V A Gopala  Bangalore

HEAT ON CORRUPTION

MONEY-GRABBING SCANDALS AMONG CIVIL SERVANTS IN INDIA HAVE INSPIRED CONTESTS AND INVESTIGATIONS (TIME International Magazine September 23, 1996 Volume 148, No. 13)

ANTHONY SPAETH

These are nervous days for corrupt Indian officials: cops and prosecutors are working overtime on the largest accretion of high-smelling scandals India has ever known. Public disgust is written on the nation's walls--and some other unexpected spots. At a recent gathering in New Delhi, more than 100 women competed to draw the most eye-catching designs on their palms in mehndi, or henna, a traditional art. The winning design was an intricate floral, but second and third places went to contestants who used skin as a medium of protest against bribes and rake-offs. Most of the entrants were similarly inspired, drawing officials sitting on sacks of money and caricatures of politicians accused of corruption, including former Prime Minister P.V. Narasimha Rao. The most fervent allowed the designs to go off the palm and all the way up to their elbows.

Which is not surprising in a land chin deep in official venality. "We're talking about a pervasive phenomenon," says Samuel Paul, director of the Public Affairs Center, a polling organization in Bangalore that releases regular "report cards" on government performance. Politicians catch most of the heat because they accumulate the plumpest moneybags. In just one of the scandals dominating the newspapers, investigators raided the residence of former Telecommunications Minister Sukh Ram in August and found piles of bank notes. In a single raid in New Delhi, they toted away $700,000, and more was discovered in another house belonging to the former minister in his hometown.

But on the whole, more cash is accumulated by India's vast army of salaried government employees, numbering nearly 20 million, who siphon away development project funds, hold up approvals for bribes, or demand payment for such privileges as getting a telephone or even, in some cities, sleeping on the pavement. They are rarely caught and never have to worry about being booted out in an election.

But now some heat is being fanned their way. A handful of high-profile civil servants have published books that expose rampant official wrongdoing, especially at the senior levels. "The system has become rotten," says K.J. Alphons, whose book Making a Difference details how he has made an ongoing career of fighting corruption in various jobs. "Public money is being stolen, but even honest, hardworking officers just keep quiet. This is the curse of the country." And the shrill sound of whistle blowing is coming from other levels too. In Uttar Pradesh, India's most populous state, members of the Indian Administrative Service are trying to "out" their dirtiest colleagues: these bureaucrats plan to cast secret ballots to name the state's most underhanded officials. The three who garner the greatest number of votes will be exposed, and an independent panel will probe allegations against each one who earns more than 100 votes. Officials in the neighboring state of Bihar are planning a similar exercise. "It is time we called a spade a spade," says Uttar Pradesh's Home Secretary, G. Patnaik.

Efforts to reverse the situation will require not spades but bulldozers. After independence in 1947, Indians were confident that homegrown bureaucrats would be more dedicated and honorable than the retreating British, and a job in either the ias or the Foreign Service was a mark of towering prestige. But low salaries, poor discipline and the power to make or break business deals--which had to be officially approved--turned many bureaucrats to careers of soliciting bribes. Others remained personally honest but kept mum about the misdeeds around them. Election commissioner T.N. Seshan, in a book called The Degeneration of India, identifies the Emergency Rule of the late Prime Minister Indira Gandhi in the mid-1970s as the turning point. Civil servants carried out illegal orders, helped Mrs. Gandhi jail her opponents and, Seshan writes, "almost gleefully" helped gag the press. "The bureaucracy, for the most part, utterly caved in," he concludes. "Over the years, the practice of corruption has become so endemic that it has acquired a veneer of almost complete legality." Fellow author J.N. Dixit, until recently the top bureaucrat in India's Foreign Ministry, complains in a new book that India's best and brightest do not apply for the Foreign Service anymore because the pickings are better in domestic posts. Madhav Godbole, secretary of New Delhi's Ministry of Home Affairs in the early 1990s, concludes that there is too much political interference in the civil service. "This is now a mutually reinforcing system with each aiding and abetting the other in getting the maximum out of the spoils system," he writes in Unfinished Innings.

But a handful of honchos looking back in anger and disgust will not solve many problems, and few other initiatives are trickling down from the top. Probably the only real hope is for local action. Earlier this year in Rajasthan state, villagers suspecting that government funds for development work such as water supply or health care were being pocketed, demanded to see records proving the money had been disbursed. The bureaucracy resisted but finally gave in when the villagers continued public protests. If India is getting fed up with corruption, the people will have to send the message however they can--even if it is painted on the hands of their young women.

--Reported by Meenakshi Ganguly/New Delhi

Freedom of Information Is key to Anti Corruption in Rural India

Lasani is a small village which is part of Rawatmaal panchayat (village council) in Rajasthan's Ajmer district. According to the panchayat records, Rs. 56,000 was recently spent to construct water channels linking the village talab (pond) with the fields. The water channels, however, exist only on paper.

This is one of many shocking revelations that emerged at a recent public hearing (jan sunwai) led by the Mazdoor Kisan Shakti Sangathan (MKSS), a people's organisation working in the region since 1988. The public hearing is one of the means used by the MKSS in its struggle to ensure the people's right to information. One aim of the campaign is to root out corruption at the local level and demand accountability from the development establishment.

The public hearing, held on 19 January 1998 in Surajpura village, focused on development works in Surajpura. It began with a puppet show dealing with the abuse of development funds by village leaders, politicians and government functionaries. Hundreds of women and men participated in the hearing. Some of them had participated in development works as labourers or masons, and had seen corruption from close quarters or even been cheated themselves.

During the next few hours, 23 development works recently completed in these panchayats were examined. These works included the construction of anicuts, culverts and checkdams; latrines and bathrooms; schools and other types of community buildings. The examination began with MKSS activists disclosing detailed information on each item of development work. This information had been obtained earlier from the village panchayats and cross-checked through visits to work sites and enquiries in the villages. Predictably, panchayat leaders had shown some reluctance to part with information, but in the end they had no choice but to co-operate. The Government of Rajasthan recently recognised the people's right of access to official documents at the panchayat level: a gazette notification now entitles any member of the public to a certified photocopy of these documents at a nominal price. This landmark legislation is itself the result of a sustained campaign led by MKSS, which culminated in a 53-day long dharna (sit-in) in Jaipur in June-July 1997.

As the activists took out file after file and invited participants to present their testimonies, excitement built up. Soon a wide range of frauds were identified. To mason Dood Singh's surprise, his name was found on the muster rolls of two different works for the same period, while he had not even received his due wages for one. Bhanvri Singh, a labourer, stated that she had received only Rs. 300 as wages, as against Rs. 570 shown in the muster rolls against her name. The crowd was suitably amused when the name of Devi Singh, a man who had died 30 years ago, was found on the muster rolls.

The 23 development works examined over the day accounted for a total expenditure of Rs. 33 lakhs (1 lakh = 100,000 Rs./1£=64 Rs.). Of this, it was estimated that at least Rs. 5 lakhs had been siphoned off by various people in complicity with the sarpanch (head of the village council). Of this amount, one third was accounted for by fake bills for the purported purchase of cement.

A remarkable feature of the public hearing was its constructive and orderly tone. The participants though often angry, did not lose their temper. Their was no hint of compromise with fraud, nor was the hearing confrontational. This constructive atmosphere had much to do with the effective way in which MKSS activists played their role of moderators.

The sarpanches (including two women) of the five panchayats were present. Since their signature is required for all items of development expenditure, they were considered to have an inescapable responsibility for the frauds identified. The fact that the sarpanches had joined the public hearing without coercion was itself significant. On earlier occasions they had often ignored invitations. One possible reason for this change is the success of another public hearing held a few weeks earlier where one sarpanch returned Rs. 50,000 in cash in front of the crowd and agreed to return another Rs. 50,000 in two instalments. This gesture made a tremendous impression in the area. The sarpanches who came on January 19 probably felt that there was no way out, and that co-operating with the process was in their own interest.

The reactions of the sarpanches were varied. Some of them attempted to challenge the accusations of fraud. In other cases, they agreed that fraud had taken place, but blamed others for it. In some cases they accepted that they had failed to ensure honest implementation of works, or even admitted personal involvement in frauds. At the end of the day, the sarpanches agreed to cooperate with the follow-up process of recovering misappropriated funds. Some of them even promised to return money themselves in cases where their personal responsibility had been established. For instance, the sarpanch of Rawatmaal volunteered to return Rs. 56,000 appropriated in the name of non-existent water channels.

These may seem like small victories but their symbolic significance is far-reaching. All over rural India, scores of small development works have been undertaken in the name of the poor. The main beneficiaries of these schemes, however, are not the poor but a network of contractors, bureaucrats and village leaders who are looting public funds for private gain. There is also a connection between this development scam and the corruption of the electoral system, whereby local leaders are allowed to misuse public funds in return for delivering votes. The casualty is not just development but also democracy.

Against this background, the right to information campaign is an opportunity for ordinary citizens to break out of the vicious circle of collective apathy and individual hopelessness. Aside from being a practical weapon to eradicate corruption at the village level, the public hearing is a creative exercise in government for the people by the people. It is a small but significant step towards the transition from representative to participatory democracy.

Frontline, 6 March 1998, Chennai, India.

50% Indian Pay Bribe

Survey by CENTRAL VIGILANCE COMMISSION

NEW DELHI, Nov 10 (AFP) - Almost 50 percent of Indians using government services end up paying bribes, according to a recent survey commissioned by India's Central Vigilance Commission (CVC).

But only 20 percent actually filed complaints against such corrupt practices.

The study was carried out by the Centre for Media Studies (CMS), which interviewed 2,576 visitors to government offices in five cities across the country from October 31 to November 4.

More than 60 percent of respondents said the problem of corruption was not being tackled seriously and that the judiciary was largely ineffective.

Most of the respondents agreed the offices for securing driving licenses and civil supplies were the most corrupt in all five cities -- New Delhi, Lucknow, Madras, Hyderabad and Pune.

One-third of respondents admitted to using "influence or favour" to get the service they needed.

The survey noted that members of the business community and the self-employed topped the list of bribe givers.

According to the survey, the government departments in Lucknow and Hyderabad were the most corrupt.

About 42 percent of people said the departments operated "middle men" who acted as a paid conduit between the public and officials.

The public departments covered by the survey included electricity and telephone boards, civil supplies, driving license and local urban development offices.

India Plans to Establish Anti-Corruption

NEW DELHI, 16-11-2000: The Indian government will introduce a bill in parliament in the coming winter session to set up the office of Lokpal to investigate corruption charges against serving civil servants and ministers.

The government is determined to introduce the Lokpal bill in the winter session of parliament,'' cabinet spokesman and Parliamentary Affairs Minister Pramod Mahajan told reporters after a cabinet meeting on Thursday.

Mahajan did not give any details on the bill. The winter session of parliament starts next week.

The bill has failed to get parliament's approval several times in the past due to lack of consensus among lawmakers about the exact functions of the Lokpal (Ombudsman) and whether to include the office of the prime minister in the definition of public servant.

A recent survey by a private agency showed 2/3rd of more than 2,500 people questioned thought there was corruption in Indian government offices and this corruption has taken our country backward by 25 years.

Nearly half of those interviewed said they or someone close to them had given a bribe to obtain a government service.

In October, former Prime Minister Narasimha Rao and his ex-cabinet colleague Buta Singh were sentenced to three years in jail by a special court in a vote-buying case, but this will not help as these politician know they will be acquitted in Supreme Court.

The case involved allegations that in 1993 Rao tried to influence a parliamentary vote of no-confidence by bribing four lawmakers of a regional group.

Vajpayee vows to 'root out corruption'

NEW DELHI, 25-3-2001: Pledging to "root out corruption," Indian Prime Minister Atal Bihari Vajpayee told supporters Sunday that bribery accusations against top politicians are a plot to undermine his government.

Vajpayee told about 100,000 supporters in the Indian capital the government was ready for an independent inquiry into the scandal that has rocked the government, but he also said the calls for his resignation by the opposition were a "challenge to war" and he was ready for it.

"We accept this challenge, and we will fight it," Vajpayee said.

He acknowledged corruption was deeply rooted and that it would take time to get to the bottom.

"The malady has been in existence for more than 50 years," he said. "It is wrong to think that we can root it out in three months. We don't say so. However, we are committed to root out corruption."

Vajpayee has been emboldened by the support he received over the weekend from the senior leaders of his party at their national executive meeting. Party leaders conceded that videotapes at the heart of the scandal have dismayed supporters.

The tapes appear to show a host of party leaders, government officials and senior army officers discussing offers of kickbacks and bribes with reporters who posed as arms dealers.

Parliament has been paralyzed over the last week and a half, with the opposition demanding top officials step down. Leaders of two parties have resigned as a result of the scandal.

Vajpayee expressed anger over the opposition's demands, saying an inquiry must be conducted before anyone jumps to conclusions.

"You keep your point of view and prove us guilty," he said. "Baseless allegations will not work, and because of these allegations, you should not stop the proceedings of Parliament."

With five state elections due in early May, the opposition is set to keep pressure on the government.

As Vajpayee addressed his rally,tens of thousands of opposition demonstrators took part in another rally a few kilometers away. They burned effigies of government leaders who they said have lost the moral authority to govern

MP'S Immunity: Is there a need for review

BRIBE-TAKING LEGISLATORS SHOULD BE LIABLE FOR PROSECUTION

by Justice Jeevan Reddy

The four Jharkhand Mukti Morcha (JMM) Members of Parliament who voted for the Narasimha Rao government in return for monetary consideration were let off by the court on the basis of the words contained in one significant clause in the Constitution, viz. clause 2, Article 105: “in respect of anything said, or any vote given by him”.

Article 105 guarantees the members of Parliament absolute freedom of speech in the House. Clause 2 of this article, which is actually a continuation of clause 1, enjoins that no proceedings shall be taken against any Member of Parliament in a court of law ‘in respect of anything said or any vote cast by any member within the House’. And clause 3 specifies that the privileges and immunities of the members of Parliament shall be the same as those of the members of England’s House of Commons.

In the JMM case, the prosecution argued that the four JMM MPs and Ajit Singh were given money for voting against the motion of no confidence against Narasimha Rao. (It was a minority government and needed the support of MPs of other parties to defeat the motion). The JMM MPs voted against the motion, while Ajit Singh took the bribe but did not cast his vote.

The Supreme Court having already held that the members of Parliament are public servants, and come under the purview of the Prevention of Corruption Act and the Indian Penal Code, the prosecution framed charges against those who took the bribes as well as those who gave them.

But the JMM MPs contended in the Supreme Court that even if, assuming that they have taken the bribes the court cannot prosecute or punish them for that because of the language contained in the clause 2 of article 105. In short, even if money was offered, it is something, which is in respect of their casting of a vote in Parliament.

An identical question was gone into by the US Supreme Court in 1962 in what is known as the Brewster’s case. In that case, the majority (six out of nine judges) held that the charter of absolute freedom given to members of Congress is not a charter for corruption. It amounts to perverting the basic concept behind the charter of freedom. Members cannot sell themselves. However, the minority opinion (three out of nine) held a contrary view. According to this view, if such protection were not guaranteed to the members of the legislature, then they would feel constrained or not absolutely free in the manner of voting or speaking in the house. They said that the threat of such prosecution in the court could have a chilling effect on the free speech right. The Brewster’s case was extensively cited and relied upon by both three prosecution and the defence counsels while arguing the JMM bribery case.

But in the case of our Supreme Court, three out of the five judges or the majority opinion decided to follow the minority opinion given in the Brewster’s case. Which meant that the freedom of speech was absolute and the MPs could not be prosecuted in respect of anything said or any vote cast by any member within the house. Whereas, the minority of two judges preferred the majority opinion given in the American case that the freedom of speech cannot be absolute. The judges while giving the judgment further pointed out that Ajit Singh who had also taken the bribe but not voted could not claim immunity since he did not cast his vote.

Another question, which was considered by the judges, was that under the Prevention of Corruption Act, sanction of the appropriate authority has to be obtained before a public servants but that neither the Prevention of Corruption Act nor the Constitution specifies who should be the authority to sanction the prosecution. On this issue there was a divergence of opinion amongst the judges. The minority was of the view that the permission of the Speaker in the case of the Lok Sabha and the Chairman in the case of the Rajya Sabha was sufficient, as they were the competent authority. The majority view held that since it was not specified, no one could give this sanction. But they also pointed out that this is not a happy situation and it calls for a change.

Before we go into the changes that are being proposed to be introduced, one important distinction between the American and Indian legislature needs to be highlighted. In the United States, as a result of the Principle, of Separation of Powers, how you vote has no effect on the life of the executive. For instance, in the Clinton impeachment trial, many Democrats voted against Clinton while many Republicans voted for him. The party discipline is not of great significance. But in a parliamentary system like in India, party discipline is of great import as it can make or break a government. It is for this reason that we have a provision for a party whip etc.

The question that needs to be considered is whether the majority opinion of the Supreme Court that MPs enjoy freedom in respect of speech and voting in Parliament should be introduced. To probe this question reference was made to earlier cases, English cases, Lord Salmon and Lord Nolan’s reports, the British Law Commission etc. Most took the view that bribe taking cannot be allowed.

So, we were prima facie of the opinion and this should not be permitted.

There are two alternatives, which can be considered. Whether immunity should be removed only in respect of voting or both in respect of voting and speaking. We have suggested a new clause in article 105. Clause 3 (a) ‘Nothing in the clause 1,2,3 should bar the prosecution of a Member of Parliament under the Prevention of Corruption Act etc, if they take money for voting in Parliament’. The other issue is of the competent authority to grant sanction for prosecution. We have suggested the constitution of a permanent committee of five members elected by the MPs themselves. It would comprise three members from the Lok Sabha and two from the Rajya Sabha.

We have made this consultation paper public to generate a debate. We have to still finally make up our minds on whether to suggest this change and the manner in which this is to be effected or to let the situation remain as it is.

Hindustan Times 14-1-2001

Cities Reek of Corruption: Survey

Netizens may love to anoint Hyderabad as Cyberabad. But its inhabitants think the city government is reeking with corruption. If the residents of Delhi, Lucknow, Ahmedabad, Chennai and Pune reflect a slightly better opinion of their local governments it is only in contrast to what the Hyderabadis think about their government.

In each of these six cities, the departments dealing with driving license and ration cards are perceived as most corrupt.

The urban development authority and the electricity and telephone departments are, in many cases, seen as only a step behind.

And, on an average, one in every two persons has at one point or the other greased a palm to get his work done.

Not surprisingly, it is the politician who tops the charts for fuelling corruption except in Hyderabad where the “officer” is pulled out of the shadow and held accountable.

These are among the findings of the first-ever survey done to map the level and extent of corruption.

Although the exercise, conducted by Centre of Media Studies, is confined to six cities and six public utility services, it reflects the stranglehold of the phenomenon that cuts across social and geographic barriers, as indicated in the selection of cities and samples.

Billed to be an annual exercise, the CMS survey clearly intends to turn “social auditing’ into a buzzword of the near future as it traces its inspiration to Chief Vigilance commissioner N.Vittal’s initiatives against corruption.

The survey, based on a sample of 900 between October 31 and November 4,2000 on the eve of the nation-wide Vigilance Awareness Week through “Exit Polls”. People visiting public offices during this period were included in the survey.

The offices covered included the urban development authority, city government, electricity, telephone, driving license and ration card/civil supplies departments.

Hindustan Times 12-1-2001

N. Vittal On Corruption In India

N Vittal (Chairman, Chief Vigilance Commisioner)

Corruption is an all pervasive phenomenon in India. We have three pillars of the state, namely, Judiciary, Executive and Legislature. So far as Judiciary is concerned, the shield of 1971 Contempt of Court Act protect them. Any attempt at even making objective criticism runs the risk of person making the comments being held up for Contempt of court. Truth is no defence against Judiciary. Executive includes the political and the bureaucratic executive. Legislature is of course the area of operation leaders.

Political corruption is seen as one of the most significant sources of corruption and the root of the culture of corruption in our country. In fact, our entire political process and the system of election depend on black money. Every candidate in an election from the lowest to the highest level needs money. 40 per cent of India’s GDP is black money. No wonder that Indian politics also has a significant association with black money. It is not as if the politicians or those who participate in politics want to be corrupt. Many of them are good professionals and would probably earn more professionally if they do not spend time in politics. There are also other genuinely committed social leaders who may not like to handle black money. But over a period of years, a new culture of "political honesty" has grown in which while the political leader, at least at the individual level may be honest, is forced for the sake of the party to raise funds even from questionable sources. This lies at the root of political corruption. If a greater degree of transparency in the financing of politics brought about, two benefits will follow. Firstly, the political process will become open and accountable. Secondly, the dependence on black money will disappear. India is a corrupt country. According to the Transparency International’s Corruption Perception Index 2000, India ranks at 69 out of 90 countries. Corruption is threatening our national security. The Hawala scam brought out the link between the corrupt neta, babu, lala, jhola and dada in our system. We must therefore examine whether any reform can be made in the funding process for elections so that the political corruption can be checked at its root. One idea which has been debated is the public funding of elections. This will be a sheer waste of public resources. Even if the resources are given not in cash but in kind in terms of TV time or advertisement space etc., still the very nature of the democratic election process is such that there will be a tendency of raise additional resources and display one upmanship. Unscrupulous people just entering the election fray to get the financial advantage of such electoral funds and then disappearing cannot also be ruled out.

The simplest idea which can work is to remove the present hypocrisy about political contributions. Under the Income Tax Law, contribution to the political parties by business houses is eligible for tax deduction only if a nexus for business advantage can be proved. This provision forgets the basic issue that after all every contribution which any businessman in his individual capacity or in a corporate capacity makes is with a view to get at least some benefits and if nothing else, advantage in the form of a more friendly approach in the corridors of power.

We should therefore aim at a more transparent system of funding of elections and the political process. We should try to emulate what the United States has done. In the current election, for example, we all know how much funds were raised by what means by both the contesting candidates on the Republican and the Democratic side. Why cannot we create such a situation in India? It is true that even the US system is not foolproof. John McCain made campaign fund reform a major issue. But, definitely the American political system is much cleaner than the Indian system.

The funding of the elections and the contribution to the political funds by individuals or corporate bodies must be freely permitted and such contributions must be eligible for tax deduction under the Income Tax Act. The information about all these contributions should be in the public domain and could be published in the web site of the concerned individuals or the oraganisations and, more important, in the web site of the political parties. Secondly, the political parties must get their accounts audited properly so that there is absolute transparency in the funding process. This will, at one stroke, eliminate the specter of black money which is haunting India and which is resulting in all round corruption.

The shift from black money based political funding to legitimate funding will not take place overnight, but the transformation process will begin. The contributors to the political kitty are the business houses. CII and ASSOCHAM have agreed that they will ask their members not to bribe.

Black money is not the only negative aspect of Indian politics. The Vohra Committee Report had highlighted one negative aspect of our politics namely the criminalisation of politics. So if we want to start a process by which we will be able to achieve corruption - free government, where the law makers play a very effective role in achieving this objective, it is necessary that we should first take steps to ensure that the law breakers and criminals do not become law makers.

Chief Election Commissioner should see how we can amend the electoral law, particularly Representation of People’s Act, to see that the law breakers do not become law makers. Following suggestions may be considered:

*No political party must be permitted to contest the elections unless it has got the latest annual accounts duly audited by an auditor as may be prescribed by a notified agency like the Election Commission, the CAG or the Supreme Court, etc.

*No political party must be permitted to context the elections unless it has cleared its income tax dues and has got the requisite certificate from the income tax authorities.

Complaints regarding corrupt practices during elections can be looked into by the Election Commission even before the date of polling. The Election Commission has an excellent communication system to receive complaints of this type and can immediately take action so that there will be a healthy check and deterrent effect on corrupt practices during elections. Prevention is always better than cure.

The explanation 1 below Section 77 of the Representation of People Act, which reads as follows, should be deleted.-

"Account of election expenses and maximum thereof. (1) Every candidate at an election shall, either by himself or by his election agent, keep a separate and correct account of all expenditure in connection with the election incurred or authorized by him or by his election agent between (the date on which he has been nominated) and the date of declaration of the result thereof, both dates inclusive."

"Explanation 1. Notwithstanding any judgment, order or decision of any court to the contrary, any expenditure incurred or authorized in connection with the election of candidate by a political party or by any other association or body of persons or by any individual (other than the candidate or his election agent) shall not be deemed to be, and shall not ever be deemed to have been, expenditure in connection with the election incurred or authorised by the candidate or by his election agent for the purposes of this sub-section.

Provided that nothing contained in this Explanation shall affect -

Any judgment, order or decision of the Supreme Court whereby the election of a candidate to the House of the People or to the Legislative Assembly of a State has been declared void or set aside before the commencement of the Representation of the People (Amendment) Ordinance, 1974 (14 of 1974):

Any judgment, order or decision of a High Court whereby the election of any such candidate has been declared void or set aside before the commencement of the said Ordinance if no appeal has been preferred to the Supreme Court against such judgement, order or decision of the High Court before such commencement and the period of limitation of filing such appeal has expired before such commencement."

A person who has been accused of an offence involving moral turpitude or other criminal offences should not be permitted to contest the elections. The Election Commission may identify these offences. In stead of going only by the gravity of the offence and FIR being filed, the critical test for applying the ban on the candidate contesting the election should be that the concerned judicial authority like a magistrate should have examined the FIRs and the data and gone to the stage of framing charge sheet.

If a person who has been framed in cases involving grave offences and moral turpitude as identified and notified by the Election Commission, is banned from fighting the elections, it will ensure that criminals do not enter politics and become representatives of the people.

Equally important is the need for having laws which will punish the corrupt. Corruption today in our country has become a low risk high profit business activity. The Law Commission in its 167th report has suggested the enactment of the Corrupt Public Servants (Forfeiture of Property) Act. This act has been pending with the government from 4-2-1999. It is high time that this law is enacted so that the corrupt public servants do not take advantage of the present legal process themselves to escape the punishment.

The dynamics of corruption in government starts with a systematic attempt at politicising the bureaucracy. Though in principle we are supposed to have a politically neutral permanent civil service of the British type, what we have in practice is the spoil system of USA, without the corresponding checks and balances in that country which makes that country a far less corrupt country than India. The simple instrument by which the political executive has found that the bureaucracy can be made to dance to its tunes, is the instrument of transfers and postings. The importance of insulating at least the important and sensitive posts from this transfer instrument was highlighted by the Supreme Court in the Vineet Narain case popularly known as the Hawala case. The Supreme Court pointed out that at least the two key, investigating agencies of the Government of India, namely the CBI and the Enforcement Directorate must be insultated from outside influences. This was sought to be achieved by making the CVC as a statutory body and making the CVC supervise the activities of the CBI. The CVC as a statutory body and making the CVC supervise the activities of the CBI.

This initiative of the SC so far as CBI and ED are concerned points a way by which we can systematically introduce a practice in government for de-politicising or at least reducing the possibility of corrupt elements in the bureaucracy getting posted to sensitive posts and exploiting their position. It will be worthwhile to identify all the sensitive posts in government and bring in a discipline that these posts will be filled up from a panel of names recommended by an objective and independent committee like the CVC’s Committee for CBI and ED. Unless we tackle the issue of corruption in the political sphere in a systematic manner, we are not likely to succeed.

N.Vittal Says he will purge the poison of Corruption in India

PUNE, 3-9-1998: The newly-appointed Chief Vigilance Commissioner, N Vittal, said today his first and foremost task would be to supervise the functioning of the Central Bureau of Investigation (CBI), in so far as it relates to investigations under the Prevention of Corruption Act.

Vittal, who was in the city to attend the South Asian Association of Regional Cooperation meet, was selected for the post by a committee comprising Prime Minister Atal Behari Vajpayee, Union Home Minister L K Advani and leader of the Opposition in the Lok Sabha Sharad Pawar yesterday. He will assume charge tomorrow.

Vittal said his priorities would be to ``purge the poison of corruption'' from India, which has been ranked the world's 9th most corrupt country by a German agency, Transparency International.

The entire perspective of looking at corruption has to change, he said, ``The judicial in India thinks that a man is not corrupt unless proved otherwise has created a cushion of safety for corrupt persons to thrive and cock a snook at the law enforcing agencies, by providing him enough loopholes to escape from the clutches of law'', he said.

The other factors that breed corruption include the scarcity of services or commodities, the lack of transparency in various departments that issue tenders and work orders, and red-tapism and delay in court cases which sometimes takes 20 years to give judgement.

Vittal said another reason for corruption thriving was that the system of punishing the accused was laborious, ``For example, during an inquiry in a government department, the inquiry officer asks for loads and loads of documents. And by the time all the documents arrive, the officer gets transferred and all the time is wasted'', he said.

Asked how he would counter political pressures he might face during the anti-corruption drive, Vittal said, ``I would not like to answer this question as I have still not taken over''.

A prolific writer, Vittal is a strong proponent of liberalisation and a critic of the bureaucratic processes that he feels have slowed down the pace of development in India.

And Justice For All

By Tavleen Singh in India Today, October 21, 2000

If cases are decided in weeks instead of decades, few people will dare to be corrupt

It could be because the Gods look more benignly upon India at Dussehra when we celebrate – as we have for thousands of years - the victory of good over evil. Or it could just be a coincidence that we have seen a former prime minister and a former demi goddess chief minister convicted of corruption in this season of propitiating the gods. P.V. Narasimha Rao for buying the votes of MPs and Jayalalitha for selling herself Tamil Nadu government land at much less than it was worth. Despite the convictions it’s hard to see Jayalalitha doing hard labour for the next three years, as part of her sentence, or Rao spending his remaining years in some gloomy cell. Something will surely save them from punishment but the convictions bring a tiny measure of desperately needed hope in a judicial system so inefficient that most Indians have lost faith in it.

Much needs to be done if that faith is to be restored and it is in the hands of the judiciary and the Law Ministry to do it. Yet, whenever the question of reforming our decrepit judicial system comes up we find all the main players take up defensive positions. From the judiciary we hear that the reason why it will take us more than 300 years to clear the backlog of cases in our courts is because we have too few courts too few judges, too deficient a system. In addition, from the Law Ministry we hear that simplifying laws will take a very long time since there are 2,500 Central government laws to be examined and when we get to state laws, we are talking of nearly 30,000. So law ministers have come and gone and nothing has been done despite experts having made any number of excellent suggestions like the calling of a special session of Parliament on litigation. This particular suggestion came from Bibek Debroy who has spent so much time studying the flaws in our legal system that it compelled him to write a book called ‘In the Dock: Absurdities of Indian Law’. Will Union Law Minister Arun Jaitley please read it?

Unless we can get the justice system to start working at least as efficiently as it did in the Rao and Jayalalitha cases we can be sure that corruption will continue to flourish and grow. Evil will continue to triumph over good and we only have to glance around us to see that it already does.

Remember the fire in Delhi’s Uphaar cinema three years ago? Remember that 59 innocent people lost their lives because the cinema’s management was criminally negligent? The men responsible should have already been in jail but they are out and about and will be for a long time because the process of putting the evidence together in the case has not yet been completed. Remember those bomb blasts in Mumbai in 1993 that killed more than 200 people? Well, it is pretty much the same story with that case so it requires little imagination to know that in a country where it takes an average of 20 years to bring murderers to justice corrupt officials and politicians can go about their business in peace. And, they do.

It is because of corrupt officials and politicians that our most sacred rivers have become sewers. Crores of rupees have been washed down the Ganga because the action plan to clean it leaked like a sieve. Instead of trying to plug the holes the government announced an action plan to clean the Yamuna and we can be sure that this will go the same way. Corrupt officials are the reason why we may soon have no forests left in India and, if what happened to that poor tigress in the Andhra zoo is an indication; we may soon have poachers hunting animals in our zoos. It is also the reason why we spend thousands of crores of rupees on roads that disappear annually with the first monsoon showers and why we provide other public facilities so substandard that we would do better to stop wasting our money.

Our only hope lies in making the justice system work, as it should. As an ordinary citizen may I make a few simple suggestions? Judges should be given deadlines so that day-to-day hearings become necessary. Television cameras should be allowed in the courtroom so that we know exactly who to blame for delays. A special Doordarshan channel should be dedicated to this purpose. Lawyers who cause needless delays should be debarred. Pre-trial hearings should eliminate flippant cases like the one filed - and admitted in a Delhi court - by a man who claimed to be Priyanka Gandhi’s husband. Finally, government departments - responsible for nearly 70 per cent of our civil cases - should be banned from going to court unless necessary. By taking only these small steps we could have a justice system that could make all the difference.

Economics of 2 countries India-Japan

Source: World Bank World Tables 1995
Tales of Corruption (The root cause of India's problems)
 

19-Sep-2000	19-Sep-1998	04-Dec-1997	03-Dec-1997	03-Nov-1997
02-Oct-1997	13-Sep-1997	02-Sep-1997	27-Aug-1997	26-Aug-1997
22-Aug-1997	20-Aug-1997	19-Aug-1997	17-Aug-1997	16-Aug-1997
15-Aug-1997	14-Aug-1997	13-Aug-1997	10-Aug-1997	09-Aug-1997
06-Aug-1997	05-Aug-1997	01-Aug-1997	31-Jul-1997	25-Jul-1997
24-Jul-1997	23-Jul-1997	20-Jul-1997	17-Jul-1997	15-Jul-1997
14-Jul-1997	11-Jul-1997	10-Jul-1997	09-Jul-1997	08-Jul-1997
07-Jul-1997	01-Jul-1997	30-Jun-1997	25-Jun-1997	24-Jun-1997
23-Jun-1997	22-Jun-1997	20-Jun-1997	01-Apr-1997	20-Mar-1997
18-Mar-1997	17-Mar-1997	11-Mar-1997	10-Mar-1997	08-Mar-1997
07-Mar-1997	05-Mar-1997	04-Mar-1997	03-Mar-1997	28-Feb-1997
27-Feb-1997	26-Feb-1997	20-Feb-1997	19-Feb-1997	18-Feb-1997
12-Feb-1997	05-Feb-1997	04-Feb-1997	03-Feb-1997	19-Aug-1996

Source: Biswanath Halder

Law of Corruption

The Imperatives of Political Corruption in India

In India, the electoral laws and the compensation mechanism of the representatives of the people virtually eliminate the possibility of non-corrupt people contesting elections to provide governance services to the nation.

[Alternative statement: The People of India - as reflected through the laws they have enacted - WANT corruption.]

Proof This proof has been vetted by about 50 of India's top economists across the world and all members of IPI. The names of the economists are listed here. Nobody has anything further to add to this proof and as of now, no one in India has challenged this proof, including the Dy. Chief Election Commissioner, India.

Please check out the electoral laws of India here.

Let us consider Mr. X, who, convinced after tremendous reading and direct experience, that he has understood what is wrong with India, is willing to provide governance services to the nation. Mr. X, unfortunately, happens to be an honest person, and as is the usual situation with such people, is rather minimally endowed with financial assets. He has barely enough to build a small house and maintain a small family. He cannot afford to propagate his message to a large constitutency. It is assumed that Mr. X is strongly influenced by the financial calculation which he makes at the commencement of the electoral process.

Mr. X will enter the process of providing governance services to India if and only if he and his family are not financially put at serious risk in that process. 

 
Assumptions: 
------------

Assume that

* black money is not used.
* supporters do not fund substantially (as citizens, we usually free ride)
* there are n major candidates
* if elected, the candidate survives 5 years as representative
* once the 5 years are over the representative retires and lives for another 25 years
* there is no inflation
* the discount rate is the market rate, say @ %
* the MP is not assassinated (i.e., we do not add any risk premium)
* there is nothing to forfeit if a candidate loses an election.

Data:
=====

Analysis of what MPs actually get

Cost (official limit)                   15 lakhs
Probability of being elected:           1/n

Returns:
--------

Component 1: "Take home"
------------------------

Salary                  Rs. 4000
Dearness Allowance      Rs. 6000

Component 2: "Against job related expenditures"
----------------------------------------------

Sumptuary allowance     Rs. 2500 (meant for entertaining guests)
Constitutency allownace Rs. 8000 (meant for discretionary spending
                                  on visitors from constituency, etc.)
Daily allowances        Rs. 400 per day (meant to cover actual costs
                                  on travel)
Secretarial allownace   Rs. 6000 (paid to secretary) (not received by MP)
32 free air journeys/yr (rest out of the pocket) 
                                (many travel more than this)
100,000 free tel. calls (rest out of pocket) (many spend more)
2nd AC coach            free to anywhere in nation
                        any number of times. (a privilege hardly used:
                        how many MPs have you met in trains?)
Pension is Rs 2500 per month (there might be a small dearness all. on that).

In addition, an MP gets a house in Delhi. An MP has to maintain two establishments - one at 'home' and one in Delhi.

Discretionary quotas: An MP is allowed to issue gas and telephones to people he/she likes. The quota for gas connections was raised from 100 to 160 and the phone connections from 25 to 50. (unfortunately, this is not part of the 'salary of the MP).

Loss to MP: He/she stops earning whatever he/she was earning before, while he is an MP. Conflict of interests, mostly, and also, no time for work.

The actual take-home salary is Rs.10,000 per month.

Source:http://www.indiapolicy.org/lists/india_policy/1998/Jul/msg00176.html

Returns (net salary paid as MP)         Rs. 10,000 x 12 x 5
Plus pension at a fixed rate of         Rs. 1,400 per month

Rule: divide each annual return by n to ensure that the probability of being elected is taken into account

Calculation:
------------

PV of Return =  1.2  +   1.2      +           1.2              +  etc.
                ----    -------           -----------
                 n      n (1+ @/100)      n (1 + @/100)^2

NPV =  PV of return - 15

    =  strongly negative.

In other words, Mr. X must be willing to lose heavily and place his family in great jeopardy. He will almost for sure suffer great bankruptcy.

Of course, if Mr. X has great inherited wealth, he might wish to 'sacrifice' it for the common good. In other words, Mr. X might well be an altruist.

The question is, are we best served by self-sacrificial altruists or,
alternatively, imprudent fools who jeopardize their own families?

The reality, as we well know, is far more sinister and mean and lowly. Such people (whether fools or altruists) do not enter politics - at least on a large scale. In reality, given the nature of the fact that huge losses are incurred during the process of representing the people, only thosewith huge black money, and those morally comfortable with making illicit transactions, enter this area.

ALMOST ALL BUT THE CORRUPT ARE DRIVEN OUT OF THE POLITICAL MARKET

The more complete analysis:
===========================

In the more complete analysis, the costs are much higher. One will have to account for three kinds of costs to contesting an election, one uncertainty and four kinds of risk:

Costs
=====

        -       opportunity cost of career forgone for 6 years
                (one year before elections, to familiarize the people
                and 5 years as MP)
        -       cost of campaigning (officially 15 lakhs; unofficially
                more)
        -       security deposit

Let us incorporate reality into the picture:

Cost of contesting election = close to 3-6 crores (300-600 lakhs), as stated by none other than TN Seshan, the ex-CEC.

Uncertainty
===========

        -       Probability of return = 1/n     where n = major candidates
       
Risk
====
        -       loss of life and limb (many candidates are killed off,
                also many ministers are attacked; Prime Ministers are
                routinely blown up or killed)

        -       loss of future returns from children whose careers
                are ruined due to neglect of children's education
                during these six years.
       
        -       risk of divorce since wife is extremely annoyed
                with the continuous infux of people into the house
       
Inconvenience
=============
       
        -       high level of inconvenience; job of computer
                engineer is much better, for example.

                (however, this can be cancelled off against the
                reward from public recognition, etc.)

Return
======
        -       official salary of MP


A COMPLETELY DISTORTED VIEW OF INCENTIVES: It appears that journalists of India have a very poor capacity of analysis. They have always claimed that an MP gets a lot of money, little realizing that it COSTS enormously to become an MP, and that if paid as poorly as they are today, the MPs of India have not much choice except to be corrupt.

Article titled 'A case of custodians looting the coffers' by P.L.Prasada Rao appeared on Page 25, The Hindu dated Dec 1 1998.

Some points made were:

The monthly salary of an MP has been enhanced to Rs.4000 from Rs.1500, his daily allowance (a sitting fee for each day the MP attends parliament or any meeting of the house Committee)  increased to Rs.400 from Rs.200 (on an average there is a sitting of either of the Houses or a committee on at least 20 days in a monthwhich means Rs.8000 a month), office expenses (stationery) to Rs.2500 (Rs. 1500), secretarial allowance to Rs.6000 (Rs. 4000), constituency allowance to Rs.8000 (Rs. 6000), pairs of air tickets to 32 (28), free electricity to 25000 units (15000), car allowance to Rs.1 lakh (Rs.50000), monthly pension to Rs.2500 (Rs.1400), family pension to Rs.1000 (Rs.500), accomodation in a mansion or an apartment with host of other privileges. The new pay package to the MPs brought in with retrospective effect from April 1, 1998 is estimated to entail a recurring expenditure of over Rs. 15.05 crores a year and a non-recurring expenditure of Rs. 3.65 crores.

... on restoring the "out of turn" allotment of gas connections and telephone connections,
the author says -

...Adding insult to injury, the quota for gas connections was raised from 100 to 160 and the phone connections from 25 to 50.

... Not the kind to be left behind, the MLAs also have been giving themselves hefty hikes in their emoluments. An MLA in Punjab gets the highest basic monthly salary of Rs. 7500
followed by Haryana Rs. 7000, Karnataka Rs. 6700, UP Rs. 5850, and Assam Rs. 5700 besides a host of other allowances. Under the "vehicle loan scheme" all the 87 MLAs in Punjab had a
Rs.4 crore bonanza of Tata Sumo cars. In AP, the MLAs are given a grant of Rs.54,500 and a loan of Rs.17,250 to purchase computers.

The author also suggests that pension be given only to those who quit politics for good.

REALITY: Given the risks involved, the hard work and the tension involved, I have verified from many mothers that they would NEVER let their children enter politics unless the salary of the MP was raised to well above Rs. 1 lakh per month. Sanjeev.

Suggestion of CEC: EC shoots down HM advice on poll reforms (see mirror on IPI here). The Commission felt that private companies should be permitted to contribute up to 5 per cent of the average net profits. Gill's explanation: Companies would make donations to politicians anyway, so it was better to make it legal, transparent and in the public gaze, rather than drive it underground.

An example of transparency US Presidents' electoral funding and Center for Public Integrity

ISSUES NEEDING FURTHER EXAMINATION:

A project needs to be carried out to investigate the following: [Times of India correspondent Arindam Roy is in the process of carrying out this project. Others can help.]  

A1) Go to your District Election Officer. Check CEC
page which says

Inspection of papers and supply of copies thereof

22. Any person can, on payment of a fee of rupee one, inspect the account lodged with the district Election Officer (or Returning Officer, as the case may be) by any candidate. According to rule 88 of Conduct of Election, Rules, 1961, the Commission has fixed the fee of one rupee per folio or part of a folio chargeable for the supply of attested copies of the account of election expenses or of any part thereof.

Maybe the electon Commission shd simply publish all these. Maybe all here can scrutinize these for Re.1 each. Arindam: here is your source of authority as a citizen to investigate these expenses.

"absolute meaninglessness of the existing law on election expenditure"
as per Election Commission:

CEC page

* rules reg election expenses

rules


A2) Visit the MPs/ MLAs in the state/ central capital, randomly, through
appointment (you all have the press passes)

        *       ask them how much it cost them to run for their
                elections

        *       how much it costs them to feed the visitors who
                come to their residences

        *       what did they declare regarding electoral expenses
                to the election commission

        *       opportunity cost: what is the MP/MLA forfeiting
                by not doing his/ her regular profession.

B) Visit the dalals who organize campaigns for parties.

        *       ask how much it will cost Mr. X to campaign in
                a constituencey of average size

                        (include -      vehicle hire/ purchase
                                        petrol, etc.
                                        payments to drivers
                                        cost of posters
                                        cost of big cut-outs
                                        cost of mike and other         
                                                equipment
                                        cost of wining and dining
                                                people before
                                               the elections  

        *       cost of purchasing electoral rolls

        *       cost of printing manifestos/ brochures

        *       cost of printing party flags
       
C)  To countercheck the info, ask poster painters and others about
                the cost of making large cutouts and big banners,
                etc. Also check out the licence fee for putting these
                up.

D) Political party offices. Get statements regarding funds received, funds spent in day-to-day purposes, funds spent in elections, etc. Particularly ask the big parties how the aeroplane trips and helicopters are funded for the big leaders. Also find out how the funds are generated for 'party retainers' at the village level, i.e., those folk whose job is to carry petitions from villages to the MLAs/ Ministers.

E) Election commission or its rep at the state level.
Ask for a copy of the detailed statements of account of the    political parties and the statements of campaign expenses made by the candidates. Also complete copy of electoral laws relating to the survival of a party as well as the procedure to spend funds in a campaign.

Once the data is available, we can improve our analysis and find out if it is indeed possible for any honest person to contest elections in India.

Vohra Committee Report

[Scanned and compared from the publicly available, i.e., abridged, document,

with no guarantee of authenticity. Please obtain the original from Home Ministry.]

MINISTRY OF HOME AFFAIRS

l. l Government had (through its Order No.S/7937/SS(ISP)/93 dated 9th July ‘93) established a Committee, comprised as below, to take stock of all available information about the activities of crime Syndicates/Mafia organisations which had developed links with and were being protected by Government functionaries and political personalities. Based on the recommendations of the Committee, Government shall determine the need, if any, to establish a special organisation/agency to regularly collect information and pursue cases against such elements:

(i) Home Secretary Chairman

(ii) Secretary (R) Member

(iii) DIB Member

(iv) Director CBI Member

(v) JS(PP) MHA Member Secy.

1.2 The Committee was authorised to invite senior officers of various concerned Departments to gather the required information.

1.3 Special Secretary (Internal Security & Police), MHA, was subsequently added as a Member of the Committee. The Committee was desired to submit its Report within 3 months.

2.1 In the first meeting of the Committee (held on l5th July ‘93), I had explained to the Members that Government had established the Committee after seeing the reports of our Intelligence and Investigation agencies on the activities/linkages of the Dawood Ibrahim gang, consequent to the bomb blasts in Bombay in March 1993. From these various reports, it was apparent that the activities of Memon Brothers and Dawood Ibrahim had progressed over the years, leading to the establishment of a powerful network. This could not have happened without these elements having been protected by the functionaries of the concerned Government departments, specially Customs, Income Tax, Police and others. It was, therefore, necessary to identify the linkages and to also determine how such information could be timely collected and acted upon in the future.

2.2 In the course of the discussions, I perceived that some of the Members appeared to have some hesitation in openly expressing their views and also seemed unconvinced that Government actually intended to pursue such matters. Accordingly, I addressed separate personal letters to each of the Mernbers of the Committee seeking their well considered suggestions and recommendations. Their responses are briefly brought out below.

2.3 The various offices abroad of this Agency have limited strength and are largely geared to the collection of military, economic, scientific and political intelligence. R&AW monitor the activities of certain organisations abroad only insofar as they relate to their involvement with narco-rerrorist elements and smuggling arms, ammunition, explosives, etc. into the country. It does not monitor the activities of criminal elements abroad, which are mainly confined to "normal smuggling without any links to terrorist elements". The present strength of the Agency’s offices abroad would not permit it to enlarge its field of activities. If, however, there is evidence to suggest that these organisations have links with Intelligence agencies of other countries, particularly Pakistan, and that they are being used or are likely to be used by such countries for destabilising our economy, it would become R&AW’s responsibility to monitor their activities, as is being done by this Agency to collect vital information in regard to the investigations in the Bombay bomb blasts case.

2.4 The creation of a nodal agency to collect information regarding the activities of Mafia organisations is very essential. All the existing information/data available with R&AW, IB and CBI could be made available to this nodal agency. R&AW will nominate an officer of suitable rank to Iiaise with the nodal agency on a

regular basis to enable expeditious follow-up action.

3. l A Report on the nexus between the Bombay City Police and the Bombay under-world was prepared by CBI in 1986. It would be useful to institute a fresh study by CBI, on the basis of which appropriate administrative/ legal measures could be initiated.

]

3.2 An organised crime Syndicate/Mafia generally commences its activities by indulging in petty crime at the local level, mostly relating to illicit distillation/gambling/organised satta and prostitution in the larger towns. In port towns, their activities involve smuggling and sale of imported goods and progressively graduate
to narcotics and drug trafficking. In the bigger cities, the main source of income relates to real estate - forcibly occupying lands/buildings, procuring such properties at cheap rates by forcing out the existing occupants/tenants etc. Over time, the money power thus acquired is used for building up contacts with bureaucrats and politicians and expansion of activities with impunity. The money power is used to develop a network of muscle-power which is also used by the politicians during elections.

3.3 CBI has reported that all over India crime Syndicates have become a law unto themselves. Even in the smaller towns and rural areas, muscle-men have become the order of the day. Hired assassins have become a part of these organisations. The nexus between the criminal gangs, police, bureaucracy and politicians has come out clearly in various parts of the country. The existing criminal justice system, which was essentially designed to deal with the individual offences/crimes, is unable to deal with the activities of the Mafia; the provisions of law in regard economic offences are weak; there are insurmountable legal difficulties in attaching/confiscation of the property acquired through Mafia activities.

3.4 It has been suggested that the menace has first to be tackled at the local level where the agencies of the State and the concerned Central Enforcement Agencies like Customs and Excise, Income Tax etc. would be required to take effective action. In cases where a crime Syndicate has graduated to big business, it would be necessary to conduct detailed investigations into its assets, both movable and immovable. It has been stressed that when such action is not timely and effectively taken, the lower functionaries of the concerned State and Central Departments/organisations start over-looking the activities of the crime Syndicates. To elucidate this point, the Director CBI has given the example of IQBAL MIRCHI of Bombay who, till the late 80’s, was

merely a visitor to passenger and carrier ships to obtain liquor and cigarettes for selling the same at a profit. In the last 3-4 years, MIRCHI acquired real estate valuing crores of rupees; he has many bank accounts and has been paying lakhs of rupees to his carriers. The growth of MIRCHI is due to the fact that the concerned Enforcement agencies did not timely take action against him and, later, this perhaps became difficult on account of the enormous patronage that he had developed. If MIRCHI is investigated, the entire patronage enjoyed by him and his linkages will come to light. Director CBI has observed that there are many such cases, as that of MIRCHI where the initial failure has led to the emergence of Mafia giants who have become too big to be tackled.

3.5 Director CBI has stated that the main mode of communications/contacts of the Mafias operating at the international level is through telephonic communications. Referring to the useful leads emerging from the investigations into the activities of Dawood Ibrahim, a Mafia leader, the director CBI has stated that the effective monitoring of the telephone calls made from India/received from abroad would yield useful information and, for this being done, Government may grant sanction to monitor certain telephone connections.

3.6 The assistance of Banks is an essential input. The Bank Managers can be placed under obligation to render reports on all heavy transactions and suspicious accounts to the Enforcement agencies. Such a practice obtains in UK.

3.7 Concluding his analysis, Director CBI has made the following suggestions to bring under control the activities of the criminal Syndicates:

(i) Identification of offences and award of deterrent punishments, including preventive detention.

(ii) Trial procedures should be simplified and hastened.

(iii) Surveillance should be carried out through finger printing, photographs and dossiers.

(iv) Monitoring mechanisms should be established at the State and Central levels.

(v) Establishment of Special Cells in the States CIDs and CBI.

(vi) Suitable amendments should be introduced in the existing laws to more effectively deal with the activities of Maixa organisations, etc.; this would also include review of the existing laws.

(vii) A detailed case study of l0-15 cases would provide useful information regarding the administrative/legal measures, which would be required to be taken to effectively tackle the functioning of Mafia organizations. The CBI can do this within a short period.

6.1 DIB has reported that due to the progressive decline in the values of public life in the country "warning signals of sinister linkage between thc underworld politicians and the bureaucracy have been evident with disturbing regularity, as exemplified by the exposures of the networks of the Bombay blast case". He has
recommended itnmediate attention to:-

(i) Identification of the nexus between the criminals/Mafias and anti-national elements on the one hand and bureaucrats, politicians and other sensitively located individuals on the other.

(ii) Identification of the nature and dimensions of these linkages and the modus operandi of their operations.

(iii) Assessment of the impact of these linkages on the various institutions, viz., the electoral, political, economic, law and order and the administrative apparatus.

(iv) Nexus, if any, between the domestic linkages with foreign intelligence.

(v) Necessary action to show effective action to counteract/ neutralise the Mafia activities.

(vi) Political and legal constraints in dealing with the covert/illegal functioning of the linkages.

6.2 Like the Director CBI, the DIB has also stated that there has been a rapid spread and growth of criminal gangs, armed senas, drug Mafias, smuggling gangs, drug peddlers and economic lobbies in the country which have, over the years, developed an extensive network of contacts with the bureaucrats/Government functionaries at the local levels, politicians, media persons and strategically located individuals in the non-State sector. Some of these Syndicates also have international linkages, including the foreign intelligence agencies. In this context, the DIB has given the following examples

(i) In certain States, like Bihar, Haryana and UP, these gangs enjoy the patronage of local level politicians, cutting across party lines and the protection of governmental functionaries. Some political leaders become the leaders of these gangs/armed senas and, over the years, get themselves elected to local bodies, State Assemblies and the national Parliament. Resultantly, such elements have acquired considerable political clout seriously jeopardizing the smooth functioning of the administration and the safety of life and property of the common man, causing a sense of despair and alienation among the people.

(ii) The big smuggling Syndicates, having international linkages, have spread into and infected the various economic and financial activities, including havala transactions, circulation of black money and operations of a vicious parallel economy causing serious damage to the economic fibre of the country. These Syndicates have acquired substantial financial and muscle power and social respectability and have successfully corrupted the government machinery at all levels and wield enough influence to make the task of Investigating and Prosecuting agencies extremely difficult; even the members of the Judicial system have not escaped the embrace of the Mafia.

(iii) Certain elements of the Mafia have shifted to narcotics, drugs and weapon smuggling and established narco-terrorism networks, specially in the States of J&K, Punjab, Gujarat and Maharashtra. The cost of contesting elections has thrown the politician into the lap of these elements and led to a grave compromise by officials of the preventive/detective systems. The virus has spread to almost all the centres in the country; the coastal and the border States have been particularly affected.

(iv) The Bombay bomb blast case and the communal, riots in Surat and Ahmedabad have demonstrated how the Indian underworld has been exploited by the Pak ISI and the latter’s network in UAE to cause sabotage, subversion and communal tension in various parts of the country. The investigations into the Bombay bomb blast cases have revealed extensive linkages of the underworld in the various governmental agencies, political circles, business sector and the film world.

6.3 DIB has stated that the network of the Mafia is virtually running a parallel Government, pushing the State apparatus into irrelevance. It is thus most immediately necessary that an institution is established to effectively deal with the menace. In this connection, the DIB has stated:

 (i)  Presently, there. is no system/ mechanism which is specifically designated to collect and collate intelligence pertaining to the linkages developed by crime Syndicates/Mafias with the governmental set up. Nonetheless, the various intelligence/investigation/enforcement agencies collect, in the normal course of their functioning, information about the nexus between the bureaucracy and politicians with the Mafia gangs, smugglers and the underworld. These agencies use such available inputs "only within the narrow confines of their work charter and choose not to take undue cognisance and follow-up action, leave alone sharing with any other agencies". Thus, all these agencies "function within their own cocoons, with the result that a plethora of information fails to get specific and purposeful attention needed for the exposure of the Linkages". It is, therefore, necessary to immediately have an institutionalized system which "while giving total freedom to the various agencies to pursue their charter of work, would simultaneously cast on them the onus of sharing such inputs to a nodal outfit whose job will be to process this information for attention of a single designated authority". This will enable the  nodal Group to provide useful leads to the various agencies and, over time, a progressive database will get generated "to facilitate periodic reviews and analysis which could then be passed to a designated body".

7.1 As would be seen from the afore-stated brief discussion, specially the views expressed by Director CBI and DIB, it is evident that the muscle power of the crime Syndicates is sustained by their enormous financial power which, in turn, is, secured by the Mafia elements by committing economic offences with impunity. In this context, I held detailed personal discussions with Secretary (Revenue) under whose control operate the various economic intelligence/investigative/enforcement agencies.

7.2 The Department of Revenue functions through the following major agencies:

Inter alia, CBSE is responsible for the prevention of smuggling, In this and other tasks, it is assisted by the by the Director General of Revenue Intelligence (DGRI) and the Directorate General of Anti-Evasion (DGAE). The DGRI deals with the evasion of customs duties; the DGAE with Excise duty evasion.

Income Tax Department administers the Income Tax Act, Wealth Tax Act, etc.

The CEIB is responsible for coordinating and strengthening the intelligence gathering activities and the investigative and enforcement actions of the various agencies responsible for investigation into economic offences and the enforcement of economic laws. The CEIB is responsible for maintaining liaison with the concemed Departments Directorates both at the Centre and at the State levels and is expected to provide overall direction to the investigative agencies under the Department of Revenue.

The CEIB is expected, inter alia, to attend to the following tasks:

(a)  Identification of major sources generating black money; directing and developing intelligence about such sources; planning and coordinating action and operations against such sources.

(b)  Assisting the various enforcement agencies in strengthening the  intelligence gathering infrastructure and building up their capability for storage and retrieval of intelligence.

(c) Conducting investigative and analytical studies in difficult areas of black money operations and monitoring indicators thereof.

This Directorate is concerned with the enforcement of the investigation and penal provision of the Foreign Exchange Regulation Act; collection of intelligence relating to foreign exchange offences; enquiries into suspected violations of the provisions of FERA, etc.

The NCB is responsible for the administration of the Narcotic Drugs and Psychotropic Substances Act. It is responsible for coordination with different Central and State Government Departments/Ministries and the various Central and State law enforcement agencies for the implementation of the NDPS Act. I explained to Secretary (Revenue) the broad considerations on account of which the government had set up a Committee to look into the linkages developed by the Mafia elements. He informed me that he had recently held a meeting with senior representatives of the RBI, the Chairman CBEC, Chairman CBDT and the Economic Intelligence Council in the Department of Revenue, and readily agreed with my request to attend a meeting of the Committee along with his concerned officers for a full discussion on the issues before the Committee. Accordingly, I arranged a meeting of the Committee (30th Aug ‘93) to hear the views of Seeretary (Revenue), who was accompanied by chairman CBDT, DGRI, Member (Customs) and Director (Enforcement). During the course of the discussions with Secretary (Revenue) and his aforesaid principal officers, the following significant observations were made:

 

(i) In the normal course of his work, to detect violations of Customs &  Excise laws, the DGRI comes across information on linkages  crime Syndicates and governmental functionaries etc. As following  of such information is not within the charter of duties of DGRI, his officers focus primarily on the information relating to the violation of  laws relating to their charter.  

(ii) As in the case of DGRT, indirect information also becomes available  the CBDT about linkages. Here again, not being directly relating to their charter of responsibilities, the CBDT do not follow up such  leads.

(iii) While the NCB is specifically responsible for booking drug traffickers, with the increasing importance being given to Narco-terrorism, the NCB has been asked to gather further information so that the real king-pins in the narcotics trade can be apprehended.  

(iv) The Directorate of’ Enforcement comes across information on linkages and passes it on to the CBI and IB. 

(v) Of late, currency amounting to crores of rupees is being seized, invariably packed in suitcases and gunny bags. The Banks are reluctant to pass on informaton about account holders to CBDT and do not allow their officers to hold exploratory enquiries.  

(vi) While a certain arnount of information is shared between the various organisations under the Department of Revenue, and those under the MHA and Cabinet Secretariat, the exchanges are sporadic and limited. This is perhaps due to the fact that each concerned organisation/agency is anxious to protect its sources and is apprehensive that a full sharing of all information might jeopardise its operations, on account of premature leakage of information.  

(vii) While DGRI, Director (Enforcement) and DG NCB are authorised to undertake phone tapping of suspected offenders, the DGRI has not been allowed to enforce surveillance on the telephonic communications of political personalities.  

(viii) Senior Police officers, even in the border States, are not trained or adequately informed of the work done by the Directorate of Enforcement, specially in regard to money laundering operations.  

(ix) Information about the activities of drug traffickers is passed on by DG NCB to the concerned State Governments and their agencies. However, niggardly responses by the latter and prolonged delays in the disposal of cases before the Courts seriously hampers. the effective functioning of the NCB. While the NDPS Act prescribes the award of deterrent punishments to offenders, the results are to the contrary. It is necessary that the Directorates of Prosecution in the State Governments are urgently brought under the control of the State Police. 

7.5 Secretary (Revenue) stated that the field officers of his various Departments were faced with various problems, amongst which are:

(i)  The utter inadequacy of the criminal justice system; cases are not heard  timely; functioning of the Government lawyers is grossly inadequate; all  this results in a low percentage of convictions and mild punishments.  Unless the criminal justice system is geared up, the work of the  enforcement agencies cannot be effective.

(ii)  The field officers of the various agencies of the Revenue Department are often pressurized by senior government functionaries/political leaders, apparently at the behest of crime Syndicates/Mafia elements. Unless the field level officers are offered effective protection, they cannot be  expected to maintain interest in vigorously pursuing action against the activities of such elements.

7.6 Chairman CBDT stated that insofar as the functioning of his officers is concerned, whenever they come into possession of any information regarding the violation of any other law, they pass it on to the concerned agency. He suggested that if the information available with other agencies is passed on to him, his officers could pursue the sane.

8.l As a result of the discussions held by the Committee with Secretary (Reveriue) and his principal officers, it is evident that:

(i)  While, in the course of their normal activities, information on the   linkages of the crime Syndicates sometimes becomes available, such  information is not pursued on the score that it is not directly related to offences falling within the laws administered by these agencies; 

(ii)  such information is occasionally passed on by these agencies to the CBI and or IB;

(iii)  the various agencies under the Department of Revenue do not specifically  search out information on the linkages of crime Syndicates.

9. 1 Consequent to the Committee’s discussions with the Secretary (Revenue) and his principal officers, I held a series of further personal discussions with the Secretary (Revenue). At my request, Secretary (Revenue) gave me a personal note indicating his views, which are briefly as below:

(i) The information gathered by the various agencies under the Revenue Department, while gathering intelligence on offences relating to the laws administered by them, is generally not put to any use unless it is required to be passed on to other intelligence agencies outside the Department of Revenue.

(ii) The linkages developed by crime Syndicates get generally confirmed when pressure is mounted on the concerned agencies not to take action against the offenders or to go slow in the cases against them. Such pressures are mounted either immediately after a raid is conducted or at the time when prosecution is about to be initiated. Pressures are also exerted whenever corrupt and undesirable officers are shifted from sensitive assignments (Preventive Customs Divisions at the Airports, sensitive Collectorates in the Central Excise etc.).

(iii) In the narcotics arena, which includes cultivation of opium, manufacture of alkaloids, prevention of narcotics, smuggling etc. the financial stakes are astronomically high. Consequently, the level of corruption is of a very high order in this area of functioning and enormous pressures are brought to bear even when subordinate officials are posted away specially when the shift of an officer adversely affects the interests of those who are making easy money.

(iv) Narcotics trade has a world-wide network of smugglers who also have close links with terrorists. Terrorists indulge in narcotics trade to amass huge funds, in various foreign currencies, from which they source their procurement of weapons etc.

9.2 While the Department of Revenue has initiated a number of steps to deal with the activities of smugglers and to plug loop-holes in the system, Secretary (Revenue) has stated that a possible approach to effectively liquidating the linkages developed by the crime Syndicates would be to mercilessly prosecute the offenders without succumbing to any pressure whatsoever. He is of the view that once the offenders are deterrently punished under the law, their influence and strength will start declining, as also of all those who support them, wherever located. He has emphasised that for this objective being achieved it will be extremely necessary that: the entire governmental machinery involved in taking action against the crime Syndicates is allowed to perform its duties with total freedom; officers with impeccable integrity should be posted to head the various organisations which are responsible for taking action against tax offenders, smugglers etc; such officers should be selected with utmost care and provided sufficiently long tenures, giving them the clear mandate to ruthlessly punish the offenders; action must be taken to ensure the objective functioning of Courts which deal with the trial of economic offences; all cases before the Courts should be speedily concluded without the judicial officers coming under any pressure or succumbing to temptations; inefficient and corrupt elements in the various organisations venue must be weeded out and Government should take stringent action against officers who seek to exert political pressure for securing postings and appointments of their choice.

10.1 From the above narrated analysis, the following conclusions can be drawn:-

(i) On the basis of the extensive experience gained by our various concerned  intelligence, investigative and enforcement agencies, it is apparent that  crime Syndicates and Mafia organisations have established themselves in various parts of the country.

(ii) The various crime Syndicates /Mafia organisations have developed significant muscle and money power and established linkages with governmental functionaries, political leaders and others to be able to operate with impunity (as recently exemplified by the activities of the Memon Brothers and Dawood Ibrahim).

(iii) While the CBI and IB and the various agencies under the Department of Revenue, in their normal course of functioning, come across information relating to the linkages of crime Syndicates/Mafia organisations, there is presently no system under which they are expected  to pass on such information to an indentified nodal agency. Sharing of such information is presently of an occasional nature and no evidence is available of the same having been put to any operational use (the only mentionable exception perhaps relates to the recent investigations into the activities of Memon Brothers and the Dawood gang on which several of our agencies were put to work collectively).

11.1 Even where an agency comes across certam information about the linkages of crime Syndicates, it has no mandate to immediately pass it on to one or more agencies. An agency which comes across information regarding linkages is also apprehensive that the sharing of such information may jeopardize its own functioning through premature leakage. In sum, the various agencies presently in the field take care to essentially focus on their respective charter of duties, dealing with the infringement of laws relating to their organisations and consciously putting aside any information on linkages which they may come across.

12. 1 In the discussions in lhe Committee, I asked each of the Members as well as the Secretary (Revenue) and his principal officers about their views regarding the establishment of a Nodal Agency for the collection, collation and operationalisation of all information relating to the activities of crime Syndicates. Broadly, the following approaches have been mooted:

(i) The DIB has stated that while considering the establishment of any nodal mechanism, "It must be appreciated that the problems has enormous impact on national security and is indeed highly political in nature". In this context, he has suggested that the nodal set up should be under the IB, which is even otherwise engaged in monitoring various political activities having a bearing on national security. He has recommended that "an exclusive Top Secret Cell be established in the IB to function as the Nodal Group for receipt of inputs from various security/revenue agencies which reveal a politician-bureaucrat-underworld nexus. Such sharing will be through personal communications in writing, while operating difficulties could be sorted out through periodic meetings among the heads of these organisations to be chaired by the Home Secretary". The Top Secret Cel1 will share all tactical and operational information with other concerned agencies on "need to know and act basis". 

(ii) The other approach recommended is to set up a system under which the Heads of the various Intelligence and Revenue agencies shall meet on a regular basis and exchange vital information, without there being any leakage.

13.1 In the background of the discussions so far, there does not appear to be need for any further debate on the vital importance of setting up a nodal point to which all existing intelligence and Enforcement agencies (irrespective of the Department under which they are located ) shall promptly pass on any information which they may come across, which relates to the activities of crime Syndicates.

13.2 If the preposition in the preceding para is sustained, a decision will need to be taken regarding the Department/Ministry under which the nodal set-up should be located.

14.1 Under the existing arrangements for the transaction of Government business, the Ministry of Home Affairs is responsible for all matters relating to internal security. It is for this reason that the Intelligence Bureau is a part and parcel of this Ministry (It is only by tradition that the DIB reports directly to authorities outside MHA). R&AW functions under the Cabinet Secretariat and deals with external intelligence. The various Intelligence, Investigation and Enforcement agencies dealing with the implementation of economic laws report to the Revenue Department under the Ministry of Finance. The CBI, which is the principal criminal investigation agency of the Centre, is under the Department of Personnel.

14.2 In my view, considerable care would have to be taken to ensure that the information which becomes available to the Nodal Cell is handled by a very senior and trust-worthy officer. Any leakage of such information would not only jeopardize potential action against the powerful criminal Syndicates, but may also be susceptible to political exploitation. Under all circumstances, it will have to be ensured that the information available with the nodal set-up is used strictly and entirely for stringent action against the crime Syndicates, without allowing any scope whatever of its being exploited for political gain.

14.3 In the preceding context, it would be logical if the nodal set-up is under the MHA, directly handled by the Home Secretary who can be assisted by one or more selected officers of the Ministry for the collation and compilation of all information received from IB, CBI, R&AW and the various agencies under the Department of Revenue The manner in which such information is operationalised would need to be confidentially discussed with the concerned Heads of Organisation and, as necessary, with Secretary (Revenue). It will also need to be ensured that the nodal set-up functions with extreme secrecy. Needless to say, any leakage whatever about the linkages of crime Syndicate senior Government functionaries or political leaders in the states or at the centre could have a destabilizing effect on the functioning of Government. As such, it would not appear prudent to entrust the functioning of the Nodal Cell to any level below that of the Home Secretary. Further, the government would also have to  carefully consider and prescribe the authorities to whom the Home Secretary will report in regard to the sensitive information received by the nodal set-up as well as regarding the operations to be launched by one or more of the concerned agencies to apprehend, investigate and prosecute the offenders.

15.1 In the normal course this report would have been drafted by the Mernber Secretary and finalized by the Committee. Considering the nature of the issues involved, I did not consider it desirable to burden the Members of the Committee with any further involvement beyond the views expressed by them. Accordingly, I decided to personally dictate this Report.

15.2 I have prepared only three copies of this Report. One copy each is being submitted to MOS(IS) and HM, the third copy being retained by rne. After HM has perused this Report, I request him to consider discussing further action with finance Minister, MOS(IS) and myself. The emerging approach could thereafter be got approved from Prime Minister before being implemented. At that stage other concerned senior officers would be taken into confidence.

15.3 After an initial discussion at the level of MOS(IS) and HM I could send a copy of this Report to FM, before the issues are discussed with him.

Sd/-

(N. N. VOHRA )

HOME SCRETARY

5.10.93

HM [Copy No.1/3]

MOS [Copy No.2/3]

India's Elite bereaucrats

Corruption runs rampant as a fresh breed of bureaucrats takes over the country's reins

They are the elite of India's elite: the brilliant men and women who belong to the Indian Administrative Service (IAS), the top strata of civil servants--numbering about 5,000--who in effect rule this country of more than 1030 million people. At one time, many of these gilded bureaucrats came from the high, priestly caste of Brahmins and were schooled in the classics, philosophy and even the proper iron to use for a chip onto the green. They were also given riding lessons since, it was assumed, anyone who could handle a horse could govern a district. Thus aesthetically armed, the young officers were dispatched across India and expected to cope with famines, fend off man-eating tigers, put down revolts and build irrigation canals.

Today's IAS officer is more likely to be bouncing across his domain in an Indian-made jeep than on a horse. And since a few harsh words in the vernacular can be remarkably more effective in stopping a mob than a clever Latin quip, Ovid is off the curriculum at the IAS training academy. Instead, the new generation of officers is expected to learn a couple of India's 18 official languages. The IAS used to be the exclusive preserve of India's most prominent families. But these days, the sons and daughters of the urban, English-speaking elite prefer going abroad to earn advanced degrees or taking high-paying jobs with one of the many multinational companies elbowing into the Indian economy.

The shunning of the IAS by India's brightest and snobbiest is beginning to change the fabric of the country's entire 20-million-employee bureaucracy. For average Indians, the trend is likely to mean dealing with an elite that is more aggressive--and hungrier for a bribe. Says B.S. Baswan, director of the Lal Bahadur Shastri National Academy of Administration, the IAS' two-year finishing school in the Himalayan hill town of Mussoorie: "There has been a shift in the social composition of the recruits. These people are more the upwardly mobile crowd." Agrees Nazeem Dawood, a student: "These urban types are not so interested in the service. But a rural chap sees the official car with the red flashing lights and craves it."

In the eyes of some IAS officers, the new egalitarianism is causing problems. As fewer officers are drawn from the upper strata of Indian society, old-timers say, the service has become increasingly politicized--and in some cases increasingly dishonest. In the northern state of Bihar, for example, four IAS officers have been named in a corruption scandal. At least 25 senior civil servants are under criminal investigation in the southern state of Tamil Nadu. In Uttar Pradesh, some honest IAS officers were so incensed by the swindling and bribe-taking of their superiors that they tried to embarrass the culprits by polling colleagues to select the three most corrupt and undesirable officials in the state. The secret ballot was held last December, but the three worst offenders have yet to be disclosed. Says S.S. Tinaiker, the former municipal commissioner of Bombay: "There's a total demoralization of the bureaucracy at the top level. Officers were supposed to be close to the people. Now you find them hanging around ministers and party bosses." The British, who set up this top tier of bureaucrats, referred to it as a "steel frame" on which they constructed their Indian empire. A young IAS officer in Bombay calls it instead "a rubber frame." He explains: "We're bending all the time before our political bosses." Since it is virtually impossible to sack an IAS officer, politicians often use the threat of transfer to bend administrators and even make them comply with unethical or downright illegal orders.

The lure of corruption begins right at the gates of the IAS academy. There, around 100 of the brightest recruits are selected each year from among thousands of applicants and sent for two years of administrative training. The list of new arrivals is keenly awaited by industrialists, high-ranking civil servants and government ministers. Explains Santosh Matthew, an academy teacher: "Bureaucracy represents power, and these people all want to seek an alliance with this power."

Such alliances often are sealed through arranged marriages. Industrialists with an unhitched daughter or son might try to make a match with one of the academy's students. According to an alumnus, a promising young officer was hounded by his home state's chief minister, demanding that he wed a senior minister's daughter. When the officer refused to comply, the angry minister stalled his promotion. In another case, a student had to be hidden by his friends from a squad of police officers who were trying to pair him off with their boss's daughter. Often parents of the would-be bride offer dowries of up to $15,000, with the understanding that once the groom climbs up the bureaucratic ladder, he will use his connections to line up government contracts and favors for his in-laws. IAS grooms now rake in the highest dowries on the marriage market, above doctors and engineers, and some newspapers even run a column among the matrimonial ads devoted exclusively to the academy's graduates.

As official corruption and other abuses sap people's faith in the bureaucracy, the government is drawing up a code of conduct. Activists are also campaigning for a Right to Information bill, so that citizens can detect how much money allotted for development ends up in civil servants' pockets. A few good men and women have survived inside India's bureaucratic labyrinth. Anil Lakhina is one of them. As a former district collector in Ahmednagar in Maharashtra state, he found it difficult to locate documents among the 300,000 dossiers piled in his office. Using an old British manual as a guide, Lakhina reorganized the storage system so that any file could be readily found. His method of bundling the folders together for swifter access was copied widely, enhancing Maharashtra's reputation as one of the better administered states in the country. Another bureaucrat who has made a difference is S.R. Rao, who took over as municipal commissioner of Surat after a plague epidemic struck this fetid, polluted city of more than 2 million people in September 1994. He widened 100 km of roads, provided water and sewage to the shantytowns and had the garbage collected from alleys that swarmed with rats. He also took on a larger kind of rodent: the local real estate mob. When an underworld chieftain tried to stop a demolition team from tearing down his illegal, multi-story building on city land, Rao slapped the gangster in the face, as thousands of incredulous citizens at the site gaped. Once synonymous with plague and decay, Surat now is rated as one of India's more livable cities.

For most Indians, who have every reason to fear the country's octopus-armed bureaucracy, the scowling IAS officer sitting at his grand desk is still someone to be approached with trepidation--and, increasingly it seems, with a thick packet of rupees. Still, the IAS officer may be losing his godly status. As senior officer K.K. Sarma recently told students at the academy: "We were made to feel that we have descended from the heavens, that we just had to sit in the chair and snap our fingers. That's not true."

Reported by Faizan Ahmad/Patna, Meenakshi Ganguly/Mussoorie and Maseeh Rahman/Surat
By Tim McGirk New Delhi

DDA IS MOST CORRUPT INSTITUTION IN INDIA

World Bank takes Housing Commisioner Alphons’s word on corruption in DDA

The Delhi Development Authority (DDA) has figured in a World Bank report as one of the most corrupt institutions in India.

The World Development Report, released here today, has quoted former housing commissioner K.J. Alphons, having described the agency he worked for, the DDA as “the most corrupt institution in the country.”

He said, “Those who corrupt it, help illegal builders grab DDA land and then build houses and shops that are sold to unwitting buyers. Unauthorised buildings range from shanties for the poor to shopping centers for the middle class to mansions for the rich, all established on government land under false pretences, with political complicity.”

Moreover, Mr Alphons reported, “Nothing gets built, legal or illegal, without a bribe.” The report says many developing cities are serviced in this fashion, with essential services available only at a very heavy social cost. (UNI)

You Cant Eradicate Corruption say M.V.Kamath a noted writer in India

When a charge was levelled against the Congress that it was a corrupt party, its then president Indira Gandhi airily dismissed it, saying that corruption is a world phenomenon.

That has never been disputed. We hear regular stories of corruption in the highest quarters, whether in Japan, Indonesia, Germany or France, to mention only a few states.

But that is no excuse for India being corrupt. Unfortunately, in India corruption has reached gigantic proportions and the issue of fighting it cannot any longer be ducked.

Corruption comes in many shapes and forms. We have the Bofors case which has been under consideration since the eighties - and we have still to hear the last of it. The Bihar scams are legend, as are the scams in Uttar Pradesh and Tamil Nadu.

Politicians who only a few years ago were considered as hailing from lower to middle classes have been in recent months flaunting their wealth, with not a care in the world.

Mulayam Singh Yadav had his son wed at a place called Sahara Shahar where the dining area was said to be the size of two football fields, end to end. Two hundred and fifty people worked in a kitchen for four days to lay out eight different kinds of cuisines for 6,500 people. It must have cost him quite a packet.

The figures for Laloo Prasad Yadav's daughter's wedding are even more mind-boggling: 1,200 stems of gladioli and 20,000 garlands of marigold flown into Patna from Calcutta, while 200 quintals of sugar lay stacked in a corner for an estimated 50,000 guests. Not even a Birla would have dared to be so extravagant.

Or take the AIADMK's Jayalalitha who spent several crores on a marriage and against whom there are 46 corruption cases, one of which she recently lost.

Displayed in court were some of the jewellery she had accumulated during her years in power, including a waist belt studded with 2,389 diamonds besides numerous emeralds and rubies valued at more than half a crore of rupees! Who gave her these little presents and what was the expected quid pro?

But that is only one face of corruption.

Ex-Ministers in Delhi refuse to vacate the bungalows allotted to them; telephone bills amounting to lakhs of rupees remain unpaid. Three former Prime Ministers have been remiss in paying for the use of government planes for private trips.

It is unlikely that the government would be compensated. Two well-known industrialists are reported to owe three nationalised banks Rs 500 crores and Rs 300 crores, and the list of corporate bank loan defaulters is public property. Some Rs 45,000 crores are due and will probably have to be written off.

The names of loan defaulters - and they are from the cream of society - have been published (Observer, Jan. 15) but obviously no action has been taken against them, or else the world would have heard of it.

So far, some 99 names of top bureaucrats have been put on the website and they hail from various wings of the Union Finance Ministry such as the Income Tax Department, and Department of Central Excise and Customs.

This is at the Union Government level. If one were to list the names of corrupt officials at the State level, they would probably fill several volumes.

More recently, the Central Vigilance Commission has recommended criminal or departmental proceedings against 17 top bureaucrats including two former chairmen of Port Trusts, a former Health Secretary of Delhi, a Director General of Home Guards, a former Inspector General of Police in West Bengal and, wonder of wonders, two Chief Secretaries, no less!

If this is the level of corruption at the highest level, one can easily appreciate what it could be at the lower levels right down to the policeman on the beat and the peon in a government office.

If we condone corruption at the highest quarters, what right do we have to speak ill of the lowly clerks who, at least, can plead that they have large families to support on low salaries?

One man, the Chief Vigilance Commissioner (CVC) Mr Nagaraj Vittal, it would seem, has decided to take on the corrupt and face the consequences. He is already in trouble for doing his duty. He has been told that politicians do not come under the jurisdiction of the Central Vigilance Commission.

Fair enough. To overcome the hurdle, Mr Vittal has suggested that the CBI should investigate their cases and that has raised the hackles of politicians who feel that Mr Vittal is going beyond his brief.

But even considering that he has a point, what guarantee is there that justice will be done? The CBI is not an independent body and is under government control. If the CBI could drag its feet on the Bofors issue, what guarantee is there that it will not act similarly in the case of lesser politicians?

Mr Vittal's action in displaying the names of allegedly corrupt officials on the website has already brought him into disrepute. Isn't he condemning them before they are even tried, goes the argument.

To that the reply is that at some stage or other, the names would have had to be released anyway, and so what is wrong if they are released on the website now?

Mr Vittal's argument is that publishing names of corrupt officials would be serving a good cause as that would serve as a deterrent. But how long? And how effectively?

Sending a few bureaucrats to jail (presuming that enough evidence against them is available) or even a few politicians can at best be a temporary expedient. The event will make the headlines of the day and would, in all probability, be forgotten in no time.

Mr Vittal has an action plan, which contemplates remedial measures on administrative, legislative and societal fronts, and include cutting of red tape, insistence statutorily on a declaration of assets by MPs, MLAs, IAS and other service officers and a law for forgeiture of ill-gotten assets. But these are long-term measures.

Can we ever expect our politicians to pass legislation that is against their own interests?

Thousands of cases against Class I officers are reported to be pending with the CVC and 1,300 are reportedly being probed at the departmental level. By the time these cases are really tried, many of the accused would probably have died!

The situation, as one sees it, is hopeless. Should one, therefore, throw up one's hands and be happy with accepting the status quo?

Corruption is like prostitution; one can decry it, one can condemn it and one moralise over it, but it continues to exist. We now know that even the courts are corrupt and the highest judicial authority is only too well aware of the fact.

Salaries of judges have been raised, as they should be. Some politicians have to be tried and given their just deserts. We should acknowledge the fact that corruption cannot be eradicated. It can only be minimised. And one effective way to do so is to take government out of most decision-making situations.

Privatisation of banks would help. But we should learn to accept the limits of human behaviour.

Zero tolerance to corruption

By N. Vittal (Chief Vigilance Officer)

THE PRIME Minister, Mr. A. B. Vajpayee, addressing the nation on October 16, after the elections, observed: ``One of our immediate tasks will be to firmly put down terrorism, which has come to cast its cruel shadow on innocent people. Our message is loud and clear; the life of every Indian citizen under our dispensation is precious. In our fight against terrorism, we will be guided by the principle of zero tolerance. The same principle of zero tolerance will apply while dealing with corruption that has bred contempt for the law. One of the first legislations we will take up is the Lok Pal Bill so that the rot can be checked from the top. A broad consensus already exists on electoral reforms to weed out the muscle and money power. We propose to introduce soon in Parliament a comprehensive electoral reform bill.''

His use of the expression ``zero tolerance'' represents a significant and important shift in the perception by the Union Government, especially at the level of the Prime Minister, of the issue of corruption.

The approach to tackling corruption in our country has so far been lackadaisical. The Supreme Court judgment in the Vineet Narain case was a major step in ensuring that the Central Vigilance Commission was made a statutory body and, more important, that it had supervisory powers over the CBI in anti- corruption cases. The CVC was also to play an important role in the Enforcement Directorate.

India's economy today is a standing monument to the corruption and inefficiency of four departments - Customs, Central Excise, Income Tax and the Enforcement Directorate. It is the evasion of taxes and the failure of these departments to check illegal activities which have crystallised into black money, whose quantum has been estimated at between Rs. 40,000 crores and Rs. 1,00,000 crores. Whole industries today depend on black economy.

Our elections also involve a lot of black money and this has resulted in criminalisation of politics, highlighted by the Vohra Committee. The hawala scam brought out the linkage among the corrupt businessmen, politicians, bureaucracy and criminals. The 1993 Mumbai blasts which claimed the lives of 300 persons occurred because RDX was smuggled in allegedly by bribing a customs official with Rs. 20 lakhs. The Prime Minister, therefore, is right in applying the principle of zero tolerance to both corruption and terrorism.

India has been ranked 66 out of 85 in the Corruption Perception Index 1998 by the German non-governmental organisation, Transparency International, based in Berlin. This means 65 countries were perceived to be less corrupt than India. My goal as the CVC is to see that before I hand over charge on September 2, 2002, India's rank improves to at least 40.

As the Prime Minister has indicated, what we need to do is to apply the principle of zero tolerance. It means that no case of corruption will be tolerated and that the corrupt will be punished. In our system, the bribe-giver and the bribe-taker are both guilty. The only exceptions are members of Parliament. According to the Supreme Court judgment in the JMM case, the bribe-receiving MP, who has to do some activity within Parliament, is not guilty but the bribe-giver, even if he is a member of the House, is guilty.

The efforts made in the past to check corruption have failed precisely because the guilty under the existing system of judicial process do not generally get punished. The conviction rate in Indian courts is only 6 per cent. There are three crore cases pending in the courts! The average time taken for disposal of cases ranges from 10 to 20 years. As for the anti-corruption cases handled by the CBI, 1173 cases are pending investigation as of August 1999. When it comes to prosecution, the figures tell a more pathetic story. As of August 1999, 3484 cases are pending.

But any attempt at improving the judicial system and speeding up the disposal of cases is within the jurisdiction of the courts themselves, We have to explore other areas which are within the jurisdiction of the Government and the CVC.

How do we implement the zero tolerance strategy for checking corruption - which means prompt and effective punishment? To begin with, we have to understand the mechanics of how India became so corrupt a country. The growth of corruption after Independence has taken place in a two-stage process. The first was corrupting institutions and the second, institutionalisation of corruption.

As I see it, 1975, when emergency was imposed, was the watershed during stage-I. The principle that the bureaucracy must be committed was articulated. This meant that the bureaucracy must be committed not to the Constitution but to the Government of the day. From this started its systematic deterioration and it became highly politicised. We therefore see the bureaucrats getting aligned politically and labelled as belonging to this or that leader. Naturally, with every change of Government, massive transfers at various levels take place to ensure a proper alignment of the political frequencies of the bureaucrats and their political masters.

Corruption of the institutions has finally led to institutionalisation of corruption. As the Prime Minister pointed out, the failure to deal with corruption has bred contempt for the law. When there is contempt for the law and politics is criminalised, corruption will flourish. The honest public servant who tries to implement the law becomes a misfit in such a situation.  

As of today, entire sections of our public life have become corrupt. There are five key players on our corruption scene: the corrupt politician (neta), the corrupt bureaucrat (babu), the corrupt business (lala), the corrupt NGO (jhola) and the criminal (dada). There are five reasons why our system encourages corruption. These are (i) scarcity of goods and services, (ii) lack of transparency, (iii) red tape and delay caused by obsolete rules and procedures which are time-consuming and which encourage speed money, (iv) cushions of legal safety provided by various pronouncements of courts and CATs on the principle that everybody is innocent until proved guilty. The net result is that the corrupt are able to engage the best lawyers and quibble their way through the system. Shakespeare points out in his Measure for Measure that laws are like scarecrows. They are initially installed to scare the birds. Once the birds realise that the scarecrow is a harmless doll, they build their nests on it. (v) Finally, biradri or tribalism in which the corrupt public servants protect one another. We talk about people being thick as thieves not thick as honest men!

These five reasons are a mutually reinforcing vicious circle of corruption. This can be tackled only by setting in motion a virtuous circle which will help achieve zero tolerance to corruption. Three elements will make the virtuous circle. The first is simplification of rules and procedures so that the scope for corruption is reduced to the minimum. One can deal with corruption like one deals with malaria. One can either give medicine to those who have been affected or prevent the breeding of mosquitoes. Simplification of the rules and removal of the red tape are like removing the stagnant pools which encourage the mosquitoes of corruption.

The second element should be transparency and empowerment of the public. Here, the need for a Freedom of Information Act (FOIA) is obvious. There is an urgent need for applying information technology in every citizen-public office interface so that the common citizen can have access to the information that he needs.

The third element is effective punishment. This is where we have to go beyond depending only on the judicial system and see what other weapons can be thought of. Corruption today is a low-risk, high profit business. The principle of zero tolerance resulting in effective and prompt punishment should increase the risk. This should be the single most important element in the virtuous circle.

Whats New In Corruption
By Neeraj Bhardwaj

NEW DELHI: If it takes two to tango, let the music play on. Right? Well, that's a lot like corruption -a game that Corporate India has played with some dexterity for years. But now, in the aftermath of the Tehelka expose, India Inc. posted its distress at levels of corruption in the country.

To quote one corporate bigwig: "Corruption has always existed. The difference is: earlier it was systematic, now it is unsystematic. While bribing was required only for licenses earlier, now everyone is creating opportunities for himself. It depends on his innovativeness to earn. That is creating a lot of chaos."

Multinationals entering the country have been an obvious target. Says a senior MNC official: "When we entered the country about five years back, we were asked by the state chief minister to pay Rs 3 crore for election funding. When I expressed our disability to do so, two attempts were made on my life. When threats did not work, the minister started working the IPS lobby to exert pressure."

The impact is being felt down the line. Says a consultant for consumer product companies: "Post liberalisation in 1991-92, we were working on a huge number of feasibility studies for MNCs wanting to enter various sectors in India. In recent years, the numbers have reduced dramatically to a couple a year."

And now, post Tehelka, the perception that India does not offer a level playing field, is going to worsen. The impact is more likely to be on consumer goods MNCs, says the consultant. For, infrastructure MNCs, who work mostly with government-owned utilities worldwide, are more comfortable dealing with corruption. Consumer product companies are not.

An auto consultant echoes these views. "No one wants to do business where rules are not transparent." He goes a step further. "India is not the only corrupt country. However, MNCs tell me that when they pay bribes in China, they are certain that work will be done. In India, they are not sure." The reason: the chain of corruption is so long that companies are never certain if the money has reached the right hands.

Others too feel that corruption has reached a new high. Says a corporate top-shot: "The private sector's willingness to beat the law is also on the rise. The lobbies-politicians nexus was not so apparent even 15 years back. Now the policies are being drafted by vested interests."

The ramifications? Says the CEO of a diversified group: "All was going well. The Budget was good and the government seemed to be consolidating its position. With this, the stability of the government is in question once again and that is not good for business." Counters Dewang Mehta, president of Nasscom: "There will not be any impact on the feel-good factor created after the Budget. Things will settle down soon."

By and large, most feel it's a lose- lose situation for business. "If the government takes a tough stand and resigns, instability will rear its head again. If it does not, it will be giving an official nod to corruption. Both ways we stand to lose."

Unfortunately, these voices ring true. After all, Transparency International downgraded India's ranking on corruption, from No 28 to No 22 this year.

SLUG: Tehelka aftermath

India's Sleaze Sheet in Corruption: India Today

Corruption is the one subject on which a national consensus has finally emerged. While everybody agrees India is a corrupt land, it was to identify the nuances in the public's perception of corruption that INDIA TODAY and ORG-MARG conducted this opinion poll. The corruption poll covered 16 major state capitals and 1,743 respondents. In the cases of Punjab and Haryana, the common capital of Chandigarh was replaced by the biggest cities, respectively, Ludhiana and Faridabad.

The respondents were asked to rate the three most corrupt states in India in that order. They were then asked to do likewise for the three least corrupt states. They were also asked questions on corruption in the particular state administration and at the Center. This was aimed at examining whether corruption is seen as percolating downwards from Delhi; or whether the roots of the phenomenon appear to lie in the states. Finally, interviewees were queried on personalities and public service areas considered most conducive to corruption.

The story that emerged was by and large predictable. Yet, there were a few surprises. For instance, Assam's ranking as the fourth most corrupt province of the Union could, in part, be attributed to the negative publicity it has received of late due to the Tata Tea-ULFA extortion issue. Also, politicians dominated the list of individuals seen as dishonest. On the whole, however, Bihar led the way: most corrupt state, single most corrupt Indian -- it was an undisputed (and presumably embarrassed) winner.

WHO IS THE MOST CORRUPT INDIAN OF ALL?

Laloo Prasad Yadav and P.V. Narasimha Rao: Nationally, nobody else came even close to them. In Bihar, Laloo was named the most corrupt Indian by 53 per cent. Mulayam Singh Yadav found favour with 15 per cent of Uttar Pradesh's voters, Mayawati with 11. Jyoti Basu polled 11 per cent in West Bengal. Two chief ministers, Prafulla Mahanta (Assam) and N. Chandrababu Naidu (Andhra Pradesh), got 10 per cent in their states. Harshad Mehta was the leading non-politician, with 5 per cent in Maharashtra.

Which public service agencies are the most corrupt?

The responses were a damning indictment of the Indian state. Despite almost a half century of democracy, governmental agencies emerged as prolific breeding grounds for corruption. Ministers, the elected representatives of the people, topped the list of groups seen to be prone to non-transparent functioning.

The police came a dishonorable second; in Punjab, in fact, it even surpassed ministers. It is also noteworthy that on a scale of one to 10 not one public service agency suggested to respondents scored less than five.

For all its problems within the ruling United Front, the Left can take heart from this opinion poll. The two states which India sees as the least tainted are both ruled by CPI(M)-led coalitions. The BJP can be allowed a smile as well as the two states next in terms of honesty -- Rajasthan and Punjab -- are governed by it, either singly or in coalition. While corruption cuts across regional divides, the Hindi belt finds disproportionate representation at the pyramid's upper end, with Bihar a runaway winner.

Equally significant is the comparison between perceptions of corruption at the Centre and in the state administration. Only four of 16 states feel that the Union Government is more inclined towards bribery and swindle than the regime in the particular state. Interestingly, Delhi -- which is the seat of the Government of India and a state in its own right -- trusts national rulers less than it does local ones. The most charitable view of the Centre would seem to come from Bihar, where the state administration scores 2.5 points higher on the corruption scale.

Given a state system synonymous with thievery, is India destined to remain in kleptocracy's thraldom? Curbing discretionary powers, rewarding honest civil servants -- the solutions are all there in theory. What is missing is the action. India needs to clean up; starting yesterday.

Half the people in India has first hand Experience of Corruption

Nearly half of those who avail the services of the most-often visited public departments of the Government in the country had first hand experience of giving bribe at one time or other. In fact, as high as two-thirds of the people think that corruption in these offices is real. However, one-third think corruption is more often exaggerated. And yet, 80 per cent of the people are passive as hardly 20 per cent had ever complained about corruption to any.

In Lucknow and Hyderabad, a much higher percentage had used influence of one kind or the other to get things done. In both cities, around 60 per cent had in fact given bribe against only 38 per cent in Chennai and 42 per cent in Pune. Those in Pune obviously are more active citizens - little over a quarter have ever complained about corruption. In Chennai, more than 60 per cent had named politicians as responsible for corruption. ``Middlemen'' menace seems to be far more in Hyderabad and Lucknow.

Offices of driving licence and civil supplies were viewed as most corrupt in all the five cities. The city government of Hyderabad is viewed by its citizens as more corrupt than in other cities.

Relatively more among businessmen and self employed agreed giving bribe in all cities. Interestingly, even among ``government employees'' more than 40 per cent agreed giving bribe at one time or other in all the cities covered.

These are some of the highlights of the first-ever ``exit poll'' on corruption conducted by the Centre for Media Studies (CMS) in five cities across the country at six government public service departments in each city during the Vigilance Awareness Week of October 31-November 4. In all, 2,576 visitors to these departments during the week were personally interviewed on their way out from these offices. The exit poll was carried on the suggestion of the Central Vigilance Commission.

About 63 per cent of people think that despite corruption in these offices is ``real'' and ``big'', it is not being tackled seriously and that the judiciary has been ineffective. Most consider politicians and officers responsible for corruption in the country. This is what Mr. S. P. Agrawal, Commissioner of Delhi Municipal Corporation, confessed last week before a Delhi Court when he said that ``there was rampant corruption in the MCD and that corruption is there in any organisation which has public dealings.'' This exit polls shows that it is so not only in Delhi but elsewhere too.

The Official concerned not being available and relevant clarifications not being known to the visitor are some of the reasons most often mentioned for sustaining corruption in these offices, according to the CMS exit poll.

Experience about corruption

In the case of around one-third of visitors to offices of one or other six key public service departments in the five cities covered in the poll, they need not revisit the office for the same purpose as the work has been done. In the case of 54 per cent, however, they have to revisit the office as their job could not be completed that day. Little over half of them, in fact, had been there earlier too for the same purpose. Many of them visited more than twice.

In the case of one-fifth, they had to revisit because the official concerned was not available. Another little over a quarter had to come back ``with one or other clarification.''

All the sampled visitors were asked whether they had ever used any ``influence or favour'' to get the work done in the said department where they were interviewed. Nearly 60 per cent said they never had to do anything to get their job attended to. However, one-third had a different experience.

To another question whether anyone in ``the close circle of friends and relatives'' had the ``experience of paying or using a contact'' to get things done in the department, 41 per cent said positively. However, in the case of nearly half they knew no one with such experience.

All those who had such an experience said they had to do so either to get the work done or to get it expedited.

Menace of middle men

About 42 per cent of all the visitors covered in the exit poll said that there were ``middle men'' for the office/department.

In fact, little over one-third had confirmed experience of dealing with such ``middle men'' or some one close in the circle who had used middlemen. Nearly half of them, however, had no such experience.

To a more direct question, 48 per cent had said that they themselves or someone close to them had in fact given ``bribe, however, small or big'' at one time or other.

Hardly one-fifth of all visitors covered in the poll confirmed ``ever complaining'' about any problem encountered in availing the public services covered in the poll. However, 81 per cent never did so, as most ``passive citizens''.

Only one-third of all visitors covered in the poll heard about the Central Vigilance Commission's initiative for organising Vigilance Awareness Week.  

However 69 per cent, had not heard of the week although the offices/ departments covered in the poll were supposed to publicise.

Perceptions about corruption

As high as two-thirds of people think corruption is ``real'' against only about a quarter who think corruption is more a ``hearsay''. Nearly 40 per cent think that corruption is often exaggerated, against about 40 per cent who think otherwise.

In fact, a little over 60 per cent of people think corruption is ``large'' against less than one-third who think it is only ``petty corruption''.

Recently a former Prime Minister, a former Chief Minister and a few of politicians were sentenced for corrupt practices. But that seems to have no effect on the psyche.

Only one-third think that corruption is being tackled seriously in the country against about half who think that such efforts are ``more symbolic''.

Judiciary ineffective

In fact, a little over 40 per cent of people think that judiciary in the country is not able to tackle corruption cases. About 26 per cent, however, think that it is because of ``other reasons'' that we are not able to tackle corruption in the country effectively.

Politicians responsible

Interestingly, as high as 48 per cent think that politicians are responsible for corruption in the country. Nearly one- third, however, think bureaucrats/ officers are responsible for corruption. Nearly 10 per cent think so of ``businessmen''. About 5 per cent consider ``media'' as responsible.

The poll confirms wider perception of what Mr. N. Vittal, Chief Vigilance Commissioner has been saying that ``neta, babu, lala, dada and jola'' constitute the crux of corruption in the country.

These are some of the highlights of a CMS ``exit poll'' of six most commonly used public departments conducted on the eve of Vigilance Awareness Week starting October 31.

``Visitors'' to those six departments were sampled for five days at five key cities of the country. This is the first time in the country that a Vigilance Awareness Week was celebrated as a part of CVC's campaign against corruption.

These cities where this exit poll was conducted are New Delhi. Lucknow, Chennai, Hyderabad and Pune. The public departments covered were those of electricity, telephone, ration card/civil supplies city government, driving licence and local urban development office where a large number of people usually go.

At each of these selected offices ``visitors'' for some service or other were systematically sampled each day during peak hours of office for a structured interview at the exit gates on their way out after the visit.

Thus, in all, some 2,576 carefully sampled such visitors were interviewed for this CMS ``exit poll''. From each city not less than 500 visitors were covered in the poll during the week.

For consistency in the poll a structured questionnaire was used for the interview of visitors in all the five cities.

The interview covered ``perceptions'' about corruption as well as first hand ``experience'' in availing the services of these public offices.

Considering the sensitivity in conducting the exit poll in some cities, CMS co-opted local assistance from local premier institutes like, IIM in Lucknow, Symbiosis in Pune.

The CMS researchers witnessed threats and obstacles in conducting the poll at least one point or other mostly from the ``middle men'' operating from outside these sampled public offices.

This is the first time in the country that such a structured study was conducted on corruption.

CMS is currently developing a methodology to conduct time series study on ``corruption and civic concern''.

Why is India so Corrupt

Srinivas Saraswatuala: srinivas@uspam.ibm.com

Let me first admit that I am not attempting to give an answer to this question. You have raised a serious and a complex issue. Every society in the world has gone through such cycles of ups and downs and India is no exception. World History has numerous examples for ups and downs of moral, ethical and social values. Every country in this World had suffered and revived sometime or other in the past. Countries such as India, Egypt, Persia, Italy, Greek, France, Russia, China and most of Africa and Latin America have experienced more such cycles. In the modern times news about dishonesty, immorality and corruption get lots more publicity and attention than ever before! I do not want to be too pessimistic about the situation in India. The good news is that a sizable population of India (hundreds of millions)
still has high moral and ethical values. Those people know the difference between right and wrong. They do conduct their day to day work without any corruption and they do live a simple life. They lead good family life and teach and motivate their children with high moral values. In fact I would argue that Indian religions and Indian Culture have contributed significantly so that this minority did not follow. blindly the majority. India has not reached the stage where people with high moral and ethical values to become endangered! Those people will be able to survive without extinction due to the influence of religions which include Hindus, Christians, Muslims, Sikhs and others.

Most of the time we see the urban India and make inappropriate inference. As Mahathma Gandhi once said that the real India is in Indian villages and he is correct. India is changing fast in cities but such changes are much slower in the rural areas. India was successful in the modernization of Industries, transportation, communication and infra structural facilities. Gandhi was concerned that such changes could cause India to lose its identity and its cultural heritage.

Gandhi had a fear that modernization will provide more comforts and may instigage corruption. A quick review of the pattern of corruption in India is necessary to understand the situation. Corruption is widespread in the national capital (New Delhi), then next the state capitals, then district headquarters, then major municipalities, then travel and communication (airlines, telephones, trains, buses, taxi), etc. Those who are in power and those who live in big cities like to have more comforts (bigger houses, Television, Telephone, etc.) It is possible collect data to establish a relationship between comforts (or pleasure) and corruption! It appears that when the public wants more comforts and pleasures, they disregard honesty and morality.

Consequently, those people do not distinguish between right and wrong! India had gone through several religious and moral revivals in the past. Saints, Kings and Political Leaders have emerged at appropriate times as role models to educate, correct and motivate the people who lost faith in moral and ethical values. Notable among those are Veda Vyasa, Buddha, Mahavir, Guru Nanak, Adi Sankara, Shri Ramanuja, Sri Madhva, Jayadeva Jnaneswar, Tulasidas, Kabirdas, Ramadas, Chaitanya, the twelve Alwars (Vaishnava Saints) and Sixty three Saiva Saints of the South. In more recent times we had Ramakrishna Paramahamsa, Ramana Maharshi, Swami Vivekananda and Aurobindo and Sai Baba. Political leaders such as Tilak and Mahathma Gandhi have established and practiced high eithical standards and moral values.( I have included very few names and the only reason for omission of numerous other deserving names here is only becauseof space.) Just like the saviors in the past, a great leader will appear at appropriate time to change the course of current conditions in India. The awakening has happened so many times in the past. Why should we doubt now?

New attitude of Corruption: T.V.R.Shenoy

Between 1991 and 1996 there was a determined effort to paint Narasimha Rao as the patron saint of liberalisation, a man who blazed a new trail for the economy. This was bunkÑthe new policy was forced upon India by the international lending agencies. But yes, there was an area in which Rao was a trendsetter. The Narasimha Rao Raj ushered in a new attitude to corruption.

That cancer had always existed. But up to the point when Rao took over even its practitioners didn't flaunt the fact. It fell to Rao to change all that. It was one of Rao's ministers who decided that the best defence was to be offensive. "I brought hundreds of crores worth of investments to India," said Sukh Ram, "why is everyone so bothered about a few crores here and there?"

But Sukh Ram is a mere amateur compared to his brazen ex-boss. Narasimha Rao has taken shamelessness to another level by arguing that it was his duty to be corrupt! That, believe it or not, was the gist of his defence in the JMM bribery case. His lawyer, R.K. Anand, stated to a stunned court that Article 75(2) of the Constitution mandates that a ministry should take any measures necessary for its survival, up to and including bribery.

Quite frankly, that is one of the scariest arguments I have ever heard. If bribery is permissible, why not kidnapping? Or even outright murder of anyone who opposes you? The principle is the sameÑa warped reading of the Constitution justifying any crime. The judge, however, wasn't swayed by R.K. Anand's eloquent plea. So Rao will stand trial after all. And, hopefully, justice will be done somewhere down the line.

But there is another aspect of the episode that has gone unremarked. This is the utter silence of the Congress, the party once led by Rao. Not one Congressman has cared to remark on their former president's novel interpretation of the Constitution. Sitaram Kesri, perhaps predictably, has nothing to say. But what of the conscience-keepers of the party, A.K. Antony and Manmohan Singh? When Chacha Kesri nominated them to the Congress Working Committee he made great play on their clean image. Shouldn't both men at least try to live up to that perception?

But there isn't a word from either. Is it because both gentlemen were participants in the Rao ministry that survived on lavish bribes and unprincipled defections? If so, one can understand their shame at such a connection. But it doesn't excuse their silence today.

Come to that, the Congress as a whole is in a hurry to pretend that Narasimha Rao never existed. But they do make half-hearted attempts to discuss, say, the Ayodhya issue. Why is there such a numbing silence on the JMM bribery case? Could it be that the probe holds the potential to severely embarrass not just the past Supreme Leader, but the current one too? The judge in the case has already wondered why the CBI investigators didn't include Kesri's name in the chargesheet. As the then Congress treasurer, there is a distinct possibility that he was involved in the disbursement of funds.

Common sense dictates that the CBI should have made at least a cursory probe of this aspect. Why did it fall to the presiding judge to remind the agency of the basics of criminal investigation? I am perfectly willing to accept that Sitaram Kesri wasn't around when money was paid out to save the Congress regime in which he was a cabinet minister. But shouldn't that be proved?

Some months ago, as Rao was tottering to his fall, Manmohan Singh quoted the maxim about Caesar's wifeÑnot just innocent, but beyond suspicion. Would the erudite Dr Singh care to remind his current boss too?

Corruption Slows Growth

By Sanjay Kumar

Once upon a time, God's work wasn't supposed to involve taking bribes

Widespread graft takes its toll on businesses and the economy.

If recent news headlines are any guide, people might well be forgiven for believing that India is a land of corruption scandals. But the problem of corruption goes way beyond the few major cases that make the headlines, such as the recent arrest of former prime minister PV Narsimha Rao.

Rampant, endemic corruption in India is putting a brake on economic development - and more often than not, it's business that bears the brunt of paying out for the 'special favours' that get things done.

'Countrywide corruption is increasing at all levels,' says a top executive at industrial giant Larsen & Toubro (L&T), who, like other executives that Asian Business contacted, doesn't wish to be identified.

Worse still for the business community is that it's the government that is the fountainhead of corruption. This is particularly serious in view of the huge importance of the government sector in India's economy.

Businessmen say that this state of affairs, known as the 'licence-quota raj', was put in place by former prime minister Indira Gandhi during the 1970s: corruption and bribery were the real agenda hidden behind the facade of socialism. It was during this period that politicians and government officials acquired almost unlimited powers to issue licences - and the Indian economy is totally dependent on licences for permission to produce almost anything, in whatever quantities, using whichever raw materials. For those businesses that were willing to pay hefty bribes to get licences, officially allotted quotas were quietly relaxed.

Many businesses relished the licence-quota raj: a protected domestic market meant Indian companies never needed to spend on research and development (R&D) or improve the quality of goods and services to stay competitive. Paying bribes worked out cheaper than R&D spending or facing the rigours of an open market.

That corruption has become ubiquitous at all levels is accepted by everyone. 'Earlier, people were shy of asking [for bribes]. But not any more. They feel there's nothing wrong with it,' says the L&T executive.

'Today government officials demand bribes for anything as a matter of right,' says lawyer R Avasthi, legal manager in a leading private sector company. 'From settling electricity bills [when officials can be bribed to record a lower meter reading], getting telephones connected to setting up an industry - which means getting many clearances or seeking facilities [such as electricity and water connections, or bank loans] - you have to pay bribes.'

D Singh, vice-president of a leading rice exporting firm, says that in all the government departments businessmen have to deal with - sales tax, income tax, excise, customs, land and quality control - not even the slightest progress is possible without greasing officials'' palms. The price of resistance is infinite delay or massive harassment as, for example, in the case of Kentucky Fried Chicken (Asian Business, December 1995, page 67).

'Bribes alone speed up the work, and you're assured that your file in the department does exist and that it will be presented to the official at the right time,' says Singh. 'At a higher level, ministers demand [business] partnerships in the names of trusted [nominees], and civil servants demand cuts.'

That society at large is made to pay a heavy price for corruption is admitted candidly only by some. 'Ultimately we end up in paying almost 15% in graft,' says Singh. 'Obviously, I compromise on quality as well as quantity. In such cases, we supply rice with a higher moisture content.'

Former prime minister Rajiv Gandhi estimated that of all the government money allocated for development - which came second only to the defence budget - only 17% reached the intended beneficiaries, with the rest eaten up on the way by officials and contractors. Some estimates put the figure as low as 10%.  

Massive political corruption

That the corridors of political power are knee-deep in corruption is common knowledge. The revelations regarding corruption in high places contained in the famous 'Jain diaries', seized in 1991 by the Central Bureau of Investigation (CBI), and the ensuing legal battle spearheaded by an active section of the judiciary have put the issue on the national agenda. A whole series of court cases involving corruption is now underway.

The two Jain brothers' diaries allegedly document a trail of bribes paid to leading politicians and bureaucrats since 1988. They identify 114 recipients of graft - much of it from multinationals, totalling several billion rupees - these being by top politicians in all the major political parties (ruling as well as opposition) except the communists.

Several members of Rao's former cabinet are alleged to figure in the dairies. Rao himself was named as a recipient of bribes in a confessional statement by SK Jain to the CBI - something the CBI, functioning directly under the prime minister's office, chose to play down, with Rao still prime minister at the time. With so many political big-wigs in the net, including the late Rajiv Gandhi, many wanted to give the Jain case a speedy burial. But the Supreme Court entered the fray in October 1993, alerted by a public interest writ, and has since been whipping the CBI to act. In November 1995, the CBI charged eight bureaucrats, and in January this year seven politicians - four members of opposition parties and three ministers.

Many Indian businessmen feel that liberalisation of the economy will have no impact on reducing the corruption that has become so well entrenched. 'Bureaucrats and politicians have both tasted blood. It's foolish to expect them to change,' says Singh.

Some Indian businessmen feel that the influx of foreign companies is already unleashing a new wave of even greater corruption. 'Foreign companies give big cuts, and they do it in a big way and the attraction is very high,' says the official at L&T.

Although officials of foreign companies are wary of talking about corruption openly, a survey of 183 US firms conducted by the US embassy in 1995 revealed that US investors rated corruption in India as the third worst problem they faced after red tape and a lack of electric power. A document issued by the US embassy in Delhi titled Investment Climate Statement 1996 says that 'US firms have identified corruption as an obstacle to foreign direct investment... The government procurement area has been particularly subject to allegations of corruption. In terms of sectors, telecom and power seem especially prone to charges of corruption'.

Indian businessmen say red tape directly provides a pretext to extort money. 'The more speedbreakers they put [in], the more money they can make,' says Singh.

'Without paying, your file won't be traceable and even your business card won't reach the official you've gone to see.'

In a survey of 54 economies released in October, Transparency International, a multinational organisation headquartered in Berlin and dedicated to reducing corruption in business, placed India as the ninth most corrupt country in its Corruption Perception Index, followed by Indonesia and the Philippines; China ranked fifth.

Businessmen say the blame for the deluge of corruption in India lies in the lack of transparency in the rules of governance, extremely cumbersome official procedures, excessive and unregulated discretionary power in the hands of politicians and bureaucrats, who are prone to abuse it, and a lax judiciary.

Singh says many impediments are created by politicians and bureaucrats to make investors cough up cash: 'Kentucky Fried Chicken was literally made to chase around the courts for a single fly on its premises [in Delhi]. Name any Indian outfit where you don't find dozens of flies, but would you dream of seeing them prosecuted?'

Critics point out that other major instances of corruption belong to the era of liberalisation. In August, the CBI raided properties belonging to Sukh Ram, minister of communications for three years under Rao. Unaccounted for money to the tune of Rs361 million (US$10.1 million) was seized along with other unaccounted for wealth.

It was under Ram that the controversial privatisation of telecoms was begun. The process lacked transparency and provoked loud protests. Rules were changed midway through to suit favoured parties. A centralised purchasing system was created, bypassing all the established ministerial norms and every purchase was routed through the minister. In some cases, it is alleged that the minister used discretionary powers to place orders without even inviting tenders.

Insiders believe that during Ram's tenure between Rs10 billion and Rs15 billion were extorted as kickbacks in nationwide telecom deals. Half was distributed among officials and touts, with politicians pocketing the other half. The exchequer lost some 20 to 30 times these amounts in licence fees.

That economic and political corruption go hand in glove has been further illustrated by the prosecution of three members of Parliament belonging to the Jharkhand Mukti Morcha party, together with former prime minister Rao, who allegedly bribed these MPs to win a crucial vote of confidence in 1993. Rao is also embroiled in another case involving a non-resident Indian, Lakhubhai Pathak, who alleges that he was swindled of US$100,000 a decade ago by Rao's crony Chandraswamy - a religious charlatan - on Rao's assurance of awarding a contract.

With the old systems and culture still in place, there is cynicism about the containment of corruption. 'It is not possible to do business completely honestly in India and make money,' says DS Mehta, a newspaper columnist and veteran business observer. His view is typical of those of other people involved in business.

Despite the tremendous cynicism, the Indian business community sees some hope in the active role being played by the Supreme Court and other echelons of the judiciary in hauling up errant politicians and bureaucrats, and bolstering faith in the rule of law and fair play.

One example is that the Supreme Court last month ordered former petroleum minister Satish Sharma to pay damages of Rs5 million to the government for causing loss to the exchequer by his 'illegal and arbitrary' allotment of petrol pump licences from his discretionary quota. The Court has urged the CBI to prosecute him for any criminal breach of trust.

Progress against corruption is likely to be slow, but successful prosecutions of high-profile officials and politicians are crucial to its success. 'Unless exemplary action is taken against erring individuals, it is impossible to think of any positive change,' says Singh.