| Corruption
Corruption can be defined as use of governmental power for private
gain.
There are two kinds of corruption: Extortionary Corruption and
Collusive Corruption.
Extortionary Corruption can be defined as corruption where money
has to be paid to acquire services that are legitimately due and
honestly entitled.
Collusive Corruption implies bribe given or bribe taken to give
something that is not legitimately due and here the bribe taker
and bribe give, collude to transact a resource, that honest means
would not have entitled.
Corruption can also be categorized as: Political Corruption and
Retail Corruption.
Political corruption is corruption by elected representatives.
Retail Corruption is corruption by government officials.
Often corruption in India is accepted. However there is a cost
to corruption.
India’s growth rate could be higher by 2% if India’s corruption
level is contained. So if corruption is not contained India’s
GDP could be half in 3 decades.
It is difficult to estimate the quantum of corruption in India.
But in a GDP of national economy of Rs. 60 lakh crores, almost
3 lakh crores – 5 lakh crores is routed through corruption. Thus
almost 5% of GDP is routed through corruption.
The World Bank estimates that almost 5% of global GDP is lost
due to corruption around the world and this may be as high as
25% in some African countries.
If these estimates seem a little high, consider this there are
4 million trucks. Each truck has to pay Rs. 200 a day. Thus almost
Rs. 100 crore a day or Rs. 35000 crore a year is routed through
corruption only in truck sector.
Consider registration of housing, one has to pay amount equal
to registration fees for corruption and this may amount to as
much as 1% of cost of housing. Thus real estate sector could significantly
add to corruption.
Enterprises have to pay some amount, even when paying appropriate
legitimate taxes. Thus even to do legitimate dealing, one has
to pay an illegal component.
These are examples of retail corruption. But there is considerable,
political corruption too. Expenditure on elections is huge. While
there is expenditure limit of Rs. 25 lakh on Parliamentary elections
and Rs. 10 lakh on Assembly elections, it is reasonable to estimate
that these expenditure limits are exceeded by 10-100 times, depending
upon the state and nature of constituency.
Clearly politicians spending huge amount of money in election,
will want to get a good rate of return. C K Prahalad, the late
management guru estimated that almost Rs. 2.5 lakh crore is earned
by politicians over a 5 year term. This calculation stems from
an estimate that almost Rs. 8000 crore is spent on Union Parliamentary
elections by political parties. If assembly elections are included,
the expenditure could easily exceed Rs. 25000 crore. Clearly for
this kind of ‘investment’ a return of at least 10 times would
be expected. Hence it is not unreasonable to estimate that almost
Rs. 2.5 lakh crores is earned by politicians over 5 year period.
That would mean almost Rs. 50,000 crore per annum.
Thus out of total corruption of Rs. 3 lakh crore, anywhere between
Rs. 50,000 crores to Rs. 75,000 crores(including local government
corruption) is political corruption and almost 80% of corruption
is retail corruption. Thus though political corruption attracts
most attention, retail corruption cannot be neglected as it almost
forms 70-80% of all corruption. Indeed while there are mere 5000
politicians there are almost 20 million government employees.
Election expenditure, that are in excess of ceiling limit are
usually indulged in to buy votes, through enticement. Some people
estimate that almost 20-60% of votes are bought by politicians
by providing liquor or giving cash of some goods. Most poor class
votes or even lower middle class votes are purchased. Voters may
even take money from multiple candidates.
Since Indian elections operate on principle of first past the
post system, every single vote is invaluable. And hence politicians
are willing to spend huge amount of money to acquire the marginal
vote because it is so valuable.
Indeed the political class presumes, that while spending on elections
does not ensure victory, not spending on election almost certainly
guarantees loss. Considering the enormous importance of money
in elections, political parties are compelled to field candidate
with money spending power and hence by definition, politicians,
who are more likely than not likely to be corrupt.
However, very few, if any people, much less politicians are punished
for corruption. Indeed not a single politician has been jailed
for prolonged period for corruption, though it is realistic to
presume that a very large percentage of politicians are corrupt.
There is also very scant and not strong enough action against
retail corruption. Hence both retail corruption and political
corruption continue to thrive unchecked by law.
Challenges
1. Lack of strict enforcement and strong punitive
action.
2. Weak enforcement of law.
3. Tolerance of corruption
Central Government
Actions taken by Government
Apart from token actions, inadvertently government has ended up
checking corruption through actions that were not necessarily
intended to check corruption such as:
1. Dismantling of License permit Raj.
2. Technological solutions enforcing transparency.
Legal Position
There are several laws that can be used to check
corruption. However enforcement is weak and very few have to face
strong punitive actions.
1. There is ceiling on expenditure in election.
2. Prevention of corruption was enacted in 1988. The Prevention
of Corruption Act, 1988 it incorporated the Prevention of Corruption
Act, 1947, the Criminal Law Amendment Act, 1952, and sec. 161
to 165-A of the Indian Penal Code with modifications
3. Right to Information Act 2005 gives citizens right to information
which can be used to check corruption.
Advocacy to Government, Political
Parties and Media
The fight against corruption must begin with tough enforcement
of existing laws and self monitoring by political parties. Actions
that may be advocated would include:
1. Tough and assured punishment.
2. Select good candidates.
3. Proportional Voting rather than first past the post voting
system.
4. Direct election to similar to US Presidential elections.
5. Give local power and decentralize governance.
6. Strong movement to transparency.
7. Media should highlight corruption.
What should corporates do?
Corporates should realize that corruption is not merely
moral issue but actually an economic one. Corporates should at
least pay due taxes. Corporates should use international instruments
to check corruption in the nation.
What should common people do?
Common people should use RTI to expose corruption. With informed
collective assertion, common people can over years transform the
extent of corruption in India. Common people should elect clean
politicians.
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