Corruption

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aspx
Press Information Bureau

Government of India
Ministry of Finance
10-August-2012 16:1 IST
Initiatives Taken by the Government for Unearthing and Curbing Black Money: A Fact Sheet
Initiatives taken by the Investigation Division of Central Board of Direct Taxes (CBDT)
for unearthing black money :
I. The Government of India has commissioned a study on unaccounted income/ wealth both
inside and outside the country bringing out the nature of activities engendering money laundering
and its ramifications on national security. The study is being conducted by three national
institutes viz. National Council of Applied Economic Research (NCAER), National Institute of
Public Finance & Policy (NIPFP) and National Institute of Financial Management (NIFM), with
inputs from various ministries/departments. The study will be completed by the end of 2012.
II. A Directorate of Criminal Investigation (DCI) has been created as an attached office
of the Central Board of Direct Taxes (CBDT) to track financial transactions relating to illegal /
criminal activities, including illicit cross-border transactions, from the direct tax angle and bring
such activities to justice. Creation of DCI is also in line with FATF recommendations to
exclusively deal with tax crimes, including direct taxes.
III. CBDT is coordinating with the Election Commission of India (ECI) for controlling
political expenditure and verification of affidavits filed by candidates of political parties.
IV. In order to strengthen the existing laws relating to black money, the Government
constituted a Committee under the Chairman, CBDT to examine the measures to strengthen the
existing legal and administrative framework to deal with the menace of generation of black
money through illegal means including, inter alia,
a) Declaring wealth generated illegally as national asset;

b) Enacting / amending laws to confiscate and recover such assets; and
c) Providing for exemplary punishment against its perpetrators.
The Committee submitted its report to the Government on 29th March 2012. The report has been
sent to different Ministries / Organisations and State Governments for necessary action.
V. Information received under DTAA – Information from Germany & France has been
investigated. Tax evasion of more than Rs.600 crore detected and taxes of Rs.200 crore has
already been realized. Prosecution proceedings have been launched in 17 cases pertaining to LGT
Bank accounts. Assessment proceedings have been initiated in cases relating to HSBC accounts.
Further information from outside the country is awaited in several cases. Information received
from different countries under the automatic exchange of information arrangement is
appropriately utilized for the purpose of investigation and assessment.
VI. Search & Seizure, Surveys – In the last three financial years, the Investigation wing of
the CBDT has detected undisclosed income of over Rs.32,000 crore besides seizing undisclosed
assets valued at over Rs.2,600 crore. The Income Tax Department (ITD) has further detected
undisclosed income of Rs.17,325 crore in surveys conducted at business premises.
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Print Release http://pib.nic.in/newsite/PrintRelease.aspx
VII. Tax Prosecutions – Out of 1,548 prosecution cases disposed of during the last three
financial years, the ITD has obtained conviction in 97 cases besides fiscal compounding in 771
cases of admitted tax evasion, leading to a success rate of 56.1 percent.
Beside above, the Government has also taken the following steps to deal with the
problem of Black Money under a five pronged strategy in last 3 years:
1. Creating an appropriate Legislative Framework

· In 2009, we had 78 Double Taxation Avoidance Agreements (DTAAs) in force. 75 of
these DTAAs did not have specific provisions for exchange of banking information and
information without domestic interest. Renegotiation of these DTAAs was started to
broaden the scope of Article concerning Exchange of Information. Till date we have
completed renegotiation in 29 cases; and renegotiation in remaining cases are under
progress. In addition we have finalised negotiation of 19 new DTAAs and 17 new Tax
Information Exchange Agreements (TIEAs). It may be clarified that as on today we
have 84 DTAAs. TIEAs are concluded with countries with which we do not want to have
DTAAs at this stage. Further, FM has approved negotiations for TIEAs with 25
countries/jurisdictions on 31st December, 2011. Hence, as on date, we have completed
negotiation with 65 countries/jurisdictions (29 existing DTAA, 19 new DTAAs and 17
TIEAs). 33 treaties (21 DTAAs/ 12 TIEAs) have been signed.
In addition to DTAAs and TIEAs, the Government of India has also signed
the Multilateral Convention on Mutual Administrative Assistance in Tax Matters on 26
January 2012. These Multilateral Conventions have been ratified which contain provisions
for automatic exchange of information, exchange of past information and assistance in
collection of tax claims. This has come into force on 1st June, 2012.
NOTE: Status of DTAAs/TIEAs negotiations as on 1st August 2012 is

given at the end as Annexure-I.
· Enacted legislation incorporating counter measure against non-cooperative jurisdiction

(Section 94 A in Finance Act 2011).
· PMLA was amended on 01.06.2009 to increase list of scheduled offenses.
· Commissioned study to estimate quantum of Black Money both inside and outside the
country in March, 2011.
· 30 of our existing 84 DTAA also contain article for assistance in collection of taxes
including taking measures of conservancy. Government is trying to have this Article in
other treaties as well.
2. Setting-up institutions to deal with illicit funds:
· 8 more Income Tax Overseas Units are being set-up (In addition to existing two overseas
units). Proposal has been sent to MEA for setting up 14 more such units.
· Computerized Exchange of Information unit (EOI Unit) has been set up.
· Directorate of criminal investigations has been set up.
3. Developing systems for implementation:
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· New policy for deployment of manpower to Directorate of Transfer Pricing and

International Taxation is implemented.
· Manpower of FT&TR Division is doubled.
· Directorate of Enforcement is strengthened by creating additional posts.
4. Imparting skills to the manpower for effective action:

· More than 100 officers were imparted specialized training abroad in field of International
Taxation and Transfer Pricing in F.Y. 2010-11 and 2011-12.
· High level international seminar on transfer pricing was held in India in month of June
2011.
5. Joining the Global crusade against Black Money:
· Issues of tax evasion, end of banking secrecy, past banking information, automatic
Exchange of Information have been raised by India in various G 20 meetings like in
London, Paris, Washington, Cannes, etc.
· India is playing a key role in Global Forum on Transfer Pricing and Exchange of
Information for tax purpose as Vice Chairman of Peer Review Group.
· In June 2010 India became the 34th member of Financial Action Task Force, responsible
for enforcement of anti-money laundering (AML) and combating financing of terrorism
(CFT) regime. In December 2010 it became 9th member of Eurasia group. India has also
jointed Task Force on financial integrity and Economic Development.
· India is actively participating in policy groups of OECD and UN on Exchange of
Information, International Taxation and Transfer Pricing as observer and member
respectively.
· ITD Global Conference was held in India in the month of December, 2011 to discuss
ways to address growing inequality due to tax evasion and generation of black money
Result Achieved
(a) Huge network of amended DTAA (84) and TIEA with tax havens (9).
(b) Specific requests made by tax authorities have increased significantly
(c) More than 12,500 pieces of Information regarding details of asset and payments received
by Indian citizen in several countries have been obtained which are now under different stages of
processing and investigation.
(d) 30,765 pieces of domestic information about suspicious transactions has been obtained
by FIU which are under investigation by respective agencies.
(e) Directorate of Transfer Pricing has detected mispricing of Rs. 67,768 crore in last
financial year and in the current financial year (Rs 43,531 crore in F.Y. 2011-12). This has
prevented shifting of equivalent profit out of the country.
(f) Directorate of International Taxation has collected taxes of Rs. 48,951 crore from cross
broader transactions in last two financial years.
(g) Investigation wing of CBDT has detected concealed income of Rs. 19,938 crore in last two
financial years. Focused searches have been conducted in a number of cases in the current year
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on the basis of information received from foreign jurisdictions under the provisions of Double
Taxation Avoidance Agreements.
(h) Under the EOI Article of DTAA with France, India has received information regarding
Indians having bank accounts in this financial year. In 219 cases, the department has detected
undisclosed income totalling Rs 565 crore and taxes amounting to Rs 181 crore has already been
realized so far.
6. Appraisal of Indian Efforts by International Organizations:
(a) Mr. Jeffrey Owens, head CTPA, OECD said on 12th December, 2011 that India
has made remarkable progress in tackling the issues of tax evasion and illicit money in the last
two years by negotiating TIEAs and it should be patient to see their effective implementation. He
added that India is playing a major role in G20 deliberations for combating tax evasion, black
money and money laundering, which are all correlated, and for better cooperation in tax
information exchange. It is also urging other countries to share past information, which is a
technical and legal issue.
(b) Mr. Pascal saint Amans, Head of the Global Forum on Tax Transparency, In December,
2011, rated India among the first three, if not the first, in terms of promoting the global standards
on transparency, fighting tax evasion and having the international community lining up.
(c) Global Financial Integrity supported India’s stand in G20 Summit in Cannes in November,
2011, on Automatic Exchange of Information becoming part of International Standards.
(d) The Task Force on Financial Integrity and Economic Development in a statement dated
17th October, 2011 stated that India is playing a major role in the global crusade against tax
crimes and is rapidly expanding its tax agreement network.
7. Amendments made through the Finance Act, 2012 to deal with the Menace of Black
Money:
Some of the amendments made through the Finance Act, 2012 to deal
with the menace of Black Money and to deter the generation and use of unaccounted money are
summarized as under:
(a) Introduction of General Anti Avoidance Rules to counter Aggressive Tax Avoidance
Schemes
(b) Introduction of compulsory reporting requirement in case of assets held abroad.
(c) Allowing for reopening of assessment upto 16 years in relation to assets held abroad.
(d) Tax collection at source on purchase in cash of bullion or jewellery in certain cases.
(e) Tax collection at source on trading in coal, lignite and iron ore.
(f) Increasing the onus of proof on closely held companies for funds received from
shareholders as well as taxing share premium in excess of fair market value.
(g) Taxation of unexplained money, credits, investments, expenditures etc., at the highest rate
of 30 per cent irrespective of the slab of income.
(f) Introduction of a reporting mechanism for assets and bank accounts in a foreign country.
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Annexure-I
Status of DTAA/TIEA negotiations as on 1st August 2012 is as follows:

1. Status of old DTAAs
No of No of No of countries with No of the

countries countries with whom these countries with
with whom whom we are renegotiations are which revised
DTAAs were negotiating finalised and signed agreement signed
in force in article along with names and entered into
2009. allowing for force
exchange of
banking
information
along with
names
Total 78 (see Total 75 (In Negotiation Signed (11):
the list the list of 78 finalized: 29 Australia, Finland,
attached). countries, three Armenia, Australia, Malaysia, Nepal,
Out of these, countries, i.e. Bangladesh, Brazil, Netherlands,
3 DTAAs Iceland, Finland, France, Norway,
already had Tajikistan and Indonesia, Kenya, Singapore,
specific Myanmar Luxembourg, Switzerland,
provision for already have Malaysia, Malta, Tanzania, UAE and
exchange of the specific Morocco, Nepal, Uzbekistan
banking provision and Netherlands, Norway,
information hence, Poland, Romania, Entered into
remaining 75 Singapore, Sri Lanka, force(5): Finland,
countries were South Africa, Spain, Luxembourg,
taken up for Sweden, Switzerland, Nepal, Singapore,
renegotiation Tanzania, Thailand, Switzerland
UK, UAE,
Uzbekistan, Zambia
Status of New DTAAs since 2009
No of countries with whom No of new DTAAs No of new DTAAs

negotiation for new DTAAs signed entered into force
have been completed
Total 19 Signed(9): Entered into

Albania, Bhutan, Chile, Croatia, Colombia, Estonia, force(6): Estonia,
Colombia, Estonia, Ethiopia, Ethiopia, Georgia, Lithuania,
Fiji Georgia, Hong Kong, Iran, Mexico, Georgia, Mexico,
Latvia, Lithuania, Mexico, Mozambique, Mozambique,
Mozambique, Senegal, Taiwan, Lithuania, Taiwan, Taiwan
Uruguay, Venezuela, Uruguay
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2. Total DTAAs in force as on today
It may be clarified that as on today we have 84 DTAAs, 78 above plus six more new
DTAAs (with Estonia, Georgia, Lithuania, Mexico, Mozambique and Taiwan)
3. Status of New TIEAs since 2009
No of countries with whom No of countries with No of countries with

negotiations for TIEAs whom TIEA negotiations whom TIEA have
commenced in 2009 with are finalised along with been signed along
names names with names
Total 22 (Argentina, Bahrain, Total 17 (Argentina, Signed (12):
Bermuda, Bahamas, British Bahamas, Bahrain, Argentina, Bahamas,
Virgin Islands, Cayman Islands, Bermuda, British Virgin Bahrain, Bermuda,
Congo, Costa Rica, Gibraltar, Islands, Cayman Islands, British Virgin Islands,
Guernsey, Isle of Man, Jersey, Congo, Costa Rica, Cayman Islands Isle of
Liberia, Liechtenstein, Macau, Gibraltar, Guernsey, Isle Man, Guernsey,
Maldives, Marshall Islands, of Man, Jersey, Liberia, Jersey, Liberia, Macau
Monaco, Netherland Antilles, Macau, Marshall Islands, and Monaco
Panama, Saint Kitts & Nevis, Monaco, Saint Kitts & Entered into
Seychelles) Nevis) force(9):
Bahamas, Bermuda,
British Virgin Islands,
Cayman Islands Isle of
Man, Jersey, Guernsey
Liberia and Macau
4. In 2012, negotiations for TIEAs commenced with 25 more countries/jurisdictions as

under:
1. Andorra
2. Anguilla
3. Antigua and Barbuda
4. Aruba
5. Barbados
6. Belize
7. Brunei Darussalam
8. Cook Islands
9. Curacao
10. Dominica
11. Dominican Republic
12. Faroe Islands
13. Greenland
14. Grenada
15. Honduras
16. Jamaica
17. Montserrat
18. Peru
19. Saint Lucia
20. Saint Vincent and the Grenadines
21. Samoa
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22. San Marino

23. Saint Maarten
24. Turks and Caicos
25. Vanuatu
5. In addition to DTAAs and TIEAs, the Government of India has also signed the
Multilateral Convention on Mutual Administrative Assistance in Tax Matters on 26
January 2012 which has come into effect on 1st June, 2012.
6. List of DTAA countries as on 2009 (78)

Sr. No. Country with which India Whether under renegotiation
has DTAA
1. Armenia Yes
2. Australia Yes
3. Austria Yes
4. Bangladesh Yes
5. Belarus Yes
6. Belgium Yes
7. Botswana Yes
8. Brazil Yes
9. Bulgaria Yes
10. Canada Yes
11. China Yes
12. Cyprus Yes
13. Czech Republic Yes
14. Denmark Yes
15. Egypt Yes
16. Finland Yes
17. France Yes
18. Germany Yes
19. Greece Yes
20. Hungary Yes
21. Iceland Already have provision for

exchange of banking information
22. Indonesia Yes
23. Ireland Yes
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24. Israel Yes
25. Italy Yes
26. Japan Yes
27. Jordon Yes
28. Kazakstan Yes
29. Kenya Yes,
30. Korea Yes
31. Kuwait Yes
32. Kyrgyz Republic Yes
33. Libya Yes
34. Luxembourg Yes
35. Malaysia Yes
36. Malta Yes
37. Mauritius Yes
38. Mongolia Yes
39. Montenegro Yes
40. Morocco Yes
41. Myanmar Already have provision for

42. Namibia Yes
43. Nepal Yes
44. Netherlands Yes
45. New Zealand Yes
46. Norway Yes
47. Oman Yes
48. Philippines Yes
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49. Poland Yes
50. Portuguese Republic Yes
51. Qatar Yes
52. Romania Yes
53. Russia Yes
54. Saudi Arabia Yes
55. Serbia Yes
56. Singapore Yes
57. Slovenia Yes
58. South Africa Yes
59. Spain Yes
60. Sri Lanka Yes
61. Sudan Yes
62. Sweden Yes
63. Swiss Confederation Yes
64. Syria Yes
65. Tajikistan Already have provision for

66. Tanzania Yes
67. Thailand Yes
68. Trinidad and Tobago Yes
69. Turkey Yes
70. Turkmenistan Yes
71. UAE Yes
72. Uganda Yes
73. UK Yes
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74. Ukraine Yes
75. USA Yes
76. Uzbekistan Yes
77. Vietnam Yes
78. Zambia Yes
Note 1: The three countries, i.e. Iceland, Tajikistan and Myanmar already have the
specific provision and hence, remaining 75 countries were taken up for renegotiation.
******
DSM/RS
10 of 10 12-Aug-12 8:01 AM

Government of India
Prime Minister's Office
24-July-2012 19:23 IST
Anti-Corruption Measures by UPA-2
The Group of Ministers (GoM) set up in January 2011 to consider measures to tackle
corruption has submitted two reports. In pursuance of this,
1. Government has directed that requests for sanction of prosecution are to be decided upon
by the competent authority within a period of three months.
2. Government decided that for all officers of the central government above the rank of Joint
Secretary, the competent authority to approve initiation of enquiry/investigation under Section 6A
of the Delhi Special Police Establishment Act will be the Minister-in-charge in the Government of
India.
3. Government has also accepted the recommendation of the GoM to put in place regulatory
parameters for exercise of discretionary powers by Ministers and to place them in public
domain.
Other anti-corruption initiatives include:-
4. A comprehensive ‘Lokpal and Lakyuktas Bill, 2011’ was passed by the Lok Sabha this year.
5. ‘The Whistle Blowers Protection Bill 2011’ intended to provide protection to whistle-blowers,
was passed by the Lok Sabha and is presently with the Rajya Sabha.
6. India ratified the United Nations Convention Against Corruption in May, 2011. The
Convention has entered into force for India on 8th June 2011. With a view to ensuring full
compliance with this Convention, ‘The Prevention of Bribery of Foreign Public Officials and
Officials of Public International Organizations Bill 2011’ was introduced in the Lok Sabha. The
Report of the Parliamentary Standing Committee on the Bill is under consideration of the
Government.
Making all Government services accessible to common man with transparency
The National e-Governance Plan was approved by the Government with the vision to
“Make all Government services accessible to the common man in his locality, through common
service delivery outlets and ensure efficiency, transparency & reliability of such services at
affordable costs to realize the basic needs of the common man”.
1. A network of more than 100,000 Common Service Centres for electronic delivery of public
services to citizens in rural areas has been rolled out.
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2. Computer software tools and fonts have been made available in 22 Indian languages in 24
States.
3. Pilots for delivering high-volume, citizen-centric e-Governance services have been

implemented in 88 districts across seven states under the e-District Project.
4. The MCA-21 e-Governance project for facilitating business by simplifying and reducing
documentation was carried forward by enabling online allotment of the Direct Identification
Number and integrating it with the Income Tax PAN. This will substantially reduce delays in
incorporation of a company.
5. A record 15 lakh annual reports were filed during the year with a peak of 70,000 filings on
a single day.
6. Rules have been amended to facilitate payments by direct credit to the bank accounts of
payees. A secured electronic payment system, through “Government e-payment gateway” has
been commissioned to facilitate this process. This measure will streamline the process of making
payments, minimize the interface of the payees with Government offices and will usher in green
banking.
Transparency in Public Procurement Legislation
Following the announcement made by the Prime Minister in his Independence Day
address of 2011:
1. The Public Procurement Bill, 2012 has been approved by the Cabinet.
2. The Bill seeks to regulate public procurement by all Ministries and Departments of the
central government, Central Public Sector Enterprises and bodies controlled by the Central
Government to ensure transparency, fair and equitable treatment of bidders, promoting
competition and enhancing efficiency and economy in the procurement process.
3. The Bill would create a statutory framework for public procurement which will provide
greater accountability, transparency and enforceability of the regulatory framework.
Making the Public Service Delivery a right of citizens
The Right of Citizens for time-bound delivery of Goods and Services and Redressal of their
Grievances Bill’ was introduced in the Lok Sabha on 20th December 2011, and has since been
referred to the Department related Parliamentary Standing Committee. This bill is intended to
make the Citizens’ Charter statutory and to endow the public with the right to delivery of goods
and services.
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Increasing people’s access to justice and enhancing accountability
The Judicial Standards and Accountability Bill 2012 has been passed by the Lok Sabha.
1. The National Mission for Justice Delivery and Legal Reforms was launched in the
Department of Justice for increasing access to justice by
a) reducing delays and arrears,
b) enhancing accountability through structural changes and

c) setting performance standards and capacities.
2. Information such as filing of petition, allotment of cases to courts, generation of cause list,
date of hearing and status of the case can be ascertained from judicial service centres set up by
district and subordinate courts.
***
SH/SKS
3 of 3 26-Jul-12 8:28 AM
Print Release http://www.pib.nic.in/newsite/PrintRelease.aspx

Government of India
Prime Minister's Office
09-June-2012 16:20 IST
PMO writes to Anna Hazare addressing the issues raised by him
Dear Shri Anna Hazare,
This refers to the letter dated 26.5.2012 addressed to the Prime Minister purported to have been signed by
you and several others. I have been directed to make the following submissions to the issues raised:
The Government has tabled a strong Lokpal Bill in Parliament which has features that are more progressive
than in any Bill tabled before. This Bill has been prepared after extensive discussions with you and your
colleagues and all suggestions that were considered to be feasible have been incorporated. This Bill has
been passed by the Lok Sabha. Government is of the opinion that Parliament has to take a final view on the
Bill and the passage of the Bill should be a Parliament-led process. To this end, Government is open to
suggestions from all parties. In fact, many suggestions have been accepted by the Government in the
course of the discussions on the Bill and two all-party meetings have been held in an effort to build
consensus. The Bill has now been referred to a Select Committee which will be open to receive and examine
all relevant suggestions.
In addition to the Lokpal Bill, Government has taken a slew of measures, both legislative and executive, to
curb and reduce corruption. The Public Interest Disclosure and Protection of Persons Making the Disclosure
Bill, the Prevention of Bribery of Foreign Public Officials and Officials of International Organisations Bill, the
Citizens' Right to Grievance Redress Bill and the Judicial Standards and Accountability Bill have been
brought forward. India has also ratified the United Nations Convention against Corruption. A comprehensive
public procurement law has been approved by the Cabinet. The National Mission for Delivery of Justice and
Legal Reforms has been set up.
A Group of Ministers set up by the Government to consider measures to tackle corruption has approved a
large number of measures as given in the annexure. These are being implemented by the various Ministries
and a monitoring mechanism has been set up to track progress.
To fight the menace of black money, the Benami Transactions (Prohibition) Act and amendment to the
Prevention of Money Laundering Act have been passed. A special committee has been set up to examine
measures to strengthen laws to curb black money generation. Independent agencies have been
commissioned to assess the quantum of black money and make recommendations. New Income Tax
Overseas Units have been set up and new Tax Information Exchange Agreements and Double Taxation
Avoidance Agreements have been signed to contain generation and outflow of illicit funds.
Agencies like CBI, ED, CAG and CBDT continue to function independently as per their mandates. In fact, the
term of this Government has been especially marked by zero interference in the functioning of these
agencies. CAG has functioned in an unfettered way in conducting audit of various departments.
The Government continues to welcome suggestions from all segments of civil society, including the one
represented by you, on measures to bring greater probity in governance and public life. The Government is
committed to make all efforts to reduce corruption and bring in greater transparency. The Government is
also determined to ensure that baseless and uninformed allegations made against public servants are not
allowed to create fear that can lead to paralysis in decision-making and slow down growth and
development.
We have noted from your letter that you have previously addressed communications to all the Ministers
conveying the allegations made against them for their views.
As regards the allegations made against the Prime Minister, they seem to be based on a leaked draft of the
CAG on coal block allocations and on media stories. You have provided no evidence to back up these
allegations and you have yourself said that you are not making these allegations. All details of the policy and
procedures followed for coal block allocations have been placed in the public domain by the Coal Ministry
and can be seen by all by going to the link http://coal.nic.in/welcome.html. All decisions were taken in
1 of 3 11-Jun-12 7:20 AM
public interest on the basis of legal provisions and relevant policy in force.
The final report of the CAG has not yet been tabled in Parliament. When it is tabled, the Government will
submit detailed responses before the Public Accounts Committee as per Constitutional procedure. It is also
understood that the CVC, in exercise of the powers vested in it, has recently directed the CBI to carry out a
Preliminary Enquiry on a complaint on coal block allocations filed by an Opposition MP and some others. CBI
will carry out the enquiry fairly and independently. Your insinuations and allegations against the CBI are
unwarranted and unjustified.
I must regret that your statement that "top most institutions of the country like the Supreme Court, High
Court, CAG etc. have leveled these allegations [against the Ministers] from time to time", is not only vague
but unacceptable.
The tone and tenor of your letter and the broad and sweeping nature of the statements made are also
unacceptable.
Your demand for the constitution of a Special Investigation Team has been considered, as also the terms of
reference suggested by you. Having regard to the fact that the existing legal and statutory framework has
adequate and sufficient provisions for addressing the issues raised by you, your demand cannot be acceded
to.
The allegation that an understanding has been reached by the Government with Shri Mulayam Singh to hush
up ongoing CBI enquiries is baseless and untrue. It is unfair to the Government, Shri Mulayam Singh and the
CBI and an insult to the judicial system.
As regards allegations leveled against what you have termed as 'team Anna', these too would be subject to
due investigation by concerned agencies if and when reports are filed. There is no provision under law to
subject anyone to twice the penalty allowed under the relevant law.
Finally, with regard to the special fast track courts suggested by you to deal with cases of allegedly tainted
MPs, the matter has been considered but cannot be acceded to since Government and the judiciary both
monitor the pendency of cases in various courts.
Annexure
Key measures approved by the GoM to tackle corruption
> Fast-tracking of all cases of public servants accused of corruption –
· Competent authority to take decision within 3 months on requests from investigating agencies for
sanction of prosecution (orders issued since).
· Competent authority to decide within 3 months all requests for granting/denying permission under
Section 6(a) of DSPE Act, 1946. The competent authority for officers of the level of JS and above in GoI will
be the Minister-in-Charge. (orders issued since).
> Electoral Reforms –
· Ministry of Law & Justice directed to come up with specific proposals for initiating reforms
expeditiously. (These are awaiting political consensus).
> Relinquishing discretionary powers enjoyed by Ministers at the Centre-
· DoPT directed to issue a general advisory to all Ministries/Depts. to carry out an exercise for putting in
place regulatory parameters for exercise of discretionary powers and putting them in public domain.
(instructions since issued by DoPT).
> Introduction of an open and competitive system of exploiting natural resources-
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· Most of the recommendations of the Ashok Chawla Committee accepted. DEA directed to monitor the
implementation of the same by the respective Ministries/Depts.
Click here to See the Hindi Version
*******
AD
3 of 3 11-Jun-12 7:20 AM
Age of graft | Frontline http://www.frontline.in/cover-story/age-of-graft/article4711122.ece?css=...
COVER STORY
Published: May 15, 2013 12:30 IST | Updated: May 13, 2013 14:24 IST
Age of graft
Show Caption
Corruption tends to be greater in periods when there is a state-engineered redistribution of wealth in

favour of a few at the explicit or implicit expense of the many. Liberalisation is one such period. By C.P.
CHANDRASEKHAR
IT cannot be verified and may not be true. But, the view that the record of graft and corruption during the two-term, nine-year rule of
the United Progressive Alliance (UPA) is the worst in India’s post-Independence history is widespread. The reason is obvious. While
corruption has always been with us, and is by no means only an Indian disease, the period in question has seen an almost respite-less
spate of allegations of corruption, many of which have stuck.
Yet, to the nation’s dismay, the government is unmoved. It attempts in the first instance to sit through the controversy generated by
every allegation, especially when it involves protecting the highest in the land. It allows some to be charged and investigated, while
refusing to entertain questions to those at the top, as has happened in the 2G spectrum scam. It dismisses demands from members of a
duly constituted parliamentary committee that specific individuals should be invited to testify before it. It even dares to tamper with a
status report on a Supreme Court-mandated investigation by the Central Bureau of Investigation (CBI), and then ignore the court’s
strictures. In the event, the suspicion that the government is aware of corrupt practices, harbours those involved, and does not care,
has grown.
The terrain in question is wide, with allegations of kickbacks in procurement for Commonwealth Games events and for the Army, of
procedural errors and malfeasance in the distribution of resources varying from land, non-reproducible reserves of coal and iron ore
and spectrum, of suspect disinvestment and privatisation, and of violations such as the “sale” of government positions to the highest
bidder interested either in the regular incomes they afford or the opportunity for graft they provide.
Across this wide terrain, the allegations suggest, the scale of each instance has been on the rise. Petty corruption, such as those of a
clerk or a constable, is now almost forgotten though widespread. A few hundred rupees make no bribe when payments amounting to
crores, tens of crores, or even hundreds of crores of rupees are routinely quoted in the media. What is at issue today is large-scale
corruption. Moreover, the allegations are against those at the top, involving senior bureaucrats, high-level public sector executives,
Ministers, and, even if tangentially, the Prime Minister. The bribe-givers too are allegedly big, including some of the top and hitherto
unsullied businesses and captains of industry. Does this then mark a new phase in the ubiquity and intensity of an old problem? That
seems to be the case, even if difficult to prove.
However, the visibility of corruption may be greater now because of increased transparency and improved reporting. It is true that the
number of allegations in any given time period is much larger than before. There are many factors that may be contributing to this rise
in the number and significance of the “revelations”. One is, of course, the proliferation of media and competition within a media space
which increases the dependence on sensationalism to attract readers and viewers. With defamation laws still weak, such competition
results in a willingness to deliver an exposé even when the evidence is not complete. The language and method is also in many cases in
the nature of a media trial without adequate investigation. Moreover, the media too are not free of corruption, with allegations not just
of paid news parading as editorial content, but also of the investigative story being used as a weapon to extract advertising revenue. So
there is reason to believe that there is far more reporting of alleged corruption today than in the past. This tendency is aggravated by
the fact that politics today is a far more contested terrain and the politicisation of the bureaucracy has increased. Selective leaks to the
media to discredit opponents help trigger a scandal and force an investigation. The more the leaks, the greater the evidence of
corruption.
A more encouraging reason for the spate of revelations of corruption is increased access to information. Not only has civil society
1 of 3 6/2/2013 9:51 PM
activism yielded a Right to Information Act that is being exploited to garner information that puts errant officials under scrutiny, but
statutory bodies have also played a role. Obvious examples are the office of the Comptroller and Auditor General (CAG) of India,
which has investigated and questioned dubious practices in areas varying from the sale of spectrum to the allocation of coal blocks, or
of Lok Ayuktas, such as the one in Karnataka which exposed malpractice in the issue and use of mining licences.
While these reasons for greater reporting and increased revelation of the corruption phenomenon may suggest that the problem need
not be worse than it was, the fact of the matter is that even the revealed tip of the corruption iceberg is far too large for comfort.
Moreover, there are other reasons to infer that the space and potential for corrupt practices have increased, rather than decreased,
after liberalisation. The “urge” to engage in such practices also seems to have been enhanced in the new environment.
Advocates of liberalisation had long held that state control and regulation during the pre-liberalisation years, between the 1950s and
1970s, allowed for corruption. Given the detailed physical and financial controls in place, bureaucrats and policymakers were seen as
capable of using their control over the levers of policy, in areas varying from licensing through tariffs and foreign exchange allocation
to provision of credit, to favour those whom they wanted to privilege. While this was done in the name of plan objectives, it was
claimed, it also provided the grounds for demanding and receiving a quid pro quo.
There were, of course, many sensational instances of allegations of large-scale corruption. The cancer of corruption that pervaded the
East India Company had indeed affected even early leaders of Provincial Councils, forcing Gandhi to declare in the late 1930s: “We
seem to have weakened from within. I would go to the length of giving the whole Congress a decent burial, rather than put up with the
corruption that is rampant.” However, Gandhi’s standards were high, and the number of individuals, the instances, and the
magnitudes involved were small relative to later trends. The problem persisted in the post-Independence period.
Post-Independence controversies
The Jeep scandal of 1948, involving the purchase of army jeeps for Rs.80 lakh through a process that bypassed established procedure,
and the Mundhra scandal of 1957 involving the sale of fraudulent shares to LIC by the businessman Haridas Mundhra, were two
among the well-known post-Independence corruption controversies. The first was closed, but the second led to Mundhra’s arrest and
the resignation of Finance Minister T.T. Krishnamachari.
But there was much in the system that seemed to make these the exception than the rule. Political leaders in early post-Independence
India had won their spurs through the national movement, as part of which they had engaged in much sacrifice. They were unlikely to
turn to corruption so easily. Moreover, as Feroze Gandhi’s role in the Bennett Coleman acquisition, LIC-Mundhra and Jeep scandals
showcased, parliamentary scrutiny of the (mis)use of authority was considerable. Besides parliamentary scrutiny, the ethos of the time
was such that the majority of the bureaucracy saw itself as part of a common national project. Corruption was not the norm, and peer
example discouraged it. Moreover, the income levels and lifestyles of the bureaucracy did not induce a desire for large additional
incomes on the side. So even if petty corruption was significant, big corruption was not widespread. Nor was it always very big. In the
old days, allegations of corruption were inevitably associated with the unearthing of wealth beyond that warranted by known sources
of income. Given the size of those incomes, the magnitude of corruption could not have been large.
Matters seemed to have changed since the 1980s, with the Bofors scandal involving kickbacks from Bofors AB in return for orders of
its 155 mm howitzer almost symbolising the transition. This change cannot be attributed to just a change in the value system as the
nationalist fervour and commitment to social change associated with the freedom movement wore out. Social behaviour of the kind
that leads to an escalation of the scale of corruption must be a result of systemic influences associated with a change in circumstances
with time.
Two changes occurring in this period are of relevance here. The first was political: the destruction of the Congress as a mass party
under Indira Gandhi, the associated end of one-party dominance, and the emergence of competitive politics. Not only did central
leaders and vote-getting local satraps become important, but competitive politics saw an increase in the use of money power in the
electoral process. The second was socio-economic: a transition in the social vision underlying the trajectory of development, from one
in which the focus was on regulating capitalism to ensure that the fruits of development were equitably shared, to one where the
emphasis was on unfettering capitalism in the hope of realising capitalist success.
The first was an obvious encouragement to corruption among the political elite. If money has to be outlaid to win elections, it must be
mobilised either from those who expect favours from politicians who benefit from their donations or garnered by the politicians
themselves during periods when power is held and exercised. That provides the basis for increased corruption. The second involved
state functionaries favouring capital as part of the development project, making it easier for them to push policies in return for which
they can expect illegitimate payments. Since this occurs in a period when the social ethos is one that celebrates the wealthy and the
economically successful, sudden increases in wealth of individuals are not seen as abnormal. For even a suspicion of corruption, it is
not enough that an individual’s wealth exceeds what can be built based on the known sources of income. What matters is direct and
adequate evidence of illegitimate acquisitions of income that violate existing laws. Moreover, the rise in inequality and the
consumerism spawned by a combination of new-found wealth and the freedom to imitate international lifestyles substantially
increased the desires of the post-liberalisation middle class. Money had to be found if such desires were to be met.
Liberalisation and corruption
It is in this light that we need to examine the argument that liberalisation should result in a reduction in the extent of corruption. The
premise underlying this argument is that it is only under regulated capitalism of the 1950s kind in India that the state, which rationed
access to commodities, services or finance, can, by favouring some, lay the ground for a quid pro quo. That is not true.
In all societies, there are scarcities of one kind or another: access to the best free hospital facilities; access to land; access to a scarce
“intangible” resource like the air waves; or rights to extract limited and non-reproducible mineral resources, to name just a few. In a
regulated regime there are well-defined rules on how this is to be done. Those rules can be violated, but there are well-defined
procedures and benchmarks to decide whether unwarranted access has been provided to one or other agent. In a liberalised economic
order, on the other hand, while the government still has the right to determine the level of access, its role is seen as one of providing
such access as part of a process of encouraging private sector-led growth.
In that world, state involvement can lead to corruption from both the “buy” and the “sell” side. Bribes can be paid when orders are
placed by the state for military equipment, for the purchase of goods for consumption or investment, or for the provision of a host of
2 of 3 6/2/2013 9:51 PM
services. Since liberalisation involves an increasing emphasis on getting the state out of production and on outsourcing services of
different kinds, corruption from the buy side is bound to increase.
But bribes can also be received when public assets are disposed of by the state: through the disinvestment of public equity or
privatisation of public enterprises, the provision of land for various “development purposes”, or the sale of spectrum or coal blocks.
Since these can be sold only to some and at prices decided by politicians and bureaucrats, there is much profit to be made. A “small”
fee for the agents delivering such profit is not a high price to demand.
This increases the space for the misuse of power. The result is large payoffs for two groups. The first is for those occupying high
positions in the state apparatus. The second is for the business interests that derive gains from decisions purchased at a small price. If
we go by the CAG’s estimate, the loss of revenues to the state from the mispricing of 2G spectrum alone is Rs.1.76 lakh crore or close to
10 per cent of the Gross Fixed Capital Formation in the economy in 2008-09. If much of that is a transfer to those acquiring spectrum,
it points to huge illegitimate benefits for the private sector. There is, here, clearly a link between public and private corruption.
However, when discussions of corruption occur, the possibility that it serves as a mechanism for private aggrandisement receives little
attention. The tenor of the discourse is that the virus of corruption afflicts only government officials and politicians who control and
misuse state power. But, increasingly, corruption appears to reflect payments made by the private sector to realise illegitimate gains
that are not merely violative of fair practice and/or the law, but damaging from the development, environmental or fiscal points of
view. Given the large amounts that can be garnered in this fashion, the state seems to have emerged as an important site for primitive
accumulation for the private sector during the phase of liberalisation and economic reform.
The essential point is that corruption tends to be greater in periods when there is a state-engineered redistribution of wealth in favour
of a few and at the explicit or implicit expense of the many. Liberalisation is one such period, whether it be of the “shock therapy” kind
in a largely state-controlled Russia or the (relatively speaking) moderately paced kind adopted in the so-called “mixed economies”
like India. In such periods, corruption is not just an aberration involving a few wayward individuals overcome by greed. It is systemic
and reflects an aggravation of the tendency towards primitive accumulation of capital characteristic of capitalism throughout its
history and more rampant in the distorted capitalism superimposed on the partially destroyed, pre-capitalist formations in the
underdeveloped world.
With the transition to a neoliberal order, electoral democracy too has its cost. Evidence of the wealth amassed by elected
representatives reporting their assets when they stand in consecutive elections is quoted to show what corruption could be delivering
to politicians. But what is also noteworthy is that it is getting increasingly difficult to participate in the electoral process without access
to wealth, irrespective of the rules that the Election Commission frames. This intensifies the drive to adopt corrupt practices.
In sum, there are two systemic causes for corruption in today’s India: the political and the economic. This has important implications.
The problem can of course be partially addressed by exploiting the legal potential and the checks and balances that the current system
of democracy based on the principle of separation of powers affords. But addressing it in adequate measure requires that to be
combined with systemic changes in the medium term.
Printable version | Jun 2, 2013 9:51:07 PM | http://www.frontline.in/cover-story/age-of-graft/article4711122.ece

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3 of 3 6/2/2013 9:51 PM
DO YOU KNOW?
RECENT STEPS TO CHECK GENERATION AND SPREAD OF BLACK MONEY
What, broadly, has been the unaccounted income/wealth (a) Declaring wealth generated
Government’s Strategy for both inside and outside the illegally as national asset;
tackling illicit funds? country. (b) Enacting/amending laws to
The Government has adopted ! Creation of new Directorate confiscate and recover such
five-fold strategy to tackle the of Income Tax (Criminal assets; and
menace of illicit funds. This Investigation) (c) Providing for exemplary
consists of: ! The government will punishment against its
introduce a Bill in the perpetrators.
i) Joining global crusade against
‘black money’; monsoon session of The Committee will also
ii) Creating an appropriate Parliament that will enable consult all the stakeholders and
legislative framework; confiscation of illegal submit its report within a period
iii) Setting up institutions for money. of six months.
dealing with Illicit Funds; What is the constitution of the Which are the national level
iv) Developing systems for committee set up to examine ways institutions conducting the
implementation; and to strengthen laws to curb the study for estimation of
v) Imparting skills to the generation of black money ? unaccounted income ?
manpower for effective The study is being
The Committee will be headed
action. undertaken by the following
by Chairman, Central Board of
What steps have been taken national institutes:-
Direct Taxes (CBDT). It includes
recently by the Central Member (L&C), CBDT; Director, (a) N a t i o n a l I n s t i t u t e o f
Government to check the Public Finance and Policy
Enforcement Directorate (ED);
generation and spread of black (NIPFP);
Director General, Directorate
money ? of Revenue Intelligence (DRI); b) National Institute of Financial
Director General (Currency); Joint Management (NIFM) ; and
The government has recently
Secretary (FT&TR),CBDT; Joint c) National Council of Applied
taken several steps to check the
Secretary, MoL; Director, FIU- Economic Research
generation and spread of black
IND, all as its Members. The (NCAER).
money. Some of these include:
! Constitution of a Committee Commissioner of Income Tax (CIT) What is the purpose of the
under the Chairmanship of (Inv), CBDT would be its Member study ?
Chairman, Central Board Secretary.
This study will bring out
of Direct Taxes (CBDT) to What are the functions of this the nature of activities that
examine ways to strengthen encourage money laundering
committee?
laws to curb the generation of and its ramifications on national
black money in the country, The Committee will examine the security. The study has already
its illegal transfer abroad and existing legal and administrative commenced in March, 2011
its recovery. framework to deal with the menace and is expected to be completed
! Commissioning fresh study of generation of black money within a period of 18 months. The
through top national level through illegal means including, terms of reference of the study
institutions for estimation of inter alia, are as follows:-
YOJANA July 2011 43

(i) To assess/survey unaccounted What would be the function of (g) To coordinate with and
income and wealth both the newly created Directorate extend necessary expert,
in s ide and o ut s ide th e o f I n c o m e Ta x ( C r i m i n a l technical and logistical
country. Investigation) ? support to any other
(ii) To profile the nature of The DCI will perform functions intelligence or law
activities engendering money in respect of criminal matters enforcement agency in India
laundering both inside and having any financial implication investigating crimes having
outside the country with its punishable as an offence under cross-border, interstate or
ramifications on national international ramifications
any direct tax law.The DCI will be
security. that pose a threat to national
required to perform the following
(iii) To identify important sectors functions: security;
of economy in which (h) To enter into agreements for
(a) To seek and collect information
unaccounted money is sharing of information and
about persons and transactions
generated and examine causes other cooperation with any
suspected to be involved in
and conditions that result in central or state agency in
criminal activities having
generation of unaccounted
cross-border, inter-state or India;
money.
international ramifications, (i) To enter into agreements for
(iv) To examine the methods that pose a threat to national sharing of information and
employed in generation of security and are punishable
unaccounted money and other cooperation with such
under the direct tax laws; agencies of foreign states as
conversion of the same into
accounted money. (b) To investigate the source and may be permissible under
use of funds involved in such any international agreement
(v) To suggest ways and means
criminal activities; or treaty; and
for detection and prevention
of unaccounted money and (c) To cause issuance of a show (j) Any other matter relating to
bringing the same into the cause notice for offences the above
mainstream of economy. committed under any direct
tax law; What will be the broad structure
(vi) To suggest methods to be of DCI ?
employed for bringing to (d) To file prosecution complaint
tax unaccounted money kept in the competent court under The DCI will be headed by a
outside India. (vii) To estimate any direct tax law relating to a Director General of Income Tax
the quantum of non-payment criminal activity; (Criminal Investigation), who
of tax due to evasion by (e) To hire the services of special will be an officer of the rank of
registered corporate bodies. prosecutors and other experts Chief Commissioner of Income
for pursuing a prosecution Tax, and will be located in New
So far there are no reliable
estimates of black money ‘complaint filed in any court Delhi. The DCI will function
generated and held within and of competent jurisdiction; under administrative control
outside the country. The different (f) To execute appropriate witness of the Member (Investigation)
estimates on quantum of black protection programmes for in the Central Board of Direct
money range between USD 500 effective prosecution of Taxes (CBDT) and will be a
billion to USD 1,400 billion. criminal offences under the subordinate office of CBDT.The
The Government has therefore, direct tax laws, i.e. to protect DCI shall have eight Directors
commissioned these institutions and rehabilitate witnesses who o f I n c o m e Ta x ( C r i m i n a l
to get an estimation and sense support the state in prosecution Investigation) located at Delhi,
of the quantum of illicit fund of such offences so as to Chandigarh, Jaipur, Ahmedabad,
generated and held within and insulate them from any harm Mumbai, Chennai, Kolkata and
outside the country. to their person; Lucknow. "
44 YOJANA July 2011

Cinema
Lessons for the Lokpal SCOPE HARNEET SINGH
The Korean and Indonesian experiments with anti-corruption commissions offer instructive parallels
C R SASIKUMAR
rarely created in an institutional vac-
SARWAR LATEEF uum. The Korean ACCR does not
duplicate the functions of the police Where did Shah
and the public prosecutors, but over-
sees them. The Indonesian KPK has
overlapping functions, but has the Rukh Khan go,
power to overrule those organisa-
tions, take over cases it considers not
being properly investigated. This has
been a source of unseemlyy inter- to come back?
agency
g y conflict. The Jan Lokpal Lokpa
Lo kpal
p l bill
bill
proposes
propos
pro
p poses
p es to shift
shift the anti-corruption
anti-c
ant i-corr
orrupt
uption
p ion SRK hasn’t shrunk, it’s just that
THAT India needss a str strong
strong,
ong,g, ind
inde-e- wing
wing of the CBI to the Lo Lokpal.
Lokpakpal.
p l. The
pend
pe
p
pendent
nden entt and
and ef effe
effective
ffect
ctiv
ivee anti-corrup-
anti
an ti-c
-cororru
rup-
p- government
govern
ggov ernmen
mentt bil proposes
billl p
propos
pro poses
p separate
es sep
separa
parate te others have also learnt to think big
tion
tio commission
n com
commismissio
sion n is no longer in dis- and potentially
potent
pot
p ential
ially
lyy overlapping
overla
ove rlappi
pping
pp ngg investi-
invest
inv esti-
i-
p
pute. The ggovernment’s belated gation
ggation and p prosecution
prosec
pro secuti
utionon functions
functi
fun ctions
ons for LET’S cut the fluff. Let’s demystify the romance. Let’s
ratification
ratifi
rat ificat
cation
ion in Mayy of the 200 20055 the Lo Lokpal.
Lokpakpal.
p l. The sta standing
standinding commit-
ngg com
commit mit-- get off the Ra.One treadmill for a moment and talk
United
Uni ted Nations
Nation
Nat ionss Convention
Conven
Con ventio
tionn Against
Agains
Agag instt tee,
tee, which
which is already
alread
alr eadyy being
beingg lobbied
lobbie
lob bied d byy plain facts. So Shah Rukh Khan has a film up for
Corruption
Corrup
Cor ruptio
ptionn (UNCAC)
(UNCA
((UN CAC) C)) binds
binds the the CVC and CBI, CBI, needs
needs to ensureensure a release. It’s a big film in terms of size and budget. It’s
country
countr
cou ntryy to having
having suchsuch a body.
body. How- clear
clea
clearr division
divi
diivisi
sion
on of labour
labo
la
abour and and effective
effe
efffect
ctivivee his home production. It’s his first release in 20 months.
ever, policy
p y reviews of the three coordination
coordi
coo rdinat
nation
ion mechanisms.
mechan
mec hanismisms. s. It’s a big event movie. It’s been created like one, sold
dozen-odd
dozen-
doz en-odd
odd corruption
corrup
cor ruptio
ptionn commissions
commis
com missiosions
ns Fourth,
Fourt
Fo urth, establishing
h, est
establ
ablishishing
ingg str
strong
ongg mod
mod-- like one, marketed like one, and if trade is to be be-
established
establ
est ablishished
ed in the developing
develo
dev elopin
pingg world
p world ern management
manage
man agemen
g mentt systems
system
sys
y temss in anti-cor-
anti-c
ant i-cor-
or- lieved, it is already a blockbuster. The talk on the street
overr the past
ove past couple
p couple of decades
decade
dec adess paint
paint ruption
ruptio
rupption agencies
n age
agenci
g ncies es is as imp important
import
portantant as is not “Ra.One chalegi ya nahin”; it is “Ra.One kitni
a dis
dismal
mal picpicture.
pictur
ture.e. The two frequently
q y getting
gettin
get tingg the legal
legal framework
framew
fra mework ork right.
right. In chalegi?” Or, to be more specific, whether it will reach
cited examples, p in Hon
Hongg Kon
Kongg and Indonesia, processes were thought Rs 100 crore in four days or five days?
Singapore,
Singap
Sin ggapore
pore,, are mature
mature institutions
instit
ins tituti
utions
ons through and effective systems put in Déjà vu anyone? It’s become the norm of the year.
thatt mir
tha mirror
ror the suc success
succes
cesss of the
thesese cit
city-
y
y- to survey results. Action plans are were two of the three conditions for place. The KPK was exempted from As film business opens up and the audience shows its
states.
states
sta tes.. Their
Their relevance
releva
rel evance
nce to a large
largge vi- developed based on these assess- Anna Hazare breakingg his fast at civil service rules. Salaries were set willingness to embrace with gusto whatever the
brant
bra nt democracy
democr
dem ocracy
acy like
like ours
ours is limited.
limite
lim ited.
d. ments and their implementation The agenda for a Ramlila ggrounds. Yett thi thiss is a recipe
recipe p way above government levels. An Mumbai film industry is churning out, buzz like this is a
Two more relevant examples that monitored. Organisation ratings new agency needs to be for the Lo Lokpal
Lokpa
kpal
p l bei
being ngg bur
buried
ied und
under er HR firm was competitively procured staple during a superstar’s big-ticket release. It hap-
have shown initial success are the along with survey results are made avalanche
an ava
avalan
lanche
che of pub public complaints.
lic com
compla plaintints.
s. to manage a successful “Indonesia pened for Salman Khan’s Ready and Bodyguard and for
Anti-Corruption and Civil Rights public, creating a powerful incentive
manageable. Korea’s If (s)he fails to deal with them expe- calling” recruitment campaign. The Ajay Devgn’s Singham. The ultimate goalpost is, of
Commission of Korea (ACRC) es- to improve performance. anti-corruption commission ditiously, (s)he will lose credibility best and the brightest were re- course, Aamir Khan’s 3 Idiots with its Rs 202 crore
tablished in 2002 and the Corruption The Indonesian KPK covers all focuses on preventive and cynicism will set in. (When Ko- cruited, including from the police record booty that must be conquered. The moot point,
Eradication Commission (KPK) of branches of government except the measures in the executive rea merged the ombudsman func- and public prosecutors. A code of thus, is no longer whether a superstar’s film will get an
Indonesia, established in 2004. Both military. Private firms are prose- tion with its anti-corruption com- conduct was established. Staff was opening; it is whether the film will have strong enough
were a response to the public per- cuted when co-accused. The com-
branch. Indonesia’s panel mission in 2008, public grievances subject to a strongg results focus. Sim- legs to race past 3 Idiots. That, of course, depends on
ception that the Asian financial crisis mission reviews complaints and as- focuses on enforcement, quickly dominated the agency’s g y ilarly,y, ensuring
ensuri
ens uringngg sound
sound management
manage
man agemen
g mentt the merit of the film — marketing after all can only
of the ‘90s was greatly exacerbated signs these to the police, the attorney and has cherry picked the workload.)) The com compromise
compro promis
p misee sug sug-
g- systems
system
sys
y temss has imp implications
implic
plicati
ations
ons for who is do so much.
by crony capitalism and state cap- general’s office, or other relevant cases it wishes to pursue, gested
ggested byy the Nat National
Nation ional Campaign
al Cam
Campai paign
p ggn appointed
appoin
apppointedted to manmanage age
g the Lo Lokpal.
Lokpakpal.
p l. Ra.One is being pitched as this huge SRK come-
ture. The jury is still out on the sus- agency, or it investigates these itself. for PePeople’s
Peopl
ople’s
p e’s Right
Rigght to Information
Inform
Inf ormati ationon Finally,
Finall
Fin ally,
yy, the p political
politi
pol itical
cal wil
willl to sus
sus-- back venture, which is a misrepresentation. Where did
tainability of these initiatives. Indeed In the 2004-2009 period, the com-
leaving the rest to other — a separate
separa
sep
parate governing
te law ggov
govern erning citizens’
ingg cit
citize
izens’ns’ tain support
tain sup
suppor
ppportt for an ant anti-corruption
anti-c
i-corr
orrupt
uptionion SRK go for him to come back? He’s been doing very
powerful vested interests are already mission established a 100 per cent agencies. This is where the charter-related
charte
cha rter-r
r-rela
elated grievances
ted ggri
grievaevancencess wit
with ha agency
agency is typically
typica
typ ically
lly weak.
weak. Strong well — his last flop was 2005’s Paheli, after all. It’s just
trying to defang the KPK. conviction rate on 85 important Jan Lokpal bill is flawed. separate
separa
sep
parate te bod
bodyy to man manage age thi
thiss — vested interests are threatened and that the rise of Salman Khan has changed the power
The Korean ACRC, whose man- cases of bribery. It successfully con- makes
makes eminent
eminen
emi nentt sense.
sense. will resist change. A vigilant public equations in B-town. However, Salman’s rise is not
date only covers the executive victed public prosecutors, police offi- The government is right to ex- and civil society strongly support the proportional to SRK’s decline. Not discounting his re-
branch, focuses on preventive and cials, the chief election commis- Second,
Second
Sec ond,, the ageagenda
g nda for a new clude the judiciaryy from the p purview Korean and Indonesian anti-corrup- cent success tsunami, Salman has always been a huge
educational measures. It is charged sioner, members of parliament, agency needs
agency needs to be manageable.
manage
man ageabl
able.
e. of the Lokpal. p The separationsepara
sep paratiotion n of tion agencies. Social networks in In- star and SRK is still very much on the ball, it’s just that
with developing anti-corruption cabinet members and central bank Korea’s ACRC focuses on preven- powers
powers in the Con
p Constitution
Consti stitut
tution
ion nee
needs ds to donesia have mobilised public opin- the perception surrounding them has changed.
policies, codes of conduct, reforming officials, eroding the sense of im- tive measures in the executive be preserved.
preser
pre
p served
ved.. The judiciary
judici
jjud iciary
aryy must
must see ion and are trying to resist efforts to Perception. That nifty little gameplan every star is
the legal and institutional frame- punity that prevailed in the past. p branch. Indonesia’s KPK has fo- the Lokpal
Lokpa
Lo kpal
p l as an allyally rather
rather than
than an dilute the powers of the KPK. In In- leaning to play to his advantage. SRK was one of the
work, evaluating ministries and pub- There are sev several
severa lessons
erall les
lesson
sonss fro
fromm cused on enforcement, and has adversary.
advers
adv ersary
ary. Passage
y. Pa
Passa
ssage
gge of a soundsound judi-
jjudi- dia, Anna Hazare’s movement has first stars to treat the media as an important ally.
lic sector organisations, monitoring these
the se cases
cases that
that could
could helphelp assess
assess the cherry picked the cases it wishes to cial accountability
cial acc
accounountabtabili
ility
tyy bil
billl wil reassure
willl rea
reassu
ssure re catalysed support for this agenda. “We’re in the same profession” has been his mantra for
corruption and protecting whistle- Lokpal
Lokpa
Lo kpall bill
bill when
w it emergesg from the pursue, leavingg the rest to other the p public
pub lic tha
thatt the ggov government
governernmen
mentt is But public support pp can dissipate p or the media. Slowly his colleagues got the drift. Now that
blowers. The commission does not standingg committee. Fir First, indepen-
st, ind
indepe
epen-
p n- agencies.
g This
This is where
where the Jan Lok- Lok- serious
seriou
ser iouss aboaboutut addressing
addres
add ressinsingg judicial
judici
jud icial
al be distracted. There There is no alternative
altern
alt ernati
ativeve everybody is on the media gravy train and access is not
directly investigate cases of corrup- dence
den ce fro
fromm the ggov government
govern ernmen
mentt for the pal bil
p billl is deeply
deepplyy flawed.
flawed
flawed.. Its mandate
mandat
man datee corruption.
corr
co rrup
upti
tion
on.. It will also help ensure to a professionally
proffess
pro
p essiiona
onalllyy orgorganised
orgaganis civil
niseed civ
civi il so- an issue, every star gets his requisite time before a film
tion but receives complaints and di- agency’s
agency
age
g ncy’s
y’s budget,
budget
bud gget,, staffing,
staffi
sta ffing,
ng,
g and policy
policyy
p not onlonlyy covers
covers all 3 mil million-plus
millio
lion-p
n-plus
plus that the special courts that will try ciety
cietyy that
that systematically
system
sys
y temati atical
cally
lyy mobilises
mobili
mob ilises
ses release. So other stars are growing in perception and
rects these to the relevant agencies. and operational
operat
ope ration
ionalal decisions
decisi
dec isions
ons is critical.
critic
critical.
al. Central
Centra
Cen government
trall ggov
govern
ernmen
mentt empemployees
employ
ployees
yees ((as corruption cases have judges of the voters
voters in a non-partisan
non-pa
non -parti
p rtisansan wayy and es- not so much as SRK is declining. But the showman that
Its flagship product, an annual in- The Korean and Indonesian com- against
agains
aga
g instt onl
onlyy Gro
Group upp A civcivil servants
il ser
servan
vants
ts highest integrity. In Indonesia, the chews
chews the bla blackmail
blackmckmail ail impimplicit
impliclicit
it in he is, SRK is enjoying the role he has been assigned.
tegrity assessment for key organisa- missions enjoy j y such autonomy. y Giv
Giv-- in the government
govern
ggov ernmen
mentt bill),
bill),
) but alsoalso now decentralised national anti-cor- Gandhian
Gandhi
Gan dhianan fasts.
fasts. He has taken it upon himself to play the Wounded
tions and ministries, is based on sur- ingg the Lokpal
Lokpa
Lo kpal
p l constitutional
consti
con stitut
tution
ionalal status
status Parliament
Parli
Pa rliame
ament nt and the judiciary.
judici
jjud iciary
ary.y. More-
More-
M ruption court was critical to the high King to the hilt for Ra.One. So 3-D came in. So a
veys of users and employees and an together
togeth
toggether
er with
with budgetary,
budget
bud ggetary
ary,
y, policy
policyy and
p over,
ove includes
r, it inc
includ
ludes
es ppublic
pub grievances
lic ggri
grieva
evancencess in conviction rates. The writer specialises in issues of Rajinikanth cameo was pencilled in (rest assured, the
evaluation of management response operational
operat
ope ration
ionalal autonomy
autono
aut onomy my would
would help.
help. relation
relati
rel ation
on to citizens’
citize
citizens’
ns’ charters.
charte
cha rters.
rs. These Third, a new organisation is governance and development south territories for Ra.One are conquered). Akon was
brought in Lady Gaga is coming in Ra One then
Lessons for Lokpal, from Lokayukta
A study of Karnataka’s Lokayukta reveals that the core problem is criminal conviction of the corrupt — without which the institution is fated to fail
Over the last six months, re- are pprocessed in India. Hence, the
searchers at the Azim Premji 90.0
PROCESSING RATE OF CASES lega
legal administrative
g l and admi
administ nistrati
rative
ve mode
modell off
University’s Law and Gover- (AS PERCENTAGE OF TOTAL CASES) (1995-2011) Karnataka
the Karn
Karnatak
atakaa Lo Lokayukta
Lokayu
kayukta
y kta for the
80.5
nance Initiative examined a com- 80.0 complaint
complain
comp plaintt and investigation
investig
inve stigatio
gation n stage
stagge
prehensive data set of all raid and 70.0 satisfactorily
satisfac
satisfactori
torily
lyy reso lves most of the
resolves
NARAYANA A. trap cases by the Lokayukta in 65.9 63.9 issues
issu es that have domi dominated
dominatenated d the
Karnataka over the last 16 years 60.0
54.4
p debate.
Lokpal
Lo kpal debate.
(1995 - 2011) obtained under the The core of the p problem
prob lem for
PER CENT
50.0 TRAP
Right
g to Information Act. Our 43.3 41.4
Karnataka
the Karn
Karnatakatakaa Lo Lokayukta
Lokayu
kayukta
y kta is the
empirical
empirica
empip ricall anal
analysis
yysis of the best 40.0 RAID criminal
crim inal tria
trial,l, over whic
which h it has lit-
SUDHIR Lokayukta
Lokayu
Lo y kta in the country
kayukta countryy brings
brings tle cont
control.
rol. Over 95 p per cent off
30.0
KRISHNASWAMY new insights
insights to this debate.
debate. Our casess in which
the case which charge
chargge sheets
sheets
preliminary analysis suggests 20.0 have been file filed d are under
under trial.
trial.
that: first, the existing Lokayukta The cases under trial are, on an
10.0
model in Karnataka successfully 2.8 1.4
average,
aver age,
g more than five yyear yearss old.
resolved most issues that have 0.6 0.003 In anyy even
event, t, onlyy 16 casecasess over
over--
0.0
Investigated Sanctioned Chargesheeted Trial Convicted
dominated the current debate on completed all have resu
resulted convictions.
lted in conv
convictiictions.
ons.
the Lokpal.
p Secondly, y thatt an all- STAGE This is a conviction rate of 20 per
VIKAS KUMAR powerful
powe
p rful Lo
Lokpal
kpal
p ggear
geared
ed to crim
crimi-i- cent of completed cases and a
nal pprosecution
prosecut
pros ecution condemned
ion is cond
condemne
emned d to ILLUSTRATION: C R SASIKUMAR small fraction of pending p g cases.
ure due to the incapacities
failure
fail incapaci
inca ties of
pacities
p This is much lowe lowerr than the rate
PARLIAMENT will consider the the crim
criminal
inal just
justice
ice syst
system.
em. the yyears. Hence, the lega legal
g lppowerr
powe cent), admi
administration
administnistrati on ((37.65 per
ration officials. Only 0.8 per cent belong these problems are the core prob- convictions
of conv
convicti ons in criminal
ictions criminal prose-
prose-
p
Lokpal Bill this week. The debate The need to establish a strong to init
initiate
iate acti on does not dete
action deter-
r- cent),) welf
welfareare (17.61 per cent) to the IAS, IPS, IFS and KAS lems for the anti-corruption cutions
cuti anti-corruption
ons in anti
anti-cor-corrupt
ruptionion case
casess
on policy choices and the institu- Lokpal that initiates criminal in- mine whet
whetherher we have a p proac-
proa c- and regu
regulation
regulati on (2.54 per cent).
lation cadres. So it is likely that the case agency. In about 80.5 (52.2) per in India in recent years, which is
tional design for a new anti-cor- vestigation and process has been a anti-corruption
tive anti
anti-cor
-corrupt
ruption
ion agen cy. The
agency. The rest of the cases are divided docket of a Lokpal that includes cent of the trap (raid) cases inves- between 34 and 40 p per cent.
ruption agency
g y is sharply py p po- key demand in the current de- incentives for administrative ac- between agriculture and irriga- officers of all categories will be tigation has been completed and Hence,
Henc e, the keyy p problem
prob lem at the
larised. There
There is agreement
g ementt on
agreemen
agre bate. The Karnataka Lokayukta tion seem to lie elsewhere. Inst Institu-
itution (3.76 per cent) and economic overwhelmed by cases against the this does not vary significantly de- core of a crim criminal conviction
inal conv
convicti
iction
on
the mora imperative
morall impe
imperati
p rative
ve to tack
tackle
le had the power, under the Preven- tional
tion al leadership
leadersh
lead ership p is seen to have
ip activities (12.75 per cent). Analy- lower bureaucracy. While the cur- pending on the rank of official be- modell for tack
mode tackling corruption
lingg corr
corrupti
uptionon in
corruption
corrupti
corr uption seriously,
on seri
seriousl y, leading to
ously, tion of Corruption Act, 1988, to significant
a sign
signific
g ificantant impa
impact
p ct on the sis of raid cases reveals a similar rent debate seeks to emphasise ingg investigated.
g This high g inve
inves-
s- Indiaa is the tria
Indi triall stag
stage.
ge.
the quick conclusion that we need investigate cases of corruption agency’s
agen
g cy’sy p performance
performa
perf ormancence as more departmental
p distribution. This the equal blameworthiness and le- tigation
tiga
g tion rate is p particularly
particul
part icularly
arlyy The choi
choice ce of a crim inal con-
criminal
a powerful national institution to and was recently endowed with than 66 p per cent of the raid case casess distribution
distribu
dist ribution
tion sugg
suggests
ggests that the gal culpability of petty and grand impressive
impressi
impr ve when we consider
p essive consider that viction
viction mode
modell as the best anti anti-cor-
anti-cor
-cor--
criminallyy prosecute
p the corrupt.
p suo motu powers to initiate crim- were initiated
initiate
init iatedd between
between 2006 and withdrawal
withdraw
with drawal al of the stat
statee from non- corruption, the institutional im- the case
casess ppending
pend investigation
ingg inve
investig
stigatio
gationn ruption
rupt
p ion stra
strategy
tegygy is at the core off
Our deba
debate
te has focu
focused
sed on the inal investigation. However, be- 2011,, when Just
2011 Justice
ice Sant
Santosh
osh activities
core acti
activiti
vities structural
es is not a stru
structur
cturalal pact on the allocation of scarce are on an aver
average
age
g abou
aboutt one yyear the Lo
Lokpal
kpal Bill Bill.. We learn from
design
desi institution
ggn of such an inst
institut
itution
ion and tween 1995 and 2011, Kar- Hegdee was the Lo
Hegd Lokayukta.
Lokayu
kayukta.
kta. solution
solu eliminate
tion to elim
eliminat corruption.
inatee corr
corrupti
uption.
on. prosecutorial resources will be a Further,
old. Fu
Furthe
rther,r, abou
aboutt 95 p per cent of the Karnataka Lokayukta’s expe-
has ignored
g red the choice
igno choice of crimi-
crimi- nataka’s Lokayukta carried out There have been several esti- The distinction between petty serious one. investigated
all inve
investig gated cases
stigated cases have re- rience that it is condemned to fail
nal law or criminal
criminal conviction
convicti
conv on as
iction only 357 suo motu raids against mates (through public perception and grand corruption is a well-es- The crea tion of a strong
creation strongg inves-
inves- ceived
ceiv ed sanc
sanction
tion for p prosecution.
prosecut
pros ecution.
ion. to achieve its primary purpose:
primary
thee p
th prim
pr imar
ary objective
ry ob
obje
bjject
ctiv anti-
ivee of an an
anti
ti-- individual officials but received surveys or by public disclosure tablished one in the academic liter- g tion and prosecution
tigation
tiga prosecut
pros
p ion arm has
ecution Hence,
Henc government’s
e, the ggove
governme
rnment’snt’s sanc
sanction
tion the criminal conviction of corrupt p
corruption
corrupti
corr uption
p on agen
agency.
g cy.y Further, no and responded to over 2,159 websites) of the departmental ature on corruption. Further, it is a been cent
central
ral to the Indi
Indian
an deba
debatete for pprosecution
prosecut
pros ecution
ion has not oper
operated
ated officials. Unle
Unless radically
ss we radi
radicall
callyy re-
attempt
atte mptp has been made to learn learn complaints against 2,681 officials distribution of corruption in In- contentious issue in the Lokpal on the Lokpal.
Lokpal
Lo kpal.. IIt is suggested that as a signsignificant
signific
ificant limitt to the
ant limi form the crim
criminalinal jjust
justice
ice syst
system,
y em, a
from an empirical
empirica
empip ricall analysis
analyysis of the (and 59 private persons). In other dia. A department-wise analysis debate with respect to the inclu- either refusal of sanction for pros- Lokayukta’s
y functions. Charge
Chargge strong
stro ngg Lo
Lokpal
kpal
p will onlyy assu assuage
age
g
performance
performa
perf
p nce of existing
ormance existing institu-
institu- words, for every six cases investi- of prosecution of corruption by sion of Group p C and D officials. ecution or the failure of the sheets
shee ts have been file filedd in over 97 public
publ
p ic ange
anger
g r and sati satiate
ate our urge
tional
tion al models.
models. The latest parlia- gated in response to citizen com- the Karnataka Lokayukta y reveals Karnataka,
In Karn
Karnatak
ataka,a, near
nearly
lyy half of the agency to complete investigations per cent of the case
p casess in whicwhichh vengeance.
for veng
vengeanc
eance. e.
mentary standing committee re- plaints, only one is initiated by the thatt more than 80 per p cent of the officials
official
officialss agai
against
g nst whom Lo Lokayukta
Lokayu
kayukta
y kta are the key problems that a Lok- sanction
sanc prosecution
tion for pros
prosecut
ecution
ion has been
port’s use of anecdotes as department suo motu. Further, trap
trap cases
p ca
case aree related
sess ar rela
re lated to four
ted four es-
es- has pproceeded
proceede
proc eeded g nst are officials
d agai
against official
officialss pal should be designed to avoid. obtained.
ined.. This processing rate
obtained
obta The writers are faculty
empirical evidence exemplifies the percentage of raid cases in the sential
sent functions
ial func
function government:
tionss of gove
governme
rnment:nt: in the lowe bureaucratic
lowerr bure
bureaucr
aucratic
atic scal
scalee In Karnataka, our analysis leads compares favourably with the rate at Azim Premji University,
this approach. case docket has decreased over locall gove
loca government
governme
rnment nt (24.06 per while about 10 per cent are senior to the conclusion that neither of at which criminal cases in general Bangalore
h l
, ,
One step forward,

two steps back
H
opelessly ineffectual and constitutionally
suspect, the Lokpal and Lokayuktas Bill,
2011 is nothing less than a betrayal of na-
tional trust. It is inexcusable that a Bill,
substantially weaker than the August 2011 version that
was forced to be withdrawn on the widespread belief
that it would be fortified in key areas, has been tabled in
the Lok Sabha. The whole purpose of the exercise is
supposed to be the creation of a strong, effective, and
credible mechanism to go after corruption, especially
political corruption, which has assumed monstrous
proportions in India. The key provisions of the new Bill
relating to the selection of the nine-member Lokpal, its
anti-corruption functions and powers, and adminis-
trative control over India’s premier criminal investiga-
tion agency mock that purpose.
In the first place,, Section 4 of the Bill, which provides
for a five-member Selection Committee to choose the
chairman and eight other members of the Lokpal, gives
the government political control over this process.
Secondly, the separation of the power to enquire, in-
vestigate, and prosecute set out in the Bill is much
worse than the scheme contained in the earlier Lokpal
Bill, Section 20 of which gave the Lokpal its own in-
vestigation wing. In allowing the Lokpal only an In-
quiry Wing headed by a Director of Inquiry ““for the
purpose of conducting preliminary inquiry into any
offence alleged to have been committed by a public
servant punishable under the Prevention of Corrup-
tion Act, 1988” and denying it its own investigation
wing, the new Bill neuters the anti-corruption watch-
dog. Allowing the Lokpal “a Prosecution Wing headed
by the Director of Prosecution for the purpose of prose-
cution of public servants in relation to any complaint
by the Lokpal under this Act” may look like a step
forward. But this cannot possibly make up for the
failure to provide for a clean process of independent
investigation that is safeguarded from executive in-
terference. At a time when the Lokayukta in a State
terference
such as Karnataka has its own investigation wing –
something it has used to very good effect – it is retro-
gressive to withhold this instrument from the Lokpal.
At the same time, the new Bill hass sought to keep the
Central Bureau of Investigation out of the Lokpal’s
purview ostensibly on the ground that it should have
autonomy over its investigations. Given the agency’s
record of bowing to the diktats of its political masters,
there is no reason to believe that investigations, even
those that are Lokpal-referred and Lokpal-monitored,
will be free of political interference.. The Centre, which
has retained administrative control (read: promotions,
transfers, etc.) of the CBI via the Ministry of Personnel,
knows better than most that he who pays the piper calls
the tune. W While the proposal that a new panel (com-
prising the Prime Minister, the Leader of the Opposi-
tion, and the Chief Justice of India or his nominee)
selects the Director of the CBI will go some way in
enhancing the credibility of the agency,, the opportuni-
ty to confer on it genuine independence is being lost.
Just as problematic is the constitutional validity of
some basic provisions of the Bill. The inclusion of
minorities among the groups given reservation in the
nine-member body is bound to be challenged on the
ground that it amounts to a quota being given on
grounds of religion. While this issue has little bearing
on tackling corruption, the deep and seemingly irre-
concilable political divisions it has created, reflected in
the manner in which it dominated the parliamentary
debate on the Bill, is bound to have a bearing on its
passage. Is this a ploy to let anti-corruption legislation
fall victim to a wholly extraneous issue – reservation?
Will it be allowed to degenerate, as in the case of the
women’s reservation bill, into a legislative exercise that
everyone claims to support but few really want?
There have also been serious concerns on another
constitutional front – federalism. While it is hard to
fault the principle of having comparable mechanisms
and instruments to go after corruption at the central
and State levels, the legislative procedure adopted is
open to question. Rather than mandating the creation
of a Lokpal-like structure in every State, would it not
have been in keeping with India’s federal structure and
regional sensitivities for the central legislation to have
model or enabling provisions for constituting effective
Lokayuktas in States? G Given the strong national public
mood against corruption, it is unlikely that State gov-
ernments would risk going against it.
Unfortunately, the improvements in the new Bill
have been overshadowed by the slew of regressive
alterations. TThe inclusion of the Prime Minister under
the Lokpal with certain exceptions is a step up from the
earlier stipulation that permitted any inquiry only af-
ter he or she demitted office. The new Bill brings both
Group ‘A’ and ‘B’ officers under the Lokpal’s ambit.
While this is short of Team Anna’s demand that Group
‘C’ and ‘D’ officials be covered as well, it is an improve-
ment on earlier drafts, under which the Lokpal’s pur-
view was limited to Group ‘A’ officers. Further, while
the ‘C’ and ‘D’ categories will be covered by the Central
Vigilance Commission, cases relating to them will be
reviewed by the Lokpal. The idea of granting constitu-
tional status to the office of the Lokpal would have had
traction had the Bill vested the body with the strength
and self-sufficiency to make a serious impact on cor-
ruption. Unfortunately, a mixture of bad faith and a
reluctance to loosen the grip on the handle of power
have contributed to the making of a Bill that hass caused
deep divisions in Parliament and enough disenchant-
ment to fuel a new round of Team Anna-led protests
against the Centre. The country is no closer to a con-
sensus on the Lokpal Bill than it was many months ago.
t
r
-
-
e
-
s
-
s
y
y.
-
-
m
e
s
t
s
”
-
r.
g
-
e
-
e
e
al
y
-
e
is
e
n-
c-
P
or
y
i-
Shortcomings and malignant provisions
Anil Divan
A few major provisions of the Government Clause 25,, an opportunity
pp y to be heard is to be
T
given
g to anyy person
p “other than the prospec-
here is unanimity of opinion that
corruption at the higher levels of Lokpal Bill make for a ticking time bomb. It tive accused.”
These provisions
p aree bound to undermine
TUESDAY, NOVEMBER 1, 2011

governance can be fought by a
strong, credible, effective and inde- is better to have no Lokpal rather than have effective investigation
g
dence. The prospective
p p
and collection of evi-
accused will act as an
pendent Lokpal mechanism. As far back as active terrorist to destroy the Lokpal’s ef-
1979, the Supreme Court, speaking through the one envisaged by the government. forts. Apart from going for judicial review at
Seven billion
Justice V.R. Krishna Iyer, observed that every stage, alleging lack of adequate oppor-
“corruption and repression — cousins in tunity to be heard, the potential accused,
such situations — hijack developmental Bill is such that it gives a dominant and Exclusion of Prime Minister after inspection of the material, would have
and counting
processes.” President Pratibha Patil, in her preponderant voice to the political executive the opportunity to approach witnesses, in-
Independence Day-eve speech, lamented in the selection of the Lokpal (Chairperson In an earlier article (The Hindu, July 1, timidate or corrupt whistleblowers, and fab-
that “corruption is a cancer affecting our and members). 2011), I argued that the Prime Minister ricate evidence and interfere with the
nation’s political, economic, cultural and so- The Selection Committee (Clause 4) con- should be under the Lokpal. Article 361 of investigation. These provisions are a ticking
I
s the population bomb ticking again? The world cial life. It is necessary to eliminate it.” In his sists of the Prime Minister (Chairperson); the Constitution grants immunity from time bomb which can be detonated by the
has crossed the milestone of seven billion people, Independence Day speech, the Prime Minis- the Speaker of the Lok Sabha (normally ap- criminal proceedings only to the President prospective accused at a time he chooses.
ter expressed the need for “a strong Lokpal pointed by and owing allegiance to the ruling and the Governors (earlier the Rajj Pra-
and there is renewed debate on the impact of a to prevent corruption in high places.” combination); a Union Cabinet Minister mukhs)) duringg their term of office. No im- Inclusion of NGOs as public
growing number of humans on the planet’s finite nominated by the Prime Minister; and one munityy from criminal or civil liability has servants
resources.. Neo-Malthusian arguments, centred mostly The major flaw eminent jurist and one person of eminence been granted to the Prime Minister. Thus Clause 17 of the government
g Bill and relat-
on environmental concerns, are pitted against the opti- In the Indian system of governance, a fun- in public life, both nominated by the Central the basic structure of the Constitution need clauses expand
p the definition of “public
p
mistic view that economic development will safely sta- damental flaw is that it is impossible
p for the government. gates and denies any immunity to the Prime servant” to include non-governmental
g orga-
g
bilise birth rates. The population question is complex Central Bureau of Investigation,
g , the premier
p Thus,, in a nine-member Selection Com- Minister. nisations// societies// their office-bearers
anti-corruption
p investigative
g agency
g y that is mittee four will be nominees of the govern-
g who receive donations from the public. Even
and there is no panacea for the travails of hundreds of subordinate to the Prime Minister’s Office ment,, and one the Speaker
p of the Lok Sabha,, Procedure and opportunity to autonomous NGOs not controlled by the
millions of deprived citizens who need food, shelter, (PMO), to even commence an inquiry or all enjoying the confidence of the ruling par- suspected accused government but aided by it are brought with-
safe water, and energy. It is distressing thatt more than investigation into allegations of corruption ty. The other four members are Leaders of Clauses 23 to 29 completely undermine in the definition of ‘public
p servant.’ This is
800 million people live in slums and a similar number, against the higher bureaucracy — which of- the Opposition in the Lok Sabha and the the provisions and procedures under the the most mischievous provision
p with
w h a view
mostly women, are not literate. In the popular imag- ten acts in concert with the political
p exec- Rajya Sabha, a sitting judge of the Supreme Code of Criminal Procedure which apply to to harassing,
g, intimidatingg and blackmailingg
utive — without the priorp approval
pp of the Court and a sitting Chief Justice of the High all crimes, including crimes committed un- NGOs/societies
/ and their office-bearers who
ination, growing populations can only have a negative Central government
g under Section 6A of the Court — both nominated by the Chief Justice der the Prevention of Corruption Act, 1988. are the principal
p p activists and whistleblow-
outcome, depleting scarce resources faster — more so Delhi Special Police Establishment Act. of India. How will such a committee inspire Under the normal procedure, the police have ers under the Right to Information Act, and
in an era of economic uncertainty.. The dilemma there- Thus, the CBI is unable to enforce the postu- public confidence or ensure a credible and the power to investigate, gather physical and who are leading the movement for an effec-
fore is whether to enlarge the pie or reduce the number late laid down by Chief Justice J.S. Verma in independent Lokpal mechanism? scientific evidence, interview and interro- tive Lokpal to curb corruption at the highest
of hands competing for a share. Empirical evidence the Jain Hawala case: “Be you ever so high, As against this, the Jan Lokpal Bill (Ver- gate individuals who can assist the investiga- levels. These NGOs are liable under the nor-
supports the humane answer, which is simply to have the law is above yyou.” sion 2.3) provides for a Selection Committee tion and, thereafter, furnish their final mal criminal law and should be excluded
The ggolden keyy to combatingg corruption
p is consisting of the Prime Minister, the Leader report to the appropriate court under Sec- from the definition of ‘public servant.’
more development. Crucially, this demands sharing to fashion an anti-corruption
p police
p force of the Opposition in the Lok Sabha, two tion 173 of the Code. It is then for the court to
the fruits of economic growth with the less privileged completely independent of the executive. judges of the Supreme Court and two perma- either frame charges against the potential Investigative machinery and
through access to education, health care, and welfare, nent Chief Justices of the High Courts se- accused or discharge them. During the in- prosecution wing
besides re-distribution of wealth. P Particularly signif-
Government Lokpal Bill lected by collegiums of all Supreme Court vestigation and the final report (popularly Under the Constitution, n,, there are checks
icant is the role played by education and empowerment In the short space of an article, one can Judges (four judicial members in all), the known as the charge sheet), there is no ques- and balances on the political and bureau-
only highlight and emphasise a few major Comptroller and Auditor-General, the Chief tion of giving any opportunity to show cause cratic executives.
executives Broadlyy theyy are the jjudi-
of women. provisions which are insidious and malig- Election Commissioner, and all previous or disclose to the accused the material or the ciary, the CAG, and the CEC. Members of the t
Developing countries with higher population growth nant in the Government Lokpal Bill. Unless chairpersons of the Lokpal.
p evidence collected. g
higher j y, the CAG and the CEC can-
judiciary,
rates are often viewed as the source of an emerging these are dropped, the Bill will be a ticking It means a total of two politicians,
p , four Under Clause 23,, an opportunity
pp y to be not be removed by the political executive
environmental crisis. That perspective is narrow and time bomb. It is better to have no Lokpal superior
p court judges, the CAG and the CEC. heard,, and a copypy of the complaint
p and mate- except byy impeachment.
p This secures for
flawed, given the patterns of resource consumption. A As rather than have the one envisaged in the Surely, such a Selection Committee would rial collected,, are to be ggiven to the suspect
p at them an independence
p from the executive
India’s Nobel laureate Amartya Sen observed in a 1994 government Bill. inspire greater public confidence. The stran- several stages
g before the completion of the which enables them to invalidate,, audit and
glehold of politicians representing the ruling investigation.
g Under Clause 24,, inspection
U nspection
p is check the excesses of the executive. Howev-
essay titled “Population: Delusion and Reality” (New Appointment of Chairperson and combination in the Government Lokpal Bill to be allowed to the suspect p when
w an in- er,, the anti-corruption
p machinery as indicat-
York Review of Books), “one additional American typ- other members is a highly malignant provision that requires vestigation
g or inquiry
q y is “proposed to be ini- ed above is completely flawed.
ically has a larger negative impact on the ozone layer, The structure of the Government Lokpal to be summarily dropped. tiated by the Lokpal.” Similarly, under It is essential that either the anti-corrup-
global warmth, and other elements of the earth’s envi- tion branch of the CBI be transferred imme-
ronment than dozens of Indians and Zimbabweans put diately to function under the Lokpal
together.” That was true even before the world had six
CARTOONSCAPE mechanism so that it is completely free from
executive interference, or the entire CBI be
billion people, and the pattern remains unchanged, brought under the Lokpal mechanism and be
although h a small minority of profligate emerging econ- made subordinate to it.
omy consumers now have a comparable ecological Once the investigative machinery is put in
footprint. WWhat reinforces fears of overpopulation the place under the Lokpal, it should be a sep-
most is the visibly desperate living condition of large arate ‘cadre’ and none of its members should
go back to or be transferred to any Central or
numbers of the poor. It is this that governments must State cadre or other investigative g organisa-
g
address on top priority. They alsoo need to prepare for a tions. In substance,, the Lokpal p and the in-
difficult future in which greater life expectancy cou- vestigative
g machineryy should be totallyy
pled with falling birth rates would produce an ‘inverted insulated and independent
p of all outside in-
pyramid’ — an enlarging geriatric population and terference,, influence,, favours and patronage.
p g
shrinking numbers of young men and women. Equally If the CBI is not under the Lokpal, p , turf wars
and jurisdictional
j disputes
p between the CBI
important is preserving the natural environment, and the Lokpal p will lead to litigation,
g , scut-
which has thus far enabled increasing levels of food tling the efficient working of the Lokpal.
production.n. Only a rising quality of life can lead to Unless these fundamental flaws are elim-
voluntary stabilisation of the world’s population, inated, it is best to scrap the Government
which is projected by the United Nations to touch 9.3 Lokpal Bill and continue with the present
system because the remedyy would be worse
billion by 2050. than the disease. The Lokpal p as contemplat-p
ed byy the government
g will be misused byy the
executive to silence the anti-corruption
movement. The T efforts of civil society led by
Tunisian voters
Anna Hazare will come to naught.
Compromise, accommodation and give-
and-take are essential to work a successful
lead the way

and vigorous democracy. In conclusion,, re-
member what Mahatma Gandhi said: “All
compromise
p is based on give-and-take,
g , but
there can be no give-and-take
g on fundamen-
A
s expected, victory in the Tunisian general tals. Anyy compromise
p on fundamentals is a
election has been
n claimed by the Islamist par- surrender. For it is all give and no take.”
(Anil Divan is a Senior Advocate and pres-
• IN ORDER to keep thecommon man’s faith in the justice delivery system, there must be
a self-activating mechanism to create additional special CBI courts as soon as the
pendency of corruption cases reaches an alarming number. The Supreme Court has
mooted this idea and sought the Centre’s response over it, while observing that such a
system could help decisions come in most of the corruption cases within six months. The
DoPT, in its affidavit, had informed that a total of 7,023 corruption cases were currently
pending in the country and it required 140 courts to handle them. At present, 122 special
courts are functional.
• The strength of the CBI officers comprised 50 per cent from direct recruitment and 50
percent on deputation. The Centre must act on the parliamentary committee reports,
recommending separate cadre for the CBI officers. “The cadre of the CBI must be
strengthened. Therehas been no effort by the governmentto do this but they continue to
engage officials ondeputation. According to us, independence of the CBI is compromised
with when officers of other cadre are engaged on deputation
• Special Police Establishment [DSPE] Act, 1946 does not allow the CBI to conduct an
enquiry or investigation into offences committed by an officer of the rank of Joint
Secretary or above, without the prior permission of the government There are also
delays in getting sanction for prosecution, execution of Letters Rogatory and requests for
investigation of offences committed abroad. Another major impediment is the delays in
trial of cases. The CBI alone has 10,000cases pending trial,”
• The Directorate of Income-Tax Criminal Investigation (DCI), is in danger of
death in infancy. The newly-created body intended to curb the generation and circulation
of black money has failed to take off and is on the brink of collapse. Till recently, tax
administration in India had no separate set-up for targeted investigation into criminal
cases. Despite repeated requests from the DCI, the CBDT has failed to provide suitable
officers or staff to carry out searches and criminal investigation. The DCI, which has
eight regional offices, seeks information about persons and transactions suspected to be
involved in criminal activities with cross-border, inter-state, or international
ramifications, which pose a threat to national security and are punishable.
• Licence Raj” has been replaced with a “clearance regime,” where both the private and
public sectors had to wade through unending clearances before projects actually take off.
For example, out that at least 58 clearances are needed at the various departments
andMinistries in the State/Central/ local levels for settingup a power project. The PMO
has proposed that one way of getting around this constraint is to float an SPV,
incorporated under the Ministry concerned, with the specific task of securing clearances.
The SPV will be responsible for identifying projects/ firming up the outlines of the
proposal, securing clearances and managing the id/auction process. “In a way, the SPV
would be hand holding project proposals, bringing them to a certain level of maturity and
then pushing them into bidding pipeline.
• A/c to India’s Chief Economic Advisor, Raghuram Rajan, India’s corrupt elites have
moved from controlling licences to cornering newly valuable resources like land. The
Resource Raj rose from the ashes of the Licence Raj. The first resource-related scam of
the liberalised era was probably the Sukh Ram- Himachal Futuristic Communications
episode. Then came land. We all know the sham of SEZs. The scam over allocation of
coal blocks for captive mining is the most recent example in this trend. Politically
connected business elites built empires by cornering resources such as land, coal,
minerals and spectrum.
• None of the bills or laws addresses the fountainhead of corruption — the opaque
management of political parties which includes the source and deployment of their
funds. Unless the political system is accountable, going after individual cases of
corruption will achieve little. Corruption is nothing but a reflection of the distribution of
power within societies. The country is where it is because the political system is self-
perpetrating and no party is accountable to anyone except a coterie of people that
dominates all decisions. Criminal elements that once pulled in votes for party candidates
are now getting voted to power themselves, gaining social respectability and public
funds. Unless the political system is accountable, going after individual cases of
corruption will achieve little. Corruption is nothing but a reflection of the distribution of
power within societies. The country is where it is because the political system is self-
perpetrating and no party is accountable to anyone except a coterie of people that
dominates all decisions. Criminal elements that once pulled in votes for party candidates
are now getting voted to power themselves, gaining social respectability and public
esteem in the bargain. Meanwhile, campaign-spending limits being easy to flout, buying
the voter is easily managed. Until political parties field clean candidates and promote and
reward them, a climate of ethical dealings simply cannot emerge. The only way this can
change is by educating voters on the dynamics behind the power play. Simply put, it
means having knowledge about the origin of party funds to provide insights into the
interests that back a political party. Equally how such contributions might influence
future policies —including the future outlook for using public funds and natural
resources. A Bill called the Registration and Regulation of Political Parties (2011) has
been drafted by a committee chaired by Justice M.N. Venkatachaliah, former Chief
Justice of India. The bill includes a democratic process for selecting party office-bearers
as well as those given the ticket. It talks of limits on donations by individuals and
corporations, suggests penalties for non-compliance and addresses the vexed question of
how to deal with support groups that spend money that remains unaccounted for in the
candidates’ election expenses.
Watchdog institutions in weak democracy

India has a multitude of watchdog institutions, constitutional and statutory. What is their
experience?
Election Commissions have tried to curb the role of black money in elections, but the politicians
have proved cleverer and circumvented it all. The Commission has not been successful in checking
malpractices that result in the compromised getting elected — who then claim legitimacy and propagate corruption
with impunity. The CAG audits government departments to track malpractices, but those in power
have found ways to get around it. Intelligence agencies (the Intelligence Bureau, the Directorate
of Revenue Intelligence and so on) keep tabs on important people and their wheeling and dealing
and hold vast amounts of information, but illegality has only grown. There are the CVC, the
CBI and various police agencies. Government departments have their vigilance wings. There
are agencies to protect the environment, but the powerful violate environmental laws with
impunity. There are regulatory authorities (such as the Securities and Exchange Board of
India and the Telecom Regulatory Authority of India) to check private business activity, but
they could not prevent the 2G scam or insider trading in the stock markets. The Reserve Bank of
India regulates financial institutions, but it has been found wanting, as in the Harshad Mehta
scam, the failure of cooperative banks, and so on.
The Information Commission oversees the Right to Information. It has shown some success,
but increasingly the whistle-blowers are being eliminated and its success has remained limited to
the highly literate. The media have exposed innumerable cases of corruption, but now sections
of them are entangled in the vice of paid news. Some media stars have been found to be
hobnobbing with the powerful and the compromised.
The judiciary is an independent constitutional body, yet the number of cases of alleged
corruption against judges is increasing. Cases are piling up in courts, and the number of pending
cases has crossed four crore. This has resulted in miscarriage of justice in many instances.
In brief, neither independence of functioning nor constitutional status has helped watchdog
institutions to effectively perform their assigned tasks. The reason is that democracy, the super-
watchdog which should deliver all-round accountability, has become weak in India. Democracy
ought to have ensured accountability of institutions. Votes should have weeded out the corrupt
but just the opposite has been happening — the honest rarely win elections. Legislatures should
check corruption but it would not be so if the elected are beholden to the corrupt or are
themselves corrupt. The problem is political; it cannot be resolved through technical fixes or by
having more laws — these are anyway being circumvented. A weak democracy presents a no-
win situation: if a democracy is weak, the corrupt get elected and misuse their autonomy; if the
legislators' autonomy is curbed, democracy weakens. Only a conscious public, not rules and
laws, can deliver autonomous and incorruptible legislators.
Lokpal
• Constitutional status: As mentioned in “watchdog institutions in weak democracy”,
India has several constitutional authorities, such as the Comptroller and Auditor General
laws, can deliver autonomous and incorruptible legislators.
Lokpal
• Constitutional status: As mentioned in “watchdog institutions in weak democracy”,
India has several constitutional authorities, such as the Comptroller and Auditor General
and the Central Vigilance Commissioner, to check malpractices. Yet, illegality has only
grown. Hence constitutional status might not be the answer we are looking for.
• The answer is not a Lokpal. It is to find the key to how the executive’s hold on power can
be challenged. Corruption of power is a bigger danger even than the corruption which is
about money grabbing. One of the most remarkable things about India is the extent to
which the power of the executive is unchecked. When chief ministers can no longer
scold the police for doing their job, you won’t need Lokpals.
• The Lokpal now being proposed is a strange beast, one that concentrates too many
punitive powers, and acts as a parallel police and court.
o prime minister is now accountable to the Lokpal, which was only the legislature’s
prerogative so far.
o The Lokpal needs no sanction or approval for preliminary investigations, can
search and seize any documents, and has the powers of a civil court (unlike the
CBI, which still needs sanction).
o It has de facto control of the CBI, its investigations, chargesheets and closure
reports.
o If a public servant fails to declare her assets, for whatever reasons, these will be
“presumed to be assets acquired by corrupt means”.
o For all this reflexive suspicion of legislators and civil servants, it reposes great
trust in the individuals who will people its offices
Lokayukta
The ombudsman s office could potentially emerge as an alternative power centre, clashing with the state
government or aiding it, unless there is greater clarity on its powers and responsibilities, and more
uniformity in its design. If the Lokayukta is to function as a free and fair overseer, then the terms of
appointment have to be transparent. It would also require the governor s appointment to be utterly non-
partisan, and not a political gift for services rendered or a way to get Raj Bhavan to breathe down the
neck of an opposition government. If the Lokayukta is to be above political skirmishes, other institutions
must also cease to hold an instrumental value for political parties. That s a tall order s and it reveals the
perils of creating an ombudsman in a way that the institution revolves around the individual.
Lokayukta conference
Measures suggested for enhancing the effectiveness of the Lokayukta and other anti-corruption
agencies was
• inclusion of members of civil services or all India services or holding civil posts or
employed in connection with the affairs of the State, within the definition of ‘public
servant / public functionary
• The Administrative Reforms Commission has held that role of a Secretary and Minister is
‘inextricably entwined’ and so having two different enquiries for the same actions, that of
Minister by Lokayukta and that of the IAS officer by the vigilance department, makes no
sense.
• Lokayukta be given with the power to take suo motu cognizance in any case so that they
may be able to act even if there is no complaint. “In Delhi, this power vests with the
Lokayukta
• The scrutiny of non government organisations depending primarily on Government
and/or State funding be brought under the ambit of Lokayukta.
• since powers of search and seizure are exercised by even magistrates, there was “no
earthly reason why former Judges of the High Court acting as Lokayuktas should be
denied this power or to nurture any apprehension of misuse
• since it is accepted that the executive should not have jurisdiction over the anti-corruption
bodies such as the Central Bureau of Investigation, Central Vigilance Commission and
the like, “the Lokayukta in the State should have supervisory jurisdiction over the anti-
corruption bodies/agencies” there.
• for the independent and effective functioning of the institution, the Lokayuktas have
stated that “financial and administrative autonomy is a sine-qua-non” and this can be
subject to financial discipline. “There can be a planned budget and the Lokayukta should
• since it is accepted that the executive should not have jurisdiction over the anti-corruption
bodies such as the Central Bureau of Investigation, Central Vigilance Commission and
the like, “the Lokayukta in the State should have supervisory jurisdiction over the anti-
corruption bodies/agencies” there.
• for the independent and effective functioning of the institution, the Lokayuktas have
stated that “financial and administrative autonomy is a sine-qua-non” and this can be
subject to financial discipline. “There can be a planned budget and the Lokayukta should
be required to spend as per it.”
Chawla Committee
The Ashok Chawla Expert Committee on Natural resource had identified natural resources such
as coal, minerals, petroleum, natural gas, spectrum, forests, water and land where the
government has a major role to play in articulating the policy framework or otherwise
influencing the manner of their allocation. It has looked at the efficacy and suitability of existing
legal and regulatory framework and rules being employed in the allocation processes and
recommended measures for enhancing their sustainability and improving transparency and
effectiveness of the processes.
Key recommendations of the Committee include
• standardising the format of minutes for all Standing Linkage Committee(Long-Term)
meetings, particularlyfor meetings where allocationdecisions aremade;
• the creation of a National Data Repository for petroleum exploration;
• future telecom licences as unified licences and spectrum de-linked from the licence and
improving the predictability and reducing the time taken for clearances.
• comprehensive national legislation to deal with all water related issues;
• inventory of the land available with the Union government and all dealings through
competitive and transparent e-auctions.
Black money
• India became the 13th country and the first non-OECD (Organisation for Economic
Cooperation and Development) nation to ratify the ‘Multilateral Convention on Mutual
Administrative Assistance in Tax Matters,’ which seeks to promote transparency and
exchange of tax-related. The Convention provides for all possible forms of administrative
co-operation between states in the assessment and collection of taxes, in particular with a
view to combating tax avoidance and evasion. This co-operation ranges from exchange of
information, including automatic exchanges, to the recovery of foreign tax claims. This
will give a fillip to the efforts of the government in bringing the Indian money illegally
stashed abroad. It offers a wide range of tools for cross-border tax co-operation. It
includes automatic exchange of information, multilateral simultaneous tax examinations
and international assistance in the collection of tax due. At the same time, the Convention
imposes safeguards to protect the confidentiality of the information exchanged.
• a huge information network had been created through amended DTAAs (double taxation
avoidance agreements) with 81 nations and four TIEAs (tax information exchange
agreements) with four tax havens (Liechtenstein, Panama, Seychelles and Bahrain)
• India has negotiated 19 new double taxation avoidance agreements and 17 new tax
information exchange agreements. Under the revised accord with Switzerland, India will
be allowed to seek information on tax evasion cases whereas, under the earlier
agreement, the country could only seek bank details in relation to tax fraud cases.
• The revised DTAA with Switzerland, would allow India to obtain banking information
from the European nation in specific cases for a period starting from April 1, 2011. India
is also constructively” engaged with Mauritius to update the tax avoidance treaty in line
with international practices.
• The government has set up an electronic centre unit in the Finance Ministry to deal with
the unaccounted money issue in India, Brazil and South Africa (IBSA) countries. The
unit, in close association with the revenue intelligence agencies of other countries, will
identify and share information on tax evaders, “abusive tax schemes”. The revenue
authorities of IBSA countries will also study the latest trends in tax evasion, abuse of
taxation laws and the trends that have emerged to avoid taxes. They will also help in
tracing black money flow in these countries and get information in a speedy and accurate
manner.
• As per the latest data from the Swiss National Bank, the total deposits of Indian
identify and share information on tax evaders, “abusive tax schemes”. The revenue
authorities of IBSA countries will also study the latest trends in tax evasion, abuse of
taxation laws and the trends that have emerged to avoid taxes. They will also help in
tracing black money flow in these countries and get information in a speedy and accurate
manner.
• As per the latest data from the Swiss National Bank, the total deposits of Indian
individuals and companies in Swiss banks at the end of 2010 is pegged at about $ 2.5
billion.
• Liechtenstein, Panama, Seychelles and Bahrain have asked India for a double taxation
avoidance treaty instead of tax information exchange arrangement. However, India is not
very keen on having DTAAs with these countries because while TIEAs provide for only
information sharing, DTAAs provide for a whole gamut of benefits. Apart from providing
tax benefits and capital flows, it also helps in facilitation of trade with those countries. We
don’t have much trade or transactions with these jurisdictions. So it will not be beneficial
for us to enter into an arrangement which will lead to a Mauritius-like situation for us

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Print Release http://pib.nic.in/newsite/PrintRelease.

Press Information Bureau

a) Declaring wealth generated illegally as national asset;

1. Creating an appropriate Legislative Framework

NOTE: Status of DTAAs/TIEAs negotiations as on 1st August 2012 is

· Enacted legislation incorporating counter measure against non-cooperative jurisdiction

3. Developing systems for implementation:

· New policy for deployment of manpower to Directorate of Transfer Pricing and

4. Imparting skills to the manpower for effective action:

6. Appraisal of Indian Efforts by International Organizations:

Status of DTAA/TIEA negotiations as on 1st August 2012 is as follows:

No of No of No of countries with No of the

Status of New DTAAs since 2009

No of countries with whom No of new DTAAs No of new DTAAs

Total 19 Signed(9): Entered into

2. Total DTAAs in force as on today

3. Status of New TIEAs since 2009

No of countries with whom No of countries with No of countries with

4. In 2012, negotiations for TIEAs commenced with 25 more countries/jurisdictions as

22. San Marino

6. List of DTAA countries as on 2009 (78)

11. China Yes

12. Cyprus Yes

13. Czech Republic Yes

14. Denmark Yes

15. Egypt Yes

16. Finland Yes

17. France Yes

18. Germany Yes

19. Greece Yes

20. Hungary Yes

21. Iceland Already have provision for

23. Ireland Yes

24. Israel Yes

25. Italy Yes

26. Japan Yes

27. Jordon Yes

28. Kazakstan Yes

29. Kenya Yes,

30. Korea Yes

31. Kuwait Yes

32. Kyrgyz Republic Yes

33. Libya Yes

34. Luxembourg Yes

35. Malaysia Yes

36. Malta Yes

37. Mauritius Yes

38. Mongolia Yes

39. Montenegro Yes

40. Morocco Yes

41. Myanmar Already have provision for

43. Nepal Yes

44. Netherlands Yes

45. New Zealand Yes

46. Norway Yes

47. Oman Yes

48. Philippines Yes

49. Poland Yes

50. Portuguese Republic Yes

51. Qatar Yes

52. Romania Yes

53. Russia Yes

54. Saudi Arabia Yes

55. Serbia Yes