Strug­gle for trans­parency

The Pak Banker - - Editorial - Pranab Bard­han

In a du­bi­ous land­mark and a first for In­dia, the Par­lia­ment could hardly meet for its win­ter ses­sion, paral­ysed by an al­liance of op­po­si­tion par­ties in rowdy protests against a cor­rup­tion scan­dal in the state al­lo­ca­tion of the telecom­mu­ni­ca­tion spec­trum.

The scathing pub­lic au­di­tor re­port as well as en­er­getic ju­di­cial in­ter­ven­tion comes close on the heels of other re­cent scan­dals in­volv­ing land and hous­ing schemes and the malfea­sance widely re­ported in the ar­range­ment of the Com­mon­wealth Games. Some of the op­po­si­tion par­ties, of course, throw stones from their own glass houses - one of them most re­cently as­so­ci­ated with min­is­ters in­volved in land scams and il­le­gal mines in the state of Kar­nataka. Are there struc­tural rea­sons for such per­va­sive cor­rup­tion? And does In­dia's cor­rup­tion dif­fer from that, say, in China?

A com­mon ques­tion is why cor­rup­tion, once as­so­ci­ated with the dis­cre­tionary pow­ers of the ear­lier "li­cense-per­mit raj," seems to be on the rise in In­dia, in­stead of fall­ing with the abo­li­tion of that con­trol regime. One can im­me­di­ately think of at least three rea­sons to ex­plain this puz­zle. First, de­spite a great deal of dereg­u­la­tory re­forms and trade lib­er­al­i­sa­tion, some ma­jor con­trols, par­tic­u­larly at the level of state gov­ern­ments, re­main. For ex­am­ple, any­one who wants to start a fac­tory needs land, of­ten acquired from the state, wa­ter and elec­tric­ity con­nec­tions made pos­si­ble by rel­e­vant de­part­ments, and then need en­vi­ron­men­tal clear­ance, putting the ap­pli­cant at the mercy of fac­tory in­spec­tors and labour-law im­ple­ment­ing agen­cies, and so on. This is not to sug­gest that some of these reg­u­la­tions do not have ra­tio­nale based on le­git­i­mate so­cial ob­jec­tives - say, over­see­ing min­i­mum work con­di­tions in fac­to­ries or re­stric­tions on pol­lu­tion - but con­sid­er­able of­fi­cial dis­cre­tion is in­volved and, with that, some scope for cor­rup­tion.

Se­condly, with high eco­nomic growth the mar­ket value of scarce pub­lic re­sources - land, oil and gas fields; min­eral re­sources; the telecom­mu­ni­ca­tion spec­trum and more - has gone up enor­mously, and so has the chance of mak­ing money from their fa­vored al­lo­ca­tion. For ex­am­ple, in the case of the al­lo­ca­tion of 2G spec­trum, in­stead of the stan­dard method of auc­tions, the min­is­ter concerned al­lo­cated them to fa­vored agents in 2008 at low 2001 prices, re­sult­ing in a loss to the trea­sury of up to $39 bil­lion, ac­cord­ing to an es­ti­mate, pos­si­bly bit of an over­es­ti­mate, by the pub­lic au­di­tor.

Third, over time elec­tions at all lev­els have be­come more ex­pen­sive in terms of advertisement costs, petrol for trans­port, and al­co­hol and cash for the large num­bers of vote­mo­bil­is­ing youth, par­tic­u­larly as ?an In­dian con­stituency in­volves num­bers of vot­ers much larger than else­where, more than a mil­lion in case of par­lia­men­tary seats. With­out pub­lic fi­nanc­ing of elec­tions, ?rais­ing money from all kinds of pri­vate sources, of­ten through il­le­git­i­mate means, is in­dis­pens­able. Of course, those pri­vate sources in turn de­mand and get quid pro quo from politi­cians in terms of pol­icy favours.

In com­par­ing In­dia with China, this last rea­son of elec­tion ex­penses is barred. Yet the other two rea­sons re­main valid in China as well and may ex­plain part of the large cor­rup­tion there. In fact, with fewer checks and bal­ances ei­ther in govern­ment in­sti­tu­tions or from in­de­pen­dent ju­di­ciary or me­dia or civil so­ci­ety, the cor­rupt in China can get away with un­scrupu­lous be­hav­iour much more eas­ily. In ru­ral ar­eas where house­holds do not have own­er­ship rights on land, Chi­nese lo­cal of­fi­cials, in col­lu­sion with lo­cal busi­ness, have been much more peremp­tory in ac­quir­ing land with­out ad­e­quate com­pen­sa­tion. Noth­ing like In­dia's re­cently en­acted - though as yet weakly im­ple­mented - Right to In­for­ma­tion Act de­ters the cor­rupt Chi­nese of­fi­cial.

Of course, those caught in the act face the threat of more se­vere pun­ish­ment in China: Cor­rupt of­fi­cials are some­times sum­mar­ily ex­e­cuted while in con­trast, In­dian cor­rupt of­fi­cials, if pun­ished at all, get off rel­a­tively lightly. But in gen­eral, Chi­nese pun­ish­ment for cor­rup­tion is of­ten ar­bi­trary and, more of­ten than not, used against po­lit­i­cal ad­ver­saries or small fry. Of course, pub­lic pro­test­ers against cor­rup­tion are also pun­ished some­times on charges of dis­rupt­ing pub­lic or­der - a re­cent case in point is that of the large-scale tainted milk scan­dal of 2008, which led to the ex­e­cu­tion of a high of­fi­cial and also im­pris­on­ment of protest­ing par­ents of some vic­tims.

It's in­ter­est­ing to note that Chi­nese jour­nal­ists who were fully aware of the de­vel­op­ing story of the tainted milk scan­dal post­poned writ­ing about it un­til the 2008 Olympic Games - China's moment of in­ter­na­tional glory - con­cluded, in or­der to be "har­mo­nious," as one edi­tor ex­plained to a for­eign re­porter in jus­ti­fi­ca­tion. Mean­while 300 chil­dren fell sick, and dozens died. In con­trast, me­dia fury in In­dia broke out over re­ports of of­fi­cial in­ep­ti­tude and cor­rup­tion in the ar­range­ments for the Com­mon­wealth Games in New Delhi this year just be­fore they be­gan.

There are, how­ever, grounds to sug­gest In­dia has more in­sti­tu­tional in­duce­ments for cor­rup­tion than in China. First, in China the lines of author­ity are more well-de­fined and stream­lined, whereas In­dia op­er­ates with an ad­min­is­tra­tive sys­tem of mul­ti­ple veto pow­ers on a given de­ci­sion - a legacy of colo­nial times and dis­trust in­sti­tu­tion­alised in the ad­min­is­tra­tive process.

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