Corruption and Development - Anupama Jha, Executive Director, Transparency International India

Introduction Corruption hampers development in India by distorting markets, misallocating resources , weakens national institutions and leads to inequitable social services . It also makes the poor poorer, leads to blatant injustice along with widespread economic inefficiency and unchecked environmental exploitation. As corruption in the country reached dizzying levels ,in recent times, we saw the restless country reeling under scams of various dimensions, taking to streets to demand an effective Lokpal to govern the country. The Lokpal movement was a clear indication of how sick and tired people were of the rising corruption which has dried up domestic and foreign investment, has hit social sector projects and shaved up to 2% of the annual GDP growth. Harmful effects of corruption Corruption in key services such as education and health results in poor people finding themselves excluded from schools or hospitals that they cannot afford or simply asked to pay extra simply to gain access to services to which they already have a right. Studies also suggest that in countries where levels of corruption are higher, immunization rates are lower and levels of child mortality are higher. It also leads to an unsuspecting person buying useless counterfeit drugs , putting his health in grave danger. In the education system corruption can start in the procurement of material and labour for school construction as corrupt officials siphon off funds for school buildings, which increases the cost of the building. Similarly, there can be corruption in the purchase of textbooks, desks, blackboards and other supplies . In some states we also find there are irregularities in the hiring of teachers, which in the most extreme form, results in the recruitment of ‘ghost teachers’ or even in the creation of entire ‘ghost institutions’- with the allocated salaries and other expenses channelled into the pockets of officials. For electricity and water supplies , corrupt officials regularly demand bribes to accept bids or to approve the completion of the work. Even in the day-to-day operations corruption continues. Falsifying meter readings, illegal connections, carrying out repairs for side-payments and bribing for getting water and electricity connection, is commonplace. Social safety net programmes are important part of the anti poverty programmes but they are also vulnerable to corruption. Corruption in programme such as NREGS where names of non existent workers are enrolled, or payments are demanded to register the names of recipients is rampant. Similarly under the PDS system, foodgrain meant for the poor never reaches them because they disappear in the black market because of corruption. Very often cases of fair price shop owners selling subsidized grains for the poor, sell much of this on the open market at inflated prices. Government has tried to reduce these leakages with more targeted programmes, but even these are susceptible to corruption during the selection of beneficiaries. Corruption undermines human development. Corrupt public servants and politicians corrode ideals of public service and their corrupt practices have hampered economic growth and weakened tax collection, leaving them less to spend on public service programmes. Corruption also undermines efforts at poverty reduction – by diverting goods and services targeted for the poor to well – off and well – connected households who can afford to bribe officials. As a result of corruption, even though India’s economic boom continues the poor continue to stay poor. Both corrupt political and corporate officers manage to siphon off funds – intended to aid the people of India – off to political and private sector elite.This translates to economic, political, social and cultural divide among people, which has far reaching negative consequences. The Maoist insurgency which has increased in the recent times, covers 40,000 square kilometres across Central and Eastern India is just one example of what corruption by private companies and politicians can do. Money that could be spent on developing the social infrastructure, eradicating poverty and empowering the poor (who could be potential market for the multinationals) goes into the hands of few individuals making them richer and increasing the rich-poor divide. Corruption of this sort also disadvantages domestic firms and distorts decision making in favour of projects that benefits few rather than many. Eventually, companies prospers while the country suffers. Causes of corruption An important reason for rampant corruption in the country is lack of political will to check corruption. Rather , politicians are misusing their privileged positions for siphoning off money by colluding with corrupt public servants and private sector. In recent times, the nation read with sinking feeling reports of scams in Commonwealth Games and 2G spectrum. Suresh Kalmadi heading the organising committee of Commonwealth Games was accused of corruption and embezzlement of several thousand crores for organising the Game. More recently, in the 2G scam case, the then Telecom Minister Raja is alleged to have been involved in corruption along with some senior public servants. Some time back, Madhu Koda, the former Chief Minister of Jharkhand was accused of misappropriating Rs 270 crore of state funds and former Chief Minister of Bihar was alleged to be involved in the fodder scam. Few years earlier, a cabinet minister was caught on camera accepting bribe and about 100 odd tainted ministers, cutting across the party lines, rule the country. One of the most blatant manifestations of political corruption is when politicians bribe voters directly. The practice - prescribed by most national legislations - is fuelled by money that is not properly accounted for at best, from criminal sources at worst. Vote buying tends to be carried out where parties are weak, with elections centred on candidates rather than parties, and where traditions of patronage are engrained. A number of studies suggest that it is poor people who are most often targeted with offers to buy their votes. Votes may be bought by incumbents using public funds. The other important reason for rising corruption is the existence of weak anti corruption agencies - CBI and CVC. The former does not function independently and does not even come within the ambit of RTI and the latter has only recommendatory powers and most of the recommendations are disregarded by the government, which wants to protect corrupt public servants. The courts take years to conclude trials and there is also considerable corruption in the judiciary because of the lack of accountability of the higher judiciary and the lack of an effective anti-corruption agency to investigate corruption within its ranks. . This is the reason why, a handful of anti corruption activists – Arvind Kejriwal, Santosh Hegde, Shanti Bhushan along with Anna Hazare and some others proposed the idea of creating an anti corruption and grievance handling system by forming an independent body with powers to investigate corruption and punish the corrupt. The idea was that an independent Lokpal institution — would be completely independent of the government, empowered to effectively investigate corruption of all public servants of the central government including the Prime Minister, the judiciary, etc. (with Lokayuktas in the States to investigate public servants of the State governments and local bodies), and accountable in multiple ways to ensure that any corruption in the Lokpal institution would be immediately investigated and action taken. This is exactly what is required by the UNCAC, which has just been ratified by India after much delay. However, political parties, politicians, and also some sections of general public and media feel that Lokpal proposed by Anna Hazare and his team would be a “super” government and that it would run a parallel government. We also find that public servants join hands with politicians and engage in corrupt behaviour. Many civil servants see corruption as ‘low-risk’ and ‘high-award’ activity. They also in many cases slow procedures and force users to join queues that can only be jumped by paying bribes.Most tax related corruption, for example, flourishes within excessive red tape which requires frequent interactions between tax payers and tax officials. Also, very often we find that the ‘big fish’ are allowed to go scot free, while the subordinate officials are caught in corruption cases as an eyewash. Corruption is also rife in the private sector. The 2G scam is a case in point which is a clear result of the nexus between corrupt political leaders and private players. Most companies do not have a clearly laid down compliance programmes, are only driven by profit motive , no policy to prohibit facilitation payment and tolerate and encourage corruption. The Press has played an important role in exposing corruption in the country, yet we find many media houses being run by private companies which leads to conflict of interest. Corruption is a phenomenon of materialistic society. Lack of emphasis on ethics and value in school education has also led to children not able to distinguish between right and wrong. They grow up without any role models and highly materialistic individuals concerned only with increasing their wealth at any cost. Infusing the sense of duty consciousness is important to help the person to take into consideration well being of other persons and in doing so not to stoop to corrupt practices. Lack of enough civil society organisations actively promoting good governance and raising awareness about governance is another factor that has led to phenomenal growth of corruption. Tackling corruption is not a job for governments alone. There are very few civil society organizations monitoring and reporting on standards of government and private sector. The Anna movement has proved that the civil society and public participation can force the government to bow down to the legitimate demands of people. It has also proved that public participation can play an important role in demanding accountability from the Government and countering corruption. Left to the politicians, corruption will thrive as it has happened for so many decades. It will thrive on secrecy when undisturbed by public access to information about government and business activities. Countering it requires public participation and transparency in anti-corruption efforts and in governance. Points for action against corruption A multi-pronged approach to tackle corruption is the need of the hour. Creating political will by making the politicians and civil servants accountable , partly through the ballot box but also through strong and effective civil society is important. A strong and effective Lokpal is important to take deterrent action against the corrupt officials at the top level is the need of the hour. Merit based recruitment and promotion of civil servants along with rigorous systems of control is equally important. Codes of conduct and effective compliance programmes in the private sector and among the professionals including the lawyers and accountants is to be ensured. Governance tools such as Right to Information, citizens charter and social audit is to be promoted and information technology (IT) and e-governance offer opportunities to break the monopoly of corrupt officials . Role of Transparency International Transparency International (TI) , a global coalition against corruption conducts studies to check the extent of corruption in different countries and believes that tackling corruption should be high on the agenda of all the countries of the world. The NGO works in more than 100 counties and has a full fledged chapter in India. This NGO promotes tools such as Integrity Pact to check corruption in public procurement, Development Pact to demand transparency and accountability from the elected representatives and promotes governance tools such as Right to Information, Citizens Charter , Social audit and e-Governance. TI also promotes ethics and value in school education because it believes that if a society is to be free of corruption , it has to be made up of evolved , or at least, evolving individuals who have a fairly strong sense of what is right and what is wrong. Transparency International in India has also set up Advocacy and Legal Advise Centers to help victims of corruption. We also work with 40 public sector companies, some private companies and emphasise a lot on corporate governance. At present, we work in several states including Orissa, Bihar, Jharkhand, Chhattisgarh, Tamil Nadu, Rajasthan and Uttaranchal. (Courtesy : CUSAT_EBRF Seminar)