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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.
SATISHCHANDER . Selfishness and greed are two main cause of corruption. nepotism. being corrupt are a way to get what they desire. Political corruption is the abuse of their power by the state official for their unlawful private gain. Of late. Corruption allows criminal activities such as money laundering. ruining or the spoiling of a society or a nation. bribes are given to avoid punishment . At times. ethical teaching and standards of morality are weak. The judiciary. the law enforcement agencies and the education sector have an important role to play the corruption by changing prevailing laws. virtue or moral principles. Inequality of wealth. bribery. Various forms of corruption include extortion. religious. A license-permit regime or scarcity of basic commodities promotes corruption. face menace of corruption. it becomes a way of life.CULTURE OF CORRUPTION IN INDIA 5 A. CORRUPTION The word of corruption means the destruction.For some people. People getting very low wages feel they have to demand bribes in order to lead decent lives. punishments and the education system. cronyism. In societies where traditional. Employees often strike corrupt deals to supplement their meagre income. But they do not realize that corruption cause suffering to other. It changes for the worse. Corruption is an old age phenomena. Such a society begins to decay and sets itself on the road to self-destruction. A corrupt society stops valuing integrity. Nations having tyrannical powerful ruling elite that refuses to punish the corrupt within it. Corruption has prevailed in all form of government. In societies which ignore corruption. Over 1500 year ago the mighty Roman Empire disintegrated when its rulers became corrupt and selfish. graft. embezzlement and patronage. low wages and salaries are some of the economics cause of corruption. INTRODUCTION 1. corruption often thrives. A corrupt society is characterized by immorality and lack of fear and respect for law. the media has carried out of large number of stories of prophets who misuse offerings and traditional healers who abuse penitents. These values should revive among their congregation and subjects and in this effort religious leaders and chiefs have an important role to play. extortion drug trafficking to thrive. Corruption cannot be divorced from the economics.
The authorities move very quickly when the press or the television highlights instances of corruption. and it focuses exclusively on corruption in the public sector. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 6 The consequences of corruption for social and economic development are bad.In the long run unchecked corruption pushes more and more people into poverty which often destabilizes a society. the use of this definition excludes the possibility of corruption in the private sector. Equal treatment of all economic agents is essential for a well-working market economy. its activities. while the poor suffer terribly . A few people manage to get rich at the expense of society as a whole.” There are three basic elements of this definition. What is corruption? There are several answers to this question.” as “the misuse This definition considers the cause of corruption in public authority and its abuse. there is no corruption. and links corruption to the state. 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. state intervention on the market and the existence of the public sector. Societies can fight corruption by letting the state know that they have had enough of it. Analytically speaking. Resources are diverted from the sectors such as education and heath to less important sectors or personal enrichment. Corruptions hinder economic growth and deter investment. 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. Education spreads political add social awareness and are some factor that help curb the menace of corruption. This definition is consistent with the behalf of Noble Prize laureate Gary Becker that “If we abolish the state. Definition of corruption Corruption is defined by the World Bank & transparency international (TI) of public office for private gain. In other words. If there is no bias. The impact of development assistance of reduced and natural resources are overexploited causing further harm to a country’s environment assets. The rule of eroded and the people no longer respect or trust the state. we abolish corruption”. Bias towards particular economic agents definitely violates the arm’s-length principle and fulfils a necessary condition for corruption.
there is no corruption.CULTURE OF CORRUPTION IN INDIA 7 There are two additional necessary conditions for corruption. and that obligation does not grow obsolete. or similar activities. it is obvious that there is a time gap between the two actions. imperfect information. Some of them are straightforward theft. the returned favour is sometimes not even specified. does not represent corruption. If a senior governmental official simply illegally appropriates a sum of money from the budget without providing any SATISHCHANDER . embezzlement. but similar gain can imply expensive gifts or various favours returned. Deriving some advantage. there must be some advantage for the individual who commits a violation of the arm’s-length principle. The first condition is that the bias must be intentional – accidental violation of the arm’s-length principle because of. so that seizing the benefits from the one who is corrupted moves into the future. This definition is consistent with the beliefs of Nobel Prize laureate Gary Becker that “if we abolish the state. Second. but definitely not corruption. If the returned favour is a well-paid job for the son. and links corruption to the state. Seizing some benefit or deriving some advantage can be carried out simultaneously with a violation of the arm’s-length principle. can have different forms. state intervention on the market and the existence of the public sector. biased behaviour of the one who is corrupted makes an informal. and the son has just started college. Furthermore. It is a rather widespread notion that corruption is receiving money (this form of corruption is most often called bribery). or seizing some benefit for the corrupted economic agent. otherwise. “The problem with the alternative definition is that not all abuses of public office are corruption. Violating impartiality may sometimes represent racism. but the obligation is assumed. its activities. 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. in formulating the corruption contract.” This definition considers the cause of corruption in public authority and its abuse. 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. we abolish corruption. Namely. In other words. but those two actions can be taken at different times. fraud. for example. the use of this definition excludes the possibility of Corruption in the private sector and it focuses exclusively on corruption in the public sector. but it is not corruption. but sometimes binding obligation of the corruptor to return or repay the favour. or rather conditions that must be fulfilled for observed bias (“non-compliance with the arm’s-length principle”) to be specified as corruption.
It is socially unacceptable. The factors that create rent are the ones that create fertile ground for corruption. This is to say that due to the illegal nature of the corruption contract. 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. political and economic phenomenon that affects all countries. its transactions costs are multiplied. Corruption undermines democratic institutions. SATISHCHANDER . and enforcing the contract.CULTURE OF CORRUPTION IN INDIA 8 service orator to anyone. monitoring the contract. i. but it is still not corruption. Rent is a factor’s income that is above the competitive returns of the factor. perverting the rule of law and creating bureaucratic quagmires whose only reason for existing is the soliciting of bribes. the consequence of rent appropriation. corruption is in most cases. for example) a violation of this kind is not corruption. The transaction cost feature of corruption is of great relevance and must be taken into account when the consequences of corruption are analysed. there will be no rents. On the contrary. hence in the world of perfectly competitive markets. but of another kind. From the point of view of its source.e. that is not corruption – it is a crime. Competitive returns are those achieved on the competitive market.e. i. From the enforcement point of view. but since there is no advantage for the victim of extortion (a judge or a prosecutor. slows economic development and contributes to governmental instability. a properly operating court would process corruption as a criminal offense. Corruption attacks the foundation of democratic institutions by distorting electoral processes. 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. This origin of corruption should always be taken into account when discussing the factors of corruption. formulating the contract (particularly taking into account all foreseeable and unforeseeable contingencies). 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 a complex social. This is not to say that standard legal contracts are free of transaction costs. a situation in which economic agents are willing to pay a bribe to be included in the rent appropriation scheme – they are paying to earn some rent. the most important of which are: finding the counterpart. corruption is a contract. Corruption is just a form of rent appropriation and its dissipation. corruption is not the only thing that is socially unacceptable and illegal. This very specific feature of corruption as an illegal contract generates its substantial transaction costs. In addition. extortion is something that provides intentional non-compliance with the arm’s length principle.
corruption is not institutionalized. it is very well developed. The analysis of corruption which follows is morally neutral.CULTURE OF CORRUPTION IN INDIA 9 A few words on the ethical aspects in defining corruption should be added. but also its predictions regarding political corruption are wrong. One view is set within the framework of the principle-agent theory. Accordingly. it seems that not only are the assumptions of the model unrealistic. the state is benevolent. Only administrative corruption (corruption of civil servants) can be explained and predicted. However.e. Within such a framework. Basic Types of Corruption The types of corruption are strictly linked to the theoretical view on corruption. This approach is analytically very clear. SATISHCHANDER . if corruption is considered endogenous to the political process. The methodological breakthrough of the kind has been recently achieved by Charap are Harms. the political regime in the country. the economics of organized crime and the political economy of dictatorship. including administrative corruption. 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). The methodological approach based on recent contributions to literature on the economics of conflict and appropriation. corruption is institutionalized and its level and pattern depend on the political constellation. For an overwhelming majority of people corruption is something morally unacceptable. and the models of theoretical models of corruption based on this approach are analytically rich. Since the list of corrupted politician and associated political scandals is lengthy in virtually all counties of the world. corruption is considered as a form rent appropriation by the ruler. Political corruption simply cannot be explained within this methodological framework. so there is no possibility for political corruption. According to the main assumption. as they can explain a wide range of behaviours of civil servants. In other words. it is the evil that should be fought because its very existence is against basic moral principles. Economic theory has developed two basic views of corruption. The issue of morality is irrelevant to the considerations in this document. The crucial feature of this approach is that corruption is exogenous to the political process. Nonetheless. Corruption is nothing but a consequence of the political process. i. benevolent politicians are not informed about the misdemeanours of their subordinates. In that sense Tanzi’s definition of corruption is morally neutral. hence principal-agent relations (and the scale and scope of asymmetry of information) are not as influenced by the political process and political constellations as by the outcomes of the process. this approach cannot explain political corruption.
given the level the structure of corruption. Corrupt civil service is nothing but the extension of efficient rent appropriation by the ruler. its poor administrative capacities or a poor supply of administrative service.CULTURE OF CORRUPTION IN INDIA 10 Corruption is the answer to the problem of internal cohesion of predatory teams. The rent is extracted through sales of a limited number of permits and licenses for economic activity. as suggested by Shleifer and Vishney. instead of not doing it. from turning to the public to denounce the system. Finally. The second type of corruption is a corruption that violates the legal rules. civil servants are cooperative because they have their share in the spoils. there is no legal barrier for his passport to be issued. although the model provides information on the structure of incentives for rent appropriation. civil servants are corrupted to do their job or to do it more quickly then they usually do. i.e. Corrupt civil servants are created to satisfy ruler desire to foster loyalty through patronage. there basic types of corruption are identified. Its specific and more aggressive version is bribing officials for jumping the queue for providing the service that is thoroughly legal. Hence. Nonetheless. due to their own participation. Dictators can. hence we have information on the driving force of the change. when and is necessary. If a person bribes civil servants in charge of issuing a passport that a briber/corruptor is entitled to. This is administrative corruption and is the most modelled type of SATISHCHANDER . find a reason why an uncooperative civil servant is found guilty of corruption. Corruption serves as a hostage mechanism to minimize the probability of defection or insurrection by lower level insiders of corrupted civil servants. i. aimed at creating the rent and its redistribution via corruption. this methodological approach does not provide a clear analytical framework for consideration. there is both the carrot and the stick to strengthen loyalty. 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. Furthermore. The main problem is that the structure of incentives to the political decision makers and change of the structure are not explained. within one or other theoretical views. This approach is tempting because it provides grounds for understanding and explaining the relationship between corruption and the political process. One should bear in mind that the shortage of supply of administrative services can be deliberately produced. that is exactly the first types of corruption. 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. or a very biased enforcement of the rules. In other words. they are effectively constrained.e. The frequency of this type of corruption is a good indicator of the capacity and effectiveness of a country’s administration. In general.
SATISHCHANDER . Accordingly. it is actually better for the society that they are not enforced. since the political process resulted in bad policies (and no alternatives to political process are feasible in the foreseeable future). whatever the source of these bad public polices. Although there is no doubt that such a process exists. The main problem is that interest group influence legislators’ decision making in all counties. The underlying assumption is that legislation and public policies are influenced by the bribing of legislators by a few oligarchs-very powerful business people. and more specifically are the public policies designed by lobbying superior to ones designed through corruption? Additionally. one should take into account the costs of corruption as a method for circumventing bad public policies. the crucial question is to what extent are the outcomes regarding public policies from legitimate lobbying and illegal corruption different.corruption that is aimed at changing the rules and regulations into rules and regulations that favour the interests of the corruptor. not the public. It would be better if these policies were not enforced at all. there is “state capture’’. In brief. Nonetheless. The crucial analytical problem of the “state capture” concept is specifying a cut-offline between legitimate political lobbying and “state capture” created by corruption. public policies are inevitably formulated to favour the oligarchs. The state can be captured both by aggressive lobbying and by effective corruption. A cynical approach to the issue within counties with widespread corruption is that some pubic polices are so bad. the concept of ‘’state capture’’ lacks analytical clarity. and that this type of corruption can explain some elements of public policy in many counties (not only transitional ones). Subsequently. 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. Finally. corruption is seen as a solution for bad public polices. The most significant direct consequence of this type of corruption is that legislation and public policies are not justly enforced. This is due to very clear motives and incentives for each economic agent and very clear relation between them. Strong lobbying is an entirely legal and legitimate activity in mature democracies.CULTURE OF CORRUPTION IN INDIA 11 corruption – the vast majority of theoretical contributions in the field are about administrative corruption. as the total supply of corruption (demand for the bribe for violating the rules) is provided by the civil servants. Nonetheless. although the type of corruption that influences public policy is very important to consider. 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. corruption is considered to be the second best solution. This type of corruption corresponds to the principle-agent model of corruption. 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.
In decentralized corruption. steps in and regulations in a hands-on manner. Theoretically speaking. Within the methodological framework of a benevolent state. economic agents are engaged in the rent-seeking process. The crucial prerequisite for centralized corruption is the ability to enforce joint profit in bribe collection. It is closely related to problem of the problem enforcing collusion in oligopoly. instead of enabling the free market to regulate relations and transactions among economic agent on the market. Basic Causes of Corruption All economic agents are maximizing their individual utility. rather than single. violation of free market operations.Accordingly. a single corruptor is dealing with multiple. but in realty the most significant rent generator is government intervention.e. whatever the motive may be. Resources are allocated to the activities the greatest return on investment (an allocation decision).e. In other words. i. SATISHCHANDER .e. As described earlier. a monopolized corruption pattern is superior to a decentralized one regarding the scale of transaction costs. selfish interests of economic agents are the basic motive for economic transaction between them. the analysis of industrial organization cannot answer why some (benevolent) governments are equipped with agencies like the KGB while others are not. i.CULTURE OF CORRUPTION IN INDIA 12 The other important distinction in the case of corruption is its industrial organization. emphasizing centralized (monopolized) vs. the government. such as the KGB in the former Soviet Union. A frequently used synonym for this type of government intervention is regulation. because rent appropriations will maximize individual utility (welfare). rent is a factor of income above the competitive returns (opportunity costs) of the factor. corruption in the country is centralized. decentralized pattern of corruption. personal welfare (wealth). i. Because of that. rent can be created in a few distinctive ways. corruption contracts (transactions) hence the transaction costs are multiplied. as Shleifer and Vishney thoroughly analysed the phenomenon. It has been pointed out that when governments have an effective policing machine to monitor the action of civil servants. In short. people in all conceivable conditions behave economically rationally. the crucial distinction is the one of transaction costs. Apart from the prerequisites for distinctive industrial organization of corruption. the process of creation and distribution (appropriation) of rent. In other words.
results in fewer free-market operations. the more opportunity there is for corruption. At that specified quantity. Not only does such legislation create incentives for corruption. Nonetheless. is very important for corruption. The complicated and non-transparent legislation specifying slow procedure (procedures with unspecified time limits or no binding deadlines). Only the firms the obtain import certain goods and only the quantity specified in the license. and consequentially dangerous forms of corruption are linked to Rent-seeking behaviour. Needless to say.CULTURE OF CORRUPTION IN INDIA 13 The majority of government intervention on the market is prohibitive. more government regulation ceteris paribus (all other things being equal). i. which are rules regarding enforcement of rules and regulations.e. at the discretion of civil servants in the enforcement process. at the end of the day. apart from the content of legislation that introduces government regulation. SATISHCHANDER . unless the government explicitly empowers some of them to do so. 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. There are some cases of corruption not Linked to rent. A typical example of this occurs with a large variety of customs tariff rates in general and for rather similar products in particular. appropriated. but by the administratively specified quantity. Accordingly.e. That will inevitably create a shortage in the market. clear. If the customs tariff rate for one product is 3% and for another similar product is 30%. By paying a bribe to get an import license. unclear. A typical regulation of kind is import licensing. and easily understandable by anyone. there are strong incentives for corruption aimed at misclassification of the goods and illegally reducing the levy by applying the lower rate. supply will not be formulated according to the marginal costs of the producer/importer. procedural legislation. creates tremendous opportunity for corruption. but it also decreases the probability of detection. As to the specification of the rules.e. the commanded by demand (i. making threats to the corruptors and corrupted less credible. The more complicated. Furthermore. but the most significant. without introducing import License regulation there would be no rent and there would be no corruption. i. it is very important how these rule and the process of the enforcement are specified. That difference is economic rent which will be distributed. and ambiguous the rules. a portion of the Rent is appropriated by the corruptor and the remaining Portion is appropriated (in the form of bribe) by the Corrupted. and therefore more corruption. most common. for efficient enforcement the rules should is simple. economic agents’ are precluded from doing something.
For economic agents the most important aspect of the rule of law is protection of private property rights through efficient contract enforcement. 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. Accordingly. There will be no barriers to entry that must be circumvented by a certificate issued by a civil servant. clear. strict rule of law is one of the elements of an effective strategy for fighting corruption. hence there will be no source of corruption of that kind. 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. 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. all measures that improve the rule of law will definitely contribute to the fight against corruption.CULTURE OF CORRUPTION IN INDIA 14 The analysis of corruption factors is a prerequisite for an effective strategy for fighting corruption. Deregulation and decreasing the role of the government has its limits. and transparent rules that are understood by all concerned parties. as the strategy should take into account and address the main sources of corruption. no queues for goods whose supply is limited. In the case of rule of law. 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. The basic reason for the government to exist is to provide the rule of law. deregulation will decrease and in some cases eliminate corruption due to the lack of discretionary power of civil servants. On the contrary. 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. Deregulation means abolishing government intervention that is prohibitive. There will be no shortage on the market. Civil servants will lose their power to decisively influence the fortune of businesspeople and citizens. because civil servants will not be in a position to offer any favour to the corruptor. SATISHCHANDER . Then there will be no incentive for private parties to bribe civil servants. For example. no black market and no rent generated and appropriated from long queues and the black-market. government power should not be diminished. etc. thus allowing market forces to function effectively. From another perspective. the crucial element for any effective strategy for fighting corruption is deregulation.
Accordingly. The increased probability of apprehension and punishment creates a deterrent for civil servants to accept bribes. the most important prerequisite for effective anticorruption strategies is strong and unconstrained political will. it should be recognized that the bribe itself is nothing but a redistribution of income. 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. Nonetheless. and increases the visibility of corruption cases. wages in the private sector. Such a will can be generated by identifying the most significant consequences of corruption. Such a framework increases the probability of detecting corruption misdeed sand apprehending corrupted civil servants. therefore decreasing incentives for corruption. Nonetheless. for credibility. 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. punishment. i. In other words. 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. government must send an unequivocal and credible signal to all concerned parties that it is committed to fighting Corruption. Consequences of Corruption As to the consequences of corruption. the bribe itself is not a welfare loss – the SATISHCHANDER . i. i. 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. In this sense. Furthermore. Strong words are necessary. situations in which procedural legislation is violated. the wage scheme as a segment of an anticorruption strategy should always be considered along with the probability of apprehension.e. this element of the strategy should be considered within the framework of the deterrent. but not sufficient.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. reduces the discretionary power of civil servants.e. Increasing wages of civil servants is another important segment of the strategy for fighting corruption. If such a will exists.e. value-adding sector.
Corruption violates the rule of law.e. i. senior managers in countries with widespread corruption spend about 20% of their working time negotiating corruption and enforcing corruption contracts. There is a rather widespread notion that the corruption income of corrupted civil servants provides compensation for their lower wages. instead of the purchasing these inputs on the market. Although these public policies are in favour of these interest groups. the corruption burden is its own kind of a “tax burden” that. all firms produce the majority of inputs internally. enables the proper tax burden to be decreased. In other words. The origin of rent-seeking is public policies that boost government intervention and disable free market operation. i. If there is no rule of law. Hence there is no need for a wage increase and no need for increasing the tax burden. And transaction costs are real costs: the opportunity costs of resources engaged in transaction activities. proper taxation (together with efficient tax administration) decreases Uncertainty and transaction costs. 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. they are not in favour of the public interest. These public policies can be deliberately pursued specifically because they create rent. Hence. Furthermore. In other SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 16 scale of social welfare does not change. and the rule of law is prerequisite for the market economy. and therefore its transaction costs are Massive. However. The first reason is the existence of huge transaction costs from corruption. As it has been pointed out. corruption “taxation” is inferior in terms of economic efficiency. According to some estimates (Tanzi). Because of the poor exchange between firms. 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. Although strictly speaking this is true. there is no protection of private property rights and noncontract enforcement. according to this approach. only its distribution. corruption is an illegal contract. this is the amount of transaction costs in terms of the opportunity costs of highly skilled labour.e. they are completely wrong regarding maximization of economic efficiency and social welfare. it was demonstrated that rent-seeking activities are closely related to corruption. emphasizing only distributional aspects of corruption is one of the major fallacies of corruption research.
Corruption increases basic business uncertainty. Since there is no specialization. and sometimes evens a destructive. i. SATISHCHANDER . redistributing activities and allocating their talents to it. are less likely to invest when lower returns are expected. there is no social division of labour and no prerequisite for specialization. instead of focusing on productive. If corruption is widespread. As suggested by Baumol. wealth creating activities will focus on corruption. expected cash flow for investments in various countries and decide to invest their capital in the country with the highest expected returns. As a consequence. And it is the nation that must make some difficult decisions regarding it. activity. This is a crucial dilemma for every nation: will the available resources be engaged in creating wealth or merely in its redistribution? Widespread corruption is a symptom of a severely ill society with a majority of resources and innovation allocated to the area of redistribution. entrepreneurship is a resource that can be alternatively allocated to productive activities or to unproductive and destructive activities. Innovations that are a result of entrepreneurship will be allocated to redistribution and corruption. particularly regarding protection of property rights. entrepreneurs. Investors. making their decisions based on expected profit rate (returns). It will go to the activity that enables the entrepreneur the highest possible returns on his activity. Since corruption decreases expected returns. There is another reason that countries with widespread corruption cannot expect high growth rates that is directly related to entrepreneurship and innovations.CULTURE OF CORRUPTION IN INDIA 17 words.e. New methods of corruption will be introduced instead of new products and new methods of production. This kind of uncertainty decreases the expected profit rate for potential investors. a significant source of increasing economic efficiency is absent. This is particularly true for the foreign direct investors who compare expected returns. if the highest possible returns are in the area of corruption. other resources will be also be allocated to redistributive activities. i.” It is about the future of the nation.e. Corruption is not about an amount of money changing hands or about “grease in the wheels of business. Corruption is definitely an unproductive. 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.
” 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. For their part. The responsibility of containing corruption must not ignore the participation of international Firms.CULTURE OF CORRUPTION IN INDIA 18 2. foreign governments and others engaged in corrupt practices either actively or passively. therefore. An active. Draconian anticorruption Programs. it would be Unrealistic and cost-prohibitive to attempt to eliminate corruption completely. In most countries. moreover. 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. The new “No bribery pledge” initiated by OECD is one. While all those who are part of the problem must be part of the solution. all parts of society must share the responsibility for containing corruption because all are willing or unwilling participants. A number of instruments are available to curb cross-border corruption. 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. including the prosecution of companies and governments in the North and tax deductibility of bribes paid by Northern companies in the South. Each corrupt transaction requires a “buyer” and a “seller. The aim. involved and empowered citizenry is indeed essential to any anti-corruption campaign. Additionally. Among stronger measures is the criminalization of bribery. bureaucratic discretion is necessary for effective administration. is not to achieve complete rectitude but rather a Fundamental increase in the honesty. Such a strategy would be likely to create new inefficiencies in government. the demand for reform is being led by organizations of civil society and the International donor community. Reformers can only achieve real gains when a Society changes its expectations and understanding of its entitlement to a government that is not corrupt. SATISHCHANDER . efficiency. WHO IS RESPONSIBLE? Ultimately. government leaders’ politicians and bureaucrats’ must provide the political will to address all forms of corruption. and fairness of government.
Despite these common characteristics. and a benefit. The actors amenable to leading or supporting reform also vary significantly from country to country. they are weak and unaccustomed to having a ‘voice’ or speak authoritatively to their government. In the case of bribery. or neutralized. For instance. the private sector and other elements of civil society are well-organized and poised to assume an assertive role. For corruption-extortion or bribery-to take place. Corruption most likely will occur in the interaction between the public and private sectors. All of these factors dictate the importance of carefully choosing the strategy and entry points for anti-corruption measures. corruption takes on very different features from one place to another. even if they are caught. in others. in money or in kind. 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. it occurs in all countries regardless of the level of social and economic development. In other Countries.CULTURE OF CORRUPTION IN INDIA 19 3. the failure to pay a living wage lies. apply or enforce specific regulations. income tax collection. in some countries. public servants still engage in corrupt behaviour despite adequate pay. elsewhere the judiciary is suborned. customs duties. there is also collusion between the dishonest official and one or more public or private officials. Still. Corruption flourishes in different places in different forms including: land Re-joining. to all parties involved. Others have politicians who create legislation that seems designed to render corrupters free from prosecution. there must be a public official with discretionary power followed by a misuse of that power. promotions. and many more. In some countries. or levy fees or taxes. at least in part. at the root of the problem. SATISHCHANDER . and non-merit based appointments. Corruption has a freer rein in some countries than in others. And it is generally practiced by public officials who have direct responsibility to deliver services to the public. IS CORRUPTION GLOBLE TYPOLOGY? Corruption does have some common characteristics. For example. acquiescent. Some Developing countries enjoy the rule of law and benefit from an independent judiciary that conscientiously reviews the legality of official actions. Some governments have incentives that encourage law enforcement officers to be willing partners in anti-corruption activities.
More and more development experts have come to the conclusion that it is impossible to alleviate poverty without first curbing corruption. can directly support civil society’s efforts. This framework allows for activities in which the Bank and IMF can advise countries on economic policy reform and strengthening institutional capacity. as a lender to governments. policy dialogue. corruption can be addressed by World Bank and IMF staff as an economic Concern within the framework approved by the Board for governance issues. there are limits on the extent to which the Bank. -Helping countries that request support in their efforts to reduce corruption. and though civil society is crucial to sustaining reform. However. -Adding its voice and support to international efforts to reduce corruption. -Greater consideration of corruption in country-assistance strategies. 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. 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. IMF and the international community in general. SATISHCHANDER . analytical work.CULTURE OF CORRUPTION IN INDIA 20 4. The new approach presented in this book is founded upon the premise that corruption is a major hindrance to economic development. 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. More specifically. the Bretton Wood organizations’ mandate do not extend to the political aspects of controlling corruption. country-lending Considerations. 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.
” is the flip side of fighting corruption. as well as. is to help client countries curb corruption and build integrity. The program dovetails with other reforms such as: Public Sector Management program. 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. and the judiciary -and of civil society. SATISHCHANDER . improve their public services and create an enabling environment for the private sector. 5. prevention. research and dissemination of findings. 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. The model assumes that corruption is a function of weak institutions and of policies that create economic rents.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. that strengthen the rule of law Building “integrity”. Prevention an important tool for fighting corruption The approach presented in this paper is essentially holistic. particularly by strengthening non-governmental organizations (NGOs) and the media. The majority of donors believe that tackling corruption is less a matter of new instruments than of reducing corruption through existing ones. which suggests a positive. (b) institutional strengthening and (c) international action. The approach to promote good governance through among other things. which focuses on prevention through civil-service reform and public-expenditure planning and management. watchdog and enforcement agencies. and therefore. pro-active preventive approach.(b) building integrity by promoting governmental accountability and transparency. Experience gained from work with client countries demonstrates that it is preferable to focus on prevention through the building of integrity. Legislative reforms to strengthen parliament role in overseeing the executive but also the passing of new anticorruption legislation Legal reforms. and (c)building an prevention and anti-corruption capacity of the public sector-including parliament. The strategy is based on action coming from three directions: (a) economic policy reform. 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. which means “using public powers for the public good. on supporting governance activities.
It is often necessary to explain to partners that what is sought is not merely the curbing of corruption or the improvement of integrity. Three areas of focus combine to promote better delivery of public services. 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. The real impact these programs seeks is improved delivery of public services. A first element is to build systemic integrity within the society as a whole and establish the rule of law. As Shown in Figure 1. against the background of an appropriate macroeconomic framework. established rule of law and creation of an enabling environment for the private sector.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. SATISHCHANDER . A third is to reorient government in order to improve performance or results.
More attention was given to budgets and activities than to the economic outcomes and impacts that would be achieved by these activities. Politicians and employees should be held accountable individually and collectively for fulfilling government’s responsibilities and commitments. 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 . Underlying principles of this new governance strategy A. New Paradigms In the old paradigm. donor agencies preferred to work almost entirely with government agencies.CULTURE OF CORRUPTION IN INDIA 23 6. 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. the general public or civil society organizations as important agents for change. Results were seldom the focus. 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. And government accountability and transparency were not seen as particularly important. Governments and donors alike gave little recognition to the private sector.
To institute accountability and transparency in government. In recent years. more will need to be done because less than two per cent of the population in most developing countries works for the government. Raising Public Awareness Educating and involving the public in building integrity is the key to preventing corruption and thereby the key challenge and the keystone of this holistic integrated strategy and can take different forms: • Public education and awareness campaigns (radio. both internal and external pressure is needed. tools have been developed that can help client ministries and municipalities increase government accountability and performance. 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. Even if leaders are successful in changing attitudes within the government bureaucracy. it has helped clients organize integrity workshops and administer informal surveys involving public sector officials to raise their awareness of the causes and consequences of corruption. TV). Accountability must be generated by a combination of political will from the top and public pressure from the base. media and civil society. involvement and empowerment of the remaining98 per cent of the population. and empower the citizens to Monitor the government through periodic service delivery surveys. • 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. newspapers. C. SATISHCHANDER . • Inform citizens about their rights (Citizens’ Charter). The new governance approach is based on the assumption that increased public sector accountability can only be achieved through the education. How can transparency and accountability be generated? The approach presented in this paper is to help clients change the mind set of public-sector employees. Through its work with client countries.
the sustainable effect of these initiatives are questionable. codes of conduct. The new approach emphasizes the importance of leadership and an integrity mind set among Public servants. and declarations and monitoring of assets. but without a leadership confident in introducing Accountability. The new approach to capacity building encouraged and Pioneered by the Economic Development Institute (EDI) of the World Bank in close Collaboration with TI. Integrity is critical when appointments of key executive or civil service positions are made and is equally important among politicians. Broad Based Capacity Building to strengthen all Pillars of Integrity Capacity building has traditionally focused on expanding government facilities and skills. • Investigative journalism and information by the media. such projects financed infrastructure. municipal and sub-county level. D. equipment and technical skills training. • Dissemination. These activities are important.CULTURE OF CORRUPTION IN INDIA 25 • Production and dissemination of a national integrity strategy and an annual corruption survey at national. involves two major shifts from traditional approaches. Typically. • Production of integrity surveys at the municipal or sub-national level. SATISHCHANDER . transparency and a focus on objectives and results. “Mind set” refers to the outlook and state of mind that policy-makers and Civil servants bring to their jobs. Donors work as facilitators with clients to establish Standards and ground rules for leaders in the public service through the introduction of Leadership codes.
law enforcement agencies. a National Integrity System needs to be built with mutually supportive pillars. LEADERSHIP. WHO ENFORCEMENT AGENCIES. Capacity Building . 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.SKILLS. NGOs and private-sector organizations. CIVIL SOCIATY.WATCHDOG AGENCIES. judiciaries. the focus of donor attention has been on the Executive branch of government. Pillars of Integrity To ensure that there is an enabling environment that is supportive of private. INFORMATION.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. However. PARLIAMENT. Traditionally. A more systemic approach to building integrity and sustainable development requires institutional strengthening of other “pillars” that is. The collection of stakeholder groups is referred to as “pillars of integrity” because it is incumbent on them to support and uphold SATISHCHANDER .JUDICIARY.INCENTIVES.CULTURE OF CORRUPTION IN INDIA 26 INPUT TRADITIONAL CAPACITY BUILDING NEW APPROACH OUTPUT WHAT TOOLS.EXECUTIVE.INTEGRITY. particularly the relating to government ministries. domestic stakeholders both inside and outside government.MEDIA. capacity building focused most entirely on strengthening the capacity of ministries to deliver public services is insufficient. The “pillars of integrity” in a society include actors outside the executive and outside government itself.PRIVATE SECTOR. public account committees.MIND-SET.
the system can no longer support sustainable development and effectively collapses illustrates the inter action of the different stakeholders in combating corruption. Provide a direct link between government and institutions of civil society for research. 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. E. 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. almost generic. inadequate rule of law could turn out to be the critical bottleneck for progress. objectives are identified: rule of law.CULTURE OF CORRUPTION IN INDIA 27 practices that promote public integrity. etc. In the fifteen countries that have embraced the reform effort. and donors into a coherent framework of institutional strengthening.) (7) Civil society (8) Law enforcement agencies The pillars are interdependent. SATISHCHANDER . civil society. A National Integrity System is based on eight pillars of integrity:- (1) Executive (2) Parliament (3) Judiciary (4) Watchdog agencies (5) Media (6) Private sector (Chambers of Commerce. The Role of the National Integrity Unit in Integrating Reforms Develop a systemic approach to building integrity by ensuring the inclusion of Integrity issues in the economic reform agenda. Three broad. 1. a weakening of one pillar results in an increased load being shifted on the others. Where several pillars weaken. The reasons for building an integrity system may differ from country to country. and quality of life. sustainable development.
NGOs. and using Information in partnership with the media. Facilitate integrity-building activities as part of the implementation of the government’s economic and public-sector reform programs. Requesting. integrity-building Workshops and other events.CULTURE OF CORRUPTION IN INDIA 28 2. Information and public awareness-raising 3. Conduct SDSs. 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. The National Integrity Strategy should result in a wide range of reforms that are interrelated and integrated in order to create systemic change. 4. 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. The focus of the strategy is on achieving Specific out comes in the expectation that these will. providing. and citizens. 5. in turn.
However. Customs 1) 2) 3) 4) 5) 6) 7) Review customs precede legislation to strength incompliance. The Champions of Reform in India A ninth “pillar” can be added to the eight organizational or institutional pillars.. Such groups increasingly have the power and influence needed to protect the Institutions undergoing reform from the enemies of reform. 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.CULTURE OF CORRUPTION IN INDIA 29 Each of the outcomes listed in represents a series of integrated activities and outputs. 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 . Ideally. 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. F. and in terms of deregulation as an element of economic/regulatory reform. the nation’s chief executive May be the formal client for governance work while the real champion is another senior Government official India.. in other situations. Depending on the country. this group could be derived from municipalities or youth. 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. 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.
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.
The local community is best positioned to know and understand its particular problems. Government efforts have failed when the confidence and support of civil society were absent. the network of participants.CULTURE OF CORRUPTION IN INDIA 31 Strategy for building integrity A. The potential partner in civil society must be one the government feels comfortable with to enhance creativity. Local Ownership First among key elements in promoting new governance strategy is local ownership. Local actors must drive the process for the very reason that they will be bringing about reform. 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. thus the stipulation that credible donors be invited into a country by government and an organization in civil society. This protects the donor’s objectivity on political issues and ensures that work is directed towards the entire system rather than individuals. There are practical benefits to including an international NGO such as TI in the partnership. An apathetic. Corruption takes a myriad of forms. Such a partnership also helps minimize risks and exposure for the donor in this admittedly sensitive area of activity. and the internal dynamic vary subtly but distinctively from country to country. Local “Ownership” must be rapidly achieved when a pilot governance program is launched. There are various stakeholders in the integrity system and success depends on involving as many as possible. cynical public could undermine even a government’s best intentions. so it is essential to develop broad coalitions supporting reform. There are no standard solutions SATISHCHANDER . It is naive for outsiders to believe they can solve another country’s corruption problems. The Role of Civil Society Civil society’s involvement is a central part of a strategy to build integrity. Having an international NGO as a partner opens avenues into civil society through its contacts with leading individuals and opinion-makers in the country. and the best possible solutions.
The strategy is to demonstrate an approach that can be incorporated into projects and to act as a resource for NGOs and local institutions. Who is paying and who is receiving the bribes? 4. Rather than presenting themselves as policy experts. the donors should work as facilitators.” B.CULTURE OF CORRUPTION IN INDIA 32 that any donor can impose upon or recommend to a country. With a shared understanding of objectives among all the partners and with the process being locally owned and driven. change over time. These facilitators should help governments determine how to manage a change process that results in increased transparency. The donors’ competitive advantage lies in: (a) The knowledge it acquires through its global experience and perspective. accountability and improved service delivery. Action Research Action research refers to learning by doing. There are many questions to be answered. 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. Ultimately. Where is the money going? SATISHCHANDER . which provide baseline data and measure. the objective is to help client countries mainstream integrity so anticorruption practices become institutionalized and systemic. What is the role and impact of bribes paid by companies from the North to civil servants in the South? 2. ranging from formal surveys. (b) Its ability to help identify the questions that should be asked. Various instruments and tools are used. which might include: 1. focusing on the process. One of the strategies is to initiate a process that will lead all the stakeholders to identify their roles and recognize that “they are either part of the problem or part of the solution.
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. The information disseminated about the government’s responsibilities and what it is actually doing empowers the public and increases the accountability of public servants. the following prevention and integrity tools have been developed. countries across all five regions have been chosen. 7. In order to make this learning process as rich as possible. learn from the results as they become available. and adapt each national strategy accordingly. C. 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. adapting to case law and best practice experience in order to improve the strategy’s effectiveness. The Sequencing of reforms is an action-research issue of particular interest to CICP’s and its Clients. opening up government to the public.CULTURE OF CORRUPTION IN INDIA 33 5. The strategy for building integrity systems must remain flexible at all times. The objective of the action-research process is to monitor the performance of different tools and processes within these countries. While these efforts need to be tailored carefully to each client’s situation. Action-Oriented Data Collection Critical to the success and sustainability of the integrated approach to governance is the innovative use of information. Prevention and integrity tools and activities The process of strengthening a National Integrity System begins with a national dialogue followed by national action. While it is too soon to provide clear guidelines. some approaches based upon the Team’s prior experiences have married well with the circumstances of other countries. this element is being studied in each country case. SATISHCHANDER . 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. Data from different surveys and other economic and financial data are made available to all integrity pillars.
CULTURE OF CORRUPTION IN INDIA 34 1. Enforce code of conduct including declaration and monitoring of assets 6. CIET international. The NGO. and other reforms. The Service Delivery Survey (SDS) is an important tool used by governments to provide information about service quality. National Integrity Unit (NIU) A. Municipal and Sub-national Integrity Workshops 4. government clients are better equipped to decide which services should be delivered by the State. The Integrity Pledge 8. Surveys focusing on service delivery 2. 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. If not more important. and quality of each service. External oversight in tender process 5. Equally. developed the SDS methodology and continues to administer the surveys for the government. effectiveness. including information about the cost. The SDS provides essential baseline data and periodic evaluation information to help design civil service. 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. programs to increase the integrity. decentralization. Integrity or corruption Surveys 3. If the information SATISHCHANDER . By obtaining more accurate information about service delivery. National Integrity Steering Committee (NISC) 10. monitor results. timeliness. including factors constraining the delivery of public services. National and Integrity Workshops (NIWs) (broad based action planning) 7. private sector. and efficiency of public management have had limited success. privatization. the SDS cycle employs processes which build local capacity for data collection and analysis. coverage. and NGOs. Service Delivery Surveys (SDSs) In many countries. Islands of Integrity 9.
The basic building block of the community-based data is the household survey. Second. households and service providers are asked about their perceptions of the quality of public services. interpreting findings and planning on the basis of timely.CULTURE OF CORRUPTION IN INDIA 35 leads a government to privatize some services or to ask NGOs to deliver them. Thus. the appropriate number of Local supervisors and interviewers are trained to organize the surveys and analyses the results. relevant information. the methodology is inherently inter-sectorial.g. First. Since households have a wide range of contacts with public institutions (e. All SDSs observe the same guiding principles and methods. existing problems. health. which enables national and subnational public managers and policy makers to do their jobs more effectively. SATISHCHANDER . and institutional reviews. A group of communities is chosen in given region or country. The SDS uses a large enough sample to permit statistical analysis of the survey results data.. The survey results provide valuable information. SDSs do not require highly developed capacities to be in place. which permits comparison between communities over time in order to measure the effect of reforms. and in all cases. A large number of nationals are trained to sustain the process. The SDS process provides data for sub-national levels (such as regions and districts) as a basis for rational planning at these levels. The SDS process involves a number of steps. It builds skills among planners and decision makers at local levels in the process of designing surveys. taxation. The quantitative data is supplemented with qualitative data collected through focus groups. the results are shared and interpreted by focus groups comprised of both the households and the service providers. the survey is conducted. Several survey cycles are required to build local capacity sufficiently so that future surveys may be conducted independently. roads and police protection). 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. By emphasizing analysis and communication capacities. Finally. After the data is collected. and ways to overcome the problems. collecting data. capacity building is a central theme. the surveys will also give the agencies responsible for the out-sourcing excellent information to manage the contracts. SDSs can contribute substantively to national capacities for evidence-based planning. workshops bringing all key stakeholders together are conducted to build consensus and find acceptable solutions to service delivery problems. Next. instead. key informant interviews. it develops from and along with national capacities. An SDS supplements existing institutional data with community-based data.
A pilot cycle was run in ministries (urban transportation. with donor support. One way of doing this is to conduct an annual bribery survey similar to the TI SATISHCHANDER . New laws. B. instruments. In each country. and outcomes are different and reflect the particular country’s context. and needs. effectiveness. and their suggestions for improvements. These additional “pressure points” outside the civil service should increase the accountability of the public sector and may lead to improved efficiency. The information gathered was used to raise the awareness of designers of an institutional development Program to improve service delivery. By contrast. enforcement remains one of their biggest challenges. capacities. which examine many aspects of service delivery and identify multiple reasons for inefficient and ineffective delivery. 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. with smaller surveys focused specifically on corruption. in Mali. can play an important role in helping reformers to monitor the effectiveness of enforcement measures. For most reformers and governments committed to change. Regionally. and customs services) that opted into the reform program. environment. SDSs were used further up-stream in program development. The SDS was part of an effort financed by donors to reform public administration.CULTURE OF CORRUPTION IN INDIA 36 Survey results are used in different ways by different stakeholders. 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. They can also be used as part of an anti-corruption enforcement strategy. and responsiveness. NGOs such as TI. Survey questions dealt with specific problems that public-sector manager shad identified. the objectives. client countries have found it useful to complement the extensive Service Delivery Surveys. Integrity Surveys Since 1997. 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. With the growing realization that an assessment of public-service delivery should consider the private sector. rules and regulations serve little purpose without an adequately funded and staffed enforcement strategy. the SDS compares public and private services and highlights the areas where the public and private sectors interact. which services were most important to them. 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. which ones had problems. a representative sample of households were asked open-ended questions about their contact with government services.
parliament. In small discussion groups. these small groups are then encouraged to apply lessons learned and prepare an action plan. Examples of these activities include:- -the declaration and monitoring of assets as occurred in Tanzania. When this was done in Tanzania.CULTURE OF CORRUPTION IN INDIA 37 Index. 60 per cent of the proposed actions in the plan were accomplished within a year. strengthen enforcement. media.Payment of adequate wages. In addition to the formal integrity surveys. Delivery is by facilitating actions and promoting reforms that increase accountability and transparency in institutions and among stakeholder groups. civil society. With a contextual understanding of the problem. raise public awareness. 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 build (or strengthen) institutions. the judiciary. External actors can facilitate the process. and others. The objective of an NIW is to promote better public service. C. but the dialogue and its results must be developed and therefore owned by the local stakeholders. the participants identify and form a consensus about where and how corruption affects their society. The NIW assembles representatives of all the major stakeholders or integrity pillars in society: the executive branch of government. Follow-up activities may aim to help prevent corruption. and international experiences and best practices in controlling corruption. -the establishment of Citizens’ Charters. . SATISHCHANDER . informal participant surveys are sometimes Included as part of an integrity workshop or symposium to draw attention to a particular corruption issue. papers written by representatives of each of the “integrity pillars” describing how corruption is present in various stakeholder groups. The workshop can start with a presentation of the SDS and Integrity Survey data. watchdog agencies.
and Ukraine). 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. Awareness-raising activities include: -dissemination of survey and workshop results to the media (Tanzania. 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. -a media campaign and public-education program about corruption (Tanzania. including the political opposition.). Uganda. -prepare an outline drawing on best practice that can serve as a basis for informed public discussion and political debate. and -concrete expression of political will A series of two or more NIWs is useful in building a National Integrity System. especially within the OECD. the issues of integrity and ethics and their relation to corruption control are addressed. 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. During the initial workshop. the facilitators describe their experience in working with societies addressing comparable problems and actions taken internationally. and Ukraine). SATISHCHANDER . Specifically.CULTURE OF CORRUPTION IN INDIA 38 -The re-enforcement of anti-corruption laws (on election financing. 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. The workshop develops a general outline of a National Integrity System within the guidelines of the country. Uganda. gifts for civil Servants. etc. As part of this dialogue. -The strength inning of the court system and the police. to constrain transnational corruption and its impact on countries in the South.
The integrity workshop model marshals the ideas and resources of key stakeholders by inviting them to contribute to the proceedings as equal partners. Accountability and value for money. -establish ownership and commitment of the participants to the conclusions and an action plan. transparency. B. Seek agreement on the importance of an improved service delivery system to increase the efficiency and effectiveness of delivery. They want to know residents ‘opinions of the services provided. 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. 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. A review of progress made on an earlier Action Plan. An Integrity Pledge that expresses the consensus of the workshop on the issue of corruption. This is done through a Municipal Integrity Workshop. A National Integrity Action Plan by the end of the workshop. 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. D.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. and enhance the image of the municipality. Introduce the idea of a Local Integrity System to enhance accountability and transparency. find out where corruption may be siphoning resources. Municipal and other sub-national workshops are part of a four-phase program to introduce a Municipal (or subnational) Integrity System. It also emphasizes the production of tangible outputs:- A. effectiveness. SATISHCHANDER . Phase II focuses on carrying out an SDS directed at specific areas of concern.
Being Held accountable for decisions made at the workshop makes participants role models for accountability throughout the country. The results of the Local Integrity Action Plan can be measured in terms of progress made in building a Local Integrity System. Of particular importance is the extent to which the plan has been implemented. 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. the municipal or other sub-national workshop should Produce tangible outputs. Each stakeholder should be encouraged to self-assess the outputs and outcomes achieved by the organization. changes in revenue collection. introducing a Code of Conduct and periodic appraisals of the SATISHCHANDER .g.Measuring results may show progress in terms of “outputs” (e. monitoring and evaluation. Phase IV involves implementing the action plan according to the agreed timetable. Regularly repeated SDS will provide outside confirmation of changes in public-sector performance and of the factors that are responsible for these changes. Integrity surveys can provide additional information on the extent to which the public perceives that corruption has been curbed.. which expresses the consensus of The workshop about corruption. Other indicators of progress can be established at the Municipal Integrity Workshop (e. changes in foreign direct investment. media coverage of corruption. 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. including: (a) an Integrity Pledge.g. or evidence of successful prosecutions for corrupt practices). Drawing on the SDS findings. the results of the SDS are presented at a second Municipal Integrity Workshop and an Action Plan is drafted.
4. 2. 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. Action Plans Translating dialogue into action is a critical step in the process of building a National Integrity System. E.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. SATISHCHANDER . Defining the roles of relevant actors (donors. NGOs. and other integrity pillars). More specifically. Workshops for ministers have similar objectives. these workshops aim at: 1. which focus on corruption as seen from their perspective and what it means for them in carrying out their public roles and responsibilities. 3. Special Integrity Workshops for Each Integrity Pillar Special workshops have been held for peer groups. Occurrences of ministerial indiscretions being vaguely defined and being defended as being “in the public interest” are all too common. making participants appreciate the detrimental effects of corruption. whether they are a National Integrity Action Plans. The sustainable “impacts” of these changes in terms of less corruption and improvements in public services overall will be influenced. For example. Assisting/facilitating local authorities in setting up Local Integrity Systems. 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. Fostering discussion of what will be needed to set up a Local Integrity System with all Integrity pillars. F. To give one example. however. The same principles apply to all action plans. by factors (such as wage scales and offers of bribes from the private sector) beyond the control of a particular municipality. municipal or other sub-national action plans. 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.
which proved successful in the INDIA reform efforts.Select actions where the participants have authority to change things . can be used. As a third principle. the civil service. Public opinion surveys. government departments. and professional Associations among other groups. prosecution agencies.Pick areas that are visible and important to the public . public procurement agencies. The action plan should be endorsed or issued by an executive commission. 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. staggered events. Fourth. and enforcement Expectations must be managed carefully to ensure that promises are realistic. a major effort must be made to draw civil society into the process in imaginative and Constructive ways. any action plan should call for major initiatives in four separate areas: awareness-raising. for example. a high level of co-ordination within the government will be needed as actors and Stakeholder execute the program. Second. A time table with benchmarks. will typically involve the auditor-general’s office the ombudsman’s office. to be successful. Donors can help organizations achieve reform by providing resources. the effort must be wholly owned and driven by the subject country. 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) . prevention of corruption by minimizing opportunities and increasing risks of detection. The process of devising a National or Local Integrity Action Plan is event-driven. both top-down and bottom-up. that some changes are made quickly and that they are communicated to the public to maintain their confidence in the process. Stakeholders should be held accountable for achieving results. In particular.CULTURE OF CORRUPTION IN INDIA 42 First.Pick action items that you can afford to implement SATISHCHANDER . space and protection. institution building. and monitoring schedules is necessary but there should be some room for flexibility. the country’s political leader and his/her deputy play a central role in setting the Tone and asserting moral authority. Implementing the national action plan.
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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
which was introduced so successfully in Hong Kong.CULTURE OF CORRUPTION IN INDIA 47 perception seemed to be that matters were getting worse. in some countries we have seen municipalities start to realize that there is space for them to reform local practices. and work well. respectable and respected future as a member of the U. Added to this there was a working judiciary and a pool of well-paid. Instead there was a Prime Minister who was well-paid and ruthlessly determined to rid the country of corruption. highly professional Investigators and prosecutors to conduct enforcement work. What was it about the Asian model that helped it succeed there. and thus could sustain the shocks of a police strike and an enforced partial amnesty being granted for past sins which shocked the populace and might well have brought down a popularly-elected government. The 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. The country was undemocratic. not better. Mayors are starting to develop strategies. with no family or business links into the local scene. and again it worked. Thus. although the Commission (actually an Agency) was accountable to the Prime Minister (and formed part of his office). pointing to other lessons. There was also determined to see the experiment succeed and so honoured the independence of the Commission. Africa? The Hong Kong environment was an ideal one for the Commission approach. 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. The same ingredients were there. with the exception of an outsider as head of government. drawing civil society watch-dogs into the frame to inform and to authenticate the processes. There was a head of government (a Colonial Governor) from outside the colony. and there will be many interesting insights gained at the local level in the coming months. 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). We have also seen very starkly that what will work in one country.g. may be wholly ineffectual in another. 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. Singapore took the model. Yet when the same models SATISHCHANDER . particularly to information management being essential). He was well paid and could look forward to a comfortable. even though this was nominally accountable to himself. House of Lords. The most outstanding example of this would be the Independent commission Against Corruption. and copied with a high degree of success in Singapore.K. which he had identified as the major barrier to the country succeeding. whilst failing dismally in e.
and many of those working in the public sector were poorly paid. As the Vice President of Uganda remarked to donor mission. In both countries the resources available for the agencies were grotesquely insufficient. By contrast.CULTURE OF CORRUPTION IN INDIA 48 were established in Africa they undoubtedly failed. The development in Botswana are too recent for us to be able to judge the success of the reforms. This. highlights the problem of transition. Botswana—an African country well-run. inadequately motivated and professionally lacking. 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. courts were unpredictable to say the least. the rule of law was far from entrenched. the money would have vanished and the story would have ended then and there). “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. It tried to resolve these at times by bringing in expatriates to head the office. Zambia is another country that had a similar problem. hugely disruptive and the state lacking moral authority to act—how does one achieve an amnesty. a Commission was established under the Hong Kong model and a former Deputy from the Hong Kong ICAC brought in to run it. who are corrupt at the lower levels. east or south. its reports simply disappeared into a black hole. well-resourced and where the rule of law was functioning—adopted the Hong Kong model after scandals involving ministers had been uncovered. The Prevention of Corruption Bureau in Tanzania was been blunt about political interference in its work. north. then. 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. once the unquestionably “clean” Julius Nyrere stepped down as president. 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. but these departed in situations surrounded by controversy. Reporting to the Office of the President. So if prosecution for all past transgressions is not a viable option—too many people. 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 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. but without doubt the presence of ethical leadership at the highest levels of government have played a significant role in the achievements to date. Quickly.
Hong Kong introduced the offence of a civil SATISHCHANDER .g. which requires that all assets be declared but then goes on to exempt just about everything imaginable). But for the monitoring of assets to work there must be several thresholds met—the declarations must be true and correct (and so able to serve as a benchmark against which future assets can be measured). the whole exercise is valueless. There are many legislatures who have been going through motions of one sort or another. 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. whether through unnecessary foreign travel. with legislators notorious for their male chauvinism suddenly becoming advocates of the rights of wives to earn and hold wealth separate and apart from. and the immediate family of the of the official must also be covered in appropriate ways (the debates in legislatures are wonderfully instructive. Rationally one can explain why this might be necessary. The same questions overhang another simple reform. the chances are that he will have (perhaps have been forced by economic circumstances to have) augmented his income in irregular ways. 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. the procedure must be such as to deter people from making false declarations (e. If a person has survived for some time in a systematically corrupt environment and risen to a position of prominence. “ghost” up-country trips or simply servicing his private car in the public service garage.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. it might be. 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”. And if they do not complete the forms correctly. whether publicly or privately. soft on the causers (sic) of crime”. or they must be Accessible to the press and the public to enable civil society to do its own monitoring). This is now widely seen as the key to unlocking the anti-corruption chest. There are very real problems. Indeed. and unknown by. An alternative approach—or a supplemental one—can be the introductions of systems whereby senior decision makers declare their assets. etc. 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. They must be subject to random audit if they are made in confidence. 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. their spouse). This means that anyone filling out a declaration of assets will in effect be declaring that they possess illicit wealth.
The crowd roared with mirth when the name of a person long dead was listed as a paid labourer. A public hearing.CULTURE OF CORRUPTION IN INDIA 50 servant “living beyond known means”. unless and until he or she can Produce an affirmative defence and show that the wealth came from licit sources. In building accountability between officials and the public they are meant to be serving. SATISHCHANDER . The Indian village of Surajpura is a long way from Washington D.C. The accounts listed some as being paid who had not been. Why not? 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. This has proved powerful in Hong Kong. Others suggested that payments had been made for materials that were never used. Now an NGO. But again. Schools. landmark legislation itself the culmination of a 53-day hunger strike. even more potently. 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. 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. It was not necessary to show a corrupt act. the Mazdoor Kisan Shakti Sangathan (MKSS) is taking that information to the people. 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. 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. Some showed inflated bills. an EDI/TI team was told that the provision was “a bit harsh “and that “we do not like it very much”.. A crowd soon gathered and most stayed for the next six hours. more and more started to ask questions and to identify a wide range of frauds. drainage and sewage schemes and other projects were looked at and as confidence among the crowd grew. in Africa the provision has been enacted but there have been no prosecutions. both by the use of surveys and. Singapore and Malaysia to name three. on 19 January 1998 in Surajpura village began with a puppet show dealing with the abuse of development funds by politicians and government functionaries. The Government of Rajasthan recently recognized the people’s right to access to official documents at the local level. attended by village leaders. yet access to information—which forced President Nixon from office in the USA after the Watergate Tapes become public—proved no less potent there.
At its end. the meeting was surprisingly constructive and orderly. made possible through skilful facilitation by MKSS and its success in persuading officials that they really had no alternative but to take part. Aside from being a creative exercise in government for the people by the people. These may seem small victories. A particular challenge for the outsider is to identify the appropriate (and clean) partners in a given country.CULTURE OF CORRUPTION IN INDIA 51 Throughout. 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. First. Unpaid workers and suppliers were promised payment. there are also as many challenges. the question is the sequencing of reforms. providing as it does an opportunity for all stakeholders to participate in a process that otherwise tends to be dominated. 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. 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. for no good or compelling reason. 9. 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. but not just yet. CHALLENGES AHEAD If there are many unanswered questions. by lawyers. Just how do we get there? The answers are coming. Overall. It is in this context that the “national integrity system workshop” can be most effective. but actually working out precisely where to start in the process is an important one as it will dictate much of the path ahead. 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 meetings are small but significant steps towards a transition from representative to participatory democracy. some even agreeing on the spot to return money where personal liability had been established. We know where we want to be. The looted money then helps pay for the buying of votes and so distorts democracy as well as development. This will differ from country to country.
The traditional form of expert aid—a foreigner flying in for a short period. 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. in particular. too. The more conspicuous is the role of the donor. So donor organizations must re-examine their own practices. should and do fund. both as part of the problem and as part of the solution. defined. Whatever may have been the position in the past. doing a job and going—has been conspicuous by its failure to achieve sustainable development. need to be identified from the outset. The donor community can. most countries now have the human resources to tackle their own problems. but it is essential that these be locally owned and driven. supportive and facilitative. unfair some may think this to be. SATISHCHANDER .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. 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. An institution lacking in trust will not. And as part of the solution there are activities which donors can. And at the heart of credible institutions lies their manifest and popularly-accepted integrity. a word of encouragement. both as complainants and as witnesses. The credibility of enforcement and watchdog agencies is crucial to the building of public trust and confidence. Credible agencies will attract public co-operation. but they may need access to information. and the base line of acceptable (or perhaps better described as tolerable)conduct which the people are prepared to live with. it is a perception that is very real.) the less likely the efforts are to bear fruit. This dictates a Special role for civil society in a country from the very outset so as to ensure that the reform process is fostered with the right “champions”. something which many have been doing. However. The donor community also has a significant role to play in developing countries. at times. the tools they need to undertake the job and. (dominating small group discussions etc. Thus the donor’s role is to be low key. and to tolerate the misappropriation of public funds to suit their own ends. Their leaders must role model conduct of the highest kind. And in many instances there is substance to the complaint. The road blocks.
constitutional reforms. and pruned from.CULTURE OF CORRUPTION IN INDIA 53 And they can help stress a focus on the bribe giver. economic reforms. 10. and the final one is information sharing. decentralization. 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. And we would conclude with an invitation to others to join in this project as being one from which all can benefit through sharing. 2) Reform is a long-term process where attitudes and conduct must be examined and reevaluated for effectiveness at all levels. This is particularly the case in so-called “grand corruption”. 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. The “hand that gives” must also be addressed at the national level. CONCLUSION The process of building national integrity systems is as important as the content. 1) Successful reform requires a country to integrate and harmonies all reforms in to a National Reform Program. This is not an area in which “experts” should develop stand-alone and discreet information bases. The following are six final thoughts about the process. privatization. and not just the bribe receiver. civil-service reform. financial reforms. SATISHCHANDER . This will be added to. as experience grows. Frank acknowledgement of the role of the rich countries in contributing to the present decline. and legal reforms. army demobilization. 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. including: sector reforms. 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. There are many lessons to learn.
The growing realization that the private and public sectors should be examined supports efforts to develop effective. 5) Reform is a process of instituting building blocks that must be put in place over a number of years. They play an important role in measuring the places where the private sector interacts with the public. and political welfare. but the strategy must remain adaptable. The so-called Service Delivery Surveys (SDSs). It is dependent upon the people’s loyalty to its philosophy and policies regarding the development of the society’s social. 4) Initially. more analyses are needed to assess the relative advantages of decentralization and the process for the efficient delivery of public services. are in the latter category and are consequently expensive. which are Often more relevant and easier to sell to other countries in the same region. economic. As decentralization becomes a growing priority. Some the anti-models based upon the governance group’s prior experiences have been effective. The model should change as “case law” or best practice experience increases with the final objective being improved effectiveness. These ten country examples are important since they act as regional examples. actionoriented information-gathering procedures. (c) that are discrete and where reformers can control implementation. reform should only tackle areas: (a) that can show credible impact on issues Important to key stakeholders. 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. Surveys help establish baseline on which to judge progress. SATISHCHANDER . 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. At the heart of successful reform is the State’s.CULTURE OF CORRUPTION IN INDIA 54 3) Successful reformers will have to manage both expectations and change while introducing realistic incentive structures and sanctions. (b) where the return on investment is greatest. 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. done in partnership with CIET International. to ensure effectiveness. much of the governance work should be done at the sub-national level. (d) that are within the budget. and(e) that can have some short-term positive impact. such as the case of the TI survey. However.
Montinola and Jackman 2002). on average. The Heterogeneity/ Fractionalization Hypothesis India. linguistic and religious diversity3. Thus a discussion about the effects of heterogeneity on corruption applies quite well in the case of India.16 billion inhabitants. incentives are reduced for politicians and bureaucrats to engage in rent-seeking behaviour. Hypotheses of corruption Additional Literature and the Hypotheses 1. 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). Christianity. Due to the greater likelihood of being caught. be less corrupt. Alt and Lasson 2003. Citizens are more apt to back a politician that is of their SATISHCHANDER . regions or countries with higher levels of ethno-linguistic fractionalization might reduce the Like LaHood that citizens will oppose or penalize corrupt public officials.CULTURE OF CORRUPTION IN INDIA 55 11. As Mauro (1995) argues. It has two major ethnic groups (Indo-Aryan and Dravidian). Numerous studies have shown strong empirical support for the impact of income and education on corruption (Treisman 2000. 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. La Porta et al 1999. Essentially. a country of 1. Buddhism and Sikh) 4. is a country with high levels of ethnic. 2. The higher levels of wealth also give more citizens the resources to mobilize and take action against corrupt public officials. 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). We would thus hypothesize that regions in India with greater levels of education and affluence. 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. Islam. would. 15 official languages and at least 5 major religious (Hindu. This sentiment is essentially echoed by Huntington (1968).
4. The argument as to why these two forces are related is rather straight-forward. 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). We would thus expect that. you and Khagram (2004) show that in democracies. we would anticipate that on average. 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. more of the citizens will of course be poorer. In response to redistributive pressures. inequality and corruption are expected to be related. Additionally. 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). In this scenario. Based on this. which should compel them to pressure the state for greater redistribution.CULTURE OF CORRUPTION IN INDIA 56 religion or ethnicity and in return. India is a long-time federal system with state-level SATISHCHANDER . the greater number the poor. 3. La Porta et al 1999.on corruption is a hotly contested topic. Gyimah-Brempong 2002) and others showing support that inequality increases corruption. The Effect of Decentralization on Corruption The impact of decentralization – whether political. religious or linguistic group. leaders of various groups might be more inclined to allocate resources in a systematically unfair way to benefit their own ethnic. ceteris paribus. greater diversity is associated with higher levels of corruption (Alesina et al 2003. the wealthy have greater incentives to engage in political corruption to avoid paying higher tax along with bureaucratic corruption to avoid tax payments. 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. Several studies have found evidence suggesting that on average. In areas that are more unequal. Further. which would come from taxing the wealthier class (Meltzer and Richard 1983). higher levels of income inequality in Indian states are associated with higher levels of corruption. Income Inequality Hypothesis Although admittedly it is next to impossible to distinguish a distinct causal direction between these two variables. in particular in democratic states (You and Khagram 2004). the more opportunities for vote buying during a political campaign. with some finding that corruption has a positive effect on income inequality (Gupta et al 2002. Several recent studies have demonstrated a significant relationship between these two variable. financial or administrative .
centralized system. Today it contains a total of 28 states and 7 unit territories. 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. thus building a population that is better suited to monitor and penalize corrupt behaviour in the public sector. Tanzi (2001) and others argue that fiscal decentralization might lead to greater levels of corruption. India provides an excellent test case in that there are substantial variations in the level of decentralization – especially fiscal decentralization – among the states. Fisman and Gatti (2002) and Gurgur and Shah (2005) find empirical evidence for greater levels of decentralization being associated with lower corruption levels.CULTURE OF CORRUPTION IN INDIA 57 elected official and parliaments which are represented by both national and regional parties. variations in press freedom are expected to be low to non-existent across regions. especially in developing countries. one might expect that states with higher levels of media consumption might have a more informed public on political matters. Each state is primarily responsible for issues such as law enforcement. However. the greater the political or fiscal decentralization. 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. However. Moreover. Ahrend 2002). Since this analysis is examining a sample of state within one country. the closer the voters come to their politicians. On the one hand. public works and services. On the other hand. ceteris paribus (Brunetti and Weder 2003. 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. 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. most of the tests of this hypothesis have been conducted using national level data on corruption and aggregated levels of decentralization. encourage responsible governance and reduce corruption. Gerring and Thacker (2004) find empirical evidence in a cross-sectional study supporting this argument with respect to political decentralization. thus voters do become more confused regarding to whom they should assign blame for corrupt politics. education. Lindstedt and Naurin 2005. most of which under the States Reorganization Act in 1956 were draw around linguistic lines5. 5. and hospital care within their borders. who should increase accountability. At the provincial level. the lines of responsibility are more blurred than in a strict unitary. 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.
Transparency International estimates that truckers pay US$5 billion in bribes annually. 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. embezzlement. 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. supported the transition towards a market economy and transformed the economy. Corruption in India Corruption is widespread in India. she also publicly stated "nonchalantly" that "corruption was a global phenomenon" and her government was no different.2% in 2007and 9. evasion of tax and exchange controls. CULTURE OF CORRUPTION IN INDIA 12. Overview Although former Prime Minister and Congress party leader Indira Gandhi is quoted as saying that corruption is a misuse of power. The year 2011 has proved to be a watershed in the public tolerance of political corruption in India. In India. its growth has been uneven across social and SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 58 B. economic liberalization in India has reduced red tape and bureaucracy.6% in 2006. though the Indian economy has become the 6th largest in the world. Since 1991. In 2010 India was ranked 87th out of 178 countries in Transparency International's Corruption Perceptions Index (3.3). However. etc. Political and bureaucratic corruption in India is major concerns. corruption takes the form of bribes. 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. with record growth rates of 9. Corruption has taken the role of a pervasive aspect of Indian politics and bureaucracy.
and immigration.86 billion) between years 2005 and 2006.4 trillion) in the form of black money. India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (approximately USD 1. whereas all the corrupt ones. even as the Enforcement Directorate (ED) probes US$8 billion worth transactions allegedly involving suspected money launderer Hassan Ali Khan. Indian-owned Swiss bank account assets are worth 13 times the country’s national debt. "including human trafficking. unutilized committed external assistance was of the order of Rs.339 crore.” In a most recent example of corruption. It seems as if India is a rich country filled with poor people". are well known.000 crore (US$24. It seems as if only the honest people are poor in India and want to get rid of their poverty by education. This amount is enough to fund the national drinking water project in all the six lakh (600. The Comptroller and Auditor General of India said. like Hassan Ali Khan are getting rich through scams and crime. “As on March 31. with sections of society experiencing some of the highest levels of poverty in the world. the organizers of Dandi March II in the United States said. perceptible in public sector inefficiencies and inadequate infrastructure. “The recent scams involving unimaginably big amounts of money. 2010. such as the 2G spectrum scam.CULTURE OF CORRUPTION IN INDIA 59 economic groups. India has more black money than the rest of the world combined. It is estimated that more than trillion dollars are stashed away in foreign havens.000) villages in India for the next 10 years. The cost of corruption. Endemic corruption contributes to this uneven distribution of wealth. rape and even murder". To put things in perspective. 05. Criminalization is also a serious problem in contemporary Indian politics. immigration rackets. evidence available with a news source in India shows that he had transactions of over Rs 112. while 80% of Indians earn less than 2$ per day and every second child is malnourished. embezzlement.1. SATISHCHANDER . In July 2008 The Washington Post reported that nearly a fourth of the 540 Indian Parliament members faced criminal charges. is undermining efforts to reduce poverty and promote sustainable growth. According to the data provided by the Swiss Banking Association Report (2006). emigration to cities.
and corruption emerged almost as an illegitimate price mechanism. State Assemblies. These were largely distortions created by the politico-economic regime. such that scarce resources could still be allocated within the economy. however. The unpublished annexures to the Vohra Report are believed to contain highly explosive material. and by design. procedures are complicated SATISHCHANDER . some of the distorted cultural norms that took hold during the earlier period are slowly being repaired by the sheer forces of competition.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. power-hungry politicians. There is a lack of transparency in governance rules. submitted by the former Indian Union Home Secretary. Forms of Corruption Most reports and studies emphasize that the country continues to face major governance challenges. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. protectionism. N. and even the Parliament. Vohra. a shadowy quasimarket. when the License Raj held sway. It revealed that political leaders had become the leaders of gangs. all kinds of free market mechanisms were hobbled or stymied. While a sea change has occurred in the years following 1991.N. politicians and bureaucrats in India. and decisions could get made. and public ownership. particularly pre-1991. leading to pervasive corruption and slow growth. They were connected to the military. License Raj was often at the core of corruption. According to Jitendra Singh. It also discussed criminal gangs who enjoyed the patronage of politicians — of all political parties — and the protection of government functionaries. "in the bad old days. The Vohra Report. The economy was subject to extensive regulation. The process will be long and slow." One of the major problems and obstacles to development that many developing countries face is corruption by greedy. studied the problem of the criminalization of politics and of the nexus among criminals. which is endemic in certain parts of the world. It will not change overnight. in October 1993. Over the years criminals had been elected to local bodies.
graft. Political corruption Political corruption is the use of legislated powers by government officials for illegitimate private gain. and embezzlement. literally meaning "rule by thieves". Worldwide. bribery alone is estimated to involve over 1 trillion US dollars annually. A state of unrestrained political corruption is known as a kleptocracy. journalists are harassed for reporting on corruption and recent years have seen an increase in off-the-books campaign finance arrangements. patronage. and human trafficking. money laundering. Neither are illegal acts by private persons or corporations not directly involved with the government. an exclusivist process of decision-making. Nepotism is embedded in the civil service. certain political funding practices that are legal in one place may be illegal in another. Political corruption and corruption scandals involving high ranking officials and ministers periodically hit the headlines. nepotism. Forms of corruption vary. poorly-paid civil servants and the absence of effective internal control mechanisms. extortion. but include bribery. In some cases. is not considered political corruption. which make it difficult to distinguish between legal and illegal actions. For instance. government officials have broad or poorly defined powers. undermining the legitimacy of democratic processes and citizens’ trust in public institutions. and one to take it. While corruption may facilitate criminal enterprise such as drug trafficking. The country is further characterized by rigid bureaucratic structures. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties. Either may initiate the corrupt offering. The activities that constitute illegal corruption differ depending on the country or jurisdiction. it is not restricted to these activities. a customs official may demand bribes SATISHCHANDER . Types Bribery A bribe is a payment given personally to a government official in exchange of his use of official powers. such as repression of political opponents and general police brutality. Bribery requires two participants: one to give the bribe. overly centralized government.CULTURE OF CORRUPTION IN INDIA 61 and the bureaucracy enjoys broad discretionary power. Misuse of government power for other purposes. for example. cronyism.
giving. Political campaign contributions in the form of cash. skim. property. They may also be demanded in order to bypass laws and regulations. advantage. is an act implying money or gift given that alters the behavior of the recipient. lucrative contract. vote. object of value. or influence of a person in an official or public capacity. preferment. In some developing nations. or promotion (rise of position/rank). Bakshish is more akin to tipping. 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. Bribery. for example. sponsorship/backing. favor. perk. inflated sale of an object or property. free ad. good. discount. is considered bribery in some societies. fund raiser. higher paying job. SATISHCHANDER . However. receiving. waived fee/ticket. no financial incentive). bribes are referred to as "mordida" (literally. emolument. a form of corruption. in Arab countries they are Baksheesh or Bakshish.CULTURE OF CORRUPTION IN INDIA 62 to let through allowed (or disallowed) goods. sweetheart deal. free tickets. Expectations of when a monetary transaction is appropriate can differ from place to place. or a smuggler might offer bribes to gain passage. or merely a promise or undertaking to induce or influence the action. are considered criminal acts of bribery in some countries. Bribes may be demanded in order for an official to do something he is already paid to do. right in action. In addition to using bribery for private financial gain. up to half of the population has paid bribes during the past 12 months. stock options. campaign contribution. while in others the two concepts may not be interchangeable. "bite"). free food. One must be careful of differing social and cultural norms when examining bribery. making it extremely difficult for individuals to stay in business without resorting to bribes. while in the United States they are legal. privilege. kickback/payback.e. In some countries the culture of corruption extends to every aspect of public life. grease money. funding. gift. for example. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering. secret commission. free trip. The bribe is the gift bestowed to influence the recipient's conduct. Tipping. It may be any money. they are also used to intentionally and maliciously cause harm to another (i. In some Spanish-speaking countries. Forms of bribery Many types of bribes exist: tip. donation.
or "commission occultes" ("secret commission" or "kickback"). but according to the Transparency International corruption perception index. The offence may be divided into two great classes: the one. "wine-pot"). In German the common term is Schmiergeld ("greasing money"). in the course of his employment. SATISHCHANDER . "pot-de-vin" (literally. Bribery around the world is estimated at about $1 trillion (£494bn). kick-back etc. The moment a new queen is crowned. For example. a partial payment made between the buyer and seller. a bribe may be effectively extracted from the person paying it. the expression "dessous-de-table" can be often understood as a commonly accepted business practice (for instance. Bribery may also take the form of a secret commission. The Slug Queens set the rare example of creating an environment where bribery is both accepted and encouraged. the other. The forms that bribery takes are numerous. needless to say. In Eugene. While the last two expressions contain inherently a negative connotation. the briber might hold a powerful role and control the transaction. although this is better known as extortion. Euphemisms abound for this (commission. or in other cases. this is a good way to launder money).) Bribers and recipients of bribery are likewise numerous although bribers have one common denominator and that is the financial ability to bribe. a citizen seeking paperwork or utility line connections might bribe a functionary for faster service. a motorist might bribe a police officer not to issue a ticket for speeding. the old queens. Likewise. who are the judges of the pageant. are open to bribery. corruption would be rare in that part of the world.CULTURE OF CORRUPTION IN INDIA 63 French-speaking countries often use the expressions "dessous-de-table" ("under-the-table" commissions). sweetener. Oregon. a profit made by an agent. where a person invested with power is induced by payment to use it unjustly. on the occasion of a real estate transaction before the notary. where power is obtained by purchasing the suffrages of those who can impart it. bribery is an important aspect of the local SLUG Queen pageant that sets it apart from other pageants. without the knowledge of his principal.
as in the Canadian tradition of allowing the Prime Minister to appoint the heads of a number of commissions and agencies. etc. or financial aid that an organization or individual bestows to another. 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 difference with bribery is that this is a tri-lateral relation. Some patronage systems are legal. Patronage Patronage is the support. arts patronage refers to the support that kings or popes have provided to musicians. as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe. or influence peddling in certain countries. decision power or influence to those lobbyists who offer the highest retribution. 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. encouragement. 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. families. or other regulations perceived as too stringent.CULTURE OF CORRUPTION IN INDIA 64 Trading in influence Trading in influence. In some countries the term is used to describe political patronage. ethnicities for their electoral support using illegal gifts or fraudulently-awarded appointments or government contracts. privilege. The term derives from the Latin patrons. From a legal point of view. the term may refer to a type of corruption or favoritism in which a party in power rewards groups. SATISHCHANDER . and the guardianship of saints. in many cases. and sculptors. painters.or decision-makers can freely "sell" their vote. the formal relationship between a Patronus and his Cliens. social. these appointments go to people who have supported the political party of the Prime Minister. It can also refer to the right of bestowing offices or church benefices. In the history of art. As well. refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). it becomes possible to provide for distinctive criteria and to consider that trading in influence involves the use of "improper influence". the business given to a store by a regular customer. which is the use of state resources to reward individuals for their electoral support. Where lobbying is (sufficiently) regulated.
are selected before more able ones. as in North Korea or Syria. A similar problem can also be seen in Eastern Europe. trumped-up charges are often brought up against journalists or writers who bring up politically sensitive issues. For example. for example demanding that a business should employ a relative of official controlling regulations affecting the business. They may be almost exclusively selected from a particular group (for example. This may be legitimate. as a payment for supporting the regime. as when a newly elected government changes the top officials in the administration in order to effectively implement its policy. for example in Romania. some examples are most of the Dravidian parties of south India and also the largest party in India – Congress. In the Indian political system. 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). Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. Nepotism and cronyism Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. A milder form of cronyism is an "old boy network". Sunni Arabs in Saddam Hussein's Iraq. In no democracies many government officials are often selected for loyalty rather than ability. the nomenklatura in the Soviet Union. SATISHCHANDER . The most extreme example is when the entire state is inherited. This may be combined with bribery. for example with government employment. 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. leadership of national and regional parties are passed from generation to generation creating a system in which a family holds the center of power.CULTURE OF CORRUPTION IN INDIA 65 Patronage refers to favoring supporters. It can be seen as corruption if this means that incompetent persons. or the Junkers in Imperial Germany) that support the regime in return for such favors. such as a politician's acceptance of bribes.
CULTURE OF CORRUPTION IN INDIA 66 Electoral fraud Electoral fraud is illegal interference with the process of an election. the company benefits. It is a misappropriation of property. depressing the vote share of the rival candidates. the mechanisms involved include illegal voter registration. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. and in exchange for betraying the public. which is a portion of the sum the company received. and improper vote counting. or both. intimidation at polls. when a director of a public enterprise employs company workers to build or renovate his own house. suppose that a politician is in charge of choosing how to spend some public funds. SATISHCHANDER . Kickbacks are also common in the pharmaceutical industry. whether by increasing the vote share of the favored candidate. In this case. He can give a contract to a company that is not the best bidder. Also called voter fraud. Another common type of embezzlement is that of entrusted government resources. any situations in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption. Embezzlement Embezzlement is outright theft of entrusted funds. Acts of fraud affect vote counts to bring about an election result. Kickbacks are not limited to government officials. the official receives a kickback payment. For example. as many doctors and physicians receive pay in return for added promotion and prescription of the drug these pharmaceutical companies are marketing. or allocate more than they deserve. for example. Kickbacks A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding.
unholy alliances are not necessarily illegal. where Huang Jinrong was a police chief in the French concession. an unholy alliance can be much more dangerous to the public interest. Howard Taft. Later the U. well-known use of the term was by Theodore Roosevelt (TR): "To destroy this invisible Government. a corrupt government profiting on illegal drug trade. while simultaneously being a gang boss and co-operating with Du Yuesheng. The United States accused Manuel Noriega's government in Panama of being a "narcokleptocracy".CULTURE OF CORRUPTION IN INDIA 67 Unholy alliance An unholy alliance is a coalition among seemingly antagonistic groups. and protection rackets undisturbed. by its deceptive nature and often great financial resources." – 1912 Progressive Party Platform. the local gang ringleader. invaded Panama and captured Noriega. especially if one is religious. etc. Conditions favorable for corruption It is argued that the following conditions are favorable for corruption: Information deficits SATISHCHANDER . for ad hoc or hidden gain. attributed to TR and quoted again in his autobiography where he connects trusts and monopolies (sugar interests. The relationship kept the flow of profits from the gang's gambling dens. but unlike patronage. to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day. Standard Oil. Involvement in organized crime An illustrative example of official involvement in organized crime can be found from 1920s and 1930s Shanghai.) to Woodrow Wilson. prostitution. An early.S. Like patronage. and consequently both major political parties.
in the same government or others. o Weak accounting practices. This enables large scale political corruption in the foreign nations. SATISHCHANDER . in particular comparison to those who do the best work. o Lacking civic society and non-governmental organizations which monitor the government. This has created competition among government agencies in order to improve. The Indian Right to Information Act 2005 has "already engendered mass movements in the country that is bringing the lethargic. It annually awards the best practices which has received widespread media attention. This will also enable an evaluation of the officials who are fighting corruption and the methods used. o Lack of measurement of corruption.CULTURE OF CORRUPTION IN INDIA 68 o Lacking freedom of information legislation. often corrupt bureaucracy to its knees and changing power equations completely. costs. o Weak judicial independence." o Lack of investigative reporting in the local media. o Weak civil service and slow pace of reform. including lack of timely financial management. o Contempt for or negligence of exercising freedom of speech and freedom of the press. especially in nationwide elections. 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. The Peruvian organization Ciudadanos al Dia has started to measure and compare transparency. o Lack of benchmarking that is continual detailed evaluation of procedures and comparison to others who do similar things. 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 rule of law. o An individual voter may have a rational ignorance regarding politics. o Lacking protection of whistle-blowers. since each vote has little weight. Lacking control of the government. Opportunities and incentives o Individual officials routinely handle cash. instead of handling payments by giro or on a separate cash desk—illegitimate withdrawals from supervised bank accounts are much more difficult to conceal. For example. o Weak legal profession. and efficiency in different government departments in Peru.
o Large. Social conditions o Self-interested closed cliques and "old boy networks’’. such as the Soviet blat system. For example. with a tradition of nepotism/favouritism being acceptable. unsupervised public investments. if Rs 1.g. Misuse of government power for other purposes. o Sale of state-owned property and privatization. o Long-time work in the same position may create relationships inside and outside the government which encourage and help conceal corruption and favoritism. o Family-.000 funds.000 is embezzled from a local agency that has Rs 2. e. for instance certain high rank officials in French government services (e. o Lacking literacy and education among the population. like applications and tax forms. o Government licenses needed to conduct business. import licenses. Rotating government officials to different positions and geographic areas may help prevent this.000.000 funds. with expenses exceeding normal sources of political funding. and then processing this with automated computer systems. This may also speed up the processing and reduce unintentional human errors. o A gift economy. o Frequent discrimination and bullying among the population. Political corruption is the use of legislated powers by government officials for illegitimate private gain. it is easier to notice than from a national agency with Rs 2. o Tribal solidarity. o War and other forms of conflict correlate with a breakdown of public security. giving benefits to certain ethnic groups Politics The public trust in democratic processes in India is seriously undermined by opaque financing of electoral processes.CULTURE OF CORRUPTION IN INDIA 69 o Public funds are centralized rather than distributed. especially when funded with taxpayer money.g. and encourage bribing and kickbacks. o A windfall from exporting abundant natural resources may encourage corruption. widespread bribery and other forms of corrupt practices. using the Internet for sending in required information. o Costly political campaigns. See e-Government. and clan-centered social structure. treasurerpaymasters general) must rotate every few years. o Less interaction with officials reduces the opportunities for corruption. o Poorly-paid government officials. For example. such as repression of political SATISHCHANDER . emerges in a Communist centrally planned economy..
While corruption may facilitate criminal enterprise such as drug trafficking. literally meaning "rule by thieves". and human trafficking. In some cases. A state of unrestrained political corruption is known as a kleptocracy. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties. patronage. For instance. more than a fifth of federal parliament members in 2008 faced criminal charges. According to The Economist. and non-governmental organizations). but include bribery.despite laws requiring public disclosure of candidates’ assets. including Cabinet Ministers and Chief Ministers. corporations. Forms of corruption vary. 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. extortion. it is not restricted to these activities. Worldwide. such as in the 2G spectrum scam and the Adarsh Housing Society Scam. nepotism. including murder and rape. cronyism. which make it difficult to distinguish between legal and illegal actions. bribery alone is estimated to involve over 1 trillion US dollars annually.CULTURE OF CORRUPTION IN INDIA 70 opponents and general police brutality. in achieving its purpose and mission. criminal records and educational backgrounds – is another alarming facet of political corruption in India. and embezzlement. 120 are facing criminal charges. SATISHCHANDER . graft. 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. government officials have broad or poorly defined powers. is not considered political corruption. Neither are illegal acts by private persons or corporations not directly involved with the government. Of the 522 members of India’s current parliament. around 40 of these are accused of serious crimes. money laundering. Many of the biggest scandals since 2010 have involved very high levels of government. The activities that constitute illegal corruption differ depending on the country or jurisdiction. certain political funding practices that are legal in one place may be illegal in another. The entry of criminals into politics .
and furthermore. but a hundred years ago bureaucracy meant something positive.CULTURE OF CORRUPTION IN INDIA 71 Development Modern bureaucracies arose as the government of states grew larger during the modern period. 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. Weberian Bureaucracy Bureaucratic administration means fundamentally domination through knowledge. Weber listed several preconditions for the emergence of the bureaucracy. With the hierarchical authority and functional a specialization. he saw it as the key process in the on-going rationalization of the Western society. As the authors David Osborne and Ted Gaebler pointed out in 1993: It is hard to imagine today. His critical study of the bureaucratization of society became one of the most enduring parts of his work. Development of communication and transportation technologies made more efficient administration possible but also in popular SATISHCHANDER . hierarchically organized civil service of the Continental type is called "Weberian civil service". As the most efficient and rational way of organizing. It connoted a rational. efficient method of organization – something to take the place of the arbitrary exercise of power by authoritarian regimes. and especially following the Industrial Revolution. Many aspects of modern public administration go back to him. and a classic. – Max Weber Weber described many ideal types of public administration and government in his magnum opus Economy and Society (1922). Bureaucracy brought the same logic to government work that the assembly line brought to the factory. bureaucratization for Weber was the key part of the rationallegal authority. It was Weber who began the studies of bureaucracy and whose works led to the popularization of this term. they made possible the efficient undertaking of large complex tasks.
not individuals. the system needs entrepreneurs and politicians. The decisive reason for the advance of bureaucratic organization has always been its purely technical superiority over any other form of organization. where the public meets public officials. Weber's ideal bureaucracy is characterized by hierarchical organization. rule-based. China. – Max Weber While recognizing bureaucracy as the most efficient form of organization. Malaysia. Weber also saw it as a threat to individual freedoms. in which increasing rationalization of human life traps individuals in the aforementioned "iron cage" of bureaucratic. SATISHCHANDER . 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. and democratization and rationalization of culture resulted in demands that the new system treats everybody equally. rational control. and even indispensable for the modern state. action taken on the basis of and recorded in written rules. and the on-going bureaucratization as leading to a "polar night of icy darkness". nepotism. 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. Bureaucratic corruption pervades the Indian administrative system with widespread practices of bribery. Taxes and bribes are common between state borders. bureaucratic officials need expert training. In order to counteract bureaucrats. rules are implemented by neutral officials. Thailand. Transparency International estimates that truckers pay annually US$5 billion in bribes.CULTURE OF CORRUPTION IN INDIA 72 demand. and career advancement depends on technical qualifications judged by organization. South Korea. Vietnam. revealed Indian bureaucracy to be not just least efficient out of Singapore. Taiwan. Hong Kong. delineated lines of authority in a fixed area of activity. and misuse of official positions and resources. A 2009 survey of the leading economies of Asia. Japan.
divided corrupt officers into two types: meat-eaters. or selectively pursuing.CULTURE OF CORRUPTION IN INDIA 73 Philippines and Indonesia. More rarely. other personal gain. further it was also found that working with India's civil servants was a "slow and painful" process. 53% have said that political intervention has been the key corruption that they have faced. Police corruption Police corruption is a specific form of police misconduct designed to obtain financial benefits. who "aggressively misuse their police powers for personal gain. who "simply accept the payoffs that the happenstances of police work throw their way. 50% of the people admit having paid money. which investigated corruption in the New York City Police Department in the early 1970s. 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. Police sector The percentage of people affected by corruption in Police sector is about 2% of the entire population of India. 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. through the use of falsified evidence. Another example is police officers flouting the police code of conduct in order to secure convictions of suspects — for example." and grasseaters." The sort of corrupt acts that have been committed by police officers have been classified as follows: SATISHCHANDER . an investigation or arrest. The duty police officer (54%) is seen as the chief beneficiary. and/or career advancement for a police officer or officers in exchange for not pursuing. However this is lower in the West (36%) and the metros (39%). police officers may deliberately and systematically participate in organized crime themselves. The Knapp Commission. clerk in the police station. officer in charge.
large-scale corruption involving the police not only exist but can even become institutionalized. 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. 7) Direct criminal activities: of law enforcement officers themselves. The well-known is case of Frank Serpico. for bribery or as a personal favour. Where corruption exists. 6) "Fixing": undermining criminal prosecutions by withholding evidence or failing to appear at judicial hearings. illustrates how powerful the code of silence can be. being bought and sold. such as shifts and holidays. Prevalence of police corruptions Accurate information about the prevalence of police corruption is hard to come by. This can include. meals. a police officer who spoke out about pervasive corruption in the NYPD despite the open hostility of other members. 9) The "frame-up": the planting or adding to evidence. the widespread existence of a Blue Code of Silence among the police can prevent the corruption from coming to light. SATISHCHANDER . 8) Internal payoffs: prerogatives and perquisites of law enforcement organizations. 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. in American policing. 5) Protection of illegal activity: being "on the take". especially in drug cases. and other gratuities. accepting payment from the operators of illegal establishments such as brothels. 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. casinos. since the corrupt activities tend to happen in secret and police organizations have little incentive to publish information about corruption. for instance.CULTURE OF CORRUPTION IN INDIA 74 1) Corruption of authority: police officers receiving free drinks. In Australia in 1994. 3) Opportunistic theft: from arrestees and crime victims or their corpses. Police officials and researchers alike have argued that in some countries. contractors and tow truck operators. by 46 votes to 45. 4) Shakedowns: accepting bribes for not pursuing a criminal violation. or drug dealers to protect them from law enforcement and keep them in operation. 2) Kickbacks: receiving payment from referring people to other businesses. rather than the exception.
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. judicial officers. 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. real estate developers and law enforcement officials. DPP. 36% of those interacted talk of money being demanded. services and tax. elected politicians. Mafia Raj consisting of municipal and other government officials. SATISHCHANDER . 2) On an average. develop and sell land in illegal ways. 1) There are two main forms of corruption faced in this sector. In cities and villages throughout India. 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%). In 59% of the cases money is directly demanded. acquire.
Medicine In Government Hospitals. which are groupings of corrupt public works officials. getting admission. such as road building. consultations with doctors and availing diagnostic services. land in areas with short supply is relatively common with government entities awarding public land to private concerns at negligible rates. Shoddy construction and material substitution (e. SATISHCHANDER . mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous. materials suppliers. and sometimes simply washed away when India's heavy monsoon season arrives.CULTURE OF CORRUPTION IN INDIA 76 3) The key beneficiaries of corruption in this sector are perceived to be Surveyors (45%).g. are dominated by construction mafias. Many state-funded construction activities in India. corruption is associated with non-availability of medicines (or duplicate/fake medicines). politicians and construction contractors. 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. Preferential award of public resources As detailed earlier. 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. 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. Revenue officers (30%) and Tehsildars (23%). 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.
According to Transparency International. and the court system is severely backlogged and understaffed. Food Corporation of India. rice. established by the Government of India under Ministry of Consumer Affairs. and a loss of confidence in the law and in the justice system. Public Distribution System Public Distribution System (PDS) is a national food security system. This results in delays in the processing of cases. 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. Major commodities distributed to consumers include staple food grains such as wheat. hospitality or gifts not only to obtain a favourable decision but to move the case through the system and speed up the court proceedings. shortage of judges and complex procedures. It distributes subsidized food and non-food items to India's poor. people are tempted to resort to bribes. Court procedures are very slow and complicated. Also to add to this point “Justice delayed is justice denied”. 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. and kerosene through a network of Fair Price Shops (FPS) established in several states across the country. all of which are exacerbated by a preponderance of new laws". judicial corruption in India is attributable to factors such as "delays in the disposal of cases. high courts at state level and subordinate courts at district and local level. SATISHCHANDER . Food and Public Distribution and managed jointly with state governments in India. favours. sugar. In such contexts.CULTURE OF CORRUPTION IN INDIA 77 Judiciary The Indian court system consists of a supreme court. a PSU.
Many retail shopkeepers have large number of bogus cards to sell food grains in the open market. Also. the consumers get inferior food grains in ration shops. A lot of families also mortgage their ration cards for money. SATISHCHANDER . 2. 3. 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.C. Deceitful dealers replace good supplies received from the F.I (Food Corporation of India) with inferior stock. This results in the genuinely poor being excluded whilst the ineligible get several cards. 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. 5. There is also no clarity as to which families should be included in the BPL list and which excluded.99 lakh Fair Price Shops (FPS) across India.D. Several schemes have augmented the number of people aided by PDS. Many FPS dealers resort to malpractice since they acquire little profit. This is one of the biggest bottlenecks in the efficient functioning of PDS in India. but the number is still extremely low. 4. Numerous malpractices make safe and nutritious food inaccessible and unaffordable to many poor. it is considered to be the most important food security network. Generally. In terms of both coverage and public expenditure. which are managed by state governments.CULTURE OF CORRUPTION IN INDIA 78 distributes food grains to FPS throughout the country. Despite the PDS. The average level of consumption of PDS grains in India is only 1 kg per person / month.S System 1. Fallouts of P. India accounts for over 400 million poor and hungry people. 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. Many BPL families are not able to acquire ration cards either because they are seasonal migrant workers or because they live in unauthorized colonies. the stock assigned to a single family cannot be bought in instalments. As of date there are about 4. The PDS has been criticized for its urban bias and its failure to serve the poorer sections of the population effectively.
The Fair Price dealers seldom display rate chart and quantity available in the block-boards in front of the shop. there is still polio. which is a tall order for an agency that has no real incentive to do so. which is an added expenditure for taxpayers. somewhere a child dies every minute of SATISHCHANDER . F. Personnel in charge of the Department should be chosen locally. the following suggestions are furnished for: 1. 2. Frequent checks & raids should be conducted to eliminate bogus and duplicate cards. only about 42% of subsidized grains issued by the Central Pool reach the target group. Margin of profit should be increased for honest business.CULTURE OF CORRUPTION IN INDIA 79 To improve the current system of the PDS. 7. according to a Planning Commission study released in March 2008. 5. Vigilance squad should be strengthened to detect corruption. and is even talking of putting people on the Moon. 4. This should be enforced. 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. 3. which is again is an added expenditure and not fool proof. The Civil supplies Corporation should open more Fair Price shops in rural areas.I. In aggregate. the same India that has developed nuclear weapons.C. 6. which would cause reasonable belief that the PDS system is only fuelling starvation in India. and other prominent agencies should provide quality food grains for distribution. in which case the market system is more apt anyway.
then at what might be done about it: SATISHCHANDER . not the salmonella. but I would argue that we are largely wasting our time with massive health projects and programmes.CULTURE OF CORRUPTION IN INDIA 80 every day from diarrhoea and every 6 minutes a woman dies from pregnancy related causes. it is corruption. Infant female foeticide is raging .ironically in wealthier districts. Each of these deaths is preventable with low tech technology already well known for decades. investments in buildings. So what is ‘causing’ these problems. Tackling these problems does not require more research or the application of more expensive technologies. and what might be done about it. Logically. dysfunctional and often dead? The biggest killer in India today is not the mosquito. training courses. So let us focus on this one cause. or cultural values enshrined in centuries or millennia of cultural attitudes and beliefs. is too big a step at this stage. and certainly not the polio bacterium despite the disproportionate effort spent on eradicating it. Road traffic accidents in Delhi alone are of epidemic proportions. not tobacco. Let us look at some of its manifestations first. We do not need a better polio vaccine or better oral rehydration salts. and to become politically active to control such a significant cause of death. To make it sound more technical and acceptable to the medical profession perhaps we need to label it. But we also need to address it because it is alive and well amongst health professionals themselves. and consider its role in the morbidity and mortality of hundreds of millions of people across the globe today. Such a study may seem outside the responsibility of the health professional. in Orissa). I should take a step back and focus on what causes or enables corruption to thrive. Doctors and other health professionals have an ethical responsibility to highlight the contribution of corruption to the health status of their patients. but trying to change human nature. Corruption may be. and a myriad more that leave countless millions every year disabled. mass distribution of drugs and vaccines. and even in districts where female literacy is the highest e. staphylococcus or streptococcus bacteria.g. because of the undermining effects of corruption in all areas of the health system.
• Subversion of licensing. • Lack of accountability of staff and contractors due to corrupt supervisors/ masters SATISHCHANDER . a woman with an obstructed labour can’t call an ambulance. • Students bribe college staff resulting in under-experienced/ qualified staff taking up posts. • Failure of drugs and other consumables to reach the intended point of use. • Unnecessary duplication and irrational drug prescribing by doctors. • Spurious and adulterated drugs proliferate because high level politicians protect the killers who sell them. • Official government and externally funded programmes are neglected as senior District health officials are more interested in recouping the cost of buying their post. • Inattention to ensuring clean water and hygienic environments resulting in filthy hospitals . and power breakdowns compromise the safety of hospitals. and she dies. • Staff not paid or reimbursed for outreach work because of embezzlement of their wages or babus demanding favours to move their files. • Issuing of licences to service providers and manufacturers inappropriately. • Under the desk payments demanded from patients by everyone for the watchman to the doctor. • Drivers can bribe policemen on side of road so speeding and ignoring red lights is common-place.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. due to lack of accountability and incentives from unscrupulous pharmaceutical companies. • Lack of electrical energy because politicians will not tackle theft of electricity. so another generation grows up ignorant of basic health measures. • 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. accreditation and legal systems intended to promote quality and root out negligence. • Buildings fall down in earthquakes because of building violations. • Doctors don’t attend place of work despite drawing a wage from the Government.
or to blame development agencies. similarly incompetent consultants and advisers are appointed to ‘assist’ projects. 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. discouraging proper use. to become active combatants in a crusade to eradicate this mass killer. And certainly for far too long development agencies have ignored or connived in such corruption.CULTURE OF CORRUPTION IN INDIA 82 • Buildings constructed at inappropriate sites to please politicians and others. It is easy to blame the masses for voting short-sightedly for the wrong sorts of politicians. 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. etc. and also led indirectly to more hygienic conditions in non-health settings. so they do not properly challenge the non-appropriateness of buildings. • Politicians and public servants badger development agencies or private sector banks for loans which have little or no technical justification. Development agencies are under pressure to spend money and to show short term results. It is easy to blame the effects of globalisation. sites or non-maintenance. Let us look back again into medical history. so we must not necessarily anticipate universal admiration of our efforts to tackle Coruptionomia. his pioneering work led to better aseptic practices in hospitals and clinics around the world. However. To blame are the politicians for veniality or civil servants (especially the IAS) for their unholy alliances with the political classes. • Theft and sabotage of instruments by staff wanting to make their private practices look more efficient than the public sector.). • The wrong staff is sent on training courses (even abroad) because of patronage. 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. They also need to take seriously the challenge of ‘political medicine’. 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. SATISHCHANDER . he was hounded out of Vienna and finally died in a mental asylum. Despite his successful demonstration of the efficacy of this simple remedy.
medicine) were to start with a zero tolerance campaign within the sector itself. 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. • Refusing pharmaceutical companies’ and others’ incentives. O To commit themselves to rational drug use. • Refusing to buy posts or co-operate with those who buy post. • Participate actively in designing and pressurising for governance systems that are transparent and fool proof. and to set up their own selfdisciplinary machinery if the official machinery won’t do it. 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.CULTURE OF CORRUPTION IN INDIA 83 If the health professionals of India and other developing countries (led by the profession primus inter pares. 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). 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. SATISHCHANDER . • Refusing to tolerate bribery among junior staff. referral and evidence based interventions.
This could also mean that more doctors should be employed in the hospitals depending upon the demand of doctors in a particular department. SATISHCHANDER .3% of the entire population of India. A. 4) Doctors should demand less money. 2) The dominant corruption after getting admission is non-proper care by doctors and nurses and also in terms of non-proper medicine. 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. got admission through an irregular process. The key process that seeds corruption in this sector is the Admission process. The Study shows that 18% of those who interacted with this sector. food etc. followed by direct payments being made. Improvement in Health Sectors 1) Government to keep close vigil on the working of the hospitals. Education The percentage of people affected by corruption in Education sector is about 5. Payments made for admission to hospitals are higher in the South. This trend was strongest in South (39%) and lowest in East (6%). 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%).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.
if the quality of education imparted is improved. If the management of all Schools and other educational institutions are able to ensure good quality education. B. B.9% of the entire population of India. Even otherwise. Private tuition should be stopped It was suggested that private tuition in all its forms should be prohibited.CULTURE OF CORRUPTION IN INDIA 85 B. ‘Improper supply of electricity’ and ‘Payment of excess bill’ – were the key corruptions faced. Inspection of teachers / schools Proper and timely inspection of all educational institutions and teachers would also ensure the above stated point. C. in most cases (67%) money is directly demanded. Power Sector The percentage of people affected by corruption in Power sector is about 5. A. Education Sectors A. SATISHCHANDER . the students will not have to seek private tuitions. The two main dominant modes of corruption in the Admissions process are (a) Donations (57%) and (b) Use of an influential relative (19%). and give in to their unreasonable demands. Receiving donations is a custom strongly rooted in the South zone (70%). Of these 50%. 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. D. About 50% respondents who had interacted with the Power sector in the past one year had to pay the office staff. then people will not have to unnecessarily flock to only ‘some’ reputed institutions. Management to see – teacher teaches responsibly.
Stealing of electricity to be stopped: This is more or less a subset of the above suggestion. Solutions A. A. Punishment for wrong doers’ Proper punishment in the form of Suspension of corrupt officials was suggested B. Punishment for wrong doers B.CULTURE OF CORRUPTION IN INDIA 86 C. 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. D. The incidence of this experience was much higher in West Zone (72%). Officers (24%). Quick rectification of faults this would prevent people from falling prey into the unreasonable demands made by linesmen and the like. Telecom A.66% of the entire population of India. SATISHCHANDER . 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. Time to time checking against corruption C. The key actors in corruption in this sector are Linesmen (37%). Surprisingly this sector has garnered a lower ‘Corruption score’ as compared to other sectors. C. Meter readers (23%) and Billing clerks (22%). Privatization of telecom sector D. Taxation The percentage of people affected by corruption in Taxation sector is about .
only about 11% talk about paying money. Many officers have been caught for allegedly selling defence stores in the black market in the border districts of Indian states and territories. On the other hand. D. A string of eye-popping fraud cases has damaged the institution in recent years.CULTURE OF CORRUPTION IN INDIA 87 B. The key corruption faced is “paying for getting reduced or correct assessment”. bureaucracy and the politicians in the embezzlement of government property. more than 50% people who had interacted claimed to be paying Income tax. SATISHCHANDER . 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. However. 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. The tax officer (44%) and the clerk in tax department (35%) are the key actors in the corruption in this sector. 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. C. Municipal tax (»80%) features are very strongly in the West and South. The latest Adarsh land scam is another example of the nexus between the armed forces. Indian Navy and Indian Air Force. and metros. Armed forces The Indian Armed Forces have frequently witnessed corruption involving senior armed forces officers from the Indian Army. In the North zone. Many privately operated television channels have been formed since the privatization of Indian television in 1991.
although the chairman for the Centre for Media Studies believed that the content. particularly on television. like education. The TI India study estimates the monetary value of petty corruption in 11 basic services provided by the government.CULTURE OF CORRUPTION IN INDIA 88 Political bias There have been events when the media has been accused of political bias. SATISHCHANDER . the corruption has also crept into religious institutions. in April 2011 the incumbent information and broadcasting minister. At the same gathering.. Ambika Soni claimed that it was "probably the freest in the world". India still ranks in the bottom quartile of developing nations in terms of the ease of doing business. However. 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. 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.g. the average time taken to secure the clearances for a start-up or to invoke bankruptcy is much greater. a representative from Tanzania commented that he had not seen evidence of political bias in Indian newspapers. 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. and compared to China and other lower developed Asian nations. to be around 21. healthcare.7 billion). 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. judiciary. "smack (sic) of elitism". police.068 crore (US$4. etc.
A combination of rapid growth and democratization ultimately led to at least a semidemocratic polity by the early 1980s (Chai-Anan 1990). who accept bribes. Rock 2000. at least up to a point. But as the institutions of transparency and accountability in new democracies rise as they mature. provided protectionist rents to a surprisingly small number of Sino-Thai entrepreneurs in exchange for kickbacks. rises. the government protected private property and extracted rents at a low enough ‘tax’ rate to entice entrepreneurs to invest. In their model. including army officers. the bureaucracy and the army (Rock 2003. At the theoretical level. government officials. 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). 2004). As in Indonesia. young democracies suffering from insufficient checks and balances and lack of transparency. Rock and Bonnett. Corruption and Democracy What We Know Both theory and case evidence provide compelling support for a democratization breeds corruption hypothesis. without making the corrupt acts of rent-seekers and officials open to public scrutiny. corrupt networks were more or less tightly controlled by political elites in government. Taken together. at least from Indonesia and Thailand. 2000) and Rockand Bonnett (2004) argue with respect to Thailand’s bureaucratic polity. during the time Prem SATISHCHANDER . For a while. The case evidence.CULTURE OF CORRUPTION IN INDIA 89 13. 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. this combination implies an inverted U pattern between corruption and the durability or maturity of new democracies. provide rent-seekers with greater access to public officials and hence greater opportunities for collecting public sector rents. which they did. democratization led to the break-up of a centralized corruption network between political elites. at least up to a point. In both polities. competition among rent-seekers ultimately reduces returns to individual rent seekers even as it drives aggregate rents up. Because of free entry into rent-seeking. In this centralized network. 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. is broadly consistent with this picture. As Rock (1994.
the Central Bank. 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 the national planning agency. 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). 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. competitive party systems. SATISHCHANDER . is also supposed to be the least corrupt structurally among the variety of parliamentary and presidential democracies. peak business associations.CULTURE OF CORRUPTION IN INDIA 90 was the prime minister (1980-88). Poor Democracy Poor democracies do not lack the structural mechanisms that help constrain corruption: reelection pressures. the National Economic and Social Development Board (Rock 2000: 197-198. free media and free speech that make open and transparent government possible. This led at least one long time analyst to ask whether new democracies could manage their macro-economies (Ammar 1997).6 They did so. Callahan and McCargo 1996. 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). Its plurality voting system tends to produce national parties and reduces extortions by individuals. Murray 1996).7 Although it is difficult to know whether the new constitution reduced corruption in Thailand. politicizing the core institutions of macroeconomic policy—the Ministry of Finance. intra-government checks and balances. King 1996). The Westminster parliamentary democracy. by among other things. the new constitution recentralized politics by significantly reducing the number of political parties (Hicken 2006). One outcome of this process was the rise of another provisional businessman Thaksin Shinawata. 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. factions and small parties with narrow interests and constituencies. 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. of which India is one.
rather than broad-based parties. These characteristics have indeed afflicted India’s political system. the combination of elite accessibility and meagre economic opportunity can contribute to a fragmented patronage system leading to extreme corruption. If democracy or the lack thereof is characterized by different relationships between the state and society (aside from institutional differences).” 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. patronage politics is fragmented. along with economic opportunities and political SATISHCHANDER . The clientalism literature establishes a causal relation between democracy and corruption by suggesting that clients or voters desire patronage politics because it supplies extra-bureaucratic material benefits. a weak state (elite accessibility). then these different relationships should have an important impact on the types of corruption resulted. Corruption takes many forms. 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. Elites build personal followings. They therefore depend on building personal patronage systems to seek and maintain power. 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. In short. intense political competition. and scarce economic opportunities. political elites are not only accessible but they seek power amid weak institutions. A stronger state (elite autonomy). combined with political opportunities and economic scarcities. Yet because material rewards are scare and political opportunities more plentiful. produce in India decentralized structures in the corruption process.CULTURE OF CORRUPTION IN INDIA 91 Poor Democracy with Corruption in India In a poor democracy. and find them hard to control due to a chronic shortage of material rewards yet availability of political alternatives for followers. In such a political setting. Such patronage politics may also involve more sinister groups that resort to intimidation and violence.
corruption undermines the legitimacy of government and such democratic values as trust and tolerance. corruption increases the cost of business through the price of illicit payments themselves. 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. Though the socialist legacy and economic liberalization are compounding factors in the Indian scenario. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking. Conclusion Democracy in a poor. In the private sector. and public offices are bought and sold. Effects On politics. the availability of bribes can also induce officials to contrive SATISHCHANDER . it undermines democracy and good governance by flouting or even subverting formal processes. corruption erodes the institutional capacity of government as procedures are disregarded. are produces in other country more centralized corruption with a lesser degree of rent seeking. Although some claim corruption reduces costs by cutting bureaucracy. developing country has not been more successful at tackling corruption than an authoritarian developmental state. Economic effects Corruption undermines economic development by generating considerable distortions and inefficiency.CULTURE OF CORRUPTION IN INDIA 92 scarcities. At the same time. administration. and corruption in public administration results in the inefficient provision of services. In the political realm. and institutions Corruption poses a serious development challenge. resources are siphoned off. the management cost of negotiating with officials. More generally. corruption in the judiciary compromises the rule of law. 14. and the risk of breached agreements or detection. It violates a basic principle of republicanism regarding the centrality of civic virtue.
) In the case of Africa. and the fact that new governments often confiscated previous government's corruptly-obtained assets. one of the factors for this behavior was political instability. law and order. In Nigeria. unionization prevention. and child labor. In contrast. University of Massachusetts researchers estimated that from 1970 to 1996. more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999. environmental. reduces the quality of government services and infrastructure. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings. out of reach of any future expropriation. it cannot be enforced if officials can easily be bribed. thus further distorting investment. capital flight from 30 sub-Saharan countries totaled $187bn. through infrastructure investment. SATISHCHANDER . etc. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. exceeding those nations' external debts. expressed in retarded or suppressed development. Where corruption inflates the cost of business. and increases budgetary pressures on government. have been modeled in theory by economist Mancur Olson. corruption has primarily taken the form of rent extraction with the resulting financial capital moved overseas rather than invested at home (hence the stereotypical. or other regulations. Environmental and social effects Corruption facilitates environmental destruction. This encouraged officials to stash their wealth abroad. but often accurate. shielding firms with connections from competition and thereby sustaining inefficient firms. for example. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in the former.CULTURE OF CORRUPTION IN INDIA 93 new rules and delays. (The results. Corrupt countries may formally have legislation to protect the environment. it also distorts the playing field. The same applies to social rights worker protection. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market. Asian administrations such as Suharto's New Order often took a cut on business transactions or provided conditions for development. Corruption also lowers compliance with construction. image of African dictators having Swiss bank accounts).
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. food aid is often robbed at gunpoint by governments. it is government action or inaction that determines its severity. bribes paid by suppliers to the automotive industry in order to sell poor quality connectors used for instance in safety equipment such as airbags. trade unions. Examples are endless. SATISHCHANDER . Other areas: health. The 20th century is full of many examples of governments undermining the food security of their own nations – sometimes intentionally. 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. bribes paid by suppliers to manufacturers of defibrillators (to sell poor quality capacitors). bribes paid to obtain diplomas. or transition countries. India. 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. There have also been cases against (members of) various types of non-profit and nongovernment organisations. players. criminals. contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children. These various manifestations of corruption can ultimately present a danger for the public health. Corruption can also affect the various components of sports activities (referees. and warlords alike. members of national sport federation and international committees deciding about the allocation of contracts and competition places). medical and laboratory staff involved in anti-doping controls. In western countries. Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good. and often even whether or not a famine will occur. developing. In Bihar. public safety." While drought and other naturally occurring events may trigger famine conditions. etc. and sold for a profit. as well as religious organisations. etc. more than 80% of the subsidized food aid to poor is stolen by corrupt officials. Similarly. Corruption is not specific to poor. education. Officials often steal state property.
and South Asia." In Roman law. the Horn of Africa. which was "not permissible under Roman law but became widely practiced in medieval Europe. which are primarily located in the Middle East. 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. CAUSES 15. especially in commercial transactions". 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. 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. D. The transfer of debt. 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 words aval and avallo were themselves derived from Hawala.CULTURE OF CORRUPTION IN INDIA 95 Ultimately." 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. North Africa." SATISHCHANDER ." On the other hand. Origins Hawala has its origins in classical Islamic law and is mentioned in texts of Islamic jurisprudence as early as the 8th century.
As the system does not depend on the legal enforceability of claims. in some parts of the world it is the only option for legitimate funds transfers. A customer approaches a Hawala broker in one city and gives a sum of money to be transferred to a recipient in another. and need not take the form of direct cash transactions. gives disposition instructions of the funds (usually minus a small commission). due to differences in legal environment in places such as Afghanistan. As settlements often take place without any foreign exchange transactions. and promises to settle the debt at a later date. 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. In South Asia. Generally. Hawala is attractive to customers because it provides a fast and convenient transfer of funds. usually with a far lower commission than that charged by banks. Moreover. SATISHCHANDER .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. and a running tally of the amount owed by one broker to another is kept. The Hawala broker calls another Hawala broker in the recipient's city. Somalia). which was only gradually replaced by the instruments of the formal banking system in the first half of the 20th century. Yemen. the transaction takes place entirely on the honor system. or Hawaladars. it can operate even in the absence of a legal and juridical environment. In addition to commissions. How Hawala works In the most basic variant of the Hawala system. Today. The unique feature of the system is that no promissory instruments are exchanged between the Hawala brokers. the funds enter the system in the source country's currency and leave the system in the recipient country's currency. Hawala is probably used mostly for migrant workers' remittances to their countries of origin. city. it appears to have developed into a fully-fledged money market instrument. they can be made at other than official exchange rates. money is transferred via a network of Hawala brokers. and has even been used by aid organizations in areas where it is the best-functioning institution. Hawala brokers often earn their profits through bypassing official exchange rates. Informal records are produced of individual transactions.g. usually foreign. Settlements of debts between Hawala brokers can take a variety of forms.
which are a major advantage to customers with tax. In some countries however. to be a legal and effective system in many countries across the globe.2-0.CULTURE OF CORRUPTION IN INDIA 97 Furthermore. Hundis referred to legal financial instruments evolved on the Indian subcontinent. Hawala are actually regulated by local governments and Hawaladars are licensed to perform their money brokering services. currency control.5% per transaction from transferring money from one city to another. They charge a commission of around 0. immigration.S. 2001 Hawala has been made illegal in some U. or other concerns. Hawala after September 11. They were also used as credit instruments for borrowing and as bills of exchange for trade transactions. however. It continues. Angadia The word Angadia means courier (in Hindi) but it is also used for people who act as Hawaladars within the country (India). Being a part of an informal system. Technically. 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. they were used as remittance instruments for the purpose of transfer of funds from one place to another. In the era of bygone kings and the British Raj these Hundis served as Travellers Cheques. These were used in trade and credit transactions. Hundis now have no legal status and were not covered under the Negotiable Instruments Act. These people mostly act as a parallel banking system for businessmen. 1881. Hundis On a similar note. They were mostly used as Cheques by indigenous bankers. the transfers are usually informal and not effectively regulated by governments. states and other countries as it is seen to be a form of money laundering and can be used to move wealth anonymously. SATISHCHANDER .
the company had been on the list for the past eight years.S. for example into neighbouring Kenya. though some assets remain frozen. Many of its agents in several countries were initially arrested. though later freed after no concrete evidence against them was found. that the overwhelming majority of those who use these informal networks are doing so for legitimate purposes. the UN did not explain why it had elected to remove Al-Barakat from its terror list. the Swedish branch of Al-Barakat was removed from the United Nations' list of terrorist organizations. However. SATISHCHANDER . authorities. terror list. widespread efforts are currently being made to introduce systematic anti-money laundering initiatives on a global scale. According to the Swedish Public Radio broadcaster SR. Experts emphasize. to better curb the activities of the financiers of terrorism and those engaged in laundering the profits of drug smuggling. Whether these initiatives will have the desired effect of curbing such activities has yet to be seen. though.S. 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. although a number of Hawala networks have been closed down and a number of Hawaladars have been successfully prosecuted for money laundering. and had had its bank account funds frozen. where two of the conspirators had opened a personal account. Media has been speculating that Somali pirates use the Hawala system to move funds internationally. In October 2009. However as a result of intense pressure from the U. there is little sign that these actions have brought the authorities any closer to identifying and arresting a significant number of terrorists or drug smugglers. the Bush administration froze the assets of AL-Barakat a Somali remittance Hawala company used primarily by the large Somali diaspora. In August 2006 the last Al-Barakat representatives were taken off the U. 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. the American government suspected that some Hawala brokers may have helped terrorist organizations to transfer money to fund their activities.CULTURE OF CORRUPTION IN INDIA 98 After the September 11 terrorist attacks. where corruption is high and these transactions are neither taxed nor recorded. Al-Barakat is now able again to access its bank account funds. In November 2001. but rather by inter-bank wire transfer to a SunTrust Bank in Florida.
Thousands of records were seized to dig into the movement of billions of dollars in and out of Afghanistan. He ordered a commission to review scores of past and current anti-corruption inquests. 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 Kabul office of New Ansari Exchange. SATISHCHANDER . partly because the Hawala records (including diaries) were judged in court to be inadequate as the main evidence. Hawala scandal in India The Hawala scandal or Hawala scam was an Indian political scandal involving payments allegedly received by politicians through Hawala brokers. In January 2010. including relatives of President Hamid Karzai. Banki dealt with the question of whether Hawala transactions violated the current U. was shuttered following a raid by the Sensitive Investigative Unit. 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.S.CULTURE OF CORRUPTION IN INDIA 99 The 2010 court case United States v. and another US-advised anticorruption group. sanctions against trade with Iran. donor organizations. in the process. Many were acquitted in 1997 and 1998. Karzai took control of the taskforce that staged the raid. 2010. the Financial Crimes Enforcement Network issued an advisory on "Informal Value Transfer Systems". the country's national anti-graft task force vetted and trained by the US Drug Enforcement Administration (DEA). to quash the investigation into New Ansari. Afghanistan's largest Hawala money transfer business. In August 2010. On September 1. and development aid agencies. the Major Crimes Task Force. the Jain brothers. It was a US$18 million bribery scandal that implicated some of the country's leading politicians. There were links between the money transfers by this company and political and business figures in the country. Senior US military and civilian officials viewed Karzai's move as an effort to protect those close to him and.
Lichtenwald and Mackenzie article emphasizes the importance of multi-agency working groups and the tools that can be used to identify. As a result. 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. and dismantle organizations operating along the crime-terror nexus points. accounting and other types of fraud. either worldwide or within their national economy. corruption. Many regulatory and governmental authorities quote estimates each year for the amount of money laundered. whereas terrorist financing cares little about the source of the funds. governments and international bodies have undertaken efforts to deter prevent and apprehend money launderers. The methods by which money may be laundered are varied and can range in sophistication from simple to complex. terrorist financing and money laundering are conceptual opposites.CULTURE OF CORRUPTION IN INDIA 100 16. including drug dealing. Money Laundering Money laundering is the practice of disguising the origins of illegally-obtained money. Regardless of the difficulty in measurement. 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. The Perri. the FATF. Money laundering is the process where cash raised from criminal activities is made to look legitimate for re-integration into the financial system. both as a result of government requirements and to avoid the reputational risk involved. but it is what the funds are to be used for that defines its scope. an intergovernmental body set up to combat money laundering. and tax evasion. SATISHCHANDER . Ultimately. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money. Often linked in legislation and regulation. However. the amount of money laundered each year is in the billions and poses a significant policy concern for governments. it is the process by which the proceeds of crime are made to appear legitimate. The money involved can be generated by any number of criminal acts. infiltrate." Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance. In 1996 the International Monetary Fund estimated that two to five per cent of the worldwide global economy involved laundered money.
etc. Structuring at multiple branches or the same branch with multiple activities. Transactions involving a high volume of incoming or outgoing wire transfers. transfers between bank accounts of related entities or charities for no apparent reasons. Account transactions that are inconsistent with past deposits or withdrawals such as cash. terrorists are buying out/controlling front-end businesses especially cash-intensive businesses including in some cases money services businesses to move monies. go to. non-cooperative nations and sympathizer nations. 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. and through international ATM transactions. Terrorists also continue to move monies through MSBs/Hawala.CULTURE OF CORRUPTION IN INDIA 101 Terrorists use low value but high volume fraud activity to fund their operations. wire transfers. B. D. 2) Lack of apparent fund raising activity. the older systems have not given way. Nonetheless. Unexplainable clearing or negotiation of third party Cheques and their deposits in foreign bank accounts. They are now also moving monies through the new online payment systems. 1) Wire transfers by charitable organisations to companies located in countries known to be bank or tax havens. SATISHCHANDER . Charities also continue to be used in countries where controls are not so stringent. Paramilitary groups in Northern Ireland are using legitimate businesses such as hotels. Cheques. Even beyond Ireland. with no logical or apparent purpose that come from. for example a lack of small Cheques or typical donations associated with charitable bank deposits. or transit through locations of concern that is sanctioned countries. Bulk cash smuggling and placement through cash-intensive businesses is one typology. Corporate layering. C. pubs and taxi operators to launder money and fund political activities. They also use trade linked schemes to launder monies. The following patterns of activity indicate collection and movement of funds that could be associated with terrorist financing: A.
A charity may be a link in the transaction. international transfer of funds) revealing links with other countries including FATF blacklisted countries. Reverse transactions of this nature are also suspicious. including Abdurrahman Alamoudi. The funds may have moved through a state sponsor of terrorism or a country where there is a terrorism problem. 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. who worked for the SAAR Foundation. banks must focus on the CFT angle with renewed vigor and knowledge derived from the extensive databank of case studies now available. For this reason. 6) Cash debiting schemes in which deposits in the US correlate directly with ATM withdrawals in countries of concern. It would be difficult to determine by the activity alone whether the particular act was related to terrorism or to organized crime. often numbered sequentially. no link between the activity of the organization and other parties involved in the transaction. Alamoudi admitted that he plotted with Libya to assassinate the Saudi ruler and was sentenced to 23 years in jail. 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. 7) Issuing Cheques. or other identifiable similarities associated with addresses. money orders or other financial instruments. to the same person or business. The Operation Green Quest raids led to the convictions of two people. bank signatories.CULTURE OF CORRUPTION IN INDIA 102 3) Using multiple accounts to collect funds that are then transferred to the same foreign beneficiaries 4) Transactions with no logical economic purpose. Banks must focus on not just name matching with sanctions databases but also with other know SATISHCHANDER . Bank processes In addition to normal AML controls. 5) Overlapping corporate officers. these activities must be examined in context with other factors in order to determine a terrorist financing connection. references and financial activities. A link with a Politically Exposed Person (PEP) may ultimately link up to a terrorist financing transaction. that is. particularly for trafficking in narcotics and weapons and may be linked with foreign terrorist groups. or to a person or business whose name is spelled similarly. Some of the customers may have police records.
should be evaluated. for example. 2002 came into effect on 1 July 2005. (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. Section 12 (1) prescribes the obligations on banks. The Prevention of Money-Laundering Act. whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other. To safeguard against this. 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. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. India The Prevention of Money-Laundering Act. They must use technologies like link analysis to establish second and third level links that identify transactions as potentially suspicious from a CFT perspective. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed. are also important to watch for. Controls out of the transaction monitoring process. Focus on preventing identity theft is an integral part of any CFT program. and where such series of transactions take place within a month. 2002 came into effect on 1 July 2005. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed. Section 12 (1) prescribes the obligations on banks. whether such transactions comprise of a single transaction or a series of transactions SATISHCHANDER . Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned above. Detection rules designed to capture the suspicious activity list given above.CULTURE OF CORRUPTION IN INDIA 103 your customer (KYC) high-risk databases of good third party vendors. account openings by groups of individuals. The recent activity in money laundering in India is through political parties’ corporate companies and share market. must be maintained for ten years after the transactions finished. 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.
However. in the context of corrupt (including but not limited to) political dealings by governments. 17. is an auxiliary monetary account or a reserve fund. Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned above. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. SATISHCHANDER . illegitimacy. or secrecy in regard to the use of this money and the means by which the funds were acquired.CULTURE OF CORRUPTION IN INDIA 104 integrally connected to each other. The recent activity in money laundering in India is through political parties’ corporate companies and share market. Richard Nixon's "Checkers speech" of 1952 was a successful effort to dispel a scandal concerning a rumored slush fund of campaign contributions. and can be viewed on the surface as corrupt and subversive of the democratic process. large corporations or other bodies and individuals. For example. colloquially. 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. and where such series of transactions take place within a month. 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. Slush fund A slush fund. 18. must be maintained for ten years after the transactions finished. (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. Political dealings with slush funds tend to create suspicions of quid pro quo (buying political favors). a slush fund can have particular connotations of illegality.
in order to attain. These companies. masquerading as Mauritian companies. the Double Taxation Avoidance Convention (DTAC). such as by gaining control of land and other preexisting natural resources. such as political lobbying. 19. maintain or increase monopoly power. SATISHCHANDER . Foreign entities have set up paper companies in Mauritius. or by imposing burdensome regulations or other government decisions that may affect consumers or businesses. An example of rent-seeking is the limitation of access to skilled occupations imposed by medieval guilds. The term itself derives. rent-seeking is an attempt to derive economic rent by manipulating the social or political environment in which economic activities occur. Rent-seeking agents will spend money in socially unproductive ways. however.CULTURE OF CORRUPTION IN INDIA 105 Double Taxation Avoidance Convention The key to the apparent paradox lies in the provisions of a two-decade-old bilateral agreement. have invested in India and taking advantage of the DTAC they save paying taxes in India. Rent-seeking In economics. from the far older practice of appropriating a portion of production by gaining ownership or control of land. rather than by adding value. Description of concept Rent-seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity. claiming to be Mauritian residents. Many current studies of rent-seeking focus on efforts to capture various monopoly privileges stemming from government regulation of free enterprise competition.
by contrast with these two. Often-cited examples include a farm lobby that seeks tariff protection or an entertainment lobby that seeks expansion of the scope of copyright. wage. The expression rent-seeking was coined in 1974 by Anne Krueger. Rent-seeking behavior is distinguished in theory from profit-seeking behavior. Studies of rent-seeking are focus on efforts to capture special monopoly privileges such as government regulation of free enterprise competition. SATISHCHANDER . for instance. Often a further distinction is drawn between rents obtained legally through political power and the proceeds of private common-law crimes such as fraud.by shifting the government tax burden or government spending allocation. is obtained when a third party deprives one party of access to otherwise accessible transaction opportunities. This viewpoint sees "profit" as obtained consensually. making nominally "consensual" transactions a rent-collection opportunity for the third party. The word "rent" does not refer here to payment on a lease but stems instead from Adam Smith's division of incomes into profit. and rent.CULTURE OF CORRUPTION IN INDIA 106 In modern industrialized countries. in which entities seek to extract value by engaging in mutually beneficial transactions. economic benefits derived by most people involve some form of rent-seeking. Other rent-seeking is held to be associated with efforts to cause a redistribution of wealth --. by force or fraud inflicted on one party by another. Development of theory The phenomenon of rent-seeking in connection with monopolies was first formally identified in 1967 by Gordon Tullock. The term "monopoly privilege rent-seeking" is an often-used label for the former type of rent-seeking. Critics of the concept point out that in practice. there may be difficulties distinguishing between beneficial profit-seeking and detrimental rent-seeking. and the proceeds of common-law crime non-consensually. through a mutually agreeable transaction between two entities (buyer and seller). Rent. but in the aggregate such behaviors may result in substantial social losses. embezzlement and theft.
or additional capital goods — which retards economic growth. improved business practices. To the extent that the issuing of medallions constrains overall supply of taxi services (rather than ensuring competence or quality). a firm may choose the former option. the moral hazard of rent-seeking can be considerable. If "buying" a favorable regulatory environment is cheaper than building more efficient production. which is seen as enabling extensive rent-seeking behavior. which opens up the possibility of exploitation of the consumer. tax officials may take bribes for lessening the tax burden of the tax payers. employee training. 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. as they are neither legal profits nor the proceeds of common-law crimes. For example. Rent-seeking may be initiated by government agents. It has SATISHCHANDER . It has been shown that rent-seeking by bureaucracy can push up the cost of production of public goods.CULTURE OF CORRUPTION IN INDIA 107 The abnormal profits of the illegal drug trade are considered rents by this definition. Rent-seeking is held to occur often in the form of lobbying for economic regulations such as tariffs. especially when the government agency must rely on the firms for knowledge about the market. Faizul Latif Chowdhury suggested that ‘bribery’ is a kind of rent-seeking by the government officials. or the undue influence of special interests. Possible consequences From a theoretical standpoint. 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. such agents soliciting bribes or other favors from the individuals or firms that stand to gain from having special economic privileges. This results in a sub-optimal allocation of resources — money spent on lobbyists and counter-lobbyists rather than on research and development. Regulatory capture is a related concept which refers to collusion between firms and the government agencies assigned to regulate them. Taxi medallions are another commonly referenced example of rent-seeking.
road building.g. maintenance of peace and order. It was coined by Indian statesman Chakravarthi Rajagopalachari. figures in Georgist economic theory. Up to 80 government agencies had to be satisfied before private companies could produce something and. 20.] I want the officials appointed to administer laws and policies to be free from pressures of the bosses of the ruling party. the government would regulate production.. SATISHCHANDER . Term The term plays off "British Raj". rather than resulting from any action or contribution by the landowner.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. refers to the elaborate licenses. but Indian labour laws still prevent manufacturers from reducing their workforce without prohibitive burdens. who firmly opposed it for its potential for political corruption and economic stagnation and founded the Swatantra Party to oppose these practices. Reforms since the mid-1980s have significantly reduced regulation. the Permit Raj. etc. in terms of land rent. where the value of land is largely attributed to provision of government services and infrastructure (e. License Raj License Raj.CULTURE OF CORRUPTION IN INDIA 108 also been shown that rent-seeking by tax officials may cause loss in revenue to the public exchequer. regulations and accompanying red tape that were required to set up and run businesses in India between 1947 and 1990... provision of public schools. "I want the corruptions of the Permit/License Raj to go.) and the community in general. Rent-seeking behavior. the period of British rule in India. and gradually restored back to the standards of fearless honesty which they once maintained. [. if granted.
in which firms required licenses to invest and develop... The quantity of goods they were allowed to produce was determined by the license regime. Before the process of reform began in 1991. Planning and the state.] I want real equal opportunities for all and no private monopolies created by the Permit/License Raj. not by free-market demand. The government also prevented firms from lying off workers or closing factories. would determine how much investment was needed in which sectors. the rupee. Consequences India had started out in the 1950s with good era. India also operated a system of central planning for the economy. High growth rates SATISHCHANDER . the government attempted to close the Indian economy to the outside world. Rajagopalachari History The architect of the system of License Raj was Jawaharlal Nehru. The key characteristic of the License Raj is a Planning Commission that centrally administers the economy of the country. how much. was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market.CULTURE OF CORRUPTION IN INDIA 109 [. rather than markets. A mixed economy is one in which capitalism is combined with government intervention. Inspired by the economy in the Soviet Union. The central pillar of the policy was import substitution. the belief that India needed to rely on internal markets for development. India's first Prime Minister. The Indian currency. he implemented a mixed economy in India. Private players could manufacture goods only with official licenses. 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. not international trade — a belief generated by a mixture of socialism and the experience of colonial exploitation." Swarajya Newspaper. Like a command economy. at what price and what sources of capital were used. C.
" The federal government. the Rupee devalued and economic reforms were forced upon India. the country was left with bad age. Low growth rates Closure to trade and investment A license-obsessed. manufacturing organizations still encounter a permit process (though not as extensive as earlier) in procurement of land. though much of the actual progress was made under P. and opened up to international trade and investment. by the 1980s. indeed crisis Current status The License Raj-system was in place for four decades. However. SATISHCHANDER . restrictive state Inability to sustain social expenditures Macro instability. The government of India initiated a liberalization policy under the Prime Minister ship of Rajiv Gandhi. with DrMan Mohan Singh as finance minister. importing equipment. Recently.Narasimha Rao. duties and taxes. this liberalization may be altered under a draft bill seeking to regulate broadcasting media.V. etc. 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.CULTURE OF CORRUPTION IN INDIA 110 Openness to trade and investment A promotional state Social expenditure awareness Macro stability However. Gold bullion was transferred to London as collateral. Liberalization resulted in substantial growth in the Indian economy. reduced licensing regulations. lowered tariffs.
Swiss banking officials have said that the largest depositors of illegal foreign money in Switzerland are Indian.CULTURE OF CORRUPTION IN INDIA 111 E. estimated the total at over Rs 7. India has more black money than the rest of the world combined. India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (approximately USD 1. Black money in Swiss banks While official numbers are not available. BLACK MONEY Black money refers to funds earned on the black market. expected to become active by January 2012. but one estimate by R Vaidyanathan. will allow the government to make inquiries of Swiss banks SATISHCHANDER . According to the data provided by the Swiss Banking Association Report (2006). The total amount of black money deposited in foreign banks by Indians is unknown. EFFECTS 21. This revision.4 trillion). Indian-owned Swiss bank account assets are worth 13 times the country’s national debt. a Professor of Finance.4 trillion) in the form of black money. on which income and other taxes have not been paid. To put things in perspective. 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.000 Crore (USD $1. the government revised the Double Taxation Avoidance Agreement to provide means for investigations of black money in Swiss banks. In August 2010.280. 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.
These include political. with politicians and public servants regularly caught accepting bribes or mismanaging public resources. Monaco. Argentina and the Marshal Islands . Hassan Ali Khan was arrested on charges of stashing over 36. 2011 Hassan Ali Khan scandal SATISHCHANDER .Bahamas. India has signed TIEA with 10 countries . the Isle of Man. financial. the British Virgin Islands. SCANDALS Major scandals involving high level public officials have shaken the Indian public service in recent years. corporate and others. 22.where money is believed to have been stashed away Prominent cases In April 2011. Bermuda. and the British island of jersey. This suggests corruption has become a pervasive aspect of Indian politics and bureaucracy. Tax Information Exchange Agreement To curb black money.CULTURE OF CORRUPTION IN INDIA 112 in cases where they have specific information about possible black money being stored in Switzerland.000 crore in foreign banks. St Kitts and Nevis. The following is a list of alleged scams and scandals in India since independence. the Cayman Island.
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 .
At the heart of this Rs. 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. but none bigger than the scam involving the process of allocating unified access service licenses. 1) The under-pricing of the 2G spectrum by the Department of Telecommunications which resulted in a heavy loss to the exchequer..76-lakh crore worth of scam is the former Telecom minister A Raja – who according to the CAG. 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. SATISHCHANDER ..CULTURE OF CORRUPTION IN INDIA 115 Harshad Mehta securities scam Palmolein Oil Import Scam 1989 Bofors Scandal 1982 Cement Scam 1971 Nagarwala Scandal 1957 Haridas Mundhra scandal 1948 Jeep Scandal The Top Scams in India 1) 2G Spectrum Scam We have had a number of scams in India.1. The scam involved allegations regarding.
2) Commonwealth Games Scam Another feather in the cap of Indian scandal list is Commonwealth Games loot. will-full delays in execution of contracts. 5) Bofors Scam The Bofors scandal is known as the hallmark of Indian corruption. every scam must have something unique in it to make money out of it in an unscrupulous manner. The Bofors scam was a major corruption scandal in India in the 1980s. The Telgi clearly had a lot of support from government departments that were responsible for the production and sale of high security stamps. Abdul Karim Telgi had mastered the art of forgery in printing duplicate stamp papers and sold them to banks and other institutions. has found discrepancies in tenders – like payment to non-existent parties. Yes. The scam came to public notice when the Supreme Court of India took Subramaniam Swamy's complaints on record. It is estimated that out of Rs. literally a loot! Even before the long awaited sporting bonanza could see the day of light. 3) Telgi Scam As they say.and Telgi scam had all the suspense and drama that the scandal needed to thrive and be busted. over-inflated price and bungling in purchase of equipment through tendering – and misappropriation of funds. The tentacles of the fake stamp and stamp paper case had penetrated 12 states and was estimated at a whooping Rs. 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. Finally. when the then PM Rajiv Gandhi and several others including a powerful NRI family named the Hindujas. Most of SATISHCHANDER . the grand event was soaked in the allegations of corruption. 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. 14000 crore. Satyam is the biggest fraud in the corporate history to the tune of Rs. the company was taken over by the Tech Mahindra which has done wonderfully well to revive the brand Satyam. 20000 crore plus. The Central Vigilance Commission. were accused of receiving kickbacks from Bofors AB for winning a bid to supply India’s 155 mm field howitzer. 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. only half the said amount was spent on Indian sportspersons. 70000 crore spent on the Games.
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all, the Bofors scam had a strong emotional appeal because it was a scam related to the defence services and India’s security interests.
6) The Fodder Scam
If you haven’t heard of Bihar’s fodder scam of 1996, you might still be able to recognize it by the name of “Chara Ghotala,” as it is popularly known in the vernacular language. In this corruption scandal worth Rs.900 crore, an unholy nexus was traced involved in fabrication of “vast herds of fictitious livestock” for which fodder, medicine and animal husbandry equipment was supposedly procured.
7) The Hawala Scandal
The Hawala case to the tune of $18 million bribery scandal, which came in the open in 1996, involved payments allegedly received by country’s leading politicians through Hawala brokers. From the list of those accused also included was then the Leader of Opposition. Thus, for the first time in Indian politics, it gave a feeling of open loot all around the public, involving all the major political players being accused of having accepted bribes and also alleged connections about payments being channelled to Hizbul Mujahedeen militants in Kashmir.
8) IPL Scam
Well, I am running out of time and space over here. The list of scandals in India is just not ending and becoming grave by every decade. Most of us are aware about the recent scam in IPL and embezzlement with respect to bidding for various franchisees. The scandal already claimed the portfolios of two big-wigs in the form of Shashi Tharoor and former IPL chief Lalit Modi.
9, 10) Harshad Mehta & Ketan Parekh Stock Market Scam
Although not corruption scams, these have affected many people. There is no way that the investor community could forget the unfortunate Rs. 4000 crore Harshad Mehta scam and over Rs. 1000 crore Ketan Parekh scam which eroded the shareholders wealth in form of big market jolt.
23. Slow Progress
According to a report by KPMG, "high-level corruption and scams are now threatening to derail the country's credibility and [its] economic boom".
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Will Growth Slow Corruption In India?
Now that India is playing an ever larger role in the world economy, the issue of corruption, in both the private and public sectors, is coming into sharper focus. Two scenarios are possible: As India's multinational corporations develop both economic and political muscle; they may act as a broom, sweeping corruption from the economic sphere. On the other hand, entrenched practices may prove the stronger force, and corruption could end up being a significant brake on India's economic rise. Widespread corruption in India costs billions of dollars and threatens to derail the country’s growth, a survey says. The report by consultancy firm KMPG said that the problem had become so endemic that foreign investors were being deterred from the country, BBC News informs. Over (2010) the last six months India has been hit by a series of corruption scandals including a Multi-billion dollar telecoms scandal, alleged financial malpractices in connection with the Commonwealth Games and allegations that houses for war widows were diverted to civil Servants.
The License Raj and the Spoils System
One strand in the knot of corruption is the legacy of the License Raj, which ended in the early 1990s. The system created bureaucracies that were all but self-perpetuating. In a context where government workers were routinely underpaid, graft became an industry all its own. Civil servants were, and remain, anything but disinterested administrators.
Wharton management professor Jitendra Singh and Ravi Ramamurti, professor of international business at North-eastern University, have been studying the emergence of multinational corporations in emerging economies such as India. In late June, they organized a conference on this topic in Boston; the conference's papers will form the core of an edited volume which is planned for publication in 2008.
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"In the bad old days," Singh said in an interview, "particularly pre-1991, when the License Raj held sway, and by design, all kinds of free market mechanisms were hobbled or stymied, and corruption emerged almost as an illegitimate price mechanism, a shadowy quasimarket, such that scarce resources could still be allocated within the economy, and decisions could get made.
"Of course, this does not in any way condone the occurrence of such corruption. The shameful part of all this was that while value was captured by some people at the expense of others, it did not go to those who created the value, as it should in a fair and equitable system."
The real failing, he said, "was a distortion of incentives within the economy, such that people began expending efforts toward fundamentally unproductive behaviours because they saw that such behaviours could lead to short-term gains. Thus, cultivating those in positions of power who could bestow favours became more important than coming up with an innovative product design. The latter was not as important, anyway, because most markets were closed to foreign competition--automobiles, for example--and if you had a product, no matter how uncompetitive compared to global peers', it would sell.
"These were largely distortions created by the politico-economic regime. While a sea change has occurred in the years following 1991, some of the distorted cultural norms that took hold during the earlier period are slowly being repaired by the sheer forces of competition. The process will be long and slow, however. It will not change overnight."
India's advancement producing valuable goods is of limited utility if they cannot be transported in a timely fashion, for example. Transparency International estimates that Indian truckers pay something in the neighbourhood of $5 billion annually in bribes to keep freight flowing. "Corruption is a large tax on Indian growth," Ramamurti said in an interview after the conference. "It delays execution, raises costs and destroys the moral fibre."
Corruption also cripples the effort to ameliorate poverty in India and to improve the country's stock of "human capital." The rate at which this happens varies tremendously from region to region. Edward Luce, for example, author of In Spite of the Gods: The Strange Rise of Modern India notes that "Rates of theft vary widely from state to state in India, with
CULTURE OF CORRUPTION IN INDIA
the better states, such as Kerala and Tamil Nadu, getting more than 80% of subsidized government food to their poor. Meanwhile, in the northern state of Bihar, India's second poorest with a population of 75 million, more than 80% of the food is stolen."
Indian MNC's as Change Agents
"A few Indian companies," Ramamurti said, "such as the Tata group or Wipro, have taken the high road, but most firms find it impossible to get anything done without greasing palms." Wipro, headed by Azim Premji, is India's third-biggest global tech services provider (behind Tata Consultancy Services (other-etc.: TACSF - new - people) and Infosys).
In Bangalore Tiger: How Indian Tech Upstart Wipro Is Rewriting the Rules of Global Competition, business journalist Steve Hamm writes that "Wipro is not just a company, it's a quest." That quest, according to some observers, is as much about moral rectitude as it is about business success. For example, according to Hamm, the company pays no bribes and has a zero tolerance policy for corruption.
"The paradox," Ramamurti said, "is that even though India's faster growth in recent years is the result of fewer government controls, most Indian managers would tell you that corruption has increased, not decreased, in tandem.
"How could this be? The explanation is that faster growth has created new choke points at which politicians and bureaucrats can extract payments, such as land regulation, spectrum allocation or college admissions--all of which have become much more valuable in this century. Faster growth has also raised the economic cost to firms of delays in public approvals, giving officials that much more 'hold-up' leverage over private investors."
Poverty is widespread in India, with the nation estimated to have a third of the world's poor. According to a 2005 World Bank estimate, 41.6% of the total Indian population falls below
000– 90. 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.C.25 a day (PPP.6% of them or about 35 million (about 200 million Indians).000) accounted for only 15. The Planning Commission of India has accepted the Tendulkar Committee report which says that 37% of people in India live below the poverty line.000 per year. According to NCAER. Another 80 million households are in income levels of Rs 45.The N. in 2009. the Indian government and non-governmental organizations have initiated several programs to alleviate poverty. 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). 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. and SATISHCHANDER .6 a day in urban areas and Rs 14. including subsidizing food and other necessities. increased access to loans. Estimates by NCAER (National Council of Applied Economic Research) show that 48% of the Indian households earn more than Rs 90. in nominal terms Rs 21. Poverty estimates There has been no uniform measure of poverty in India.000 (US$1. the absolutely poor households (annual incomes below Rs 45. Saxena Committee report states that 50% of Indians live below the poverty line. improving agricultural techniques and price supports.998) annually (or more than US$ 3 PPP per person). Impact of poverty Since the 1950s. of the 222 million households in India.3 in rural areas). 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 $2 per day as compared with sub-Saharan Africa.50 per day).CULTURE OF CORRUPTION IN INDIA 121 the international poverty line of US$ 1.
and reduced illiteracy and malnutrition.25). 11. that a family of four with an annual income of 1. and 2. According to a recently released World Bank report.7% a scooter.25 per day.7%). 31. As per the 2001 census.37 lakh rupees could afford some of these luxury items. jeep or van. or Delhi (7. increasing the effective poverty rate from 27.1% a phone. Uttar Pradesh (4.5% to 37.3% or 268 million people by 2020. SATISHCHANDER .5% a car.6% of the population will still live under US$1.23% by December 2008 and has an annual growth of 40%. However by 2015. 34. cut absolute poverty levels by more than half. Presence of a massive parallel economy in the form of black (hidden) money stashed in overseas tax havens and underutilization of foreign aid have also contributed to the slow pace of poverty alleviation in India. economic groups. 35. its growth has been uneven when comparing different social groups. 43. and rural and urban areas. These tallies with the fact. geographic regions. one quarter of the nation's population earns less than the government-specified poverty threshold of 12 rupees per day (approximately US$ 0.8%). According to Department of Telecommunications of India the phone density has reached 33. 35. an estimated 53 million people will still live in extreme poverty and 23.4%). Despite significant economic progress. Poverty rates in rural Orissa (43%) and rural Bihar (41%) are among the world's most extreme.7% a bicycle. India is on track to meet its poverty reduction goals.5% of the households had none of these assets.5%). 9. Although the Indian economy has grown steadily over the last two decades. the effects of the worldwide recession in 2009 have plunged 100 million more Indians into poverty than there were in 2004.1%). the annualized growth rates for Gujarat (8. or Madhya Pradesh (3. at the same time.5% of Indian households availed of banking services.1% owned a radio or transistor.2%.However.4%) were much higher than for Bihar (5.CULTURE OF CORRUPTION IN INDIA 122 promoting education and family planning. Between 1999 and 2008. These measures have helped eliminate famines.6% a television. Haryana (8. motorcycle or a moped. This number is expected to reduce to 20.
Others. and continues to segregate Dalit. casteism is widespread in rural areas. By 1999. In 1947. US$770 for South Korea. but South Korea became a developed country by 2000s. —BBC India had started out in the 1950s with. According to William A. a promotional state. how much. respectively. M. At the same time. (Numbers are in 1990 international Maddison dollars) In other words. regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990. Caste explanations of poverty fail to account for the urban/rural divide. compared with US$619 for China. openness to trade and investment. however. 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. at what price and what sources of capital were used.818.CULTURE OF CORRUPTION IN INDIA 123 Causes of poverty in India Caste system According to S. 65% of rural forward castes are below the poverty line. Another cause is corruption. US$3. have noted the steady rise and empowerment of the Dalit through social reforms and the implementation of reservations in employment and benefits. the average income in India was not much different from South Korea in 1947. the average annual income in India was US$439. the numbers were US$1. where all aspects of the economy are controlled by the state and licenses were given to a select few. Using the Definition of poverty. India was left as one of the world's poorer countries.720. License Raj refers to the elaborate licenses. The License Raj was a result of India's decision to have a planned economy. US$13.317. Haviland. social expenditure awareness and macro stability but SATISHCHANDER . Michael. and US$15. high growth rates. and US$936 for Taiwan.259. Corruption flourished under this system. Dalit’s constitute the bulk of poor and unemployed.
As journalist and the Rural Affairs editor for The Hindu. the average poor family in 2007 has about 100 kg less food per year than it did in 1997. with some saying the true number is much higher.000.High population growth rate. Government policies encouraging farmers to switch to cash crops. agriculture growth rate has dropped from 4. As professor Utsa Patnaik. That number remains disputed. inability to sustain social expenditures and macro instability. While services and industry have grown at double digit figures. according to Sainath. Poverty has decreased significantly since reforms were started in the 1980s. P Sainath describes in his reports on the rural economy in India.CULTURE OF CORRUPTION IN INDIA 124 ended the 1980s with: low growth rates. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totalled close to 200. hunger in India has reached its highest level in decades. resulted in a very high portion of rural households getting into the debt cycle.8% to 2% Over-reliance on agriculture. a licenseobsessed. when at the same time. He also points out that rural economies across India have collapsed. Commentators have faulted the policies pursued by the government which. although demographers generally agree that this is a symptom rather than cause of poverty. 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. in place of traditional food crops. restrictive state (License Raj). closure to trade and investment. India’s top economist on agriculture. has pointed out. The human cost of the "liberalization" has been very high. indeed crisis. 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. or on the verge of collapse due to the neoliberal policies of the government of India since the 1990s. resulting in a very high number of farm suicides. while market forces determined the price of the cash crop. There is a surplus of labour in agriculture. has resulted in an extraordinary increase in farm input costs. according to official statistics. Sainath points out that a disproportionately SATISHCHANDER . the level of inequality has risen to extraordinary levels.
” from 26 per cent of farm households to 48. this elite group has grown an average of 11 per cent annually. Hunger has grown very fast. all along. while only 4-7% of the Indian populations hold any equity. there are few jobs to be found. Between 2006 and 2007. too. 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. Employment has collapsed. Meanwhile.) Millions move towards towns and cities where. Non-farm employment has stagnated. there is food left to survive on. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times.1 country. the number of wealthy individuals in India surged by 23 per cent. India kept reducing investment in agriculture (standard neoliberal procedure). marginal or small farmers. Life was being made more and more impossible for small farmers. Sainath argues that Farm incomes have collapsed. Much has happened to make it a lot worse. sub-marginal.CULTURE OF CORRUPTION IN INDIA 125 large number of affected farm suicides have occurred with cash crops. Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal “economic reforms. During the time when Public investment in agriculture shrank to 2% of the GDP. the government spends less than 0. In a report by Chetan Ahya. He also points out that inequality has reached one of the highest rates India has ever seen. Nothing has happened in 15 years that has changed that situation for the better. Public investment in agriculture shrank to nothing a long time ago. 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.000 individuals in India with high net-worth. Executive Director at Morgan Stanley. As of 2006. even if the price falls. SATISHCHANDER .2% of GDP on agriculture and less than 3% of GDP on education. In one estimate.6 per cent. because with food crops such as rice. But now there is no. which is the highest growth rate in the world. the same time as India became the nation of second highest number of dollar billionaires. the nation suffered the worst agrarian crisis in decades. Since 2000. Rich Indians not generous There are 115. over 85 per cent of rural households are landless. However.
6% of their household income for charitable purposes. a majority of Indians will be middle-class by 2025. Probably the most important initiative has been the supply of basic commodities. Marvin J. and "a large part of CSR initiatives are artfully masqueraded and make it back to the balance sheet". Despite government initiatives. the middle class gives 1. partner.6 where the percentage is 2. govt." says Arpan Seth.9% of household income to philanthropy. the wealthiest have the lowest level of giving at 1. Cetron writes that an estimated 300 million Indians now belong to the middle class.2 in the United States. sustained. one-third of them have emerged from poverty in the last ten years. At the current rate of growth. "While the 'high class'. donates 2. The widening income gap between the rich and the poor over the years has raised fears of a social backlash.1% to charity. and refined various planning schemes to help the poor attain self-sufficiency in food production. which is ranked one level below the 'upper class' on the income and education scale. SATISHCHANDER . has initiated. Analysts such as the founder of "Forecasting International". available throughout the country as poor spend about 80 per cent of their income on food. Only 10 percent of funding comes from individuals and corporates. particularly food at controlled prices. corporate social responsibility (CSR) remains low on the agenda of corporate sector. Reduction in Poverty Despite all the causes. Bain & Company. The percentage of India's GDP that is spent for charitable purposes is only 0.CULTURE OF CORRUPTION IN INDIA 126 However. Efforts to alleviate poverty Since the early 1950s. India currently adds 40 million people to its middle class every year.
Poverty alleviation is expected to make better progress in the next 50 years than in the past. India is adding 60 to 70 million people to its middle class every year. Analysts such as the founder of "Forecasting International". one-third of them have emerged from poverty in the last ten years. Increasing stress on education. but the distribution of wealth is not at all even. SATISHCHANDER .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. 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. are also expected to contribute to the alleviation of poverty. Cetron writes that an estimated 390 million Indians now belong to the middle class. Literacy rates have risen from 52 per cent to 65 per cent during the initial decade of liberalization (1991–2001). 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. as a trickle-down effect of the growing middle class. After the liberalization process and moving away from the socialist model. It is incorrect to say that all poverty reduction programs have failed. highlights the increasing disconnect between official poverty estimates and calorie deprivation. In its report on global hunger index. reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society. At the current rate of growth. Outlook for poverty alleviations Eradication of poverty in India is generally only considered to be a long-term goal. a majority of Indians will be middle-class by 2025. Marvin J. Controversy over extent of poverty reduction The definition of poverty in India has been called into question by the UN World Food Programme.
lived on less than 20 rupees per day (USD 0. the highest in the world) as of 2008.25 a day is expected to go down from 435 million or 51. like journalist P Sainath. it is likely that a significant fraction of the rural population will continue to migrate toward cities. the picture is not so clear if one considers other non-pecuniary dimensions (such as health. at 230 million. India was at 122ond place in the same index.6 per cent by 2015 and 268 million or 20.3 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. It is the lowest rank for the country in over 10 years. 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." However. or 836 million people. SATISHCHANDER . together with China.CULTURE OF CORRUPTION IN INDIA 128 While total overall poverty in India has declined. finding that the number of people living on US$1. as well as the declaration made by India's former Finance Minister Yashwant Sinha that poverty in India has reduced significantly. Nicholas Stern.3 per cent in 1990 to 295 million or 23. In 1992. Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall poverty in India.0 in PPP). hold the view that while absolute poverty may not have increased India remains at an abysmal rank in the UN Human Development Index. and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18.50 nominal. crime and access to infrastructure). 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. Some. education. making the issue of urban poverty more significant in the long run. they should not be dismissed outright. While there is a consensus that there has not been increase in poverty between 1993–94 and 2004–05. India is positioned at 132ond place in the 2007-08 UN HDI index. and is 94th of 119 in the world hunger index). A 2007 report by the state-run National Commission for Enterprises in the Unorganized Sector (NCEUS) found that 77% of Indians. with most working in "informal labour sector with no job or social security. has published defences of the poverty reduction statistics. USD 2. has shown the clearest trends of globalization with the accelerated rise in per-capita income. the extent of poverty reduction is often debated. a new report from the UN disputes this. With the rapid economic growth that India is experiencing. India.5). living in abject poverty.
465 million more people will be lifted out of poverty." The World Bank also noted that "while poverty is often the underlying cause of malnutrition in children. 34 per cent of the world's stunted children and 46 per cent of the world's wasted children. 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. business interests and other entities (such as lawSATISHCHANDER . and they project that it will drop to 26% by 2025. Mafia Raj Mafia Raj refers to an economic and political situation where public goods. citing estimates made by the World Health Organization. F.5% of the children in India suffer from malnutrition. Persistence of malnutrition among children According to the New York Times.000 rupees a year. CRIMES 25.3% annual growth over the next 20 years. elected politicians. the superior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa. More than 103 million people have moved out of desperate poverty in the course of one generation in urban and rural areas as well. 93% of the Indian population lived on a household income of less than 90. has not translated into superior nutritional status for the South Asian child.CULTURE OF CORRUPTION IN INDIA 129 A study by the McKinsey Global Institute found that in 1985. to 54%. states that "About 49 per cent of the world's underweight children." 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. rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985 to 61% in 2005. is estimated that about 42. or about a dollar per person per day. They project that if India can achieve 7. live in India. by 2005 that proportion had been cut nearly in half. Contrary to popular perceptions. The World Bank. property and funds are controlled and systematically embezzled by a criminalized nexus (or "mafia") of government officials.
road construction mafia or road contract mafia) and land mafia are commonly used. The coal mafia has had a negative effect on Indian industry. non-governmental organizations. even a human corpse has been discovered in a sealed coal wagon. public sector businesses or entire sectors of the economy that are subject to these conditions. forest mafia). states. and employs caste allegiances to maintain its power. Higher quality coal is sometimes selectively diverted. SATISHCHANDER . It is alleged that the coal industry's trade union leadership forms the upper echelon of this particular arrangement. Jungle Raj (law of the jungle) and Anarchy are used to refer to the same phenomenon. the mafias are usually mentioned by the name of the economic sector in which they are involved. countries which share a similar culture to that of India. Coal Mafia An Indian coal mine. The state-owned coal mines of Jharkhand were among the first areas in India to see the emergence of a sophisticated mafia. inflated or fictitious supply expenses. terms like Goonda Raj (rule of the Dons’). The Dhanbad mine complex is allegedly dominated by a coal mafia. contractor mafia (sometimes.The phenomenon of Mafia Raj is highly prevalent in Pakistan and Bangladesh as well. timber mafia (sometimes. In the Indian and Pakistani media. government departments. beginning with the mining town of Dhanbad. Pilferage and sale of coal on the black market. trade unions or criminal organizations). and missing coal replaced with stones and boulders in railway cargo wagons. falsified worker contracts and the expropriation and leasing-out of government land have allegedly become routine. Once. Terms such as coal mafia. with coal supplies and quality varying erratically. 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. and can refer to cities. sometimes openly and with the use of violent intimidation. The term is used primarily in India.CULTURE OF CORRUPTION IN INDIA 130 enforcement authorities. Due to the ability of these mafias to operate their illegal activities in a sustained fashion.
and the higher quality wood was intercepted in the process of being smuggled across the state border into Punjab. local politicians. of low-grade wood. Besides the environmental degradation. and one 1994 estimate of stolen timber in the state of Karnataka amounted to Rs 1. in fact. there have also been incidents of substitution. with over a million hectares in the environs of Chhotanagpur alone being illegally transferred by the forest department directly to industrial. Veerappan was a notorious bandit who. authorized for government use. underpayment of government royalties. has gained international attention. Protected forest areas in several parts of India. when the procurement of wood is. 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. In an incident in 2005. public financial losses can be substantial. which spans encroachment of forest areas. Clear-cutting is sometimes coveredup by conniving officials who report fictitious forest fires. 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. Himachal Pradesh. such as Jammu and Kashmir. mining and logging companies. As with coal. until his shooting death by state police in 2004. and has generated controversy. Karnataka and Jharkhand. Timber Mafias India's Himalayan and other forests are vulnerable to timber mafias. Terrorist groups have also joined the nexus in militancy-affected areas such as Kashmir. and conflict with tribal regarding land-rights. specialized in illegally logging sandalwood in Karnataka and Tamil Nadu. are vulnerable to illegal logging by timber mafias that have coped or intimidated forestry officials. Many studies indicate large losses of forest cover to indiscriminate logging by timber mafias. SATISHCHANDER . businesses and citizenry. for highquality timber.CULTURE OF CORRUPTION IN INDIA 131 Illegal mining in India Illegal mining in India is widespread in various ore-rich states of India.000 crore (about US$ 230 million).
his family and supporters maintained that an attempt at a cover-up was being made. for example in the public works for which the Municipal Corporation of Delhi is responsible. 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. In a widely covered case. so that a complete audit trail of bids and activity is maintained. SATISHCHANDER . 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. sometimes by attempting to move them online. was murdered in 2003. with the connivance of administrative and police officials. materials suppliers. such as road building. Many state-funded construction activities in India. judicial officers. real estate developers and law enforcement officials.g.CULTURE OF CORRUPTION IN INDIA 132 Contractor Mafias Public works. Shoddy construction and material substitution (e. mafias consisting of municipal and other government officials. Construction mafias are alleged to have used their political influence decisively to frustrate many such attempts. such as road construction. are dominated by construction mafias. and sometimes simply washed away when India's heavy monsoon season arrives. which are groupings of corrupt public works officials. Satyendra Dubey. develop and sell land in illegal ways for profit. elected politicians. Although a CBI investigative report after the assassination stated that there was no contractor mafia involvement in Dubey's murder. politicians and construction contractors. are sometimes dominated by contractor mafias. mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous. In cities and villages throughout India and Pakistan. 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. Sometimes. Attempts have been made to reduce mafia influence by making construction tendering processes more transparent. acquire. a project director with the National Highways Authority of India.
6 million children in hazardous occupations. connecting Delhi and Agra. and Monsanto etc. which transfers the land to developers at those low prices. In 1998. a lake was filled in and government buildings torn down after illegal transfers to a developer by mafia-connected officials. Although the Constitution of India guarantees free and compulsory education to children between the age of 6 to 14 and prohibits employment of children younger than 14 in any hazardous environment. Primark. which is expected to become quite valuable once the highway is inaugurated. Child labour Of 12. Computerization of records relating to the classification of tracts and land ownership is a key tool in countering the illegal activities of land mafias. intended to procure private land at relatively low prices for public benefit or redistribution to poorer people under social justice programs.CULTURE OF CORRUPTION IN INDIA 133 In one set of allegations in Karnataka. since it creates transparency on all information relating to a given parcel of land. For example. but efforts to extend it elsewhere have sometimes met with strong resistance by land mafias. although it may have shifted its attention to illegally encroaching on land along the planned Taj Expressway. 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. 26.s Eminent domain laws. the land mafia in the Noida area. manifesting itself as bureaucratic inaction. vigorous legal action by the Greater Noida Authority reportedly led to this mafia alliance backing away from this theft. 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. are abused to pressure existing landholders to sell land to a government entity. on the outskirts of Delhi. Focused vigilance in specific areas by government agencies has also acted as a deterrent to land mafia activities. Subsequent to coverage in the press. 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 . India has the highest number of labourers in the world less than 14 years of age. Companies including Gap. and who in turn sell it back on the market at much higher prices. child labour is present in almost all sectors of the Indian economy.
Some of the children are actually sold to the brick kiln owners. dhabas. spas and resorts effective from October 10.000 while NGOs estimate the figure to be around 20 million. 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. 2006.000 bonded children are employed by the silk industry in India. the contractors had employed adults. The Child Labour Prohibition and Regulation Act were enacted based on the recommendations of the committee in 1986. Adults are found in construction of both home and office buildings. As per Human Rights Watch. Official estimates for child labour working as domestic labour and in restaurants is more than 2. Children are forced to dip their hands in scalding water to palpate the cocoons and are often paid less than Rs 10 per day. and are not paid. the Indian government formed the Gurupadswamy Committee to find about child labour and means to tackle it. SATISHCHANDER . hotels.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. Each year. working in awful conditions. making it a small issue. Initiatives against child labour In 1979. Human Rights Watch estimates that at least 350. thousands of children are rescued from brick kilns. The misuse of adult labour can be found in the construction industry too. for the construction of the Asian Games care house. The ministry of Labour and Employment had implemented around 100 industry-specific National Child Labour Projects to rehabilitate the child workers since 1988.500. for they had to be paid more. A National Policy on Child Labour was formulated in 1987 to focus on rehabilitating children working in hazardous occupations. In 2011. 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.
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
which seems to suggest the stereotype that these women are engaging in token resistance (Malamuth & Brown. In some countries. state: Rape victims are blamed more when they resist the attack later in the rape encounter rather than earlier (Kopper. 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. in a review of studies of rape myths. & Pinto. like being in a daze or a dream. In general. SATISHCHANDER . and/or feelings that remind the victim of the assault 5) Anxiety or increased alertness (difficulty sleeping. Bell. Often. the defense of provocation is not accepted as mitigation for rape. rape and sexual assault are among the most common causes of PTSD in women. Amy M.) 6) Avoidance of social life or place of rape For one-third to one-half of the victims. In most Western countries. 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. simply by not behaving demurely. Kunju.1989. Check & Malamuth. Victim blaming "Victim blaming" is holding the victim of a crime to be in whole or in part responsible for the crime. Miller. rape victims are blamed more when they are raped by an acquaintance or a date rather than by a stranger (e. memories. Buddie and Arthur G. thoughts. Muehlenhard & Rogers. etc. places. Franco. Kanekar. victims are said to have "asked for it". 1994. & Lottes. and women who have been raped are sometimes deemed to have behaved improperly. concentrating.g. Finally. Bridges & McGrail. victim-blaming is more common. 1991. 1983. or feeling that the world is strange and unreal) 2) Difficulty remembering important parts of the assault 3) Reliving the assault through repeated thoughts. 1994. Kuriloff. In the context of rape. this concept refers to the Just World Theory and popular attitudes that certain victim behaviours (such as flirting. 1998) or leading the man on because they have gone along with the sexual experience thus far. Shaherwalla. Bridges.CULTURE OF CORRUPTION IN INDIA 139 1) Depersonalization or dissociation (feeling numb and detached. or wearing sexually-provocative clothing) may encourage rape. 1996). In extreme cases. these are countries where there is a significant social divide between the freedoms and status afforded to men and women.
that women want forced sex and to be pushed around." A number of gender role stereotypes can play a role in rationalization of rape. Thus. state may have different requirements while other countries may have less stringent limits. The underlying message of this research seems to be that when certain stereotypical elements of rape are in place. Tetreault & Barnett. SATISHCHANDER . In the case of female-on-male rape. is considered the most under. 1987).CULTURE OF CORRUPTION IN INDIA 140 1991. and that male sexual impulses and behaviors are uncontrollable and must be satisfied. The legal requirements for reporting rape vary by jurisdiction — each U. 2004). the victim may either be perceived as weak or.reported violent crime (American Medical Association. these include the idea that power is reserved to men whereas women are meant for sex and objectified. they also state that "individuals may endorse rape myths and at the same time recognize the negative effects of rape. However. Investigation Since the vast majority of rapes are committed by persons known to the victim. in cultures where men acquire status by sexual conquest.S. 1982. rape victims are prone to being blamed. 1995). the initiation and process of a rape investigation depends much on the victim's willingness and ability to report and describe a rape. 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. In the case of male-on-female rape. the number of reported rapes is lower than both incidence and prevalence rates (Wallaby and Allen. Prosecution Reporting Sexual violence and rape in particular. as fortunate. L'Armand & Pepitone.
rape has been regarded as spoils of war. The government has been expressed its concern at the year-on-year increase in attrition of reported rape cases. and be compared to reference samples collected from patients and suspects. saliva. War rape In 1998." Support groups. vaginal epithelial cells (typically collected by a rape kit) may be identified and genetically typed by a crime lab. vaginal secretions. Now it will be considered a war crime. the response to sexual violence is comprehensive. provide information regarding the circumstances of the incident. including some on-line. putting it at an all-time low of 5. Conviction In the United Kingdom. and pledged to address this "justice gap" (Home Office. Prevention and treatment As sexual violence affects all parts of society. 2002a). The responses can be categorized as: individual approaches. health care responses. figures on reported rape cases show an ongoing decline in the conviction rate. usually accessed by "umbrella" organizations (see List of anti-sexual assault organizations in the United States) are prevalent. We want to send out a strong message that rape is no longer a trophy of war. SATISHCHANDER . The information derived from the analysis can often help determine whether sexual contact occurred.CULTURE OF CORRUPTION IN INDIA 141 Biological evidence such as semen. blood. community-based efforts and actions to prevent other forms of sexual violence.6% in 2002. "Recovery from sexual assault is a complicated and controversial concept. Judge Navanethem Pillay of the International Criminal Tribunal for Rwanda said: From time immemorial.
In 1998.000 women by the Japanese soldiers during the six weeks of the Nanking Massacre is an example of such atrocities. As a result. it is often very difficult. to assemble an accurate view of what really happened. Wartime propaganda often alleges.CULTURE OF CORRUPTION IN INDIA 142 Rape. Documents written during or after Genghis Khan's reign say that after a conquest. Persian. Some estimate that around 60% of combatants in Congo are HIVinfected. Chad and the Democratic Republic of Congo. caused much destruction during their invasions. 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 .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). the International Criminal Tribunal for Rwanda found that systematic rape was used in the Rwandan genocide. both practically and politically. mistreatment of the civilian population by enemy forces and allegations of rape figure prominently in this. a monk who survived the Mongol invasion of Hungary.000 Bosnian Muslim women were raped by Serb forces during the Bosnian War. During World War II an estimated 200.000 females living in the Democratic Republic of the Congo today have been raped in recent conflicts. Greek and Roman armies reportedly engaged in war rape. who established the Mongol Empire across much of Eurasia. According to UNICEF rape was prevalent in conflict zones in Sudan. The Mongols. pointed out not only the genocidal element of the occupation.000 Korean and Chinese women were forced into prostitution in Japanese military brothels. and that at least 20. in the course of war. UNICEF states that in Kenya reported cases of sexual violence doubled within days of post-election conflicts. French Moroccan troops known as Goumiers committed rapes and other war crimes after the Battle of Monte Casino. 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. drawing a link between the occurrence of sexual violence with the significant uprooting of a society and the crumbling of social norms. The Israelite. According to UNICEF rape is common in countries affected by wars and natural disasters. dates back to antiquity. It is estimated that more than 200. as so-called "Comfort women". the Mongol soldiers looted pillaged and raped. ancient enough to have been mentioned in the Bible. It has been alleged that an estimated 200. and exaggerates. but also that the Mongols especially "found pleasure" in humiliating women. Rape by soldiers was common in many areas occupied by the Red Army. Rogueries’. The systematic rape of as many as 80.
recognizes rape. Examples of behaviors commonly associated with rape culture include victim blaming and sexual objectification. "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. and media condone. torture and enslavement by Bosnian Serb soldiers. Specifically. Rape culture Rape culture is a term which originated in women's studies and feminist theory. which defines the jurisdiction of the International Criminal Court. practices. norms.000 women were raped during the 1994 Rwandan Genocide. 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. enforced prostitution. describing a culture in which rape and sexual violence against women are common and in which prevalent attitudes. policemen and members of paramilitary groups after the takeover of the city in April 1992. forced pregnancy. sexual slavery. manifesting the specific intent required for those acts to constitute genocide. excuse." An estimated 500. Now India is making a rape culture.CULTURE OF CORRUPTION IN INDIA 143 systematic and had been perpetrated against Tutsi women only. or tolerate sexual violence against women. The Rome Statute. SATISHCHANDER . it was recognised that Muslim women in Foča (southeastern Bosnia and Herzegovina) were subjected to systematic and widespread gang rape. Amnesty International stated that the ruling challenged the widespread acceptance of the torture of women as an intrinsic part of war. enforced sterilization. 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. 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 even due to a non-sexual relationship perceived as inappropriate. The perceived dishonor is normally the result of one of the following behaviors. (c) engaging in heterosexual sexual acts outside marriage. Human Rights Watch defines "honor killings" as follows:- Honor killings are acts of vengeance. Women and girls are killed at a much higher rate than men. Definitions In the modern age. Ane Nauta in 1978. (b) wanting to terminate or prevent an arranged marriage or desiring to marry by own choice. including: refusing to enter into an arranged marriage. committed by male family members against female family members. seeking a divorce—even from an abusive husband—or (allegedly) committing adultery. Honour killings are directed mostly against women and girls. SATISHCHANDER . usually death. due to the belief of the perpetrators (and potentially the wider community) that the victim has brought dishonor upon the family or community. The mere perception that a woman has behaved in a way that "dishonors" her family is sufficient to trigger an attack on her life.000 women and girls a year are killed by members of their own families. Nauta sought a term that could be used in distinguish honour killings from blood feuds.CULTURE OF CORRUPTION IN INDIA 144 28. the term was first used by a Dutch scholar of Turkish society. Honor killing An honor killing or honour killing is the killing of a member of a family or social group by other members. The United Nations Population Fund (UNFPA) estimates that perhaps as many as 5. who are held to have brought dishonor upon the family. A woman can be targeted by (individuals within) her family for a variety of reasons. or the suspicion of such behaviors: (a) dressing in a manner unacceptable to the family or community. and (d) engaging in homosexual acts. being the victim of a sexual assault. Many women's groups in the Middle East and Southwest Asia suspect the victims are at least four times more.
As a cultural practice Sharif Kanaana. for example in feminist and integration politics. clan. some otherwise low-status immigrant men and boys have asserted their dominant patriarchal status by inflicting honor killings on women family members who have participated in public life. Ahmet Yildiz. was shot outside a cafe and later died in hospital. publicly engage other communities. but by pragmatic calculations. says that honor killing is:- A complicated issued that cuts deep into the history of Arab society. during the year 2002 in Pakistan. 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. In another case. thereby failing to "purify" the family name. 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. In countries that receive immigration. What the men of the family. Women for the tribe were considered a factory for making men. Alternatively. a gay Jordanian man was shot and wounded by his brother. professor of anthropology at Birzeit University. it is estimated that 245 women and 137 men were killed in the name of Karo-karis in Sindh. Sociologists have called this Turkey's first publicized gay honor killing. a homosexual Turkish student.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 . In one case. since many men in these societies will refuse to marry the sister of a "shamed" female whom the family has not chosen to punish. These killings target women and men who choose to have relationships outside of their family's tribal or religious community. For example. Women in the family tend to support the honor killing of one of their own. 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. Some women who bridge social divides. There is some evidence that homosexuality can also be perceived as grounds for honor killing by relatives. or adopt some of the customs or the religion of an outside group may be attacked.
and sometimes for marrying outside their caste or religion. 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. has so far shown that little if any social stigma is attached to honor killing. What's behind it is the issue of fertility. and family members have no socially acceptable alternative but to remove the stain on their honor by attacking the woman. honour killings are rare to non-existent in South India and the western Indian states of Maharashtra and Gujarat. The lawyer and human rights activist Henna Jilani says. literate. the tribal leaders condone the act and protect the killers and the police connived to the coverup. It also comments that the practice is not related to a feudal societal structure. Nighat Taufeeq of the women's resource center Shirkatgah (Lahore. Uttar Pradesh and Bihar. "There are also perpetrators who are welleducated university graduates. Pakistan) says: "It is an unholy alliance that works against women: the killers take pride in what they have done. In contrast. In some other parts of India. the predominantly Kurdish area of Turkey. notably West Bengal. as a result of people marrying without their family's acceptance. 60 percent are either high school or university graduates or at the very least. or reproductive power.CULTURE OF CORRUPTION IN INDIA 146 control sexual power or behavior. Of all those surveyed. Haryana. "The right to life of women in Pakistan is conditional on their obeying social norms and traditions. mainly in the Indian states of Punjab." A July 2008 Turkish study by a team from Deckle University on honor killings in the Southeastern Anatolia Region." India Honor killings have been reported in northern regions of India. Rajasthan. honor SATISHCHANDER .
where she later died from her injuries. The victim had screamed for help for about 20 minutes before neighbours arrived. This body reviewed constitutional. The NCW's activism has contributed significantly towards the reduction of honor killings in rural areas of North India. In a landmark judgment in March 2010. Despite having been given police protection on court orders. 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. Haryana also is known for incidents of honour killing. Indian women are considerably better protected against honor killings by Indian law and government than Pakistani women. Jayvirsingh Bhadodiya shot his daughter Vandana Bhadodiya and struck her on the head with an axe. largely due to the activism and influence of reformists such as Vivekananda. their mutilated bodies were found a week later in an irrigation canal. from Bhojpur who was set on fire inside her house in a case of what the police called ‘moral vigilantism’. Ramakrishna. The Indian state of Punjab is notorious for honour killings. Bhagalpur in the northern Indian state of Bihar has also been notorious for honour killings. and they have suggested that governments of countries SATISHCHANDER . they were kidnapped. 34 honour killings were reported in the state between 2008 and 2010: 10 in 2008. Among Rajput’s. legal and other provisions as well as challenges women face. According to data compiled by the Punjab Police. Recent cases include a 16-year-old girl. In May 2008.CULTURE OF CORRUPTION IN INDIA 147 killings ceased about a century ago. a man and woman of the same clan who eloped and married in June 2007. Karnal district court ordered the execution of the five perpetrators of an honour killing. Imrana. This form of honour killing is attributed to Rajput culture and traditional views on the perceived "purity" of a lineage. marriages with members of other castes can provoke the killing of the married couple and immediate family members. and four in 2010. Ahmed. only to find her still smoldering. 20 in 2009. Vidyasagar and Raja Ram Mohan Roy. In June 2010 some incidents were reported even from Delhi. According to Pakistani activists Henna Jilani and Emans M. and imprisoning for life the khap (local caste-based council) head who ordered the killings of Manoj Banwala (23) and Babli (19).
Alarmed by the rise of honour killings. While difficult to generalise across jurisdictions. on which they tolled their money. the Supreme Court of India issued notices to the Central Government and six states including Uttar Pradesh. fairs. fraudulent claims. In the majority of cases. The word bankruptcy is formed from the ancient Latin bancus (a bench or table). In June 2010. 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. and ruptus (broken). Punjab. conflicts of interest. however. scrutinizing the increasing number of honour killings. 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. Haryana and Rajasthan to take preventive measures against honor killings. the Government planned to bring a bill in the Monsoon Session of Parliament July 2010 to provide for deterrent punishment for 'honour' killings. when a banker failed. Hence. concealment or destruction of documents. 29. A "bank" originally referred to a bench. Fraud Bankruptcy fraud is a white-collar crime. etc. false SATISHCHANDER . in markets. wrote their bills of exchange. common criminal acts under bankruptcy statutes typically involve concealment of assets. to advertise to the public that the person to whom the bank belonged was no longer in a condition to continue his business. 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. which the first bankers had in the public places. An involuntary bankruptcy petition may not be filed against an individual consumer debtor who is not engaged in business. he broke his bank.
insolvency. India India does not have a clear law on corporate bankruptcy even though individual bankruptcy laws have been in existence since 1874. trustee if a debtor attempts to later assert ownership of such an "unscheduled asset" after being discharged of all debt in the bankruptcy. Legal meaning of the terms bankruptcy. The trustee may then seize the asset and liquidate it for the benefit of the (formerly discharged) creditors. On the other hand. Multiple filings are not in and of themselves criminal. but they may violate provisions of bankruptcy law. A closed bankruptcy may be reopened by motion of a creditor or the U.CULTURE OF CORRUPTION IN INDIA 149 statements or declarations. not the debtor to decide whether a particular asset has value. it is for the creditors. but may work against the filer. which is not a criminal act. All assets must be disclosed in bankruptcy schedules whether or not the debtor believes the asset has a net value. SATISHCHANDER . 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.S. The current law in force was enacted in 1920 called Provincial Insolvency Act. liquidation and dissolution are contested in the Indian legal system. 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. This is because once a bankruptcy petition is filed. The future ramifications of omitting assets from schedules can be quite serious for the offending debtor. Bankruptcy fraud should be distinguished from strategic bankruptcy. 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. and fee fixing or redistribution arrangements.
’’ he said.” the minister said. 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). “While countries have accepted to end bank secrecy in the general. come countries have agree to do so only from a prospective date and are not willing to exchange past banking information. such as Switzerland. SATISHCHANDER . in the case of domestic criminal Investigations of offences established in accordance with this Convention. additional privacy is provided to beneficial owners through the use of numbered bank accounts or otherwise. Despite efforts made at the global level and statements issued by G-20 leaders at their London summit in April 2009.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. Singapore. a criminal complaint has been filed). regretted that the banking system is still opaque in various non-tax and low tax jurisdictions. there are appropriate mechanisms available within its domestic legal system to overcome Obstacles that may arise out of the application of bank secrecy laws. Such issue put a question mark on the efficacy of exchange of banking information. Mukherjee. Bank secrecy is prevalent in certain countries. he said. In some cases. 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.”We cannot say with certainly that the bank secrecy is over in all cases. Each State Party shall ensure that. as well as offshore banks and other tax havens under voluntary or statutory privacy provisions.
hence there is a larger diversification of the idiosyncratic risks. there have been tremendous alterations in the constitution and functioning of Chit funds. It is considered one of the best instruments to cater to the needs of the poor. in India. ROSCAs are a means to „save and borrow‟ simultaneously. It enables poor people to convert their small savings into lump sums. The main mechanisms are. wherein the members contributed some money in return for an accumulated sum at the end of the tenure. and (e) legal recognition also helps the chit fund operators to scale their operations. In return the chit fund companies take a fee from the clients to cover their expenses. (b) provides an option to people to participate in schemes where members need not know each other. (c) to some extent ensures transparency in the operations. insurance which allows a lump sum to be enjoyed at some unspecified future time (for SATISHCHANDER . 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. this industry has been highly regulated and is governed by stringent rules. chit funds have been formally institutionalized as well. The concept of chit funds originated more than 1000 years ago. for „consumption‟ purposes. 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. Initially it was in the form of an informal association of traders and households within communities. Legally recognized firms provide a variety of chit schemes. However. (d) given that the law determines the size of the bidding and the commission the company can charge. in the form of a commission. in other words. in recent times. This makes it easier to provide chit schemes in urban settings where social linkage among members might be weak. it encourages competition among chit fund firms to improve services to clients. 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. Chit funds are the Indian equivalent of the Rotating Savings and Credit Associations (ROSCA) that are famous throughout the world. The chit fund company provides a variety of mechanisms by which the savings of the members can be transformed into lump sums. 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. savings deposit which allow a lump sum to be enjoyed in future in exchange for a series of savings made at present.CULTURE OF CORRUPTION IN INDIA 151 30. Under the Chit Fund Act. Whiles in most places ROSCAs are user-owned and organized informally. Participation in Chit funds was mainly for the purpose of purchasing some property or.
chitty. and transit country for men. Such chit fund schemes may be conducted by organized financial institutions or may be unorganized schemes conducted between friends or relatives.CULTURE OF CORRUPTION IN INDIA 152 example. While no comprehensive study of forced and bonded labor has been completed. in his turn. Chit funds also played an important role in the financial development of people of south Indian state of Kerala. 1982. SATISHCHANDER . destination. daughter’s marriage) in exchange for a series of savings made both at present and in the future. chits as defined in Section 2 of the Chit Funds Act. 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. as foremen. conducting or supervising. chit fund. In Kerala. beggars. and children are held in debt bondage and face forced labor working in brick kilns. According to Section 2(b) of the Chit Fund Act. "Chit means a transaction whether called chit. men. NGOs estimate this problem affects 20 to 65 million Indians. agent or in any other capacity. There are also variations of chits where the savings are done for a specific purpose. the main business activity of it being the chitty business. agriculture. there exists a company under the State Government. 31. rice mills. 1982. Human trafficking in India India is a source. and children trafficked for the purposes of forced labor and commercial sexual exploitation. called Kerala State Financial Enterprise. Internal forced labor may constitute India’s largest trafficking problem. A Chit fund is a kind of savings scheme practiced in India. Children are subjected to forced labor as factory workers. as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement. A Chit fund company means a company managing. In Kerala chitty (chit fund) is a common phenomenon practiced by all sections of the society. 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. domestic servants. and embroidery factories. be entitled to the prize amount". women. women. by providing easier access to credit.
Europe. In some cases. and physical or sexual abuse. Prescribed penalties under the ITPA — ranging from seven years’ to life imprisonment — are sufficiently stringent and commensurate with those for other grave crimes.CULTURE OF CORRUPTION IN INDIA 153 and agriculture workers. and the United States for work as domestic servants and low-skilled laborers. the Child Labor Act. is facilitated by corrupt officials and people having a stake in this lucrative business. Prosecutions The Government of India prohibits some forms of trafficking for commercial sexual exploitation through the Immoral Trafficking Prevention Act (ITPA). in other cases. unlawful withholding of passports. These laws are ineffectually enforced. restrictions on movement. SATISHCHANDER . prohibiting kidnapping and selling minors into prostitution respectively. and their prescribed penalties — a maximum of three years in prison —are not sufficiently stringent. India is also a destination for women and girls from Nepal and Bangladesh trafficked for the purpose of commercial sexual exploitation. such workers are the victims of fraudulent recruitment practices that lead them directly into situations of forced labor. including debt bondage. They protect brothels that exploit victims. India also prohibits bonded and forced labor through the Bonded Labor Abolition Act. Nepali children are also trafficked to India for forced labor in circus shows. bonded labor and movement of sex trafficking victims. Penalties under these provisions are a maximum of ten years’ imprisonment and a fine. where some are subjected to conditions of involuntary servitude. to arrest traffickers. including nonpayment of wages. high debts incurred to pay recruitment fees leave them vulnerable to exploitation by unscrupulous employers in the destination countries. Indian authorities also use Sections 366(A) and 372 of the Indian Penal Code. and protect traffickers and brothel keepers from arrest and other threats of enforcement. and have been used as armed combatants by some terrorist and insurgent groups. There are also victims of labor trafficking among the thousands of Indians who migrate willingly every year to the Middle East. Indian women are trafficked to the Middle East for commercial sexual exploitation. and the Juvenile Justice Act. however. In addition to this.
Some states provide services to victims of bonded labor. 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. it did not.000 rupees ($450). Bulk of bonded labor heads for Middle East to emerging economies and there are several media reports which testify the plight of Indian workers. but remains inadequate in many places. 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. Indian diplomatic missions in destination SATISHCHANDER . India’s Central Bureau of Investigation incorporated anti-trafficking training into its standard curriculum. but this program is unevenly executed across the country. so few victims receive this assistance. however. In November. sustained efforts in combating trafficking for commercial sexual exploitation usually come to a naught because of ineffectual laws as well as delays in prosecution. the State of Maharashtra developed an action plan to combat trafficking. The central government does not provide protection services to Indian victims trafficked abroad for forced labor or commercial sexual exploitation. Protection India’s effort to protect victims of trafficking varies from state to state. However. allocate appropriate funding to accomplish the objectives of this plan. Government authorities do not proactively identify and rescue bonded laborers.CULTURE OF CORRUPTION IN INDIA 154 Usually. State governments regularly conduct campaigns through their welfare departments along with police raids. Although children trafficked for forced labor may be housed in government shelters and are entitled to 20. The government does not break down these statistics by sections of the law.000 rupees ($225) from the central government for rehabilitation. Victims of bonded labor are entitled to 10. but Non-Governmental Organisations provide the majority of protection services to these victims.
Although statistics on arrests under Section 8 are not kept. once repatriated. The government also does not repatriate Nepali victims. This is because of the fact that most of the destinations abroad pay better sums of money. SATISHCHANDER . the government and some NGOs report that. Because most law enforcement authorities lack formal procedures to identify trafficking victims among women arrested for prostitution. Section 8 of the ITPA permits the arrest of women in prostitution. Many victims decline to testify against their traffickers due to the length of proceedings and fear of retribution by traffickers. The government has also instituted pre-departure information sessions for domestic workers migrating abroad on the risks of exploitation. Therefore. legal. psychological. however. Most of the Indian workers’ pay huge sums of money to agents who facilitate their emigration outside the official channels and willingly emigrate despite being aware of the conditions prevailing in those destinations. NGOs primarily perform this function. India has not ratified the 2000 UN TIP Protocol.CULTURE OF CORRUPTION IN INDIA 155 countries may offer temporary shelter to nationals who have been trafficked. Those who are subject to removal are not offered legal alternatives to removal to countries in which they may face hardship or retribution. Some foreign victims trafficked to India are not subject to removal. NGOs report that some Bangladeshi victims of commercial sexual exploitation are pushed back across the border without protection services. police officers no longer use this provision of the law. or reintegration assistance for these victims. it is unclear whether arrests of women in prostitution under Section 8 have actually decreased. some victims may be arrested and punished for acts committed as a result of being trafficked. through sensitization and training. NGOs that receive funding indirectly from either the central or state government do not want to be brought within the scrutiny of anybody. a dream of better future ahead often lures the people abroad and hence trafficking cannot entirely be prevented. neither the central government nor most state governments offer any medical. Prevention Ministry of Labor and Employment displays full-page advertisements against child labor in national newspapers at periodic intervals.
The CPI was subsequently published annually. The headquarters is located in Berlin. Joe Githongo. The CPI ranked nations on the prevalence of corruption within each country. based upon surveys of business people. Germany but operates through more than 70 national chapters. SATISHCHANDER . It was criticized for poor methodology and unfair treatment of developing nations. Kamal Husain. PREVENTION &REDUCTION TOOLS (ACT’S) 32. Fritz Heimann. Founding board members included Eigen. Hansjörg Elshorst. Dolores L. Español. George Moody Stuart. Michael Hershman. Jeremy Pope and Frank Vogl. In 1995. while also being praised for highlighting corruption and embarrassing governments. TI developed the Corruption Perceptions Index (CPI). It publishes an annual Corruption Perceptions Index. TI began publishing the Bribe Payers Index (BPI) which ranked nations according to the prevalence that a country's multinational corporations would offer bribes. Transparency International Transparency International (TI) is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. Jerry Parfitt. a former regional director for the World Bank. In 1999. History TI was founded in May 1993 through the initiative of Peter Eigen.CULTURE OF CORRUPTION IN INDIA 156 G. Eigen acted as Chairman and Pope was Managing Director. a comparative listing of corruption worldwide.
whereas prior to the 1990s this topic was not broadly discussed. it also publishes an annual Global Corruption Report. TI compiles surveys that ask businessmen and analysts. TI says of itself: "Transparency International is the global civil society organization leading the fight against corruption. International Institutions such as the World Bank and the International Monetary Fund now view corruption as one of the main obstacles for development. women and children around the world. Germany. The goal of TI is to be nonpartisan and to build coalitions against corruption.CULTURE OF CORRUPTION IN INDIA 157 Organization and role TI is organized as a group of some 100 national chapters. Relying on the number of actual corruption cases SATISHCHANDER . 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. TI is now an international non-governmental organization. their perceptions of how corrupt a country is. It develops tools for fighting corruption and works with other civil society organizations. TI does not undertake investigations on single cases of corruption or expose individual cases. TI has issued an annual Corruption Perceptions Index (CPI). TI furthermore played a vital role in the introduction of the United Nations Convention against Corruption and the OECD Anti-Bribery Convention." Since 1995. To form this index. TI's biggest success has been to put the topic of corruption on the world's agenda. Originally founded in Germany in May 1993 as a not-for-profit organization. a Global Corruption Barometer and a Bribe Payers Index. both in and outside the countries they are analysing. and claims to be moving towards a completely democratic organizational structure. companies and governments to implement them. Corruption Perceptions Index The CPI—besides the World Bank corruption index—is the most commonly used measure for corruption in countries worldwide. with an international secretariat in Berlin.
including a study entitled “Differences between Politically Connected and Non-Connected Firms: A Cross Country Comparison”. Transparency International advocates SATISHCHANDER . With governments committing huge sums to tackle the world's most pressing problems.. To address these challenges. The 2010 Corruption Perceptions Index shows that nearly three quarters of the 178 countries in the index score below five. These results indicate a serious corruption problem. Data can vary widely depending on the public perception of a country. since. governments need to integrate anti-corruption measures in all spheres. This makes it difficult to evaluate the result of new policies. The main one stems from the difficulty in measuring corruption. Mara Faccio (Purdue University. Competitiveness and corruption A review of the linkages between countries' competitiveness and the incidence of corruption was initiated at a TI workshop in Prague. USA) has issued a number of papers on this subject. November 1998 and picked-up in the International Anti-Corruption Conference three years later. They argue that "perceptions matter in their own right. on a scale from 10 (highly clean) to 0 (highly corrupt).. from the instability of financial markets to climate change and poverty. The CPI therefore needs to rely on third-party surveys which have been criticized as potentially unreliable. The CPI has received criticisms over the years. corruption remains an obstacle to achieving much needed progress. The CPI authors replied to these criticisms by reminding that the CPI is meant to measure perception and not "reality". firms and individuals take actions based on perceptions". The second issue is that data cannot be compared from year to year because TI uses different methodologies and samples every year. which by definition happens behind the scenes. from their responses to the financial crisis and climate change to commitments by the international community to eradicate poverty. the completeness of the surveys and the methodology used.CULTURE OF CORRUPTION IN INDIA 158 would not work since laws and enforcement of laws differ significantly from country to country.
The rapidly growing number of States that have become parties to the Convention is further proof of its universal nature and reach. Notable among decliners over the past year are some of the countries most affected by a financial crisis precipitated by transparency and integrity deficits. global policy solutions too many global crises are at risk. The UNCAC covers five main areas: prevention.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. SATISHCHANDER . a major concern for countries that pursue the assets of former leaders and other officials accused or found to have engaged in corruption. international cooperation. asset recovery.1. abuse of power. followed closely by Finland and Sweden at 9. New Zealand and Singapore are tied at the top of the list with a score of 9. Among those improving in the past year. 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. Denmark. and various acts of corruption in the private sector. A further significant development was the inclusion of a specific chapter of the Convention dealing with the recovery of assets. The UNCAC covers many different forms of corruption. such as trading in influence. slightly trailing Myanmar and Afghanistan at 1. 33. and technical assistance and information exchange.4 and Iraq at 1.2. The message is clear: across the globe.5. transparency and accountability are critical to restoring trust and turning back the tide of corruption. the general absence of OECD states underlines the fact that all nations need to bolster their good governance mechanisms. criminalization and law enforcement measures. Bringing up the rear is Somalia with a score of 1.3. Without them. United Nations Convention against Corruption The United Nations Convention against Corruption (UNCAC) is the only legally binding universal anti-corruption instrument.
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. the Office of the Comptroller and the Auditor General. SATISHCHANDER . The sectors most affected by corruption include public procurement. 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. The Supreme Court. The Government has put in place a well-developed legal and institutional framework. public funds embezzlement. law enforcement remains weak and reforms have a long way to go. has taken a firm stance against corruption in recent years and made several important rulings. and the Central Vigilance Commission. High ranking officials have also been involved in major corruption scandals. The 2006 report by Transparency International puts India at the 70th place and states that significant improvements were made by India in reducing corruption. in particular. 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. and the police. fraudulent Procurement practices and judicial corruption. tax and customs administration. However. which grants citizens access to government information and a mechanism to control public spending. In spite of progress. The latter has been identified as one of the most corrupt institutions by various surveys. however. with institutions including the Central Bureau of Investigation. public utilities. infrastructure.CULTURE OF CORRUPTION IN INDIA 160 34. corruption remains widespread in the country and there have been many instances of political and bureaucratic corruption. Another achievement in the fight against corruption has been the enactment of the Right to Information (RTI) Act in 2005.
as it encourages the common citizen to enthusiastically participate in the whole process of governance. including education and health care that have intense and pervasive impact on all the human activities. Specifically. to minimize corruption and inefficiency in public offices and to ensure people’s participation in governance and decision making. State Government sand Local Bodies. directly or indirectly. so that the public has to take minimum recourse to the use of this legislation for obtaining information. and inter alia includes all authorities under the Central Government. to promote transparency and accountability in governance. by the public funds also fall within the ambit of this Act. 2005 Right to information (RTI) is inherent in democratic functioning and a precondition to good governance and realization of all other human rights. participatory and meaningful. The Act promises to make the right to information more progressive. The non-governmental organizations (NGOs) substantially funded. 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. the main objectives of the law on RTI are: to operationalize the fundamental right to information. SATISHCHANDER . (ii) The duty of the Government to proactively provide certain key information even in absence of a request. to set up systems and mechanisms that facilitate people’s easy access to information. 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. in section 4 of the Act.CULTURE OF CORRUPTION IN INDIA 161 Salient Features of Right to Information Act. The citizens are not only free to ask for information from the Government. but also have the right to get it. A duty has been cast. unless specifically defined exemptions apply.
The jurisdiction of the lower court is barred under section 20 of the Act. This Act. as well as an alert. paves the way for an empowered citizen. which are exempted from the provisions of this Act. responsive. or destroying information and so on. makes it mandatory for the PIO to provide the information within 30days. The Act establishes a two-tier mechanism for appeal. such exemption would not be available. it has been made mandatory to provide it within 48 hours of the receipt of the request. the Commission may impose penalty on the concerned officials for denial of information and recommend disciplinary action against the errant officials.CULTURE OF CORRUPTION IN INDIA 162 The procedure of securing information as provided in section 6 of the Act. The Commission is vested with the power of a Court. In cases of allegations of violation of human rights. prescribes a procedure. The first appeal lies to an officer within the organization who is senior in rank to PIO. The fee payable is reasonable and information is to be provided free of cost to citizens living below the poverty line. who do not comply with the requirements of the Act. The second appeal lies in the Information Commission. A citizen has to merely make a request to the concerned Public Information Officer (PIO) specifying the information sought by him. under Section 25(5) of the Act. Under Section 20. Even the exemptions are not absolute if disclosure of the information outweighs the harm to the public authorities. Even in the case of security and intelligence agencies and organizations. In addition. efficient. or forgiving incorrect. Moreover. section 7 of the Act. if there were cases of allegation of corruption and human rights violation. transparent and accountable government. thus. The categories of information exempted from disclosure in this Act are kept to a bare minimum. the Information Commission has also been empowered to recommend disciplinary action against the government servants. incomplete or misleading information. The Act provides for penalties in case of failure to provide information in time. mainly information seekers and providers. To assure that the information sought is provided quickly. or for refusing to accept application for information. which is very simple. 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. the Commission may also advise the appropriate Government in the matters of maintenance SATISHCHANDER . information would be made available after the approval of the Information Commission. If the information requested concerns the life or liberty of a person.
ensure effective implementation of the Act. We.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. in order to promote transparency and accountability in the working of every public authority. (ii) media reports on the issues pertaining to RTI matters. 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. The assessment of impact is proposed to be made in terms of the stated objectives of the RTI Act. SATISHCHANDER . therefore. The powers vested with the Information Commissioner. propose to find an answer to the question: whether the objectives of the Act are being realized? It must be admitted that the assessment of the RTI on good governance and development is indeed a daunting task. for developing an understanding on how it works and what it does or does not do. Impact of RTI on the Elements of Good Governance The RTI Act was implemented in October 2005. Though a period of less than three years is too a short period to assess the success of RTI. reliance is made on (i) the responses of the RTI requesters and the activists. However. mainly those relating to corruption and accountability of public bodies. which are outlined in its preamble. It is stated furthermore that:Democracy requires an informed citizenry and transparency of information which are vital to its functioning and also to contain corruption and to hold Governments and their instrumentalities accountable to the governed. since data are lacking to permit methodological rigour of analysis. and (iii) preliminary research studies and publications of results. particularly during the course of hearings conducted by the Author in the cases listed before the Commission to resolve the disputes between information seekers and providers. it may be worthwhile to analyse some evidences. who are appointed by the President of India/Governor of a state.
All these parameters are critical elements of good governance. an era which will truly fulfil the hopes of the founding fathers of our Republic. an era which will eliminate the scourge of corruption. the major objectives of the Act are:- 1) Greater Transparency in functioning of public authorities. 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’.CULTURE OF CORRUPTION IN INDIA 164 In addition to the above. an era which will bring the common man’s concern to the heart of all processes of governance. including internet. including Village level Panchayats – have put the records in SATISHCHANDER . as under. the public authorities are also required to ‘provide as much information suo motu to the public at regular intervals through various means of communication. regulations and decisions. 2005: I believe that the passage of this Bill will see the dawn of a new era in our processes of governance. an era of performance and efficiency. In compliance of the above provisions of the Act. all the levels of the Government – the Centre. The public authorities are therefore required to make pro-active disclosures through publication of relevant documents. on May 11. 2) Improvement in accountability and performance of the Government. Besides. 4) Reduction in corruption in the Government departments. stated. the Prime Minister of India. Transparency With a view to ensuring maximum disclosure of information regarding government rules. while piloting the Bill for its passage by the National Parliament. 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. Evidently. so that the public have minimum resort to the use of this Act to obtain information’. States and Local Bodies. 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.
which include ‘file noting’s. to facilitate the access to information. 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. (iii) Taking certified sample of material. such as. Thus. for necessary directions to the parties as per the provisions of the Act. In the cases where the information sought for are not provided within the stipulated period of 30 days or the information furnished are incomplete. domestic gas. records. The disclosure of information relating to use of funds allocated to rural employment guarantee scheme. there is greater transparency than before in the working of the public bodies. 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. every public SATISHCHANDER . thus. by whom and with what consequences or outcomes. Accountability The RTI provides people with the mechanism to access information. And. if available. In a large number of cases. documents.CULTURE OF CORRUPTION IN INDIA 165 public domain. records of recruitment. such as above. educational and health facilities. etc. the lists of beneficiaries of the Government’s subsidized schemes. a requester is free to file a complaint or appeal before the Information Commission (IC). food grains supplied through ration shops. cabinet papers. information in electronic form. through publications as well as internet in the regional languages. (ii) Taking notes extracts or certified copies of the documents or records. the Commission has ordered for providing the details of the decision-making processes. has thus resulted in checking corrupt practices in delivery of services and ensuring the reach of entitlements to the poor. etc. have contributed to advocacy in favour or against the policies and/or political leaderships. (IV) Obtaining. muster rolls underemployment guarantee schemes. misleading or incorrect. In effect. The disclosure of vital information. a citizen has the right to: (i) Inspection of work. selection and promotion of staff. shelter for poor. water and electricity. documents pertaining to tender processes and procurement procedure. In addition.
The information regime has. SATISHCHANDER . particularly for the poor. This has begun to happen with salutary effects on delivery of socioeconomic services. In effect. It was. In the process. the concerned officials at all levels objectively record the reasons for the observations made by them. Such an era of darkness in policy planning is over. being full aware that the records pertaining to the decision-making process. Until the implementation of the RTI Act. the quality of decision making and delivery of services have duly improved. including file noting’s. It creates an environment of distrust between the people and the government. doctors and nurses do not attend health centres. it perpetuates poverty and harms the poor. Attempts are also made to effectively implement the programs as the relevant details are proactively disclosed. for instance. as ineffective in terms of its outcome.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. Such a chance given to people empowers them to make appropriate choice of leadership and the policies that affects them. which was found most often. As a result. Reduction in Corruption Lack of transparency and accountability encourage the government officials to indulge in corrupt practices. ration card holders do not receive subsidized food grains and the promised jobs are not provided to the people. created conducive conditions for every One to have a better understanding of how the government works or how a Particular decision was reached. which result in lower investments due to misuser diversion of funds for private purposes. For instance. thus. the teachers do not teach. which impinge upon the development and jeopardize democratic governance. are required to be put in public domain. it was not possible for an ordinary persons to seek the details of a decision making process. not possible to hold a free and frank discussion on issues of common concern of people or to fix the responsibility for any action. the government’s social spending yields no worthwhile benefits. therefore. because. in effect.
the problem may get rectified. As the functioning of public authorities becomes more transparent and ensure proactive disclosure of the policies. programmes and their outcomes. but this normally involves financial compensation. It is important therefore to enhance the capacity of public authorities as well as the citizens to develop awareness and understanding of information. endeavours should be made to increase the effective demand for improvement in delivery of services. Ombudsmen An ombudsman (conventional English plural: ombudsmen) is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing not only but mostly the broad scope of constituent interests. Ombudsmen in most countries do not have the power to initiate legal proceedings or prosecution on the grounds SATISHCHANDER . and Swedish term. and to oversee the investigation of complaints of improper government activity against the citizen. If the ombudsman finds a complaint to be substantiated. who are receiving the benefits of development as per their entitlements. Ombudsman in politics In general. or an ombudsman report is published making recommendations for change. 35. an ombudsman is a state official appointed to provide a check on government activity in the interests of the citizen. usually appointed by the government or by parliament. essentially meaning "representative". there would be greater participation by people in every sphere of development. which has resulted in reduction of corruption. Ombudsman is etymologically rooted in the Old Norse word umboðsmaðr. Norwegian. An indigenous Danish.CULTURE OF CORRUPTION IN INDIA 167 RTI has enabled people to participate in the process of development. An ombudsman is an official. particularly the poor. In effect. 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. to make its effective use for the benefits of citizens. who is charged with representing the interests of the public by investigating and addressing complaints reported by individual citizens. Further redress depends on the laws of the country concerned.
by reporting to the CEO or board of directors. and according to the International Ombudsman Association (IOA) Standards of Practice do not serve any other role in the organization. They are beginning to appear around the world within organizations.CULTURE OF CORRUPTION IN INDIA 168 of a complaint. This role is sometimes referred to as a "tribunitian" role. The major advantage of an ombudsman is that he or she examines complaints from outside the offending state institution. The CVC (Central Vigilance Commission) was setup on the recommendations of Santhanams Committee (1962–64). universities. 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 introduction of ombudsmen has tended to yield mixed results. and has been traditionally fulfilled by elected representatives – the term refers to the ancient Roman "tribunes of the plebians" (tribuni plebis). These ombudsman roles are structured to function independently. and on the cooperation of at least some effective official from within the apparatus of the state. sometimes as an alternative to anonymous hot-lines in countries where these are considered inappropriate or are illegal. However. Perhaps for this reason. insurance and other sectors being serviced by both private and public bodies and corporations. and managers and/or other constituencies. outside Scandinavia. non-profit organizations and government agencies also have an ombudsman (or an ombuds office) to serve internal employees. the ombudsman system relies heavily on the selection of an appropriate individual for the office. whose role was to intercede in the political process on behalf of common citizens. Industry and organizational ombudsman Many private companies. thus avoiding the conflicts of interest inherent in selfpolicing. SATISHCHANDER . and in addition to hot lines because ombuds offices typically receive many more calls than do hot lines.
1973 was passed by the State Legislature and received assent of the President on 26. Municipalities and Corporations. However. which has so far not been enacted. Kerala (1998). Lokayukta institution has come into existence in different years. An amendment to the Constitution has been proposed to implement the Lokayukta uniformly across Indian states as a three-member body. Uttaranchal (2002) and West Bengal (2003) and Haryana (2004). Maharashtra is the first state to have established the institution in 1972. the Lokayukta doesn't have suo moto powers of instigating an enquiry. In the State of Rajasthan. Delhi (1995). this institution was established in different States in different years namely: Maharashtra (1972). Bihar (1974). Assam (1986). Uttar Pradesh (1977). Himachal Pradesh (1983). headed by a retired Supreme Court judge or high court chief justice. Some states have UpaLokayukta under Lokayukta and in some states. Karnataka (1984). corruption and mal administration. 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.3. Andhra Pradesh (1983). the Lokayukta institution was established in the year 1973 after the Rajasthan Lokayukta and Up-Lokayukta Act. the jurisdiction of the Lokpal is not extended for judiciary like in New Zealand. These institutions are based on the Ombudsman in Scandinavian countries. Orissa is the first state to present a bill on establishment of Lokayukta in 1970. in different States in India. An Administrative Reforms Commission (ARC) was set up on 5 January 1966 under the Chairmanship of Shri Morarji Desai. Punjab (1996). He or she can enquire/investigate into allegations of action. The Lokayukta is an anti-government corruption organization in the Indian states. The central Government introduced the first Lokpal Bill. The structure of the Lokayukta is not uniform across all the states. however. The appointment is made under the provisions of the Kerala Panchayats Raj Act. Gujarat (1988). A Retd-Judge of the High Court is appointed by the Governor for a term of 3 years.CULTURE OF CORRUPTION IN INDIA 169 In India. Thereafter. Lokpal and Lokayukta Bill in 1968 and lastly in 2005. Madhya Pradesh (1981).1973. inaction. Kerala State has an Ombudsman for Local Self Government institutions like Panchayats. Chhattisgarh (2002). and comprise of the state vigilance commissioner and a jurist or an eminent administrator as other members. Ombudsman is called as Lokpal or Lokayukta. SATISHCHANDER .
for example. 36. 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.CULTURE OF CORRUPTION IN INDIA 170 At the national level. such as fraud. bureaucrats and even sitting judges. and corruption.One of the first laws that protected whistle-blowers was the 1863 United States False Claims Act (revised in 1986). The public also gave nation-wide support to Anna Hazare in his demand for strong and tough anti-corruption law. 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. sometimes from related organizations. to other people within the accused organization) or externally (to regulators. the Lokayukta is largely recommendatory and enjoys limited powers to initiate action. regulation and/or a direct threat to public interest. ombudsmen at state level (Lok Ayutka) have been created in some Indian states such as Karnataka. Whistle-blowers may make their allegations internally (for example. 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 . Second. Whistle-blowers frequently face reprisal. there is no ombudsman. and sometimes under law. sometimes at the hands of the organization or group which they have accused. However. three issues that have clearly emerged across states where the institution exists need to be highlighted. law enforcement agencies. 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. a violation of a law. to the media or to groups concerned with the issues). Third. rule. However. The alleged misconduct may be classified in many ways. which tried to combat fraud by suppliers of the United States government during the Civil War. In the first place. a public or private organization. or a company. 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. 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. health/safety violations.
if there are complaint systems that offer not just options dictated by the planning and control organization. SATISHCHANDER . 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. law enforcement or watchdog agencies. who report misconduct on a fellow employee or superior within their company." solely pursuing personal glory and fame. In these cases. There is some reason to believe that people are more likely to take action with respect to unacceptable behavior. external whistleblowing is encouraged by offering monetary reward. state. others view them as "tattle tales" or "snitches. Definition Most whistleblowers are internal whistleblowers. whistleblowers may report the misconduct to lawyers. In some cases. within an organization. report misconduct on outside persons or entities. Whistleblowers are commonly seen as selfless martyrs for public interest and organizational accountability. 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. Common reactions Ideas about whistleblowing vary widely. however. the media. depending on the information's severity and nature. including an option that offers near absolute confidentiality." which refers to a whistle being blown by a policeman or a referee to indicate an activity that is illegal or a foul. or federal agencies. but a choice of options for individuals. External whistleblowers.CULTURE OF CORRUPTION IN INDIA 171 Overview The term whistleblower comes from the phrase "blow the whistle. or other local.
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. but also because of fear of losing their relationships at work and outside work. SATISHCHANDER . The wrongdoing might take the form of fraud. and how they eventually became published or publicized. corruption or mismanagement. many whistleblowers report there exists. most whistleblower protection laws provide for limited "make whole" remedies or damages for employment losses if whistleblower retaliation is proven. Persecution of whistleblowers has become a serious issue in many parts of the world. This decision follows the death of various whistleblowers. For purposes of the English Wikipedia. Whistleblower 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 whistleblowers but the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill. this section emphasizes the English-speaking world and covers other regimes only insofar as they represent exceptionally greater or lesser protections. Although whistleblowers are often protected under law from employer retaliation. in the United States. including Manjunath Shanmugam and Satyendra Dubey. and/or harsh mistreatment by other employees.CULTURE OF CORRUPTION IN INDIA 172 It is probable that many people do not even consider blowing the whistle. where and how secrets were revealed. the idea of seeking fame and glory may be less commonly believed. Legal protection Legal protection for whistleblowing varies from country to country and may depend on any of the country of the original activity. wage garnishment. demotion. 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. However. not only because of fear of retaliation. suspension. 2010 was approved by the government as part of a drive to eliminate corruption in the country's bureaucracy. such as termination. there have been many cases where punishment for whistleblowing has occurred. For example.
of India has introduced the whistle blower law named as "Right to Information act”. however. 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. A committee of 10 people has been sectioned from Govt who will lead this committee. Now. he said in reply to a question in Rajya Sabha. Whistleblowers Protection Bill soon.Mr. He. it is planning to bring a legislation in this regard soon (incorporating all the guidelines in the resolution). 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. Minister of state for personnel Prithviraj Chavan said the government had brought the whistleblowers' resolution in 2004 to ensure transparency.CULTURE OF CORRUPTION IN INDIA 173 India As of 2009 Govt. SATISHCHANDER . He said the government was "fully committed" to implement the policy of "zero tolerance" to curb corruption. did not indicate the timeframe for bringing the Bill.Anna Hazare a civilian with his committee has demanded the ombudsman law called as "Jan Lokpal bill”. 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. 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. 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.
One of the latest case of such murder is of V Sasindran Company Secretary of Palakkad based Malabar Cement Limited. Whistle-blower protection refers to the provisions put in place in order to protect someone who exposes alleged wrongdoing. including Manjunath Shanmugam and Satyendra Dubey. Kerala High Court ordered CBI probe on 18 February 2011. A lack of alertness is a symptom of a number of conditions. 37. corruption or mismanagement. Whistleblowers play a major role in the fight against corruption. 2010 was approved by the government as part of a drive to eliminate corruption in the country's bureaucracy.Mr. Indian courts are regularly ordering probe in cases of murders or so-called suicide of several whistle blowers. The word is formed from "alert". of India has introduced the whistle blower law named as "Right to Information act”. A committee of 10 people has been sectioned from Govt who will lead this committee. CBI showed its unwillingness for probing into such cases citing over-burden as a reason. The wrongdoing might take the form of fraud. a Government company in Kerala and his two minor children. or sleep deprivation. Alertness Alertness is the state of paying close and continuous attention. attention deficit disorder. Initially. Addison's disease. 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. and depression. This decision follows the death of various whistle-blowers. India currently does not have a law to protect whistleblowers. which comes from the Italian "all'erta” SATISHCHANDER .Anna Hazare a civilian with his committee has demanded the ombudsman law called as "Jan Lokpal bill”. and chronic fatigue syndrome. or being quick to perceive and act. It is related to psychology as well as to physiology. including narcolepsy. India does not have a law to protect whistle-blowers but the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill. which was highlighted by the assassination of Satyendra Dubey.CULTURE OF CORRUPTION IN INDIA 174 Whistle blowers in India As of 2009 Govt. being watchful and prompt to meet danger or emergency.
2005 and 2008 but all failed to pass. advocate Prashant Bhushan.. 1985. Research shows that for people ". the upper house of the Parliament of India. Justice N. The bill proposes the institution of the office of Lokpal (Ombudsman) at the center and local Lokayukta at the state level. the government-drafted bill has failed to pass the Rajya Sabha. Subsequent Lokpal bills were introduced in 1971. retaining a constant level of alertness is rare if not impossible. 1989. the Jan Lokpal Bill (also referred to as the citizens' ombudsman bill) is a proposed anti-corruption law designed to effectively deter corruption.. The bill was collaboratively drafted by Shanti Bhushan. Jan Lokpal Bill In India. SATISHCHANDER . Prime Minister Man Mohan Singh stated that the Lokpal Bill would be introduced in the 2011 monsoon session of parliament. 1998. 2001. The first Lokpal Bill was passed in the 4th Lok Sabha in 1969 but stalled in the Rajya Sabha. M. in wide public consultation with the leaders of the India Against Corruption movement and civil society." If people employed in safety-related or transportation jobs have lapses in alertness. such as air traffic controllers or pilots often face challenges maintaining their alertness. 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. For 42 years. Lyngdoh. this "may lead to severe consequences in occupations ranging from air traffic control to monitoring of nuclear power plants.CULTURE OF CORRUPTION IN INDIA 175 Physiological aspects People who have to be alert during their jobs." 38. Following the four day Anna Hazare fasting struggle. and former chief election commissioner J. The original bill was mooted by the National Campaign for Peoples’ Right to Information (NCPRI) in its delegated committee. retired Indian Police Service officer Kiran Bedi.engaged in attention-intensive and monotonous tasks. 1996. The law would create an ombudsman called the Jan Lokpal. 1977. Santosh Hegde. redress grievances and protect whistleblowers.
private citizens and constitutional authorities through a transparent and participatory process.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. 6) Investigations of each case must be completed in one year. In addition to spiritual leaders Sri Ravi Shankar. Key features of proposed bill 1) To establish a central government anti-corruption institution called Lokpal. SATISHCHANDER . The bill's backers consider existing laws too weak and insufficiently enforced to stop corruption. 7) Losses caused to the government by a corrupt individual will be recovered at the time of conviction. giving a total maximum process time of two years. a former justice of the Supreme Court of India and Lokayukta of Karnataka. supported by Lokayukta at the state level. the Lokayukta will publish a list of cases dealt with. 4) A selection committee will invite shortlisted candidates for interviews. As a result. which will then be given as compensation to the complainant. Santosh Hegde. Prashant Bhushan. the Lokpal will be supervised by the Cabinet Secretary and the Election Commission. many celebrities showed their public support. 3) Members will be appointed by judges. N. Any resulting trials should be concluded in the following year. 5) Every month on its website. Swami Ramdev. cases dealt with and those which are pending. 2) As in the case of the Supreme Court and Cabinet Secretariat. Indian Administrative Service officers with a clean record. It will also publish lists of all cases received by the Lokayukta during the previous month.. their outcome and any action taken or proposed. Swami Agnivesh and former Indian cricketer Kapil Dev. brief details of each. a senior lawyer in the Supreme Court along with the members of the India Against Corruption movement. 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. 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. video recordings of which will thereafter be made public.
Minister of Water Resources. Government representation Five Cabinet ministers will be a part of the Drafting Committee. from the political arena. judge or politician. Finance Minister. including five from the government and five drawn from society. Co-Chairman. Chairmen The Government of India accepted that the committee be co-chaired by a politician and an activist. will fill those roles. Drafting Committee The drafting committee was officially formed on 8 April 2011. Chidambaram. will result in the officer being dismissed within two months. and Salman Khursid. if found to be substantive. Veerappa Moily. 11) Whistleblowers who alert the agency to potential corruption cases will also be provided with protection by it. Minister of Law and Justice. Minister of Home Affairs. 10) The existing anti-corruption agencies (CVC.CULTURE OF CORRUPTION IN INDIA 177 9) Complaints against any officer of Lokpal will be investigated and completed within a month and. departmental vigilance and the anticorruption branch of the CBI) will be merged into Lokpal which will have complete power and authority to independently investigate and prosecute any officer. Minister for Communications and Information Technology. It consists of ten members. and Shanti Bhushan. SATISHCHANDER . It is reported that Pranab Mukherjee. They are: Pranab Mukherjee. from civil society. non-politician. Kapil Sibal. P.
These non-governmental organizations have intervened. However. in significant ways. Former Minister of Law and Justice. However. Santosh Hegde.CULTURE OF CORRUPTION IN INDIA 178 Civil society representation Five leading social activists will be a part of the Drafting Committee. In addition. Anna Hazare. which has been partially remedied by the Right to Information Act in 2002. Some states are involving NGO in the decision-making process as well as in defining expenditure priorities. 1) Conduct a media campaign against corruption SATISHCHANDER . N. They are: Shanti Bhushan. Arvind Kejriwal. 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. Civil Society The Constitution of India guarantees every citizen the fundamental right to form associations. Prashant Bhushan. the media acted as a watchdog by reporting incidents of misuse of power and corruption. the Right to Information Act has faced serious problems in Implementation. 39. Conduct a national public awareness campaign. on behalf of common citizens to ensure the protection of their rights on the one hand and secure the accountability of those exercising power on the other. Lawyer. 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. A by-product of this new legislation is the need for public agencies to create a Citizens Charter and enumerate the rights of stakeholders. Social Activist. Co-Chairman. Lokayukta (Karnataka).
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.g. Prevention of Corruption Act 1988 To deal with corruption amongst public servants India enacted Prevention of Corruption Act 1988. In India in addition to a large number of health and educational institutions. Delhi. Center for Policy Research. replacing Prevention of Corruption Act 1947. through trial courts and higher courts. 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. the government also aids many other kinds of organizations. This act also widens the scope of definition of Public servants. pay of the government. 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. 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. Public duty means a duty in the discharge of which the state. According to Prataps Bhanu Mehta. the bill "is premised on an institutional imagination that is at best naïve. Normally corruption is defined as SATISHCHANDER . Kejriwal further states that the proposed bill also lists clear provisions in which the Supreme Court can abolish the Lokpal. monitoring and evaluation (e. or the community at large has an interest. Hence. The claim that the Lokpal will be an extra-constitutional body has been derided by Hazare’s closest lieutenant. the employees of such bodies are also covered by this act. The ‘State’ includes a corporation established by or under a central. 40. Arvind Kejriwal. or remunerated by the government by fees or commission for the performance of any public duty. the public. Public servant means any person in the service. President. at worst subversive of representative democracy".CULTURE OF CORRUPTION IN INDIA 179 2) 3) 4) 5) Conduct a public awareness campaign in secondary schools Conduct further research.
Provincial or State Act. 3) any person in the service or pay of a corporation established by or under a Central. 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 this clause "State" includes a corporation established by or under a Central. 5) Any person authorised by a court of justice to perform any duty. 4) Any Judge.a) "Election" means any election. Persons holding various public offices are public servants. by whatever means held under any law for the purpose of selecting members of Parliament or of any Legislature. "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. unless the context otherwise requires. public or the community at large has an interest. SATISHCHANDER . 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. local authority or other public authority. any adjudicatory functions.CULTURE OF CORRUPTION IN INDIA 180 using public office for private gains. c) Explanation. receiver or commissioner appointed by such court. including any person empowered by law to discharge. including a liquidator. 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. 1956. 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. 1956. Definitions In this Act. 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. Provincial or State Act. whether by himself or as a member of any body of persons. the public or the community at large has an interest. 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. whether appointed by the government or notes. in connection with the administration of justice.
publish. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 181 7) Any person who holds an office by virtue of which he is empowered to prepare. maintain or revise an electoral roll or to conduct an election or part of an election.
2002 came into effect on 1 July 2005. whatever legal defect there may be in his right to hold that situation. 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. in whatever manner established. industry. Money-Laundering Act. 9) any person who is the president. receiving or having received any financial assistance from the Central Government or any State Government. lecturer or any other teacher or employee. scientific. 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. social. 2002 The Prevention of Money-Laundering Act. cultural or other institution. trade or banking. by whatever designation called. by whatever name called.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.-Persons falling under any of the above sub-clauses are public servants. 1956. whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other. professor. and where such series of transactions take place within a month. 12) Any person who is an office-bearer or an employee of an educational. 11) any person who is a Vice-Chancellor or member of any governing body. 41. or a member of any selection committee appointed by such Commission or Board for the conduct of any examination or making any selection on behalf of such Commission or Board. Provincial or State Act. they shall be understood of every person who is in actual possession of the situation of a public servant. (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. secretary or other office-bearer of a registered cooperative society engaged in agriculture. Explanation 1. or local or other public authority. Section 12 (1) prescribes the obligations on banks. Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned SATISHCHANDER . 10) any person who is a chairman.-Wherever the words "public servant" occur. member or employee of any Service Commission or Board. reader. whether appointed by the Government or not. Explanation 2. 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. financial institutions and intermediaries (a) to maintain records detailing the nature and value of transactions which may be prescribed.
It studied the problem of the criminalization of politics and of the nexus among criminals. Government shall determine the need. must be maintained for ten years after the transactions finished. The recent activity in money laundering in India is through political party’s corporate companies and share market. Over the years criminals had been elected to local bodies. State Assemblies and Parliament. MHA. 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. Special Secretary (Internal Security & Police). Vohra Report The Vohra (Committee) Report was submitted by the former Indian Union Home Secretary. The unpublished annexures to the Vohra Report were believed to contain highly explosive material. Based on the recommendations of the Committee. in October 1993. Vohra. Government had (through its order No. SATISHCHANDER . The Committee was desired to submit its report within 3 months. comprised as below. S/7937/SS (ISP)/93 dated 9 th July 93 established Committee. N.CULTURE OF CORRUPTION IN INDIA 183 above. and the protection of government functionaries. was subsequently added as member of the Committee. politicians and bureaucrats in India. They were connected to the military. In 1997 the Supreme Court recommended the appointment of a high level committee to ensure in-depth investigation into the findings of the N. It revealed that political leaders had become the leaders of gangs. Vohra Committee and to secure prosecution of those involved. of all parties. It also discussed criminal gangs who enjoyed the patronage of politicians. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. 42.N.N. 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.
4) The creation of a nodal agency to collect information regarding the activities of Mafia organisations is very essential. All the existing information/data available with R&AW. and they are being used or are likely to be used by such countries for destabilising our economy. 2) In the course of the discussions. It was. necessary to identify the linkage and to also determine how such information could be timely collected and acted upon in future. it would become R&AWs responsibility to monitor their activities. If. SATISHCHANDER . particularly Pakistan. From these various reports. there is evidence to suggest that these organisations have links with intelligence agencies of other countries. therefore. it was apparent that the activities of Memon Brothers and Dawood Ibrahim had progressed over the years. Police and others. 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. consequently to the Bomb blasts in Bombay in March 1993. IB. The responses are briefly brought out below. as is being done by this Agency to collect vital information in regard to the investigations in the Bombay bomb blasts case. and CBI could be made available to this nodal agency. Income Tax. This could not have happened without these elements having been protected by the functionaries of the concerned Government departments specially Customs. ammunition. R&AW will nominate an officer of suitable rank to liaise with nodal agency on a regular basis to enable expeditious follow-up action. economic. etc. leading to the establishment of a powerful network. R&AW monitor the activities of certain organisations abroad only insofar as they relate to their involvement with narco-terrorist elements and smuggling arms. explosives. Secretary (R&AW) 3) The various offices abroad of this Agency have limited strength and are largely geared to the collection of military. 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. Accordingly. scientific and political intelligence. however. The present strength of the Agency’s office abroad would not permit it to enlarge its field of activities. It does not monitor the activities of criminal elements abroad which are mainly confined to "normal smuggling without any links to terrorist elements". into the country. I addressed separate personal letters to each of the Members of the Committee seeking their well-considered suggestions and recommendations.CULTURE OF CORRUPTION IN INDIA 184 1) In the first meeting of the Committee (held on 15 th July93).
Income-Tax etc. The nexus between the criminal gangs. both movable and immovable. the money power thus acquired is used for building up contacts with bureaucrats and politicians and expansion of activities with impunity. A report on the nexus between the Bombay City Police and the Bombay under-world was prepared by CBI in 1986. their activities involve smuggling and sale of imported goods and progressively graduate to narcotics and drug trafficking. In the bigger cities. there are insurmountable legal difficulties in attaching/confiscation of the property acquired through Mafia activities. later. 4. To elucidate this point. as that of MIRCHI where SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 185 Director CBI 1. Hired assassins have become a part of these organisations. which was essentially designed to deal with the individual offences/crimes. bureaucracy and politicians has come out clearly in various parts of the country. 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. would be required to take effective action. 2. the main source of income relates to real estate. It would be useful institute a fresh study by CBI. The existing criminal justice system. this perhaps became difficult on account of the enormous patronage that he had developed. it would be necessary to conduct detailed investigations into its assets. An organised crime Syndicate/Mafia generally commences its activities by indulging in petty crimes at the local level. It has been stressed that when such action is not timely and effectively taken. muscle-men have become the order of the day. was merely a visitor to passenger and carrier ships to obtain liquor and cigarettes for selling the same at a profit. police. In the last 3-4 years. is unable to deal with the activities of the mafia. 3. Director CBI has observed that there are many such cases. mostly related to illicit distillation/gambling/organised seta and prostitution in the larger towns. the provisions of law in regards to economic offences are weak. the entire patronage enjoyed by him and his linkages will come to light. procuring such properties at cheap rates by forcing out the existing occupants/tenants etc. 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. he has many bank accounts and has been paying lakhs of rupees to his carriers. The growth of MIRCHI is due to the fact that the concerned Enforcement agencies did not timely taken action against him and. In cases where a crime Syndicate has graduated to big business. in port towns. Even in the smaller towns and rural areas. the lower functionaries of the concerned State and Central Departments/organisations start overlooking the activities of the crime Syndicates. Mirchi acquired real estate valuing crore of rupees. The money power is used to develop a network of muscle-power which is also used by politicians during elections. on the basis of which appropriate administrative/legal measures could be initiated. If MIRCHI is investigated. Over time.forcibly occupying lands/buildings.
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. Establishment of Special Cells in the States CIDs and CBI. the director CBI has stated that the effective monitoring of the telephonic calls made from India/received from abroad would yield useful information and. 6) The assistance of Banks in an essential input. 7) Concluding his analysis. He has recommended immediate attention to: - SATISHCHANDER . K. as exemplified by the exposures of the networks of the Bombay Bomb Blast case". Surveillance should be carried out through finger printing. The CBI can do this within a short period. Trial procedures should be simplified and hastened. ii. 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. vii. iv. 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. v. 5) Director CBI has stated that the main mode of communications/contacts of the Mafias operating at the international level is through telephonic communications. Government may grant sanction to monitor certain telephonic connections. for this being done. Director IB 1. Director CBI has made the following suggestions to bring under control the activities of the criminal Syndicates: i. Such a practice obtains in U.. this could also include review of the existing laws. The Bank Managers can be placed under obligations to render reports on all heavy transactions and suspicious accounts to the Enforcement agencies. Monitoring mechanisms should be established at the State and Central levels. vi. Referring to the useful leads emerging from the investigations into the activities of Dawood Ibrahim. a Mafia leader. etc. iii. Suitable amendments should be introduced in the existing laws to more effectively deal with the activities of Mafia organisations. photographs and dossiers. Identification of offences and awards of deterrent punishments including preventive detention.
having international linkages. the electoral.CULTURE OF CORRUPTION IN INDIA 187 i. 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. drug peddlers and economic lobbies in the country which have. Certain elements of the mafia have shifted to narcotics. the DIB has also stated that there has been a rapid spread and growth of criminal gangs. Nexus. especially in the States of J&K. iii. cutting across party lines and the protection of Government functionaries. iv. The virus has spread to almost all the centres in the country. 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. drug mafias. circulation of black money and operations of a vicious parallel economy causing serious damage to the economic fibre of the country. smuggling gangs. vi. 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. the coastal and the Border States have been particularly affected. Assessment of the impact of these linkages on the various institutions viz. armed senas. over the years. politicians and other sensitively located individuals on the other. In this context. politicians. even the members of the judicial system have not escaped the embrace of the mafia. media persons and strategically located individuals in the non-State sector. law and order and the administrative apparatus. the DIB has given the following examples: - 1. 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. between the domestic linkages with foreign intelligence. including the foreign intelligence agencies. economic. including Hawala transactions. i. Resultantly. iv. v.. ii. over the years. Some political leaders become the leaders of these gangs/armed senas and. political. Like the Director CBI. Necessary action to show effective action to counteract/neutralise the Mafia activities. Identification of the nature and dimensions of these linkages and the modus operandi of their operations. these gangs enjoy the patronage of local level politicians. subversion and communal tension in SATISHCHANDER . Punjab. like Bihar. iii. Political and legal constrains in dealing with the covert/illegal functioning of the linkages. if any. Gujarat and Maharashtra. In certain States. Haryana and UP. Identification of the nexus between the criminals/mafias and antinational elements on the one hand and bureaucrats. get themselves elected to local bodies. causing a sense of despair and alienation among the people. ii. have spread into and infected the various economic and financial activities. Some of these syndicates also have international linkages. developed an extensive network of contacts with bureaucrats/Governments functionaries at the local levels. drugs and weapon smuggling and established narco-terrorist networks. State Assemblies and the National parliament. The big smuggling Syndicates.
etc. it is assisted by the Director General of Revenue Intelligence (DGR) and Directorate General of Anti-Evasion (DGAE). Central Board of Direct Taxes (CBDT) Income Tax Department administers the Income Tax Act.CULTURE OF CORRUPTION IN INDIA 188 various parts of the country. in turn. It is. Nonetheless. necessary to immediately have an institutionalised system which "while giving total freedom to the various agencies to pursue their charter of work. 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". the various intelligence/investigation/enforcement agencies collect. a progressive data will get generated "to facilitate periodic reviews and analysis which could then be passed to a designated body". 1. In this context. I held detailed personal discussions with Secretary (Revenue) under whose control operate the various economic intelligence/investigative/enforcement agencies. 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. and the DGAE with Excise duty evasion. information about the nexus between the bureaucracy and politicians with Mafia gangs. DBI has stated that the network of the Mafia is virtually running a parallel Government. in the normal course of their functioning. Central Board of Excise & Customs (CBEC) Interalia. all these agencies "function within their own cocoons. smugglers and the underworld. CBEC is responsible for the prevention of smuggling. This will enable the Nodal Group to provide useful leads to the various agencies and. pushing the State apparatus into irrelevance. political circles. therefore. Wealth Tax Act. it is evident that the muscle power of the crime Syndicates is sustained by their enormous financial power which. Thus. is secured by the Mafia elements by committing economic offences with impunity. Presently. 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. 1. leave alone sharing with any other agencies". SATISHCHANDER . business sector and the film world. 2. ii. DIB has stated: i. The Department of Revenue functions through the following major agencies: i. As would be seen from the afore-stated brief discussions. with the result that a plethora of information fails to get specific and purposeful attention needed for the exposure of the linkages". The investigations into the Bombay bomb blast cases have revealed extensive linkages of the underworld in the various governmental agencies. In this and other tasks. It is thus most immediately necessary that an institution is established to effectively deal with the menace. The DGRI deals with the evasion of customs duties. especially the views expressed by Director CBI and DIB. over time. In this connection.
the Chairman CBEC. enquiries into suspected violations of the provisions of FERRA. Chairman CBDT and the Economic Intelligence Council in the Department of Revenue. Narcotics Control Bureau (NCB) The NCB is responsible for the administration of the Narcotics Drugs and Psychotropic Act. planning and coordinating action and operations against such sources. c. collection of intelligence relating to foreign exchange offences. ii. to detect violations of Customs & Excise laws. the following significant observations were made: i. 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 attend to the following tasks: a. Assisting the various enforcement agencies in strengthening the intelligence gathering infrastructure and building up their capability for storage and retrieval of intelligence. Enforcement Directorate This Directorate is concerned with the enforcement of the investigation and penal provision of the Foreign Exchange Regulation Act. 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. In the normal course of his work. 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. i. 1. DGRI. DGRI comes across information of linkages between crime Syndicates and Governmental SATISHCHANDER . directing and developing intelligence about such sources. He informed me that he had recently held a meeting with senior representatives of the RBI. etc. I arranged a meeting of the Committee (30th Aug 93) to hear the view of Secretary (Revenue). During the course of the discussions with Secretary (Revenue) and his aforesaid principal officers. Accordingly. b. and readily agreed with my request to attend a meeting of the Committee along with his concerned officers for a full discussion on the issues before the Committee. The 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. Interalia. Conducting investigative and analytical studies in difficult areas of black money operations and monitoring indicators thereof. Identification of major sources generating black money. who was accompanied by Chairman CBDT.CULTURE OF CORRUPTION IN INDIA 189 iii. Member (Customs) and Director (Enforcement). The CEIB is expected.
iii. i. The Directorate of Enforcement comes across information on linkages and passes it on to the CBI and IB. cases are not heard timely. 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. ix. While a certain amount of information is shared between the various organisations under the Department of Revenue. the work of the enforcement agencies cannot be effective. The Banks are reluctant to pass on information about account holders to CBDT and do not allow their officers to hold exploratory enquiries. functioning of the Government lawyers is grossly inadequate. amongst which are: 1. While the NDPS act prescribes the award of deterrent punishments of offences. the CBDT do not follow up such leads. all this results in a low percentage of convictions and mild punishments. As following up of such information is not within the charter of duties of DGRI. a niggardly response by the latter and prolonged delays in the disposal of cases before Courts seriously hampers the effective functioning of the NCB. even in the Border States. ii. Under the criminal justice system is geared up. Of late. Secretary (Revenue) stated that he field officers of his various Departments were faced with various problems. invariably packed in suitcases and gunny bags. 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. v. SATISHCHANDER . vi. It is necessary that the directorates of prosecution in the State Governments are urgently brought under the control of the State Police. his officers’ focus primarily on the information relating to the violation of the laws relating to their charter. Senior Police officers. they cannot be expected to maintain interest in vigorously pursuing action against the activities of such elements. functionaries etc. the exchanges are sporadic and limited. and those under the MHA and Cabinet Secretariat. viii. currency amounting crore of rupees in being seized. Information about the activities of drug traffickers is passed on by DG NCB to the concerned State Governments and their agencies. with the increasing importance being given to Narco-terrorism. the NCB have been asked to gather further information so that the real king-pins in the narcotics trade can be apprehended. are not trained or adequately informed of the work done by the directorate of Enforcement. Indirect information also becomes available to the CBDT about linkages. While DGRI. Unless the field level officers are offered effective protection.CULTURE OF CORRUPTION IN INDIA 190 ii. As in the case of DGRI. on account of premature leakage of information. However. iv. While the NCB is specifically responsible for booking drug traffickers. the DGRI has not been allowed to enforce surveillance on the telephonic communications of political personalities. vii. not being directly relating to their charter of responsibilities. especially in regard to money laundering operations. The utter inadequacy of the criminal system. the results are to the contrary. Here again. Director (Enforcement) and DG NCB authorised to undertake phone tapping of suspected offenders.
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. I held a series of further personal discussions with the Secretary (Revenue). information on the linkages of the crime Syndicates sometimes become available. While. iv. 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. in the course of their normal activities. SATISHCHANDER . which includes cultivation of opium. while gathering intelligence on offences relating to the laws administered by them. Such pressures are mounted either immediately after a raid is conducted or at the time when prosecution is about to be initiated. it is evident that: i. Terrorists indulge in narcotics trade to amass huge funds. smuggling etc. ii.) In the narcotics arena. from which they source their procurement of weapons etc. Consequent to the Committees discussions with the Secretary (Revenue) and his principal officers. such information is not pursued on the score that it is not directly related to offences falling within the laws administered by these agencies. The various agencies under the Department of Revenue do not specifically search on the linkages of crime Syndicates. 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. Narcotics trade has a world-wide network of smugglers who also have close links with terrorists.CULTURE OF CORRUPTION IN INDIA 191 1. As a result of the discussions held by the Committee with Secretary (Revenue) and his principal officers. especially when the shift of an officer adversely affects the interests of those who are making easy money. 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 financial stakes are astronomically high. iii. prevention of narcotics. they pass it on to the concerned agency. Pressures are also exerted whenever corrupt and undesirable officers are shifted from sensitive assignments (Preventive Customs Divisions at the Airports. Consequently. The information gathered by the various agencies under the Revenue Department. 1. whenever they come into possession of any information regarding the violation of any other law. He is of the view that once the offenders are deterrent 1. sensitive Collect orates in the Central Excise etc. Chairman CBDT stated that insofar as the functioning of his officers is concerned. i. 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. At my request Secretary (Revenue) gave me a personal note indicating his views. manufacture of alkaloids. in various foreign currencies. Such information is occasionally passed on by these agencies to the CBI and or IB. iii. He suggested that if the information available with other agencies is passed on to him. his officers could pursue the same. which are briefly as below:- 1. ii.
iii. Even where an agency comes across certain information about the linkages of crime Syndicates. such officers should be selected with utmost care and provided sufficiently long tenures. In the discussions in the Committee. there is presently no system under which they are expected to pass on such information to an identical nodal agency. it has no mandate to immediately pass it on to one or more agencies. investigative and enforcement agencies. come across information relating to the linkages of crime Syndicates/Mafia organisations. 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. action must be taken to ensure the objective functioning of Courts which deal with the trial of economic offences. dealing with the infringement of laws relating to their organisations and consciously putting aside any information on linkages which they may come across. in their normal course of functioning. In slum. 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. their influence and strength will start declining. smugglers etc. it is apparent that crime Syndicate and Mafia organisations have established themselves in various parts of the country. ii. political leaders and others to be able to operate with impunity (as recently exemplified by the activities of the Memon Brothers and Dawood Ibrahim). SATISHCHANDER . as also of all those who support them. the various agencies presently in the field take care to essentially focus on their respective character of duties. 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. collation and operationalisation of all 1. While the CBI and IB and the various agencies under the Department of Revenue. 1. 1. From the above narrated analysis. the following conclusions can be drawn: i.. 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.CULTURE OF CORRUPTION IN INDIA 192 punished under the law. officers with impeccable integrity should be posted to head the various organisations which are responsible for taking action against tax offenders. The various crime Syndicates/Mafia organisations have developed significant muscle and money power and established linkages with governmental functionaries. On the basis of the extensive experience gained by our various concerned intelligence. 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. giving them the clear mandate to ruthlessly punish the offenders. wherever located. all cases before the Courts should be speedily concluded without the judicial officers coming under any pressure or succumbing to temptations.
In this context. it will have been ensured that the information available with the nodal set-up is SATISHCHANDER . 2. 1. Investigation and Enforcement agencies dealing with the implementation of economic laws report to the Revenue Department under the Ministry of Finance. which is even otherwise engaged in monitoring various political activities having a bearing on national security. In the background of the discussions so far. 1. 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. Broadly. he has suggested that the nodal set up should be under the IB.CULTURE OF CORRUPTION IN INDIA 193 information relating to the activities of crime Syndicates. ii. 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". The CBI. is under the department of Personnel. In my view. R&AW functions under the Cabinet Secretariat and deals with external intelligence. Such sharing will be through personal communication in writing. If the proposition in the preceding Para is sustained. which relates to the activities of crime Syndicates. The various Intelligence. while operating difficulties could be sorted out through periodic meetings among the heads of these organisations to be chaired by the Home Secretary". but may also be susceptible to political exploitation. the following approaches have been mooted: i. a decision will need to be taken regarding the Department/Ministry under which the nodal set-up should be located. Under the existing arrangements for the transaction of Government business. the Ministry of Home Affairs is responsible for all matters relating to internal security. without there being any leakage. The Top secret Cell will share all tactical and operational information with other concerned agencies on "need to know and act basis". which is the principal criminal investigation agency of the Centre. 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. 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. 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). 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. 2. Under all circumstances.
which SATISHCHANDER . As such. I request him to consider discussing further action with finance Minister. it would be logical it the nodal set-up is under the MHA. it would not appear prudent to entrust the functioning of the Nodal Cell to any level below that of the Home Secretary. otherwise known as corruption. Accordingly. 43. 3. as necessary. 3. called the Jan Lokpal Bill.CULTURE OF CORRUPTION IN INDIA 194 used strictly and entirely for stringent action against the crime Syndicates. The manner in which such information is operationalised would need to be confidentially discussed with the concerned Head of Organisations and. I did not consider it desirable to burden the Members of the Committee with any further involvement beyond the views expressed by them. After an initial discussion at the level of MOS (IS) and HM I could send a copy of this Report to FM. with Secretary (Revenue). The emerging approach could therefore be got approved from Prime Minister before being implemented. the third copy being retained by me. without allowing any scope whatever of its being exploited for political gain. I have prepared only three copies of this report. before the issues are discussed with him. 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. R&AW and the various agencies under the Department of Revenue. One copy each is being submitted to MOS (IS) and HM. The protests have centred on a proposed bill. 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. It will also need to be ensured that the nodal set-up functions with extreme secrecy. 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. investigate and prosecute the offenders. CBI. MOS (IS) and myself. Further. 2. I decided to personally dictate this Report. 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. In the normal course. 1. After HM has pursued this Report. Considering the nature of the issues involved. At that stage other concerned senior officer would be taken into confidence. this Report would have been drafted by the Member Secretary and finalised by the Committee.
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. much publicized protest action. when Anna Hazare. first went on a hunger strike which he called a "fast unto death". New Delhi on 4 June 2011. Further. Following Hazare's initial. that the act of caching money. They believe that the changes would make the body intended to oversee the issue. We are ready to sacrifice our lives but will not buckle under pressure” -Anna Hazare SATISHCHANDER . The protesters are of the opinion that the government desires to dilute proposals contained in the original draft of the Jan Lokpal bill. Protests included fasts. candlelight vigils and rallies. no more than a powerless advisory body in the Indian bureaucracy. The second struggle of independence has started. Hazare. comprised of both members from "civil society" and government representatives. He held a hunger strike on 4 June when his demands were not met. 10 million Indians would participate in the Satyagraha on 4 June 2011 throughout India. Ramdev demanded that untaxed money invested abroad should be declared to be the wealth of the nation. a second major protest saw controversial events take place at the Ram Lila Maidan. The figurehead for these protests was Swami Ramdev and their aim was to highlight the need for strong legislation to bring back to the country what has been called "black money" deposited abroad. in foreign banks should be declared a crime against the state. 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. According to Ramdev. the Lokayukta. He had demanded the creation of a joint drafting committee for the bill. a prominent activist. who is a Gandhi an. The movement has gained momentum in particular since 5 April 2011. The protests led to the creation of a movement that saw protests being organized in various cities and towns of India.CULTURE OF CORRUPTION IN INDIA 195 the protestors believe could address the issue if it was suitably worded and enforced. 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. which is alleged to have been obtained illegally. went on his initial hunger strike when talks designed to consider the issues broke down. It is estimated that around US$ 350 billion to US$ 1400 billion worth of illegal money is in foreign banks.
SATISHCHANDER . It allows Indian citizens (except those living in Jammu and Kashmir) to request information. Various scandals were discovered in the period 2010-2011.CULTURE OF CORRUPTION IN INDIA 196 Background Issues regarding corruption in India have become more prominent in recent years. Activists have used this to uncover graft cases against various politicians and bureaucrats. It also discussed criminal gangs who enjoyed the patronage of politicians – of all political parties – and the protection of government functionaries. and they demonstrated how entrenched corruption had become in India. studied the problem of the criminalization of politics and of the nexus among criminals. Vohra. State Assemblies.N. They were also connected to the military. and public ownership led to slow growth. one consequence being that some of those activists have been attacked and even killed. The Right to Information Act of 2005 has helped civilians work effectively towards tackling corruption. Extensive regulation. They led also to popular. It revealed that political leaders had become the leaders of gangs. for a fixed fee of Rs 10. Forbes commented in 2007 that the system of bureaucratic controls called License Raj was often at the core of corruption. and the Commonwealth Games scam. and even the Parliament. The Vohra Report of 1993. non-political movements campaigning to fight graft via new legislation. Adarsh Housing Society Scam. protectionism. The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. These involved various Ministers and also members of the Armed Forces. from a "public authority" (a body of Government or "instrumentality of State") which is required to reply expeditiously or within thirty days. 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. politicians and bureaucrats in India. submitted by the former Indian Union Home Secretary N. The country was subject to socialist-inspired economic policies between the 1950s and the late 1980s. including the 2G spectrum scam. Over the years criminals had been elected to local bodies.
a valueless note designed to be given to corrupt officials when they request bribes. Jaago Re! One Billion Votes is an organization originally founded by Tata Tea and Janaagraha to increase youth voter registration. The party has fielded candidates in Andhra Pradesh. including corruption. SATISHCHANDER . it obtained its first elected post. The IAC is a strictly voluntary organization and its participants are bound by the IAC code of conduct. One organization. the Lok Satta Movement.CULTURE OF CORRUPTION IN INDIA 197 India against corruption India against Corruption (IAC) is a citizen's movement to demand strong anti-corruption laws. when Jayaprakash Narayan won the election for the Kukatpally Assembly Constituency in Andhra Pradesh. Rights and Action (ASTRA) is an NGO focused on grassroots work to fight corruption in Karnataka. and Bangalore. In 2008. It is currently headed by Anna Hazare. Anti-corruption organizations A variety of organizations have been created in India to actively fight against corrupt government and business practices. The primary focus of IAC movement is to ensure a strong Local bill. 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. Tamil Nadu. has transformed itself from a civil organization to a full-fledged political party. They have since expanded their work to include other social issues. yet they were never passed by the Indian Parliament. 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. the Lok Satta Party. Notable organizations include: 5th Pillar is most known for the creation of the zero rupee notes. Lokpal bills were introduced several times since 1968.
the Supreme Court ruled that prosecutors do not need prior permission to begin proceedings against politicians facing corruption charges5. It has the status of an autonomous body. 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. the Office of the Controller & Auditor General (C&AG). the Central Bureau of Investigation (CBI). 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. It has challenged the powers of states in several instances. in 2007 in Uttar Pradesh. key institutions include the Supreme Court. in a landmark ruling. and the Chief Information Commission (CIC). In other instances. the Central Vigilance Commission (CVC). Central Vigilance Commission (CVC) Central Vigilance Commission (CVC) is an apex Indian governmental body created in 1964 to address governmental corruption. In December 2006.CULTURE OF CORRUPTION IN INDIA 198 44. At the federal level. For example. judges have taken on a stronger role in responding to public interest litigation over official corruption and environmental issues. The Supreme Court The Supreme Court has taken a stronger stance against corruption in recent years. it challenged the state governor’s powers to pardon politically connected individuals based on arbitrary considerations. free of control SATISHCHANDER .
and advising various authorities in central Government organizations in planning. The CVC has the power to undertake inquiries or investigations of transactions involving certain categories of public servants. It was set up by the Government of India in February. industries and banks. 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. reviewing and reforming their vigilance work. But given the constraints of manpower. 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. The CVC has an online whistle-blower complaint mechanism available on its website. in cases where they are suspected of having committed an offence under the Prevention of Corruption Act. However. While it monitors the progress of these complaints. such number is really small. 1964 on the recommendations of the Committee on Prevention of Corruption. Therefore. Central Vigilance Commission: CVC is the apex body for all vigilance cases in Government of India. The CVC is not an investigating agency. In December 2007. especially when it suspects motivated delays or where senior officials could be implicated. The CVC is mandated to investigate public sector corruption at the federal level and not at the state level. there is delay and the complainants are often disturbed by this. It also has supervisory powers over the Central Bureau of Investigations. and it either gets the investigation done through the CBI or through the Departmental Chief Vigilance Officers. Santhanam. SATISHCHANDER . Railways. to advise and guide Central Government agencies in the field of vigilance. it has to depend on the vigilance wings of respective departments and forwards most of the complaints for inquiry and report to them. More recently. system improvements. the Commissioner issued a directive to this effect which has resulted in 32 public sector undertakings having adopted an integrity pact. CVC is a very small set up with staff strength less than 200. executing. the CVC is working in collaboration with Transparency International India on introducing Integrity pacts in all state-owned public sector companies. various preventive measures and cases in which the Commission's advises were ignored etc.CULTURE OF CORRUPTION IN INDIA 199 from any executive authority. it does not have adequate resources commensurate with the large number of complaints that it receives. The CVC can investigate complaints against high level public officials at the central level. and Income Tax etc. Nittoor Srinivasa Rau was selected as the first Chief Vigilance Commissioner of India. some of them being as big as Central Excise. headed by Shri K. It is supposed to check corruption in more than 1500 central government departments and ministries. charged with monitoring all vigilance activity under the Central Government of India. It directly enquires into a few complaints on its own.
But these are not much in focus in Parliamentary debates or by the media. it can only advise government. the final decision lies with the government. However. It deals only with vigilance or disciplinary matters. Even in those cases. CVC mentions these cases of non-acceptance in its monthly reports and the Annual Report to Parliament. Though the government does consult CVC before appointing the Chief Vigilance Officers of various departments. The CBI has to seek the permission of that department. the officials below CVO are appointed /transferred by that department only. It does not have powers over politicians. Central Government Departments seek CVC’s advice on various corruption cases. if the CVO chooses to bring it to the notice of CVC. CVC does not have administrative control over officials in vigilance wings of various central government departments to which it forwards corruption complaints. Often it is seen that CVC forwards a complaint to a department and then keeps sending reminders to them to enquire and send report. CVC does not have powers to register criminal case. Experience shows that CVC’s advice to initiate prosecution is rarely accepted and whenever CVC advised major penalty. it was reduced to minor penalty. CVC could bring pressure on the Department to revoke orders but again such recommendations are not binding. which are directly enquired into by the CVC. CVC does not have any really effective powers over them to seek compliance of its orders. Therefore. If there is an involvement of a politician in any case. however. Many a times.CULTURE OF CORRUPTION IN INDIA 200 CVC is merely an advisory body. they are free to accept or reject CVC’s advice. CVC can hardly be treated as an effective deterrent against corruption. Also. CVC could at best bring it to the notice of the Government. Only in exceptional cases. It does not have any direct powers over departmental vigilance wings. There are several cases of serious corruption in which officials and political executive are involved together. 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. CVC cannot direct CBI to initiate enquiries against any officer of the level of Joint Secretary and above on its own. SATISHCHANDER . the departments just do not comply.
Therefore. 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). the resolution on Public Interest Disclosure and protection of Informer” dated April 2004. all the officers under him belong to the same department). 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. reviewing and reforming their vigilance work. The appointments are opaque. In addition. The Commission consists of: (i) a Central Vigilance Commissioner -Chairperson. these supervisory powers have remained ineffective. Departmental Vigilance Wings: Each Department has a vigilance wing. though the leader of the Opposition is a member of the Committee to select CVC and VCs. The Central Vigilance Commission (CVC) is conceived to be the apex vigilance institution. though CVC is relatively independent in its functioning. 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. However.CULTURE OF CORRUPTION IN INDIA 201 Appointments to CVC are directly under the control of ruling political party. free of control from any executive authority. SATISHCHANDER . and (ii) not more than two Vigilance Commissioners – Members. Besides. However. But the Committee only considers names put up before it and that is decided by the Government. 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. executing. CBI is under administrative control of DOPT rather than CVC. CVC Act gives supervisory powers to CVC over CBI. monitoring all vigilance activity under the Central Government and advising various authorities in Central Government organizations in planning. which is manned by officials from the same department (barring a few which have an outsider as Chief Vigilance Officer.
There have been instances of the officials posted in vigilance wing by that department having had a very corrupt past. (ii) review the progress of investigations conducted by the DSPE into offences alleged to have been committed under the PC Act. review etc. or offence under CRPC for certain categories of public servants and to give directions to the DSPE for purpose of discharging this responsibility. 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. Even if someone complaints against that officer to the CVC or to the Head of that Department or to any other authority.e. (iv) tender independent and impartial advice to the disciplinary and other authorities in disciplinary cases. (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. So. If a complaint is received against a senior officer. There are indeed examples of such absurdity. still they have to be handled by those who otherwise report to him. to which the executive control of the Government of India extends..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. some officials double up as vigilance officials. In some departments. appeal. of India and other organizations to which the executive power of the Union extends. it is practically impossible for them to be independent and objective while inquiring into complaints against their colleagues and seniors. if some citizen complaints against that officer. (vi)chair the Committee for selection of Director (CBI). especially in the Ministries. the complaint are expected to be enquired into by the same officer. is suspected or alleged to have acted for an improper purpose or in a corrupt manner. involving vigilance angle at different stages i. While in vigilance. the complaint is forwarded by all these agencies and it finally lands up in his own lap to enquire against himself. It means that an existing official is given additional duty of vigilance also. 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. 1988. they try to scuttle all cases against SATISHCHANDER . (v) exercise a general check and supervision over vigilance and anti-corruption work in Ministries or Departments of the Govt. inquiry. investigation. and (vii) undertake or cause an inquiry into complaints received under the Public Interest Disclosure and Protection of Informer and recommend appropriate action. Director (Enforcement Directorate) and officers of the level of SP and above in DSPE. Even if he recuses himself from such inquiries.
the lower house of the Parliament. constituted by the Parliament of India. These reports have revealed many financial irregularities. it is practically impossible for them to enquire against senior officials of that department. Departmental vigilance does not investigate into criminal aspect of any case. Therefore. poor targeting and corrupt practices in many branches of government. the upper house of the Parliament. and 7 from Rajya Sabha. They also do not have any powers against politicians. suggesting a lack of monitoring of public expenses. It does not have the powers to register an FIR. public sector enterprise. the government often fails to implement the reports’ proposals. with offices of Accountant Generals (AG) in all states. and tax administration. SATISHCHANDER . 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.CULTURE OF CORRUPTION IN INDIA 203 themselves. where cases are closed for consideration. However. for the auditing of the expenditure of the Government of India. None of the 22 members shall be a minister in the government. telecommunications. The C & AG has produced several reports on state departments such as railways. Public Accounts Committee The Public Accounts Committee (PAC) is a committee of selected members of Parliament. Since the vigilance wing is directly under the control of the Head of that Department. the vigilance wing of any department is seen to soft-pedal on genuine complaints or used to enquire against “inconvenient" officers. The PAC is formed every year with a strength of not more than 22 members of which 15 are from Lok Sabha. since the C & AG has no authority to ensure compliance with its recommendations. They also turn vigilance wing into a hub of corruption.
but criticised the apathy and lack of awareness of many citizens. which was set up in 1941 by the Government of India.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. Its motto is "Industry. 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. It has delivered decisions instructing government. Nine pioneered access to information laws before the RTI Act was passed. and Integrity". The Central Bureau of Investigation Introduction The Central Bureau of Investigation traces its origin to the Special Police Establishment (SPE). The commissions have not been immune to criticism. State information commissions have also been opened. 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. courts. The superintendent of the SPE was vested with the War Department. 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. however. It was established on 1 April 1963 and evolved from the Special Police Establishment founded in 1941. A state report card one year on complimented the quality of the law. of India. SATISHCHANDER . universities. Even after the end of the War. 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 Central Bureau of Investigation (CBI) is a government agency of India that serves as a criminal investigation body. police. and ministries on how to share information of public interest. 26 have officially constituted information commissions to implement the RTI Act. national security agency and intelligence agency. Impartiality. Of India's 28 states.
CBI has powers of a police station to investigate and register FIR. whose wrongdoings are sought to be SATISHCHANDER . 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. Therefore. if a complaint pertains to any minister or politician who is part of a ruling coalition or a bureaucrat who is close to them. bomb blasts. 1946). if a citizen wants to make a complaint about corruption by a politician or an official in the Central Government. including bank frauds. 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. antiques. because CBI is directly under the control of Central Government. So. cultural property and smuggling of other contraband items etc. CBI investigations have a major impact on the political and economic life of the nation. sensational homicides.. 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. Secretaries to Government.CULTURE OF CORRUPTION IN INDIA 205 The CBI is controlled by the Department of Personnel and Training in the Ministry of Personnel. CMDs of Banks. The Anti-Corruption Division of the Central Bureau of Investigation (CBI) under the Ministry of Personnel. and (iii) Special Crimes. CBI is directly under the administrative control of Central Government. such as cases of terrorism. Officers of the All India Services. has handled cases against Chief Ministers. large-scale smuggling of narcotics. etc. CBI is overburdened and does not accept cases even where amount of defalcation is alleged to be around Rs 1 crore. Public Sector Undertakings. Ministers. The CBI is the official Interpol unit for India. While analogous in structure to the FBI. CBI is perceived to have been often used to settle scores against inconvenient politicians. there isn’t a single anti-corruption agency which is effective and independent of the government.(ii) Economic crimes. financial frauds. Financial Institutions. public grievance and pensions. Again. Central Public Sector Undertakings and Central Financial Institutions. kidnapping for ransom and crimes committed by the mafia/the underworld. Departments. Public Grievances and Pension of the Union Government usually headed by a Union Minister who reports directly to the Prime Minister. Import Export & Foreign Exchange violations. the CBI's powers and function are severely limited to specific crimes based on Acts (mainly the Delhi Special Police Establishment Act.
The following broad categories of criminal cases are handled by the CBI:- SATISHCHANDER . It was therefore decided in 1987 to constitute two investigation divisions in the CBI. the High Courts. CBI as an organization is held in high esteem by the Supreme Court. Apart from this. Anti-Corruption Division and Special Crimes Division. 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. demands were made on it to take up investigation of more cases of conventional crime such as murder. namely. the Parliament and the public. Economic Crimes and Special Crimes. It is an elite force playing a major role in preservation of values in public life and in ensuring the health of the national economy. CBI has powers but it is not independent. CBI investigations have a major impact on the political and economic life of the nation. The services of its investigating officers are sought for all major investigations in the country. meaning that it reports to the Indian Government and not to the individual states. CBI takes shape As the CBI. established a reputation of being India's premier investigative agency with adequate resources to deal with complicated cases. Role and functions The CBI is the premier investigating police agency in India. The CBI is a central subject under the Constitution of India. It is also the nodal police agency in India which coordinates investigation on behalf of Interpol Member countries.CULTURE OF CORRUPTION IN INDIA 206 investigated. Anti-Corruption. besides economic offences. viz.. terrorism. kidnapping. the latter dealing with cases of conventional crime. etc. It is also involved in collection of criminal intelligence pertaining to three of its main areas of operation. Taking into account the fact that several cases falling under this category were being taken up for investigation by the CBI. CVC is independent but it does not have sufficient powers or resources. over the years. The CBI has to investigate major crimes in the country having interstate and international ramifications. it was found expedient to entrust such cases to the Branches having local jurisdiction.
due to limited resources. Special Crimes Division: Deals with cases such as cases of terrorism. Import Export & Foreign Exchange violations. duties. privileges and liabilities on the members of Delhi Special Police Establishment (CBI) with Police Officers of the Union Territories. Central Public Sector Undertakings and Central Financial Institutions. Departments. kidnapping for ransom and crimes committed by the mafia/the underworld. employees or concerning affairs of the Central Govt. antiques. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 207 Anti-Corruption Division: Cases of corruption and fraud committed by public servants of all Central Govt. The CBI can investigate only such of the offences as are notified by the Central Government under the DSPE Act. 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. The Central Government may extend to any area. sensational homicides. bomb blasts. Besides. the powers and jurisdiction of members of the CBI for investigation subject to the consent of the Government of the concerned State. and the employees of the Central Public Sector Undertakings and Public Sector Banks. CBI may investigate. Cases which is essentially against Central Govt. financial frauds. CBI would not be able to investigate crimes of all kind. While exercising such powers. besides Union Territories. Economic Crimes Division: Deals with cases including bank frauds. privileges and liabilities The legal powers of investigation of CBI are derived from the DSPE Act 1946. Cases in which the financial interests of the Central Government are involve. cultural property and smuggling of other contraband items etc. This Act confers concurrent and coextensive powers. Jurisdiction of CBI V/S State Law and Order is a State subject and the basic jurisdiction to investigate crime lies with State Police. large-scale smuggling of narcotics. Jurisdiction powers.
Even the Top Bosses are known for stooping to illegal fund diversions. 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. Controversies Normally. RTI activist Krishnan and Tripathi has alleged harassment from CBI in order to save itself from exposure through RTI. SATISHCHANDER . Big cases of fraud.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. BR Lal. mal-prosecution and outright corruption. and if necessary. In his book. Cases having interstate and international ramifications and involving several official agencies where. to initially register any case coming under its jurisdiction. Corruption in CBI Because of its intensely political overtones. and is never far from controversy. to be engaging in nepotism. the cases may be transferred to the CBI. from all angles. The CBI handles many high profile cases. it has been exposed by its former bigwigs like Joginder Singh and BR Lal who were Director and Joint Director respectively. Who Owns CBI. through mediation by the central government. it is considered necessary that a single investigating agency should be in charge of the investigation. It is a usual practice for the respective state police departments. cases assigned to the CBI are sensitive and of national importance. CBI has now been exempted from RTI act. 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. cheating.
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. SATISHCHANDER . The 410 howitzer field guns purchased in the $1. It is often suspected that ruling governments interfere with the work of the CBI. for money and sex. The CBI. one of the prime accused in the Bofors scandal of 1986 which had tainted the Rajiv Gandhi government.CULTURE OF CORRUPTION IN INDIA 209 Bofors scandal In January 2006. The CBI was responsible for the inquiry into the Bofors Case. with $40 million in kickbacks moved from Britain and Panama to secret Swiss banks. and the handling of the Bofors investigation by CBI under Congress governments has created a new synonym for CBI. Interpol withdrew the Red Corner Notice against Quattro chi. Associates of then Prime Minister Rajiv Gandhi were linked to alleged payoffs made in the mid-1980s by the Swedish arms firm AB Bofors. it was found that CBI had quietly unfrozen bank accounts of Italian businessman Octavio Quattro chi. the development that came barely three weeks before the end of the Man Mohan Singh government’s tenure. After letting off the Bofors accused. The CBI investigation did not reveal the existence of a spy ring. It was a well-planned scheme to remove the then DGP Ramon S by concocted links to Maldivian lady. 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. who were originally described by newspapers as agents of Pakistani intelligence. The scheme was plotted by some officers of Kerala police.300 million arms sale were reported to be inferior to those offered by a French competitor. Following a communication from the CBI. Oppositions have never tried to call it the 'Congress Bureau of Investigation. and by early 1995 it was clear that the case was more a product of inexperience and over exoneration on the part of the police and Intelligence Bureau. the media and Muslim League as DGP was made of sterner stuff.
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 CBI's role was again criticized. after which the High Court issued a bail able warrant against the accused. in which Santosh Kumar Singh.CULTURE OF CORRUPTION IN INDIA 210 Hawala scandal In 1991 an arrest linked to militants in Kashmir led to a raid on Hawala brokers. UP. revealing evidence of large-scale payments to national politicians. Nithari Killings The CBI was given the responsibility of investigating the murders of dozens of children in the Nithari village near Noida. the Supreme Court of India directed that the Central Vigilance Commission should be given a supervisory role over the CBI. R K Raghavan. In concluding the Vineet Narayan case. requested two Special Directors. the 1999 judgment commented on how "the influence of the father of the accused has been there". though not handled by the CBI). and yet the court cases of the Hawala scandal eventually all collapsed without convictions. The CBI filed an application for early hearing in July 2006. P C Sharma and G H Achari. The accused was the son of a high ranking officer in the Indian Police Service. to study the judgment. the alleged murderer of a 22-year old law student was acquitted for what the case judge called "deliberate inaction" by the investigating team. Embarrassed by the judgment. the-then CBI Director. Priyadarshini Mattoo murder case The CBI has been under a cloud owing to its handling of the Priyadarshini Mattoo case. However. due to which the case had been shifted from the regular police force to the CBI. This was after the local police was found to be incompetent SATISHCHANDER . The High Court subsequently found Santosh Kumar Singh guilty of rape and murder and awarded a death sentence for the same in October 2006. Subsequently the CBI appealed the verdict in Delhi High court in 2000. The prosecution that followed was partly prompted by a public interest petition (Vineet Narayan).
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. Altogether there were five CBI inquiries into the murder case so far without any tangible results. Abhaya had caught them in a compromising position. sent Letters Rogatory abroad. who claims the CBI is pressuring her to falsely implicate former Gujarat Minister Amit Shah in the Sohrabuddin fake encounter case. the Federal Investigation Agency. who was found dead in water well in Saint Pius X convent hostel in Kottayam. CBI. 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. Sister Abhaya murder case Sister Abhaya murder case concerns a nun. even sent a probe SATISHCHANDER . Sant Singh Chatwal case Sant Singh Chatwal was an accused in the CBI’s records for 14 years. Kerala on7 March 1992. which is dealing with the Sohrabuddin case in Gujarat. questioned Geeta Johri an IPS officer. CBI had filed two charge sheets naming him as accused. for its comments on recent media reports about the detention of Dawood Ibrahim by authorities in Karachi.CULTURE OF CORRUPTION IN INDIA 211 and lethargic in their investigations. Dawood Ibrahim case In August 2007. the CBI asked its Pakistani counterpart. The powerful Catholic Lobby had exerted their undue influence to subdue the case as a Priest and a nun were involved.
Bhopal gas tragedy The public perceived that the CBI was very ineffective in trying the Bhopal gas tragedy case. The trials in the other two cases are still in progress. 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. and dropped charges. closed the principal case of bank fraud in which Chatwal had been embroiled for over a decade. 2007 and August 10. the former CBI director has now confessed that he asked to remain soft on extraditing the Union Carbide CEO Warren Anderson. But CBI has recently been exempted from RTI act and it is unclear if this information will be disclosed. in effect. In all. including culpable homicide. 2008. four charge sheets were filed by the CBI. 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. On May 30. Along with four others. with Chatwal named as accused in two.992. who received two year sentences.Varghese also known as Malan Kara Varghese. CBI is highly being criticized for this by Kerala High Court and Media. a member of Malan Kara Orthodox Church's managing committee and a timber merchant in 5 December 2002. CIC later ordered the CBI to disclose the information.32 crore). Till date. against those accused in this case. Sant Singh Chatwal has been awarded with Padma Bhushan despite these cases.On 9 May 2010 charged Father Varghese Thekkekara. the prime accused has not been arrested.M. 1997. 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. SATISHCHANDER .CULTURE OF CORRUPTION IN INDIA 212 team to the US and put Chatwal and his wife behind bars from February 2 to February 5. RTI applicant Krishnan and Tripathi was denied access to public information concerning the closed cases. 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 $8.815 (Rs 28. This. Malan Kara Varghese murder case The Malan Kara Varghese murder case concerns the death of T.
CULTURE OF CORRUPTION IN INDIA 213 Anti-corruption police and courts The income tax department of India. Certain states such as Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta) have similar agencies and courts. 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. Objective The prime objective of the Enforcement Directorate is the enforcement of two key Acts of the Government of India namely. SATISHCHANDER . 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. The proposal has not yet been acted upon by the Indian government. Central Vigilance Commission and Central Bureau of Investigation all deal with anti-corruption initiatives. 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 comprises of officers of the Indian Revenue Service. the Foreign Exchange Management Act 1999(FEMA) and the Prevention of Money Laundering Act 2002. Ministry of Finance. It is part of the Department of Revenue.
SATISHCHANDER . and other web-based telecommunication technologies to improve and/or enhance on the efficiency and effectiveness of service delivery in the public sector. and particularly the Internet. business partners and employees”. and even the use of television and radios to provide government-related information and services to the citizens. tracking systems such as RFID tags. 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. as a tool to achieve better government. E-government. audio/video presentations. short for electronic government. as well as surveillance systems. 2006. 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. The focus should be on: The use of Information and communication technologies. 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). 2005) 'Electronic Government' essentially refers to the approach ‘How government utilized IT.CULTURE OF CORRUPTION IN INDIA 214 45. E-government includes the use of electronics in government as large-scale as the use of telephones and fax machines. AOEMA. deals heavily with Internet and non-internet applications to aid in governments.’ (United Nations. instant-messaging (IM).’ E-government describes the use of technologies to facilitate the operation of government and the disbursement of government information and services. ICT.
constituency participation and governance by transforming internal and external relationships through technology. **By managing their customer (citizen) relationship. e. or another government agency. In this model. notifications. Two-way communications between the agency and the citizen. users can engage in dialogue with agencies and post problems. As such. 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. comments. e-Governance can be defined as the use of ICTs as a tool to achieve better governance. four kinds of activities take place: Pushing information over the Internet. The continuous optimization of service delivery. the NPR ([National Partnership for Reinventing Government National Partnership for Reinventing Government]) has been implemented from 1993.g. the G2C models apply the strategy of Customer Relationship Management (CRM) with business concept. issue briefs.: regulatory services. etc. a business. the business (government) can provide the needed products and services fulfill the needs from customer (citizen). or requests to the agency.CULTURE OF CORRUPTION IN INDIA 215 The use of information and communication technologies in all facets of the operations of a government organization. general holidays. public hearing schedules. SATISHCHANDER . e-Governance is understood to extend the scope by including citizen engagement and participation in governance. 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. **In United States. Whilst e-Government has traditionally been understood as being centered on the operations of government. following in line with the OECD definition of e-Government.
and hidden agendas of government groups that could influence and bias public opinions. PDA.: lodging tax returns. online community facilities. Bluetooth. polling station technology (where non-online e-voting is being considered).: 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.. Governance. RFID. online chat. tracking systems. CCTV. SATISHCHANDER . biometric identification. road traffic management and regulatory enforcement.g. SMS text messaging. TV and radio-based delivery of government services (e. e. and instant messaging technologies. e. MMS. CSMW).g. fax. applying for services and grants. 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.g. identity cards. reliability of information on the web. smart cards and other Near Field Communication applications." many non-Internet "electronic government" technologies can be used in this context. newsgroups and electronic mailing lists. email. Some non-Internet forms include telephone.CULTURE OF CORRUPTION IN INDIA 216 1) 2) 3) 4) 5) Conducting transactions. wireless networks and services.
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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.
transparent and inexpensive fashion. 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. Accountable.The Smart way Forward". government and its agencies can share information to citizens who share common interests and concerns. convenient.The report cited several prior initiatives as source of its inspiration including reference to the Singapore ONE programme. In the state of Rhode Island. Report of the Working Group on Convergence and E-Governance for The Tenth Five Year Plan (2002–2007). Through List Serves. mobile messaging. According to the Paragraph 83. November. 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 . visit transparent govt. Treasurer Frank T. computers. Responsive and Transparent’ government. Government of India. Interested people can sign up at here. mobile phones. RSS feeds. Caprio is offering daily tweets of the state’s cash flow.CULTURE OF CORRUPTION IN INDIA 221 Government and its agents also have the opportunity to follow citizens to monitor satisfaction with services they receive. According to this report the goals of e-Governance were defined as follows: 1) Better service delivery to citizens SATISHCHANDER . 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. 2001. It is under the administration of the Department of Information Technology of Ministry of Communications and Information Technology. The ARC report was submitted to the GOI on 20 December 2008. Moral. For a full list of state agencies with Twitter feeds. For more information. Planning Commission. Internet and other components of the ICT technologies in India over the last couple of decades. Government is also beginning to Twitter. micro-blogging services and blogs. SMART government is defined as ‘Simple. Background With the widespread usage of IT. This plan was an outcome of the recommendations of the Second Administrative Reforms Commission". visit Real Life Live document.
as its core objective. interoperability of applications and a common and robust nationwide infrastructure is also required. the project also aims to deliver substantial cost savings in governance. the National e-Governance Plan (NeGP) has been formulated by the Department of Information Technology (DIT) and Department of Administrative Reforms & Public Grievances (DAR&PG). service oriented and citizen centric format. Introduction With the Last mile service delivery. establishing connectivity and setting up delivery outlets would be the other aspect of project implementation. Besides improved governance and improvement in quality of life for Indian citizens. Given that NeGP aims to provide a whole host of Union & State Government services to the common man.” 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. through common service delivery outlets and ensure efficiency. it is planned as a centralized initiative with decentralized implementation. This requires application development of government services in transparent. Additionally. SATISHCHANDER .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. 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. transparency & reliability of such services at affordable costs to realise the basic needs of the common man. The report recognized the existence of ongoing eGovernment initiatives in India at that time and recommended them to be consolidated under NeGP for coordinated implementation. For this purpose. digitization of current records. Vision The NeGP has the following vision: “Make all Government services accessible to the common man in his locality. development of ICT infrastructure.
State Government. Department of Information Technology (DIT). It is being created in every State and Union Territory to ensure seamless and single-window delivery of public services to the common man. Appropriate authorities have been identified and assigned the duties of laying down standards. 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. The infrastructure requirements of NeGP are broken down into core & support infrastructure requirements. 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. Chandrasekhar. Standardization Testing and Quality Certification (STQC). Dr. Singh. Secretary. Department of Telecommunication. R. undertaking capacity building. This infrastructure is supposed to be common for all projects under the NeGP umbrella. Mrutyunjay Sarangi. Shashi Kant Sharma. Gairola.CULTURE OF CORRUPTION IN INDIA 223 Programme Governance NeGP is monitored and coordinated at the highest level by the National e-Governance Advisory Group. Unique Identification Authority of India (UIDAI). Common Services Centres (CSC) and development of eForms for service delivery. etc. industry and academia representatives. State Wide Area Networks (SWAN). Additional. The latest appointments to the Group were done in First week of November. It is headed by the Minister of Communications & Information Technology. D. Department of Information Technology. Special Secretary. Government of India. State Data Centres (SDC). Secretary. 2010 with its first scheduled meeting on 12th Nov 2010. National Informatics Centre (NIC). providing technical support. B. Department of Administrative Reforms & Public Grievances. Implementation Infrastructure This would include development of National/State Service Delivery Gateway (NSDG/SSDG). developing policy guidelines. SATISHCHANDER .V. Secretary. R&D work. Currently it includes various eminent personalities of India including Nandan Nilekani Chairman. Director General National Informatics Centre among other Central Government.K. Cabinet Secretariat.
It was approved on 18 May 2006 by the Government of India. These MMPs include the following:- SATISHCHANDER . The three primary pillars of NeGP infrastructure are SWAN (State Wide Area Networks) (SWAN). that the project has measurable outcomes and service-levels. SDC (State Data Centers). GIS National Spatial Data Infrastructure and Language Resource Centre. State Data Centres. ERNET and other service providers). Resource Centre for eGovernance. and the project has well-defined milestones and time-lines for implementation. "Mission Mode" implies that the objective and the scope of the project are clearly defined.CULTURE OF CORRUPTION IN INDIA 224 The core infrastructure consists of National eGovernment Intranet(NICNET. Block and Village levels including Wireless infrastructure for last mile connectivity. Further E-post and Integrated Service Delivery Front ends like the proposed Common Services Centers (CSC) are required as part of the support infrastructure. Security Infrastructure(PKI etc. National eGovernment Data Centres. District. 10 State MMPs and 7 Integrated MMPs spanning multiple Ministries/ Departments. State wide Intranets. Web enabled delivery of public services Mission Mode Projects (MMPs) NeGP comprises 27 Mission Mode Projects (MMPs) encompassing 10 Central MMPs. and CSC for web-enabled anytime-anywhere services & information.). 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. Awareness. Communication The stakeholders of NeGP include at least 20 central departments. the following steps have been planned: Support for creation of State e-governance Mission Teams (SeMTs) Support to Central Project e-Mission Teams (CPeMTs) Support to State Administrative Training Institutes Human resource management . proper estimation and implementation of capacity gaps are required.000 man-years of effort. Given the complexity of this mammoth task estimated at more than 70. The three specific capacity gaps in the states envisaged to be filled are:- Lack of personnel with appropriate background and aptitude. Immigration & Visa Pension e-Office Foreigners Registration & Tracking Municipalities Gram Panchayats Police Road Transport Treasuries Capacity Building. etc. 360 departments across 35 states/UTs and nearly 500 implementation agencies.This component addresses several areas including training for: o E-Governance policy makers like Chief Information Officers. Inadequate skill sets of personnel already deployed Lack of appropriate institutional framework to handle the specific program To address these. SATISHCHANDER .
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. union government and private institutions of India. Interoperability etc. stat government.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.) Standards. workshops/ seminars/ Conferences o Competitions and Awards o EGovernance forum for NGOs. Sector. The objective is collective SATISHCHANDER . films etc. Creating awareness about NeGP . Knowledge exchange In order to assist the government in ensuring the high quality of implementation of the NeGP initiatives. use of local language solutions. Quality Assurance & Conformance Network and Information Security E-Gov. Academic Training Institutions o Publicity and Awareness (media. Knowledge exchange. Digital Signature. advanced courses architecture. quality & security These would require implementation of the following: National Policy on Open Standards Localization and Language Technology Standards Biometrics. It is a collaborative effort to collect. language technologies o Equipping National/State Institutions of Public Administration for eGovernance Training etc. 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. Pvt.
They focus on the “citizen” not the “customer”. 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. This portal aims to develop conceptual knowledge about eGovernance domain from public. Central Ministries & State Governments in India. Academics. This new approach is referred to as Transformational Government. They take a whole-of-government view of the most efficient way managing the cost base of government. 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. That is. SATISHCHANDER . they seek to engage with the citizens as owners of and participants in the creation of public services. 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. They include initiatives to e-enable the frontline public services: that is. Just like other collaborative portals.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. and Industry working in the domain of e-Government. not as passive recipients of services.
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CULTURE OF CORRUPTION IN INDIA 232 45. Amherst College. and Evidence from India---Christopher Kingston. THE ECONOMICS AND POLITICS OF TRANSITION TO AN OPEN MARKET ECONOMY: INDIA—by Ashok V. Social Capital and Corruption: Theory. 46. Desai SATISH CHANDER 7/17/2011 SATISHCHANDER .
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