANDER . An attempt is therefore made below to examine the extent to which the RTI has been successful in influencing the above factors in desirable direction. the public authorities are also required to ‘provide as much information suo motu to the public at regular intervals through various means of communication.CULTURE OF CORRUPTION IN INDIA 164 In addition to the above. an era which will truly fulfil the hopes of the founding fathers of our Republic. all the levels of the Government – the Centre. while piloting the Bill for its passage by the National Parliament. the major objectives of the Act are:- 1) Greater Transparency in functioning of public authorities.
every public SATISHCHANDER . Accountability The RTI provides people with the mechanism to access information. selection and promotion of staff.CULTURE OF CORRUPTION IN INDIA 165 public domain. In addition. In a large number of cases. to facilitate the access to information. such as. there is greater transparency than before in the working of the public bodies. educational and health facilities. for necessary directions to the parties as per the provisions of the Act. has thus resulted in checking corrupt practices in delivery of services and ensuring the reach of entitlements to the poor. such as above. have contributed to advocacy in favour or against the policies and/or political leaderships. a requester is free to file a complaint or appeal before the Information Commission (IC). food grains supplied through ration shops. thus. etc. misleading or incorrect. the Commission has ordered for providing the details of the decision-making processes. the lists of beneficiaries of the Government’s subsidized schemes. (ii) Taking notes extracts or certified copies of the documents or records. The disclosure of vital information. The disclosure of information relating to use of funds allocated to rural employment guarantee scheme. documents pertaining to tender processes and procurement procedure. all the public authorities have duly placed the information in public domain and that a citizen has the right to observe as to what is going on inside an organization. domestic gas. muster rolls underemployment guarantee schemes. (IV) Obtaining. etc. records of recruitment. if available. documents. through publications as well as internet in the regional languages. a citizen has the right to: (i) Inspection of work. information in electronic form. records. which they can use to hold the government to account or to seek explanation as to why decisions have been taken. (iii) Taking certified sample of material. which include ‘file noting’s. by whom and with what consequences or outcomes. In effect. water and electricity. MLA/MP local area funds. In the cases where the information sought for are not provided within the stipulated period of 30 days or the information furnished are incomplete. cabinet papers. shelter for poor. And. Thus.
the quality of decision making and delivery of services have duly improved. are required to be put in public domain. as ineffective in terms of its outcome. which was found most often. the concerned officials at all levels objectively record the reasons for the observations made by them. thus. which result in lower investments due to misuser diversion of funds for private purposes. for instance. because. For instance. created conducive conditions for every One to have a better understanding of how the government works or how a Particular decision was reached. SATISHCHANDER . ration card holders do not receive subsidized food grains and the promised jobs are not provided to the people. therefore. it perpetuates poverty and harms the poor. As a result.CULTURE OF CORRUPTION IN INDIA 166 authority is required ‘to provide reasons for its administrative or quasi-judicial decisions to the affected persons’ u/s4 (1) (d) of the Act. it was not possible for an ordinary persons to seek the details of a decision making process. doctors and nurses do not attend health centres. the teachers do not teach. Attempts are also made to effectively implement the programs as the relevant details are proactively disclosed. It creates an environment of distrust between the people and the government. In the process. in effect. being full aware that the records pertaining to the decision-making process. which impinge upon the development and jeopardize democratic governance. the government’s social spending yields no worthwhile benefits. This has begun to happen with salutary effects on delivery of socioeconomic services. including file noting’s. In effect. Until the implementation of the RTI Act. It was. Such an era of darkness in policy planning is over. Such a chance given to people empowers them to make appropriate choice of leadership and the policies that affects them. The information regime has. not possible to hold a free and frank discussion on issues of common concern of people or to fix the responsibility for any action. particularly for the poor. Reduction in Corruption Lack of transparency and accountability encourage the government officials to indulge in corrupt practices.
As the functioning of public authorities becomes more transparent and ensure proactive disclosure of the policies.CULTURE OF CORRUPTION IN INDIA 167 RTI has enabled people to participate in the process of development. the problem may get rectified. to make its effective use for the benefits of citizens. If the ombudsman finds a complaint to be substantiated. It is important therefore to enhance the capacity of public authorities as well as the citizens to develop awareness and understanding of information. particularly the poor. In effect. there would be greater participation by people in every sphere of development. essentially meaning "representative". or an ombudsman report is published making recommendations for change. who are receiving the benefits of development as per their entitlements. programmes and their outcomes. and Swedish term. and to oversee the investigation of complaints of improper government activity against the citizen. It has just begun to happen for the first time for establishing an open and participatory governance system that protects and promotes the socio-economic interests of every citizen. endeavours should be made to increase the effective demand for improvement in delivery of services. usually appointed by the government or by parliament. Ombudsman in politics In general. An ombudsman is an official. Ombudsmen An ombudsman (conventional English plural: ombudsmen) is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing not only but mostly the broad scope of constituent interests. Ombudsmen in most countries do not have the power to initiate legal proceedings or prosecution on the grounds SATISHCHANDER . An indigenous Danish. who is charged with representing the interests of the public by investigating and addressing complaints reported by individual citizens. 35. Norwegian. which has resulted in reduction of corruption. but this normally involves financial compensation. Ombudsman is etymologically rooted in the Old Norse word umboðsmaðr. an ombudsman is a state official appointed to provide a check on government activity in the interests of the citizen. Further redress depends on the laws of the country concerned.
They are beginning to appear around the world within organizations. However. the ombudsman system relies heavily on the selection of an appropriate individual for the office. The CVC (Central Vigilance Commission) was setup on the recommendations of Santhanams Committee (1962–64). sometimes as an alternative to anonymous hot-lines in countries where these are considered inappropriate or are illegal. This role is sometimes referred to as a "tribunitian" role. the introduction of ombudsmen has tended to yield mixed results. outside Scandinavia.CULTURE OF CORRUPTION IN INDIA 168 of a complaint. and according to the International Ombudsman Association (IOA) Standards of Practice do not serve any other role in the organization. INDIA The Government of India has designated several ombudsmen (sometimes called Chief Vigilance Officer or CVO) for the redressal of grievances and complaints from individuals in the banking. insurance and other sectors being serviced by both private and public bodies and corporations. Perhaps for this reason. whose role was to intercede in the political process on behalf of common citizens. by reporting to the CEO or board of directors. and in addition to hot lines because ombuds offices typically receive many more calls than do hot lines. The major advantage of an ombudsman is that he or she examines complaints from outside the offending state institution. and on the cooperation of at least some effective official from within the apparatus of the state. non-profit organizations and government agencies also have an ombudsman (or an ombuds office) to serve internal employees. and managers and/or other constituencies. These ombudsman roles are structured to function independently. thus avoiding the conflicts of interest inherent in selfpolicing. and has been traditionally fulfilled by elected representatives – the term refers to the ancient Roman "tribunes of the plebians" (tribuni plebis). SATISHCHANDER . Industry and organizational ombudsman Many private companies. universities.
1973. headed by a retired Supreme Court judge or high court chief justice. Maharashtra is the first state to have established the institution in 1972. SATISHCHANDER . These institutions are based on the Ombudsman in Scandinavian countries. Lokayukta institution has come into existence in different years.3. which has so far not been enacted. Orissa is the first state to present a bill on establishment of Lokayukta in 1970. Uttaranchal (2002) and West Bengal (2003) and Haryana (2004). Municipalities and Corporations. the Lokayukta institution was established in the year 1973 after the Rajasthan Lokayukta and Up-Lokayukta Act. He or she can enquire/investigate into allegations of action. Bihar (1974). and comprise of the state vigilance commissioner and a jurist or an eminent administrator as other members. The structure of the Lokayukta is not uniform across all the states. 1973 was passed by the State Legislature and received assent of the President on 26. Ombudsman is called as Lokpal or Lokayukta. Uttar Pradesh (1977). In the State of Rajasthan. Gujarat (1988). Kerala State has an Ombudsman for Local Self Government institutions like Panchayats. the jurisdiction of the Lokpal is not extended for judiciary like in New Zealand. The Lokayukta is an anti-government corruption organization in the Indian states. Kerala (1998). Himachal Pradesh (1983). The central Government introduced the first Lokpal Bill. The appointment is made under the provisions of the Kerala Panchayats Raj Act. Punjab (1996). Delhi (1995). An amendment to the Constitution has been proposed to implement the Lokayukta uniformly across Indian states as a three-member body. A Retd-Judge of the High Court is appointed by the Governor for a term of 3 years. in different States in India. Karnataka (1984). Chhattisgarh (2002). However. however. Thereafter. An Administrative Reforms Commission (ARC) was set up on 5 January 1966 under the Chairmanship of Shri Morarji Desai. Lokpal and Lokayukta Bill in 1968 and lastly in 2005. It recommended two-tier machinery: Lokpal at the Centre (Parliamentary commissioner as in New Zealand) and one Lokayukta each at the State level for redressal of people's grievances. Some states have UpaLokayukta under Lokayukta and in some states. corruption and mal administration. the Lokayukta doesn't have suo moto powers of instigating an enquiry. this institution was established in different States in different years namely: Maharashtra (1972). Madhya Pradesh (1981). Andhra Pradesh (1983). Assam (1986). inaction.CULTURE OF CORRUPTION IN INDIA 169 In India.
One of the first laws that protected whistle-blowers was the 1863 United States False Claims Act (revised in 1986). and corruption. a public or private organization. a violation of a law. bureaucrats and even sitting judges. to the media or to groups concerned with the issues). the Lokayukta is largely recommendatory and enjoys limited powers to initiate action.CULTURE OF CORRUPTION IN INDIA 170 At the national level. Whistle-blowers frequently face reprisal. Second. three issues that have clearly emerged across states where the institution exists need to be highlighted. Third. sometimes at the hands of the organization or group which they have accused. or a company. Whistle-blowers may make their allegations internally (for example. The act encourages whistle-blowers by promising them a percentage of the money recovered or damages won by the government and protects them from wrongful dismissal. which tried to combat fraud by suppliers of the United States government during the Civil War. However. However. SATISHCHANDER . there is no ombudsman. sometimes from related organizations. 36. regulation and/or a direct threat to public interest. Social welfare worker Anna Hazare has led a movement to compel the Indian Government to notify the Committee for the implementation of the Lokayukta against corruption as an independent body and also giving enough powers to the Lokayukta to also receive corruption complaints against politicians. ombudsmen at state level (Lok Ayutka) have been created in some Indian states such as Karnataka. in many states the Lok Ayutka is hampered by the fact that it does not have an independent investigating agency and is dependent on the government agencies to carry forward its investigations. for example. In the first place. Whistleblowers A whistle-blower is a person who tells the public or someone in authority about alleged dishonest or illegal activities (misconduct) occurring in a government department. The alleged misconduct may be classified in many ways. to other people within the accused organization) or externally (to regulators. and sometimes under law. Anna Hazare has achieved this big success through his non-violence measures like fasting till death at the Jantar Mantar place in Delhi Capital City of India. rule. law enforcement agencies. such as fraud. The public also gave nation-wide support to Anna Hazare in his demand for strong and tough anti-corruption law. health/safety violations. the success and visibility of the institution has more to do with the person who occupies the position than the authority and powers vested in the office.
External whistleblowers. In some cases.CULTURE OF CORRUPTION IN INDIA 171 Overview The term whistleblower comes from the phrase "blow the whistle. Definition Most whistleblowers are internal whistleblowers. Whistleblowers are commonly seen as selfless martyrs for public interest and organizational accountability. SATISHCHANDER . report misconduct on outside persons or entities. Some academics feel that whistleblowers should at least be entitled to a rebuttable presumption that they are attempting to apply ethical principles in the face of obstacles and that whistleblowing would be more respected in governance systems if it had a firmer academic basis in virtue ethics. external whistleblowing is encouraged by offering monetary reward. whistleblowers may report the misconduct to lawyers. or other local. who report misconduct on a fellow employee or superior within their company. but a choice of options for individuals. In these cases. within an organization. law enforcement or watchdog agencies. others view them as "tattle tales" or "snitches. including an option that offers near absolute confidentiality." which refers to a whistle being blown by a policeman or a referee to indicate an activity that is illegal or a foul. One of the most interesting questions with respect to internal whistleblowers is why and under what circumstances people will either act on the spot to stop illegal and otherwise unacceptable behavior or report it. depending on the information's severity and nature." solely pursuing personal glory and fame. state. There is some reason to believe that people are more likely to take action with respect to unacceptable behavior. Common reactions Ideas about whistleblowing vary widely. or federal agencies. however. if there are complaint systems that offer not just options dictated by the planning and control organization. the media.
SATISHCHANDER . For example. the idea of seeking fame and glory may be less commonly believed. 2010 was approved by the government as part of a drive to eliminate corruption in the country's bureaucracy. The wrongdoing might take the form of fraud. suspension. where and how secrets were revealed. India does not have a law to protect whistleblowers but the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill. this section emphasizes the English-speaking world and covers other regimes only insofar as they represent exceptionally greater or lesser protections. Whistleblower protection refers to the provisions put in place in order to protect someone who exposes alleged wrongdoing. including Manjunath Shanmugam and Satyendra Dubey. demotion. This decision follows the death of various whistleblowers. Legal protection Legal protection for whistleblowing varies from country to country and may depend on any of the country of the original activity. and how they eventually became published or publicized. and/or harsh mistreatment by other employees. there have been many cases where punishment for whistleblowing has occurred. Although whistleblowers are often protected under law from employer retaliation. but also because of fear of losing their relationships at work and outside work. Because the majority of cases are very low-profile and receive little or no media attention and because whistleblowers who do report significant misconduct are usually put in some form of danger or persecution. A widespread "shoot the messenger" mentality by corporations or government agencies accused of misconduct and in some cases whistleblowers have been subjected to criminal prosecution in reprisal for reporting wrongdoing. However. Persecution of whistleblowers has become a serious issue in many parts of the world. not only because of fear of retaliation.CULTURE OF CORRUPTION IN INDIA 172 It is probable that many people do not even consider blowing the whistle. in the United States. For purposes of the English Wikipedia. wage garnishment. corruption or mismanagement. such as termination. many whistleblowers report there exists. most whistleblower protection laws provide for limited "make whole" remedies or damages for employment losses if whistleblower retaliation is proven.
A committee of 10 people has been sectioned from Govt who will lead this committee. government on Thursday said that a comprehensive Whistleblowers Protection Bill would be brought soon as part of its policy of "zero tolerance" to curb corruption in the bureaucracy.Mr. of India has introduced the whistle blower law named as "Right to Information act”. Now.CULTURE OF CORRUPTION IN INDIA 173 India As of 2009 Govt. it is planning to bring a legislation in this regard soon (incorporating all the guidelines in the resolution). SATISHCHANDER . The whistleblowers' resolution was passed by way of an office order in 2004 in response to the Supreme Court directive in the Bihar-based engineer Satyendra Dubey case. Govt tells RS Over four years after the Centre passed a resolution designating the Central Vigilance Commission (CVC) as the key agency for receiving complaints of corruption and ensure the protection of complainants' identity. however.Anna Hazare a civilian with his committee has demanded the ombudsman law called as "Jan Lokpal bill”. he said in reply to a question in Rajya Sabha. He. He said the government was "fully committed" to implement the policy of "zero tolerance" to curb corruption. Minister of state for personnel Prithviraj Chavan said the government had brought the whistleblowers' resolution in 2004 to ensure transparency. did not indicate the timeframe for bringing the Bill. Still to maintain and increase the stability in law Govt of India is on the path to introduce an Ombudsman law which was demanded by a civil society against corruption. Whistleblowers Protection Bill soon. Dubey had complained about irregularities in the execution of contracts awarded by the National Highway Authority of India in the state and paid with his life since there was no mechanism in place to protect those who made complaints against corruption in government departments.
India currently does not have a law to protect whistleblowers. attention deficit disorder. which was highlighted by the assassination of Satyendra Dubey. India does not have a law to protect whistle-blowers but the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill. a Government company in Kerala and his two minor children. 2010 was approved by the government as part of a drive to eliminate corruption in the country's bureaucracy. 37. Whistleblowers play a major role in the fight against corruption. including Manjunath Shanmugam and Satyendra Dubey. Initially. This decision follows the death of various whistle-blowers. Alertness Alertness is the state of paying close and continuous attention. or sleep deprivation. Addison's disease. A committee of 10 people has been sectioned from Govt who will lead this committee. and depression. Indian courts are regularly ordering probe in cases of murders or so-called suicide of several whistle blowers. of India has introduced the whistle blower law named as "Right to Information act”. including narcolepsy. Kerala High Court ordered CBI probe on 18 February 2011. A lack of alertness is a symptom of a number of conditions.CULTURE OF CORRUPTION IN INDIA 174 Whistle blowers in India As of 2009 Govt. It is related to psychology as well as to physiology. Whistle-blower protection refers to the provisions put in place in order to protect someone who exposes alleged wrongdoing. Still to maintain and increase the stability in law Govt of India is on the path to introduce an Ombudsman law which was demanded by a civil society against corruption. The word is formed from "alert". corruption or mismanagement. which comes from the Italian "all'erta” SATISHCHANDER . and chronic fatigue syndrome. or being quick to perceive and act. being watchful and prompt to meet danger or emergency.Anna Hazare a civilian with his committee has demanded the ombudsman law called as "Jan Lokpal bill”. The wrongdoing might take the form of fraud. CBI showed its unwillingness for probing into such cases citing over-burden as a reason. One of the latest case of such murder is of V Sasindran Company Secretary of Palakkad based Malabar Cement Limited.Mr.
. Jan Lokpal Bill In India. the Jan Lokpal Bill (also referred to as the citizens' ombudsman bill) is a proposed anti-corruption law designed to effectively deter corruption. the government-drafted bill has failed to pass the Rajya Sabha. redress grievances and protect whistleblowers.CULTURE OF CORRUPTION IN INDIA 175 Physiological aspects People who have to be alert during their jobs. M. The original bill was mooted by the National Campaign for Peoples’ Right to Information (NCPRI) in its delegated committee. SATISHCHANDER . this "may lead to severe consequences in occupations ranging from air traffic control to monitoring of nuclear power plants. 1985. For 42 years." 38. such as air traffic controllers or pilots often face challenges maintaining their alertness. the upper house of the Parliament of India. Lyngdoh. The bill was collaboratively drafted by Shanti Bhushan. 1998. 1989. retaining a constant level of alertness is rare if not impossible.engaged in attention-intensive and monotonous tasks. Subsequent Lokpal bills were introduced in 1971. The first Lokpal Bill was passed in the 4th Lok Sabha in 1969 but stalled in the Rajya Sabha. advocate Prashant Bhushan. Following the four day Anna Hazare fasting struggle. 2001. retired Indian Police Service officer Kiran Bedi." If people employed in safety-related or transportation jobs have lapses in alertness. Justice N. The law would create an ombudsman called the Jan Lokpal.. in wide public consultation with the leaders of the India Against Corruption movement and civil society. and former chief election commissioner J. 2005 and 2008 but all failed to pass. 1977. Santosh Hegde. Research shows that for people ". 1996. The bill proposes the institution of the office of Lokpal (Ombudsman) at the center and local Lokayukta at the state level. Prime Minister Man Mohan Singh stated that the Lokpal Bill would be introduced in the 2011 monsoon session of parliament. this would be an independent body similar to the Election Commission of India with the power to prosecute politicians and bureaucrats without prior government permission.
3) Members will be appointed by judges. Swami Ramdev. it will be completely independent of the government and free from ministerial influence in its investigations. The bill's backers consider existing laws too weak and insufficiently enforced to stop corruption. Indian Administrative Service officers with a clean record. In addition to spiritual leaders Sri Ravi Shankar. video recordings of which will thereafter be made public.. 6) Investigations of each case must be completed in one year. Key features of proposed bill 1) To establish a central government anti-corruption institution called Lokpal. As a result. many celebrities showed their public support. Any resulting trials should be concluded in the following year. This movement has also been joined by many people providing their support in Internet social media such as Twitter and Facebook. which will then be given as compensation to the complainant. cases dealt with and those which are pending. Swami Agnivesh and former Indian cricketer Kapil Dev. It will also publish lists of all cases received by the Lokayukta during the previous month. 4) A selection committee will invite shortlisted candidates for interviews. 2) As in the case of the Supreme Court and Cabinet Secretariat. giving a total maximum process time of two years. brief details of each. Santosh Hegde. N. supported by Lokayukta at the state level. their outcome and any action taken or proposed. SATISHCHANDER . the Lokpal will be supervised by the Cabinet Secretary and the Election Commission. 5) Every month on its website. a senior lawyer in the Supreme Court along with the members of the India Against Corruption movement. the Lokayukta will publish a list of cases dealt with. Prashant Bhushan. 7) Losses caused to the government by a corrupt individual will be recovered at the time of conviction.CULTURE OF CORRUPTION IN INDIA 176 Background Renewed calls for a Jan Lokpal Bill arose over resentment of the major differences between the draft 2010 Lokpal Bill prepared by the government and the Jan Lokpal Bill prepared by the members of this movement. a former justice of the Supreme Court of India and Lokayukta of Karnataka. private citizens and constitutional authorities through a transparent and participatory process. 8) Government office work required by a citizen that is not completed within a prescribed time period will result in Lokpal imposing financial penalties on those responsible.
Drafting Committee The drafting committee was officially formed on 8 April 2011.CULTURE OF CORRUPTION IN INDIA 177 9) Complaints against any officer of Lokpal will be investigated and completed within a month and. Minister for Communications and Information Technology. will result in the officer being dismissed within two months. It consists of ten members. SATISHCHANDER . Finance Minister. Minister of Home Affairs. Government representation Five Cabinet ministers will be a part of the Drafting Committee. Chidambaram. judge or politician. non-politician. It is reported that Pranab Mukherjee. if found to be substantive. 10) The existing anti-corruption agencies (CVC. departmental vigilance and the anticorruption branch of the CBI) will be merged into Lokpal which will have complete power and authority to independently investigate and prosecute any officer. Minister of Law and Justice. will fill those roles. Co-Chairman. Chairmen The Government of India accepted that the committee be co-chaired by a politician and an activist. P. They are: Pranab Mukherjee. Minister of Water Resources. 11) Whistleblowers who alert the agency to potential corruption cases will also be provided with protection by it. from civil society. including five from the government and five drawn from society. Kapil Sibal. Veerappa Moily. from the political arena. and Salman Khursid. and Shanti Bhushan.
a major bottleneck in the Indian democratic (and legal) framework has been the severe restrictions on the free flow of information to citizens on various aspects of the functioning of government. Prashant Bhushan. Former Minister of Law and Justice. on behalf of common citizens to ensure the protection of their rights on the one hand and secure the accountability of those exercising power on the other. Lawyer. In addition. Social Activist. 1) Conduct a media campaign against corruption SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 178 Civil society representation Five leading social activists will be a part of the Drafting Committee. Civil Society The Constitution of India guarantees every citizen the fundamental right to form associations. They are: Shanti Bhushan. which has been partially remedied by the Right to Information Act in 2002. The bureaucracy entrusted with the responsibility of making the Act operational has delayed the entire process and created more obstacles in the processing the name of ensuring fairness and justice for all. N. Co-Chairman. the media acted as a watchdog by reporting incidents of misuse of power and corruption. Arvind Kejriwal. A by-product of this new legislation is the need for public agencies to create a Citizens Charter and enumerate the rights of stakeholders. Lokayukta (Karnataka). Anna Hazare. Conduct a national public awareness campaign. in significant ways. However. the Right to Information Act has faced serious problems in Implementation. Santosh Hegde. Some states are involving NGO in the decision-making process as well as in defining expenditure priorities. However. 39. These non-governmental organizations have intervened.
or remunerated by the government by fees or commission for the performance of any public duty. Delhi. the public. PCA 1988 incorporates provisions of chapter IX of the Indian Penal Code to deal with Public servants and those who abet them by way of criminal misconduct and provides to enable attachment of their ill-gotten wealth obtained through corrupt means. monitoring and evaluation (e. President.g. Public servant means any person in the service. Center for Policy Research. the bill "is premised on an institutional imagination that is at best naïve. 40. or the community at large has an interest. at worst subversive of representative democracy". the employees of such bodies are also covered by this act. through trial courts and higher courts. Kejriwal further states that the proposed bill also lists clear provisions in which the Supreme Court can abolish the Lokpal. Arvind Kejriwal. replacing Prevention of Corruption Act 1947. Normally corruption is defined as SATISHCHANDER . The ‘State’ includes a corporation established by or under a central. Public duty means a duty in the discharge of which the state. In India in addition to a large number of health and educational institutions. He states the Jan Lokpal Bill drafted by civil society will only investigate corruption offences and submit a charge sheet which would then tried and prosecuted. Hence. the government also aids many other kinds of organizations. According to Prataps Bhanu Mehta.CULTURE OF CORRUPTION IN INDIA 179 2) 3) 4) 5) Conduct a public awareness campaign in secondary schools Conduct further research. The claim that the Lokpal will be an extra-constitutional body has been derided by Hazare’s closest lieutenant. pay of the government. Prevention of Corruption Act 1988 To deal with corruption amongst public servants India enacted Prevention of Corruption Act 1988. annual integrity surveys) Introduce Code of Conduct for teachers Co-ordinate the corruption campaign with the media and educational and religious organizations Criticisms of the Jan Lokpal Bill Some people have opined that the Jan Lokpal Bill is 'Naïve' in its approach to combating corruption. provincial or state act or an authority or a body owned or controlled or aided by the government or a government company defined in section 617 of the Company’s Act1956. This act also widens the scope of definition of Public servants.
CULTURE OF CORRUPTION IN INDIA 180 using public office for private gains. "Public servant" means1) Any person in the service or pay of the Government or remunerated by the Government by fees or commission for the performance of any public duty. or an authority or a body owned or controlled or aided by the Government or a Government company as defined in section 617 of the Companies Act. including a liquidator. any adjudicatory functions. whether appointed by the government or notes. 1956. local authority or other public authority. In PCA 1988 Public Servant and Public duty have very wide definitions covering every person who is in the actual possession of the situation of a public servant and discharging public duty which the state. 2) Any person in the service or pay of a local authority. including any person empowered by law to discharge. b) "Public duty" means a duty in the discharge of which the State. unless the context otherwise requires. 6) Any arbitrator or other person to whom any cause or matter has been referred for decision or report by a court of justice or by a competent public authority. whether by himself or as a member of any body of persons. in connection with the administration of justice. Persons holding various public offices are public servants. or an authority or a body owned or controlled or aided by the Government or a Government company as defined in section 617 of the Companies Act. Definitions In this Act. 5) Any person authorised by a court of justice to perform any duty. 4) Any Judge. Provincial or State Act. It extends to the whole of India except the State of Jammu and Kashmir and it applies also to all citizens of India outside India. 3) any person in the service or pay of a corporation established by or under a Central. public or the community at large has an interest. SATISHCHANDER . the public or the community at large has an interest. Provincial or State Act. receiver or commissioner appointed by such court. 1956.-In this clause "State" includes a corporation established by or under a Central.a) "Election" means any election. c) Explanation. by whatever means held under any law for the purpose of selecting members of Parliament or of any Legislature.
publish. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 181 7) Any person who holds an office by virtue of which he is empowered to prepare. maintain or revise an electoral roll or to conduct an election or part of an election.
Money-Laundering Act. 9) any person who is the president.CULTURE OF CORRUPTION IN INDIA 182 8) any person who holds an office by virtue of which he is authorised or required to perform any public duty. 41. whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other. whether appointed by the Government or not. member or employee of any Service Commission or Board. 1956. scientific. of any University and any person whose services have been availed of by a University or any other public authority in connection with holding or conducting examinations. by whatever name called. they shall be understood of every person who is in actual possession of the situation of a public servant.-Wherever the words "public servant" occur. receiving or having received any financial aid from the Central Government or a State Government or from any corporation established by or under a Central. lecturer or any other teacher or employee. Explanation 1. (b) to furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed and t records of the identity of all its clients. or local or other public authority. Section 12 (1) prescribes the obligations on banks. industry. 12) Any person who is an office-bearer or an employee of an educational. or a member of any selection committee appointed by such Commission or Board for the conduct of any examination or making any selection on behalf of such Commission or Board. Provincial or State Act. Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned SATISHCHANDER . 11) any person who is a Vice-Chancellor or member of any governing body. social. whatever legal defect there may be in his right to hold that situation. 2002 The Prevention of Money-Laundering Act. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed. secretary or other office-bearer of a registered cooperative society engaged in agriculture. cultural or other institution. by whatever designation called. receiving or having received any financial assistance from the Central Government or any State Government.-Persons falling under any of the above sub-clauses are public servants. trade or banking. reader. 10) any person who is a chairman. or any authority or body owned or controlled or aided by the Government or a Government company as defined in section 617 of the Companies Act. professor. 2002 came into effect on 1 July 2005. in whatever manner established. Explanation 2. and where such series of transactions take place within a month.
The unpublished annexures to the Vohra Report were believed to contain highly explosive material. State Assemblies and Parliament. Vohra Committee and to secure prosecution of those involved. of all parties. Government had (through its order No. It studied the problem of the criminalization of politics and of the nexus among criminals. Vohra Report The Vohra (Committee) Report was submitted by the former Indian Union Home Secretary. 42. was subsequently added as member of the Committee. S/7937/SS (ISP)/93 dated 9 th July 93 established Committee. comprised as below.CULTURE OF CORRUPTION IN INDIA 183 above. They were connected to the military. SATISHCHANDER . The Committee was desired to submit its report within 3 months. Over the years criminals had been elected to local bodies.N. The recent activity in money laundering in India is through political party’s corporate companies and share market.N. It also discussed criminal gangs who enjoyed the patronage of politicians. It revealed that political leaders had become the leaders of gangs. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. in October 1993. MHA. and the protection of government functionaries. politicians and bureaucrats in India. Based on the recommendations of the Committee. In 1997 the Supreme Court recommended the appointment of a high level committee to ensure in-depth investigation into the findings of the N. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. Vohra. to take stock of all available information about the activities of Crime Syndicates/Mafia organisations which had developed links with and were being protected by Government functionaries and political personalities. N. Government shall determine the need. Special Secretary (Internal Security & Police). if any to establish a special organisation/agency to regularly collect information and pursue cases against such elements: 1) 2) 3) 4) 5) Home Secretary Chairman Secretary ® Member DIB Member Director CBI Member JS (PP) MHA Member Secretary The Committee was authorised to invite senior officers of various concerned Departments to gather the required information. must be maintained for ten years after the transactions finished.
4) The creation of a nodal agency to collect information regarding the activities of Mafia organisations is very essential. particularly Pakistan. If. scientific and political intelligence. ammunition. This could not have happened without these elements having been protected by the functionaries of the concerned Government departments specially Customs. as is being done by this Agency to collect vital information in regard to the investigations in the Bombay bomb blasts case. economic. and they are being used or are likely to be used by such countries for destabilising our economy. therefore. I addressed separate personal letters to each of the Members of the Committee seeking their well-considered suggestions and recommendations. It does not monitor the activities of criminal elements abroad which are mainly confined to "normal smuggling without any links to terrorist elements". R&AW will nominate an officer of suitable rank to liaise with nodal agency on a regular basis to enable expeditious follow-up action. and CBI could be made available to this nodal agency. All the existing information/data available with R&AW. The responses are briefly brought out below. however. 2) In the course of the discussions. Income Tax. into the country. Police and others. it was apparent that the activities of Memon Brothers and Dawood Ibrahim had progressed over the years. etc. I perceived that some of the Members appeared to have some hesitation in openly expressing their views and also seemed unconvinced that Government actually intended to pursue such matters.CULTURE OF CORRUPTION IN INDIA 184 1) In the first meeting of the Committee (held on 15 th July93). there is evidence to suggest that these organisations have links with intelligence agencies of other countries. Accordingly. IB. R&AW monitor the activities of certain organisations abroad only insofar as they relate to their involvement with narco-terrorist elements and smuggling arms. Secretary (R&AW) 3) The various offices abroad of this Agency have limited strength and are largely geared to the collection of military. necessary to identify the linkage and to also determine how such information could be timely collected and acted upon in future. It was. explosives. SATISHCHANDER . I had explained to the members that the Government had established the Committee after seeing the report of our intelligence and Investigation agencies on the activities/linkages of the Dawood Ibrahim gang. The present strength of the Agency’s office abroad would not permit it to enlarge its field of activities. From these various reports. leading to the establishment of a powerful network. it would become R&AWs responsibility to monitor their activities. consequently to the Bomb blasts in Bombay in March 1993.
The nexus between the criminal gangs. was merely a visitor to passenger and carrier ships to obtain liquor and cigarettes for selling the same at a profit. To elucidate this point. It has been stressed that when such action is not timely and effectively taken. If MIRCHI is investigated. It would be useful institute a fresh study by CBI. Income-Tax etc. Hired assassins have become a part of these organisations. The growth of MIRCHI is due to the fact that the concerned Enforcement agencies did not timely taken action against him and. Even in the smaller towns and rural areas. procuring such properties at cheap rates by forcing out the existing occupants/tenants etc. the provisions of law in regards to economic offences are weak. 4. 2. The existing criminal justice system. later. In the last 3-4 years. bureaucracy and politicians has come out clearly in various parts of the country. there are insurmountable legal difficulties in attaching/confiscation of the property acquired through Mafia activities. A report on the nexus between the Bombay City Police and the Bombay under-world was prepared by CBI in 1986. In cases where a crime Syndicate has graduated to big business. the money power thus acquired is used for building up contacts with bureaucrats and politicians and expansion of activities with impunity. as that of MIRCHI where SATISHCHANDER . muscle-men have become the order of the day.forcibly occupying lands/buildings. It has been suggested that the menace has first to be tackled at the local level where the agencies of the State and the concerned Central Enforcement Agencies like Customs and Excise. on the basis of which appropriate administrative/legal measures could be initiated. he has many bank accounts and has been paying lakhs of rupees to his carriers. An organised crime Syndicate/Mafia generally commences its activities by indulging in petty crimes at the local level. which was essentially designed to deal with the individual offences/crimes. Over time. police. it would be necessary to conduct detailed investigations into its assets. in port towns. this perhaps became difficult on account of the enormous patronage that he had developed.CULTURE OF CORRUPTION IN INDIA 185 Director CBI 1. 3. Director CBI has observed that there are many such cases. In the bigger cities. the Director CBI has given example of IQBAL MIRCHI of Bombay who till the late 80s. mostly related to illicit distillation/gambling/organised seta and prostitution in the larger towns. would be required to take effective action. CBI has reported that all over India crime Syndicates have become a law unto themselves. both movable and immovable. The money power is used to develop a network of muscle-power which is also used by politicians during elections. their activities involve smuggling and sale of imported goods and progressively graduate to narcotics and drug trafficking. the lower functionaries of the concerned State and Central Departments/organisations start overlooking the activities of the crime Syndicates. is unable to deal with the activities of the mafia. Mirchi acquired real estate valuing crore of rupees. the entire patronage enjoyed by him and his linkages will come to light. the main source of income relates to real estate.
Trial procedures should be simplified and hastened.CULTURE OF CORRUPTION IN INDIA 186 the initial failure has led to the emergence of Mafia giants who have become too big to be tackled. The CBI can do this within a short period. A detailed case study of10-15 case would provide useful information regarding the administrative/legal measures which would be required to be taken to effectively tackle the functioning of Mafia organisations. He has recommended immediate attention to: - SATISHCHANDER . a Mafia leader. the director CBI has stated that the effective monitoring of the telephonic calls made from India/received from abroad would yield useful information and. ii. Identification of offences and awards of deterrent punishments including preventive detention. Director IB 1. Such a practice obtains in U. v. 5) Director CBI has stated that the main mode of communications/contacts of the Mafias operating at the international level is through telephonic communications. DIB has reported that due to the progressive decline in the values of public life in the country "warning signals of sinister linkage between the underworld politicians and the bureaucracy have been evident with disturbing regularity. Government may grant sanction to monitor certain telephonic connections. iv. Suitable amendments should be introduced in the existing laws to more effectively deal with the activities of Mafia organisations. vi. 6) The assistance of Banks in an essential input. Establishment of Special Cells in the States CIDs and CBI. 7) Concluding his analysis. this could also include review of the existing laws. Surveillance should be carried out through finger printing. The Bank Managers can be placed under obligations to render reports on all heavy transactions and suspicious accounts to the Enforcement agencies. Referring to the useful leads emerging from the investigations into the activities of Dawood Ibrahim. Director CBI has made the following suggestions to bring under control the activities of the criminal Syndicates: i.. etc. vii. Monitoring mechanisms should be established at the State and Central levels. photographs and dossiers. K. iii. as exemplified by the exposures of the networks of the Bombay Bomb Blast case". for this being done.
Like the Director CBI. such elements have acquired considerable political clout seriously jeopardising the smooth functioning of the administration and the safety of life and property of the common man. vi. especially in the States of J&K. politicians and other sensitively located individuals on the other. having international linkages. Haryana and UP. economic. iii. Punjab. these gangs enjoy the patronage of local level politicians. get themselves elected to local bodies. Assessment of the impact of these linkages on the various institutions viz. In certain States. law and order and the administrative apparatus. Some of these syndicates also have international linkages. iii. v. The big smuggling Syndicates. Identification of the nexus between the criminals/mafias and antinational elements on the one hand and bureaucrats. over the years. Certain elements of the mafia have shifted to narcotics. Necessary action to show effective action to counteract/neutralise the Mafia activities. political.CULTURE OF CORRUPTION IN INDIA 187 i. developed an extensive network of contacts with bureaucrats/Governments functionaries at the local levels. if any. These Syndicates have acquired substantial financial and muscle power and social respectability and have successfully corrupted the Government machinery at all levels and yield enough influence to make the task of investigating and prosecuting agencies extremely difficult. drug mafias.. between the domestic linkages with foreign intelligence. i. the DIB has also stated that there has been a rapid spread and growth of criminal gangs. have spread into and infected the various economic and financial activities. The virus has spread to almost all the centres in the country. cutting across party lines and the protection of Government functionaries. drugs and weapon smuggling and established narco-terrorist networks. Gujarat and Maharashtra. The Bombay bomb blast case and the communal riots in Surat and Ahmedabad have demonstrated how the Indian underworld has been exploited by the Pak ISI and the latter’s network in UAE to cause sabotage. causing a sense of despair and alienation among the people. like Bihar. The cost of contesting elections has thrown the politicians into the lap of these elements and led to a grave compromise by officials of the preventive/detective system. circulation of black money and operations of a vicious parallel economy causing serious damage to the economic fibre of the country. armed senas. iv. ii. politicians. Some political leaders become the leaders of these gangs/armed senas and. even the members of the judicial system have not escaped the embrace of the mafia. subversion and communal tension in SATISHCHANDER . the DIB has given the following examples: - 1. Political and legal constrains in dealing with the covert/illegal functioning of the linkages. including Hawala transactions. In this context. State Assemblies and the National parliament. ii. Identification of the nature and dimensions of these linkages and the modus operandi of their operations. Nexus. drug peddlers and economic lobbies in the country which have. including the foreign intelligence agencies. iv. Resultantly. media persons and strategically located individuals in the non-State sector. the electoral. over the years. the coastal and the Border States have been particularly affected. smuggling gangs.
Central Board of Excise & Customs (CBEC) Interalia. it is assisted by the Director General of Revenue Intelligence (DGR) and Directorate General of Anti-Evasion (DGAE). political circles. especially the views expressed by Director CBI and DIB. with the result that a plethora of information fails to get specific and purposeful attention needed for the exposure of the linkages". pushing the State apparatus into irrelevance. 2. In this and other tasks. the various intelligence/investigation/enforcement agencies collect. Nonetheless. 1. and the DGAE with Excise duty evasion. It is. These agencies use such available inputs "only within the narrow confines of their work charter and choose not to take undue cognisance and follow-up action. over time. 1. in turn. DBI has stated that the network of the Mafia is virtually running a parallel Government. This will enable the Nodal Group to provide useful leads to the various agencies and. CBEC is responsible for the prevention of smuggling. would simultaneously cast on them the onus of sharing such inputs to a nodal outfit whose job will be to process this information for attention of a single designated authority". a progressive data will get generated "to facilitate periodic reviews and analysis which could then be passed to a designated body". In this context. information about the nexus between the bureaucracy and politicians with Mafia gangs. in the normal course of their functioning. The investigations into the Bombay bomb blast cases have revealed extensive linkages of the underworld in the various governmental agencies. leave alone sharing with any other agencies".CULTURE OF CORRUPTION IN INDIA 188 various parts of the country. all these agencies "function within their own cocoons. Central Board of Direct Taxes (CBDT) Income Tax Department administers the Income Tax Act. ii. Wealth Tax Act. business sector and the film world. it is evident that the muscle power of the crime Syndicates is sustained by their enormous financial power which. etc. The Department of Revenue functions through the following major agencies: i. necessary to immediately have an institutionalised system which "while giving total freedom to the various agencies to pursue their charter of work. Thus. SATISHCHANDER . I held detailed personal discussions with Secretary (Revenue) under whose control operate the various economic intelligence/investigative/enforcement agencies. Presently. As would be seen from the afore-stated brief discussions. The DGRI deals with the evasion of customs duties. It is thus most immediately necessary that an institution is established to effectively deal with the menace. there is no system/mechanism which is specially designated to collect and collate intelligence pertaining to the linkages developed by crime Syndicates/Mafia with the governmental set up. therefore. smugglers and the underworld. is secured by the Mafia elements by committing economic offences with impunity. In this connection. DIB has stated: i.
the following significant observations were made: i.CULTURE OF CORRUPTION IN INDIA 189 iii. Assisting the various enforcement agencies in strengthening the intelligence gathering infrastructure and building up their capability for storage and retrieval of intelligence. I explained a Secretary (Revenue) the broad considerations on account of which the government had set up a Committee to look into the linkages developed by the Mafia elements. Narcotics Control Bureau (NCB) The NCB is responsible for the administration of the Narcotics Drugs and Psychotropic Act. During the course of the discussions with Secretary (Revenue) and his aforesaid principal officers. I arranged a meeting of the Committee (30th Aug 93) to hear the view of Secretary (Revenue). Member (Customs) and Director (Enforcement). Interalia. collection of intelligence relating to foreign exchange offences. Central Economic Intelligence Bureau (CEIB) The CEIB is responsible for coordinating and strengthening the intelligence gathering activities and the investigative and enforcement actions of the various agencies responsible for investigation into economic offences and the enforcement of economic laws. who was accompanied by Chairman CBDT. ii. Chairman CBDT and the Economic Intelligence Council in the Department of Revenue. Conducting investigative and analytical studies in difficult areas of black money operations and monitoring indicators thereof. and readily agreed with my request to attend a meeting of the Committee along with his concerned officers for a full discussion on the issues before the Committee. the Chairman CBEC. The CEIB is expected. 1. DGRI comes across information of linkages between crime Syndicates and Governmental SATISHCHANDER . to detect violations of Customs & Excise laws. He informed me that he had recently held a meeting with senior representatives of the RBI. b. Identification of major sources generating black money. Enforcement Directorate This Directorate is concerned with the enforcement of the investigation and penal provision of the Foreign Exchange Regulation Act. Accordingly. enquiries into suspected violations of the provisions of FERRA. i. It is responsible for coordination with different Central and State Government Departments/Ministries and the various Central and State law enforcement agencies for the implementation of NDPS Act. etc. directing and developing intelligence about such sources. DGRI. The CEIB is responsible for maintaining liaison with the concerned Departments/Directorates both at the Centre and at the State levels and is expected to provide overall direction to the investigative agencies under the Department of Revenue. In the normal course of his work. to attend to the following tasks: a. planning and coordinating action and operations against such sources. c.
functioning of the Government lawyers is grossly inadequate. As in the case of DGRI. even in the Border States. the DGRI has not been allowed to enforce surveillance on the telephonic communications of political personalities. amongst which are: 1. all this results in a low percentage of convictions and mild punishments. iv. the work of the enforcement agencies cannot be effective. However. and those under the MHA and Cabinet Secretariat. the results are to the contrary.CULTURE OF CORRUPTION IN INDIA 190 ii. currency amounting crore of rupees in being seized. they cannot be expected to maintain interest in vigorously pursuing action against the activities of such elements. viii. invariably packed in suitcases and gunny bags. Indirect information also becomes available to the CBDT about linkages. the NCB have been asked to gather further information so that the real king-pins in the narcotics trade can be apprehended. the CBDT do not follow up such leads. not being directly relating to their charter of responsibilities. functionaries etc. While the NCB is specifically responsible for booking drug traffickers. SATISHCHANDER . The Directorate of Enforcement comes across information on linkages and passes it on to the CBI and IB. Of late. iii. cases are not heard timely. Under the criminal justice system is geared up. This is perhaps due to the fact that each concerned organisation/agency is anxious to protect its sources and is apprehensive that a full sharing of all information might jeopardise its operations. with the increasing importance being given to Narco-terrorism. The field officers of the various agencies of the Revenue Departments are often pressurised by senior government functionaries/political leaders apparently at the behest of crime Syndicates/Mafia elements. It is necessary that the directorates of prosecution in the State Governments are urgently brought under the control of the State Police. The utter inadequacy of the criminal system. his officers’ focus primarily on the information relating to the violation of the laws relating to their charter. on account of premature leakage of information. The Banks are reluctant to pass on information about account holders to CBDT and do not allow their officers to hold exploratory enquiries. Secretary (Revenue) stated that he field officers of his various Departments were faced with various problems. a niggardly response by the latter and prolonged delays in the disposal of cases before Courts seriously hampers the effective functioning of the NCB. vii. While a certain amount of information is shared between the various organisations under the Department of Revenue. ix. i. Unless the field level officers are offered effective protection. vi. Senior Police officers. Information about the activities of drug traffickers is passed on by DG NCB to the concerned State Governments and their agencies. While the NDPS act prescribes the award of deterrent punishments of offences. Director (Enforcement) and DG NCB authorised to undertake phone tapping of suspected offenders. are not trained or adequately informed of the work done by the directorate of Enforcement. While DGRI. the exchanges are sporadic and limited. Here again. ii. As following up of such information is not within the charter of duties of DGRI. v. especially in regard to money laundering operations.
prevention of narcotics. from which they source their procurement of weapons etc. Consequent to the Committees discussions with the Secretary (Revenue) and his principal officers. I held a series of further personal discussions with the Secretary (Revenue). Secretary (Revenue) has stated that a possible approach to effectively liquidating the linkages developed by the crime Syndicates would be to mercilessly prosecute the offenders without succumbing to any pressure whatsoever. Terrorists indulge in narcotics trade to amass huge funds. the level of corruption is of a very high order in this area of functioning and enormous pressures are brought to bear even when subordinate officials are posted away. in the course of their normal activities. which are briefly as below:- 1.) In the narcotics arena. As a result of the discussions held by the Committee with Secretary (Revenue) and his principal officers. ii. smuggling etc. the financial stakes are astronomically high. The various agencies under the Department of Revenue do not specifically search on the linkages of crime Syndicates. they pass it on to the concerned agency. While the Department of Revenue has initiated a number of steps to deal with the activities of smugglers and to plug loopholes in the system. is generally not put to any use unless it is required to the passed on to the passed on to the other intelligence agencies outside the Department of Revenue. 1. He is of the view that once the offenders are deterrent 1. sensitive Collect orates in the Central Excise etc. At my request Secretary (Revenue) gave me a personal note indicating his views. The linkages developed by crime syndicated get generally confirmed when pressure is mounted on the concerned agencies not to take action against the offenders or to go slow in the cases against them. his officers could pursue the same. whenever they come into possession of any information regarding the violation of any other law. which includes cultivation of opium. ii. He suggested that if the information available with other agencies is passed on to him. While. SATISHCHANDER . manufacture of alkaloids. in various foreign currencies. Narcotics trade has a world-wide network of smugglers who also have close links with terrorists. Pressures are also exerted whenever corrupt and undesirable officers are shifted from sensitive assignments (Preventive Customs Divisions at the Airports. Consequently. Such information is occasionally passed on by these agencies to the CBI and or IB. The information gathered by the various agencies under the Revenue Department. especially when the shift of an officer adversely affects the interests of those who are making easy money. iii. Chairman CBDT stated that insofar as the functioning of his officers is concerned. such information is not pursued on the score that it is not directly related to offences falling within the laws administered by these agencies.CULTURE OF CORRUPTION IN INDIA 191 1. information on the linkages of the crime Syndicates sometimes become available. iii. while gathering intelligence on offences relating to the laws administered by them. iv. it is evident that: i. i. Such pressures are mounted either immediately after a raid is conducted or at the time when prosecution is about to be initiated.
Sharing of such information is presently of an occasional nature no evidence is available of the same having been put to any operational use (the only mentionable exception perhaps related to the recent investigations into the activities of Memon Brothers and the Dawood gang on which several of our agencies were put to work collectively. it is apparent that crime Syndicate and Mafia organisations have established themselves in various parts of the country. inefficient and corrupt elements in the various organisations must be weeded out and Government should take stringent action against officers who seek to exert political pressure for securing postings and appointments of their choice. giving them the clear mandate to ruthlessly punish the offenders. I asked each of the Members as well as the Secretary (Revenue) and his principal officers about their views regarding the establishment of a Nodal Agency for the collection.. On the basis of the extensive experience gained by our various concerned intelligence. the various agencies presently in the field take care to essentially focus on their respective character of duties. their influence and strength will start declining.CULTURE OF CORRUPTION IN INDIA 192 punished under the law. collation and operationalisation of all 1. While the CBI and IB and the various agencies under the Department of Revenue. all cases before the Courts should be speedily concluded without the judicial officers coming under any pressure or succumbing to temptations. ii. wherever located. political leaders and others to be able to operate with impunity (as recently exemplified by the activities of the Memon Brothers and Dawood Ibrahim). smugglers etc. Any agency which comes across information regarding linkages is also apprehensive that the sharing of such information may jeopardize its own functioning through premature leakage. it has no mandate to immediately pass it on to one or more agencies. In slum. officers with impeccable integrity should be posted to head the various organisations which are responsible for taking action against tax offenders. From the above narrated analysis. as also of all those who support them. 1. 1. come across information relating to the linkages of crime Syndicates/Mafia organisations. in their normal course of functioning. In the discussions in the Committee. the following conclusions can be drawn: i. there is presently no system under which they are expected to pass on such information to an identical nodal agency. SATISHCHANDER . He has emphasised that for this objective being achieved it will be extremely necessary that: the entire government machinery involved in taking action against the crime Syndicate is allowed to perform its duties with total freedom. action must be taken to ensure the objective functioning of Courts which deal with the trial of economic offences. such officers should be selected with utmost care and provided sufficiently long tenures. Even where an agency comes across certain information about the linkages of crime Syndicates. dealing with the infringement of laws relating to their organisations and consciously putting aside any information on linkages which they may come across. iii. The various crime Syndicates/Mafia organisations have developed significant muscle and money power and established linkages with governmental functionaries. investigative and enforcement agencies.
is under the department of Personnel. The other approach recommended is to set up a system under which the Head of the Various Intelligence and Revenue Agencies shall meet on a regular basis and exchange vital information. In this context. Under all circumstances. which is the principal criminal investigation agency of the Centre. which is even otherwise engaged in monitoring various political activities having a bearing on national security. Under the existing arrangements for the transaction of Government business. The Top secret Cell will share all tactical and operational information with other concerned agencies on "need to know and act basis". The DIB has stated that while considering the establishment of any nodal mechanism "It must be appreciated that the problems has enormous impact on national security and is indeed highly political in nature". Such sharing will be through personal communication in writing. Any leakage of such information would not only jeopardize potential action against the powerful criminal Syndicate. ii. the Ministry of Home Affairs is responsible for all matters relating to internal security. If the proposition in the preceding Para is sustained. He has recommended that "an exclusive Top Secret Cell be established in the IB to function as Nodal Group for receipt of inputs from various security/revenue agencies which reveal political-bureaucrat-underworld nexus. 2. which relates to the activities of crime Syndicates. Broadly. Investigation and Enforcement agencies dealing with the implementation of economic laws report to the Revenue Department under the Ministry of Finance. In the background of the discussions so far. The CBI. R&AW functions under the Cabinet Secretariat and deals with external intelligence. It is for this reason that the Intelligence Bureau is a part and parcel of this Ministry (It is only by tradition that the DIB reports directly to authorities outside MHA). a decision will need to be taken regarding the Department/Ministry under which the nodal set-up should be located. In my view. The various Intelligence. but may also be susceptible to political exploitation. 2. there does not appear to be need for any further debate on the vital importance of setting up a nodal point to which all existing Intelligence and Enforcement agencies (irrespective of the Department under which they are located) shall promptly pass on any information which they may come across. the following approaches have been mooted: i. it will have been ensured that the information available with the nodal set-up is SATISHCHANDER . 1. considerable care would have to be taken to ensure that the information which becomes available to the Nodal Cell is handled by a very senior and trust-worthy officer. 1.CULTURE OF CORRUPTION IN INDIA 193 information relating to the activities of crime Syndicates. without there being any leakage. he has suggested that the nodal set up should be under the IB. while operating difficulties could be sorted out through periodic meetings among the heads of these organisations to be chaired by the Home Secretary".
After HM has pursued this Report. At that stage other concerned senior officer would be taken into confidence. and leakage whatever about the linkages of crime Syndicate with senior Government functionaries or political leaders in the States or at the Centre could have a destabilising effect on the functioning of Government. Further. 2011 Indian anti-corruption movement The 2011 Indian anti-corruption movement refers to a series of protests against the Government of India intended to seek strong legislation against graft. I decided to personally dictate this Report. One copy each is being submitted to MOS (IS) and HM. the Government would also have to carefully consider and prescribe the authorities to whom the Home Secretary will report in regard to the sensitive information received by the nodal set-up as well as regarding the operations to be launched by one or more of the concerned agencies to apprehend. 43. before the issues are discussed with him. I did not consider it desirable to burden the Members of the Committee with any further involvement beyond the views expressed by them. 3. with Secretary (Revenue). which SATISHCHANDER . Considering the nature of the issues involved. 3. otherwise known as corruption. it would be logical it the nodal set-up is under the MHA.CULTURE OF CORRUPTION IN INDIA 194 used strictly and entirely for stringent action against the crime Syndicates. It will also need to be ensured that the nodal set-up functions with extreme secrecy. Needless to say. The protests have centred on a proposed bill. The manner in which such information is operationalised would need to be confidentially discussed with the concerned Head of Organisations and. directly handed by the Home Secretary who can be assisted by one or more selected officers of the Ministry for the collation and compilation of all information received from IB. After an initial discussion at the level of MOS (IS) and HM I could send a copy of this Report to FM. without allowing any scope whatever of its being exploited for political gain. In the normal course. I request him to consider discussing further action with finance Minister. it would not appear prudent to entrust the functioning of the Nodal Cell to any level below that of the Home Secretary. Accordingly. The emerging approach could therefore be got approved from Prime Minister before being implemented. investigate and prosecute the offenders. the third copy being retained by me. MOS (IS) and myself. as necessary. called the Jan Lokpal Bill. CBI. I have prepared only three copies of this report. 1. R&AW and the various agencies under the Department of Revenue. this Report would have been drafted by the Member Secretary and finalised by the Committee. In the preceding context. As such. 2.
Following Hazare's initial. no more than a powerless advisory body in the Indian bureaucracy. The movement has gained momentum in particular since 5 April 2011. the Lokayukta. He held a hunger strike on 4 June when his demands were not met. He also demanded that the nation's wealth held in foreign banks should be brought back and that India should sign the United Nations Convention against Corruption. They believe that the changes would make the body intended to oversee the issue. when Anna Hazare. Further. Ramdev demanded that untaxed money invested abroad should be declared to be the wealth of the nation. He had demanded the creation of a joint drafting committee for the bill. The figurehead for these protests was Swami Ramdev and their aim was to highlight the need for strong legislation to bring back to the country what has been called "black money" deposited abroad. in foreign banks should be declared a crime against the state. comprised of both members from "civil society" and government representatives. The protests are unusual in India as they have no political affiliation and the protesters have been very hostile to any political party trying to grab the initiative to meet its own political goals from the activists. 10 million Indians would participate in the Satyagraha on 4 June 2011 throughout India. a second major protest saw controversial events take place at the Ram Lila Maidan. The protesters are of the opinion that the government desires to dilute proposals contained in the original draft of the Jan Lokpal bill.CULTURE OF CORRUPTION IN INDIA 195 the protestors believe could address the issue if it was suitably worded and enforced. who is a Gandhi an. first went on a hunger strike which he called a "fast unto death". candlelight vigils and rallies. that the act of caching money. went on his initial hunger strike when talks designed to consider the issues broke down. The second struggle of independence has started. Protests included fasts. According to Ramdev. The protests led to the creation of a movement that saw protests being organized in various cities and towns of India. much publicized protest action. which is alleged to have been obtained illegally. Hazare. It is estimated that around US$ 350 billion to US$ 1400 billion worth of illegal money is in foreign banks. The protests to some extent have similarities in methodologies to Jayaprakash Narayan's Bihar Movement (commonly called the JP Movement) of 1974 “Mahatma Gandhi fought for our freedom but we are yet to achieve real independence. New Delhi on 4 June 2011. a prominent activist. We are ready to sacrifice our lives but will not buckle under pressure” -Anna Hazare SATISHCHANDER .
studied the problem of the criminalization of politics and of the nexus among criminals. including the 2G spectrum scam. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. These involved various Ministers and also members of the Armed Forces. They were also connected to the military. Adarsh Housing Society Scam. They led also to popular. Over the years criminals had been elected to local bodies. Activists have used this to uncover graft cases against various politicians and bureaucrats. Various scandals were discovered in the period 2010-2011. one consequence being that some of those activists have been attacked and even killed. The Jan Lokpal Bill is a proposal to establish an independent body to investigate cases of corruption within a year and to ensure a speedy prosecution within two years of an investigation being started. It allows Indian citizens (except those living in Jammu and Kashmir) to request information.CULTURE OF CORRUPTION IN INDIA 196 Background Issues regarding corruption in India have become more prominent in recent years. protectionism. Extensive regulation.N. and the Commonwealth Games scam. It also discussed criminal gangs who enjoyed the patronage of politicians – of all political parties – and the protection of government functionaries. The country was subject to socialist-inspired economic policies between the 1950s and the late 1980s. SATISHCHANDER . submitted by the former Indian Union Home Secretary N. Vohra. for a fixed fee of Rs 10. politicians and bureaucrats in India. The Vohra Report of 1993. The Right to Information Act of 2005 has helped civilians work effectively towards tackling corruption. It revealed that political leaders had become the leaders of gangs. and they demonstrated how entrenched corruption had become in India. and public ownership led to slow growth. and even the Parliament. State Assemblies. non-political movements campaigning to fight graft via new legislation. Forbes commented in 2007 that the system of bureaucratic controls called License Raj was often at the core of corruption. from a "public authority" (a body of Government or "instrumentality of State") which is required to reply expeditiously or within thirty days.
has transformed itself from a civil organization to a full-fledged political party. India against Corruption is a movement created by citizens from a variety of professions and statuses to work against corruption in India. yet they were never passed by the Indian Parliament. it obtained its first elected post. and Bangalore. The primary focus of IAC movement is to ensure a strong Local bill. SATISHCHANDER . Rights and Action (ASTRA) is an NGO focused on grassroots work to fight corruption in Karnataka. when Jayaprakash Narayan won the election for the Kukatpally Assembly Constituency in Andhra Pradesh. In 2008. The IAC is a strictly voluntary organization and its participants are bound by the IAC code of conduct. Jaago Re! One Billion Votes is an organization originally founded by Tata Tea and Janaagraha to increase youth voter registration. Anti-corruption organizations A variety of organizations have been created in India to actively fight against corrupt government and business practices. including corruption. After a fast by veteran social activist Anna Hazare and widespread protests by citizens across India the Government of India constituted a 10-member Joint Committee of ministers and civil society activists to draft an effective Jan Local Bill. Tamil Nadu. They have since expanded their work to include other social issues. Notable organizations include: 5th Pillar is most known for the creation of the zero rupee notes. Association for Social Transparency.CULTURE OF CORRUPTION IN INDIA 197 India against corruption India against Corruption (IAC) is a citizen's movement to demand strong anti-corruption laws. a valueless note designed to be given to corrupt officials when they request bribes. Lokpal bills were introduced several times since 1968. the Lok Satta Party. The party has fielded candidates in Andhra Pradesh. It is currently headed by Anna Hazare. One organization. the Lok Satta Movement.
key institutions include the Supreme Court. In December 2006. It has also started addressing corruption in the police by mandating the establishment of a police commission to look into these matters and has ruled that corrupt officers can be prosecuted without government consent. the Central Bureau of Investigation (CBI). the Central Vigilance Commission (CVC). the Office of the Controller & Auditor General (C&AG). In other instances. judges have taken on a stronger role in responding to public interest litigation over official corruption and environmental issues. in 2007 in Uttar Pradesh.CULTURE OF CORRUPTION IN INDIA 198 44. For example. Present anti-corruption systems & watch dog agencies Central Government level There are various bodies in place for implementing anticorruption policies and raising awareness on corruption issues. as confirmed by the Bertelsmann Foundation Report 2008. the Supreme Court ruled that prosecutors do not need prior permission to begin proceedings against politicians facing corruption charges5. The Supreme Court The Supreme Court has taken a stronger stance against corruption in recent years. It has the status of an autonomous body. it challenged the state governor’s powers to pardon politically connected individuals based on arbitrary considerations. Central Vigilance Commission (CVC) Central Vigilance Commission (CVC) is an apex Indian governmental body created in 1964 to address governmental corruption. and the Chief Information Commission (CIC). It has challenged the powers of states in several instances. free of control SATISHCHANDER . At the federal level. in a landmark ruling.
executing. In December 2007. Nittoor Srinivasa Rau was selected as the first Chief Vigilance Commissioner of India. It is supposed to check corruption in more than 1500 central government departments and ministries. However. But given the constraints of manpower. to advise and guide Central Government agencies in the field of vigilance. The CVC has an online whistle-blower complaint mechanism available on its website. Santhanam. CVC is a very small set up with staff strength less than 200. The CVC has the power to undertake inquiries or investigations of transactions involving certain categories of public servants. industries and banks. The CVC is not an investigating agency. 1964 on the recommendations of the Committee on Prevention of Corruption. the CVC is working in collaboration with Transparency International India on introducing Integrity pacts in all state-owned public sector companies. More recently. SATISHCHANDER . such number is really small. it has to depend on the vigilance wings of respective departments and forwards most of the complaints for inquiry and report to them. headed by Shri K. reviewing and reforming their vigilance work. The CVC can investigate complaints against high level public officials at the central level. It also has supervisory powers over the Central Bureau of Investigations. Therefore. Central Vigilance Commission: CVC is the apex body for all vigilance cases in Government of India. charged with monitoring all vigilance activity under the Central Government of India. Railways. It directly enquires into a few complaints on its own.CULTURE OF CORRUPTION IN INDIA 199 from any executive authority. system improvements. and it either gets the investigation done through the CBI or through the Departmental Chief Vigilance Officers. in cases where they are suspected of having committed an offence under the Prevention of Corruption Act. it does not have adequate resources commensurate with the large number of complaints that it receives. and Income Tax etc. While it monitors the progress of these complaints. The Annual Report of the CVC not only gives the details of the work done by it but also brings out the system failures which lead to corruption in various Departments/Organizations. there is delay and the complainants are often disturbed by this. some of them being as big as Central Excise. The CVC is mandated to investigate public sector corruption at the federal level and not at the state level. various preventive measures and cases in which the Commission's advises were ignored etc. especially when it suspects motivated delays or where senior officials could be implicated. The only investigation carried out by the CVC is that of examining Civil Works of the Government which is done through the Chief Technical Officer. It was set up by the Government of India in February. the Commissioner issued a directive to this effect which has resulted in 32 public sector undertakings having adopted an integrity pact. and advising various authorities in central Government organizations in planning.
Experience shows that CVC’s advice to initiate prosecution is rarely accepted and whenever CVC advised major penalty. the final decision lies with the government. which are directly enquired into by the CVC. Even in those cases. CVC cannot direct CBI to initiate enquiries against any officer of the level of Joint Secretary and above on its own. The CBI has to seek the permission of that department. Only in exceptional cases. CVC mentions these cases of non-acceptance in its monthly reports and the Annual Report to Parliament. If there is an involvement of a politician in any case. Central Government Departments seek CVC’s advice on various corruption cases. It does not have powers over politicians.CULTURE OF CORRUPTION IN INDIA 200 CVC is merely an advisory body. CVC can hardly be treated as an effective deterrent against corruption. it can only advise government. Many a times. CVC does not have administrative control over officials in vigilance wings of various central government departments to which it forwards corruption complaints. SATISHCHANDER . Though the government does consult CVC before appointing the Chief Vigilance Officers of various departments. It does not have any direct powers over departmental vigilance wings. however. But these are not much in focus in Parliamentary debates or by the media. Often it is seen that CVC forwards a complaint to a department and then keeps sending reminders to them to enquire and send report. it was reduced to minor penalty. It deals only with vigilance or disciplinary matters. Also. the departments just do not comply. which obviously would not be granted if the senior officers of that department are involved and they could delay the case or see to it that permission would not be granted. the officials below CVO are appointed /transferred by that department only. CVC could bring pressure on the Department to revoke orders but again such recommendations are not binding. CVC does not have any really effective powers over them to seek compliance of its orders. However. CVC does not have powers to register criminal case. CVC could at best bring it to the notice of the Government. if the CVO chooses to bring it to the notice of CVC. There are several cases of serious corruption in which officials and political executive are involved together. Therefore. they are free to accept or reject CVC’s advice.
CBI is under administrative control of DOPT rather than CVC. The Commission consists of: (i) a Central Vigilance Commissioner -Chairperson. Therefore. reviewing and reforming their vigilance work. though the leader of the Opposition is a member of the Committee to select CVC and VCs. But the Committee only considers names put up before it and that is decided by the Government. The present status of the CVC is that came into force the CVC Bill that was passed by both houses of Parliament in 2003 and the President gave its assent and the Central Vigilance Commission Act 2003 (No45 0f 2003). Besides. The appointments are opaque. and (ii) not more than two Vigilance Commissioners – Members. these supervisory powers have remained ineffective.CULTURE OF CORRUPTION IN INDIA 201 Appointments to CVC are directly under the control of ruling political party. the Government of India has authorized the Central Vigilance Commission as the "Designated Agency” to receive written complaints for disclosure on any allegation of corruption or misuse of office and recommend appropriate action. the resolution on Public Interest Disclosure and protection of Informer” dated April 2004. which is manned by officials from the same department (barring a few which have an outsider as Chief Vigilance Officer. SATISHCHANDER . though CVC is relatively independent in its functioning. it neither has resources nor powers to enquire and take action on complaints of corruption in a manner that meets the expectations of people or act as an effective deterrence against corruption. executing. monitoring all vigilance activity under the Central Government and advising various authorities in Central Government organizations in planning. However. Departmental Vigilance Wings: Each Department has a vigilance wing. The Central Vigilance Commission (CVC) is conceived to be the apex vigilance institution. all the officers under him belong to the same department). CVC Act gives supervisory powers to CVC over CBI. free of control from any executive authority. In addition. However. CVC does not have the power to call for any file from CBI or to direct them to do any case in a particular manner.
the complaint are expected to be enquired into by the same officer. (v) exercise a general check and supervision over vigilance and anti-corruption work in Ministries or Departments of the Govt. of India and other organizations to which the executive power of the Union extends. is suspected or alleged to have acted for an improper purpose or in a corrupt manner.e. (iv) tender independent and impartial advice to the disciplinary and other authorities in disciplinary cases. (ii) review the progress of investigations conducted by the DSPE into offences alleged to have been committed under the PC Act. or offence under CRPC for certain categories of public servants and to give directions to the DSPE for purpose of discharging this responsibility. investigation. especially in the Ministries. Since the officers in the vigilance wing of a department are from the same department and they can be posted to any position in that department anytime. So. There are indeed examples of such absurdity. Even if he recuses himself from such inquiries. Even if someone complaints against that officer to the CVC or to the Head of that Department or to any other authority. if some citizen complaints against that officer. appeal. (iii) undertake an inquiry or cause an inquiry or investigation to be made into any transaction in which a public servant working in any organization. 1988. While in vigilance. still they have to be handled by those who otherwise report to him. it is impossible to enquire into that complaint because an officer who is in vigilance today might get posted under that senior officer some time in future. they try to scuttle all cases against SATISHCHANDER . review etc. involving vigilance angle at different stages i. inquiry. the complaint is forwarded by all these agencies and it finally lands up in his own lap to enquire against himself. to which the executive control of the Government of India extends. and (vii) undertake or cause an inquiry into complaints received under the Public Interest Disclosure and Protection of Informer and recommend appropriate action. some officials double up as vigilance officials. It means that an existing official is given additional duty of vigilance also. (vi)chair the Committee for selection of Director (CBI).CULTURE OF CORRUPTION IN INDIA 202 The power and functions of the Central Vigilance Commission are to: (i) exercise superintendence over the functioning of the Delhi Special Police Establishment(DSPE) with respect to investigation under the Prevention of Corruption Act. In some departments. If a complaint is received against a senior officer.. Director (Enforcement Directorate) and officers of the level of SP and above in DSPE. There have been instances of the officials posted in vigilance wing by that department having had a very corrupt past. it is practically impossible for them to be independent and objective while inquiring into complaints against their colleagues and seniors.
the lower house of the Parliament. The PAC is formed every year with a strength of not more than 22 members of which 15 are from Lok Sabha. Public Accounts Committee The Public Accounts Committee (PAC) is a committee of selected members of Parliament. None of the 22 members shall be a minister in the government. Therefore. for the auditing of the expenditure of the Government of India. since the C & AG has no authority to ensure compliance with its recommendations.CULTURE OF CORRUPTION IN INDIA 203 themselves. The C & AG has produced several reports on state departments such as railways. These reports have revealed many financial irregularities. Departmental vigilance does not investigate into criminal aspect of any case. the government often fails to implement the reports’ proposals. it is practically impossible for them to enquire against senior officials of that department. SATISHCHANDER . where cases are closed for consideration. suggesting a lack of monitoring of public expenses. poor targeting and corrupt practices in many branches of government. telecommunications. They also do not have any powers against politicians. with offices of Accountant Generals (AG) in all states. It does not have the powers to register an FIR. However. The Comptroller and Auditor General The Office of the Comptroller and Auditor General (C & AG) are praised by the 2007 Global Integrity Report for being independent and well-staffed. the upper house of the Parliament. the vigilance wing of any department is seen to soft-pedal on genuine complaints or used to enquire against “inconvenient" officers. public sector enterprise. constituted by the Parliament of India. and 7 from Rajya Sabha. They also turn vigilance wing into a hub of corruption. Since the vigilance wing is directly under the control of the Head of that Department. and tax administration.
of India. 26 have officially constituted information commissions to implement the RTI Act. universities. The jurisdiction of the SPE extended to all the Union Territories and could be extended also to the States with the consent of the State Government concerned. police. Of India's 28 states. The Delhi Special Police Establishment Act was therefore brought into force in 1946. State information commissions have also been opened. This Act transferred the superintendence of the SPE to the Home Department and its functions were enlarged to cover all departments of the Govt. thus giving practical shape to the 2005 Right to Information (RTI) Act. The Central Bureau of Investigation Introduction The Central Bureau of Investigation traces its origin to the Special Police Establishment (SPE). which was set up in 1941 by the Government of India. courts. It has delivered decisions instructing government. but criticised the apathy and lack of awareness of many citizens. and Integrity". Impartiality. national security agency and intelligence agency. Nine pioneered access to information laws before the RTI Act was passed. The functions of the SPE were to investigate cases of bribery and corruption in transactions with the War & Supply Department of India during World War II.CULTURE OF CORRUPTION IN INDIA 204 The Chief Information Commission The Chief Information Commission (CIC) was established in 2005 and came into operation in 2006. The superintendent of the SPE was vested with the War Department. however. A state report card one year on complimented the quality of the law. The Central Bureau of Investigation (CBI) is a government agency of India that serves as a criminal investigation body. It was established on 1 April 1963 and evolved from the Special Police Establishment founded in 1941. The commissions have not been immune to criticism. Its motto is "Industry. the need for a Central Government agency to investigate cases of bribery and corruption by Central Government employees was felt. and ministries on how to share information of public interest. SATISHCHANDER . Even after the end of the War.
Therefore. CBI is directly under the administrative control of Central Government. It can investigate any case related to a Central Government department on its own or any case referred to it by any state government or any court. bomb blasts. So.(ii) Economic crimes. whose wrongdoings are sought to be SATISHCHANDER . CBI investigations have a major impact on the political and economic life of the nation. CBI's credibility has suffered and there is increasing public perception that it cannot do a fair investigation and that it is influenced to scuttle these cases. Financial Institutions. Officers of the All India Services. because CBI is directly under the control of Central Government. sensational homicides. Public Sector Undertakings. CBI is perceived to have been often used to settle scores against inconvenient politicians. cultural property and smuggling of other contraband items etc. While analogous in structure to the FBI. such as cases of terrorism. if a complaint pertains to any minister or politician who is part of a ruling coalition or a bureaucrat who is close to them. if a citizen wants to make a complaint about corruption by a politician or an official in the Central Government. The following broad categories of criminal cases are handled by the CBI: (i)Cases of corruption and fraud committed by public servants of all Central Govt. etc.. has handled cases against Chief Ministers. CBI is overburdened and does not accept cases even where amount of defalcation is alleged to be around Rs 1 crore. Secretaries to Government. financial frauds. antiques. large-scale smuggling of narcotics. and (iii) Special Crimes. there isn’t a single anti-corruption agency which is effective and independent of the government. The Anti-Corruption Division of the Central Bureau of Investigation (CBI) under the Ministry of Personnel. The CBI is the official Interpol unit for India.CULTURE OF CORRUPTION IN INDIA 205 The CBI is controlled by the Department of Personnel and Training in the Ministry of Personnel. 1946). Departments. CMDs of Banks. Import Export & Foreign Exchange violations. public grievance and pensions. including bank frauds. Ministers. Public Grievances and Pension of the Union Government usually headed by a Union Minister who reports directly to the Prime Minister. Again. kidnapping for ransom and crimes committed by the mafia/the underworld. the CBI's powers and function are severely limited to specific crimes based on Acts (mainly the Delhi Special Police Establishment Act. CBI has powers of a police station to investigate and register FIR. Central Public Sector Undertakings and Central Financial Institutions.
It is also the nodal police agency in India which coordinates investigation on behalf of Interpol Member countries. demands were made on it to take up investigation of more cases of conventional crime such as murder. besides economic offences. Apart from this. The CBI has to investigate major crimes in the country having interstate and international ramifications. established a reputation of being India's premier investigative agency with adequate resources to deal with complicated cases. Anti-Corruption Division and Special Crimes Division. namely. meaning that it reports to the Indian Government and not to the individual states. CBI has powers but it is not independent. CBI investigations have a major impact on the political and economic life of the nation. It is also involved in collection of criminal intelligence pertaining to three of its main areas of operation. CBI as an organization is held in high esteem by the Supreme Court. over the years. the High Courts. Anti-Corruption. CVC is independent but it does not have sufficient powers or resources. The services of its investigating officers are sought for all major investigations in the country. The CBI is a central subject under the Constitution of India. viz. it was found expedient to entrust such cases to the Branches having local jurisdiction. kidnapping.. CBI takes shape As the CBI. Role and functions The CBI is the premier investigating police agency in India.CULTURE OF CORRUPTION IN INDIA 206 investigated. etc. Economic Crimes and Special Crimes. It is an elite force playing a major role in preservation of values in public life and in ensuring the health of the national economy. Taking into account the fact that several cases falling under this category were being taken up for investigation by the CBI. terrorism. It was therefore decided in 1987 to constitute two investigation divisions in the CBI. The following broad categories of criminal cases are handled by the CBI:- SATISHCHANDER . the Parliament and the public. the Supreme Court and even the various High Courts of the country also started entrusting such cases for investigation to the CBI on petitions filed by aggrieved parties. the latter dealing with cases of conventional crime.
Cases which is essentially against Central Govt. Jurisdiction powers. antiques. Besides. This Act confers concurrent and coextensive powers. The Central Government may extend to any area. Economic Crimes Division: Deals with cases including bank frauds. Departments.CULTURE OF CORRUPTION IN INDIA 207 Anti-Corruption Division: Cases of corruption and fraud committed by public servants of all Central Govt. financial frauds. SATISHCHANDER . privileges and liabilities The legal powers of investigation of CBI are derived from the DSPE Act 1946. cultural property and smuggling of other contraband items etc. CBI would not be able to investigate crimes of all kind. members of the CBI of or above the rank of Sub Inspector shall be deemed to be officers in charge of Police Stations of respective jurisdictions. due to limited resources. privileges and liabilities on the members of Delhi Special Police Establishment (CBI) with Police Officers of the Union Territories. kidnapping for ransom and crimes committed by the mafia/the underworld. besides Union Territories. duties. the powers and jurisdiction of members of the CBI for investigation subject to the consent of the Government of the concerned State. large-scale smuggling of narcotics. Special Crimes Division: Deals with cases such as cases of terrorism. CBI may investigate. sensational homicides. Import Export & Foreign Exchange violations. Jurisdiction of CBI V/S State Law and Order is a State subject and the basic jurisdiction to investigate crime lies with State Police. Cases in which the financial interests of the Central Government are involve. bomb blasts. The CBI can investigate only such of the offences as are notified by the Central Government under the DSPE Act. and the employees of the Central Public Sector Undertakings and Public Sector Banks. While exercising such powers. Central Public Sector Undertakings and Central Financial Institutions. employees or concerning affairs of the Central Govt.
Who Owns CBI. The CBI handles many high profile cases. Controversies Normally. mal-prosecution and outright corruption. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 208 Cases relating to the breaches of Central Laws with the enforcement of which the Government of India is mainly concerned. Big cases of fraud. It is a usual practice for the respective state police departments. embezzlement and the like relating to companies in which large funds are involved and similar other cases when committed by organized gangs or professional criminals having ramifications in several States. it has been exposed by its former bigwigs like Joginder Singh and BR Lal who were Director and Joint Director respectively. Even the Top Bosses are known for stooping to illegal fund diversions. cheating. the cases may be transferred to the CBI. In his book. and if necessary. an honest and upright officer details the modus operandi of manipulating and derailing investigation this organization has become synonymous with corruption as information obtained under the RTI Act has revealed. Cases having interstate and international ramifications and involving several official agencies where. and is never far from controversy. RTI activist Krishnan and Tripathi has alleged harassment from CBI in order to save itself from exposure through RTI. Corruption in CBI Because of its intensely political overtones. from all angles. cases assigned to the CBI are sensitive and of national importance. CBI has now been exempted from RTI act. it is considered necessary that a single investigating agency should be in charge of the investigation. to initially register any case coming under its jurisdiction. through mediation by the central government. BR Lal. to be engaging in nepotism.
After letting off the Bofors accused. brought the issue of the Bofors scandal back to centre stage. The 410 howitzer field guns purchased in the $1. it was found that CBI had quietly unfrozen bank accounts of Italian businessman Octavio Quattro chi. Associates of then Prime Minister Rajiv Gandhi were linked to alleged payoffs made in the mid-1980s by the Swedish arms firm AB Bofors. which unfroze Rs 21 crore in a London bank in accounts held by Bofors scam accused Quattro chi and his wife Maria in 2006. Oppositions have never tried to call it the 'Congress Bureau of Investigation. The scheme was plotted by some officers of Kerala police. Following a communication from the CBI. It is often suspected that ruling governments interfere with the work of the CBI. The CBI. the development that came barely three weeks before the end of the Man Mohan Singh government’s tenure.300 million arms sale were reported to be inferior to those offered by a French competitor. The CBI was responsible for the inquiry into the Bofors Case. SATISHCHANDER . and by early 1995 it was clear that the case was more a product of inexperience and over exoneration on the part of the police and Intelligence Bureau. the media and Muslim League as DGP was made of sterner stuff. and the handling of the Bofors investigation by CBI under Congress governments has created a new synonym for CBI. ISRO spy ring case In 1994 two scientists with the Indian Space Research Organization (ISRO) and two Indian businessmen were arrested for allegedly conspiring to sell space secrets to two Maldivian women. for money and sex.CULTURE OF CORRUPTION IN INDIA 209 Bofors scandal In January 2006. one of the prime accused in the Bofors scandal of 1986 which had tainted the Rajiv Gandhi government. with $40 million in kickbacks moved from Britain and Panama to secret Swiss banks. The CBI investigation did not reveal the existence of a spy ring. Interpol withdrew the Red Corner Notice against Quattro chi. has facilitated his travel across the globe by asking Interpol to take him off the “wanted” list on 29 Apr 2009. It was a well-planned scheme to remove the then DGP Ramon S by concocted links to Maldivian lady. who were originally described by newspapers as agents of Pakistani intelligence.
the Supreme Court of India directed that the Central Vigilance Commission should be given a supervisory role over the CBI. However. Nithari Killings The CBI was given the responsibility of investigating the murders of dozens of children in the Nithari village near Noida. and yet the court cases of the Hawala scandal eventually all collapsed without convictions. The prosecution that followed was partly prompted by a public interest petition (Vineet Narayan). This was after the local police was found to be incompetent SATISHCHANDER . the-then CBI Director.CULTURE OF CORRUPTION IN INDIA 210 Hawala scandal In 1991 an arrest linked to militants in Kashmir led to a raid on Hawala brokers. P C Sharma and G H Achari. revealing evidence of large-scale payments to national politicians. in which Santosh Kumar Singh. to study the judgment. Subsequently the CBI appealed the verdict in Delhi High court in 2000. though not handled by the CBI). The CBI's role was again criticized. Embarrassed by the judgment. the alleged murderer of a 22-year old law student was acquitted for what the case judge called "deliberate inaction" by the investigating team. requested two Special Directors. after which the High Court issued a bail able warrant against the accused. The accused was the son of a high ranking officer in the Indian Police Service. The CBI filed an application for early hearing in July 2006. In concluding the Vineet Narayan case. UP. The case was again prominent in 2006 after much media coverage and public bashing (this was mainly due to a similar acquittal in another high profile case. the 1999 judgment commented on how "the influence of the father of the accused has been there". due to which the case had been shifted from the regular police force to the CBI. R K Raghavan. The High Court subsequently found Santosh Kumar Singh guilty of rape and murder and awarded a death sentence for the same in October 2006. Priyadarshini Mattoo murder case The CBI has been under a cloud owing to its handling of the Priyadarshini Mattoo case.
Dawood Ibrahim case In August 2007. who was found dead in water well in Saint Pius X convent hostel in Kottayam. The serial killings were in the Indian and international media for weeks since decomposing bodies were found outside the house of the accused Moninder Singh Pandher. sent Letters Rogatory abroad. the CBI asked its Pakistani counterpart. for its comments on recent media reports about the detention of Dawood Ibrahim by authorities in Karachi. CBI. CBI had filed two charge sheets naming him as accused. even sent a probe SATISHCHANDER . Altogether there were five CBI inquiries into the murder case so far without any tangible results. questioned Geeta Johri an IPS officer. Rajkot Police Commissioner Geeta Johri has alleged in the Supreme Court. which is dealing with the Sohrabuddin case in Gujarat. Kerala on7 March 1992. who claims the CBI is pressuring her to falsely implicate former Gujarat Minister Amit Shah in the Sohrabuddin fake encounter case. The powerful Catholic Lobby had exerted their undue influence to subdue the case as a Priest and a nun were involved. the Federal Investigation Agency. Sister Abhaya murder case Sister Abhaya murder case concerns a nun.CULTURE OF CORRUPTION IN INDIA 211 and lethargic in their investigations. Sohrabuddin case CBI has been accused of acting for the ruling party Congress (UPA) to trap its opposition party mainly BJP. Abhaya had caught them in a compromising position. Sant Singh Chatwal case Sant Singh Chatwal was an accused in the CBI’s records for 14 years.
who received two year sentences.M. CBI is highly being criticized for this by Kerala High Court and Media. in effect. Along with four others.On 9 May 2010 charged Father Varghese Thekkekara. In all. including culpable homicide. CIC later ordered the CBI to disclose the information. This was done in spite of advice of a string of investigators — including a Special Director and Joint Director — and it was decided not to appeal his discharge. the former CBI director has now confessed that he asked to remain soft on extraditing the Union Carbide CEO Warren Anderson.992. This. 2008. The trials in the other two cases are still in progress. SATISHCHANDER . with Chatwal named as accused in two.32 crore). the prime accused has not been arrested. former CBI Director Vijay Shankar and the agency’s present Director Ashwani Kumar respectively signed orders saying there was no need to challenge the discharge of Sant Singh Chatwal and his co-accused. four charge sheets were filed by the CBI. Malan Kara Varghese murder case The Malan Kara Varghese murder case concerns the death of T. On May 30.815 (Rs 28. 1997. But CBI has recently been exempted from RTI act and it is unclear if this information will be disclosed. a priest and manager of the Angamali diocese in the rival Jacobite Syrian Christian Church (a part of the Syriac Orthodox Church) with conspiracy in the murder of Malan Kara Varghese and named him as the prime accused. a member of Malan Kara Orthodox Church's managing committee and a timber merchant in 5 December 2002. Till date. Chatwal was charged with being part of a “criminal conspiracy” to defraud the Bank of India’s New York branch to the tune of US $8.CULTURE OF CORRUPTION IN INDIA 212 team to the US and put Chatwal and his wife behind bars from February 2 to February 5. against those accused in this case. and dropped charges. Sant Singh Chatwal has been awarded with Padma Bhushan despite these cases. Bhopal gas tragedy The public perceived that the CBI was very ineffective in trying the Bhopal gas tragedy case. closed the principal case of bank fraud in which Chatwal had been embroiled for over a decade. RTI applicant Krishnan and Tripathi was denied access to public information concerning the closed cases. 2007 and August 10.Varghese also known as Malan Kara Varghese.
It comprises of officers of the Indian Revenue Service. There have been calls for the Indian government to create an anti-theft law enforcement agency that investigates and prosecutes corruption in government at national. Directorate General of Economic Enforcement The Directorate General of Economic Enforcement is a law enforcement agency and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India. Certain states such as Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta) have similar agencies and courts. Objective The prime objective of the Enforcement Directorate is the enforcement of two key Acts of the Government of India namely. state and local levels Special courts that are more efficient than the traditional Indian courts with traveling judges and law enforcement agents are being proposed. Central Vigilance Commission and Central Bureau of Investigation all deal with anti-corruption initiatives. The proposal has not yet been acted upon by the Indian government. SATISHCHANDER . It is part of the Department of Revenue. the Foreign Exchange Management Act 1999(FEMA) and the Prevention of Money Laundering Act 2002.CULTURE OF CORRUPTION IN INDIA 213 Anti-corruption police and courts The income tax department of India. Ministry of Finance.
2005) 'Electronic Government' essentially refers to the approach ‘How government utilized IT. as well as surveillance systems. ICT.’ (United Nations. AOEMA. and particularly the Internet. as a tool to achieve better government. short for electronic government. and other web-based telecommunication technologies to improve and/or enhance on the efficiency and effectiveness of service delivery in the public sector. and even the use of television and radios to provide government-related information and services to the citizens. E-government. business partners and employees”. The focus should be on: The use of Information and communication technologies.CULTURE OF CORRUPTION IN INDIA 214 45. tracking systems such as RFID tags.’ E-government describes the use of technologies to facilitate the operation of government and the disbursement of government information and services. E-government includes the use of electronics in government as large-scale as the use of telephones and fax machines. and in any way more sophisticated than a simple email letter to the address provided at the site” and “the use of technology to enhance the access to and delivery of government services to benefit citizens. Examples of e-Government and e-Governance E-Government should enable anyone visiting a city website to communicate and interact with city employees via the Internet with graphical user interfaces (GUI). E-Government Defining e-Government ‘E-Government' (or Digital Government) is defined as ‘The utilization of the Internet and the world-wide-web for delivering government information and services to the citizens. instant-messaging (IM). deals heavily with Internet and non-internet applications to aid in governments. SATISHCHANDER . 2006. audio/video presentations.
the NPR ([National Partnership for Reinventing Government National Partnership for Reinventing Government]) has been implemented from 1993.CULTURE OF CORRUPTION IN INDIA 215 The use of information and communication technologies in all facets of the operations of a government organization. constituency participation and governance by transforming internal and external relationships through technology. issue briefs. notifications. Delivery models and activities of e-Government The primary delivery models of e-Government can be divided into: Government-to-Citizen or Government-to-Consumer (G2C) **In this model. a business. public hearing schedules. e-Governance is understood to extend the scope by including citizen engagement and participation in governance. comments. the business (government) can provide the needed products and services fulfill the needs from customer (citizen).g. SATISHCHANDER . e. **By managing their customer (citizen) relationship. e-Governance can be defined as the use of ICTs as a tool to achieve better governance. etc. general holidays. The continuous optimization of service delivery. the Internet and new media. As such. Whilst e-Government has traditionally been understood as being centered on the operations of government. **In United States. Government-to-Business (G2B) Government-to-Government (G2G) Government-to-Employees (G2E) Government-to-Religious Movements/Hindu temple (G2R) Government-to-Households (G2H) Within each of these interaction domains. following in line with the OECD definition of e-Government. four kinds of activities take place: Pushing information over the Internet. the G2C models apply the strategy of Customer Relationship Management (CRM) with business concept. or another government agency. users can engage in dialogue with agencies and post problems. Two-way communications between the agency and the citizen. or requests to the agency.: regulatory services. In this model.
: lodging tax returns. applying for services and grants. TV and radio-based delivery of government services (e. wireless networks and services. SATISHCHANDER . Governance. email. CCTV.. online chat. and instant messaging technologies. tracking systems.g. biometric identification. newsgroups and electronic mailing lists. fax. e. MMS. road traffic management and regulatory enforcement. smart cards and other Near Field Communication applications. e.: To enable the citizen transition from passive information access to active citizen participation by: Informing the citizen Representing the citizen Encouraging the citizen to vote Consulting the citizen Involving the citizen Non-internet e-Government While e-government is often thought of as "online government" or "Internet-based government. polling station technology (where non-online e-voting is being considered).g. Bluetooth. Some non-Internet forms include telephone. CSMW). online community facilities. identity cards.CULTURE OF CORRUPTION IN INDIA 216 1) 2) 3) 4) 5) Conducting transactions. reliability of information on the web.g. and hidden agendas of government groups that could influence and bias public opinions. PDA. RFID. Laws/Acts E-Government Act of 2002 Controversies of e-Government Disadvantages The main disadvantages concerning e-government is the lack of equality in public access to the internet." many non-Internet "electronic government" technologies can be used in this context. SMS text messaging.
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There are many considerations and potential implications of implementing and designing egovernment, including disintermediation of the government and its citizens, impacts on economic, social, and political factors, vulnerability to cyber-attacks, and disturbances to the status quo in these areas.
Increased contact between government and its citizens goes both ways. Once e-government begins to develop and become more sophisticated, citizens will be forced to interact electronically with the government on a larger scale. This could potentially lead to a lack of privacy for civilians as their government obtains more and more information on them. In a worst case scenario, with so much information being passed electronically between government and civilians, a totalitarian-like system could develop. When the government has easy access to countless information on its citizens, personal privacy is lost.
Although “a prodigious amount of money has been spent” on the development and implementation of e-government, some say it has yielded only a mediocre product. The outcomes and effects of trial Internet-based governments are often difficult to gauge or unsatisfactory. According to Gartner, Worldwide IT spending is estimated to total $3.6 trillion in 2011 which is 5.1% increase from the year 2010($3.4 trillion).
An e-government site that provides web access and support often does not offer the “potential to reach many users including those who live in remote areas, are homebound, have low literacy levels, exist on poverty line incomes.”
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False sense of transparency and accountability
Opponents of e-government argue that online governmental transparency is dubious because it is maintained by the governments themselves. Information can be added or removed from the public eye. To this day, very few organizations monitor and provide accountability for these modifications. Those that do so, like the United States’ OMB Watch and Government Accountability Project, are often nonprofit volunteers. Even the governments themselves do not always keep track of the information they insert and delete.
E-government allows for government transparency. Government transparency is important because it allows the public to be informed about what the government is working on as well as the policies they are trying to implement. Simple tasks may be easier to perform through electronic government access. Many changes, such as marital status or address changes can be a long process and take a lot of paper work for citizens. E-government allows these tasks to be performed efficiently with more convenience to individuals. Egovernment is an easy way for the public to be more involved in political campaigns. It could increase voter awareness, which could lead to an increase in citizen participation in elections. It is convenient and cost-effective for businesses, and the public benefits by getting easy access to the most current information available without having to spend time, energy and money to get it. E-government helps simplify processes and makes access to government information more easily accessible for public sector agencies and citizens.
One goal of e-government will be greater citizen participation. Through the internet, people from all over the country can interact with politicians or public servants and make their voices heard. Blogging and interactive surveys will allow politicians or public servants to see the views of the people they represent on any given issue. Chat rooms can place citizens in real-time contact with elected officials, their offices or provide them with the means to replace them by interacting directly with public servants, allowing voters to have a direct
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impact and influence in their government. These technologies can create a more transparent government, allowing voters to immediately see how and why their representation in the capital is voting the way they are. This helps voters better decide who to vote for in the future or how to help the public servants become more productive. A government could theoretically move more towards a true democracy with the proper application of e-government. Government transparency will give insight to the public on how decisions are made and hold elected officials or public servants accountable for their actions. The public could become a direct and prominent influence in government legislature to some degree.
Proponents of e-government argue that online government services would lessen the need for hard copy forms. Due to recent pressures from environmentalist groups, the media, and the public, some governments and organizations have turned to the Internet to reduce this paper use. The Indian government utilizes the website http://www.india.gov.in/ to provide “internal government forms for employees” and thus “produce significant savings in paper.
Speed, efficiency, and convenience
E-government allows citizens to interact with computers to achieve objectives at any time and any location, and eliminates the necessity for physical travel to government agents sitting behind desks and windows. Improved accounting and record keeping can be noted through computerization, and information and forms can be easily accessed, equaling quicker processing time. On the administrative side, access to help find or retrieve files and linked information can now be stored in databases versus hardcopies stored in various locations. Individuals with disabilities or conditions no longer have to be mobile to be active in government and can be in the comfort of their own homes.
Recent trials of e-government have been met with acceptance and eagerness from the public. Citizens participate in online discussions of political issues with increasing frequency,
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and young people, who traditionally display minimal interest in government affairs, are drawn to e-voting procedures.
Although internet-based governmental programs have been criticized for lack of reliable privacy policies, studies have shown that people value prosecution of offenders over personal confidentiality. Ninety percent of United States adults approve of Internet tracking systems of criminals, and fifty-seven percent are willing to forgo some of their personal internet privacy if it leads to the prosecution of criminals or terrorists.
There are also some technology-specific sub-categories of e-government, such as mgovernment (mobile government), u-government (ubiquitous government), and ggovernment (GIS/GPS applications for e-government.
E-government portals and platforms the primary delivery models of e-Government are classified depending on who benefits. In the development of public sector or private sector portals and platforms, a system is created that benefits all constituents. Citizens needing to renew their vehicle registration have a convenient way to accomplish it while already engaged in meeting the regulatory inspection requirement. On behalf of a government partner, business provides what has traditionally, and solely, managed by government and can use this service to generate profit or attract new customers. Government agencies are relieved of the cost and complexity of having to process the transactions.
To develop these public sector portals or platforms, governments have the choice to internally develop and manage, outsource, or sign a self-funding contract. The self-funding model creates portals that pay for themselves through convenience fees for certain egovernment transactions, known as self-funding portals.
Social networking is an emerging area for e-democracy. The social networking entry point is within the citizens’ environment and the engagement is on the citizens’ terms. Proponents of e-government perceive government use of social networks as a medium to help government act more like the public it serves. Examples can be found at almost every state government portal through Facebook, Twitter, and YouTube widgets.
Accountable. Report of the Working Group on Convergence and E-Governance for The Tenth Five Year Plan (2002–2007). Interested people can sign up at here. The ARC report was submitted to the GOI on 20 December 2008. mobile messaging. Through List Serves. convenient. For a full list of state agencies with Twitter feeds. Internet and other components of the ICT technologies in India over the last couple of decades. transparent and inexpensive fashion.The Smart way Forward". Moral. the need for eGovernment in India was finally articulated in the form of the 11th report of Second Administrative Reforms Commission titled "Promoting e-Governance . Treasurer Frank T. NeGP NeGP (National e-Governance Plan) is a plan of the Government of India to make all Government services available to the citizens of India via the electronic media. Caprio is offering daily tweets of the state’s cash flow. This plan was an outcome of the recommendations of the Second Administrative Reforms Commission".The report cited several prior initiatives as source of its inspiration including reference to the Singapore ONE programme. According to this report the goals of e-Governance were defined as follows: 1) Better service delivery to citizens SATISHCHANDER . November. For more information. visit transparent govt. computers. Government is also beginning to Twitter. Background With the widespread usage of IT. 2001. SMART government is defined as ‘Simple. Planning Commission. government and its agencies can share information to citizens who share common interests and concerns. micro-blogging services and blogs. RSS feeds. According to the Paragraph 83. In the state of Rhode Island. Government of India.CULTURE OF CORRUPTION IN INDIA 221 Government and its agents also have the opportunity to follow citizens to monitor satisfaction with services they receive. mobile phones. It is under the administration of the Department of Information Technology of Ministry of Communications and Information Technology. The ARC report defined the need for eGovernance to bring the government closer to its citizens (G2C) and businesses (G2B) while promoting inter-government agency cooperation in a friendly. visit Real Life Live document. Responsive and Transparent’ government.
service oriented and citizen centric format. it is planned as a centralized initiative with decentralized implementation. the project also aims to deliver substantial cost savings in governance. the National e-Governance Plan (NeGP) has been formulated by the Department of Information Technology (DIT) and Department of Administrative Reforms & Public Grievances (DAR&PG). Additionally. establishing connectivity and setting up delivery outlets would be the other aspect of project implementation. as its core objective.” This vision articulates the priorities of the Indian government for improved governance through use of technology leading to the improvement in quality of life for the average Indian citizen. This requires application development of government services in transparent. through common service delivery outlets and ensure efficiency. The report recognized the existence of ongoing eGovernment initiatives in India at that time and recommended them to be consolidated under NeGP for coordinated implementation. For this purpose. other than the citizen-centric application development. development of ICT infrastructure. interoperability of applications and a common and robust nationwide infrastructure is also required. digitization of current records. Given that NeGP aims to provide a whole host of Union & State Government services to the common man. Vision The NeGP has the following vision: “Make all Government services accessible to the common man in his locality. Besides improved governance and improvement in quality of life for Indian citizens. Introduction With the Last mile service delivery. SATISHCHANDER . This would involve several focus areas including development and delivery of citizen-centric services through Common Services Centers.CULTURE OF CORRUPTION IN INDIA 222 2) 3) 4) 5) Ushering in transparency and accountability Empowering people through information Improved efficiency within Governments Improve interface with business and industry. transparency & reliability of such services at affordable costs to realise the basic needs of the common man.
industry and academia representatives. R. Department of Information Technology. Secretary. It is headed by the Minister of Communications & Information Technology. Centre for Development of Advanced Computing (C-DAC) and National Institute for Smart Government (NISG) are just some of the organizations at the national level working on this project. National Informatics Centre (NIC).V. The latest appointments to the Group were done in First week of November. Mrutyunjay Sarangi. Dr. Secretary. State Data Centres (SDC). etc. Government of India. R&D work. State Wide Area Networks (SWAN). Implementation Infrastructure This would include development of National/State Service Delivery Gateway (NSDG/SSDG). Shashi Kant Sharma. developing policy guidelines. Common Services Centres (CSC) and development of eForms for service delivery.K. Unique Identification Authority of India (UIDAI). Department of Information Technology (DIT). The infrastructure requirements of NeGP are broken down into core & support infrastructure requirements. Currently it includes various eminent personalities of India including Nandan Nilekani Chairman. Additional. Standardization Testing and Quality Certification (STQC). D. Secretary. It is being created in every State and Union Territory to ensure seamless and single-window delivery of public services to the common man.CULTURE OF CORRUPTION IN INDIA 223 Programme Governance NeGP is monitored and coordinated at the highest level by the National e-Governance Advisory Group. It is the apex advisory body to the government on policy issues and strategic interventions necessary for coordinated progress across the various Union/State government departments/ministries for timely implementation of eGovernance across the country. Department of Telecommunication. Department of Administrative Reforms & Public Grievances. This infrastructure is supposed to be common for all projects under the NeGP umbrella. Appropriate authorities have been identified and assigned the duties of laying down standards. providing technical support. Special Secretary. Chandrasekhar. Director General National Informatics Centre among other Central Government. SATISHCHANDER . State Government. Singh. undertaking capacity building. 2010 with its first scheduled meeting on 12th Nov 2010. B. Gairola. Cabinet Secretariat. Dr.
10 State MMPs and 7 Integrated MMPs spanning multiple Ministries/ Departments. The three primary pillars of NeGP infrastructure are SWAN (State Wide Area Networks) (SWAN). Security Infrastructure(PKI etc. Web enabled delivery of public services Mission Mode Projects (MMPs) NeGP comprises 27 Mission Mode Projects (MMPs) encompassing 10 Central MMPs. Block and Village levels including Wireless infrastructure for last mile connectivity. State Data Centres. ERNET and other service providers). and the project has well-defined milestones and time-lines for implementation. These MMPs include the following:- SATISHCHANDER . National eGovernment Data Centres. and CSC for web-enabled anytime-anywhere services & information. that the project has measurable outcomes and service-levels.CULTURE OF CORRUPTION IN INDIA 224 The core infrastructure consists of National eGovernment Intranet(NICNET. It was approved on 18 May 2006 by the Government of India.). The support infrastructure includes Service delivery infrastructure at State. GIS National Spatial Data Infrastructure and Language Resource Centre. State wide Intranets. SDC (State Data Centers). District. Resource Centre for eGovernance. Further E-post and Integrated Service Delivery Front ends like the proposed Common Services Centers (CSC) are required as part of the support infrastructure. "Mission Mode" implies that the objective and the scope of the project are clearly defined.
Awareness. Given the complexity of this mammoth task estimated at more than 70.This component addresses several areas including training for: o E-Governance policy makers like Chief Information Officers. Immigration & Visa Pension e-Office Foreigners Registration & Tracking Municipalities Gram Panchayats Police Road Transport Treasuries Capacity Building. Communication The stakeholders of NeGP include at least 20 central departments. the following steps have been planned: Support for creation of State e-governance Mission Teams (SeMTs) Support to Central Project e-Mission Teams (CPeMTs) Support to State Administrative Training Institutes Human resource management . etc.CULTURE OF CORRUPTION IN INDIA 225 Central MMPs Banking Central Excise Customs Income Tax (IT) Insurance State MMPs Agriculture & Commercial Taxes e−District Employment Exchange Land Records Integrated MMPs CSC e-Biz e-Courts eProcurement EDI For eTrade NSDG India Portal MCA21 National Citizen Database Passport. proper estimation and implementation of capacity gaps are required. Inadequate skill sets of personnel already deployed Lack of appropriate institutional framework to handle the specific program To address these. The three specific capacity gaps in the states envisaged to be filled are:- Lack of personnel with appropriate background and aptitude.000 man-years of effort. 360 departments across 35 states/UTs and nearly 500 implementation agencies. SATISHCHANDER .
Knowledge exchange In order to assist the government in ensuring the high quality of implementation of the NeGP initiatives. It is a collaborative effort to collect. Pvt. Interoperability etc. The objective is collective SATISHCHANDER . develop and share knowledge and material on eGovernance initiatives across the different government agencies. Academic Training Institutions o Publicity and Awareness (media. the NISG (a non-profit organisation) started a portal project called E-Gov. Quality Assurance & Conformance Network and Information Security E-Gov. films etc. Knowledge exchange. union government and private institutions of India. stat government. Creating awareness about NeGP . quality & security These would require implementation of the following: National Policy on Open Standards Localization and Language Technology Standards Biometrics.Various strategies for change management and raising awareness are planned including:o E-Readiness assessment of various States/ Departments o Setting up of Virtual eGovernance Forums o Assessment of e-Projects o Best practices for eGovernance o EGovernance National Resource Database o Newsletters on eGovernance. workshops/ seminars/ Conferences o Competitions and Awards o EGovernance forum for NGOs. Sector. Digital Signature. language technologies o Equipping National/State Institutions of Public Administration for eGovernance Training etc. advanced courses architecture.) Standards.CULTURE OF CORRUPTION IN INDIA 226 o Project specific training o General IT Skills and Competencies along with Special training programs for specialists o Security. use of local language solutions.
private and government levels. Just like other collaborative portals.CULTURE OF CORRUPTION IN INDIA 227 learning from each other’s projects and learning lessons. SATISHCHANDER . Central Ministries & State Governments in India. content development is a community effort shared by the different stakeholders of eGovernance namely the Department of Information Technology (Government of India). That is. They take a whole-of-government view of the most efficient way managing the cost base of government. This portal aims to develop conceptual knowledge about eGovernance domain from public. staff involved in direct personal delivery of services such as education and healthcare – rather than just looking at transactional services which can be e-enabled on an endto-end basis. and Industry working in the domain of e-Government. They focus on the “citizen” not the “customer”. E-Government – an alternative approach Recent government policy updates have seen a shift away from e-Government towards a much more radical focus on transforming the whole relationship between the public sector and users of public services. Academics. Transformation programs differ from traditional e-Government programs in four major ways: They take a whole-of-government view of the relationship between the public sector and the citizen or business user. not as passive recipients of services. They include initiatives to e-enable the frontline public services: that is. This new approach is referred to as Transformational Government. they seek to engage with the citizens as owners of and participants in the creation of public services.
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