In­dia’s ‘cor­rupt­ibles’ and their spec­tac­u­lar scams

A book that ex­plores the salience of cor­rup­tion in the In­dian body politic

Governance Now - - BOOK REVIEW - Rahul Dass

Heav­ily sweet­ened dirty deals have al­ways raised a stink and there is no end to in­sa­tiable greed. The prob­lem in this coun­try is that the mor­bid stench of cor­rup­tion is no longer over­pow­er­ing. We seem to be putting the hand­ker­chief to our nose and mov­ing on, as if this is the new nor­mal.

n ram, chair­man of Kas­turi & sons Lim­ited and former edi­tor-in-chief of The Hindu and Front­line mag­a­zine, delves deep into the in­tractable cor­rup­tion prob­lem in his new book: ‘Why scams are here to stay’. it at­tempts to help the reader un­der­stand cor­rup­tion in in­dia and it does cover a lot of ground.

The book says that cor­rup­tion dates back to the days of the east in­dia com­pany and adds that it was shaped by its se­nior of­fi­cials and its ‘nabobs’, who, re­turn­ing home with huge for­tunes, be­came a by­word for the ‘new cor­rup­tion’ in eigh­teenth cen­tury Bri­tain. “East In­dia Com­pany of­fi­cials were the ma­jor per­pe­tra­tors of cor­rup­tion in in­dia but the colo­nial nar­ra­tive made it ap­pear that was an en­dem­i­cally cor­rupt so­ci­ety that had en­snared them in its coils,” Ram notes.

“in an in­fa­mous de­fence of his ve­nal­ity, robert clive, the founder of Bri­tish im­perium in in­dia, gave ex­pres­sion in 1772 to the view that it was im­pos­si­ble to avoid the giv­ing and re­ceiv­ing of costly ‘pre­sents’ in the coun­try. in a pri­vate let­ter writ­ten to a Tory politi­cian, the east in­dia com­pany’s third gov­er­nor gen­eral, charles corn­wal­lis, con­fided that he ‘re­ally’ be­lieved ‘every na­tive of Hin­dostan’ to be cor­rupt,” it adds.

af­ter in­dia gained in­de­pen­dence, there have been some ef­forts to get the mea­sure of cor­rup­tion. The first se­ri­ous at­tempt was by the K san­thanam com­mit­tee, which was tasked in 1962 to “re­view the prob­lem of cor­rup­tion and make sug­ges­tions”. It had the fol­low­ing to say: “The prob­lem of cor­rup­tion is com­plex, hav­ing roots and ram­i­fi­ca­tions in so­ci­ety as a whole. in its widest con­no­ta­tion, cor­rup­tion in­cludes im­proper or self­ish ex­er­cise of power and in­flu­ence at­tached to a pub­lic of­fice or to the spe­cial po­si­tion one oc­cu­pies in pub­lic life. in this sense, the prob­lem would have to be viewed in re­la­tion to the en­tire sys­tem of moral val­ues and so­cio-eco­nomic struc­ture of so­ci­ety which we could not un­der­take.”

ac­cord­ing to ram, the prob­lem in in­dia, “where moral­is­tic ap­proaches to cor­rup­tion are com­mon and of­ten dom­i­nate pub­lic dis­course, is that the gap be­tween what the anti-cor­rup­tion cam­paign­ers, many of them ‘Gand­hi­ans’, de­mand and what the polity and the le­gal sys­tem are will­ing and able to do, is enor­mous.”

The re­sult, he ar­gues, is that “anti-cor­rup­tion in­sti­tu­tional ar­range­ments and ac­tions ha­bit­u­ally miss the mark; and mass cam­paigns against cor­rup­tion, fu­elled largely by moral out­rage, make their con­tri­bu­tion by rais­ing the level of pub­lic aware­ness but are un­able to sus­tain them­selves be­yond a point and fail to meet the lofty ob­jec­tives they set them­selves.” The anti-cor­rup­tion move­ments spear­headed by Jayaprakash narayan in the 1970s and by anna haz­are in 2011-12 make the point.

To an oft re­peated ar­gu­ment on cor­rup­tion, the book notes that there was a time when the stock ex­pla­na­tion for cor­rup­tion in in­dia was the ‘per­mit-li­cence-quota raj’ – vir­tu­ally every­thing could be at­trib­uted to it. “The pre­dic­tion of­fered by a le­gion of ne­olib­eral econ­o­mists and po­lit­i­cal the­o­rists was that dereg­u­la­tion and lib­er­al­i­sa­tion would lead to the pre­ven­tion, con­tain­ment, and even­tual elim­i­na­tion of cor­rup­tion.” Pre­cisely the op­po­site has hap­pened: lib­er­al­i­sa­tion has ush­ered in cor­rup­tion in a much larger va­ri­ety of forms than any­thing seen un­der the so-called li­cence raj. not to for­get, crony cap­i­tal­ism.

Tak­ing a crit­i­cal look at elec­toral fi­nance, the au­thor says it typ­i­cally in­volves cor­rup­tion on a large scale. “But the vari­abil­ity of na­tional laws reg­u­lat­ing cam­paign fi­nanc­ing and do­na­tions to po­lit­i­cal par­ties and the se­ri­ous­ness with which they are en­forced can make a sig­nif­i­cant dif­fer­ence to the in­ci­dence, forms and scale of this type of cor­rup­tion.”

so, how much of an ac­tual ad­vance does the Lok­pal as an in­sti­tu­tion, rep­re­sent?

ram refers to an emailed re­sponse from ns nigam, as­so­ciate pro­fes­sor at the azim pre­mji uni­ver­sity in Ben­galuru, who ex­plained why the Lok­pal could not pos­si­bly be a deep cure for cor­rup­tion in in­dia: “its pro­posed strength is its in­de­pen­dence from the po­lit­i­cal cor­rup­tion that it is sup­posed to in­ves­ti­gate. how­ever, even the most in­de­pen­dent of in­ves­tiga­tive agen­cies can­not ad­ju­di­cate the guilt of per­sons ac­cused of cor­rup­tion. an in­ves­ti­gat­ing body can­not es­tab­lish con­clu­sively that a per­son is in­volved in po­lit­i­cal cor­rup­tion; in a democ­racy this func­tion is per­formed by the ju­di­ciary alone. if the ju­di­cial process is de­layed or com­pro­mised in ad­ju­di­cat­ing on cor­rup­tion, the Lok­pal’s ef­forts will nec­es­sar­ily fail to bear fruition.”

is in­dia more cor­rupt that most other coun­tries? To that, the book says, when it comes to com­par­isons, there is an easy case and a vir­tu­ally in­sol­u­ble one. What we can say with cer­tainty or near cer­tainty, based on our gen­eral knowl­edge and ex­pe­ri­ence, is that there is far more cor­rup­tion in in­dia than in den­mark or the uk or Ger­many or sin­ga­pore. This is a sub­jec­tive, qual­i­ta­tive judge­ment that is easy to form and it is un­likely to be con­tested se­ri­ously.

But, is there more cor­rup­tion in in­dia than in china or south africa or Brazil or nige­ria?

The au­thor says, “we can­not an­swer this ques­tion be­cause there is no re­li­able em­pir­i­cal ba­sis on which quan­ti­ta­tive com­par­isons of cor­rup­tion can be made, and qual­i­ta­tive judge­ments can be no more than guesses.”

The book goes on to say that there are sec­tors such as min­ing and, most no­to­ri­ously the arms trade, where many for­eign com­pa­nies try­ing to do busi­ness with in­dia en­gage in cor­rup­tion, al­most al­ways through in­ter­me­di­aries or mid­dle­men. “dis­guis­ing bribes and kick­back as com­mis­sions and rout­ing them through agents to de­ci­sion­mak­ers seems to the rule rather than the ex­cep­tion.”

in the sec­tion de­voted to case stud­ies, ram dis­cusses at length the Bo­fors scan­dal and cor­rup­tion in Tamil nadu. no­tably, he had led The Hindu’s in­ves­ti­ga­tion in the Bo­fors case. The Bo­fors scan­dal re­volved around the ra­jiv Gandhi gov­ern­ment’s de­ci­sion to pur­chase from the swedish arms man­u­fac­tur­ing com­pany an ad­vanced 155mm how­itzer sys­tem. The trans­ac­tion was val­ued at sek 8.41 bil­lion (₹1,437.72 crore at the pre­vail­ing ex­change rate). “it turned out that un­ac­knowl­edged pay­ments ag­gre­gat­ing ₹64 crore – termed com­mis­sions and cal­cu­lated on a per­cent­age ba­sis – had been paid by Bo­fors into se­cret swiss bank ac­counts af­ter the con­tract was won on March 24, 1986.”

an in­ter­est­ing anec­dote shared by ram is that when stren­u­ous dam­age lim­i­ta­tion and cover-up ef­forts were un­der­way in in­dia and swe­den, a tip came from un­ex­pected quar­ters. “dur­ing the course of an in­for­mal con­ver­sa­tion at the rash­tra­p­ati Bha­van in 1988, r venkatara­man, pres­i­dent of in­dia who had held var­i­ous key min­is­te­rial port­fo­lios in­clud­ing de­fence, and was known for his in­tegrity, said to me, ‘don’t you know that the stan­dard rate of com­mis­sion in ma­jor de­fence deals is 6 per­cent?’ ”

The book men­tions the deadly cor­rup­tion sys­tem in Bjp-ruled mad­hya pradesh’s ‘vya­pam’, which in­volved a set of in­ge­niously de­vised crim­i­nal ser­vices pro­vided on a rate-card ba­sis, by the rack­e­teers to stu­dents and job­seek­ers to cheat their way into staterun med­i­cal col­leges and gov­ern­ment jobs. The book should have, but does not go deeper into the vya­pam scam.

The au­thor de­scribes Tamil nadu as a case of grand cor­rup­tion. “it has spec­i­fied rates for fa­cil­i­ta­tive, col­lu­sive and ex­trac­tive cor­rup­tion, de­pend­ing on the sec­tor; fixed col­lec­tion quo­tas, sweet­ened with in­cen­tives, for min­is­ters, bureau­crats, and other col­lec­tion agents; and no-non­sense en­force­ment of the rules.”

ram sug­gests some re­me­dial mea­sures to tackle the deep-rooted malaise of cor­rup­tion. he calls for ac­tion on the leg­isla­tive front, in­clud­ing no­ti­fy­ing with­out de­lay the Whistle­blow­ers pro­tec­tion act. ac­tion has also been sought on the need to over­come the lack of en­force­ment ca­pac­ity. The au­thor also stresses upon the need for stricter, cleaner and more ef­fec­tive reg­u­la­tion, be­sides rais­ing the vis­i­bil­ity of cor­po­rate and pri­vate sec­tor fraud. an im­por­tant sug­ges­tion is for re­form­ing and cleans­ing po­lit­i­cal fi­nance and elec­toral fund­ing.

The book will be of con­sid­er­able in­ter­est to re­searchers and aca­demics, but for the av­er­age reader, it could be a clunky read in some parts. The nar­ra­tive could have been much bet­ter han­dled. The sec­tion on case stud­ies could have been more ex­pan­sive since there is a lot of ma­te­rial in pub­lic do­main, on a string of scams that have rocked this coun­try over the past few decades.


Why Scams Are Here to Stay

By N Ram

Aleph Book Com­pany 202 pages, ₹399

Arun ku­mar

The Anna Haz­are-led protest in 2011 brought the is­sue of cor­rup­tion to the fore

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