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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.
cronyism. Political corruption is the abuse of their power by the state official for their unlawful private gain. CORRUPTION The word of corruption means the destruction. graft. Corruption has prevailed in all form of government. In societies which ignore corruption. ethical teaching and standards of morality are weak.CULTURE OF CORRUPTION IN INDIA 5 A. People getting very low wages feel they have to demand bribes in order to lead decent lives. corruption often thrives. But they do not realize that corruption cause suffering to other. nepotism. Such a society begins to decay and sets itself on the road to self-destruction. At times. Inequality of wealth. it becomes a way of life. Nations having tyrannical powerful ruling elite that refuses to punish the corrupt within it. religious. A corrupt society is characterized by immorality and lack of fear and respect for law.For some people. extortion drug trafficking to thrive. the law enforcement agencies and the education sector have an important role to play the corruption by changing prevailing laws. bribes are given to avoid punishment . The judiciary. Over 1500 year ago the mighty Roman Empire disintegrated when its rulers became corrupt and selfish. Corruption cannot be divorced from the economics. Of late. INTRODUCTION 1. 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. embezzlement and patronage. Employees often strike corrupt deals to supplement their meagre income. It changes for the worse. virtue or moral principles. 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. face menace of corruption. SATISHCHANDER . bribery. Various forms of corruption include extortion. Selfishness and greed are two main cause of corruption. being corrupt are a way to get what they desire. In societies where traditional. A license-permit regime or scarcity of basic commodities promotes corruption. ruining or the spoiling of a society or a nation. Corruption is an old age phenomena. punishments and the education system. Corruption allows criminal activities such as money laundering.
while the poor suffer terribly . If there is no bias. Education spreads political add social awareness and are some factor that help curb the menace of corruption. and it focuses exclusively on corruption in the public 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 impact of development assistance of reduced and natural resources are overexploited causing further harm to a country’s environment assets. SATISHCHANDER . The rule of eroded and the people no longer respect or trust the state. What is corruption? There are several answers to this question. state intervention on the market and the existence of the public sector. 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. Equal treatment of all economic agents is essential for a well-working market economy. its activities. Corruptions hinder economic growth and deter investment.In the long run unchecked corruption pushes more and more people into poverty which often destabilizes a society. Analytically speaking. there is no corruption. and links corruption to the state.” as “the misuse This definition considers the cause of corruption in public authority and its abuse. The authorities move very quickly when the press or the television highlights instances of corruption. In other words. This definition is consistent with the behalf of Noble Prize laureate Gary Becker that “If we abolish the state. Resources are diverted from the sectors such as education and heath to less important sectors or personal enrichment. we abolish corruption”. Definition of corruption Corruption is defined by the World Bank & transparency international (TI) of public office for private gain. the use of this definition excludes the possibility of corruption in the private sector.CULTURE OF CORRUPTION IN INDIA 6 The consequences of corruption for social and economic development are bad. Societies can fight corruption by letting the state know that they have had enough of it. A few people manage to get rich at the expense of society as a whole.” There are three basic elements of this definition. Bias towards particular economic agents definitely violates the arm’s-length principle and fulfils a necessary condition for corruption.
but it is not corruption. biased behaviour of the one who is corrupted makes an informal. 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. “The problem with the alternative definition is that not all abuses of public office are corruption. and the son has just started college. or seizing some benefit for the corrupted economic agent.” This definition considers the cause of corruption in public authority and its abuse. Second. If the returned favour is a well-paid job for the son. but similar gain can imply expensive gifts or various favours returned. or similar activities. embezzlement. but those two actions can be taken at different times. in formulating the corruption contract. Seizing some benefit or deriving some advantage can be carried out simultaneously with a violation of the arm’s-length principle. its activities. but the obligation is assumed. and links corruption to the state. but definitely not corruption. It is a rather widespread notion that corruption is receiving money (this form of corruption is most often called bribery). so that seizing the benefits from the one who is corrupted moves into the future. we abolish corruption. for example. there is no corruption. state intervention on the market and the existence of the public sector. This definition is consistent with the beliefs of Nobel Prize laureate Gary Becker that “if we abolish the state. and that obligation does not grow obsolete. it is obvious that there is a time gap between the two actions. 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. 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. Namely. Furthermore. otherwise.CULTURE OF CORRUPTION IN INDIA 7 There are two additional necessary conditions for corruption. In other words. or rather conditions that must be fulfilled for observed bias (“non-compliance with the arm’s-length principle”) to be specified as corruption. Some of them are straightforward theft. The first condition is that the bias must be intentional – accidental violation of the arm’s-length principle because of. does not represent corruption. imperfect information. fraud. Deriving some advantage. Violating impartiality may sometimes represent racism. but sometimes binding obligation of the corruptor to return or repay the favour. can have different forms. 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.
perverting the rule of law and creating bureaucratic quagmires whose only reason for existing is the soliciting of bribes. but since there is no advantage for the victim of extortion (a judge or a prosecutor. but it is still not corruption. a properly operating court would process corruption as a criminal offense. monitoring the contract. but of another kind. Competitive returns are those achieved on the competitive market. From the point of view of its source. SATISHCHANDER .e. i. that is not corruption – it is a crime.e. 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. i. there will be no rents. On the contrary. Corruption undermines democratic institutions. This is not to say that standard legal contracts are free of transaction costs. formulating the contract (particularly taking into account all foreseeable and unforeseeable contingencies). Rent is a factor’s income that is above the competitive returns of the factor. Corruption is a complex social. The factors that create rent are the ones that create fertile ground for corruption. for example) a violation of this kind is not corruption. Corruption attacks the foundation of democratic institutions by distorting electoral processes. political and economic phenomenon that affects all countries. In addition.CULTURE OF CORRUPTION IN INDIA 8 service orator to anyone. and enforcing the contract. corruption is a contract. It is socially unacceptable. This is to say that due to the illegal nature of the corruption contract. its transactions costs are multiplied. corruption is not the only thing that is socially unacceptable and illegal. the consequence of rent appropriation. 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. 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. Corruption is just a form of rent appropriation and its dissipation. From the enforcement point of view. corruption is in most cases. This very specific feature of corruption as an illegal contract generates its substantial transaction costs. slows economic development and contributes to governmental instability. the most important of which are: finding the counterpart. hence in the world of perfectly competitive markets. 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. The transaction cost feature of corruption is of great relevance and must be taken into account when the consequences of corruption are analysed. extortion is something that provides intentional non-compliance with the arm’s length principle. This origin of corruption should always be taken into account when discussing the factors of corruption.
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. including administrative corruption. Basic Types of Corruption The types of corruption are strictly linked to the theoretical view on corruption. as they can explain a wide range of behaviours of civil servants. SATISHCHANDER . The analysis of corruption which follows is morally neutral. Political corruption simply cannot be explained within this methodological framework. For an overwhelming majority of people corruption is something morally unacceptable. Corruption is nothing but a consequence of the political process. but also its predictions regarding political corruption are wrong. benevolent politicians are not informed about the misdemeanours of their subordinates. 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). Within such a framework. This approach is analytically very clear.e. so there is no possibility for political corruption. One view is set within the framework of the principle-agent theory. it is very well developed.CULTURE OF CORRUPTION IN INDIA 9 A few words on the ethical aspects in defining corruption should be added. the economics of organized crime and the political economy of dictatorship. if corruption is considered endogenous to the political process. corruption is considered as a form rent appropriation by the ruler. The methodological approach based on recent contributions to literature on the economics of conflict and appropriation. Only administrative corruption (corruption of civil servants) can be explained and predicted. it is the evil that should be fought because its very existence is against basic moral principles. Nonetheless. Economic theory has developed two basic views of corruption. this approach cannot explain political corruption. it seems that not only are the assumptions of the model unrealistic. Since the list of corrupted politician and associated political scandals is lengthy in virtually all counties of the world. According to the main assumption. The crucial feature of this approach is that corruption is exogenous to the political process. In other words. In that sense Tanzi’s definition of corruption is morally neutral. corruption is not institutionalized. The issue of morality is irrelevant to the considerations in this document. The methodological breakthrough of the kind has been recently achieved by Charap are Harms. corruption is institutionalized and its level and pattern depend on the political constellation. the political regime in the country. Accordingly. and the models of theoretical models of corruption based on this approach are analytically rich. i. the state is benevolent. However.
Nonetheless.e. i. 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. The rent is extracted through sales of a limited number of permits and licenses for economic activity. Corruption serves as a hostage mechanism to minimize the probability of defection or insurrection by lower level insiders of corrupted civil servants. The frequency of this type of corruption is a good indicator of the capacity and effectiveness of a country’s administration. In other words. there is no legal barrier for his passport to be issued. In general. there basic types of corruption are identified. civil servants are cooperative because they have their share in the spoils. this methodological approach does not provide a clear analytical framework for consideration. find a reason why an uncooperative civil servant is found guilty of corruption. 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. from turning to the public to denounce the system. there is both the carrot and the stick to strengthen loyalty. its poor administrative capacities or a poor supply of administrative service. due to their own participation.e. This approach is tempting because it provides grounds for understanding and explaining the relationship between corruption and the political process. Corrupt civil service is nothing but the extension of efficient rent appropriation by the ruler. The second type of corruption is a corruption that violates the legal rules. i. that is exactly the first types of corruption. Dictators can. Finally. This is administrative corruption and is the most modelled type of SATISHCHANDER . civil servants are corrupted to do their job or to do it more quickly then they usually do. within one or other theoretical views. instead of not doing it.CULTURE OF CORRUPTION IN INDIA 10 Corruption is the answer to the problem of internal cohesion of predatory teams. If a person bribes civil servants in charge of issuing a passport that a briber/corruptor is entitled to. hence we have information on the driving force of the change. although the model provides information on the structure of incentives for rent appropriation. One should bear in mind that the shortage of supply of administrative services can be deliberately produced. as suggested by Shleifer and Vishney. or a very biased enforcement of the rules. Hence. given the level the structure of corruption. aimed at creating the rent and its redistribution via corruption. Its specific and more aggressive version is bribing officials for jumping the queue for providing the service that is thoroughly legal. they are effectively constrained. Furthermore. Corrupt civil servants are created to satisfy ruler desire to foster loyalty through patronage. when and is necessary. The main problem is that the structure of incentives to the political decision makers and change of the structure are not explained.
as the total supply of corruption (demand for the bribe for violating the rules) is provided by the civil servants.corruption that is aimed at changing the rules and regulations into rules and regulations that favour the interests of the corruptor. The concept of state capture was developed by the World Bank primarily for explaining the reality of political life in transitional economies. In other words. Accordingly. corruption is seen as a solution for bad public polices. The underlying assumption is that legislation and public policies are influenced by the bribing of legislators by a few oligarchs-very powerful business people. Although there is no doubt that such a process exists. public policies are inevitably formulated to favour the oligarchs. The state can be captured both by aggressive lobbying and by effective corruption. and that this type of corruption can explain some elements of public policy in many counties (not only transitional ones). Strong lobbying is an entirely legal and legitimate activity in mature democracies. the crucial question is to what extent are the outcomes regarding public policies from legitimate lobbying and illegal corruption different.CULTURE OF CORRUPTION IN INDIA 11 corruption – the vast majority of theoretical contributions in the field are about administrative corruption. A cynical approach to the issue within counties with widespread corruption is that some pubic polices are so bad. 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. Subsequently. whatever the source of these bad public polices. 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. The main problem is that interest group influence legislators’ decision making in all counties. In brief. although the type of corruption that influences public policy is very important to consider. Nonetheless. it is actually better for the society that they are not enforced. the concept of ‘’state capture’’ lacks analytical clarity. This type of corruption corresponds to the principle-agent model of corruption. since the political process resulted in bad policies (and no alternatives to political process are feasible in the foreseeable future). This is due to very clear motives and incentives for each economic agent and very clear relation between them. there is “state capture’’. corruption is considered to be the second best solution. Finally. not the public. Nonetheless. and more specifically are the public policies designed by lobbying superior to ones designed through corruption? Additionally. SATISHCHANDER . It would be better if these policies were not enforced at all. The most significant direct consequence of this type of corruption is that legislation and public policies are not justly enforced. 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.
the process of creation and distribution (appropriation) of rent. In other words. whatever the motive may be. Basic Causes of Corruption All economic agents are maximizing their individual utility. SATISHCHANDER . a single corruptor is dealing with multiple. people in all conceivable conditions behave economically rationally. In short. i. economic agents are engaged in the rent-seeking process. the government. decentralized pattern of corruption. Theoretically speaking. violation of free market operations. In other words. i. the crucial distinction is the one of transaction costs. i. It has been pointed out that when governments have an effective policing machine to monitor the action of civil servants. The crucial prerequisite for centralized corruption is the ability to enforce joint profit in bribe collection. selfish interests of economic agents are the basic motive for economic transaction between them. personal welfare (wealth).Accordingly.e. corruption contracts (transactions) hence the transaction costs are multiplied. A frequently used synonym for this type of government intervention is regulation. because rent appropriations will maximize individual utility (welfare). the analysis of industrial organization cannot answer why some (benevolent) governments are equipped with agencies like the KGB while others are not. rent is a factor of income above the competitive returns (opportunity costs) of the factor. Resources are allocated to the activities the greatest return on investment (an allocation decision). In decentralized corruption. such as the KGB in the former Soviet Union. rent can be created in a few distinctive ways. Within the methodological framework of a benevolent state. It is closely related to problem of the problem enforcing collusion in oligopoly.e. corruption in the country is centralized.CULTURE OF CORRUPTION IN INDIA 12 The other important distinction in the case of corruption is its industrial organization. Because of that. rather than single. as Shleifer and Vishney thoroughly analysed the phenomenon. Apart from the prerequisites for distinctive industrial organization of corruption. instead of enabling the free market to regulate relations and transactions among economic agent on the market. As described earlier. but in realty the most significant rent generator is government intervention. a monopolized corruption pattern is superior to a decentralized one regarding the scale of transaction costs. emphasizing centralized (monopolized) vs.e. steps in and regulations in a hands-on manner.
at the discretion of civil servants in the enforcement process.e. There are some cases of corruption not Linked to rent. the more opportunity there is for corruption. That will inevitably create a shortage in the market. i. unclear.e. and easily understandable by anyone. without introducing import License regulation there would be no rent and there would be no corruption. most common. for efficient enforcement the rules should is simple.CULTURE OF CORRUPTION IN INDIA 13 The majority of government intervention on the market is prohibitive. SATISHCHANDER . Accordingly. more government regulation ceteris paribus (all other things being equal). A typical regulation of kind is import licensing. Needless to say. it is very important how these rule and the process of the enforcement are specified. supply will not be formulated according to the marginal costs of the producer/importer. Only the firms the obtain import certain goods and only the quantity specified in the license. unless the government explicitly empowers some of them to do so. and consequentially dangerous forms of corruption are linked to Rent-seeking behaviour. making threats to the corruptors and corrupted less credible. but by the administratively specified quantity. at the end of the day. Not only does such legislation create incentives for corruption. results in fewer free-market operations. That difference is economic rent which will be distributed.e. 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. Nonetheless. creates tremendous opportunity for corruption. i. economic agents’ are precluded from doing something. procedural legislation. apart from the content of legislation that introduces government regulation. and ambiguous the rules. At that specified quantity. As to the specification of the rules. appropriated. but it also decreases the probability of detection. The more complicated. A typical example of this occurs with a large variety of customs tariff rates in general and for rather similar products in particular. but the most significant. the commanded by demand (i. a portion of the Rent is appropriated by the corruptor and the remaining Portion is appropriated (in the form of bribe) by the Corrupted. Furthermore. which are rules regarding enforcement of rules and regulations. there are strong incentives for corruption aimed at misclassification of the goods and illegally reducing the levy by applying the lower rate. If the customs tariff rate for one product is 3% and for another similar product is 30%. and therefore more corruption. is very important for corruption. The complicated and non-transparent legislation specifying slow procedure (procedures with unspecified time limits or no binding deadlines). clear. By paying a bribe to get an import license.
Deregulation and decreasing the role of the government has its limits. thus allowing market forces to function effectively. For example. Deregulation means abolishing government intervention that is prohibitive. Accordingly. clear. There will be no barriers to entry that must be circumvented by a certificate issued by a civil servant. In the case of rule of law. etc. deregulation will decrease and in some cases eliminate corruption due to the lack of discretionary power of civil servants. strict rule of law is one of the elements of an effective strategy for fighting corruption. 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. 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. the crucial element for any effective strategy for fighting corruption is deregulation. Civil servants will lose their power to decisively influence the fortune of businesspeople and citizens. On the contrary. hence there will be no source of corruption of that kind. SATISHCHANDER . Then there will be no incentive for private parties to bribe civil servants.CULTURE OF CORRUPTION IN INDIA 14 The analysis of corruption factors is a prerequisite for an effective strategy for fighting corruption. and transparent rules that are understood by all concerned parties. 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. no black market and no rent generated and appropriated from long queues and the black-market. There will be no shortage on the market. because civil servants will not be in a position to offer any favour to the corruptor. all measures that improve the rule of law will definitely contribute to the fight against corruption. government power should not be diminished. 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. no queues for goods whose supply is limited. From another perspective. as the strategy should take into account and address the main sources of corruption. The basic reason for the government to exist is to provide the 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. One of the crucial elements of strengthening the rule of law is the creation of simple.
In other words. situations in which procedural legislation is violated. The increased probability of apprehension and punishment creates a deterrent for civil servants to accept bribes. this element of the strategy should be considered within the framework of the deterrent.e. Consequences of Corruption As to the consequences of corruption. 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. but not sufficient. wages in the private sector. for credibility. value-adding 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. therefore decreasing incentives for corruption. Increasing wages of civil servants is another important segment of the strategy for fighting corruption.e. the bribe itself is not a welfare loss – the SATISHCHANDER . If such a will exists. i. Such a will can be generated by identifying the most significant consequences of corruption. Nonetheless. government must send an unequivocal and credible signal to all concerned parties that it is committed to fighting Corruption. the most important prerequisite for effective anticorruption strategies is strong and unconstrained political will.e. reduces the discretionary power of civil servants. and increases the visibility of corruption cases.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. it should be recognized that the bribe itself is nothing but a redistribution of income. In this sense. 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. i. Nonetheless. the wage scheme as a segment of an anticorruption strategy should always be considered along with the probability of apprehension. Such a framework increases the probability of detecting corruption misdeed sand apprehending corrupted civil servants. Accordingly. punishment. Furthermore. 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.
In other SATISHCHANDER . Because of the poor exchange between firms. According to some estimates (Tanzi). there is no protection of private property rights and noncontract enforcement. and the rule of law is prerequisite for the market economy. In other words. Hence. enables the proper tax burden to be decreased. Furthermore.e. Although strictly speaking this is true. according to this approach. only its distribution. And transaction costs are real costs: the opportunity costs of resources engaged in transaction activities. The first reason is the existence of huge transaction costs from corruption. it was demonstrated that rent-seeking activities are closely related to corruption. However. The origin of rent-seeking is public policies that boost government intervention and disable free market operation. Corruption violates the rule of law. corruption “taxation” is inferior in terms of economic efficiency. corruption is an illegal contract.e. they are not in favour of the public interest. Hence there is no need for a wage increase and no need for increasing the tax burden. i. this is the amount of transaction costs in terms of the opportunity costs of highly skilled labour. 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. the corruption burden is its own kind of a “tax burden” that. all firms produce the majority of inputs internally. i. instead of the purchasing these inputs on the market. senior managers in countries with widespread corruption spend about 20% of their working time negotiating corruption and enforcing corruption contracts. If there is no rule of law. Although these public policies are in favour of these interest groups. they are completely wrong regarding maximization of economic efficiency and social welfare. 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.CULTURE OF CORRUPTION IN INDIA 16 scale of social welfare does not change. These public policies can be deliberately pursued specifically because they create rent. There is a rather widespread notion that the corruption income of corrupted civil servants provides compensation for their lower wages. and therefore its transaction costs are Massive. proper taxation (together with efficient tax administration) decreases Uncertainty and transaction costs. As it has been pointed out. emphasizing only distributional aspects of corruption is one of the major fallacies of corruption research.
CULTURE OF CORRUPTION IN INDIA 17 words. Since corruption decreases expected returns. This is the indirect way in which corruption diminishes economic efficiency and consequently Social welfare. corrupt countries receive less foreign direct investment and consequently record lower growth rates.e. i. i. This is particularly true for the foreign direct investors who compare expected returns. 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. Corruption is not about an amount of money changing hands or about “grease in the wheels of business. expected cash flow for investments in various countries and decide to invest their capital in the country with the highest expected returns. New methods of corruption will be introduced instead of new products and new methods of production. instead of focusing on productive. entrepreneurship is a resource that can be alternatively allocated to productive activities or to unproductive and destructive activities. other resources will be also be allocated to redistributive activities. Corruption increases basic business uncertainty. Corruption is definitely an unproductive. and sometimes evens a destructive. redistributing activities and allocating their talents to it.e. It will go to the activity that enables the entrepreneur the highest possible returns on his activity. activity.” It is about the future of the nation. As suggested by Baumol. if the highest possible returns are in the area of corruption. This kind of uncertainty decreases the expected profit rate for potential investors. Since there is no specialization. And it is the nation that must make some difficult decisions regarding it. As a consequence. If corruption is widespread. a significant source of increasing economic efficiency is absent. particularly regarding protection of property rights. wealth creating activities will focus on corruption. there is no social division of labour and no prerequisite for specialization. Innovations that are a result of entrepreneurship will be allocated to redistribution and corruption. are less likely to invest when lower returns are expected. SATISHCHANDER . making their decisions based on expected profit rate (returns). entrepreneurs. There is another reason that countries with widespread corruption cannot expect high growth rates that is directly related to entrepreneurship and innovations. Investors.
For their part. SATISHCHANDER . all parts of society must share the responsibility for containing corruption because all are willing or unwilling participants. The new “No bribery pledge” initiated by OECD is one. Such a strategy would be likely to create new inefficiencies in government. bureaucratic discretion is necessary for effective administration.” 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. therefore. Among stronger measures is the criminalization of bribery. government leaders’ politicians and bureaucrats’ must provide the political will to address all forms of corruption. In most countries. 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. including the prosecution of companies and governments in the North and tax deductibility of bribes paid by Northern companies in the South. The responsibility of containing corruption must not ignore the participation of international Firms.CULTURE OF CORRUPTION IN INDIA 18 2. Reformers can only achieve real gains when a Society changes its expectations and understanding of its entitlement to a government that is not corrupt. efficiency. A number of instruments are available to curb cross-border corruption. Each corrupt transaction requires a “buyer” and a “seller. Draconian anticorruption Programs. is not to achieve complete rectitude but rather a Fundamental increase in the honesty. and fairness of government. 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. the demand for reform is being led by organizations of civil society and the International donor community. While all those who are part of the problem must be part of the solution. WHO IS RESPONSIBLE? Ultimately. involved and empowered citizenry is indeed essential to any anti-corruption campaign. Additionally. foreign governments and others engaged in corrupt practices either actively or passively. it would be Unrealistic and cost-prohibitive to attempt to eliminate corruption completely. The aim. An active. moreover.
Despite these common characteristics. the failure to pay a living wage lies.CULTURE OF CORRUPTION IN INDIA 19 3. Some Developing countries enjoy the rule of law and benefit from an independent judiciary that conscientiously reviews the legality of official actions. apply or enforce specific regulations. elsewhere the judiciary is suborned. at least in part. it occurs in all countries regardless of the level of social and economic development. there is also collusion between the dishonest official and one or more public or private officials. even if they are caught. promotions. In the case of bribery. income tax collection. Corruption most likely will occur in the interaction between the public and private sectors. or levy fees or taxes. at the root of the problem. 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. in some countries. And it is generally practiced by public officials who have direct responsibility to deliver services to the public. in money or in kind. acquiescent. Still. For example. they are weak and unaccustomed to having a ‘voice’ or speak authoritatively to their government. In other Countries. the private sector and other elements of civil society are well-organized and poised to assume an assertive role. customs duties. or neutralized. and non-merit based appointments. Some governments have incentives that encourage law enforcement officers to be willing partners in anti-corruption activities. All of these factors dictate the importance of carefully choosing the strategy and entry points for anti-corruption measures. and a benefit. SATISHCHANDER . public servants still engage in corrupt behaviour despite adequate pay. Others have politicians who create legislation that seems designed to render corrupters free from prosecution. In some countries. and many more. For instance. Corruption flourishes in different places in different forms including: land Re-joining. in others. corruption takes on very different features from one place to another. to all parties involved. For corruption-extortion or bribery-to take place. there must be a public official with discretionary power followed by a misuse of that power. The actors amenable to leading or supporting reform also vary significantly from country to country. IS CORRUPTION GLOBLE TYPOLOGY? Corruption does have some common characteristics.
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. and in the choice and design of Projects. as a lender to governments. The new approach presented in this book is founded upon the premise that corruption is a major hindrance to economic development. -Adding its voice and support to international efforts to reduce corruption. country-lending Considerations. policy dialogue. and though civil society is crucial to sustaining reform. can directly support civil society’s efforts.CULTURE OF CORRUPTION IN INDIA 20 4. IMF and the international community in general. This framework allows for activities in which the Bank and IMF can advise countries on economic policy reform and strengthening institutional capacity. analytical work. However. 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. -Greater consideration of corruption in country-assistance strategies. 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. More specifically. the Bretton Wood organizations’ mandate do not extend to the political aspects of controlling corruption. -Helping countries that request support in their efforts to reduce 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. corruption can be addressed by World Bank and IMF staff as an economic Concern within the framework approved by the Board for governance issues. More and more development experts have come to the conclusion that it is impossible to alleviate poverty without first curbing corruption. SATISHCHANDER .
which focuses on prevention through civil-service reform and public-expenditure planning and management. The majority of donors believe that tackling corruption is less a matter of new instruments than of reducing corruption through existing ones. The program dovetails with other reforms such as: Public Sector Management program. as well as. Legislative reforms to strengthen parliament role in overseeing the executive but also the passing of new anticorruption legislation Legal reforms. which means “using public powers for the public good. and therefore. The model assumes that corruption is a function of weak institutions and of policies that create economic rents. and (c)building an prevention and anti-corruption capacity of the public sector-including parliament. that strengthen the rule of law Building “integrity”. 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. research and dissemination of findings. The strategy is based on action coming from three directions: (a) economic policy reform. prevention. watchdog and enforcement agencies. Prevention an important tool for fighting corruption The approach presented in this paper is essentially holistic.(b) building integrity by promoting governmental accountability and transparency. and the judiciary -and of civil society. Experience gained from work with client countries demonstrates that it is preferable to focus on prevention through the building of integrity. 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. pro-active preventive approach.” is the flip side of fighting corruption.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. which suggests a positive. on supporting governance activities. The approach to promote good governance through among other things. particularly by strengthening non-governmental organizations (NGOs) and the media. is to help client countries curb corruption and build integrity. 5. (b) institutional strengthening and (c) international action. SATISHCHANDER . 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. improve their public services and create an enabling environment for the private sector.
A third is to reorient government in order to improve performance or results. As Shown in Figure 1. SATISHCHANDER . 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.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. A first element is to build systemic integrity within the society as a whole and establish the rule of law. against the background of an appropriate macroeconomic framework. established rule of law and creation of an enabling environment for the private sector. Three areas of focus combine to promote better delivery of public services. The real impact these programs seeks is improved delivery of public services.
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. New Paradigms In the old paradigm. Governments and donors alike gave little recognition to the private sector. the general public or civil society organizations as important agents for change. donor agencies preferred to work almost entirely with government agencies. 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. 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 .CULTURE OF CORRUPTION IN INDIA 23 6. And government accountability and transparency were not seen as particularly important. Underlying principles of this new governance strategy A. Results were seldom the focus. Politicians and employees should be held accountable individually and collectively for fulfilling government’s responsibilities and commitments.
In recent years. 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. • Conduct annual broad based national/municipal integrity workshops were all Stakeholders are invited to discuss problems and suggest changes.CULTURE OF CORRUPTION IN INDIA 24 B. including the private sector. The new governance approach is based on the assumption that increased public sector accountability can only be achieved through the education. Accountability must be generated by a combination of political will from the top and public pressure from the base. 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. TV). SATISHCHANDER . To institute accountability and transparency in government. Even if leaders are successful in changing attitudes within the government bureaucracy. tools have been developed that can help client ministries and municipalities increase government accountability and performance. media and civil society. both internal and external pressure is needed. Through its work with client countries. 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. and empower the citizens to Monitor the government through periodic service delivery surveys. • Inform citizens about their rights (Citizens’ Charter). C. 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. involvement and empowerment of the remaining98 per cent of the population. more will need to be done because less than two per cent of the population in most developing countries works for the government. newspapers.
involves two major shifts from traditional approaches. Typically. but without a leadership confident in introducing Accountability. • Investigative journalism and information by the media. Broad Based Capacity Building to strengthen all Pillars of Integrity Capacity building has traditionally focused on expanding government facilities and skills. the sustainable effect of these initiatives are questionable. “Mind set” refers to the outlook and state of mind that policy-makers and Civil servants bring to their jobs. • Production of integrity surveys at the municipal or sub-national level. Integrity is critical when appointments of key executive or civil service positions are made and is equally important among politicians. and declarations and monitoring of assets. The new approach to capacity building encouraged and Pioneered by the Economic Development Institute (EDI) of the World Bank in close Collaboration with TI. codes of conduct. equipment and technical skills training. SATISHCHANDER . such projects financed infrastructure. D. Donors work as facilitators with clients to establish Standards and ground rules for leaders in the public service through the introduction of Leadership codes.CULTURE OF CORRUPTION IN INDIA 25 • Production and dissemination of a national integrity strategy and an annual corruption survey at national. • Dissemination. These activities are important. The new approach emphasizes the importance of leadership and an integrity mind set among Public servants. transparency and a focus on objectives and results. municipal and sub-county level.
LEADERSHIP. The “pillars of integrity” in a society include actors outside the executive and outside government itself. public account committees. capacity building focused most entirely on strengthening the capacity of ministries to deliver public services is insufficient. law enforcement agencies. Donors have in some of the more advanced countries been invited into help initiate awareness raising and skill building efforts with parliaments.and publicsector Contributions to sustainable development. WHO ENFORCEMENT AGENCIES.EXECUTIVE. NGOs and private-sector organizations. The collection of stakeholder groups is referred to as “pillars of integrity” because it is incumbent on them to support and uphold SATISHCHANDER .JUDICIARY. Pillars of Integrity To ensure that there is an enabling environment that is supportive of private.WATCHDOG AGENCIES. judiciaries. 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.INTEGRITY. particularly the relating to government ministries. However.SKILLS.PRIVATE SECTOR.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.MIND-SET. Traditionally. a National Integrity System needs to be built with mutually supportive pillars. domestic stakeholders both inside and outside government. PARLIAMENT.MEDIA.INCENTIVES. INFORMATION. A more systemic approach to building integrity and sustainable development requires institutional strengthening of other “pillars” that is. Capacity Building . CIVIL SOCIATY.
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.CULTURE OF CORRUPTION IN INDIA 27 practices that promote public integrity. the system can no longer support sustainable development and effectively collapses illustrates the inter action of the different stakeholders in combating corruption. E. In the fifteen countries that have embraced the reform effort. etc. and donors into a coherent framework of institutional strengthening. Three broad. SATISHCHANDER . The reasons for building an integrity system may differ from country to country. civil society. Where several pillars weaken. almost generic. Provide a direct link between government and institutions of civil society for research. sustainable development. 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. a weakening of one pillar results in an increased load being shifted on the others. 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. objectives are identified: rule of law. inadequate rule of law could turn out to be the critical bottleneck for progress. and quality of life.) (7) Civil society (8) Law enforcement agencies The pillars are interdependent. 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.
5. 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 . public-education and awareness-raising activities. integrity-building Workshops and other events. Information and public awareness-raising 3. The focus of the strategy is on achieving Specific out comes in the expectation that these will. and citizens. in turn. NGOs. Requesting. 4.CULTURE OF CORRUPTION IN INDIA 28 2. The National Integrity Strategy should result in a wide range of reforms that are interrelated and integrated in order to create systemic change. providing. Conduct SDSs. Facilitate integrity-building activities as part of the implementation of the government’s economic and public-sector reform programs. and using Information in partnership with the media. 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.
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. F. 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. 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 ... the nation’s chief executive May be the formal client for governance work while the real champion is another senior Government official India. this group could be derived from municipalities or youth.CULTURE OF CORRUPTION IN INDIA 29 Each of the outcomes listed in represents a series of integrated activities and outputs. and in terms of deregulation as an element of economic/regulatory reform. 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. in other situations. The Champions of Reform in India A ninth “pillar” can be added to the eight organizational or institutional pillars. Depending on the country. Ideally. Customs 1) 2) 3) 4) 5) 6) 7) Review customs precede legislation to strength incompliance. Such groups increasingly have the power and influence needed to protect the Institutions undergoing reform from the enemies of reform. However. 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.
banking. 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 . 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.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.
thus the stipulation that credible donors be invited into a country by government and an organization in civil society. Government efforts have failed when the confidence and support of civil society were absent. cynical public could undermine even a government’s best intentions. and the best possible solutions. The potential partner in civil society must be one the government feels comfortable with to enhance creativity. so it is essential to develop broad coalitions supporting reform.CULTURE OF CORRUPTION IN INDIA 31 Strategy for building integrity A. Local Ownership First among key elements in promoting new governance strategy is local ownership. There are no standard solutions SATISHCHANDER . The local community is best positioned to know and understand its particular problems. 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. Local actors must drive the process for the very reason that they will be bringing about reform. It is naive for outsiders to believe they can solve another country’s corruption problems. There are practical benefits to including an international NGO such as TI in the partnership. and the internal dynamic vary subtly but distinctively from country to country. Such a partnership also helps minimize risks and exposure for the donor in this admittedly sensitive area of activity. There are various stakeholders in the integrity system and success depends on involving as many as possible. Corruption takes a myriad of forms. Local “Ownership” must be rapidly achieved when a pilot governance program is launched. The Role of Civil Society Civil society’s involvement is a central part of a strategy to build integrity. This protects the donor’s objectivity on political issues and ensures that work is directed towards the entire system rather than individuals. the network of participants. 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.
CULTURE OF CORRUPTION IN INDIA 32 that any donor can impose upon or recommend to a country. There are many questions to be answered. which provide baseline data and measure. accountability and improved service delivery. 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.” B. ranging from formal surveys. Various instruments and tools are used. which might include: 1. and (c) Its capability of contributing relevant experiences from other countries and contexts into the answer-seeking processes. What is the role and impact of donors on corruption in a country? 3. to do establishment of integrity units within government. These facilitators should help governments determine how to manage a change process that results in increased transparency. 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. Rather than presenting themselves as policy experts. (b) Its ability to help identify the questions that should be asked. Where is the money going? SATISHCHANDER . change over time. The strategy is to demonstrate an approach that can be incorporated into projects and to act as a resource for NGOs and local institutions. The donors’ competitive advantage lies in: (a) The knowledge it acquires through its global experience and perspective. the objective is to help client countries mainstream integrity so anticorruption practices become institutionalized and systemic. With a shared understanding of objectives among all the partners and with the process being locally owned and driven. focusing on the process. Ultimately. the donors should work as facilitators. Action Research Action research refers to learning by doing.
and adapt each national strategy accordingly. opening up government to the public. While it is too soon to provide clear guidelines. adapting to case law and best practice experience in order to improve the strategy’s effectiveness. SATISHCHANDER . To promote national reform. Facilitating the building of national integrity to curb corruption in sixteen countries or more allows for sharing and learning among them. 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.CULTURE OF CORRUPTION IN INDIA 33 5. While these efforts need to be tailored carefully to each client’s situation. The strategy for building integrity systems must remain flexible at all times. countries across all five regions have been chosen. C. The Sequencing of reforms is an action-research issue of particular interest to CICP’s and its Clients. 7. this element is being studied in each country case. Prevention and integrity tools and activities The process of strengthening a National Integrity System begins with a national dialogue followed by national action. 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. Data from different surveys and other economic and financial data are made available to all integrity pillars. Action-Oriented Data Collection Critical to the success and sustainability of the integrated approach to governance is the innovative use of information. some approaches based upon the Team’s prior experiences have married well with the circumstances of other countries. learn from the results as they become available. the following prevention and integrity tools have been developed. The objective of the action-research process is to monitor the performance of different tools and processes within these countries. In order to make this learning process as rich as possible. The information disseminated about the government’s responsibilities and what it is actually doing empowers the public and increases the accountability of public servants.
developed the SDS methodology and continues to administer the surveys for the government. The SDS provides essential baseline data and periodic evaluation information to help design civil service. effectiveness. private sector. Enforce code of conduct including declaration and monitoring of assets 6. National Integrity Unit (NIU) A. The NGO. the SDS cycle employs processes which build local capacity for data collection and analysis. External oversight in tender process 5. privatization. If the information SATISHCHANDER . 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. and efficiency of public management have had limited success. monitor results. Integrity or corruption Surveys 3. If not more important. timeliness. The Integrity Pledge 8. National and Integrity Workshops (NIWs) (broad based action planning) 7. and other reforms. including information about the cost. and NGOs. Islands of Integrity 9. decentralization. and ultimately make services more responsive to citizens’ demands. The SDS covers many aspects of service delivery and identifies the multiple reasons for inefficient and ineffective service delivery. and quality of each service. government clients are better equipped to decide which services should be delivered by the State. Surveys focusing on service delivery 2. CIET international. programs to increase the integrity. coverage.CULTURE OF CORRUPTION IN INDIA 34 1. 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. including factors constraining the delivery of public services. Municipal and Sub-national Integrity Workshops 4. By obtaining more accurate information about service delivery. National Integrity Steering Committee (NISC) 10.
After the data is collected. which permits comparison between communities over time in order to measure the effect of reforms. 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 survey results provide valuable information.. and in all cases. taxation. households and service providers are asked about their perceptions of the quality of public services. roads and police protection). instead. SATISHCHANDER . The SDS uses a large enough sample to permit statistical analysis of the survey results data. capacity building is a central theme. First. The basic building block of the community-based data is the household survey. Since households have a wide range of contacts with public institutions (e. SDSs can contribute substantively to national capacities for evidence-based planning. it develops from and along with national capacities. An SDS supplements existing institutional data with community-based data. the results are shared and interpreted by focus groups comprised of both the households and the service providers. It builds skills among planners and decision makers at local levels in the process of designing surveys. All SDSs observe the same guiding principles and methods. A group of communities is chosen in given region or country. Second. key informant interviews. and ways to overcome the problems. the survey is conducted. The SDS process involves a number of steps. workshops bringing all key stakeholders together are conducted to build consensus and find acceptable solutions to service delivery problems. existing problems. The quantitative data is supplemented with qualitative data collected through focus groups. interpreting findings and planning on the basis of timely. collecting data. By emphasizing analysis and communication capacities. Several survey cycles are required to build local capacity sufficiently so that future surveys may be conducted independently. and institutional reviews. the surveys will also give the agencies responsible for the out-sourcing excellent information to manage the contracts. 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 methodology is inherently inter-sectorial. Thus. the appropriate number of Local supervisors and interviewers are trained to organize the surveys and analyses the results. relevant information. A large number of nationals are trained to sustain the process. health.g. Finally. which enables national and subnational public managers and policy makers to do their jobs more effectively. Next. The SDS process provides data for sub-national levels (such as regions and districts) as a basis for rational planning at these levels.
In each country. rules and regulations serve little purpose without an adequately funded and staffed enforcement strategy. the objectives. and outcomes are different and reflect the particular country’s context. New laws. which ones had problems. effectiveness. The information gathered was used to raise the awareness of designers of an institutional development Program to improve service delivery. With the growing realization that an assessment of public-service delivery should consider the private sector. SDSs were used further up-stream in program development. Integrity Surveys Since 1997. The SDS was part of an effort financed by donors to reform public administration. Survey questions dealt with specific problems that public-sector manager shad identified. the SDS compares public and private services and highlights the areas where the public and private sectors interact. capacities. which examine many aspects of service delivery and identify multiple reasons for inefficient and ineffective delivery. For most reformers and governments committed to change. can play an important role in helping reformers to monitor the effectiveness of enforcement measures. with donor support. 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. B. environment. 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. in Mali. 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. NGOs such as TI. a representative sample of households were asked open-ended questions about their contact with government services. enforcement remains one of their biggest challenges. and their suggestions for improvements. 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. They can also be used as part of an anti-corruption enforcement strategy. with smaller surveys focused specifically on corruption. A pilot cycle was run in ministries (urban transportation. instruments. and needs. and responsiveness. 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. By contrast.CULTURE OF CORRUPTION IN INDIA 36 Survey results are used in different ways by different stakeholders. One way of doing this is to conduct an annual bribery survey similar to the TI SATISHCHANDER . Regionally. client countries have found it useful to complement the extensive Service Delivery Surveys. and customs services) that opted into the reform program.
60 per cent of the proposed actions in the plan were accomplished within a year. the judiciary. the participants identify and form a consensus about where and how corruption affects their society. watchdog agencies. With a contextual understanding of the problem. External actors can facilitate the process. SATISHCHANDER . When this was done in Tanzania. In addition to the formal integrity surveys. In small discussion groups. Follow-up activities may aim to help prevent corruption. informal participant surveys are sometimes Included as part of an integrity workshop or symposium to draw attention to a particular corruption issue. Examples of these activities include:- -the declaration and monitoring of assets as occurred in Tanzania. and build (or strengthen) institutions.Payment of adequate wages. The objective of an NIW is to promote better public service. parliament.CULTURE OF CORRUPTION IN INDIA 37 Index. strengthen enforcement. -the establishment of Citizens’ Charters. media. 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. and international experiences and best practices in controlling corruption. 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. papers written by representatives of each of the “integrity pillars” describing how corruption is present in various stakeholder groups. and others. . C. The NIW assembles representatives of all the major stakeholders or integrity pillars in society: the executive branch of government. civil society. raise public awareness. The workshop can start with a presentation of the SDS and Integrity Survey data. but the dialogue and its results must be developed and therefore owned by the local stakeholders.
and Ukraine).CULTURE OF CORRUPTION IN INDIA 38 -The re-enforcement of anti-corruption laws (on election financing. Uganda. SATISHCHANDER . During the initial workshop. As part of this dialogue. and -concrete expression of political will A series of two or more NIWs is useful in building a National Integrity System. the facilitators describe their experience in working with societies addressing comparable problems and actions taken internationally. especially within the OECD. Uganda. The workshop develops a general outline of a National Integrity System within the guidelines of the country. the issues of integrity and ethics and their relation to corruption control are addressed. etc.). Specifically. 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. -prepare an outline drawing on best practice that can serve as a basis for informed public discussion and political debate. Awareness-raising activities include: -dissemination of survey and workshop results to the media (Tanzania. -a media campaign and public-education program about corruption (Tanzania. 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. -The strength inning of the court system and the police. 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. including the political opposition. gifts for civil Servants. 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. and Ukraine). to constrain transnational corruption and its impact on countries in the South.
Seek agreement on the importance of an improved service delivery system to increase the efficiency and effectiveness of delivery. An Integrity Pledge that expresses the consensus of the workshop on the issue of corruption. and enhance the image of the municipality. This is done through a Municipal Integrity Workshop. Accountability and value for money. They want to know residents ‘opinions of the services provided. effectiveness.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. or C. 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. The integrity workshop model marshals the ideas and resources of key stakeholders by inviting them to contribute to the proceedings as equal partners. find out where corruption may be siphoning resources. Introduce the idea of a Local Integrity System to enhance accountability and transparency. D. transparency. Municipal and other sub-national workshops are part of a four-phase program to introduce a Municipal (or subnational) Integrity System. Phase II focuses on carrying out an SDS directed at specific areas of concern. 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. install a Local Integrity System to improve service delivery. A National Integrity Action Plan by the end of the workshop. SATISHCHANDER . It also emphasizes the production of tangible outputs:- A. -establish ownership and commitment of the participants to the conclusions and an action plan. B. A review of progress made on an earlier Action Plan. 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.
the results of the SDS are presented at a second Municipal Integrity Workshop and an Action Plan is drafted. Of particular importance is the extent to which the plan has been implemented.. media coverage of corruption.g.g. or evidence of successful prosecutions for corrupt practices). changes in revenue collection. monitoring and evaluation. Drawing on the SDS findings. Phase IV involves implementing the action plan according to the agreed timetable. Each stakeholder should be encouraged to self-assess the outputs and outcomes achieved by the organization. which expresses the consensus of The workshop about corruption. introducing a Code of Conduct and periodic appraisals of the SATISHCHANDER . Being Held accountable for decisions made at the workshop makes participants role models for accountability throughout the country. including: (a) an Integrity Pledge. Regularly repeated SDS will provide outside confirmation of changes in public-sector performance and of the factors that are responsible for these changes. changes in foreign direct investment. 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.CULTURE OF CORRUPTION IN INDIA 40 Phase III.Measuring results may show progress in terms of “outputs” (e. The results of the Local Integrity Action Plan can be measured in terms of progress made in building a Local Integrity System. Integrity surveys can provide additional information on the extent to which the public perceives that corruption has been curbed. Other indicators of progress can be established at the Municipal Integrity Workshop (e. the municipal or other sub-national workshop should Produce tangible outputs. 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.
Assisting/facilitating local authorities in setting up Local Integrity Systems. these workshops aim at: 1. however. More specifically. and other integrity pillars).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. whether they are a National Integrity Action Plans. Special Integrity Workshops for Each Integrity Pillar Special workshops have been held for peer groups. The same principles apply to all action plans. E. 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. 3. Fostering discussion of what will be needed to set up a Local Integrity System with all Integrity pillars. 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. Occurrences of ministerial indiscretions being vaguely defined and being defended as being “in the public interest” are all too common. by factors (such as wage scales and offers of bribes from the private sector) beyond the control of a particular municipality. which focus on corruption as seen from their perspective and what it means for them in carrying out their public roles and responsibilities. NGOs. 4. Workshops for ministers have similar objectives. To give one example. Action Plans Translating dialogue into action is a critical step in the process of building a National Integrity System. The sustainable “impacts” of these changes in terms of less corruption and improvements in public services overall will be influenced. 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. F. For example. municipal or other sub-national action plans. SATISHCHANDER . making participants appreciate the detrimental effects of corruption. 2. Defining the roles of relevant actors (donors.
both top-down and bottom-up. The action plan should be endorsed or issued by an executive commission. for example. a high level of co-ordination within the government will be needed as actors and Stakeholder execute the program. prevention of corruption by minimizing opportunities and increasing risks of detection. the effort must be wholly owned and driven by the subject country. Second. In particular. As a third principle. public procurement agencies. government departments. A time table with benchmarks. which proved successful in the INDIA reform efforts. Donors can help organizations achieve reform by providing resources.Pick areas that are visible and important to the public . any action plan should call for major initiatives in four separate areas: awareness-raising. Fourth.Pick action items that you can afford to implement SATISHCHANDER . and enforcement Expectations must be managed carefully to ensure that promises are realistic. Implementing the national action plan. Public opinion surveys. to be successful. institution building. Stakeholders should be held accountable for achieving results. will typically involve the auditor-general’s office the ombudsman’s office. space and protection. and monitoring schedules is necessary but there should be some room for flexibility. that some changes are made quickly and that they are communicated to the public to maintain their confidence in the process. staggered events. prosecution agencies. can be used. 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. the civil service. and professional Associations among other groups. a major effort must be made to draw civil society into the process in imaginative and Constructive ways. The process of devising a National or Local Integrity Action Plan is event-driven.CULTURE OF CORRUPTION IN INDIA 42 First. 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) .Select actions where the participants have authority to change things . the country’s political leader and his/her deputy play a central role in setting the Tone and asserting moral authority.
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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
not better. 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. highly professional Investigators and prosecutors to conduct enforcement work. Yet when the same models SATISHCHANDER . The same ingredients were there. 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). whilst failing dismally in e. and again it worked. and copied with a high degree of success in Singapore. We have also seen very starkly that what will work in one country. even though this was nominally accountable to himself. The country was undemocratic. which was introduced so successfully in Hong Kong. What was it about the Asian model that helped it succeed there. House of Lords. Added to this there was a working judiciary and a pool of well-paid. and work well. and there will be many interesting insights gained at the local level in the coming months. Mayors are starting to develop strategies. respectable and respected future as a member of the U. and a robust economy (particularly over the later years) capable of delivering significant budgets to the Commission for its public awareness and prevention work. More recently.K. Instead there was a Prime Minister who was well-paid and ruthlessly determined to rid the country of corruption. 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. There was a head of government (a Colonial Governor) from outside the colony. in some countries we have seen municipalities start to realize that there is space for them to reform local practices. particularly to information management being essential).CULTURE OF CORRUPTION IN INDIA 47 perception seemed to be that matters were getting worse. The most outstanding example of this would be the Independent commission Against Corruption. with the exception of an outsider as head of government. There was also determined to see the experiment succeed and so honoured the independence of the Commission. drawing civil society watch-dogs into the frame to inform and to authenticate the processes. pointing to other lessons. Thus. which he had identified as the major barrier to the country succeeding.g. Africa? The Hong Kong environment was an ideal one for the Commission approach. may be wholly ineffectual in another. Singapore took the model. 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. He was well paid and could look forward to a comfortable. with no family or business links into the local scene. although the Commission (actually an Agency) was accountable to the Prime Minister (and formed part of his office).
but without doubt the presence of ethical leadership at the highest levels of government have played a significant role in the achievements to date. Zambia is another country that had a similar problem. As the Vice President of Uganda remarked to donor mission. inadequately motivated and professionally lacking. then. hugely disruptive and the state lacking moral authority to act—how does one achieve an amnesty. who are corrupt at the lower levels. courts were unpredictable to say the least. In both countries the resources available for the agencies were grotesquely insufficient. once the unquestionably “clean” Julius Nyrere stepped down as president. 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. This. well-resourced and where the rule of law was functioning—adopted the Hong Kong model after scandals involving ministers had been uncovered. “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. By contrast. north. but these departed in situations surrounded by controversy. and many of those working in the public sector were poorly paid. 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. So if prosecution for all past transgressions is not a viable option—too many people. Botswana—an African country well-run. Reporting to the Office of the President. It tried to resolve these at times by bringing in expatriates to head the office. The development in Botswana are too recent for us to be able to judge the success of the reforms. the money would have vanished and the story would have ended then and there). Quickly. both to set minds at rest and to ensure that there is not a huge spate of prosecutions such SATISHCHANDER . a government that has corruption at the highest levels lacks moral authority to act against those. 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. its reports simply disappeared into a black hole. highlights the problem of transition.CULTURE OF CORRUPTION IN INDIA 48 were established in Africa they undoubtedly failed. the rule of law was far from entrenched. The Prevention of Corruption Bureau in Tanzania was been blunt about political interference in its work. a Commission was established under the Hong Kong model and a former Deputy from the Hong Kong ICAC brought in to run it. east or south. 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 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. with legislators notorious for their male chauvinism suddenly becoming advocates of the rights of wives to earn and hold wealth separate and apart from. whether through unnecessary foreign travel. or they must be Accessible to the press and the public to enable civil society to do its own monitoring). 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). They must be subject to random audit if they are made in confidence. soft on the causers (sic) of crime”. 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.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. their spouse). and the immediate family of the of the official must also be covered in appropriate ways (the debates in legislatures are wonderfully instructive. Indeed. Hong Kong introduced the offence of a civil SATISHCHANDER . There are many legislatures who have been going through motions of one sort or another. the procedure must be such as to deter people from making false declarations (e. whether publicly or privately. The same questions overhang another simple reform. etc. 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”. Rationally one can explain why this might be necessary. which requires that all assets be declared but then goes on to exempt just about everything imaginable). This means that anyone filling out a declaration of assets will in effect be declaring that they possess illicit wealth. it might be.g. An alternative approach—or a supplemental one—can be the introductions of systems whereby senior decision makers declare their assets. And if they do not complete the forms correctly. and unknown by. the whole exercise is valueless. If a person has survived for some time in a systematically corrupt environment and risen to a position of prominence. the chances are that he will have (perhaps have been forced by economic circumstances to have) augmented his income in irregular ways. 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. There are very real problems. “ghost” up-country trips or simply servicing his private car in the public service garage. 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. This is now widely seen as the key to unlocking the anti-corruption chest.
SATISHCHANDER . A public hearing. A crowd soon gathered and most stayed for the next six hours. an EDI/TI team was told that the provision was “a bit harsh “and that “we do not like it very much”. on 19 January 1998 in Surajpura village began with a puppet show dealing with the abuse of development funds by politicians and government functionaries. attended by village leaders. This has proved powerful in Hong Kong. It was not necessary to show a corrupt act. The crowd roared with mirth when the name of a person long dead was listed as a paid labourer. yet access to information—which forced President Nixon from office in the USA after the Watergate Tapes become public—proved no less potent there. even more potently. But again.. 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. Schools. Some showed inflated bills. both by the use of surveys and.CULTURE OF CORRUPTION IN INDIA 50 servant “living beyond known means”. the Mazdoor Kisan Shakti Sangathan (MKSS) is taking that information to the people. The accounts listed some as being paid who had not been. 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. Others suggested that payments had been made for materials that were never used. drainage and sewage schemes and other projects were looked at and as confidence among the crowd grew. 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. The Government of Rajasthan recently recognized the people’s right to access to official documents at the local level. In building accountability between officials and the public they are meant to be serving. 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. more and more started to ask questions and to identify a wide range of frauds. 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. Now an NGO. Why not? Again. The Indian village of Surajpura is a long way from Washington D. Singapore and Malaysia to name three. unless and until he or she can Produce an affirmative defence and show that the wealth came from licit sources. in Africa the provision has been enacted but there have been no prosecutions.
Unpaid workers and suppliers were promised payment. 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. At its end. there are also as many challenges. 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. We know where we want to be. made possible through skilful facilitation by MKSS and its success in persuading officials that they really had no alternative but to take part. providing as it does an opportunity for all stakeholders to participate in a process that otherwise tends to be dominated. First. A particular challenge for the outsider is to identify the appropriate (and clean) partners in a given country. This will differ from country to country. 9. Just how do we get there? The answers are coming. but the outsider must be able to SATISHCHANDER . We know where we are. there is a Gordian knot that needs to be cut if it cannot be untangled.CULTURE OF CORRUPTION IN INDIA 51 Throughout. It is in this context that the “national integrity system workshop” can be most effective. some even agreeing on the spot to return money where personal liability had been established. There may be many who offer themselves. if necessary at the expense of some of the work that has been going on in more traditional governance research areas. These may seem small victories. for no good or compelling reason. by lawyers. Aside from being a creative exercise in government for the people by the people. the question is the sequencing of reforms. but actually working out precisely where to start in the process is an important one as it will dictate much of the path ahead. 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. CHALLENGES AHEAD If there are many unanswered questions. Overall. but not just yet. the meeting was surprisingly constructive and orderly. The looted money then helps pay for the buying of votes and so distorts democracy as well as development. these meetings are small but significant steps towards a transition from representative to participatory democracy.
and the base line of acceptable (or perhaps better described as tolerable)conduct which the people are prepared to live with. The donor community can. (dominating small group discussions etc. The donor community also has a significant role to play in developing countries. both as complainants and as witnesses. should and do fund. and to tolerate the misappropriation of public funds to suit their own ends. The traditional form of expert aid—a foreigner flying in for a short period. it is a perception that is very real. However. both as part of the problem and as part of the solution. doing a job and going—has been conspicuous by its failure to achieve sustainable development. Credible agencies will attract public co-operation.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. 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. So donor organizations must re-examine their own practices. supportive and facilitative. but they may need access to information. An institution lacking in trust will not. the tools they need to undertake the job and. And at the heart of credible institutions lies their manifest and popularly-accepted integrity.) the less likely the efforts are to bear fruit. 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. Thus the donor’s role is to be low key. something which many have been doing. Whatever may have been the position in the past. The credibility of enforcement and watchdog agencies is crucial to the building of public trust and confidence. at times. And in many instances there is substance to the complaint. defined. need to be identified from the outset. too. most countries now have the human resources to tackle their own problems. unfair some may think this to be. but it is essential that these be locally owned and driven. Their leaders must role model conduct of the highest kind. in particular. 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”. SATISHCHANDER . And as part of the solution there are activities which donors can. The more conspicuous is the role of the donor. The road blocks. a word of encouragement.
There are many lessons to learn. as experience grows. financial reforms. civil-service reform. and not just the bribe receiver. and pruned from. including: sector reforms. 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. 1) Successful reform requires a country to integrate and harmonies all reforms in to a National Reform Program. Frank acknowledgement of the role of the rich countries in contributing to the present decline.CULTURE OF CORRUPTION IN INDIA 53 And they can help stress a focus on the bribe giver. 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. 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. army demobilization. privatization. decentralization. This is particularly the case in so-called “grand corruption”. and the final one is information sharing. This is not an area in which “experts” should develop stand-alone and discreet information bases. and legal reforms. CONCLUSION The process of building national integrity systems is as important as the content. constitutional reforms. economic reforms. The “hand that gives” must also be addressed at the national level. And we would conclude with an invitation to others to join in this project as being one from which all can benefit through sharing. 10. This will be added to. The task countries Confront is daunting and everyone needs access to as much experience and information as possible. 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. SATISHCHANDER . The following are six final thoughts about the process. 2) Reform is a long-term process where attitudes and conduct must be examined and reevaluated for effectiveness at all levels.
It is dependent upon the people’s loyalty to its philosophy and policies regarding the development of the society’s social. (d) that are within the budget. and(e) that can have some short-term positive impact. done in partnership with CIET International. are in the latter category and are consequently expensive. (c) that are discrete and where reformers can control implementation. 5) Reform is a process of instituting building blocks that must be put in place over a number of years. much of the governance work should be done at the sub-national level. SATISHCHANDER . economic. At the heart of successful reform is the State’s. which are Often more relevant and easier to sell to other countries in the same region. such as the case of the TI survey. The so-called Service Delivery Surveys (SDSs).CULTURE OF CORRUPTION IN INDIA 54 3) Successful reformers will have to manage both expectations and change while introducing realistic incentive structures and sanctions. but the strategy must remain adaptable. They play an important role in measuring the places where the private sector interacts with the public. Some the anti-models based upon the governance group’s prior experiences have been effective. As decentralization becomes a growing priority. These ten country examples are important since they act as regional examples. However. (b) where the return on investment is greatest. actionoriented information-gathering procedures. more analyses are needed to assess the relative advantages of decentralization and the process for the efficient delivery of public services. and political welfare. 4) Initially. Surveys help establish baseline on which to judge progress. to ensure effectiveness. reform should only tackle areas: (a) that can show credible impact on issues Important to key stakeholders. The growing realization that the private and public sectors should be examined supports efforts to develop effective. The model should change as “case law” or best practice experience increases with the final objective being improved effectiveness. 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. 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 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.
Numerous studies have shown strong empirical support for the impact of income and education on corruption (Treisman 2000. would. Buddhism and Sikh) 4. This sentiment is essentially echoed by Huntington (1968). Citizens are more apt to back a politician that is of their SATISHCHANDER . 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). 2. We would thus hypothesize that regions in India with greater levels of education and affluence. As Mauro (1995) argues. on average. is a country with high levels of ethnic. be less corrupt. 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. It has two major ethnic groups (Indo-Aryan and Dravidian). Essentially. linguistic and religious diversity3. 15 official languages and at least 5 major religious (Hindu. 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. Hypotheses of corruption Additional Literature and the Hypotheses 1. Thus a discussion about the effects of heterogeneity on corruption applies quite well in the case of India. La Porta et al 1999. Christianity. a country of 1. regions or countries with higher levels of ethno-linguistic fractionalization might reduce the Like LaHood that citizens will oppose or penalize corrupt public officials. Montinola and Jackman 2002). Alt and Lasson 2003. incentives are reduced for politicians and bureaucrats to engage in rent-seeking behaviour. Islam.CULTURE OF CORRUPTION IN INDIA 55 11. Due to the greater likelihood of being caught. 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). The Heterogeneity/ Fractionalization Hypothesis India. The higher levels of wealth also give more citizens the resources to mobilize and take action against corrupt public officials.16 billion inhabitants.
religious or linguistic group. 4. 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. In areas that are more unequal. In response to redistributive pressures. Several recent studies have demonstrated a significant relationship between these two variable. the greater number the poor. 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. Income Inequality Hypothesis Although admittedly it is next to impossible to distinguish a distinct causal direction between these two variables. leaders of various groups might be more inclined to allocate resources in a systematically unfair way to benefit their own ethnic. we would anticipate that on average. In this scenario. 3. Several studies have found evidence suggesting that on average. Further. which should compel them to pressure the state for greater redistribution. 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). with some finding that corruption has a positive effect on income inequality (Gupta et al 2002. The Effect of Decentralization on Corruption The impact of decentralization – whether political. the wealthy have greater incentives to engage in political corruption to avoid paying higher tax along with bureaucratic corruption to avoid tax payments.CULTURE OF CORRUPTION IN INDIA 56 religion or ethnicity and in return. greater diversity is associated with higher levels of corruption (Alesina et al 2003. Gyimah-Brempong 2002) and others showing support that inequality increases corruption. Based on this. We would thus expect that. inequality and corruption are expected to be related. financial or administrative . higher levels of income inequality in Indian states are associated with higher levels of corruption. in particular in democratic states (You and Khagram 2004). 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. Charron 2009). ceteris paribus. which would come from taxing the wealthier class (Meltzer and Richard 1983). La Porta et al 1999. you and Khagram (2004) show that in democracies. more of the citizens will of course be poorer. The argument as to why these two forces are related is rather straight-forward. the more opportunities for vote buying during a political campaign.on corruption is a hotly contested topic. India is a long-time federal system with state-level SATISHCHANDER .
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. However. the greater the political or fiscal decentralization. the lines of responsibility are more blurred than in a strict unitary. At the provincial level. Today it contains a total of 28 states and 7 unit territories. 5. thus building a population that is better suited to monitor and penalize corrupt behaviour in the public sector. encourage responsible governance and reduce corruption. Fisman and Gatti (2002) and Gurgur and Shah (2005) find empirical evidence for greater levels of decentralization being associated with lower corruption levels. Since this analysis is examining a sample of state within one country. 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. On the one hand. Each state is primarily responsible for issues such as law enforcement. especially in developing countries. Lindstedt and Naurin 2005. On the other hand. Gerring and Thacker (2004) find empirical evidence in a cross-sectional study supporting this argument with respect to political decentralization. SATISHCHANDER . 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. thus voters do become more confused regarding to whom they should assign blame for corrupt politics. most of the tests of this hypothesis have been conducted using national level data on corruption and aggregated levels of decentralization. However. public works and services. one might expect that states with higher levels of media consumption might have a more informed public on political matters. centralized system. Tanzi (2001) and others argue that fiscal decentralization might lead to greater levels of corruption.CULTURE OF CORRUPTION IN INDIA 57 elected official and parliaments which are represented by both national and regional parties. who should increase accountability. the closer the voters come to their politicians. education. most of which under the States Reorganization Act in 1956 were draw around linguistic lines5. and hospital care within their borders. India provides an excellent test case in that there are substantial variations in the level of decentralization – especially fiscal decentralization – among the states. 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. Moreover. Ahrend 2002). variations in press freedom are expected to be low to non-existent across regions. 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. ceteris paribus (Brunetti and Weder 2003.
2% in 2007and 9. with record growth rates of 9. embezzlement. 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. Corruption in India Corruption is widespread in India. evasion of tax and exchange controls. 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.CULTURE OF CORRUPTION IN INDIA 58 B. economic liberalization in India has reduced red tape and bureaucracy. supported the transition towards a market economy and transformed the economy. In India.3). The year 2011 has proved to be a watershed in the public tolerance of political corruption in India. Since 1991. Transparency International estimates that truckers pay US$5 billion in bribes annually. Overview Although former Prime Minister and Congress party leader Indira Gandhi is quoted as saying that corruption is a misuse of power. though the Indian economy has become the 6th largest in the world. etc. CULTURE OF CORRUPTION IN INDIA 12. In 2010 India was ranked 87th out of 178 countries in Transparency International's Corruption Perceptions Index (3. she also publicly stated "nonchalantly" that "corruption was a global phenomenon" and her government was no different. Political and bureaucratic corruption in India is major concerns. its growth has been uneven across social and SATISHCHANDER . However. corruption takes the form of bribes.6% in 2006. Corruption has taken the role of a pervasive aspect of Indian politics and bureaucracy. 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.
1. even as the Enforcement Directorate (ED) probes US$8 billion worth transactions allegedly involving suspected money launderer Hassan Ali Khan. The Comptroller and Auditor General of India said. Indian-owned Swiss bank account assets are worth 13 times the country’s national debt. unutilized committed external assistance was of the order of Rs. India has more black money than the rest of the world combined. 2010. embezzlement.000) villages in India for the next 10 years. perceptible in public sector inefficiencies and inadequate infrastructure. “As on March 31. while 80% of Indians earn less than 2$ per day and every second child is malnourished. is undermining efforts to reduce poverty and promote sustainable growth. India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (approximately USD 1. “The recent scams involving unimaginably big amounts of money. emigration to cities. rape and even murder". It is estimated that more than trillion dollars are stashed away in foreign havens. immigration rackets. It seems as if only the honest people are poor in India and want to get rid of their poverty by education.” In a most recent example of corruption. "including human trafficking. like Hassan Ali Khan are getting rich through scams and crime. Endemic corruption contributes to this uneven distribution of wealth. the organizers of Dandi March II in the United States said. evidence available with a news source in India shows that he had transactions of over Rs 112. with sections of society experiencing some of the highest levels of poverty in the world.339 crore. The cost of corruption. To put things in perspective. Criminalization is also a serious problem in contemporary Indian politics. SATISHCHANDER . This amount is enough to fund the national drinking water project in all the six lakh (600.86 billion) between years 2005 and 2006. and immigration. are well known.CULTURE OF CORRUPTION IN INDIA 59 economic groups. It seems as if India is a rich country filled with poor people". According to the data provided by the Swiss Banking Association Report (2006). 05.000 crore (US$24. such as the 2G spectrum scam. whereas all the corrupt ones. In July 2008 The Washington Post reported that nearly a fourth of the 540 Indian Parliament members faced criminal charges.4 trillion) in the form of black money.
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. when the License Raj held sway. These were largely distortions created by the politico-economic regime. such that scarce resources could still be allocated within the economy. It revealed that political leaders had become the leaders of gangs. some of the distorted cultural norms that took hold during the earlier period are slowly being repaired by the sheer forces of competition. in October 1993. politicians and bureaucrats in India. however. leading to pervasive corruption and slow growth. It also discussed criminal gangs who enjoyed the patronage of politicians — of all political parties — and the protection of government functionaries. According to Jitendra Singh. While a sea change has occurred in the years following 1991. There is a lack of transparency in governance rules. "in the bad old days. and public ownership. particularly pre-1991. The economy was subject to extensive regulation. protectionism. N. License Raj was often at the core of corruption. The Vohra Report. They were connected to the military. which is endemic in certain parts of the world. power-hungry politicians. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government.N. studied the problem of the criminalization of politics and of the nexus among criminals. and decisions could get made.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. Vohra. procedures are complicated SATISHCHANDER . and corruption emerged almost as an illegitimate price mechanism. submitted by the former Indian Union Home Secretary. State Assemblies. and even the Parliament. Forms of Corruption Most reports and studies emphasize that the country continues to face major governance challenges. all kinds of free market mechanisms were hobbled or stymied. Over the years criminals had been elected to local bodies. It will not change overnight. and by design. a shadowy quasimarket. The process will be long and slow.
but include bribery. an exclusivist process of decision-making. money laundering. Either may initiate the corrupt offering. nepotism. is not considered political corruption. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties. graft. For instance. Types Bribery A bribe is a payment given personally to a government official in exchange of his use of official powers. Bribery requires two participants: one to give the bribe. government officials have broad or poorly defined powers. cronyism. The activities that constitute illegal corruption differ depending on the country or jurisdiction. Nepotism is embedded in the civil service. The country is further characterized by rigid bureaucratic structures. While corruption may facilitate criminal enterprise such as drug trafficking. Forms of corruption vary. bribery alone is estimated to involve over 1 trillion US dollars annually. Political corruption Political corruption is the use of legislated powers by government officials for illegitimate private gain. poorly-paid civil servants and the absence of effective internal control mechanisms. Misuse of government power for other purposes. A state of unrestrained political corruption is known as a kleptocracy. Worldwide. In some cases. a customs official may demand bribes SATISHCHANDER . certain political funding practices that are legal in one place may be illegal in another. literally meaning "rule by thieves". such as repression of political opponents and general police brutality. undermining the legitimacy of democratic processes and citizens’ trust in public institutions. and embezzlement. patronage. which make it difficult to distinguish between legal and illegal actions. and one to take it. and human trafficking. Neither are illegal acts by private persons or corporations not directly involved with the government. overly centralized government. it is not restricted to these activities. for example. extortion.CULTURE OF CORRUPTION IN INDIA 61 and the bureaucracy enjoys broad discretionary power. Political corruption and corruption scandals involving high ranking officials and ministers periodically hit the headlines. journalists are harassed for reporting on corruption and recent years have seen an increase in off-the-books campaign finance arrangements.
favor. In some Spanish-speaking countries. However. while in the United States they are legal. privilege. campaign contribution. for example. perk. or a smuggler might offer bribes to gain passage. Political campaign contributions in the form of cash. in Arab countries they are Baksheesh or Bakshish. fund raiser.CULTURE OF CORRUPTION IN INDIA 62 to let through allowed (or disallowed) goods. object of value. or influence of a person in an official or public capacity. Bakshish is more akin to tipping. In some developing nations. they are also used to intentionally and maliciously cause harm to another (i. receiving. preferment. Bribery. One must be careful of differing social and cultural norms when examining bribery. property. grease money. It may be any money. 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. or merely a promise or undertaking to induce or influence the action. no financial incentive). Tipping. In addition to using bribery for private financial gain. funding. higher paying job. inflated sale of an object or property. stock options. while in others the two concepts may not be interchangeable. good. right in action. waived fee/ticket. advantage. donation. gift. Bribes may be demanded in order for an official to do something he is already paid to do. kickback/payback. sweetheart deal. free trip. free ad. free tickets. bribes are referred to as "mordida" (literally. They may also be demanded in order to bypass laws and regulations. Forms of bribery Many types of bribes exist: tip. making it extremely difficult for individuals to stay in business without resorting to bribes. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering.e. or promotion (rise of position/rank). skim. free food. discount. vote. up to half of the population has paid bribes during the past 12 months. are considered criminal acts of bribery in some countries. lucrative contract. secret commission. Expectations of when a monetary transaction is appropriate can differ from place to place. sponsorship/backing. is considered bribery in some societies. a form of corruption. emolument. is an act implying money or gift given that alters the behavior of the recipient. "bite"). for example. The bribe is the gift bestowed to influence the recipient's conduct. SATISHCHANDER . In some countries the culture of corruption extends to every aspect of public life. giving.
In Eugene. The moment a new queen is crowned. The forms that bribery takes are numerous. where a person invested with power is induced by payment to use it unjustly. a profit made by an agent. or "commission occultes" ("secret commission" or "kickback"). where power is obtained by purchasing the suffrages of those who can impart it. kick-back etc. Bribery may also take the form of a secret commission. the briber might hold a powerful role and control the transaction. the old queens. While the last two expressions contain inherently a negative connotation. the expression "dessous-de-table" can be often understood as a commonly accepted business practice (for instance. SATISHCHANDER . who are the judges of the pageant. but according to the Transparency International corruption perception index. although this is better known as extortion. Bribery around the world is estimated at about $1 trillion (£494bn). a partial payment made between the buyer and seller. a citizen seeking paperwork or utility line connections might bribe a functionary for faster service. on the occasion of a real estate transaction before the notary. corruption would be rare in that part of the world. are open to bribery. The offence may be divided into two great classes: the one. The Slug Queens set the rare example of creating an environment where bribery is both accepted and encouraged. For example. without the knowledge of his principal. "wine-pot"). this is a good way to launder money). sweetener. Euphemisms abound for this (commission.CULTURE OF CORRUPTION IN INDIA 63 French-speaking countries often use the expressions "dessous-de-table" ("under-the-table" commissions). In German the common term is Schmiergeld ("greasing money"). the other. Oregon. a motorist might bribe a police officer not to issue a ticket for speeding. Likewise. or in other cases. bribery is an important aspect of the local SLUG Queen pageant that sets it apart from other pageants. in the course of his employment. needless to say.) Bribers and recipients of bribery are likewise numerous although bribers have one common denominator and that is the financial ability to bribe. a bribe may be effectively extracted from the person paying it. "pot-de-vin" (literally.
Where lobbying is (sufficiently) regulated. etc.or decision-makers can freely "sell" their vote. the business given to a store by a regular customer. in many cases. privilege. painters. or other regulations perceived as too stringent.CULTURE OF CORRUPTION IN INDIA 64 Trading in influence Trading in influence. or financial aid that an organization or individual bestows to another. Patronage Patronage is the support. refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). arts patronage refers to the support that kings or popes have provided to musicians. Some patronage systems are legal. In some countries the term is used to describe political patronage. encouragement. 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. the term may refer to a type of corruption or favoritism in which a party in power rewards groups. In the history of art. 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. It can also refer to the right of bestowing offices or church benefices. it becomes possible to provide for distinctive criteria and to consider that trading in influence involves the use of "improper influence". these appointments go to people who have supported the political party of the Prime Minister. decision power or influence to those lobbyists who offer the highest retribution. and the guardianship of saints. social. As well. From a legal point of view. which is the use of state resources to reward individuals for their electoral support. as in the Canadian tradition of allowing the Prime Minister to appoint the heads of a number of commissions and agencies. ethnicities for their electoral support using illegal gifts or fraudulently-awarded appointments or government contracts. the formal relationship between a Patronus and his Cliens. SATISHCHANDER . The difference with bribery is that this is a tri-lateral relation. families. and sculptors. as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe. or influence peddling in certain countries. 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. The term derives from the Latin patrons.
leadership of national and regional parties are passed from generation to generation creating a system in which a family holds the center of power. The most extreme example is when the entire state is inherited. some examples are most of the Dravidian parties of south India and also the largest party in India – Congress. Nepotism and cronyism Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. They may be almost exclusively selected from a particular group (for example. or the Junkers in Imperial Germany) that support the regime in return for such favors. Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. as in North Korea or Syria. A similar problem can also be seen in Eastern Europe. This may be combined with bribery. A milder form of cronyism is an "old boy network". In no democracies many government officials are often selected for loyalty rather than ability. SATISHCHANDER . trumped-up charges are often brought up against journalists or writers who bring up politically sensitive issues. In the Indian political system. for example in Romania. This may be legitimate. 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). Sunni Arabs in Saddam Hussein's Iraq. as a payment for supporting the regime. are selected before more able ones. for example with government employment. It can be seen as corruption if this means that incompetent persons. the nomenklatura in the Soviet Union. For example. 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. for example demanding that a business should employ a relative of official controlling regulations affecting the business. such as a politician's acceptance of bribes.CULTURE OF CORRUPTION IN INDIA 65 Patronage refers to favoring supporters. as when a newly elected government changes the top officials in the administration in order to effectively implement its policy.
for example. He can give a contract to a company that is not the best bidder. Also called voter fraud. and in exchange for betraying the public. For example. Another common type of embezzlement is that of entrusted government resources. whether by increasing the vote share of the favored candidate. depressing the vote share of the rival candidates. or allocate more than they deserve. or both. Kickbacks A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. the company benefits. 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. Kickbacks are not limited to government officials. Embezzlement Embezzlement is outright theft of entrusted funds. In this case. when a director of a public enterprise employs company workers to build or renovate his own house. Acts of fraud affect vote counts to bring about an election result. intimidation at polls. It is a misappropriation of property. the mechanisms involved include illegal voter registration. Kickbacks are also common in the pharmaceutical industry. the official receives a kickback payment. and improper vote counting. SATISHCHANDER . 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.CULTURE OF CORRUPTION IN INDIA 66 Electoral fraud Electoral fraud is illegal interference with the process of an election. which is a portion of the sum the company received. suppose that a politician is in charge of choosing how to spend some public funds.
S. The relationship kept the flow of profits from the gang's gambling dens. prostitution." – 1912 Progressive Party Platform. Later the U. and consequently both major political parties. and protection rackets undisturbed. but unlike patronage. where Huang Jinrong was a police chief in the French concession. by its deceptive nature and often great financial resources. Involvement in organized crime An illustrative example of official involvement in organized crime can be found from 1920s and 1930s Shanghai. invaded Panama and captured Noriega. etc.CULTURE OF CORRUPTION IN INDIA 67 Unholy alliance An unholy alliance is a coalition among seemingly antagonistic groups. Like patronage. especially if one is religious. Standard Oil. well-known use of the term was by Theodore Roosevelt (TR): "To destroy this invisible Government. An early. an unholy alliance can be much more dangerous to the public interest. unholy alliances are not necessarily illegal. 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. Conditions favorable for corruption It is argued that the following conditions are favorable for corruption: Information deficits SATISHCHANDER . while simultaneously being a gang boss and co-operating with Du Yuesheng. a corrupt government profiting on illegal drug trade. attributed to TR and quoted again in his autobiography where he connects trusts and monopolies (sugar interests. for ad hoc or hidden gain. Howard Taft. The United States accused Manuel Noriega's government in Panama of being a "narcokleptocracy".) to Woodrow Wilson.
Opportunities and incentives o Individual officials routinely handle cash. including lack of timely financial management. This will also enable an evaluation of the officials who are fighting corruption and the methods used. o Lack of benchmarking that is continual detailed evaluation of procedures and comparison to others who do similar things. o Lacking civic society and non-governmental organizations which monitor the government. instead of handling payments by giro or on a separate cash desk—illegitimate withdrawals from supervised bank accounts are much more difficult to conceal. o Lack of measurement of corruption. For example. This has created competition among government agencies in order to improve. and efficiency in different government departments in Peru. o Weak civil service and slow pace of reform. Lacking control of the government. often corrupt bureaucracy to its knees and changing power equations completely. The Peruvian organization Ciudadanos al Dia has started to measure and compare transparency. o An individual voter may have a rational ignorance regarding politics." o Lack of investigative reporting in the local media. since each vote has little weight. SATISHCHANDER . in the same government or others. o Contempt for or negligence of exercising freedom of speech and freedom of the press. o Weak rule of law. This enables large scale political corruption in the foreign nations. 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. It annually awards the best practices which has received widespread media attention. in particular comparison to those who do the best work. o Lacking protection of whistle-blowers. The Indian Right to Information Act 2005 has "already engendered mass movements in the country that is bringing the lethargic. o Weak judicial independence.CULTURE OF CORRUPTION IN INDIA 68 o Lacking freedom of information legislation. o Weak accounting practices. costs. 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 Weak legal profession. especially in nationwide elections.
o War and other forms of conflict correlate with a breakdown of public security.000. widespread bribery and other forms of corrupt practices. and then processing this with automated computer systems.CULTURE OF CORRUPTION IN INDIA 69 o Public funds are centralized rather than distributed.000 is embezzled from a local agency that has Rs 2. unsupervised public investments. with a tradition of nepotism/favouritism being acceptable. and encourage bribing and kickbacks. emerges in a Communist centrally planned economy.g. if Rs 1. import licenses. and clan-centered social structure. For example. such as repression of political SATISHCHANDER . o Costly political campaigns. Rotating government officials to different positions and geographic areas may help prevent this. Misuse of government power for other purposes. with expenses exceeding normal sources of political funding. e. For example. o Lacking literacy and education among the population. Social conditions o Self-interested closed cliques and "old boy networks’’.g.000 funds. o Large.000 funds. o Poorly-paid government officials. treasurerpaymasters general) must rotate every few years. Political corruption is the use of legislated powers by government officials for illegitimate private gain.. o Tribal solidarity. o A gift economy. o Long-time work in the same position may create relationships inside and outside the government which encourage and help conceal corruption and favoritism. it is easier to notice than from a national agency with Rs 2. o Family-. o Less interaction with officials reduces the opportunities for corruption. such as the Soviet blat system. This may also speed up the processing and reduce unintentional human errors. o Government licenses needed to conduct business. using the Internet for sending in required information. See e-Government. like applications and tax forms. o Frequent discrimination and bullying among the population. especially when funded with taxpayer money. 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. o Sale of state-owned property and privatization. o A windfall from exporting abundant natural resources may encourage corruption.
literally meaning "rule by thieves". which make it difficult to distinguish between legal and illegal actions. 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. and embezzlement. 120 are facing criminal charges. nepotism. extortion. including murder and rape. and non-governmental organizations). A state of unrestrained political corruption is known as a kleptocracy. 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. Forms of corruption vary. According to The Economist. The entry of criminals into politics . money laundering. For instance. in achieving its purpose and mission. graft. Many of the biggest scandals since 2010 have involved very high levels of government. patronage.CULTURE OF CORRUPTION IN INDIA 70 opponents and general police brutality. certain political funding practices that are legal in one place may be illegal in another. and human trafficking. but include bribery.despite laws requiring public disclosure of candidates’ assets. While corruption may facilitate criminal enterprise such as drug trafficking. The activities that constitute illegal corruption differ depending on the country or jurisdiction. corporations. more than a fifth of federal parliament members in 2008 faced criminal charges. it is not restricted to these activities. bribery alone is estimated to involve over 1 trillion US dollars annually. is not considered political corruption. including Cabinet Ministers and Chief Ministers. Of the 522 members of India’s current parliament. Worldwide. In some cases. government officials have broad or poorly defined powers. criminal records and educational backgrounds – is another alarming facet of political corruption in India. Neither are illegal acts by private persons or corporations not directly involved with the government. around 40 of these are accused of serious crimes. SATISHCHANDER . such as in the 2G spectrum scam and the Adarsh Housing Society Scam. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties. cronyism.
efficient method of organization – something to take the place of the arbitrary exercise of power by authoritarian regimes. Many aspects of modern public administration go back to him. and furthermore. Development of communication and transportation technologies made more efficient administration possible but also in popular SATISHCHANDER . bureaucratization for Weber was the key part of the rationallegal authority. As the authors David Osborne and Ted Gaebler pointed out in 1993: It is hard to imagine today. Weberian Bureaucracy Bureaucratic administration means fundamentally domination through knowledge. Weber listed several preconditions for the emergence of the bureaucracy. hierarchically organized civil service of the Continental type is called "Weberian civil service". and especially following the Industrial Revolution. With the hierarchical authority and functional a specialization. but a hundred years ago bureaucracy meant something positive. As the most efficient and rational way of organizing. they made possible the efficient undertaking of large complex tasks. Bureaucracy brought the same logic to government work that the assembly line brought to the factory. – Max Weber Weber described many ideal types of public administration and government in his magnum opus Economy and Society (1922).CULTURE OF CORRUPTION IN INDIA 71 Development Modern bureaucracies arose as the government of states grew larger during the modern period. he saw it as the key process in the on-going rationalization of the Western society. His critical study of the bureaucratization of society became one of the most enduring parts of his work. It was Weber who began the studies of bureaucracy and whose works led to the popularization of this term. It connoted a rational. and a classic. 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.
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. – Max Weber While recognizing bureaucracy as the most efficient form of organization. Japan.CULTURE OF CORRUPTION IN INDIA 72 demand. in which increasing rationalization of human life traps individuals in the aforementioned "iron cage" of bureaucratic. the system needs entrepreneurs and politicians. Vietnam. where the public meets public officials. Transparency International estimates that truckers pay annually US$5 billion in bribes. Taxes and bribes are common between state borders. The decisive reason for the advance of bureaucratic organization has always been its purely technical superiority over any other form of organization. rules are implemented by neutral officials. Malaysia. China. rational control. Weber's ideal bureaucracy is characterized by hierarchical organization. nepotism. Hong Kong. bureaucratic officials need expert training. and democratization and rationalization of culture resulted in demands that the new system treats everybody equally. and career advancement depends on technical qualifications judged by organization. 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. revealed Indian bureaucracy to be not just least efficient out of Singapore. Taiwan. action taken on the basis of and recorded in written rules. In order to counteract bureaucrats. and the on-going bureaucratization as leading to a "polar night of icy darkness". Weber also saw it as a threat to individual freedoms. Bureaucratic corruption pervades the Indian administrative system with widespread practices of bribery. rule-based. and even indispensable for the modern state. A 2009 survey of the leading economies of Asia. SATISHCHANDER . and misuse of official positions and resources. delineated lines of authority in a fixed area of activity. Thailand. not individuals. South Korea.
further it was also found that working with India's civil servants was a "slow and painful" process. More rarely. who "aggressively misuse their police powers for personal gain. who "simply accept the payoffs that the happenstances of police work throw their way. and/or career advancement for a police officer or officers in exchange for not pursuing. through the use of falsified evidence. an investigation or arrest. which investigated corruption in the New York City Police Department in the early 1970s. 50% of the people admit having paid money. clerk in the police station." and grasseaters. The duty police officer (54%) is seen as the chief beneficiary. The Knapp Commission. or selectively pursuing. 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. 14% have pointed out that money has been demanded for making an FIR. 53% have said that political intervention has been the key corruption that they have faced. Other beneficiaries are the investigation officer. Corrupt acts by police officers Police officers have various opportunities to gain personally from their status and authority as law enforcement officers. Another example is police officers flouting the police code of conduct in order to secure convictions of suspects — for example. officer in charge." The sort of corrupt acts that have been committed by police officers have been classified as follows: SATISHCHANDER . Police sector The percentage of people affected by corruption in Police sector is about 2% of the entire population of India. other personal gain. police officers may deliberately and systematically participate in organized crime themselves. divided corrupt officers into two types: meat-eaters. Police corruption Police corruption is a specific form of police misconduct designed to obtain financial benefits.CULTURE OF CORRUPTION IN INDIA 73 Philippines and Indonesia. However this is lower in the West (36%) and the metros (39%).
illustrates how powerful the code of silence can be. 5) Protection of illegal activity: being "on the take". Where corruption exists. accepting payment from the operators of illegal establishments such as brothels. being bought and sold. by 46 votes to 45. 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. rather than the exception. such as shifts and holidays. contractors and tow truck operators. 4) Shakedowns: accepting bribes for not pursuing a criminal violation. Police officials and researchers alike have argued that in some countries. or drug dealers to protect them from law enforcement and keep them in operation. meals. casinos. 7) Direct criminal activities: of law enforcement officers themselves.CULTURE OF CORRUPTION IN INDIA 74 1) Corruption of authority: police officers receiving free drinks. in American policing. 6) "Fixing": undermining criminal prosecutions by withholding evidence or failing to appear at judicial hearings. for instance. 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. large-scale corruption involving the police not only exist but can even become institutionalized. In Australia in 1994. 9) The "frame-up": the planting or adding to evidence. for bribery or as a personal favour. 2) Kickbacks: receiving payment from referring people to other businesses. 3) Opportunistic theft: from arrestees and crime victims or their corpses. 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. SATISHCHANDER . especially in drug cases. a police officer who spoke out about pervasive corruption in the NYPD despite the open hostility of other members. 8) Internal payoffs: prerogatives and perquisites of law enforcement organizations. the widespread existence of a Blue Code of Silence among the police can prevent the corruption from coming to light. and other gratuities. This can include. since the corrupt activities tend to happen in secret and police organizations have little incentive to publish information about corruption. Prevalence of police corruptions Accurate information about the prevalence of police corruption is hard to come by. The well-known is case of Frank Serpico.
real estate developers and law enforcement officials. DPP. In cities and villages throughout India. acquire. elected politicians. judicial officers. Mafia Raj consisting of municipal and other government officials.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. SATISHCHANDER . 36% of those interacted talk of money being demanded. services and tax. 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. Land Administration The percentage of people affected by corruption in Land administration sector is about 3% of the entire population of India. 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. This incidence is the strongest in the North (58%). develop and sell land in illegal ways. 2) On an average. In 59% of the cases money is directly demanded. 1) There are two main forms of corruption faced in this sector.
SATISHCHANDER . Revenue officers (30%) and Tehsildars (23%). 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. getting admission. and sometimes simply washed away when India's heavy monsoon season arrives. mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous. Preferential award of public resources As detailed earlier.g. Many state-funded construction activities in India. consultations with doctors and availing diagnostic services. politicians and construction contractors. Shoddy construction and material substitution (e. are dominated by construction mafias. materials suppliers. such as road building.CULTURE OF CORRUPTION IN INDIA 76 3) The key beneficiaries of corruption in this sector are perceived to be Surveyors (45%). which are groupings of corrupt public works officials. land in areas with short supply is relatively common with government entities awarding public land to private concerns at negligible rates. 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. corruption is associated with non-availability of medicines (or duplicate/fake medicines). Medicine In Government Hospitals. 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. 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.
and the court system is severely backlogged and understaffed. rice. Food Corporation of India. In such contexts. high courts at state level and subordinate courts at district and local level. and kerosene through a network of Fair Price Shops (FPS) established in several states across the country. a PSU. and a loss of confidence in the law and in the justice system. Major commodities distributed to consumers include staple food grains such as wheat. SATISHCHANDER . judicial corruption in India is attributable to factors such as "delays in the disposal of cases. all of which are exacerbated by a preponderance of new laws".CULTURE OF CORRUPTION IN INDIA 77 Judiciary The Indian court system consists of a supreme court. established by the Government of India under Ministry of Consumer Affairs. Food and Public Distribution and managed jointly with state governments in India. shortage of judges and complex procedures. 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. Court procedures are very slow and complicated. According to Transparency International. This results in delays in the processing of cases. Public Distribution System Public Distribution System (PDS) is a national food security system. hospitality or gifts not only to obtain a favourable decision but to move the case through the system and speed up the court proceedings. favours. It distributes subsidized food and non-food items to India's poor. 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. sugar. people are tempted to resort to bribes. Also to add to this point “Justice delayed is justice denied”.
CULTURE OF CORRUPTION IN INDIA 78 distributes food grains to FPS throughout the country. Despite the PDS. Generally. 4.I (Food Corporation of India) with inferior stock.C. which are managed by state governments. 2. Deceitful dealers replace good supplies received from the F. Fallouts of P. In terms of both coverage and public expenditure.S System 1. This is one of the biggest bottlenecks in the efficient functioning of PDS in India. but the number is still extremely low. This results in the genuinely poor being excluded whilst the ineligible get several cards. Several schemes have augmented the number of people aided by PDS. India accounts for over 400 million poor and hungry people. Many FPS dealers resort to malpractice since they acquire little profit. the stock assigned to a single family cannot be bought in instalments. As of date there are about 4. Numerous malpractices make safe and nutritious food inaccessible and unaffordable to many poor.D. 5. 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. Many BPL families are not able to acquire ration cards either because they are seasonal migrant workers or because they live in unauthorized colonies. Many retail shopkeepers have large number of bogus cards to sell food grains in the open market. SATISHCHANDER .99 lakh Fair Price Shops (FPS) across India. Also. the consumers get inferior food grains in ration shops. it is considered to be the most important food security network. The average level of consumption of PDS grains in India is only 1 kg per person / month. 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. The PDS has been criticized for its urban bias and its failure to serve the poorer sections of the population effectively. A lot of families also mortgage their ration cards for money. There is also no clarity as to which families should be included in the BPL list and which excluded. 3. 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.
in which case the market system is more apt anyway. 3. Margin of profit should be increased for honest business. and other prominent agencies should provide quality food grains for distribution. 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. The Civil supplies Corporation should open more Fair Price shops in rural areas. according to a Planning Commission study released in March 2008.CULTURE OF CORRUPTION IN INDIA 79 To improve the current system of the PDS. F.C. The Fair Price dealers seldom display rate chart and quantity available in the block-boards in front of the shop. and is even talking of putting people on the Moon.I. This should be enforced. In aggregate. Personnel in charge of the Department should be chosen locally. the same India that has developed nuclear weapons. which is an added expenditure for taxpayers. which would cause reasonable belief that the PDS system is only fuelling starvation in India. 4. 2. only about 42% of subsidized grains issued by the Central Pool reach the target group. somewhere a child dies every minute of SATISHCHANDER . Vigilance squad should be strengthened to detect corruption. 7. which is again is an added expenditure and not fool proof. there is still polio. the following suggestions are furnished for: 1. which is a tall order for an agency that has no real incentive to do so. 5. Frequent checks & raids should be conducted to eliminate bogus and duplicate cards. 6.
Road traffic accidents in Delhi alone are of epidemic proportions. it is corruption. Let us look at some of its manifestations first. staphylococcus or streptococcus bacteria. Tackling these problems does not require more research or the application of more expensive technologies. Logically. or cultural values enshrined in centuries or millennia of cultural attitudes and beliefs. but I would argue that we are largely wasting our time with massive health projects and programmes. mass distribution of drugs and vaccines. So what is ‘causing’ these problems.g. dysfunctional and often dead? The biggest killer in India today is not the mosquito. and consider its role in the morbidity and mortality of hundreds of millions of people across the globe today. is too big a step at this stage. Each of these deaths is preventable with low tech technology already well known for decades. investments in buildings. We do not need a better polio vaccine or better oral rehydration salts. not the salmonella. and what might be done about it. because of the undermining effects of corruption in all areas of the health system. training courses. in Orissa). Corruption may be. Infant female foeticide is raging . I should take a step back and focus on what causes or enables corruption to thrive. then at what might be done about it: SATISHCHANDER . not tobacco. 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.ironically in wealthier districts. and a myriad more that leave countless millions every year disabled. So let us focus on this one cause. and certainly not the polio bacterium despite the disproportionate effort spent on eradicating it. and to become politically active to control such a significant cause of death. but trying to change human nature. and even in districts where female literacy is the highest e.CULTURE OF CORRUPTION IN INDIA 80 every day from diarrhoea and every 6 minutes a woman dies from pregnancy related causes. Doctors and other health professionals have an ethical responsibility to highlight the contribution of corruption to the health status of their patients. But we also need to address it because it is alive and well amongst health professionals themselves.
due to lack of accountability and incentives from unscrupulous pharmaceutical companies. a woman with an obstructed labour can’t call an ambulance. • Misappropriation of vehicles (and much more) by officials and doctors.CULTURE OF CORRUPTION IN INDIA 81 • Phone doesn’t work because of lack of bribe to telephone lines-man. • Failure of drugs and other consumables to reach the intended point of use. • Spurious and adulterated drugs proliferate because high level politicians protect the killers who sell them. and power breakdowns compromise the safety of hospitals. • Lack of electrical energy because politicians will not tackle theft of electricity. • Lack of accountability of staff and contractors due to corrupt supervisors/ masters SATISHCHANDER . • Unnecessary duplication and irrational drug prescribing by doctors.because officials know there is no accountability. • Education of SCs and STs and slum dwellers neglected because teachers concentrate on children whose parents pay them. • Doctors don’t attend place of work despite drawing a wage from the Government. so another generation grows up ignorant of basic health measures. • Inattention to ensuring clean water and hygienic environments resulting in filthy hospitals . • Staff not paid or reimbursed for outreach work because of embezzlement of their wages or babus demanding favours to move their files. • Under the desk payments demanded from patients by everyone for the watchman to the doctor. • Issuing of licences to service providers and manufacturers inappropriately. and she dies. • Subversion of licensing. accreditation and legal systems intended to promote quality and root out negligence. • Students bribe college staff resulting in under-experienced/ qualified staff taking up posts. • Official government and externally funded programmes are neglected as senior District health officials are more interested in recouping the cost of buying their post. • Buildings fall down in earthquakes because of building violations. • Drivers can bribe policemen on side of road so speeding and ignoring red lights is common-place.
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. Let us look back again into medical history. his pioneering work led to better aseptic practices in hospitals and clinics around the world. so they do not properly challenge the non-appropriateness of buildings. similarly incompetent consultants and advisers are appointed to ‘assist’ projects. And certainly for far too long development agencies have ignored or connived in such corruption. to become active combatants in a crusade to eradicate this mass killer. and also led indirectly to more hygienic conditions in non-health settings. discouraging proper use. SATISHCHANDER . etc. • Theft and sabotage of instruments by staff wanting to make their private practices look more efficient than the public sector. However. • Politicians and public servants badger development agencies or private sector banks for loans which have little or no technical justification. To blame are the politicians for veniality or civil servants (especially the IAS) for their unholy alliances with the political classes. It is easy to blame the effects of globalisation. 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. Despite his successful demonstration of the efficacy of this simple remedy. • The wrong staff is sent on training courses (even abroad) because of patronage. 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. Development agencies are under pressure to spend money and to show short term results. It is easy to blame the masses for voting short-sightedly for the wrong sorts of politicians. 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. They also need to take seriously the challenge of ‘political medicine’. so we must not necessarily anticipate universal admiration of our efforts to tackle Coruptionomia. or to blame development agencies.). sites or non-maintenance. 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.
SATISHCHANDER . • Refusing pharmaceutical companies’ and others’ incentives. referral and evidence based interventions. medicine) were to start with a zero tolerance campaign within the sector itself. • Participate actively in designing and pressurising for governance systems that are transparent and fool proof. • Refusing to buy posts or co-operate with those who buy post. O To commit themselves to rational drug use. • Refusing to tolerate bribery among junior staff. and to set up their own selfdisciplinary machinery if the official machinery won’t do it. 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. receive or countenance bribery in their sphere of influence. O To anonymously report for collective action to highlight where and when outside interference occurs (there is safety in numbers). 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. 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.CULTURE OF CORRUPTION IN INDIA 83 If the health professionals of India and other developing countries (led by the profession primus inter pares.
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%). The key process that seeds corruption in this sector is the Admission process. This could also mean that more doctors should be employed in the hospitals depending upon the demand of doctors in a particular department. got admission through an irregular process. A. Education The percentage of people affected by corruption in Education sector is about 5. SATISHCHANDER . Payments made for admission to hospitals are higher in the South.3% of the entire population of India. 2) The dominant corruption after getting admission is non-proper care by doctors and nurses and also in terms of non-proper medicine. followed by direct payments being made. The Study shows that 18% of those who interacted with this sector.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. food etc. 2) Better medicines arrangement: Availability of Medicines to patients should be improved 3) Doctors should come on time. 1) Payment of money through hospital staff is the dominant irregular process encountered for admission. 4) Doctors should demand less money. This trend was strongest in South (39%) and lowest in East (6%). Improvement in Health Sectors 1) Government to keep close vigil on the working of the hospitals.
SATISHCHANDER . Receiving donations is a custom strongly rooted in the South zone (70%). ‘Improper supply of electricity’ and ‘Payment of excess bill’ – were the key corruptions faced. If the management of all Schools and other educational institutions are able to ensure good quality education. A. Inspection of teachers / schools Proper and timely inspection of all educational institutions and teachers would also ensure the above stated point. Even otherwise. About 50% respondents who had interacted with the Power sector in the past one year had to pay the office staff. in most cases (67%) money is directly demanded. the students will not have to seek private tuitions. Of these 50%. Education Sectors A. 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.CULTURE OF CORRUPTION IN INDIA 85 B. C. B. The two main dominant modes of corruption in the Admissions process are (a) Donations (57%) and (b) Use of an influential relative (19%). Private tuition should be stopped It was suggested that private tuition in all its forms should be prohibited. if the quality of education imparted is improved. Power Sector The percentage of people affected by corruption in Power sector is about 5. D.9% of the entire population of India. B. Management to see – teacher teaches responsibly. then people will not have to unnecessarily flock to only ‘some’ reputed institutions. and give in to their unreasonable demands.
Taxation The percentage of people affected by corruption in Taxation sector is about . 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. SATISHCHANDER . Time to time checking against corruption C. C. D. Stealing of electricity to be stopped: This is more or less a subset of the above suggestion.66% of the entire population of India. Officers (24%). The incidence of this experience was much higher in West Zone (72%). Quick rectification of faults this would prevent people from falling prey into the unreasonable demands made by linesmen and the like. Punishment for wrong doers B. Punishment for wrong doers’ Proper punishment in the form of Suspension of corrupt officials was suggested B. Meter readers (23%) and Billing clerks (22%). Solutions A. A. Telecom A. Surprisingly this sector has garnered a lower ‘Corruption score’ as compared to other sectors. Privatization of telecom sector D. The key actors in corruption in this sector are Linesmen (37%). 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.CULTURE OF CORRUPTION IN INDIA 86 C.
C. In the North zone. 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. The key corruption faced is “paying for getting reduced or correct assessment”. 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. Many officers have been caught for allegedly selling defence stores in the black market in the border districts of Indian states and territories. The latest Adarsh land scam is another example of the nexus between the armed forces.CULTURE OF CORRUPTION IN INDIA 87 B. 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. more than 50% people who had interacted claimed to be paying Income tax. Armed forces The Indian Armed Forces have frequently witnessed corruption involving senior armed forces officers from the Indian Army. D. only about 11% talk about paying money. bureaucracy and the politicians in the embezzlement of government property. and metros. Indian Navy and Indian Air Force. Many privately operated television channels have been formed since the privatization of Indian television in 1991. Municipal tax (»80%) features are very strongly in the West and South. The tax officer (44%) and the clerk in tax department (35%) are the key actors in the corruption in this sector. On the other hand. However. A string of eye-popping fraud cases has damaged the institution in recent years. SATISHCHANDER .
"smack (sic) of elitism". India still ranks in the bottom quartile of developing nations in terms of the ease of doing business. the average time taken to secure the clearances for a start-up or to invoke bankruptcy is much greater. 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. and compared to China and other lower developed Asian nations.7 billion). police. particularly on television. in April 2011 the incumbent information and broadcasting minister.CULTURE OF CORRUPTION IN INDIA 88 Political bias There have been events when the media has been accused of political bias. a representative from Tanzania commented that he had not seen evidence of political bias in Indian newspapers. SATISHCHANDER .. the corruption has also crept into religious institutions. A group of church leaders and activists has launched a campaign to combat the corruption within churches. Some of the Church of North India is making money by selling Baptism certificates. to be around 21.068 crore (US$4. etc. The TI India study estimates the monetary value of petty corruption in 11 basic services provided by the government. healthcare. 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. Ambika Soni claimed that it was "probably the freest in the world".g. 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. At the same gathering. judiciary. although the chairman for the Centre for Media Studies believed that the content. However. like education.
which they did. Rock 2000. Taken together. The case evidence. At the theoretical level. As Rock (1994. the government protected private property and extracted rents at a low enough ‘tax’ rate to entice entrepreneurs to invest. at least up to a point. 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. 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. competition among rent-seekers ultimately reduces returns to individual rent seekers even as it drives aggregate rents up. government officials. without making the corrupt acts of rent-seekers and officials open to public scrutiny. at least from Indonesia and Thailand. corrupt networks were more or less tightly controlled by political elites in government. provided protectionist rents to a surprisingly small number of Sino-Thai entrepreneurs in exchange for kickbacks. is broadly consistent with this picture. young democracies suffering from insufficient checks and balances and lack of transparency. this combination implies an inverted U pattern between corruption and the durability or maturity of new democracies. at least up to a point. In their model. Corruption and Democracy What We Know Both theory and case evidence provide compelling support for a democratization breeds corruption hypothesis. the bureaucracy and the army (Rock 2003. For a while. In this centralized network. 2004). As in Indonesia. rises. Rock and Bonnett. including army officers.CULTURE OF CORRUPTION IN INDIA 89 13. A combination of rapid growth and democratization ultimately led to at least a semidemocratic polity by the early 1980s (Chai-Anan 1990). In both polities. democratization led to the break-up of a centralized corruption network between political elites. provide rent-seekers with greater access to public officials and hence greater opportunities for collecting public sector rents. who accept bribes. But as the institutions of transparency and accountability in new democracies rise as they mature. during the time Prem SATISHCHANDER . Because of free entry into rent-seeking. 2000) and Rockand Bonnett (2004) argue with respect to Thailand’s bureaucratic polity. 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).
the National Economic and Social Development Board (Rock 2000: 197-198. 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. 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). 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. and the national planning agency. the Central Bank. peak business associations. 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). Its plurality voting system tends to produce national parties and reduces extortions by individuals. intra-government checks and balances. of which India is one. Poor Democracy Poor democracies do not lack the structural mechanisms that help constrain corruption: reelection pressures. competitive party systems. King 1996). 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. is also supposed to be the least corrupt structurally among the variety of parliamentary and presidential democracies. the new constitution recentralized politics by significantly reducing the number of political parties (Hicken 2006). factions and small parties with narrow interests and constituencies. 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). This led at least one long time analyst to ask whether new democracies could manage their macro-economies (Ammar 1997).CULTURE OF CORRUPTION IN INDIA 90 was the prime minister (1980-88).7 Although it is difficult to know whether the new constitution reduced corruption in Thailand. Callahan and McCargo 1996.6 They did so. One outcome of this process was the rise of another provisional businessman Thaksin Shinawata. The Westminster parliamentary democracy. free media and free speech that make open and transparent government possible. SATISHCHANDER . Murray 1996). politicizing the core institutions of macroeconomic policy—the Ministry of Finance.
Such patronage politics may also involve more sinister groups that resort to intimidation and violence. the combination of elite accessibility and meagre economic opportunity can contribute to a fragmented patronage system leading to extreme corruption. along with economic opportunities and political SATISHCHANDER . Elites build personal followings. combined with political opportunities and economic scarcities. intense political competition. political elites are not only accessible but they seek power amid weak institutions. Yet because material rewards are scare and political opportunities more plentiful. If democracy or the lack thereof is characterized by different relationships between the state and society (aside from institutional differences). and scarce economic opportunities. They therefore depend on building personal patronage systems to seek and maintain power. and find them hard to control due to a chronic shortage of material rewards yet availability of political alternatives for followers.CULTURE OF CORRUPTION IN INDIA 91 Poor Democracy with Corruption in India In a poor democracy. patronage politics is fragmented. In such a political setting. These characteristics have indeed afflicted India’s political system. 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. 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. then these different relationships should have an important impact on the types of corruption resulted. In short. and the dominant patterns in modern political and economic systems take the form of illicit exchange between state power and societal interests. encouraging independent monopoly or fragmented rent seeking and a greater dissipation of rents.” 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. a weak state (elite accessibility). produce in India decentralized structures in the corruption process. Corruption takes many forms. rather than broad-based parties. A stronger state (elite autonomy).
the availability of bribes can also induce officials to contrive SATISHCHANDER . In the political realm. Though the socialist legacy and economic liberalization are compounding factors in the Indian scenario. the management cost of negotiating with officials. It violates a basic principle of republicanism regarding the centrality of civic virtue. corruption undermines the legitimacy of government and such democratic values as trust and tolerance. corruption erodes the institutional capacity of government as procedures are disregarded. and public offices are bought and sold. developing country has not been more successful at tackling corruption than an authoritarian developmental state. Conclusion Democracy in a poor. At the same time. administration. 14. Effects On politics. it undermines democracy and good governance by flouting or even subverting formal processes. are produces in other country more centralized corruption with a lesser degree of rent seeking. More generally. 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. In the private sector. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking. corruption increases the cost of business through the price of illicit payments themselves.CULTURE OF CORRUPTION IN INDIA 92 scarcities. resources are siphoned off. Economic effects Corruption undermines economic development by generating considerable distortions and inefficiency. and institutions Corruption poses a serious development challenge. corruption in the judiciary compromises the rule of law. and the risk of breached agreements or detection. and corruption in public administration results in the inefficient provision of services. Although some claim corruption reduces costs by cutting bureaucracy.
it also distorts the playing field. In Nigeria. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market. Environmental and social effects Corruption facilitates environmental destruction. environmental. Corruption also lowers compliance with construction. The same applies to social rights worker protection. and increases budgetary pressures on government. shielding firms with connections from competition and thereby sustaining inefficient firms. and the fact that new governments often confiscated previous government's corruptly-obtained assets. image of African dictators having Swiss bank accounts). Corrupt countries may formally have legislation to protect the environment.) In the case of Africa. thus further distorting investment. Where corruption inflates the cost of business. for example. corruption has primarily taken the form of rent extraction with the resulting financial capital moved overseas rather than invested at home (hence the stereotypical. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. and child labor. it cannot be enforced if officials can easily be bribed. but often accurate. capital flight from 30 sub-Saharan countries totaled $187bn. law and order. SATISHCHANDER . through infrastructure investment. unionization prevention. (The results. expressed in retarded or suppressed development. Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in the former. Asian administrations such as Suharto's New Order often took a cut on business transactions or provided conditions for development. more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999. reduces the quality of government services and infrastructure. etc. have been modeled in theory by economist Mancur Olson. This encouraged officials to stash their wealth abroad. one of the factors for this behavior was political instability.CULTURE OF CORRUPTION IN INDIA 93 new rules and delays. exceeding those nations' external debts. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings. or other regulations. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. University of Massachusetts researchers estimated that from 1970 to 1996. out of reach of any future expropriation. In contrast.
Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good. contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children. developing." While drought and other naturally occurring events may trigger famine conditions. and often even whether or not a famine will occur. etc. trade unions. Other areas: health. public safety. The 20th century is full of many examples of governments undermining the food security of their own nations – sometimes intentionally.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. they can discredit certain essential institutions or social relationships. There have also been cases against (members of) various types of non-profit and nongovernment organisations. bribes paid by suppliers to manufacturers of defibrillators (to sell poor quality capacitors). In Bihar. SATISHCHANDER . Officials often steal state property. 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. medical and laboratory staff involved in anti-doping controls. etc. more than 80% of the subsidized food aid to poor is stolen by corrupt officials. food aid is often robbed at gunpoint by governments. it is government action or inaction that determines its severity. India. or transition countries. Corruption can also affect the various components of sports activities (referees. and sold for a profit. Corruption is not specific to poor. members of national sport federation and international committees deciding about the allocation of contracts and competition places). In western countries. as well as religious organisations. players. Similarly. These various manifestations of corruption can ultimately present a danger for the public health. criminals. Examples are endless. bribes paid to obtain diplomas. 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. and warlords alike. bribes paid by suppliers to the automotive industry in order to sell poor quality connectors used for instance in safety equipment such as airbags. education.
D. which are primarily located in the Middle East. and South Asia." In Roman law. The words aval and avallo were themselves derived from Hawala." 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. especially in commercial transactions". North Africa." SATISHCHANDER . CAUSES 15. Origins Hawala has its origins in classical Islamic law and is mentioned in texts of Islamic jurisprudence as early as the 8th century. was due to the large extent of the "trade conducted by the Italian cities with the Muslim world in the Middle Ages. 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. The transfer of debt. the Horn of Africa. which was "not permissible under Roman law but became widely practiced in medieval Europe." On the other hand.CULTURE OF CORRUPTION IN INDIA 95 Ultimately. 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. 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 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. 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.
In South Asia. Hawala brokers often earn their profits through bypassing official exchange rates. city. and promises to settle the debt at a later date. How Hawala works In the most basic variant of the Hawala system. A customer approaches a Hawala broker in one city and gives a sum of money to be transferred to a recipient in another. As settlements often take place without any foreign exchange transactions. SATISHCHANDER . which was only gradually replaced by the instruments of the formal banking system in the first half of the 20th century. Hawala is probably used mostly for migrant workers' remittances to their countries of origin.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. usually foreign. Moreover. it appears to have developed into a fully-fledged money market instrument. or Hawaladars. 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. and a running tally of the amount owed by one broker to another is kept. gives disposition instructions of the funds (usually minus a small commission). the transaction takes place entirely on the honor system. usually with a far lower commission than that charged by banks. the funds enter the system in the source country's currency and leave the system in the recipient country's currency. As the system does not depend on the legal enforceability of claims. and has even been used by aid organizations in areas where it is the best-functioning institution. money is transferred via a network of Hawala brokers. it can operate even in the absence of a legal and juridical environment. Settlements of debts between Hawala brokers can take a variety of forms. Somalia). The Hawala broker calls another Hawala broker in the recipient's city. Informal records are produced of individual transactions. Generally.g. and need not take the form of direct cash transactions. In addition to commissions. The unique feature of the system is that no promissory instruments are exchanged between the Hawala brokers. Today. in some parts of the world it is the only option for legitimate funds transfers. due to differences in legal environment in places such as Afghanistan. Hawala is attractive to customers because it provides a fast and convenient transfer of funds. Yemen. they can be made at other than official exchange rates.
These were used in trade and credit transactions. 1881. Hundis On a similar note. SATISHCHANDER . Hawala after September 11. Hundis referred to legal financial instruments evolved on the Indian subcontinent. They charge a commission of around 0. or other concerns.2-0. the transfers are usually informal and not effectively regulated by governments. They were also used as credit instruments for borrowing and as bills of exchange for trade transactions. states and other countries as it is seen to be a form of money laundering and can be used to move wealth anonymously. Technically.5% per transaction from transferring money from one city to another. Hawala are actually regulated by local governments and Hawaladars are licensed to perform their money brokering services. It continues. however. They were mostly used as Cheques by indigenous bankers. Hundis now have no legal status and were not covered under the Negotiable Instruments Act. Being a part of an informal system.S. In some countries however. they were used as remittance instruments for the purpose of transfer of funds from one place to another. 2001 Hawala has been made illegal in some U. In the era of bygone kings and the British Raj these Hundis served as Travellers Cheques. Angadia The word Angadia means courier (in Hindi) but it is also used for people who act as Hawaladars within the country (India). 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.CULTURE OF CORRUPTION IN INDIA 97 Furthermore. These people mostly act as a parallel banking system for businessmen. immigration. which are a major advantage to customers with tax. to be a legal and effective system in many countries across the globe. currency control.
though later freed after no concrete evidence against them was found. Experts emphasize. for example into neighbouring Kenya. In November 2001. the UN did not explain why it had elected to remove Al-Barakat from its terror list. although a number of Hawala networks have been closed down and a number of Hawaladars have been successfully prosecuted for money laundering. widespread efforts are currently being made to introduce systematic anti-money laundering initiatives on a global scale.S. In October 2009. though. that the overwhelming majority of those who use these informal networks are doing so for legitimate purposes. but rather by inter-bank wire transfer to a SunTrust Bank in Florida. the American government suspected that some Hawala brokers may have helped terrorist organizations to transfer money to fund their activities. Al-Barakat is now able again to access its bank account funds. 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. to better curb the activities of the financiers of terrorism and those engaged in laundering the profits of drug smuggling. where two of the conspirators had opened a personal account. though some assets remain frozen. 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. authorities. Whether these initiatives will have the desired effect of curbing such activities has yet to be seen. the company had been on the list for the past eight years. and had had its bank account funds frozen. where corruption is high and these transactions are neither taxed nor recorded. terror list. Media has been speculating that Somali pirates use the Hawala system to move funds internationally. Many of its agents in several countries were initially arrested. In August 2006 the last Al-Barakat representatives were taken off the U.S.CULTURE OF CORRUPTION IN INDIA 98 After the September 11 terrorist attacks. SATISHCHANDER . However as a result of intense pressure from the U. 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. the Bush administration froze the assets of AL-Barakat a Somali remittance Hawala company used primarily by the large Somali diaspora. the Swedish branch of Al-Barakat was removed from the United Nations' list of terrorist organizations. However.
the Financial Crimes Enforcement Network issued an advisory on "Informal Value Transfer Systems". In January 2010. and development aid agencies. On September 1. to quash the investigation into New Ansari. donor organizations. In August 2010. sanctions against trade with Iran. 2010. He ordered a commission to review scores of past and current anti-corruption inquests. Many were acquitted in 1997 and 1998. the Kabul office of New Ansari Exchange. 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. was shuttered following a raid by the Sensitive Investigative Unit. the Major Crimes Task Force. Afghanistan's largest Hawala money transfer business. Thousands of records were seized to dig into the movement of billions of dollars in and out of Afghanistan. in the process. partly because the Hawala records (including diaries) were judged in court to be inadequate as the main evidence. 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. the Jain brothers.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. including relatives of President Hamid Karzai. Karzai took control of the taskforce that staged the raid. SATISHCHANDER . Hawala scandal in India The Hawala scandal or Hawala scam was an Indian political scandal involving payments allegedly received by politicians through Hawala brokers. Banki dealt with the question of whether Hawala transactions violated the current U. There were links between the money transfers by this company and political and business figures in the country. the country's national anti-graft task force vetted and trained by the US Drug Enforcement Administration (DEA). Senior US military and civilian officials viewed Karzai's move as an effort to protect those close to him and.S. and another US-advised anticorruption group.
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. terrorist financing and money laundering are conceptual opposites. but it is what the funds are to be used for that defines its scope. and dismantle organizations operating along the crime-terror nexus points. whereas terrorist financing cares little about the source of the funds. Money Laundering Money laundering is the practice of disguising the origins of illegally-obtained money. As a result. including drug dealing. corruption. 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. infiltrate. Ultimately. an intergovernmental body set up to combat money laundering." Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance. accounting and other types of fraud. and tax evasion. Many regulatory and governmental authorities quote estimates each year for the amount of money laundered. The Perri. In 1996 the International Monetary Fund estimated that two to five per cent of the worldwide global economy involved laundered money. However. The money involved can be generated by any number of criminal acts. Regardless of the difficulty in measurement. it is the process by which the proceeds of crime are made to appear legitimate. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money. SATISHCHANDER . governments and international bodies have undertaken efforts to deter prevent and apprehend money launderers. Often linked in legislation and regulation. both as a result of government requirements and to avoid the reputational risk involved. the FATF. the amount of money laundered each year is in the billions and poses a significant policy concern for governments. Lichtenwald and Mackenzie article emphasizes the importance of multi-agency working groups and the tools that can be used to identify. The methods by which money may be laundered are varied and can range in sophistication from simple to complex. Money laundering is the process where cash raised from criminal activities is made to look legitimate for re-integration into the financial system. either worldwide or within their national economy.CULTURE OF CORRUPTION IN INDIA 100 16.
pubs and taxi operators to launder money and fund political activities. D. Unexplainable clearing or negotiation of third party Cheques and their deposits in foreign bank accounts. 2) Lack of apparent fund raising activity. C. Paramilitary groups in Northern Ireland are using legitimate businesses such as hotels. and through international ATM transactions. Structuring at multiple branches or the same branch with multiple activities. They are now also moving monies through the new online payment systems. SATISHCHANDER . Account transactions that are inconsistent with past deposits or withdrawals such as cash. Nonetheless. Bulk cash smuggling and placement through cash-intensive businesses is one typology. Even beyond Ireland. The following patterns of activity indicate collection and movement of funds that could be associated with terrorist financing: A. 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. for example a lack of small Cheques or typical donations associated with charitable bank deposits. with no logical or apparent purpose that come from. Cheques. terrorists are buying out/controlling front-end businesses especially cash-intensive businesses including in some cases money services businesses to move monies. etc. wire transfers. Transactions involving a high volume of incoming or outgoing wire transfers. non-cooperative nations and sympathizer nations. They also use trade linked schemes to launder monies. Terrorists also continue to move monies through MSBs/Hawala. B. 1) Wire transfers by charitable organisations to companies located in countries known to be bank or tax havens.CULTURE OF CORRUPTION IN INDIA 101 Terrorists use low value but high volume fraud activity to fund their operations. the older systems have not given way. Charities also continue to be used in countries where controls are not so stringent. or transit through locations of concern that is sanctioned countries. Corporate layering. go to. transfers between bank accounts of related entities or charities for no apparent reasons.
no link between the activity of the organization and other parties involved in the transaction. Bank processes In addition to normal AML controls. banks must focus on the CFT angle with renewed vigor and knowledge derived from the extensive databank of case studies now available. bank signatories. A link with a Politically Exposed Person (PEP) may ultimately link up to a terrorist financing transaction. often numbered sequentially. or to a person or business whose name is spelled similarly. 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. The Operation Green Quest raids led to the convictions of two people. Some of the customers may have police records. Alamoudi admitted that he plotted with Libya to assassinate the Saudi ruler and was sentenced to 23 years in jail. For this reason. these activities must be examined in context with other factors in order to determine a terrorist financing connection. who worked for the SAAR Foundation. international transfer of funds) revealing links with other countries including FATF blacklisted countries. It would be difficult to determine by the activity alone whether the particular act was related to terrorism or to organized crime. particularly for trafficking in narcotics and weapons and may be linked with foreign terrorist groups. to the same person or business. Reverse transactions of this nature are also suspicious. 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. Banks must focus on not just name matching with sanctions databases but also with other know SATISHCHANDER . 5) Overlapping corporate officers. 6) Cash debiting schemes in which deposits in the US correlate directly with ATM withdrawals in countries of concern. or other identifiable similarities associated with addresses.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. money orders or other financial instruments. The funds may have moved through a state sponsor of terrorism or a country where there is a terrorism problem. that is. including Abdurrahman Alamoudi. references and financial activities. 7) Issuing Cheques. A charity may be a link in the transaction.
They must use technologies like link analysis to establish second and third level links that identify transactions as potentially suspicious from a CFT perspective. and where such series of transactions take place within a month. Controls out of the transaction monitoring process.CULTURE OF CORRUPTION IN INDIA 103 your customer (KYC) high-risk databases of good third party vendors. Section 12 (1) prescribes the obligations on banks. The recent activity in money laundering in India is through political parties’ corporate companies and share market. Focus on preventing identity theft is an integral part of any CFT program. (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. 2002 came into effect on 1 July 2005. must be maintained for ten years after the transactions finished. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. Detection rules designed to capture the suspicious activity list given above. should be evaluated. 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. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed. 2002 came into effect on 1 July 2005. To safeguard against this. Section 12 (1) prescribes the obligations on banks. 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 integrally connected to each other. account openings by groups of individuals. for example. whether such transactions comprise of a single transaction or a series of transactions SATISHCHANDER . The Prevention of Money-Laundering Act. India The Prevention of Money-Laundering Act. 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. are also important to watch for.
colloquially. must be maintained for ten years after the transactions finished. 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. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. large corporations or other bodies and individuals. Richard Nixon's "Checkers speech" of 1952 was a successful effort to dispel a scandal concerning a rumored slush fund of campaign contributions.CULTURE OF CORRUPTION IN INDIA 104 integrally connected to each other. 17. (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. Slush fund A slush fund. Political dealings with slush funds tend to create suspicions of quid pro quo (buying political favors). is an auxiliary monetary account or a reserve fund. illegitimacy. However. in the context of corrupt (including but not limited to) political dealings by governments. SATISHCHANDER . or secrecy in regard to the use of this money and the means by which the funds were acquired. For example. a slush fund can have particular connotations of illegality. and can be viewed on the surface as corrupt and subversive of the democratic process. and where such series of transactions take place within a month. The recent activity in money laundering in India is through political parties’ corporate companies and share market. 18. Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned above. 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.
These companies. The term itself derives. in order to attain. such as political lobbying. maintain or increase monopoly power. or by imposing burdensome regulations or other government decisions that may affect consumers or businesses. Rent-seeking In economics. 19. Many current studies of rent-seeking focus on efforts to capture various monopoly privileges stemming from government regulation of free enterprise competition. Description of concept Rent-seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity. however. SATISHCHANDER . masquerading as Mauritian companies. the Double Taxation Avoidance Convention (DTAC). rather than by adding value. from the far older practice of appropriating a portion of production by gaining ownership or control of land. rent-seeking is an attempt to derive economic rent by manipulating the social or political environment in which economic activities occur. An example of rent-seeking is the limitation of access to skilled occupations imposed by medieval guilds. Foreign entities have set up paper companies in Mauritius.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. Rent-seeking agents will spend money in socially unproductive ways. such as by gaining control of land and other preexisting natural resources. claiming to be Mauritian residents. have invested in India and taking advantage of the DTAC they save paying taxes in India.
Rent-seeking behavior is distinguished in theory from profit-seeking behavior. Rent. The expression rent-seeking was coined in 1974 by Anne Krueger. SATISHCHANDER . through a mutually agreeable transaction between two entities (buyer and seller). Studies of rent-seeking are focus on efforts to capture special monopoly privileges such as government regulation of free enterprise competition.by shifting the government tax burden or government spending allocation. Often a further distinction is drawn between rents obtained legally through political power and the proceeds of private common-law crimes such as fraud. there may be difficulties distinguishing between beneficial profit-seeking and detrimental rent-seeking. by force or fraud inflicted on one party by another. economic benefits derived by most people involve some form of rent-seeking. Development of theory The phenomenon of rent-seeking in connection with monopolies was first formally identified in 1967 by Gordon Tullock. making nominally "consensual" transactions a rent-collection opportunity for the third party. and the proceeds of common-law crime non-consensually. in which entities seek to extract value by engaging in mutually beneficial transactions. for instance. 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. Often-cited examples include a farm lobby that seeks tariff protection or an entertainment lobby that seeks expansion of the scope of copyright. This viewpoint sees "profit" as obtained consensually. Other rent-seeking is held to be associated with efforts to cause a redistribution of wealth --. by contrast with these two. and rent. is obtained when a third party deprives one party of access to otherwise accessible transaction opportunities. embezzlement and theft. wage.CULTURE OF CORRUPTION IN INDIA 106 In modern industrialized countries. The word "rent" does not refer here to payment on a lease but stems instead from Adam Smith's division of incomes into profit. Critics of the concept point out that in practice.
This results in a sub-optimal allocation of resources — money spent on lobbyists and counter-lobbyists rather than on research and development. improved business practices. To the extent that the issuing of medallions constrains overall supply of taxi services (rather than ensuring competence or quality). reaping incomes entirely unrelated to any contribution to total wealth or well-being. 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. Claims that a firm is rent-seeking therefore often accompany allegations of government corruption. or additional capital goods — which retards economic growth. such agents soliciting bribes or other favors from the individuals or firms that stand to gain from having special economic privileges. If "buying" a favorable regulatory environment is cheaper than building more efficient production. employee training. which is seen as enabling extensive rent-seeking behavior.CULTURE OF CORRUPTION IN INDIA 107 The abnormal profits of the illegal drug trade are considered rents by this definition. which opens up the possibility of exploitation of the consumer. or the undue influence of special interests. It has been shown that rent-seeking by bureaucracy can push up the cost of production of public goods. For example. Possible consequences From a theoretical standpoint. Faizul Latif Chowdhury suggested that ‘bribery’ is a kind of rent-seeking by the government officials. Rent-seeking is held to occur often in the form of lobbying for economic regulations such as tariffs. 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. tax officials may take bribes for lessening the tax burden of the tax payers. especially when the government agency must rely on the firms for knowledge about the market. Rent-seeking may be initiated by government agents. Taxi medallions are another commonly referenced example of rent-seeking. a firm may choose the former option. the moral hazard of rent-seeking can be considerable. It has SATISHCHANDER . Regulatory capture is a related concept which refers to collusion between firms and the government agencies assigned to regulate them. as they are neither legal profits nor the proceeds of common-law crimes.
regulations and accompanying red tape that were required to set up and run businesses in India between 1947 and 1990.] I want the officials appointed to administer laws and policies to be free from pressures of the bosses of the ruling party. where the value of land is largely attributed to provision of government services and infrastructure (e. in terms of land rent. the government would regulate production. License Raj License Raj.. who firmly opposed it for its potential for political corruption and economic stagnation and founded the Swatantra Party to oppose these practices. etc. [. "I want the corruptions of the Permit/License Raj to go. the period of British rule in India. road building. Up to 80 government agencies had to be satisfied before private companies could produce something and. provision of public schools. the Permit Raj. 20. It was coined by Indian statesman Chakravarthi Rajagopalachari. figures in Georgist economic theory. 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. and gradually restored back to the standards of fearless honesty which they once maintained..) and the community in general.CULTURE OF CORRUPTION IN INDIA 108 also been shown that rent-seeking by tax officials may cause loss in revenue to the public exchequer. refers to the elaborate licenses. rather than resulting from any action or contribution by the landowner. but Indian labour laws still prevent manufacturers from reducing their workforce without prohibitive burdens. if granted.. Reforms since the mid-1980s have significantly reduced regulation.g. Rent-seeking behavior. maintenance of peace and order. Term The term plays off "British Raj".
High growth rates SATISHCHANDER . Inspired by the economy in the Soviet Union. would determine how much investment was needed in which sectors. The Indian currency. Like a command economy. Private players could manufacture goods only with official licenses. at what price and what sources of capital were used. The government also prevented firms from lying off workers or closing factories. The quantity of goods they were allowed to produce was determined by the license regime. was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market. Consequences India had started out in the 1950s with good era. C. 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. India has five-year plans on the lines of the Five Year Plans in the former Soviet Union. he implemented a mixed economy in India. Before the process of reform began in 1991. Rajagopalachari History The architect of the system of License Raj was Jawaharlal Nehru. in which firms required licenses to invest and develop. the government attempted to close the Indian economy to the outside world.] I want real equal opportunities for all and no private monopolies created by the Permit/License Raj. India also operated a system of central planning for the economy.. The central pillar of the policy was import substitution. the belief that India needed to rely on internal markets for development. rather than markets." Swarajya Newspaper. not international trade — a belief generated by a mixture of socialism and the experience of colonial exploitation. not by free-market demand. A mixed economy is one in which capitalism is combined with government intervention. Planning and the state..CULTURE OF CORRUPTION IN INDIA 109 [. how much. The key characteristic of the License Raj is a Planning Commission that centrally administers the economy of the country. India's first Prime Minister. the rupee.
reduced licensing regulations.Narasimha Rao. Gold bullion was transferred to London as collateral. manufacturing organizations still encounter a permit process (though not as extensive as earlier) in procurement of land. with DrMan Mohan Singh as finance minister.V. though much of the actual progress was made under P. importing equipment. this liberalization may be altered under a draft bill seeking to regulate broadcasting media.CULTURE OF CORRUPTION IN INDIA 110 Openness to trade and investment A promotional state Social expenditure awareness Macro stability However. duties and taxes." The federal government. The government of India initiated a liberalization policy under the Prime Minister ship of Rajiv Gandhi. Liberalization resulted in substantial growth in the Indian economy. etc. the Rupee devalued and economic reforms were forced upon India. indeed crisis Current status The License Raj-system was in place for four decades. SATISHCHANDER . the country was left with bad age. by the 1980s. Recently. However. lowered tariffs. 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. and opened up to international trade and investment. Low growth rates Closure to trade and investment A license-obsessed. restrictive state Inability to sustain social expenditures Macro instability.
will allow the government to make inquiries of Swiss banks SATISHCHANDER . EFFECTS 21. In August 2010. the government revised the Double Taxation Avoidance Agreement to provide means for investigations of black money in Swiss banks.4 trillion). expected to become active by January 2012. India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (approximately USD 1. This revision. To put things in perspective.000 Crore (USD $1. Swiss banking officials have said that the largest depositors of illegal foreign money in Switzerland are Indian. but one estimate by R Vaidyanathan. on which income and other taxes have not been paid.4 trillion) in the form of black money. a Professor of Finance. India has more black money than the rest of the world combined. Indian-owned Swiss bank account assets are worth 13 times the country’s national debt.280. 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.CULTURE OF CORRUPTION IN INDIA 111 E. According to the data provided by the Swiss Banking Association Report (2006). Black money in Swiss banks While official numbers are not available. estimated the total at over Rs 7. The total amount of black money deposited in foreign banks by Indians is unknown. BLACK MONEY Black money refers to funds earned on the black market. 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.
CULTURE OF CORRUPTION IN INDIA 112 in cases where they have specific information about possible black money being stored in Switzerland. SCANDALS Major scandals involving high level public officials have shaken the Indian public service in recent years. the Cayman Island.Bahamas. Tax Information Exchange Agreement To curb black money. Monaco. the Isle of Man. Argentina and the Marshal Islands . The following is a list of alleged scams and scandals in India since independence. corporate and others. and the British island of jersey. St Kitts and Nevis. with politicians and public servants regularly caught accepting bribes or mismanaging public resources.000 crore in foreign banks. financial. 22. These include political. This suggests corruption has become a pervasive aspect of Indian politics and bureaucracy.where money is believed to have been stashed away Prominent cases In April 2011. India has signed TIEA with 10 countries . Hassan Ali Khan was arrested on charges of stashing over 36. the British Virgin Islands. Bermuda. 2011 Hassan Ali Khan scandal SATISHCHANDER .
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 .
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.76-lakh crore worth of scam is the former Telecom minister A Raja – who according to the CAG.1. 1) The under-pricing of the 2G spectrum by the Department of Telecommunications which resulted in a heavy loss to the exchequer. but none bigger than the scam involving the process of allocating unified access service licenses. 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..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. SATISHCHANDER .. At the heart of this Rs. The scam involved allegations regarding.
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. Abdul Karim Telgi had mastered the art of forgery in printing duplicate stamp papers and sold them to banks and other institutions. 5) Bofors Scam The Bofors scandal is known as the hallmark of Indian corruption. were accused of receiving kickbacks from Bofors AB for winning a bid to supply India’s 155 mm field howitzer.and Telgi scam had all the suspense and drama that the scandal needed to thrive and be busted. involved in probing the alleged corruption in various Commonwealth Games-related projects.CULTURE OF CORRUPTION IN INDIA 116 2) The illegal manipulation of the spectrum allocation process to favour select companies. every scam must have something unique in it to make money out of it in an unscrupulous manner. 2) Commonwealth Games Scam Another feather in the cap of Indian scandal list is Commonwealth Games loot. The scam came to public notice when the Supreme Court of India took Subramaniam Swamy's complaints on record. only half the said amount was spent on Indian sportspersons. Finally. The tentacles of the fake stamp and stamp paper case had penetrated 12 states and was estimated at a whooping Rs. 70000 crore spent on the Games. Satyam is the biggest fraud in the corporate history to the tune of Rs. The Central Vigilance Commission. 14000 crore. It is estimated that out of Rs. will-full delays in execution of contracts. literally a loot! Even before the long awaited sporting bonanza could see the day of light. The Telgi clearly had a lot of support from government departments that were responsible for the production and sale of high security stamps. Yes. when the then PM Rajiv Gandhi and several others including a powerful NRI family named the Hindujas. 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. Most of SATISHCHANDER . 3) Telgi Scam As they say. the company was taken over by the Tech Mahindra which has done wonderfully well to revive the brand Satyam. over-inflated price and bungling in purchase of equipment through tendering – and misappropriation of funds. The Bofors scam was a major corruption scandal in India in the 1980s. 20000 crore plus. has found discrepancies in tenders – like payment to non-existent parties.
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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
Poverty estimates There has been no uniform measure of poverty in India.CULTURE OF CORRUPTION IN INDIA 121 the international poverty line of US$ 1. including subsidizing food and other necessities.3 in rural areas).50 per day). 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 $0. in 2009. the Indian government and non-governmental organizations have initiated several programs to alleviate poverty. of the 222 million households in India. Impact of poverty Since the 1950s.998) annually (or more than US$ 3 PPP per person).25 a day (PPP.000 (US$1. 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 Planning Commission of India has accepted the Tendulkar Committee report which says that 37% of people in India live below the poverty line.6% of them or about 35 million (about 200 million Indians). Another 80 million households are in income levels of Rs 45. 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. increased access to loans.000) accounted for only 15. 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). According to NCAER. 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 $2 per day as compared with sub-Saharan Africa.000– 90. improving agricultural techniques and price supports. and SATISHCHANDER .6 a day in urban areas and Rs 14.The N.C. in nominal terms Rs 21.000 per year.
According to a recently released World Bank report.1% owned a radio or transistor. As per the 2001 census.23% by December 2008 and has an annual growth of 40%. at the same time. its growth has been uneven when comparing different social groups.CULTURE OF CORRUPTION IN INDIA 122 promoting education and family planning.7% a bicycle.4%).7%).4%) were much higher than for Bihar (5. 43. the effects of the worldwide recession in 2009 have plunged 100 million more Indians into poverty than there were in 2004. one quarter of the nation's population earns less than the government-specified poverty threshold of 12 rupees per day (approximately US$ 0. Uttar Pradesh (4.5% a car.3% or 268 million people by 2020. Between 1999 and 2008. jeep or van. 31. Haryana (8. Despite significant economic progress. geographic regions.5% of Indian households availed of banking services.1%). and rural and urban areas. 9.2%.25). These measures have helped eliminate famines. 35. SATISHCHANDER . Poverty rates in rural Orissa (43%) and rural Bihar (41%) are among the world's most extreme. 35.5% to 37. and 2.1% a phone.However. However by 2015. 11.5%).25 per day. 34. 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.6% of the population will still live under US$1. or Madhya Pradesh (3. the annualized growth rates for Gujarat (8. increasing the effective poverty rate from 27.5% of the households had none of these assets. economic groups. motorcycle or a moped. Although the Indian economy has grown steadily over the last two decades. According to Department of Telecommunications of India the phone density has reached 33. that a family of four with an annual income of 1. and reduced illiteracy and malnutrition. an estimated 53 million people will still live in extreme poverty and 23.37 lakh rupees could afford some of these luxury items.8%).6% a television. cut absolute poverty levels by more than half. India is on track to meet its poverty reduction goals. These tallies with the fact. or Delhi (7.7% a scooter. This number is expected to reduce to 20.
the numbers were US$1. Dalit’s constitute the bulk of poor and unemployed. —BBC India had started out in the 1950s with. at what price and what sources of capital were used. but South Korea became a developed country by 2000s. According to William A. compared with US$619 for China. a promotional state.818. however. Using the Definition of poverty. (Numbers are in 1990 international Maddison dollars) In other words. Others. the average income in India was not much different from South Korea in 1947. Corruption flourished under this system. and continues to segregate Dalit. openness to trade and investment.317. US$3. India was left as one of the world's poorer countries.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. US$13. how much. By 1999. In 1947. 65% of rural forward castes are below the poverty line.CULTURE OF CORRUPTION IN INDIA 123 Causes of poverty in India Caste system According to S. social expenditure awareness and macro stability but SATISHCHANDER . M.259. respectively. the average annual income in India was US$439. Another cause is corruption. The License Raj was a result of India's decision to have a planned economy. regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990. The labyrinthine bureaucracy often led to absurd restrictions . At the same time. and US$936 for Taiwan. casteism is widespread in rural areas. Haviland. have noted the steady rise and empowerment of the Dalit through social reforms and the implementation of reservations in employment and benefits. Caste explanations of poverty fail to account for the urban/rural divide. and US$15. License Raj refers to the elaborate licenses. US$770 for South Korea.720. high growth rates. where all aspects of the economy are controlled by the state and licenses were given to a select few. Michael.
a licenseobsessed. While services and industry have grown at double digit figures. restrictive state (License Raj). according to Sainath. has resulted in an extraordinary increase in farm input costs. India’s top economist on agriculture. the level of inequality has risen to extraordinary levels. Farmers are a large about 60% of the population depends on agriculture whereas the contribution of agriculture to the GDP is about 18%. Also: Vote bank and use their votes to resist reallocation of land for higher-income industrial projects. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totalled close to 200. Poverty has decreased significantly since reforms were started in the 1980s. That number remains disputed. Sainath points out that a disproportionately SATISHCHANDER . As professor Utsa Patnaik. resulting in a very high number of farm suicides. agriculture growth rate has dropped from 4. the average poor family in 2007 has about 100 kg less food per year than it did in 1997. There is a surplus of labour in agriculture. The human cost of the "liberalization" has been very high. indeed crisis. in place of traditional food crops. or on the verge of collapse due to the neoliberal policies of the government of India since the 1990s. Government policies encouraging farmers to switch to cash crops.000. 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. with some saying the true number is much higher. although demographers generally agree that this is a symptom rather than cause of poverty.CULTURE OF CORRUPTION IN INDIA 124 ended the 1980s with: low growth rates. Commentators have faulted the policies pursued by the government which. hunger in India has reached its highest level in decades.High population growth rate. As journalist and the Rural Affairs editor for The Hindu. when at the same time. P Sainath describes in his reports on the rural economy in India. has pointed out. He also points out that rural economies across India have collapsed. closure to trade and investment. resulted in a very high portion of rural households getting into the debt cycle. according to official statistics.8% to 2% Over-reliance on agriculture. while market forces determined the price of the cash crop. inability to sustain social expenditures and macro instability.
Executive Director at Morgan Stanley.) Millions move towards towns and cities where. India kept reducing investment in agriculture (standard neoliberal procedure). Rich Indians not generous There are 115. the government spends less than 0.” from 26 per cent of farm households to 48. Since 2000. which is the highest growth rate in the world. Meanwhile. the same time as India became the nation of second highest number of dollar billionaires. the nation suffered the worst agrarian crisis in decades. this elite group has grown an average of 11 per cent annually. because with food crops such as rice. 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. Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal “economic reforms. Nothing has happened in 15 years that has changed that situation for the better. Non-farm employment has stagnated. all along. But now there is no. He also points out that inequality has reached one of the highest rates India has ever seen.1 country. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times. During the time when Public investment in agriculture shrank to 2% of the GDP. Life was being made more and more impossible for small farmers. Hunger has grown very fast. even if the price falls. while only 4-7% of the Indian populations hold any equity. Much has happened to make it a lot worse.CULTURE OF CORRUPTION IN INDIA 125 large number of affected farm suicides have occurred with cash crops. Between 2006 and 2007. In a report by Chetan Ahya. over 85 per cent of rural households are landless. there is food left to survive on. marginal or small farmers. However. the number of wealthy individuals in India surged by 23 per cent.2% of GDP on agriculture and less than 3% of GDP on education.6 per cent. Sainath argues that Farm incomes have collapsed. As of 2006. SATISHCHANDER .000 individuals in India with high net-worth. In one estimate. there are few jobs to be found. Employment has collapsed. sub-marginal. 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. Public investment in agriculture shrank to nothing a long time ago. too.
and "a large part of CSR initiatives are artfully masqueraded and make it back to the balance sheet". has initiated. Marvin J.6 where the percentage is 2. sustained. one-third of them have emerged from poverty in the last ten years. which is ranked one level below the 'upper class' on the income and education scale. Analysts such as the founder of "Forecasting International". partner. Efforts to alleviate poverty Since the early 1950s. the middle class gives 1.CULTURE OF CORRUPTION IN INDIA 126 However. Cetron writes that an estimated 300 million Indians now belong to the middle class.2 in the United States.6% of their household income for charitable purposes. The widening income gap between the rich and the poor over the years has raised fears of a social backlash. SATISHCHANDER . donates 2. Despite government initiatives.1% to charity. the wealthiest have the lowest level of giving at 1. govt. Reduction in Poverty Despite all the causes. At the current rate of growth." says Arpan Seth. The percentage of India's GDP that is spent for charitable purposes is only 0. 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. Probably the most important initiative has been the supply of basic commodities. India currently adds 40 million people to its middle class every year. and refined various planning schemes to help the poor attain self-sufficiency in food production. particularly food at controlled prices. a majority of Indians will be middle-class by 2025. "While the 'high class'.9% of household income to philanthropy. Bain & Company. Only 10 percent of funding comes from individuals and corporates.
Increasing stress on education. are also expected to contribute to the alleviation of poverty. 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. Outlook for poverty alleviations Eradication of poverty in India is generally only considered to be a long-term goal. but the distribution of wealth is not at all even. Controversy over extent of poverty reduction The definition of poverty in India has been called into question by the UN World Food Programme. 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. Literacy rates have risen from 52 per cent to 65 per cent during the initial decade of liberalization (1991–2001). After the liberalization process and moving away from the socialist model. Marvin J. Cetron writes that an estimated 390 million Indians now belong to the middle class. Poverty alleviation is expected to make better progress in the next 50 years than in the past. Analysts such as the founder of "Forecasting International". reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society. In its report on global hunger index. one-third of them have emerged from poverty in the last ten years. highlights the increasing disconnect between official poverty estimates and calorie deprivation.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. a majority of Indians will be middle-class by 2025. India is adding 60 to 70 million people to its middle class every year. SATISHCHANDER . It is incorrect to say that all poverty reduction programs have failed. At the current rate of growth. as a trickle-down effect of the growing middle class.
the highest in the world) as of 2008. together with China. it is likely that a significant fraction of the rural population will continue to migrate toward cities. hold the view that while absolute poverty may not have increased India remains at an abysmal rank in the UN Human Development Index. crime and access to infrastructure). lived on less than 20 rupees per day (USD 0.25 a day is expected to go down from 435 million or 51. Nicholas Stern. at 230 million. USD 2. or 836 million people. the picture is not so clear if one considers other non-pecuniary dimensions (such as health.0 in PPP). In 1992. vice president of the World Bank. He argues that increasing globalization and investment opportunities have contributed significantly to the reduction of poverty in the country.5). A 2007 report by the state-run National Commission for Enterprises in the Unorganized Sector (NCEUS) found that 77% of Indians.50 nominal.6 per cent by 2015 and 268 million or 20." However. has shown the clearest trends of globalization with the accelerated rise in per-capita income. making the issue of urban poverty more significant in the long run.3 per cent by 2020. 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. finding that the number of people living on US$1. and is 94th of 119 in the world hunger index). they should not be dismissed outright. SATISHCHANDER . India. a new report from the UN disputes this. India is positioned at 132ond place in the 2007-08 UN HDI index. education. with most working in "informal labour sector with no job or social security. 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. With the rapid economic growth that India is experiencing. as well as the declaration made by India's former Finance Minister Yashwant Sinha that poverty in India has reduced significantly. Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall poverty in India. India was at 122ond place in the same index. the extent of poverty reduction is often debated. like journalist P Sainath. It is the lowest rank for the country in over 10 years. living in abject poverty. 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. and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18.CULTURE OF CORRUPTION IN INDIA 128 While total overall poverty in India has declined. Some. has published defences of the poverty reduction statistics.
5% of the children in India suffer from malnutrition. 34 per cent of the world's stunted children and 46 per cent of the world's wasted children. CRIMES 25. The World Bank. elected politicians. Contrary to popular perceptions. Mafia Raj Mafia Raj refers to an economic and political situation where public goods. and they project that it will drop to 26% by 2025. has not translated into superior nutritional status for the South Asian child. citing estimates made by the World Health Organization.CULTURE OF CORRUPTION IN INDIA 129 A study by the McKinsey Global Institute found that in 1985. states that "About 49 per cent of the world's underweight children. F. to 54%. live in India. More than 103 million people have moved out of desperate poverty in the course of one generation in urban and rural areas as well.3% annual growth over the next 20 years. is estimated that about 42.000 rupees a year." The World Bank also noted that "while poverty is often the underlying cause of malnutrition in children. the superior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa. 465 million more people will be lifted out of poverty. business interests and other entities (such as lawSATISHCHANDER . rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985 to 61% in 2005. 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. 93% of the Indian population lived on a household income of less than 90." 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. They project that if India can achieve 7. property and funds are controlled and systematically embezzled by a criminalized nexus (or "mafia") of government officials. or about a dollar per person per day. by 2005 that proportion had been cut nearly in half. Persistence of malnutrition among children According to the New York Times.
beginning with the mining town of Dhanbad. Once. public sector businesses or entire sectors of the economy that are subject to these conditions. inflated or fictitious supply expenses. and missing coal replaced with stones and boulders in railway cargo wagons. and employs caste allegiances to maintain its power. Jungle Raj (law of the jungle) and Anarchy are used to refer to the same phenomenon. even a human corpse has been discovered in a sealed coal wagon. Pilferage and sale of coal on the black market. and can refer to cities. The Dhanbad mine complex is allegedly dominated by a coal mafia.The phenomenon of Mafia Raj is highly prevalent in Pakistan and Bangladesh as well. with coal supplies and quality varying erratically. government departments. falsified worker contracts and the expropriation and leasing-out of government land have allegedly become routine. sometimes openly and with the use of violent intimidation. contractor mafia (sometimes. SATISHCHANDER . Coal Mafia An Indian coal mine.CULTURE OF CORRUPTION IN INDIA 130 enforcement authorities. road construction mafia or road contract mafia) and land mafia are commonly used. In the Indian and Pakistani media. forest mafia). The coal mafia has had a negative effect on Indian industry. non-governmental organizations. the mafias are usually mentioned by the name of the economic sector in which they are involved. It is alleged that the coal industry's trade union leadership forms the upper echelon of this particular arrangement. The term is used primarily in India. Due to the ability of these mafias to operate their illegal activities in a sustained fashion. Higher quality coal is sometimes selectively diverted. states. 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. Terms such as coal mafia. timber mafia (sometimes. The state-owned coal mines of Jharkhand were among the first areas in India to see the emergence of a sophisticated mafia. trade unions or criminal organizations). terms like Goonda Raj (rule of the Dons’). countries which share a similar culture to that of India.
Many studies indicate large losses of forest cover to indiscriminate logging by timber mafias. and conflict with tribal regarding land-rights. with over a million hectares in the environs of Chhotanagpur alone being illegally transferred by the forest department directly to industrial. 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. local politicians. there have also been incidents of substitution. of low-grade wood. Karnataka and Jharkhand. when the procurement of wood is. Besides the environmental degradation. are vulnerable to illegal logging by timber mafias that have coped or intimidated forestry officials. which spans encroachment of forest areas. Timber Mafias India's Himalayan and other forests are vulnerable to timber mafias. has gained international attention. public financial losses can be substantial. underpayment of government royalties. Veerappan was a notorious bandit who.000 crore (about US$ 230 million). SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 131 Illegal mining in India Illegal mining in India is widespread in various ore-rich states of India. and has generated controversy. authorized for government use. and the higher quality wood was intercepted in the process of being smuggled across the state border into Punjab. Clear-cutting is sometimes coveredup by conniving officials who report fictitious forest fires. In an incident in 2005. businesses and citizenry. until his shooting death by state police in 2004. and one 1994 estimate of stolen timber in the state of Karnataka amounted to Rs 1. Protected forest areas in several parts of India. for highquality timber. such as Jammu and Kashmir. Himachal Pradesh. mining and logging companies. As with coal. Terrorist groups have also joined the nexus in militancy-affected areas such as Kashmir. specialized in illegally logging sandalwood in Karnataka and Tamil Nadu. in fact. 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.
SATISHCHANDER . Many state-funded construction activities in India. judicial officers. with the connivance of administrative and police officials. 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. Although a CBI investigative report after the assassination stated that there was no contractor mafia involvement in Dubey's murder. Shoddy construction and material substitution (e.g.CULTURE OF CORRUPTION IN INDIA 132 Contractor Mafias Public works. such as road building. are sometimes dominated by contractor mafias. are dominated by construction mafias. for example in the public works for which the Municipal Corporation of Delhi is responsible. such as road construction. 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. politicians and construction contractors. and sometimes simply washed away when India's heavy monsoon season arrives. 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. acquire. real estate developers and law enforcement officials. his family and supporters maintained that an attempt at a cover-up was being made. mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous. sometimes by attempting to move them online. which are groupings of corrupt public works officials. develop and sell land in illegal ways for profit. Sometimes. was murdered in 2003. In cities and villages throughout India and Pakistan. elected politicians. materials suppliers. so that a complete audit trail of bids and activity is maintained. mafias consisting of municipal and other government officials. Attempts have been made to reduce mafia influence by making construction tendering processes more transparent. In a widely covered case. Construction mafias are alleged to have used their political influence decisively to frustrate many such attempts. a project director with the National Highways Authority of India. Satyendra Dubey.
intended to procure private land at relatively low prices for public benefit or redistribution to poorer people under social justice programs. on the outskirts of Delhi. 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. In 1998. Focused vigilance in specific areas by government agencies has also acted as a deterrent to land mafia activities. manifesting itself as bureaucratic inaction. connecting Delhi and Agra. a lake was filled in and government buildings torn down after illegal transfers to a developer by mafia-connected officials. This approach has been effective in Bangalore. have been criticised for using child labour in either their operations in India or by their suppliers in India. India has the highest number of labourers in the world less than 14 years of age. and who in turn sell it back on the market at much higher prices. Primark. 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. which is expected to become quite valuable once the highway is inaugurated.CULTURE OF CORRUPTION IN INDIA 133 In one set of allegations in Karnataka. Computerization of records relating to the classification of tracts and land ownership is a key tool in countering the illegal activities of land mafias. and Monsanto etc. but efforts to extend it elsewhere have sometimes met with strong resistance by land mafias. since it creates transparency on all information relating to a given parcel of land. 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 . Subsequent to coverage in the press. are abused to pressure existing landholders to sell land to a government entity. the land mafia in the Noida area. vigorous legal action by the Greater Noida Authority reportedly led to this mafia alliance backing away from this theft.s Eminent domain laws.6 million children in hazardous occupations. which transfers the land to developers at those low prices. 26. For example. Child labour Of 12. child labour is present in almost all sectors of the Indian economy. although it may have shifted its attention to illegally encroaching on land along the planned Taj Expressway. Companies including Gap.
making it a small issue. thousands of children are rescued from brick kilns. dhabas. 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. A National Policy on Child Labour was formulated in 1987 to focus on rehabilitating children working in hazardous occupations. and are not paid. As per Human Rights Watch. 2006.000 bonded children are employed by the silk industry in India.500. hotels. 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. Adults are found in construction of both home and office buildings. the contractors had employed adults. for they had to be paid more. the Indian government formed the Gurupadswamy Committee to find about child labour and means to tackle it. Each year. The ministry of Labour and Employment had implemented around 100 industry-specific National Child Labour Projects to rehabilitate the child workers since 1988. for the construction of the Asian Games care house.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. spas and resorts effective from October 10. Official estimates for child labour working as domestic labour and in restaurants is more than 2. working in awful conditions. Human Rights Watch estimates that at least 350. Initiatives against child labour In 1979.000 while NGOs estimate the figure to be around 20 million. The Child Labour Prohibition and Regulation Act were enacted based on the recommendations of the committee in 1986. In 2011. SATISHCHANDER . Children are forced to dip their hands in scalding water to palpate the cocoons and are often paid less than Rs 10 per day. Some of the children are actually sold to the brick kiln owners. The misuse of adult labour can be found in the construction industry too.
CULTURE OF CORRUPTION IN INDIA
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
victim-blaming is more common. Victim blaming "Victim blaming" is holding the victim of a crime to be in whole or in part responsible for the crime. rape victims are blamed more when they are raped by an acquaintance or a date rather than by a stranger (e. Finally.1989. In extreme cases. 1994. 1991. SATISHCHANDER . these symptoms continue beyond the first few months and meet the conditions for the diagnosis of posttraumatic stress disorder. or nightmares 4) Avoidance of things. In most Western countries. victims are said to have "asked for it". Often. & Lottes. memories. 1983.CULTURE OF CORRUPTION IN INDIA 139 1) Depersonalization or dissociation (feeling numb and detached. 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. Kunju. In some countries. Muehlenhard & Rogers. like being in a daze or a dream. which seems to suggest the stereotype that these women are engaging in token resistance (Malamuth & Brown. or feeling that the world is strange and unreal) 2) Difficulty remembering important parts of the assault 3) Reliving the assault through repeated thoughts. In the context of rape. the defense of provocation is not accepted as mitigation for rape. Buddie and Arthur G. 1996). 1998) or leading the man on because they have gone along with the sexual experience thus far.) 6) Avoidance of social life or place of rape For one-third to one-half of the victims. or wearing sexually-provocative clothing) may encourage rape. Check & Malamuth. state: Rape victims are blamed more when they resist the attack later in the rape encounter rather than earlier (Kopper. and women who have been raped are sometimes deemed to have behaved improperly. Bell. Bridges & McGrail. Bridges. rape and sexual assault are among the most common causes of PTSD in women. and/or feelings that remind the victim of the assault 5) Anxiety or increased alertness (difficulty sleeping. etc. & Pinto. simply by not behaving demurely. this concept refers to the Just World Theory and popular attitudes that certain victim behaviours (such as flirting. In general. concentrating. Kanekar. Franco. places. in a review of studies of rape myths. thoughts.. 1994. Kuriloff. Amy M. these are countries where there is a significant social divide between the freedoms and status afforded to men and women. Shaherwalla.g. Miller.
is considered the most under. In the case of female-on-male rape. the initiation and process of a rape investigation depends much on the victim's willingness and ability to report and describe a rape. rape victims are prone to being blamed. The legal requirements for reporting rape vary by jurisdiction — each U.S. 1995).reported violent crime (American Medical Association. these include the idea that power is reserved to men whereas women are meant for sex and objectified. as fortunate. Tetreault & Barnett. and that male sexual impulses and behaviors are uncontrollable and must be satisfied. the number of reported rapes is lower than both incidence and prevalence rates (Wallaby and Allen. L'Armand & Pepitone. 2004).CULTURE OF CORRUPTION IN INDIA 140 1991. 1982. in cultures where men acquire status by sexual conquest. 1987). Thus. SATISHCHANDER . Investigation Since the vast majority of rapes are committed by persons known to the victim. The underlying message of this research seems to be that when certain stereotypical elements of rape are in place. Prosecution Reporting Sexual violence and rape in particular. 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. they also state that "individuals may endorse rape myths and at the same time recognize the negative effects of rape. state may have different requirements while other countries may have less stringent limits. In the case of male-on-female rape." A number of gender role stereotypes can play a role in rationalization of rape. that women want forced sex and to be pushed around. However. the victim may either be perceived as weak or.
rape has been regarded as spoils of war. blood. provide information regarding the circumstances of the incident. "Recovery from sexual assault is a complicated and controversial concept. vaginal secretions.CULTURE OF CORRUPTION IN INDIA 141 Biological evidence such as semen. community-based efforts and actions to prevent other forms of sexual violence. Now it will be considered a war crime.6% in 2002. health care responses. and pledged to address this "justice gap" (Home Office. vaginal epithelial cells (typically collected by a rape kit) may be identified and genetically typed by a crime lab. the response to sexual violence is comprehensive. Judge Navanethem Pillay of the International Criminal Tribunal for Rwanda said: From time immemorial. figures on reported rape cases show an ongoing decline in the conviction rate. including some on-line. The government has been expressed its concern at the year-on-year increase in attrition of reported rape cases. saliva. Prevention and treatment As sexual violence affects all parts of society. We want to send out a strong message that rape is no longer a trophy of war. putting it at an all-time low of 5." Support groups. and be compared to reference samples collected from patients and suspects. The information derived from the analysis can often help determine whether sexual contact occurred. usually accessed by "umbrella" organizations (see List of anti-sexual assault organizations in the United States) are prevalent. SATISHCHANDER . The responses can be categorized as: individual approaches. Conviction In the United Kingdom. 2002a). War rape In 1998.
000 Korean and Chinese women were forced into prostitution in Japanese military brothels.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). mistreatment of the civilian population by enemy forces and allegations of rape figure prominently in this. but also that the Mongols especially "found pleasure" in humiliating women. it is often very difficult.000 women by the Japanese soldiers during the six weeks of the Nanking Massacre is an example of such atrocities. a monk who survived the Mongol invasion of Hungary. as so-called "Comfort women". During World War II an estimated 200. in the course of war. In 1998. caused much destruction during their invasions. to assemble an accurate view of what really happened. 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. 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 . pointed out not only the genocidal element of the occupation. who established the Mongol Empire across much of Eurasia. Persian. the Mongol soldiers looted pillaged and raped. both practically and politically. Wartime propaganda often alleges. The Mongols. It has been alleged that an estimated 200. Some estimate that around 60% of combatants in Congo are HIVinfected. Rape by soldiers was common in many areas occupied by the Red Army.CULTURE OF CORRUPTION IN INDIA 142 Rape. Rogueries’. It is estimated that more than 200. Chad and the Democratic Republic of Congo.000 females living in the Democratic Republic of the Congo today have been raped in recent conflicts.000 Bosnian Muslim women were raped by Serb forces during the Bosnian War. and that at least 20. dates back to antiquity. The Israelite. According to UNICEF rape was prevalent in conflict zones in Sudan. drawing a link between the occurrence of sexual violence with the significant uprooting of a society and the crumbling of social norms. According to UNICEF rape is common in countries affected by wars and natural disasters. As a result. the International Criminal Tribunal for Rwanda found that systematic rape was used in the Rwandan genocide. UNICEF states that in Kenya reported cases of sexual violence doubled within days of post-election conflicts. Greek and Roman armies reportedly engaged in war rape. Documents written during or after Genghis Khan's reign say that after a conquest. and exaggerates. The systematic rape of as many as 80. ancient enough to have been mentioned in the Bible. French Moroccan troops known as Goumiers committed rapes and other war crimes after the Battle of Monte Casino.
Amnesty International stated that the ruling challenged the widespread acceptance of the torture of women as an intrinsic part of war. it was recognised that Muslim women in Foča (southeastern Bosnia and Herzegovina) were subjected to systematic and widespread gang rape. sexual slavery. excuse. and media condone. torture and enslavement by Bosnian Serb soldiers. Rape culture Rape culture is a term which originated in women's studies and feminist theory. forced pregnancy. recognizes rape. enforced sterilization.000 women were raped during the 1994 Rwandan Genocide. practices. Specifically." An estimated 500. or tolerate sexual violence against women. enforced prostitution. 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. "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. The Rome Statute. which defines the jurisdiction of the International Criminal Court. Examples of behaviors commonly associated with rape culture include victim blaming and sexual objectification. SATISHCHANDER . describing a culture in which rape and sexual violence against women are common and in which prevalent attitudes. Now India is making a rape culture. normalize. 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. norms. policemen and members of paramilitary groups after the takeover of the city in April 1992. 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.CULTURE OF CORRUPTION IN INDIA 143 systematic and had been perpetrated against Tutsi women only. manifesting the specific intent required for those acts to constitute genocide.
Ane Nauta in 1978. Honor killing An honor killing or honour killing is the killing of a member of a family or social group by other members. The mere perception that a woman has behaved in a way that "dishonors" her family is sufficient to trigger an attack on her life. including: refusing to enter into an arranged marriage. Women and girls are killed at a much higher rate than men. The United Nations Population Fund (UNFPA) estimates that perhaps as many as 5. (b) wanting to terminate or prevent an arranged marriage or desiring to marry by own choice. due to the belief of the perpetrators (and potentially the wider community) that the victim has brought dishonor upon the family or community. the term was first used by a Dutch scholar of Turkish society.CULTURE OF CORRUPTION IN INDIA 144 28. being the victim of a sexual assault. or the suspicion of such behaviors: (a) dressing in a manner unacceptable to the family or community. (c) engaging in heterosexual sexual acts outside marriage. Definitions In the modern age. Many women's groups in the Middle East and Southwest Asia suspect the victims are at least four times more. Honour killings are directed mostly against women and girls. usually death. who are held to have brought dishonor upon the family. or even due to a non-sexual relationship perceived as inappropriate. Nauta sought a term that could be used in distinguish honour killings from blood feuds. The perceived dishonor is normally the result of one of the following behaviors. Human Rights Watch defines "honor killings" as follows:- Honor killings are acts of vengeance. SATISHCHANDER . A woman can be targeted by (individuals within) her family for a variety of reasons. and (d) engaging in homosexual acts. committed by male family members against female family members.000 women and girls a year are killed by members of their own families. seeking a divorce—even from an abusive husband—or (allegedly) committing adultery.
during the year 2002 in Pakistan. In countries that receive immigration. professor of anthropology at Birzeit University. Alternatively. for example in feminist and integration politics. As a cultural practice Sharif Kanaana. a gay Jordanian man was shot and wounded by his brother. There is some evidence that homosexuality can also be perceived as grounds for honor killing by relatives. In another case. 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. For example. Women in the family tend to support the honor killing of one of their own. 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. since many men in these societies will refuse to marry the sister of a "shamed" female whom the family has not chosen to punish. Ahmet Yildiz. In one case. matriarchs may be motivated not by personal belief in the misogynistic ideology of women as property. or tribe seek control of in a patrilineal society is reproductive power. a homosexual Turkish student. or adopt some of the customs or the religion of an outside group may be attacked.CULTURE OF CORRUPTION IN INDIA 145 The loose term "honor killing" applies to killing of both males and females in cultures that practice it. The honour killing is not a means to SATISHCHANDER . Women for the tribe were considered a factory for making men. thereby failing to "purify" the family name. publicly engage other communities. Some women who bridge social divides. clan. says that honor killing is:- A complicated issued that cuts deep into the history of Arab society. but by pragmatic calculations. it is estimated that 245 women and 137 men were killed in the name of Karo-karis in Sindh. was shot outside a cafe and later died in hospital. Sociologists have called this Turkey's first publicized gay honor killing. 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. What the men of the family.
What's behind it is the issue of fertility. Pakistan) says: "It is an unholy alliance that works against women: the killers take pride in what they have done. the tribal leaders condone the act and protect the killers and the police connived to the coverup. 60 percent are either high school or university graduates or at the very least. has so far shown that little if any social stigma is attached to honor killing. as a result of people marrying without their family's acceptance. Of all those surveyed. and sometimes for marrying outside their caste or religion. "There are also perpetrators who are welleducated university graduates. mainly in the Indian states of Punjab. Uttar Pradesh and Bihar. notably West Bengal. Haryana.CULTURE OF CORRUPTION IN INDIA 146 control sexual power or behavior." A July 2008 Turkish study by a team from Deckle University on honor killings in the Southeastern Anatolia Region. or reproductive power." India Honor killings have been reported in northern regions of India. honor SATISHCHANDER . "The right to life of women in Pakistan is conditional on their obeying social norms and traditions. It also comments that the practice is not related to a feudal societal structure. the predominantly Kurdish area of Turkey. honour killings are rare to non-existent in South India and the western Indian states of Maharashtra and Gujarat. and family members have no socially acceptable alternative but to remove the stain on their honor by attacking the woman. literate. In contrast. The lawyer and human rights activist Henna Jilani says. 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. Nighat Taufeeq of the women's resource center Shirkatgah (Lahore. In some other parts of India. Rajasthan.
Recent cases include a 16-year-old girl. and they have suggested that governments of countries SATISHCHANDER . The NCW's activism has contributed significantly towards the reduction of honor killings in rural areas of North India. Bhagalpur in the northern Indian state of Bihar has also been notorious for honour killings. from Bhojpur who was set on fire inside her house in a case of what the police called ‘moral vigilantism’. legal and other provisions as well as challenges women face. In June 2010 some incidents were reported even from Delhi. Karnal district court ordered the execution of the five perpetrators of an honour killing. In a landmark judgment in March 2010. a man and woman of the same clan who eloped and married in June 2007. Jayvirsingh Bhadodiya shot his daughter Vandana Bhadodiya and struck her on the head with an axe. Imrana. The victim had screamed for help for about 20 minutes before neighbours arrived. Indian women are considerably better protected against honor killings by Indian law and government than Pakistani women. Despite having been given police protection on court orders. they were kidnapped.CULTURE OF CORRUPTION IN INDIA 147 killings ceased about a century ago. Ramakrishna. This body reviewed constitutional. This form of honour killing is attributed to Rajput culture and traditional views on the perceived "purity" of a lineage. 34 honour killings were reported in the state between 2008 and 2010: 10 in 2008. and imprisoning for life the khap (local caste-based council) head who ordered the killings of Manoj Banwala (23) and Babli (19). and four in 2010. only to find her still smoldering. 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. She was admitted to a local hospital. Ahmed. According to Pakistani activists Henna Jilani and Emans M. Haryana also is known for incidents of honour killing. their mutilated bodies were found a week later in an irrigation canal. In May 2008. The Indian state of Punjab is notorious for honour killings. where she later died from her injuries. largely due to the activism and influence of reformists such as Vivekananda. 20 in 2009. According to data compiled by the Punjab Police. marriages with members of other castes can provoke the killing of the married couple and immediate family members. Among Rajput’s. Vidyasagar and Raja Ram Mohan Roy.
however. to advertise to the public that the person to whom the bank belonged was no longer in a condition to continue his business. when a banker failed. Fraud Bankruptcy fraud is a white-collar crime. and ruptus (broken). Haryana and Rajasthan to take preventive measures against honor killings. fairs. wrote their bills of exchange. The word bankruptcy is formed from the ancient Latin bancus (a bench or table). which the first bankers had in the public places. 29. common criminal acts under bankruptcy statutes typically involve concealment of assets. Punjab. concealment or destruction of documents. An involuntary bankruptcy petition may not be filed against an individual consumer debtor who is not engaged in business. the Government planned to bring a bill in the Monsoon Session of Parliament July 2010 to provide for deterrent punishment for 'honour' killings. 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. false SATISHCHANDER . Alarmed by the rise of honour killings. A "bank" originally referred to a bench. fraudulent claims. etc.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. conflicts of interest. In June 2010. etc. While difficult to generalise across jurisdictions. in markets. scrutinizing the increasing number of honour killings. In the majority of cases. bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the insolvent individual or organisations). Bankruptcy Bankruptcy or insolvency is a legal status of a person or organisations that cannot repay the debts it owes to its creditors. on which they tolled their money. he broke his bank. Hence. the Supreme Court of India issued notices to the Central Government and six states including Uttar Pradesh.
and fee fixing or redistribution arrangements. it is for the creditors. 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. Bankruptcy fraud should be distinguished from strategic bankruptcy.S. The current law in force was enacted in 1920 called Provincial Insolvency Act. Multiple filings are not in and of themselves criminal. India India does not have a clear law on corporate bankruptcy even though individual bankruptcy laws have been in existence since 1874. All assets must be disclosed in bankruptcy schedules whether or not the debtor believes the asset has a net value. but may work against the filer. which is not a criminal act. This is because once a bankruptcy petition is filed. Legal meaning of the terms bankruptcy. On the other hand. but they may violate provisions of bankruptcy law. 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.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. Falsifications on bankruptcy forms often constitute perjury. insolvency. liquidation and dissolution are contested in the Indian legal system. The trustee may then seize the asset and liquidate it for the benefit of the (formerly discharged) creditors. not the debtor to decide whether a particular asset has value. trustee if a debtor attempts to later assert ownership of such an "unscheduled asset" after being discharged of all debt in the bankruptcy. A closed bankruptcy may be reopened by motion of a creditor or the U. SATISHCHANDER . The future ramifications of omitting assets from schedules can be quite serious for the offending debtor.
a criminal complaint has been filed). 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. such as Switzerland.”We cannot say with certainly that the bank secrecy is over in all cases. Bank secrecy is prevalent in certain countries. SATISHCHANDER . Lebanon and Luxembourg. while addressing a seminar on international taxation jointly organized by his ministry and the Organisation for the Economic Cooperation and Development (OECD). there are appropriate mechanisms available within its domestic legal system to overcome Obstacles that may arise out of the application of bank secrecy laws.” the minister said. Such issue put a question mark on the efficacy of exchange of banking information. Singapore. “While countries have accepted to end bank secrecy in the general. in the case of domestic criminal Investigations of offences established in accordance with this Convention. come countries have agree to do so only from a prospective date and are not willing to exchange past banking information. In some cases. he said.’’ he said. Mukherjee. additional privacy is provided to beneficial owners through the use of numbered bank accounts or otherwise. as well as offshore banks and other tax havens under voluntary or statutory privacy provisions. Each State Party shall ensure that. Despite efforts made at the global level and statements issued by G-20 leaders at their London summit in April 2009. regretted that the banking system is still opaque in various non-tax and low tax jurisdictions.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.
Initially it was in the form of an informal association of traders and households within communities. 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. 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. insurance which allows a lump sum to be enjoyed at some unspecified future time (for SATISHCHANDER . (b) provides an option to people to participate in schemes where members need not know each other. it encourages competition among chit fund firms to improve services to clients. in recent times. 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. In return the chit fund companies take a fee from the clients to cover their expenses. Chit funds are the Indian equivalent of the Rotating Savings and Credit Associations (ROSCA) that are famous throughout the world. However. ROSCAs are a means to „save and borrow‟ simultaneously. hence there is a larger diversification of the idiosyncratic risks. in other words. (c) to some extent ensures transparency in the operations. in the form of a commission. this industry has been highly regulated and is governed by stringent rules. The main mechanisms are. 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. for „consumption‟ purposes. The concept of chit funds originated more than 1000 years ago. Under the Chit Fund Act. The chit fund company provides a variety of mechanisms by which the savings of the members can be transformed into lump sums. in India. and (e) legal recognition also helps the chit fund operators to scale their operations. (d) given that the law determines the size of the bidding and the commission the company can charge.CULTURE OF CORRUPTION IN INDIA 151 30. savings deposit which allow a lump sum to be enjoyed in future in exchange for a series of savings made at present. This makes it easier to provide chit schemes in urban settings where social linkage among members might be weak. wherein the members contributed some money in return for an accumulated sum at the end of the tenure. there have been tremendous alterations in the constitution and functioning of Chit funds. 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. chit funds have been formally institutionalized as well. Participation in Chit funds was mainly for the purpose of purchasing some property or. It enables poor people to convert their small savings into lump sums. Whiles in most places ROSCAs are user-owned and organized informally.
domestic servants. and embroidery factories. there exists a company under the State Government. by providing easier access to credit. 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. 31. Human trafficking in India India is a source. "Chit means a transaction whether called chit. While no comprehensive study of forced and bonded labor has been completed. agriculture. NGOs estimate this problem affects 20 to 65 million Indians. According to Section 2(b) of the Chit Fund Act. Children are subjected to forced labor as factory workers. Chit funds also played an important role in the financial development of people of south Indian state of Kerala. destination. beggars. rice mills. chit fund. SATISHCHANDER . the main business activity of it being the chitty business. Such chit fund schemes may be conducted by organized financial institutions or may be unorganized schemes conducted between friends or relatives. daughter’s marriage) in exchange for a series of savings made both at present and in the future. and children are held in debt bondage and face forced labor working in brick kilns. women. be entitled to the prize amount". A Chit fund is a kind of savings scheme practiced in India. 1982. 1982. There are also variations of chits where the savings are done for a specific purpose. 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. conducting or supervising. Internal forced labor may constitute India’s largest trafficking problem. and children trafficked for the purposes of forced labor and commercial sexual exploitation. men. chits as defined in Section 2 of the Chit Funds Act. in his turn. A Chit fund company means a company managing. agent or in any other capacity. as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement. In Kerala. In Kerala chitty (chit fund) is a common phenomenon practiced by all sections of the society. women. as foremen.CULTURE OF CORRUPTION IN INDIA 152 example. and transit country for men. called Kerala State Financial Enterprise. chitty.
SATISHCHANDER . 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. Europe. high debts incurred to pay recruitment fees leave them vulnerable to exploitation by unscrupulous employers in the destination countries. and protect traffickers and brothel keepers from arrest and other threats of enforcement. Indian women are trafficked to the Middle East for commercial sexual exploitation. and physical or sexual abuse. In addition to this. Prosecutions The Government of India prohibits some forms of trafficking for commercial sexual exploitation through the Immoral Trafficking Prevention Act (ITPA). and the Juvenile Justice Act. and the United States for work as domestic servants and low-skilled laborers. Indian authorities also use Sections 366(A) and 372 of the Indian Penal Code. restrictions on movement. In some cases. where some are subjected to conditions of involuntary servitude. Nepali children are also trafficked to India for forced labor in circus shows. and have been used as armed combatants by some terrorist and insurgent groups. prohibiting kidnapping and selling minors into prostitution respectively. India also prohibits bonded and forced labor through the Bonded Labor Abolition Act. such workers are the victims of fraudulent recruitment practices that lead them directly into situations of forced labor. Penalties under these provisions are a maximum of ten years’ imprisonment and a fine.CULTURE OF CORRUPTION IN INDIA 153 and agriculture workers. bonded labor and movement of sex trafficking victims. unlawful withholding of passports. including nonpayment of wages. is facilitated by corrupt officials and people having a stake in this lucrative business. the Child Labor Act. including debt bondage. These laws are ineffectually enforced. however. They protect brothels that exploit victims. India is also a destination for women and girls from Nepal and Bangladesh trafficked for the purpose of commercial sexual exploitation. and their prescribed penalties — a maximum of three years in prison —are not sufficiently stringent. There are also victims of labor trafficking among the thousands of Indians who migrate willingly every year to the Middle East. in other cases.
Although children trafficked for forced labor may be housed in government shelters and are entitled to 20. Indian diplomatic missions in destination SATISHCHANDER . The central government does not provide protection services to Indian victims trafficked abroad for forced labor or commercial sexual exploitation.CULTURE OF CORRUPTION IN INDIA 154 Usually. sustained efforts in combating trafficking for commercial sexual exploitation usually come to a naught because of ineffectual laws as well as delays in prosecution. India’s Central Bureau of Investigation incorporated anti-trafficking training into its standard curriculum. Some states provide services to victims of bonded labor. State governments regularly conduct campaigns through their welfare departments along with police raids. but remains inadequate in many places. but Non-Governmental Organisations provide the majority of protection services to these victims. Protection India’s effort to protect victims of trafficking varies from state to state. 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.000 rupees ($450). Victims of bonded labor are entitled to 10. Bulk of bonded labor heads for Middle East to emerging economies and there are several media reports which testify the plight of Indian workers. However. so few victims receive this assistance. The government does not break down these statistics by sections of the law. there are no efforts made to tackle the problem of government officials’ complicity in trafficking workers for overseas employment. the quality of many of these homes remains poor and the disbursement of rehabilitation funds is sporadic.000 rupees ($225) from the central government for rehabilitation. Government authorities do not proactively identify and rescue bonded laborers. In November. however. allocate appropriate funding to accomplish the objectives of this plan. it did not. but this program is unevenly executed across the country. the State of Maharashtra developed an action plan to combat trafficking.
Section 8 of the ITPA permits the arrest of women in prostitution. once repatriated. some victims may be arrested and punished for acts committed as a result of being trafficked. however. SATISHCHANDER . NGOs primarily perform this function. India has not ratified the 2000 UN TIP Protocol. Some foreign victims trafficked to India are not subject to removal. psychological. legal. NGOs that receive funding indirectly from either the central or state government do not want to be brought within the scrutiny of anybody. police officers no longer use this provision of the law. NGOs report that some Bangladeshi victims of commercial sexual exploitation are pushed back across the border without protection services. 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. neither the central government nor most state governments offer any medical. a dream of better future ahead often lures the people abroad and hence trafficking cannot entirely be prevented.CULTURE OF CORRUPTION IN INDIA 155 countries may offer temporary shelter to nationals who have been trafficked. Many victims decline to testify against their traffickers due to the length of proceedings and fear of retribution by traffickers. or reintegration assistance for these victims. Therefore. This is because of the fact that most of the destinations abroad pay better sums of money. Because most law enforcement authorities lack formal procedures to identify trafficking victims among women arrested for prostitution. it is unclear whether arrests of women in prostitution under Section 8 have actually decreased. Although statistics on arrests under Section 8 are not kept. The government also does not repatriate Nepali victims. 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. Prevention Ministry of Labor and Employment displays full-page advertisements against child labor in national newspapers at periodic intervals. the government and some NGOs report that. The government has also instituted pre-departure information sessions for domestic workers migrating abroad on the risks of exploitation.
TI began publishing the Bribe Payers Index (BPI) which ranked nations according to the prevalence that a country's multinational corporations would offer bribes. Dolores L. Germany but operates through more than 70 national chapters. based upon surveys of business people. It publishes an annual Corruption Perceptions Index. Founding board members included Eigen. Joe Githongo. PREVENTION &REDUCTION TOOLS (ACT’S) 32. Eigen acted as Chairman and Pope was Managing Director.CULTURE OF CORRUPTION IN INDIA 156 G. TI developed the Corruption Perceptions Index (CPI). SATISHCHANDER . In 1999. The CPI was subsequently published annually. The headquarters is located in Berlin. Michael Hershman. Jerry Parfitt. Kamal Husain. a comparative listing of corruption worldwide. History TI was founded in May 1993 through the initiative of Peter Eigen. The CPI ranked nations on the prevalence of corruption within each country. Transparency International Transparency International (TI) is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. a former regional director for the World Bank. Español. George Moody Stuart. Jeremy Pope and Frank Vogl. while also being praised for highlighting corruption and embarrassing governments. In 1995. Fritz Heimann. It was criticized for poor methodology and unfair treatment of developing nations. Hansjörg Elshorst.
To form this index. their perceptions of how corrupt a country is. TI furthermore played a vital role in the introduction of the United Nations Convention against Corruption and the OECD Anti-Bribery Convention. It develops tools for fighting corruption and works with other civil society organizations. TI compiles surveys that ask businessmen and analysts. with an international secretariat in Berlin. whereas prior to the 1990s this topic was not broadly discussed. It brings people together in a powerful worldwide coalition to end the devastating impact of corruption on men. TI's mission is to create change towards a world free of corruption. both in and outside the countries they are analysing." Since 1995. TI has issued an annual Corruption Perceptions Index (CPI). women and children around the world. The goal of TI is to be nonpartisan and to build coalitions against corruption. TI says of itself: "Transparency International is the global civil society organization leading the fight against corruption. TI is now an international non-governmental organization. Originally founded in Germany in May 1993 as a not-for-profit organization. and claims to be moving towards a completely democratic organizational structure. Corruption Perceptions Index The CPI—besides the World Bank corruption index—is the most commonly used measure for corruption in countries worldwide. it also publishes an annual Global Corruption Report. Relying on the number of actual corruption cases SATISHCHANDER . companies and governments to implement them. TI's biggest success has been to put the topic of corruption on the world's agenda. TI does not undertake investigations on single cases of corruption or expose individual cases. a Global Corruption Barometer and a Bribe Payers Index. International Institutions such as the World Bank and the International Monetary Fund now view corruption as one of the main obstacles for development. Germany.CULTURE OF CORRUPTION IN INDIA 157 Organization and role TI is organized as a group of some 100 national chapters.
from their responses to the financial crisis and climate change to commitments by the international community to eradicate poverty. The second issue is that data cannot be compared from year to year because TI uses different methodologies and samples every year. governments need to integrate anti-corruption measures in all spheres. The CPI authors replied to these criticisms by reminding that the CPI is meant to measure perception and not "reality". Mara Faccio (Purdue University. To address these challenges.. from the instability of financial markets to climate change and poverty. The main one stems from the difficulty in measuring corruption. Data can vary widely depending on the public perception of a country. With governments committing huge sums to tackle the world's most pressing problems. November 1998 and picked-up in the International Anti-Corruption Conference three years later. This makes it difficult to evaluate the result of new policies. corruption remains an obstacle to achieving much needed progress. USA) has issued a number of papers on this subject. the completeness of the surveys and the methodology used. The 2010 Corruption Perceptions Index shows that nearly three quarters of the 178 countries in the index score below five. including a study entitled “Differences between Politically Connected and Non-Connected Firms: A Cross Country Comparison”.. which by definition happens behind the scenes. on a scale from 10 (highly clean) to 0 (highly corrupt).CULTURE OF CORRUPTION IN INDIA 158 would not work since laws and enforcement of laws differ significantly from country to country. Transparency International advocates SATISHCHANDER . They argue that "perceptions matter in their own right. These results indicate a serious corruption problem. firms and individuals take actions based on perceptions". The CPI therefore needs to rely on third-party surveys which have been criticized as potentially unreliable. 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 CPI has received criticisms over the years. since.
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. Without them. and various acts of corruption in the private sector. global policy solutions too many global crises are at risk. international cooperation.1. abuse of power. the general absence of OECD states underlines the fact that all nations need to bolster their good governance mechanisms.5. The UNCAC covers five main areas: prevention. asset recovery. followed closely by Finland and Sweden at 9. Denmark. Bringing up the rear is Somalia with a score of 1. The rapidly growing number of States that have become parties to the Convention is further proof of its universal nature and reach.4 and Iraq at 1. transparency and accountability are critical to restoring trust and turning back the tide of corruption. criminalization and law enforcement measures. New Zealand and Singapore are tied at the top of the list with a score of 9. a major concern for countries that pursue the assets of former leaders and other officials accused or found to have engaged in corruption.3. 33. The UNCAC covers many different forms of corruption. A further significant development was the inclusion of a specific chapter of the Convention dealing with the recovery of assets. and technical assistance and information exchange. such as trading in influence. The message is clear: across the globe. United Nations Convention against Corruption The United Nations Convention against Corruption (UNCAC) is the only legally binding universal anti-corruption instrument. SATISHCHANDER . slightly trailing Myanmar and Afghanistan at 1. Among those improving in the past year. Notable among decliners over the past year are some of the countries most affected by a financial crisis precipitated by transparency and integrity deficits.CULTURE OF CORRUPTION IN INDIA 159 stricter implementation of the UN Convention against Corruption. the only global initiative that provides a framework for putting an end to corruption.2.
High ranking officials have also been involved in major corruption scandals. 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. in particular. Another achievement in the fight against corruption has been the enactment of the Right to Information (RTI) Act in 2005. However. corruption remains widespread in the country and there have been many instances of political and bureaucratic corruption. The 2006 report by Transparency International puts India at the 70th place and states that significant improvements were made by India in reducing corruption. public funds embezzlement. The latter has been identified as one of the most corrupt institutions by various surveys. fraudulent Procurement practices and judicial corruption. 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. with institutions including the Central Bureau of Investigation. 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. tax and customs administration. has taken a firm stance against corruption in recent years and made several important rulings. The sectors most affected by corruption include public procurement. The Supreme Court. The Government has put in place a well-developed legal and institutional framework. the Office of the Comptroller and the Auditor General. however. SATISHCHANDER . In spite of progress. and the Central Vigilance Commission. and the police.CULTURE OF CORRUPTION IN INDIA 160 34. which grants citizens access to government information and a mechanism to control public spending. infrastructure. public utilities.
The non-governmental organizations (NGOs) substantially funded. and inter alia includes all authorities under the Central Government. as it encourages the common citizen to enthusiastically participate in the whole process of governance. the main objectives of the law on RTI are: to operationalize the fundamental right to information. including education and health care that have intense and pervasive impact on all the human activities. 2005 Right to information (RTI) is inherent in democratic functioning and a precondition to good governance and realization of all other human rights. Specifically. 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. participatory and meaningful. to promote transparency and accountability in governance. so that the public has to take minimum recourse to the use of this legislation for obtaining information. SATISHCHANDER . on every public authority to suo motu provide to the public with the information as prescribed therein. 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. but also have the right to get it. directly or indirectly.CULTURE OF CORRUPTION IN INDIA 161 Salient Features of Right to Information Act. unless specifically defined exemptions apply. A duty has been cast. to set up systems and mechanisms that facilitate people’s easy access to information. by the public funds also fall within the ambit of this Act. in section 4 of the Act. to minimize corruption and inefficiency in public offices and to ensure people’s participation in governance and decision making. The Act promises to make the right to information more progressive. The citizens are not only free to ask for information from the Government. State Government sand Local Bodies.
To assure that the information sought is provided quickly. Even in the case of security and intelligence agencies and organizations. Even the exemptions are not absolute if disclosure of the information outweighs the harm to the public authorities. such exemption would not be available. The categories of information exempted from disclosure in this Act are kept to a bare minimum. as well as an alert. efficient. The first appeal lies to an officer within the organization who is senior in rank to PIO. the Commission may impose penalty on the concerned officials for denial of information and recommend disciplinary action against the errant officials. transparent and accountable government. section 7 of the Act. incomplete or misleading information. The fee payable is reasonable and information is to be provided free of cost to citizens living below the poverty line. which are exempted from the provisions of this Act. A citizen has to merely make a request to the concerned Public Information Officer (PIO) specifying the information sought by him. or destroying information and so on. In cases of allegations of violation of human rights. The Act provides for penalties in case of failure to provide information in time. information would be made available after the approval of the Information Commission. responsive. which is very simple. The Commission is vested with the power of a Court. or for refusing to accept application for information. The Act establishes a two-tier mechanism for appeal. The second appeal lies in the Information Commission. or forgiving incorrect. the Commission may also advise the appropriate Government in the matters of maintenance SATISHCHANDER . If the information requested concerns the life or liberty of a person. paves the way for an empowered citizen. if there were cases of allegation of corruption and human rights violation.CULTURE OF CORRUPTION IN INDIA 162 The procedure of securing information as provided in section 6 of the Act. mainly information seekers and providers. prescribes a procedure. makes it mandatory for the PIO to provide the information within 30days. under Section 25(5) of the Act. 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. who do not comply with the requirements of the Act. This Act. The jurisdiction of the lower court is barred under section 20 of the Act. In addition. Under Section 20. Moreover. thus. it has been made mandatory to provide it within 48 hours of the receipt of the request. the Information Commission has also been empowered to recommend disciplinary action against the government servants.
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. The powers vested with the Information Commissioner. We. which are outlined in its preamble. who are appointed by the President of India/Governor of a state. it may be worthwhile to analyse some evidences. for developing an understanding on how it works and what it does or does not do. and (iii) preliminary research studies and publications of results. The assessment of impact is proposed to be made in terms of the stated objectives of the RTI Act. since data are lacking to permit methodological rigour of analysis. reliance is made on (i) the responses of the RTI requesters and the activists. ensure effective implementation of the Act. SATISHCHANDER . 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. in order to promote transparency and accountability in the working of every public authority. 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. Impact of RTI on the Elements of Good Governance The RTI Act was implemented in October 2005. mainly those relating to corruption and accountability of public bodies. (ii) media reports on the issues pertaining to RTI matters. therefore. Though a period of less than three years is too a short period to assess the success of RTI. However.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. 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.
2005: I believe that the passage of this Bill will see the dawn of a new era in our processes of governance. an era which will truly fulfil the hopes of the founding fathers of our Republic. all the levels of the Government – the Centre. including internet.CULTURE OF CORRUPTION IN INDIA 164 In addition to the above. 2) Improvement in accountability and performance of the Government. while piloting the Bill for its passage by the National Parliament. including Village level Panchayats – have put the records in SATISHCHANDER . the major objectives of the Act are:- 1) Greater Transparency in functioning of public authorities. an era which will bring the common man’s concern to the heart of all processes of governance. 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. so that the public have minimum resort to the use of this Act to obtain information’. In compliance of the above provisions of the Act. States and Local Bodies. All these parameters are critical elements of good governance. stated. The public authorities are therefore required to make pro-active disclosures through publication of relevant documents. an era which will ensure that benefits of growth flow to all sections of our people. 3) Promotion of partnership between citizens and the Government in decision making process. 4) Reduction in corruption in the Government departments. as under. 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’. Besides. an era of performance and efficiency. Evidently. an era which will eliminate the scourge of corruption. regulations and decisions. the Prime Minister of India. on May 11. the public authorities are also required to ‘provide as much information suo motu to the public at regular intervals through various means of communication. Transparency With a view to ensuring maximum disclosure of information regarding government rules.
shelter for poor. for necessary directions to the parties as per the provisions of the Act. cabinet papers. Accountability The RTI provides people with the mechanism to access information. every public SATISHCHANDER . thus. such as above. (iii) Taking certified sample of material. such as. educational and health facilities. The disclosure of vital information. there is greater transparency than before in the working of the public bodies. records of recruitment. food grains supplied through ration shops. the Commission has ordered for providing the details of the decision-making processes. have contributed to advocacy in favour or against the policies and/or political leaderships. documents pertaining to tender processes and procurement procedure. information in electronic form. misleading or incorrect. The disclosure of information relating to use of funds allocated to rural employment guarantee scheme. In addition. if available. 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. In a large number of cases. by whom and with what consequences or outcomes. selection and promotion of staff. And. to facilitate the access to information. In effect. In the cases where the information sought for are not provided within the stipulated period of 30 days or the information furnished are incomplete. (ii) Taking notes extracts or certified copies of the documents or records. a citizen has the right to: (i) Inspection of work. a requester is free to file a complaint or appeal before the Information Commission (IC). Thus. (IV) Obtaining. water and electricity. etc. has thus resulted in checking corrupt practices in delivery of services and ensuring the reach of entitlements to the poor. records. the lists of beneficiaries of the Government’s subsidized schemes. documents. domestic gas. which include ‘file noting’s. etc. which they can use to hold the government to account or to seek explanation as to why decisions have been taken. MLA/MP local area funds. muster rolls underemployment guarantee schemes.CULTURE OF CORRUPTION IN INDIA 165 public domain. through publications as well as internet in the regional languages.
because. In the process. Such a chance given to people empowers them to make appropriate choice of leadership and the policies that affects them. the quality of decision making and delivery of services have duly improved. which was found most often. the teachers do not teach. Such an era of darkness in policy planning is over. the government’s social spending yields no worthwhile benefits. particularly for the poor. SATISHCHANDER . Until the implementation of the RTI Act. As a result. it was not possible for an ordinary persons to seek the details of a decision making process. including file noting’s. therefore. created conducive conditions for every One to have a better understanding of how the government works or how a Particular decision was reached. This has begun to happen with salutary effects on delivery of socioeconomic services. The information regime has. being full aware that the records pertaining to the decision-making process. in effect. as ineffective in terms of its outcome. are required to be put in public domain. which result in lower investments due to misuser diversion of funds for private purposes. thus. It was. For instance. doctors and nurses do not attend health centres. the concerned officials at all levels objectively record the reasons for the observations made by them. for instance. not possible to hold a free and frank discussion on issues of common concern of people or to fix the responsibility for any action. ration card holders do not receive subsidized food grains and the promised jobs are not provided to the people. Attempts are also made to effectively implement the programs as the relevant details are proactively disclosed. which impinge upon the development and jeopardize democratic governance.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. In effect. Reduction in Corruption Lack of transparency and accountability encourage the government officials to indulge in corrupt practices. It creates an environment of distrust between the people and the government. it perpetuates poverty and harms the poor.
Further redress depends on the laws of the country concerned. 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. As the functioning of public authorities becomes more transparent and ensure proactive disclosure of the policies. An indigenous Danish. an ombudsman is a state official appointed to provide a check on government activity in the interests of the citizen. An ombudsman is an official. 35. Ombudsman in politics In general. who is charged with representing the interests of the public by investigating and addressing complaints reported by individual citizens. but this normally involves financial compensation. endeavours should be made to increase the effective demand for improvement in delivery of services. If the ombudsman finds a complaint to be substantiated. the problem may get rectified. and Swedish term. Ombudsman is etymologically rooted in the Old Norse word umboðsmaðr. programmes and their outcomes. there would be greater participation by people in every sphere of development. Ombudsmen in most countries do not have the power to initiate legal proceedings or prosecution on the grounds SATISHCHANDER . particularly the poor. to make its effective use for the benefits of citizens. usually appointed by the government or by parliament. It is important therefore to enhance the capacity of public authorities as well as the citizens to develop awareness and understanding of information. or an ombudsman report is published making recommendations for change. which has resulted in reduction of corruption. 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. who are receiving the benefits of development as per their entitlements. essentially meaning "representative". In effect. Norwegian.CULTURE OF CORRUPTION IN INDIA 167 RTI has enabled people to participate in the process of development. and to oversee the investigation of complaints of improper government activity against the citizen.
Industry and organizational ombudsman Many private companies. outside Scandinavia. These ombudsman roles are structured to function independently. insurance and other sectors being serviced by both private and public bodies and corporations. 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. The CVC (Central Vigilance Commission) was setup on the recommendations of Santhanams Committee (1962–64). They are beginning to appear around the world within organizations.CULTURE OF CORRUPTION IN INDIA 168 of a complaint. and in addition to hot lines because ombuds offices typically receive many more calls than do hot lines. sometimes as an alternative to anonymous hot-lines in countries where these are considered inappropriate or are illegal. by reporting to the CEO or board of directors. SATISHCHANDER . Perhaps for this reason. and on the cooperation of at least some effective official from within the apparatus of the state. and managers and/or other constituencies. and has been traditionally fulfilled by elected representatives – the term refers to the ancient Roman "tribunes of the plebians" (tribuni plebis). The major advantage of an ombudsman is that he or she examines complaints from outside the offending state institution. and according to the International Ombudsman Association (IOA) Standards of Practice do not serve any other role in the organization. This role is sometimes referred to as a "tribunitian" role. universities. whose role was to intercede in the political process on behalf of common citizens. thus avoiding the conflicts of interest inherent in selfpolicing. the introduction of ombudsmen has tended to yield mixed results. the ombudsman system relies heavily on the selection of an appropriate individual for the office. However. non-profit organizations and government agencies also have an ombudsman (or an ombuds office) to serve internal employees.
inaction. Kerala (1998). however. Uttaranchal (2002) and West Bengal (2003) and Haryana (2004). Madhya Pradesh (1981). which has so far not been enacted. The appointment is made under the provisions of the Kerala Panchayats Raj Act. He or she can enquire/investigate into allegations of action. Delhi (1995). Himachal Pradesh (1983). the Lokayukta doesn't have suo moto powers of instigating an enquiry. 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. corruption and mal administration. Andhra Pradesh (1983). Assam (1986). Chhattisgarh (2002). An Administrative Reforms Commission (ARC) was set up on 5 January 1966 under the Chairmanship of Shri Morarji Desai. in different States in India. and comprise of the state vigilance commissioner and a jurist or an eminent administrator as other members. Orissa is the first state to present a bill on establishment of Lokayukta in 1970. The Lokayukta is an anti-government corruption organization in the Indian states. Bihar (1974).3. Uttar Pradesh (1977). the jurisdiction of the Lokpal is not extended for judiciary like in New Zealand. 1973 was passed by the State Legislature and received assent of the President on 26. Thereafter. A Retd-Judge of the High Court is appointed by the Governor for a term of 3 years. this institution was established in different States in different years namely: Maharashtra (1972). Punjab (1996). In the State of Rajasthan. The structure of the Lokayukta is not uniform across all the states. Municipalities and Corporations. headed by a retired Supreme Court judge or high court chief justice. However.CULTURE OF CORRUPTION IN INDIA 169 In India. SATISHCHANDER . Lokayukta institution has come into existence in different years. Some states have UpaLokayukta under Lokayukta and in some states. Kerala State has an Ombudsman for Local Self Government institutions like Panchayats. Ombudsman is called as Lokpal or Lokayukta. The central Government introduced the first Lokpal Bill. Maharashtra is the first state to have established the institution in 1972. These institutions are based on the Ombudsman in Scandinavian countries. Lokpal and Lokayukta Bill in 1968 and lastly in 2005. An amendment to the Constitution has been proposed to implement the Lokayukta uniformly across Indian states as a three-member body. Karnataka (1984).1973. Gujarat (1988). the Lokayukta institution was established in the year 1973 after the Rajasthan Lokayukta and Up-Lokayukta Act.
bureaucrats and even sitting judges. such as fraud. sometimes from related organizations. 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. ombudsmen at state level (Lok Ayutka) have been created in some Indian states such as Karnataka. for example. 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. and sometimes under law.CULTURE OF CORRUPTION IN INDIA 170 At the national level. rule. to the media or to groups concerned with the issues). to other people within the accused organization) or externally (to regulators. Second. The alleged misconduct may be classified in many ways. 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.One of the first laws that protected whistle-blowers was the 1863 United States False Claims Act (revised in 1986). or a company. However. 36. Whistle-blowers may make their allegations internally (for example. a public or private organization. Whistle-blowers frequently face reprisal. health/safety violations. the Lokayukta is largely recommendatory and enjoys limited powers to initiate action. However. a violation of a law. law enforcement agencies. there is no ombudsman. and corruption. regulation and/or a direct threat to public interest. The public also gave nation-wide support to Anna Hazare in his demand for strong and tough anti-corruption law. which tried to combat fraud by suppliers of the United States government during the Civil War. 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. sometimes at the hands of the organization or group which they have accused. three issues that have clearly emerged across states where the institution exists need to be highlighted. Third. 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. 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. SATISHCHANDER .
others view them as "tattle tales" or "snitches. external whistleblowing is encouraged by offering monetary reward. whistleblowers may report the misconduct to lawyers. the media. Whistleblowers are commonly seen as selfless martyrs for public interest and organizational accountability. if there are complaint systems that offer not just options dictated by the planning and control organization. within an organization. depending on the information's severity and nature.CULTURE OF CORRUPTION IN INDIA 171 Overview The term whistleblower comes from the phrase "blow the whistle. Common reactions Ideas about whistleblowing vary widely. but a choice of options for individuals. including an option that offers near absolute confidentiality. There is some reason to believe that people are more likely to take action with respect to unacceptable behavior. state. or other local. law enforcement or watchdog agencies. report misconduct on outside persons or entities. however. or federal agencies. who report misconduct on a fellow employee or superior within their company. 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 whistleblowers. SATISHCHANDER ." which refers to a whistle being blown by a policeman or a referee to indicate an activity that is illegal or a foul. In some cases. 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. In these cases." solely pursuing personal glory and fame. Definition Most whistleblowers are internal whistleblowers.
including Manjunath Shanmugam and Satyendra Dubey. demotion. where and how secrets were revealed. For purposes of the English Wikipedia. India does not have a law to protect whistleblowers but the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill.CULTURE OF CORRUPTION IN INDIA 172 It is probable that many people do not even consider blowing the whistle. 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. this section emphasizes the English-speaking world and covers other regimes only insofar as they represent exceptionally greater or lesser protections. Although whistleblowers are often protected under law from employer retaliation. SATISHCHANDER . Legal protection Legal protection for whistleblowing varies from country to country and may depend on any of the country of the original activity. there have been many cases where punishment for whistleblowing has occurred. Whistleblower protection refers to the provisions put in place in order to protect someone who exposes alleged wrongdoing. many whistleblowers report there exists. but also because of fear of losing their relationships at work and outside work. and how they eventually became published or publicized. For example. most whistleblower protection laws provide for limited "make whole" remedies or damages for employment losses if whistleblower retaliation is proven. in the United States. Persecution of whistleblowers has become a serious issue in many parts of the world. not only because of fear of retaliation. The wrongdoing might take the form of fraud. suspension. the idea of seeking fame and glory may be less commonly believed. However. 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. and/or harsh mistreatment by other employees. 2010 was approved by the government as part of a drive to eliminate corruption in the country's bureaucracy. This decision follows the death of various whistleblowers. such as termination. corruption or mismanagement. wage garnishment.
Anna Hazare a civilian with his committee has demanded the ombudsman law called as "Jan Lokpal bill”. 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. 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. 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. it is planning to bring a legislation in this regard soon (incorporating all the guidelines in the resolution). Minister of state for personnel Prithviraj Chavan said the government had brought the whistleblowers' resolution in 2004 to ensure transparency. 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. of India has introduced the whistle blower law named as "Right to Information act”. He. A committee of 10 people has been sectioned from Govt who will lead this committee. did not indicate the timeframe for bringing the Bill. he said in reply to a question in Rajya Sabha. Now. 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.CULTURE OF CORRUPTION IN INDIA 173 India As of 2009 Govt. He said the government was "fully committed" to implement the policy of "zero tolerance" to curb corruption.Mr. SATISHCHANDER . Whistleblowers Protection Bill soon. however.
One of the latest case of such murder is of V Sasindran Company Secretary of Palakkad based Malabar Cement Limited. or being quick to perceive and act. and chronic fatigue syndrome. corruption or mismanagement. A lack of alertness is a symptom of a number of conditions. which comes from the Italian "all'erta” SATISHCHANDER . of India has introduced the whistle blower law named as "Right to Information act”. including narcolepsy. attention deficit disorder. This decision follows the death of various whistle-blowers. Addison's disease. The wrongdoing might take the form of fraud. India currently does not have a law to protect whistleblowers. The word is formed from "alert". a Government company in Kerala and his two minor children. or sleep deprivation. It is related to psychology as well as to physiology.Mr. Indian courts are regularly ordering probe in cases of murders or so-called suicide of several whistle blowers. Kerala High Court ordered CBI probe on 18 February 2011. Initially. Alertness Alertness is the state of paying close and continuous attention. which was highlighted by the assassination of Satyendra Dubey. A committee of 10 people has been sectioned from Govt who will lead this committee. being watchful and prompt to meet danger or emergency. 2010 was approved by the government as part of a drive to eliminate corruption in the country's bureaucracy. Whistle-blower protection refers to the provisions put in place in order to protect someone who exposes alleged wrongdoing. India does not have a law to protect whistle-blowers but the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill. including Manjunath Shanmugam and Satyendra Dubey. Whistleblowers play a major role in the fight against corruption. and depression. 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.CULTURE OF CORRUPTION IN INDIA 174 Whistle blowers in India As of 2009 Govt.Anna Hazare a civilian with his committee has demanded the ombudsman law called as "Jan Lokpal bill”. 37. CBI showed its unwillingness for probing into such cases citing over-burden as a reason.
For 42 years. the Jan Lokpal Bill (also referred to as the citizens' ombudsman bill) is a proposed anti-corruption law designed to effectively deter corruption. Santosh Hegde.. Justice N. in wide public consultation with the leaders of the India Against Corruption movement and civil society. retaining a constant level of alertness is rare if not impossible. 1998. SATISHCHANDER . retired Indian Police Service officer Kiran Bedi. redress grievances and protect whistleblowers.engaged in attention-intensive and monotonous tasks.CULTURE OF CORRUPTION IN INDIA 175 Physiological aspects People who have to be alert during their jobs. M. The bill proposes the institution of the office of Lokpal (Ombudsman) at the center and local Lokayukta at the state level. 1996. 1989. The first Lokpal Bill was passed in the 4th Lok Sabha in 1969 but stalled in the Rajya Sabha. Subsequent Lokpal bills were introduced in 1971. 1985. Jan Lokpal Bill In India. such as air traffic controllers or pilots often face challenges maintaining their alertness.. The bill was collaboratively drafted by Shanti Bhushan. 2005 and 2008 but all failed to pass. The law would create an ombudsman called the Jan Lokpal. 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. Lyngdoh." 38. Research shows that for people ". Prime Minister Man Mohan Singh stated that the Lokpal Bill would be introduced in the 2011 monsoon session of parliament. Following the four day Anna Hazare fasting struggle. the upper house of the Parliament of India. The original bill was mooted by the National Campaign for Peoples’ Right to Information (NCPRI) in its delegated committee. 1977. the government-drafted bill has failed to pass the Rajya Sabha. advocate Prashant Bhushan. 2001. this "may lead to severe consequences in occupations ranging from air traffic control to monitoring of nuclear power plants. and former chief election commissioner J." If people employed in safety-related or transportation jobs have lapses in alertness.
Any resulting trials should be concluded in the following year. supported by Lokayukta at the state level. the Lokpal will be supervised by the Cabinet Secretary and the Election Commission. video recordings of which will thereafter be made public. This movement has also been joined by many people providing their support in Internet social media such as Twitter and Facebook. it will be completely independent of the government and free from ministerial influence in its investigations. Key features of proposed bill 1) To establish a central government anti-corruption institution called Lokpal. N. cases dealt with and those which are pending. many celebrities showed their public support. private citizens and constitutional authorities through a transparent and participatory process. their outcome and any action taken or proposed. a former justice of the Supreme Court of India and Lokayukta of Karnataka. Swami Agnivesh and former Indian cricketer Kapil Dev. Swami Ramdev. Prashant Bhushan. 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. 4) A selection committee will invite shortlisted candidates for interviews.. 3) Members will be appointed by judges. The bill's backers consider existing laws too weak and insufficiently enforced to stop corruption. brief details of each. 5) Every month on its website.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. 7) Losses caused to the government by a corrupt individual will be recovered at the time of conviction. the Lokayukta will publish a list of cases dealt with. SATISHCHANDER . 6) Investigations of each case must be completed in one year. As a result. a senior lawyer in the Supreme Court along with the members of the India Against Corruption movement. giving a total maximum process time of two years. which will then be given as compensation to the complainant. Santosh Hegde. It will also publish lists of all cases received by the Lokayukta during the previous month. In addition to spiritual leaders Sri Ravi Shankar. 2) As in the case of the Supreme Court and Cabinet Secretariat. Indian Administrative Service officers with a clean record.
and Shanti Bhushan. Chairmen The Government of India accepted that the committee be co-chaired by a politician and an activist. 10) The existing anti-corruption agencies (CVC. Minister of Law and Justice. from the political arena. It is reported that Pranab Mukherjee. will fill those roles. Minister of Water Resources. It consists of ten members. from civil society. P. and Salman Khursid.CULTURE OF CORRUPTION IN INDIA 177 9) Complaints against any officer of Lokpal will be investigated and completed within a month and. Co-Chairman. including five from the government and five drawn from society. Kapil Sibal. Drafting Committee The drafting committee was officially formed on 8 April 2011. Minister of Home Affairs. Government representation Five Cabinet ministers will be a part of the Drafting Committee. will result in the officer being dismissed within two months. 11) Whistleblowers who alert the agency to potential corruption cases will also be provided with protection by it. Minister for Communications and Information Technology. 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. Chidambaram. They are: Pranab Mukherjee. SATISHCHANDER . non-politician. judge or politician. Veerappa Moily. Finance Minister. if found to be substantive.
Former Minister of Law and Justice. 1) Conduct a media campaign against corruption SATISHCHANDER . Santosh Hegde. Arvind Kejriwal. 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. the Right to Information Act has faced serious problems in Implementation. Civil Society The Constitution of India guarantees every citizen the fundamental right to form associations. Conduct a national public awareness campaign. Some states are involving NGO in the decision-making process as well as in defining expenditure priorities. They are: Shanti Bhushan. N. 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. which has been partially remedied by the Right to Information Act in 2002. the media acted as a watchdog by reporting incidents of misuse of power and corruption. These non-governmental organizations have intervened. 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. Social Activist. In addition. Prashant Bhushan. Lawyer. in significant ways. However. Co-Chairman. Lokayukta (Karnataka). A by-product of this new legislation is the need for public agencies to create a Citizens Charter and enumerate the rights of stakeholders. However. Anna Hazare. 39.CULTURE OF CORRUPTION IN INDIA 178 Civil society representation Five leading social activists will be a part of the Drafting Committee.
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. 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. at worst subversive of representative democracy". Arvind Kejriwal. replacing Prevention of Corruption Act 1947. According to Prataps Bhanu Mehta. The ‘State’ includes a corporation established by or under a central.CULTURE OF CORRUPTION IN INDIA 179 2) 3) 4) 5) Conduct a public awareness campaign in secondary schools Conduct further research. Hence. the government also aids many other kinds of organizations. President. This act also widens the scope of definition of Public servants. 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. through trial courts and higher courts. 40.g. 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. the public. Public duty means a duty in the discharge of which the state. monitoring and evaluation (e. or the community at large has an interest. the employees of such bodies are also covered by this act. Kejriwal further states that the proposed bill also lists clear provisions in which the Supreme Court can abolish the Lokpal. or remunerated by the government by fees or commission for the performance of any public duty. Delhi. The claim that the Lokpal will be an extra-constitutional body has been derided by Hazare’s closest lieutenant. In India in addition to a large number of health and educational institutions. Center for Policy Research. the bill "is premised on an institutional imagination that is at best naïve. Prevention of Corruption Act 1988 To deal with corruption amongst public servants India enacted Prevention of Corruption Act 1988. Public servant means any person in the service. pay of the government. Normally corruption is defined as SATISHCHANDER .
including any person empowered by law to discharge. 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. in connection with the administration of justice.a) "Election" means any election. 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. public or the community at large has an interest. 3) any person in the service or pay of a corporation established by or under a Central. 2) Any person in the service or pay of a local authority. b) "Public duty" means a duty in the discharge of which the State. including a liquidator. receiver or commissioner appointed by such court. whether by himself or as a member of any body of persons. 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. 1956. 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. Provincial or State Act. "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. whether appointed by the government or notes. Definitions In this Act. by whatever means held under any law for the purpose of selecting members of Parliament or of any Legislature. local authority or other public authority. unless the context otherwise requires. 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. 1956. c) Explanation. the public or the community at large has an interest. any adjudicatory functions.CULTURE OF CORRUPTION IN INDIA 180 using public office for private gains. 5) Any person authorised by a court of justice to perform any duty. Provincial or State Act. 4) Any Judge.-In this clause "State" includes a corporation established by or under a Central. Persons holding various public offices are public servants. SATISHCHANDER .
publish. maintain or revise an electoral roll or to conduct an election or part of an election.CULTURE OF CORRUPTION IN INDIA 181 7) Any person who holds an office by virtue of which he is empowered to prepare. SATISHCHANDER .
2002 came into effect on 1 July 2005. 41. Section 12 (1) prescribes the obligations on banks. or local or other public authority. Explanation 1. professor. cultural or other institution. 9) any person who is the president. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed. in whatever manner established. whatever legal defect there may be in his right to hold that situation. scientific. trade or banking. lecturer or any other teacher or employee. social. they shall be understood of every person who is in actual possession of the situation of a public servant. 11) any person who is a Vice-Chancellor or member of any governing body. 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. Provincial or State Act. and where such series of transactions take place within a month. Money-Laundering Act. industry.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. (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. 2002 The Prevention of Money-Laundering Act.-Persons falling under any of the above sub-clauses are public servants. reader. secretary or other office-bearer of a registered cooperative society engaged in agriculture. 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. by whatever name called. Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned SATISHCHANDER .-Wherever the words "public servant" occur. 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. receiving or having received any financial assistance from the Central Government or any State Government. whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other. member or employee of any Service Commission or Board. whether appointed by the Government or not. Explanation 2. 12) Any person who is an office-bearer or an employee of an educational. 1956. 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. by whatever designation called. 10) any person who is a chairman.
N.CULTURE OF CORRUPTION IN INDIA 183 above. N. They were connected to the military. Based on the recommendations of the Committee. must be maintained for ten years after the transactions finished. It studied the problem of the criminalization of politics and of the nexus among criminals. It also discussed criminal gangs who enjoyed the patronage of politicians. politicians and bureaucrats in India. in October 1993. comprised as below. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. 42. 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. The unpublished annexures to the Vohra Report were believed to contain highly explosive material. Vohra.N. was subsequently added as member of the Committee. MHA. State Assemblies and Parliament. Vohra Report The Vohra (Committee) Report was submitted by the former Indian Union Home Secretary. Government had (through its order No. S/7937/SS (ISP)/93 dated 9 th July 93 established Committee. Special Secretary (Internal Security & Police). The Committee was desired to submit its report within 3 months. 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. of all parties. Vohra Committee and to secure prosecution of those involved. Government shall determine the need. and the protection of government functionaries. Over the years criminals had been elected to local bodies. The recent activity in money laundering in India is through political party’s corporate companies and share market. In 1997 the Supreme Court recommended the appointment of a high level committee to ensure in-depth investigation into the findings of the N. SATISHCHANDER . It revealed that political leaders had become the leaders of gangs. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government.
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. 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. All the existing information/data available with R&AW. Police and others. R&AW monitor the activities of certain organisations abroad only insofar as they relate to their involvement with narco-terrorist elements and smuggling arms. From these various reports. into the country. ammunition. consequently to the Bomb blasts in Bombay in March 1993. 2) In the course of the discussions. and they are being used or are likely to be used by such countries for destabilising our economy. It was. leading to the establishment of a powerful network. however. necessary to identify the linkage and to also determine how such information could be timely collected and acted upon in future. as is being done by this Agency to collect vital information in regard to the investigations in the Bombay bomb blasts case. If. 4) The creation of a nodal agency to collect information regarding the activities of Mafia organisations is very essential. This could not have happened without these elements having been protected by the functionaries of the concerned Government departments specially Customs. scientific and political intelligence.CULTURE OF CORRUPTION IN INDIA 184 1) In the first meeting of the Committee (held on 15 th July93). it was apparent that the activities of Memon Brothers and Dawood Ibrahim had progressed over the years. Income Tax. economic. IB. Secretary (R&AW) 3) The various offices abroad of this Agency have limited strength and are largely geared to the collection of military. I addressed separate personal letters to each of the Members of the Committee seeking their well-considered suggestions and recommendations. The present strength of the Agency’s office abroad would not permit it to enlarge its field of activities. particularly Pakistan. and CBI could be made available to this nodal agency. It does not monitor the activities of criminal elements abroad which are mainly confined to "normal smuggling without any links to terrorist elements". therefore. there is evidence to suggest that these organisations have links with intelligence agencies of other countries. The responses are briefly brought out below. etc. it would become R&AWs responsibility to monitor their activities. Accordingly. SATISHCHANDER . explosives. R&AW will nominate an officer of suitable rank to liaise with nodal agency on a regular basis to enable expeditious follow-up action.
the money power thus acquired is used for building up contacts with bureaucrats and politicians and expansion of activities with impunity. In cases where a crime Syndicate has graduated to big business. The money power is used to develop a network of muscle-power which is also used by politicians during elections. there are insurmountable legal difficulties in attaching/confiscation of the property acquired through Mafia activities. Income-Tax etc. is unable to deal with the activities of the mafia. in port towns.forcibly occupying lands/buildings. was merely a visitor to passenger and carrier ships to obtain liquor and cigarettes for selling the same at a profit. this perhaps became difficult on account of the enormous patronage that he had developed. CBI has reported that all over India crime Syndicates have become a law unto themselves. the Director CBI has given example of IQBAL MIRCHI of Bombay who till the late 80s. their activities involve smuggling and sale of imported goods and progressively graduate to narcotics and drug trafficking. muscle-men have become the order of the day. as that of MIRCHI where SATISHCHANDER . It would be useful institute a fresh study by CBI. it would be necessary to conduct detailed investigations into its assets. Hired assassins have become a part of these organisations. Over time. The growth of MIRCHI is due to the fact that the concerned Enforcement agencies did not timely taken action against him and. The existing criminal justice system. 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. 2. 4. the lower functionaries of the concerned State and Central Departments/organisations start overlooking the activities of the crime Syndicates. later. procuring such properties at cheap rates by forcing out the existing occupants/tenants etc. would be required to take effective action. Mirchi acquired real estate valuing crore of rupees. the main source of income relates to real estate. Even in the smaller towns and rural areas.CULTURE OF CORRUPTION IN INDIA 185 Director CBI 1. The nexus between the criminal gangs. on the basis of which appropriate administrative/legal measures could be initiated. mostly related to illicit distillation/gambling/organised seta and prostitution in the larger towns. both movable and immovable. the entire patronage enjoyed by him and his linkages will come to light. In the bigger cities. he has many bank accounts and has been paying lakhs of rupees to his carriers. A report on the nexus between the Bombay City Police and the Bombay under-world was prepared by CBI in 1986. bureaucracy and politicians has come out clearly in various parts of the country. An organised crime Syndicate/Mafia generally commences its activities by indulging in petty crimes at the local level. Director CBI has observed that there are many such cases. which was essentially designed to deal with the individual offences/crimes. To elucidate this point. the provisions of law in regards to economic offences are weak. 3. In the last 3-4 years. If MIRCHI is investigated. police. It has been stressed that when such action is not timely and effectively taken.
The Bank Managers can be placed under obligations to render reports on all heavy transactions and suspicious accounts to the Enforcement agencies. 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. the director CBI has stated that the effective monitoring of the telephonic calls made from India/received from abroad would yield useful information and.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. Government may grant sanction to monitor certain telephonic connections. The CBI can do this within a short period. Suitable amendments should be introduced in the existing laws to more effectively deal with the activities of Mafia organisations. Referring to the useful leads emerging from the investigations into the activities of Dawood Ibrahim. vii. K.. 6) The assistance of Banks in an essential input. iv. Director CBI has made the following suggestions to bring under control the activities of the criminal Syndicates: i. Surveillance should be carried out through finger printing. He has recommended immediate attention to: - SATISHCHANDER . iii. as exemplified by the exposures of the networks of the Bombay Bomb Blast case". for this being done. etc. vi. photographs and dossiers. Such a practice obtains in U. Director IB 1. Establishment of Special Cells in the States CIDs and CBI. 7) Concluding his analysis. Identification of offences and awards of deterrent punishments including preventive detention. a Mafia leader. Trial procedures should be simplified and hastened. ii. v. 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. this could also include review of the existing laws. Monitoring mechanisms should be established at the State and Central levels.
iv. Identification of the nature and dimensions of these linkages and the modus operandi of their operations. causing a sense of despair and alienation among the people. 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. including the foreign intelligence agencies. the DIB has also stated that there has been a rapid spread and growth of criminal gangs. politicians and other sensitively located individuals on the other. iv. Resultantly. vi. Political and legal constrains in dealing with the covert/illegal functioning of the linkages. cutting across party lines and the protection of Government functionaries. the DIB has given the following examples: - 1. over the years. armed senas. drug peddlers and economic lobbies in the country which have. have spread into and infected the various economic and financial activities. 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.. circulation of black money and operations of a vicious parallel economy causing serious damage to the economic fibre of the country. The virus has spread to almost all the centres in the country. media persons and strategically located individuals in the non-State sector. developed an extensive network of contacts with bureaucrats/Governments functionaries at the local levels. Like the Director CBI. drugs and weapon smuggling and established narco-terrorist networks. State Assemblies and the National parliament. Certain elements of the mafia have shifted to narcotics. ii.CULTURE OF CORRUPTION IN INDIA 187 i. Haryana and UP. having international linkages. especially in the States of J&K. v. the coastal and the Border States have been particularly affected. smuggling gangs. i. if any. Assessment of the impact of these linkages on the various institutions viz. these gangs enjoy the patronage of local level politicians. get themselves elected to local bodies. 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. The big smuggling Syndicates. economic. politicians. the electoral. drug mafias. between the domestic linkages with foreign intelligence. Necessary action to show effective action to counteract/neutralise the Mafia activities. subversion and communal tension in SATISHCHANDER . political. In certain States. like Bihar. Identification of the nexus between the criminals/mafias and antinational elements on the one hand and bureaucrats. 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. iii. In this context. including Hawala transactions. Some of these syndicates also have international linkages. Gujarat and Maharashtra. Punjab. ii. Some political leaders become the leaders of these gangs/armed senas and. Nexus. over the years. iii. law and order and the administrative apparatus. even the members of the judicial system have not escaped the embrace of the mafia.
it is assisted by the Director General of Revenue Intelligence (DGR) and Directorate General of Anti-Evasion (DGAE). necessary to immediately have an institutionalised system which "while giving total freedom to the various agencies to pursue their charter of work. all these agencies "function within their own cocoons. 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". therefore. especially the views expressed by Director CBI and DIB. CBEC is responsible for the prevention of smuggling. Wealth Tax Act. Central Board of Excise & Customs (CBEC) Interalia. It is thus most immediately necessary that an institution is established to effectively deal with the menace. As would be seen from the afore-stated brief discussions. over time. DBI has stated that the network of the Mafia is virtually running a parallel Government. and the DGAE with Excise duty evasion. business sector and the film world. in turn. DIB has stated: i. 1. a progressive data will get generated "to facilitate periodic reviews and analysis which could then be passed to a designated body".CULTURE OF CORRUPTION IN INDIA 188 various parts of the country. Thus. The Department of Revenue functions through the following major agencies: i. Presently. ii. with the result that a plethora of information fails to get specific and purposeful attention needed for the exposure of the linkages". information about the nexus between the bureaucracy and politicians with Mafia gangs. In this and other tasks. 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. etc. Nonetheless. SATISHCHANDER . In this context. leave alone sharing with any other agencies". in the normal course of their functioning. I held detailed personal discussions with Secretary (Revenue) under whose control operate the various economic intelligence/investigative/enforcement agencies. 1. it is evident that the muscle power of the crime Syndicates is sustained by their enormous financial power which. The investigations into the Bombay bomb blast cases have revealed extensive linkages of the underworld in the various governmental agencies. The DGRI deals with the evasion of customs duties. It is. the various intelligence/investigation/enforcement agencies collect. 2. smugglers and the underworld. political circles. is secured by the Mafia elements by committing economic offences with impunity. This will enable the Nodal Group to provide useful leads to the various agencies and. pushing the State apparatus into irrelevance. 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. In this connection. Central Board of Direct Taxes (CBDT) Income Tax Department administers the Income Tax Act.
directing and developing intelligence about such sources. DGRI comes across information of linkages between crime Syndicates and Governmental SATISHCHANDER . enquiries into suspected violations of the provisions of FERRA. to attend to the following tasks: a. 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. Narcotics Control Bureau (NCB) The NCB is responsible for the administration of the Narcotics Drugs and Psychotropic Act. Conducting investigative and analytical studies in difficult areas of black money operations and monitoring indicators thereof. He informed me that he had recently held a meeting with senior representatives of the RBI. I arranged a meeting of the Committee (30th Aug 93) to hear the view of Secretary (Revenue). 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. to detect violations of Customs & Excise laws. 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. c. who was accompanied by Chairman CBDT. 1. ii.CULTURE OF CORRUPTION IN INDIA 189 iii. DGRI. i. b. collection of intelligence relating to foreign exchange offences. Accordingly. Member (Customs) and Director (Enforcement). Interalia. the following significant observations were made: i. In the normal course of his work. 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. The CEIB is expected. Identification of major sources generating black money. Assisting the various enforcement agencies in strengthening the intelligence gathering infrastructure and building up their capability for storage and retrieval of intelligence. Chairman CBDT and the Economic Intelligence Council in the Department of Revenue. Enforcement Directorate This Directorate is concerned with the enforcement of the investigation and penal provision of the Foreign Exchange Regulation Act. 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. planning and coordinating action and operations against such sources. the Chairman CBEC. During the course of the discussions with Secretary (Revenue) and his aforesaid principal officers. etc.
The Banks are reluctant to pass on information about account holders to CBDT and do not allow their officers to hold exploratory enquiries. While the NCB is specifically responsible for booking drug traffickers. they cannot be expected to maintain interest in vigorously pursuing action against the activities of such elements. especially in regard to money laundering operations. Of late. Director (Enforcement) and DG NCB authorised to undertake phone tapping of suspected offenders. ii. a niggardly response by the latter and prolonged delays in the disposal of cases before Courts seriously hampers the effective functioning of the NCB. Under the criminal justice system is geared up. i. Secretary (Revenue) stated that he field officers of his various Departments were faced with various problems. the work of the enforcement agencies cannot be effective. It is necessary that the directorates of prosecution in the State Governments are urgently brought under the control of the State Police. iii. Information about the activities of drug traffickers is passed on by DG NCB to the concerned State Governments and their agencies. even in the Border States. are not trained or adequately informed of the work done by the directorate of Enforcement. cases are not heard timely. Here again. Indirect information also becomes available to the CBDT about linkages. While a certain amount of information is shared between the various organisations under the Department of Revenue. While the NDPS act prescribes the award of deterrent punishments of offences. the exchanges are sporadic and limited. all this results in a low percentage of convictions and mild punishments. the DGRI has not been allowed to enforce surveillance on the telephonic communications of political personalities. not being directly relating to their charter of responsibilities. ix. with the increasing importance being given to Narco-terrorism. amongst which are: 1. However. functioning of the Government lawyers is grossly inadequate. The utter inadequacy of the criminal system. 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. currency amounting crore of rupees in being seized. Senior Police officers. and those under the MHA and Cabinet Secretariat. the results are to the contrary. vii. his officers’ focus primarily on the information relating to the violation of the laws relating to their charter. As in the case of DGRI. the NCB have been asked to gather further information so that the real king-pins in the narcotics trade can be apprehended. invariably packed in suitcases and gunny bags. v. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 190 ii. viii. While DGRI. the CBDT do not follow up such leads. 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. functionaries etc. As following up of such information is not within the charter of duties of DGRI. vi. iv. The Directorate of Enforcement comes across information on linkages and passes it on to the CBI and IB. Unless the field level officers are offered effective protection. on account of premature leakage of information.
iii. As a result of the discussions held by the Committee with Secretary (Revenue) and his principal officers. his officers could pursue the same. 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. information on the linkages of the crime Syndicates sometimes become available. Pressures are also exerted whenever corrupt and undesirable officers are shifted from sensitive assignments (Preventive Customs Divisions at the Airports. Narcotics trade has a world-wide network of smugglers who also have close links with terrorists. it is evident that: i. manufacture of alkaloids. Chairman CBDT stated that insofar as the functioning of his officers is concerned. in various foreign currencies. such information is not pursued on the score that it is not directly related to offences falling within the laws administered by these agencies. Terrorists indulge in narcotics trade to amass huge funds. from which they source their procurement of weapons etc. At my request Secretary (Revenue) gave me a personal note indicating his views. iii. especially when the shift of an officer adversely affects the interests of those who are making easy money. 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. prevention of narcotics. While. 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. sensitive Collect orates in the Central Excise etc. Such information is occasionally passed on by these agencies to the CBI and or IB. whenever they come into possession of any information regarding the violation of any other law. ii. Such pressures are mounted either immediately after a raid is conducted or at the time when prosecution is about to be initiated.CULTURE OF CORRUPTION IN INDIA 191 1. i. which includes cultivation of opium. the financial stakes are astronomically high. iv. they pass it on to the concerned agency. which are briefly as below:- 1. smuggling etc. The information gathered by the various agencies under the Revenue Department. in the course of their normal activities. SATISHCHANDER . I held a series of further personal discussions with the Secretary (Revenue). Consequent to the Committees discussions with the Secretary (Revenue) and his principal officers.) In the narcotics arena. ii. 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. Consequently. 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. The various agencies under the Department of Revenue do not specifically search on the linkages of crime Syndicates. while gathering intelligence on offences relating to the laws administered by them. He is of the view that once the offenders are deterrent 1. He suggested that if the information available with other agencies is passed on to him.
wherever located. the following conclusions can be drawn: i. dealing with the infringement of laws relating to their organisations and consciously putting aside any information on linkages which they may come across. such officers should be selected with utmost care and provided sufficiently long tenures. action must be taken to ensure the objective functioning of Courts which deal with the trial of economic offences. SATISHCHANDER . it is apparent that crime Syndicate and Mafia organisations have established themselves in various parts of the country. giving them the clear mandate to ruthlessly punish the offenders. 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. 1. there is presently no system under which they are expected to pass on such information to an identical nodal agency. ii. collation and operationalisation of all 1. In slum. all cases before the Courts should be speedily concluded without the judicial officers coming under any pressure or succumbing to temptations. the various agencies presently in the field take care to essentially focus on their respective character of duties. 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. iii. officers with impeccable integrity should be posted to head the various organisations which are responsible for taking action against tax offenders. 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. On the basis of the extensive experience gained by our various concerned intelligence. 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. 1. their influence and strength will start declining. political leaders and others to be able to operate with impunity (as recently exemplified by the activities of the Memon Brothers and Dawood Ibrahim). The various crime Syndicates/Mafia organisations have developed significant muscle and money power and established linkages with governmental functionaries. 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. In the discussions in the Committee. While the CBI and IB and the various agencies under the Department of Revenue. investigative and enforcement agencies. From the above narrated analysis. it has no mandate to immediately pass it on to one or more agencies. Even where an agency comes across certain information about the linkages of crime Syndicates. smugglers etc. in their normal course of functioning. as also of all those who support them..CULTURE OF CORRUPTION IN INDIA 192 punished under the law. come across information relating to the linkages of crime Syndicates/Mafia organisations.
1. which relates to the activities of crime Syndicates. he has suggested that the nodal set up should be under the IB. 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". is under the department of Personnel. 2. The CBI. the Ministry of Home Affairs is responsible for all matters relating to internal security. which is even otherwise engaged in monitoring various political activities having a bearing on national security. In my view. Any leakage of such information would not only jeopardize potential action against the powerful criminal Syndicate. 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. it will have been ensured that the information available with the nodal set-up is SATISHCHANDER . If the proposition in the preceding Para is sustained. Under the existing arrangements for the transaction of Government business. without there being any leakage. In this context. but may also be susceptible to political exploitation. 1. the following approaches have been mooted: i. R&AW functions under the Cabinet Secretariat and deals with external intelligence. The Top secret Cell will share all tactical and operational information with other concerned agencies on "need to know and act basis". The various Intelligence. Such sharing will be through personal communication in writing. 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. 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). while operating difficulties could be sorted out through periodic meetings among the heads of these organisations to be chaired by the Home Secretary". 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.CULTURE OF CORRUPTION IN INDIA 193 information relating to the activities of crime Syndicates. a decision will need to be taken regarding the Department/Ministry under which the nodal set-up should be located. In the background of the discussions so far. Under all circumstances. 2. Investigation and Enforcement agencies dealing with the implementation of economic laws report to the Revenue Department under the Ministry of Finance. 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. ii. which is the principal criminal investigation agency of the Centre. Broadly.
it would be logical it the nodal set-up is under the MHA. as necessary. After HM has pursued this Report. Considering the nature of the issues involved. 3. MOS (IS) and myself. before the issues are discussed with him. Accordingly. investigate and prosecute the offenders. 1. One copy each is being submitted to MOS (IS) and HM. with Secretary (Revenue). it would not appear prudent to entrust the functioning of the Nodal Cell to any level below that of the Home Secretary. 43. 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. 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. After an initial discussion at the level of MOS (IS) and HM I could send a copy of this Report to FM. The emerging approach could therefore be got approved from Prime Minister before being implemented. In the preceding context. 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. Needless to say. which SATISHCHANDER . I have prepared only three copies of this report. I decided to personally dictate this Report. At that stage other concerned senior officer would be taken into confidence. Further. the third copy being retained by me. 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. 2. CBI. I did not consider it desirable to burden the Members of the Committee with any further involvement beyond the views expressed by them. In the normal course. called the Jan Lokpal Bill.CULTURE OF CORRUPTION IN INDIA 194 used strictly and entirely for stringent action against the crime Syndicates. R&AW and the various agencies under the Department of Revenue. 3. 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. without allowing any scope whatever of its being exploited for political gain. It will also need to be ensured that the nodal set-up functions with extreme secrecy. I request him to consider discussing further action with finance Minister. otherwise known as corruption. this Report would have been drafted by the Member Secretary and finalised by the Committee. As such.
They believe that the changes would make the body intended to oversee the issue. Hazare. much publicized protest action. 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. went on his initial hunger strike when talks designed to consider the issues broke down. We are ready to sacrifice our lives but will not buckle under pressure” -Anna Hazare SATISHCHANDER . Protests included fasts. The protesters are of the opinion that the government desires to dilute proposals contained in the original draft of the Jan Lokpal bill. Further. He held a hunger strike on 4 June when his demands were not met. Ramdev demanded that untaxed money invested abroad should be declared to be the wealth of the nation. comprised of both members from "civil society" and government representatives. New Delhi on 4 June 2011. According to Ramdev. It is estimated that around US$ 350 billion to US$ 1400 billion worth of illegal money is in foreign banks. in foreign banks should be declared a crime against the state. no more than a powerless advisory body in the Indian bureaucracy. a second major protest saw controversial events take place at the Ram Lila Maidan.CULTURE OF CORRUPTION IN INDIA 195 the protestors believe could address the issue if it was suitably worded and enforced. a prominent activist. The second struggle of independence has started. 10 million Indians would participate in the Satyagraha on 4 June 2011 throughout India. which is alleged to have been obtained illegally. who is a Gandhi an. 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. The movement has gained momentum in particular since 5 April 2011. candlelight vigils and rallies. 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. Following Hazare's initial. first went on a hunger strike which he called a "fast unto death". He had demanded the creation of a joint drafting committee for the bill. when Anna Hazare. The protests led to the creation of a movement that saw protests being organized in various cities and towns of India. the Lokayukta. that the act of caching money. 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.
N. and they demonstrated how entrenched corruption had become in India. for a fixed fee of Rs 10. submitted by the former Indian Union Home Secretary N. protectionism. Activists have used this to uncover graft cases against various politicians and bureaucrats.CULTURE OF CORRUPTION IN INDIA 196 Background Issues regarding corruption in India have become more prominent in recent years. They led also to popular. one consequence being that some of those activists have been attacked and even killed. from a "public authority" (a body of Government or "instrumentality of State") which is required to reply expeditiously or within thirty days. It revealed that political leaders had become the leaders of gangs. and even the Parliament. SATISHCHANDER . 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. non-political movements campaigning to fight graft via new legislation. politicians and bureaucrats in India. including the 2G spectrum scam. Forbes commented in 2007 that the system of bureaucratic controls called License Raj was often at the core of corruption. The Right to Information Act of 2005 has helped civilians work effectively towards tackling corruption. The Vohra Report of 1993. and the Commonwealth Games scam. State Assemblies. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. studied the problem of the criminalization of politics and of the nexus among criminals. They were also connected to the military. Over the years criminals had been elected to local bodies. It also discussed criminal gangs who enjoyed the patronage of politicians – of all political parties – and the protection of government functionaries. Vohra. These involved various Ministers and also members of the Armed Forces. The country was subject to socialist-inspired economic policies between the 1950s and the late 1980s. Various scandals were discovered in the period 2010-2011. It allows Indian citizens (except those living in Jammu and Kashmir) to request information. and public ownership led to slow growth. Adarsh Housing Society Scam. Extensive regulation.
CULTURE OF CORRUPTION IN INDIA 197 India against corruption India against Corruption (IAC) is a citizen's movement to demand strong anti-corruption laws. has transformed itself from a civil organization to a full-fledged political party. Anti-corruption organizations A variety of organizations have been created in India to actively fight against corrupt government and business practices. yet they were never passed by the Indian Parliament. the Lok Satta Party. The party has fielded candidates in Andhra Pradesh. Tamil Nadu. when Jayaprakash Narayan won the election for the Kukatpally Assembly Constituency in Andhra Pradesh. One organization. it obtained its first elected post. Jaago Re! One Billion Votes is an organization originally founded by Tata Tea and Janaagraha to increase youth voter registration. They have since expanded their work to include other social issues. The primary focus of IAC movement is to ensure a strong Local bill. 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. Notable organizations include: 5th Pillar is most known for the creation of the zero rupee notes. Lokpal bills were introduced several times since 1968. SATISHCHANDER . It is currently headed by Anna Hazare. In 2008. The IAC is a strictly voluntary organization and its participants are bound by the IAC code of conduct. the Lok Satta Movement. and Bangalore. Association for Social Transparency. India against Corruption is a movement created by citizens from a variety of professions and statuses to work against corruption in India. Rights and Action (ASTRA) is an NGO focused on grassroots work to fight corruption in Karnataka. including corruption. a valueless note designed to be given to corrupt officials when they request bribes.
The Supreme Court The Supreme Court has taken a stronger stance against corruption in recent years. the Supreme Court ruled that prosecutors do not need prior permission to begin proceedings against politicians facing corruption charges5. In December 2006. the Central Bureau of Investigation (CBI).CULTURE OF CORRUPTION IN INDIA 198 44. For example. free of control SATISHCHANDER . the Central Vigilance Commission (CVC). in 2007 in Uttar Pradesh. and the Chief Information Commission (CIC). in a landmark ruling. as confirmed by the Bertelsmann Foundation Report 2008. 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. At the federal level. it challenged the state governor’s powers to pardon politically connected individuals based on arbitrary considerations. the Office of the Controller & Auditor General (C&AG). It has challenged the powers of states in several instances. It has the status of an autonomous body. Central Vigilance Commission (CVC) Central Vigilance Commission (CVC) is an apex Indian governmental body created in 1964 to address governmental corruption. judges have taken on a stronger role in responding to public interest litigation over official corruption and environmental issues. In other instances. key institutions include the Supreme Court. 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.
and it either gets the investigation done through the CBI or through the Departmental Chief Vigilance Officers. reviewing and reforming their vigilance work. industries and banks. The CVC is not an investigating agency. executing. 1964 on the recommendations of the Committee on Prevention of Corruption. The CVC is mandated to investigate public sector corruption at the federal level and not at the state level. the CVC is working in collaboration with Transparency International India on introducing Integrity pacts in all state-owned public sector companies. 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. More recently. such number is really small. various preventive measures and cases in which the Commission's advises were ignored etc. Therefore. especially when it suspects motivated delays or where senior officials could be implicated. It also has supervisory powers over the Central Bureau of Investigations. it has to depend on the vigilance wings of respective departments and forwards most of the complaints for inquiry and report to them. In December 2007.CULTURE OF CORRUPTION IN INDIA 199 from any executive authority. But given the constraints of manpower. and Income Tax etc. The CVC has the power to undertake inquiries or investigations of transactions involving certain categories of public servants. While it monitors the progress of these complaints. CVC is a very small set up with staff strength less than 200. Nittoor Srinivasa Rau was selected as the first Chief Vigilance Commissioner of India. system improvements. The CVC has an online whistle-blower complaint mechanism available on its website. It directly enquires into a few complaints on its own. charged with monitoring all vigilance activity under the Central Government of India. headed by Shri K. there is delay and the complainants are often disturbed by this. the Commissioner issued a directive to this effect which has resulted in 32 public sector undertakings having adopted an integrity pact. some of them being as big as Central Excise. Railways. 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. However. It was set up by the Government of India in February. 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. It is supposed to check corruption in more than 1500 central government departments and ministries. Central Vigilance Commission: CVC is the apex body for all vigilance cases in Government of India. SATISHCHANDER . and advising various authorities in central Government organizations in planning. The CVC can investigate complaints against high level public officials at the central level. to advise and guide Central Government agencies in the field of vigilance. Santhanam.
It deals only with vigilance or disciplinary matters. the officials below CVO are appointed /transferred by that department only. However. Experience shows that CVC’s advice to initiate prosecution is rarely accepted and whenever CVC advised major penalty. Also. 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. it can only advise government. CVC does not have administrative control over officials in vigilance wings of various central government departments to which it forwards corruption complaints. CVC could bring pressure on the Department to revoke orders but again such recommendations are not binding. But these are not much in focus in Parliamentary debates or by the media. CVC does not have any really effective powers over them to seek compliance of its orders. CVC can hardly be treated as an effective deterrent against corruption. There are several cases of serious corruption in which officials and political executive are involved together. Many a times. they are free to accept or reject CVC’s advice. however. The CBI has to seek the permission of that department. It does not have any direct powers over departmental vigilance wings. Central Government Departments seek CVC’s advice on various corruption cases. CVC does not have powers to register criminal case. which are directly enquired into by the CVC. If there is an involvement of a politician in any case. CVC could at best bring it to the notice of the Government. CVC cannot direct CBI to initiate enquiries against any officer of the level of Joint Secretary and above on its own. the departments just do not comply. 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 does not have powers over politicians. the final decision lies with the government. Though the government does consult CVC before appointing the Chief Vigilance Officers of various departments.CULTURE OF CORRUPTION IN INDIA 200 CVC is merely an advisory body. Only in exceptional cases. Even in those cases. Therefore. CVC mentions these cases of non-acceptance in its monthly reports and the Annual Report to Parliament. if the CVO chooses to bring it to the notice of CVC. SATISHCHANDER . it was reduced to minor penalty.
Besides.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. But the Committee only considers names put up before it and that is decided by the Government. monitoring all vigilance activity under the Central Government and advising various authorities in Central Government organizations in planning. Departmental Vigilance Wings: Each Department has a vigilance wing. and (ii) not more than two Vigilance Commissioners – Members. all the officers under him belong to the same department). though CVC is relatively independent in its functioning. However. The Central Vigilance Commission (CVC) is conceived to be the apex vigilance institution. 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. 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). Therefore. executing. However. In addition. 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 appointments are opaque. CVC Act gives supervisory powers to CVC over CBI. SATISHCHANDER . though the leader of the Opposition is a member of the Committee to select CVC and VCs. reviewing and reforming their vigilance work. The Commission consists of: (i) a Central Vigilance Commissioner -Chairperson. which is manned by officials from the same department (barring a few which have an outsider as Chief Vigilance Officer. the resolution on Public Interest Disclosure and protection of Informer” dated April 2004. these supervisory powers have remained ineffective. CBI is under administrative control of DOPT rather than CVC. free of control from any executive authority.
Even if someone complaints against that officer to the CVC or to the Head of that Department or to any other authority. It means that an existing official is given additional duty of vigilance also. Even if he recuses himself from such inquiries. some officials double up as vigilance officials. (ii) review the progress of investigations conducted by the DSPE into offences alleged to have been committed under the PC Act. the complaint is forwarded by all these agencies and it finally lands up in his own lap to enquire against himself. especially in the Ministries. investigation. appeal. 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.e.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. the complaint are expected to be enquired into by the same officer. There are indeed examples of such absurdity. it is practically impossible for them to be independent and objective while inquiring into complaints against their colleagues and seniors. While in vigilance. (v) exercise a general check and supervision over vigilance and anti-corruption work in Ministries or Departments of the Govt. to which the executive control of the Government of India extends. they try to scuttle all cases against SATISHCHANDER . inquiry. involving vigilance angle at different stages i. (iv) tender independent and impartial advice to the disciplinary and other authorities in disciplinary cases. or offence under CRPC for certain categories of public servants and to give directions to the DSPE for purpose of discharging this responsibility. still they have to be handled by those who otherwise report to him. 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. of India and other organizations to which the executive power of the Union extends.. and (vii) undertake or cause an inquiry into complaints received under the Public Interest Disclosure and Protection of Informer and recommend appropriate action. So. Director (Enforcement Directorate) and officers of the level of SP and above in DSPE. if some citizen complaints against that officer. (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. (vi)chair the Committee for selection of Director (CBI). In some departments. If a complaint is received against a senior officer. review etc. There have been instances of the officials posted in vigilance wing by that department having had a very corrupt past. is suspected or alleged to have acted for an improper purpose or in a corrupt manner. 1988.
constituted by the Parliament of India. the vigilance wing of any department is seen to soft-pedal on genuine complaints or used to enquire against “inconvenient" officers. They also do not have any powers against politicians. it is practically impossible for them to enquire against senior officials of that department. poor targeting and corrupt practices in many branches of government. and tax administration. where cases are closed for consideration. It does not have the powers to register an FIR. Therefore. public sector enterprise. The C & AG has produced several reports on state departments such as railways. since the C & AG has no authority to ensure compliance with its recommendations. These reports have revealed many financial irregularities. telecommunications. the government often fails to implement the reports’ proposals. the upper house of the Parliament. They also turn vigilance wing into a hub of corruption. None of the 22 members shall be a minister in the government. suggesting a lack of monitoring of public expenses. for the auditing of the expenditure of the Government of India. Public Accounts Committee The Public Accounts Committee (PAC) is a committee of selected members of Parliament.CULTURE OF CORRUPTION IN INDIA 203 themselves. However. and 7 from Rajya Sabha. Since the vigilance wing is directly under the control of the Head of that Department. The PAC is formed every year with a strength of not more than 22 members of which 15 are from Lok Sabha. the lower house of the Parliament. with offices of Accountant Generals (AG) in all states. 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. Departmental vigilance does not investigate into criminal aspect of any case. SATISHCHANDER .
universities. however. but criticised the apathy and lack of awareness of many citizens. 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. It was established on 1 April 1963 and evolved from the Special Police Establishment founded in 1941. thus giving practical shape to the 2005 Right to Information (RTI) Act. the need for a Central Government agency to investigate cases of bribery and corruption by Central Government employees was felt. The Central Bureau of Investigation Introduction The Central Bureau of Investigation traces its origin to the Special Police Establishment (SPE). of India. Of India's 28 states. The Central Bureau of Investigation (CBI) is a government agency of India that serves as a criminal investigation body. which was set up in 1941 by the Government of India. SATISHCHANDER . and Integrity". Even after the end of the War. State information commissions have also been opened.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. This Act transferred the superintendence of the SPE to the Home Department and its functions were enlarged to cover all departments of the Govt. The Delhi Special Police Establishment Act was therefore brought into force in 1946. 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. and ministries on how to share information of public interest. Impartiality. The superintendent of the SPE was vested with the War Department. The commissions have not been immune to criticism. It has delivered decisions instructing government. courts. Nine pioneered access to information laws before the RTI Act was passed. police. 26 have officially constituted information commissions to implement the RTI Act. Its motto is "Industry. national security agency and intelligence agency. A state report card one year on complimented the quality of the law.
(ii) Economic crimes.. Public Grievances and Pension of the Union Government usually headed by a Union Minister who reports directly to the Prime Minister. Ministers. So. because CBI is directly under the control of Central Government. Departments. CBI has powers of a police station to investigate and register FIR. there isn’t a single anti-corruption agency which is effective and independent of the government. public grievance and pensions. kidnapping for ransom and crimes committed by the mafia/the underworld. etc. Secretaries to Government. Public Sector Undertakings. 1946). CBI is perceived to have been often used to settle scores against inconvenient politicians. large-scale smuggling of narcotics. whose wrongdoings are sought to be SATISHCHANDER . Therefore. cultural property and smuggling of other contraband items etc.CULTURE OF CORRUPTION IN INDIA 205 The CBI is controlled by the Department of Personnel and Training in the Ministry of Personnel. Import Export & Foreign Exchange violations. financial frauds. 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. 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. the CBI's powers and function are severely limited to specific crimes based on Acts (mainly the Delhi Special Police Establishment Act. CMDs of Banks. 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. sensational homicides. Again. if a complaint pertains to any minister or politician who is part of a ruling coalition or a bureaucrat who is close to them. has handled cases against Chief Ministers. including bank frauds. The Anti-Corruption Division of the Central Bureau of Investigation (CBI) under the Ministry of Personnel. Officers of the All India Services. CBI investigations have a major impact on the political and economic life of the nation. CBI is directly under the administrative control of Central Government. if a citizen wants to make a complaint about corruption by a politician or an official in the Central Government. bomb blasts. While analogous in structure to the FBI. CBI is overburdened and does not accept cases even where amount of defalcation is alleged to be around Rs 1 crore. such as cases of terrorism. antiques. Central Public Sector Undertakings and Central Financial Institutions. and (iii) Special Crimes. Financial Institutions. The CBI is the official Interpol unit for India.
the latter dealing with cases of conventional crime. It was therefore decided in 1987 to constitute two investigation divisions in the CBI. established a reputation of being India's premier investigative agency with adequate resources to deal with complicated cases. namely. Anti-Corruption Division and Special Crimes Division. Economic Crimes and Special Crimes.CULTURE OF CORRUPTION IN INDIA 206 investigated. CVC is independent but it does not have sufficient powers or resources. demands were made on it to take up investigation of more cases of conventional crime such as murder. kidnapping. It is also involved in collection of criminal intelligence pertaining to three of its main areas of operation. meaning that it reports to the Indian Government and not to the individual states. it was found expedient to entrust such cases to the Branches having local jurisdiction. CBI takes shape As the CBI. It is also the nodal police agency in India which coordinates investigation on behalf of Interpol Member countries. Taking into account the fact that several cases falling under this category were being taken up for investigation by the CBI. the High Courts. Role and functions The CBI is the premier investigating police agency in India. the Parliament and the public. over the years. The services of its investigating officers are sought for all major investigations in the country. Anti-Corruption. viz. besides economic offences. The CBI has to investigate major crimes in the country having interstate and international ramifications. CBI has powers but it is not independent. CBI as an organization is held in high esteem by the Supreme Court. terrorism. Apart from this. CBI investigations have a major impact on the political and economic life of the nation. 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.. The following broad categories of criminal cases are handled by the CBI:- SATISHCHANDER . The CBI is a central subject under the Constitution of India. etc. 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.
CBI may investigate. privileges and liabilities on the members of Delhi Special Police Establishment (CBI) with Police Officers of the Union Territories. Jurisdiction powers. duties. Economic Crimes Division: Deals with cases including bank frauds. 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. SATISHCHANDER . besides Union Territories. Departments. sensational homicides. Cases which is essentially against Central Govt. employees or concerning affairs of the Central Govt. due to limited resources. and the employees of the Central Public Sector Undertakings and Public Sector Banks. financial frauds. The Central Government may extend to any area. 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.CULTURE OF CORRUPTION IN INDIA 207 Anti-Corruption Division: Cases of corruption and fraud committed by public servants of all Central Govt. kidnapping for ransom and crimes committed by the mafia/the underworld. Central Public Sector Undertakings and Central Financial Institutions. Import Export & Foreign Exchange violations. privileges and liabilities The legal powers of investigation of CBI are derived from the DSPE Act 1946. antiques. bomb blasts. the powers and jurisdiction of members of the CBI for investigation subject to the consent of the Government of the concerned State. Special Crimes Division: Deals with cases such as cases of terrorism. cultural property and smuggling of other contraband items etc. While exercising such powers. Besides. The CBI can investigate only such of the offences as are notified by the Central Government under the DSPE Act. This Act confers concurrent and coextensive powers. large-scale smuggling of narcotics. CBI would not be able to investigate crimes of all kind.
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. 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. through mediation by the central government. to initially register any case coming under its jurisdiction. to be engaging in nepotism. In his book. from all angles. It is a usual practice for the respective state police departments. BR Lal. it has been exposed by its former bigwigs like Joginder Singh and BR Lal who were Director and Joint Director respectively. the cases may be transferred to the CBI. Corruption in CBI Because of its intensely political overtones. Who Owns CBI. SATISHCHANDER . cheating. and is never far from controversy. and if necessary. Big cases of fraud. The CBI handles many high profile cases.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. Controversies Normally. 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. RTI activist Krishnan and Tripathi has alleged harassment from CBI in order to save itself from exposure through RTI. Even the Top Bosses are known for stooping to illegal fund diversions. mal-prosecution and outright corruption. Cases having interstate and international ramifications and involving several official agencies where.
Oppositions have never tried to call it the 'Congress Bureau of Investigation. the media and Muslim League as DGP was made of sterner stuff. Associates of then Prime Minister Rajiv Gandhi were linked to alleged payoffs made in the mid-1980s by the Swedish arms firm AB Bofors. with $40 million in kickbacks moved from Britain and Panama to secret Swiss banks. 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. and the handling of the Bofors investigation by CBI under Congress governments has created a new synonym for CBI. SATISHCHANDER . who were originally described by newspapers as agents of Pakistani intelligence.300 million arms sale were reported to be inferior to those offered by a French competitor. It is often suspected that ruling governments interfere with the work of the CBI. brought the issue of the Bofors scandal back to centre stage. 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. it was found that CBI had quietly unfrozen bank accounts of Italian businessman Octavio Quattro chi. 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. which unfroze Rs 21 crore in a London bank in accounts held by Bofors scam accused Quattro chi and his wife Maria in 2006. The CBI investigation did not reveal the existence of a spy ring. The CBI. for money and sex. one of the prime accused in the Bofors scandal of 1986 which had tainted the Rajiv Gandhi government. Interpol withdrew the Red Corner Notice against Quattro chi. After letting off the Bofors accused.CULTURE OF CORRUPTION IN INDIA 209 Bofors scandal In January 2006. the development that came barely three weeks before the end of the Man Mohan Singh government’s tenure. Following a communication from the CBI. The 410 howitzer field guns purchased in the $1. The scheme was plotted by some officers of Kerala police. The CBI was responsible for the inquiry into the Bofors Case.
UP. The prosecution that followed was partly prompted by a public interest petition (Vineet Narayan). P C Sharma and G H Achari. the alleged murderer of a 22-year old law student was acquitted for what the case judge called "deliberate inaction" by the investigating team.CULTURE OF CORRUPTION IN INDIA 210 Hawala scandal In 1991 an arrest linked to militants in Kashmir led to a raid on Hawala brokers. Subsequently the CBI appealed the verdict in Delhi High court in 2000. and yet the court cases of the Hawala scandal eventually all collapsed without convictions. However. In concluding the Vineet Narayan case. The High Court subsequently found Santosh Kumar Singh guilty of rape and murder and awarded a death sentence for the same in October 2006. in which Santosh Kumar Singh. the 1999 judgment commented on how "the influence of the father of the accused has been there". requested two Special Directors. Priyadarshini Mattoo murder case The CBI has been under a cloud owing to its handling of the Priyadarshini Mattoo case. revealing evidence of large-scale payments to national politicians. This was after the local police was found to be incompetent SATISHCHANDER . The CBI's role was again criticized. to study the judgment. the-then CBI Director. R K Raghavan. 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 accused was the son of a high ranking officer in the Indian Police Service. Nithari Killings The CBI was given the responsibility of investigating the murders of dozens of children in the Nithari village near Noida. after which the High Court issued a bail able warrant against the accused. due to which the case had been shifted from the regular police force to the CBI. though not handled by the CBI). Embarrassed by the judgment. The CBI filed an application for early hearing in July 2006. the Supreme Court of India directed that the Central Vigilance Commission should be given a supervisory role over the CBI.
which is dealing with the Sohrabuddin case in Gujarat. Abhaya had caught them in a compromising position.CULTURE OF CORRUPTION IN INDIA 211 and lethargic in their investigations. the Federal Investigation Agency. 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. questioned Geeta Johri an IPS officer. Altogether there were five CBI inquiries into the murder case so far without any tangible results. Sister Abhaya murder case Sister Abhaya murder case concerns a nun. who was found dead in water well in Saint Pius X convent hostel in Kottayam. who claims the CBI is pressuring her to falsely implicate former Gujarat Minister Amit Shah in the Sohrabuddin fake encounter case. even sent a probe SATISHCHANDER . sent Letters Rogatory abroad. Sohrabuddin case CBI has been accused of acting for the ruling party Congress (UPA) to trap its opposition party mainly BJP. Rajkot Police Commissioner Geeta Johri has alleged in the Supreme Court. Sant Singh Chatwal case Sant Singh Chatwal was an accused in the CBI’s records for 14 years. Dawood Ibrahim case In August 2007. CBI had filed two charge sheets naming him as accused. The powerful Catholic Lobby had exerted their undue influence to subdue the case as a Priest and a nun were involved. for its comments on recent media reports about the detention of Dawood Ibrahim by authorities in Karachi. CBI. the CBI asked its Pakistani counterpart. Kerala on7 March 1992.
closed the principal case of bank fraud in which Chatwal had been embroiled for over a decade. a member of Malan Kara Orthodox Church's managing committee and a timber merchant in 5 December 2002. 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. the former CBI director has now confessed that he asked to remain soft on extraditing the Union Carbide CEO Warren Anderson. In all. Till date. Sant Singh Chatwal has been awarded with Padma Bhushan despite these cases. Malan Kara Varghese murder case The Malan Kara Varghese murder case concerns the death of T.32 crore). 1997. including culpable homicide. The trials in the other two cases are still in progress. On May 30. CIC later ordered the CBI to disclose the information. CBI is highly being criticized for this by Kerala High Court and Media. against those accused in this case. Along with four others. RTI applicant Krishnan and Tripathi was denied access to public information concerning the closed cases.Varghese also known as Malan Kara Varghese. who received two year sentences. four charge sheets were filed by the CBI. in effect. 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.On 9 May 2010 charged Father Varghese Thekkekara. 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. But CBI has recently been exempted from RTI act and it is unclear if this information will be disclosed.CULTURE OF CORRUPTION IN INDIA 212 team to the US and put Chatwal and his wife behind bars from February 2 to February 5. SATISHCHANDER . This. Bhopal gas tragedy The public perceived that the CBI was very ineffective in trying the Bhopal gas tragedy case. 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.M.992. the prime accused has not been arrested. 2008. with Chatwal named as accused in two.815 (Rs 28. and dropped charges. 2007 and August 10.
Ministry of Finance. Certain states such as Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta) have similar agencies and courts.CULTURE OF CORRUPTION IN INDIA 213 Anti-corruption police and courts The income tax department of India. the Foreign Exchange Management Act 1999(FEMA) and the Prevention of Money Laundering Act 2002. 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. 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. 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. It is part of the Department of Revenue. It comprises of officers of the Indian Revenue Service. Central Vigilance Commission and Central Bureau of Investigation all deal with anti-corruption initiatives. SATISHCHANDER . The proposal has not yet been acted upon by the Indian government. Objective The prime objective of the Enforcement Directorate is the enforcement of two key Acts of the Government of India namely.
deals heavily with Internet and non-internet applications to aid in governments. E-government. and particularly the Internet. and other web-based telecommunication technologies to improve and/or enhance on the efficiency and effectiveness of service delivery in the public sector. 2006. short for electronic government. business partners and employees”. 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. The focus should be on: The use of Information and communication technologies. 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. ICT.’ (United Nations. 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). SATISHCHANDER . 2005) 'Electronic Government' essentially refers to the approach ‘How government utilized IT. as a tool to achieve better government. AOEMA. instant-messaging (IM). as well as surveillance systems. audio/video presentations.CULTURE OF CORRUPTION IN INDIA 214 45. and even the use of television and radios to provide government-related information and services to the citizens. 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. E-government includes the use of electronics in government as large-scale as the use of telephones and fax machines.
e-Governance is understood to extend the scope by including citizen engagement and participation in governance. four kinds of activities take place: Pushing information over the Internet. notifications. issue briefs. the NPR ([National Partnership for Reinventing Government National Partnership for Reinventing Government]) has been implemented from 1993. Whilst e-Government has traditionally been understood as being centered on the operations of government. or requests to the agency. As such. following in line with the OECD definition of e-Government.g. the Internet and new media. 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.: regulatory services. users can engage in dialogue with agencies and post problems. In this model. the G2C models apply the strategy of Customer Relationship Management (CRM) with business concept. e-Governance can be defined as the use of ICTs as a tool to achieve better governance. 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. SATISHCHANDER . **In United States. constituency participation and governance by transforming internal and external relationships through technology. public hearing schedules. etc. comments. e. a business. The continuous optimization of service delivery.CULTURE OF CORRUPTION IN INDIA 215 The use of information and communication technologies in all facets of the operations of a government organization. **By managing their customer (citizen) relationship. Two-way communications between the agency and the citizen. general holidays. the business (government) can provide the needed products and services fulfill the needs from customer (citizen). or another government agency.
email. SMS text messaging. reliability of information on the web. identity cards. PDA. online community facilities. biometric identification. e. newsgroups and electronic mailing lists.g. CSMW). smart cards and other Near Field Communication applications. online chat.g. TV and radio-based delivery of government services (e.: lodging tax returns. fax.. MMS. Bluetooth.: 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. RFID. applying for services and grants." many non-Internet "electronic government" technologies can be used in this context. SATISHCHANDER . e. 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. wireless networks and services. and instant messaging technologies. Some non-Internet forms include telephone. tracking systems. polling station technology (where non-online e-voting is being considered).g. and hidden agendas of government groups that could influence and bias public opinions. road traffic management and regulatory enforcement.CULTURE OF CORRUPTION IN INDIA 216 1) 2) 3) 4) 5) Conducting transactions. Governance. CCTV.
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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.
The ARC report was submitted to the GOI on 20 December 2008. Treasurer Frank T. 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. SMART government is defined as ‘Simple. For a full list of state agencies with Twitter feeds. transparent and inexpensive fashion.The Smart way Forward". micro-blogging services and blogs. Interested people can sign up at here. Through List Serves. This plan was an outcome of the recommendations of the Second Administrative Reforms Commission". Government of India. computers. mobile messaging. It is under the administration of the Department of Information Technology of Ministry of Communications and Information Technology. Planning Commission. 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 . Caprio is offering daily tweets of the state’s cash flow. Background With the widespread usage of IT. 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.The report cited several prior initiatives as source of its inspiration including reference to the Singapore ONE programme. RSS feeds. mobile phones. Internet and other components of the ICT technologies in India over the last couple of decades. According to the Paragraph 83. 2001. convenient. Government is also beginning to Twitter.CULTURE OF CORRUPTION IN INDIA 221 Government and its agents also have the opportunity to follow citizens to monitor satisfaction with services they receive. visit transparent govt. visit Real Life Live document. Report of the Working Group on Convergence and E-Governance for The Tenth Five Year Plan (2002–2007). In the state of Rhode Island. Accountable. Responsive and Transparent’ government. November. For more information. According to this report the goals of e-Governance were defined as follows: 1) Better service delivery to citizens SATISHCHANDER . Moral. government and its agencies can share information to citizens who share common interests and concerns.
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. Given that NeGP aims to provide a whole host of Union & State Government services to the common man. transparency & reliability of such services at affordable costs to realise the basic needs of the common man. through common service delivery outlets and ensure efficiency. 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). establishing connectivity and setting up delivery outlets would be the other aspect of project implementation. digitization of current records. This would involve several focus areas including development and delivery of citizen-centric services through Common Services Centers. other than the citizen-centric application development. development of ICT infrastructure. SATISHCHANDER . Introduction With the Last mile service delivery. the project also aims to deliver substantial cost savings in governance. service oriented and citizen centric format. it is planned as a centralized initiative with decentralized implementation.” 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. Additionally. as its core objective.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. interoperability of applications and a common and robust nationwide infrastructure is also required. For this purpose. Besides improved governance and improvement in quality of life for Indian citizens. This requires application development of government services in transparent. Vision The NeGP has the following vision: “Make all Government services accessible to the common man in his locality.
undertaking capacity building. State Wide Area Networks (SWAN). Chandrasekhar. Shashi Kant Sharma. State Data Centres (SDC).CULTURE OF CORRUPTION IN INDIA 223 Programme Governance NeGP is monitored and coordinated at the highest level by the National e-Governance Advisory Group.K. Special Secretary. R. It is headed by the Minister of Communications & Information Technology. The latest appointments to the Group were done in First week of November. Singh. Secretary. industry and academia representatives.V. SATISHCHANDER . Currently it includes various eminent personalities of India including Nandan Nilekani Chairman. 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. etc. Unique Identification Authority of India (UIDAI). This infrastructure is supposed to be common for all projects under the NeGP umbrella. Government of India. National Informatics Centre (NIC). State Government. 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. Dr. It is being created in every State and Union Territory to ensure seamless and single-window delivery of public services to the common man. The infrastructure requirements of NeGP are broken down into core & support infrastructure requirements. Secretary. Secretary. Gairola. Common Services Centres (CSC) and development of eForms for service delivery. Department of Information Technology (DIT). Dr. Additional. D. Department of Administrative Reforms & Public Grievances. Mrutyunjay Sarangi. Department of Telecommunication. B. Director General National Informatics Centre among other Central Government. Cabinet Secretariat. Department of Information Technology. providing technical support. 2010 with its first scheduled meeting on 12th Nov 2010. developing policy guidelines. Standardization Testing and Quality Certification (STQC). Implementation Infrastructure This would include development of National/State Service Delivery Gateway (NSDG/SSDG). R&D work. Appropriate authorities have been identified and assigned the duties of laying down standards.
and CSC for web-enabled anytime-anywhere services & information. Web enabled delivery of public services Mission Mode Projects (MMPs) NeGP comprises 27 Mission Mode Projects (MMPs) encompassing 10 Central MMPs. GIS National Spatial Data Infrastructure and Language Resource Centre.CULTURE OF CORRUPTION IN INDIA 224 The core infrastructure consists of National eGovernment Intranet(NICNET. "Mission Mode" implies that the objective and the scope of the project are clearly defined. Further E-post and Integrated Service Delivery Front ends like the proposed Common Services Centers (CSC) are required as part of the support infrastructure. It was approved on 18 May 2006 by the Government of India. that the project has measurable outcomes and service-levels. State Data Centres. Block and Village levels including Wireless infrastructure for last mile connectivity. The three primary pillars of NeGP infrastructure are SWAN (State Wide Area Networks) (SWAN). Resource Centre for eGovernance. SDC (State Data Centers).). National eGovernment Data Centres. 10 State MMPs and 7 Integrated MMPs spanning multiple Ministries/ Departments. ERNET and other service providers). District. These MMPs include the following:- SATISHCHANDER . Security Infrastructure(PKI etc. and the project has well-defined milestones and time-lines for implementation. State wide Intranets. The support infrastructure includes Service delivery infrastructure at State.
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. Communication The stakeholders of NeGP include at least 20 central departments. Given the complexity of this mammoth task estimated at more than 70.000 man-years of effort. 360 departments across 35 states/UTs and nearly 500 implementation agencies. etc. Inadequate skill sets of personnel already deployed Lack of appropriate institutional framework to handle the specific program To address these. Immigration & Visa Pension e-Office Foreigners Registration & Tracking Municipalities Gram Panchayats Police Road Transport Treasuries Capacity Building.This component addresses several areas including training for: o E-Governance policy makers like Chief Information Officers. The three specific capacity gaps in the states envisaged to be filled are:- Lack of personnel with appropriate background and aptitude. 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 . SATISHCHANDER . Awareness.
Digital Signature. use of local language solutions. advanced courses architecture. stat government. Knowledge exchange In order to assist the government in ensuring the high quality of implementation of the NeGP initiatives. language technologies o Equipping National/State Institutions of Public Administration for eGovernance Training etc. Interoperability etc. Pvt.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. Quality Assurance & Conformance Network and Information Security E-Gov.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. The objective is collective SATISHCHANDER . It is a collaborative effort to collect. films etc. Creating awareness about NeGP . develop and share knowledge and material on eGovernance initiatives across the different government agencies. the NISG (a non-profit organisation) started a portal project called E-Gov. quality & security These would require implementation of the following: National Policy on Open Standards Localization and Language Technology Standards Biometrics. Knowledge exchange.) Standards. union government and private institutions of India. Sector. Academic Training Institutions o Publicity and Awareness (media.
CULTURE OF CORRUPTION IN INDIA 227 learning from each other’s projects and learning lessons. 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. content development is a community effort shared by the different stakeholders of eGovernance namely the Department of Information Technology (Government of India). private and government levels. They take a whole-of-government view of the most efficient way managing the cost base of government. They include initiatives to e-enable the frontline public services: that is. That is. 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. This portal aims to develop conceptual knowledge about eGovernance domain from public. Central Ministries & State Governments in India. 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. not as passive recipients of services. Academics. Just like other collaborative portals. they seek to engage with the citizens as owners of and participants in the creation of public services. They focus on the “citizen” not the “customer”. This new approach is referred to as Transformational Government. SATISHCHANDER . and Industry working in the domain of e-Government.
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